UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2004

                                       or

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                         COMMISSION FILE NUMBER: 0-21295

                          GVI SECURITY SOLUTIONS, INC.

             (Exact name of registrant as specified in its charter)

                Delaware                               77-0436410
    (State or other jurisdiction of       (I.R.S. Employer Identification No.)
     incorporation or organization)

       2801 Trade Center Dr #120
           Carrollton, Texas                             75007
(Address of principal executive offices)               (Zip code)

                                 (972) 245-7353
              (Registrant's telephone number,including area code)

          (Former Name or Former Address, if Changed Since Last Report)

CHECK WHETHER THE REGISTRANT (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

|X| YES |_| NO

As of November 15, 2004 there were 30,253,787 shares of the registrant's common
stock outstanding.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT:

                                 |_| Yes |X| No


<PAGE>




                          GVI SECURITY SOLUTIONS, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION

    Item 1.  Financial Statements............................................  1

    Item 2.  Management's Discussion and Analysis or Plan of Operation.......  9

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

PART II. OTHER INFORMATION

    Item 6.  Exhibits and Report on Form 8-K................................. 13

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                          GVI SECURITY SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEET
                                    UNAUDITED
                                 (In thousands)
                                                                   September 30,
       ASSETS                                                          2004
                                                                     --------
Current Assets

   Cash                                                              $    127
   Accounts Receivable, Net                                            10,709
   Inventory                                                           13,217
   Other Receivables                                                    1,160
   Prepaid Expenses And Other Current Assets                            1,803
   Deferred Income Taxes                                                  251
   Refundable Income Taxes                                                643
                                                                     --------
      Total Current Assets                                           $ 27,910

Property And Equipment, Net                                             2,099

Other Assets

   Deposits                                                                99
   Loan Origination Fees, Net                                           1,559
   Investment In Bio Access ID                                            250
                                                                     --------
Total Assets                                                         $ 31,917
                                                                     ========
       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities

   Accounts Payable                                                  $ 17,025
   Accrued Expenses                                                     1,342
   Debt, Current Portion                                                  900
                                                                     --------
      Total Current Liabilities                                      $ 19,267

Debt, Net Of Current Portion                                           12,883
Deferred Income Taxes                                                      39
                                                                     --------
       Total Liabilities                                             $ 32,189
                                                                     --------
Commitments And Contingencies

Stockholders' Equity (Deficiency)

   Preferred Stock, Series B, $.001 Par Value, 200 Shares
     Authorized, 200 Shares Issued And Outstanding

   Preferred Stock, Undesignated, $.001 Par Value, 2,999,800
     Shares Authorized, None Issued Or Outstanding

   Common Stock, $.001 Par Value, 75,000,000 Shares
     Authorized; 29,603,787 Shares Issued And Outstanding                  12

   Additional Paid-In Capital                                             522
   Deficit                                                               (806)
                                                                     --------
      Total Stockholders' Equity (Deficiency)                            (272)
                                                                     --------
      Total Liabilities And Stockholders' Equity (Deficiency)        $ 31,917
                                                                     ========
SEE NOTES TO THE FINANCIAL STATEMENTS

                                       1
<PAGE>

<TABLE>
<CAPTION>

                          GVI SECURITY SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED
                    (In thousands, except per share amounts)

                                                             Three Months Ended      Nine Months Ended
                                                                September 30,           September 30,
                                                            --------------------    --------------------
                                                              2004        2003        2004        2003
                                                            --------    --------    --------    --------
                                                                       Predecessor             Predecessor
                                                                        Business                Business
                                                            --------    --------    --------    --------

<S>                                                         <C>         <C>         <C>         <C>
Revenues                                                    $ 15,882    $ 14,545    $ 45,905    $ 37,344

Cost of Revenues                                              13,051      11,935      38,389      30,923
                                                            --------    --------    --------    --------
Gross Profit                                                   2,831       2,610       7,516       6,421

Selling, General And Administrative Expenses                   3,597       1,993      10,300       4,967
                                                            --------    --------    --------    --------
Operating Income (Loss)                                         (766)        617      (2,784)      1,454

Other Expenses

   Interest Expense                                             (166)        (51)       (418)       (159)
   Other non-operating expense                                  (150)         --        (150)         --
                                                            --------    --------    --------    --------
   Total Other Expenses                                         (316)        (51)       (568)       (159)
                                                            --------    --------    --------    --------
Income (Loss) Before Taxes                                     (1082)        566      (3,352)      1,295
Income Tax Expense (Benefit)                                       2         230        (632)        306
                                                            --------    --------    --------    --------
Net Income (Loss)                                           $ (1,084)   $    336    $ (2,722)   $    989
                                                            ========    ========    ========    ========
Income (Loss) Per Share

     Basic                                                  $  (0.04)   $   0.01    $  (0.09)   $   0.03
                                                            ========    ========    ========    ========
     Diluted                                                $  (0.04)   $   0.01    $  (0.09)   $   0.03
                                                            ========    ========    ========    ========

Shares Used In Calculation Of Net Income (Loss) Per Share

     Basic                                                    29,604      28,372      29,604      28,372
                                                            ========    ========    ========    ========
     Diluted                                                  29,604      28,383      29,604      28,383
                                                            ========    ========    ========    ========

</TABLE>


                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                       2
<PAGE>

<TABLE>
<CAPTION>

                          GVI SECURITY SOLUTIONS, INC.
                            STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                                 (In thousands)

                                                               Nine Months Ended
                                                                  September 30,
                                                              --------------------
                                                                2004        2003
                                                              --------    --------
                                                                         Predecessor
                                                                           Business
                                                                          --------
 Cash Flows From Operating Activities
<S>                                                           <C>         <C>
     Net Income (Loss)                                        $ (2,722)   $    989
     Adjustments To Reconcile Net Income (Loss) To Net Cash
       Used In Operating Activities

         Depreciation                                              339          37
         Amortization Of Deferred Loan Origination Fees            167          13
         Deferred Tax Liability                                     --         (99)

     Changes In Assets And Liabilities

       Accounts Receivable                                       1,693      (3,548)
       Inventory                                                (4,849)     (1,157)
       Other Receivables                                           269        (763)
       Prepaid And Other Current Assets                         (1,347)        143
       Accounts Payable                                          5,694       3,603
       Accrued Expenses                                            159          61
       Deposits                                                    (99)        (21)
       Federal Income Tax Payable/Refundable Income Tax         (1,099)        393
                                                              --------    --------
       Net Cash Used In Operating Activities                    (1,795)       (349)
                                                              --------    --------
Cash Flows From Investing Activities

     Purchase Of Property And Equipment                         (1,371)        (28)
     Purchase Of Investment In Bio Access ID                      (250)         --
                                                              --------    --------
       Net Cash Used In Investing Activities                    (1,621)        (28)
                                                              --------    --------
Cash Flows From Financing Activities

     Proceeds From Subordinated Notes Payable                      159          --
     Repayment Of Subordinated Notes Payable                      (159)         --
     Proceeds Of Loan/Lines Of Credit, net of
       credit line repayments                                   13,785          --
     Proceeds Of Prior Lines Of Credit, net of

       credit line repayments                                   (8,650)        463
     Repayment Of Capital Lease                                    (52)         --
     Stockholder Distribution                                       --        (215)
     Loan Origination Fee                                       (1,609)         (7)
                                                              --------    --------
       Net Cash Provided By Financing Activities                 3,474         240
                                                              --------    --------
Net Increase (Decrease) In Cash                                     58        (137)
Cash, Beginning Of Period                                           69         166
                                                              --------    --------
Cash, End Of Period                                           $    127    $     29
                                                              ========    ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES

Liabilities Assumed in Acquisition                            $  1,819    $     --
Preferred Stock Conversions into Common Stock                 $      2    $     --
Capital Lease Equipment Acquisition                           $    501    $     --
Conversion of Related Party Note and Loan Payable and
Accrued Interest                                              $  1,517    $     --
Loan origination fee compensation cost for warrant issued     $    112    $     --
Teitelbaum stock settlement                                   $    150    $     --
</TABLE>

                      SEE NOTES TO THE FINANCIAL STATEMENTS


                                       3
<PAGE>

                          GVI SECURITY SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION These financial statements should be read in
conjunction with a reading of the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2003, and the Form 8-K/A filed on April 22, 2004.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles applicable to
interim financial information and with the requirements of Form 10-QSB and Item
310 of Regulation S-B of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. Interim results are not necessarily indicative of results
for a full year. In the opinion of management, all adjustments considered
necessary for a fair presentation of the financial position and the results of
operations and cash flows for the interim periods have been included.

On February 20, 2004, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 19, 2004, by and among the Company, GVI
Security, Inc. ("GVI"), and GVI Security Acquisition Corp., a newly formed
wholly-owned subsidiary of the Company, GVI merged (the "Merger") with GVI
Security Acquisition Corp., becoming the Company's wholly-owned subsidiary, and
the stockholders of GVI became stockholders of the Company. As a result of the
Merger, the business of GVI is now the Company's business. GVI is the exclusive
distributor of Samsung Electronics video security products in North, Central and
South America to professional end users, installers and resellers, and a major
national retailer. GVI distributes video surveillance and other security
products to wholesale distributors and consumers. GVI's security products
include both proprietary GVI solutions and components manufactured by Samsung
Electronics and other manufacturers.

For accounting purposes, because GVI Security Solutions, Inc. (formerly Thinking
Tools, Inc.) had become a shell company, the Merger was treated as a
recapitalization of GVI Security, Inc. As such, the historical financial
information prior to the merger is that of GVI Security, Inc.

Immediately prior to the Merger, and as a condition thereto, Europa exchanged
the Convertible Demand Grid Note issued by the Company in the principal amount
of $1,000,000, and all other indebtedness of the Company to Europa, for 10,000
shares of the Series D Convertible Preferred Stock of the Company, which were
convertible into an aggregate of 1,187,983 shares of common stock. In the
Merger, the Company issued to the former stockholders of GVI an aggregate of
1,000,000 shares of the Series E Convertible Preferred Stock, which were
convertible into an aggregate of approximately 28,214,587 shares of the
Company's common stock.

Pursuant to its obligations under the Merger Agreement, on March 23, 2004, the
Company filed with the Securities and Exchange Commission, a Definitive
Information Statement with respect to the approval by the Company's stockholders
of (i) amendments to the Company's certificate of incorporation increasing the
authorized shares of the Company's common stock to 75,000,000 and effecting a
one-for-65 reverse stock split of the common stock so that the Company would
have sufficient shares of unissued common stock so as to permit the conversion
of all of the Series D Stock, Series E Stock and all other convertible
securities of the Company (the "Charter Amendment"), (ii) the Stock Option Plan,
and (iii) the change of its name to GVI Security Solutions, Inc. These actions
were approved of by the Board of Directors on February 26, 2004. The Company
filed a Certificate of Amendment to its Certificate of Incorporation with the
Secretary of State of the State of Delaware giving effect to such amendments in
April 2004. In April 2004, all outstanding shares of Series A Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock automatically converted
into shares of the Company's common stock, and the Company effected a one-for-65
reverse common stock split.

In order to present comparative Earnings Per Share information for the three and
nine month periods ended September 30,2003, the shares used in the calculations
of net income (loss) per share have been adjusted as if the preferred stock
conversions occurred, as applicable, and for the one-for-65 reverse common stock
split.

Until May, 2003, GVI elected to be taxed under the provisions of Sub-Chapter S
of the Internal Revenue Code. Under those provisions, GVI did not provide for or
pay Federal and certain corporate state income taxes on its taxable income until
May 2003. Instead, the stockholders were liable for individual Federal and State
income taxes on their share of the Company's taxable income.

NOTE 2 ~ STOCK-BASED COMPENSATION

In December 2002, the Financial Accounting Standards Board Issued SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
amendment of SFAS No. 123." this statement amends SFAS No. 123, "Accounting for
Stock-Based Compensation," to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in financial
statements about the method of accounting for stock-based employee compensation
and the effect of the method used on reported results. The Company accounts for
stock-based compensation using Accounting Principles Board (APB) Option No. 25,
"Accounting for Stock Issued to Employees" and has not adopted the recognition
provisions of SFAS No. 123, as amended by SFAS No. 148. The exercise price of
options granted under the stock option plan is equal to the market price of the
underlying stock on the date of grant. Therefore, no compensation cost was
recorded under APB No. 25.


                                       4
<PAGE>

If the Company had determined compensation cost for the stock-based compensation
plan in accordance with the fair value method prescribed by SFAS No. 123,
proforma net income for the nine month periods ended September 30, 2004 and
2003, would have been as follows (in thousands):

                                                            2004        2003
                                                         ---------   ---------
Net Income (Loss), As Reported                           $  (2,722)  $     989
Stock-Based Employee Compensation
 Expense, Net Of Related Tax Effects                           (93)         (6)
                                                         ---------   ---------

  Net Income (Loss), Pro Forma                           $  (2,815)  $     983
                                                         =========   =========

The weighted average fair value of options granted during 2004 was $1.62. The
fair value of each option on the date of grant was estimated using the
Black-Scholes option pricing model with the following weighted average
assumptions:

Risk free rate of return                       3.02%          1.5%
Option lives in years                          5              3
Annual volatility of stock price               55%            --%
Dividend yield                                 --%            --%

NOTE 3 ~ DEBT

LAURUS DEBT/LINES OF CREDIT

On May 27, 2004, the Company closed a $15 million convertible debt financing
with Laurus Master Fund, Ltd. under which the Company was provided with a $5
million term loan and a $10 million accounts receivable loan facility. At
closing, the Company borrowed $5 million under the term loan and $10 million
under the receivable facility, and used $10,016,000 of the proceeds to repay in
full the indebtedness outstanding under its subsidiary's revolving credit
agreement with Comerica Bank. Additional proceeds of the financing were used to
increase working capital, pay closing fees to Laurus in the aggregate amount of
$617,500, and pay a finder's fee in the amount of $800,000. As part of the
transaction, Laurus was also issued a seven-year warrant to purchase 940,000
shares of Common Stock at a price of $3.50 per share. The Company agreed to
issue a similar warrant to purchase 94,000 shares of Common Stock to the finder.
Borrowings under the Laurus financing are secured by all assets of the Company.
At September 30, 2004, $4.925 million in principal was outstanding under the
Term Loan and $ 8.8 million in principal was outstanding under the accounts
receivable facility.

The term loan is evidenced by a Secured Convertible Term Note and, subject to
monthly adjustments as set forth below, bears interest at an initial rate per
annum equal to the prime rate (as reported in the Wall Street Journal), plus two
percent, subject to a floor of six percent. Interest on the term loan is payable
monthly commencing June 1, 2004, and amortizing payments of principal on the
term loan are payable monthly on the first day of each month commencing
September 1, 2004, with a final payment due on May 27, 2007 as set forth in the
table below.

                  Period                              Principal Amount

September 2004 through December 2004                  $75,000 per month

January 2005 through May 2005                         $75,000 per month

June 2005 through May 2006                           $150,000 per month

June 2006 through April 2007                         $190,000 per month

May 2007                                             $435,000

The interest rate under the Term Note is subject to downward adjustment at the
end of each month as follows. If at the end of the applicable month we have
registered the shares of Common Stock underlying the Term Note with the SEC,
interest payable on the term loan will be adjusted downward by 200 basis points
(two percent) for each incremental 25 percent increase in the market price of
our Common Stock, at the end of the month, in excess of the conversion price
under the Term Note.

Amounts outstanding under the Term Note are convertible into Common Stock at
Laurus's option at a conversion price initially equal to $2.70 per share. In
addition, subject to (i) having an effective registration statement with respect
to the shares of Common Stock underlying the Term Note, and (ii) limitations
based on trading volume of the Common Stock, scheduled principal and interest
payments under the Term Note will be made in shares of Common Stock valued at
the conversion price. Prepayments under the Term Note are subject to a premium
in the amount of 20% of the principal being prepaid.

Subject to monthly adjustments as set forth below, borrowings under the
receivable facility bear interest at an initial rate per annum equal to the
prime rate minus two percent. The interest rate under the receivable facility is
subject to downward adjustment at the end of each month in the same manner as
provided for under the Term Note. In addition, on and after November 26, 2004,
if the market price of the Common Stock is below the fixed conversion price at
the end of a month, the interest rate under the receivable facility will be
reset to equal the prime rate plus two percent. The receivable facility
terminates, and borrowings thereunder become due, on May 27, 2007.

                                       5
<PAGE>

Amounts outstanding under the receivable facility are convertible to Common
Stock at Laurus's option at a conversion price initially equal to $3.38 per
share. To the extent the Company repays loans outstanding under the receivable
facility and/or Laurus converts loans under the receivable facility into Common
Stock, the Company may reborrow or make additional borrowings under the
receivable facility, provided that aggregate loans outstanding under the
receivable facility at any time may not exceed the lesser of $10 million or a
borrowing base equal to the sum of 90% of "eligible accounts" plus 60% of
"eligible inventory" (with borrowings based on eligible inventory limited to $2
million).

The loan documents with Laurus required the Company's Common Stock to be quoted
on the NASD Over the Counter Bulletin Board by July 27, 2004, which date was
extended to September 27, 2004 in consideration of the issuance of seven-year
warrants to purchase 150,000 shares of Common Stock at an exercise price of
$3.50 per share. Laurus has agreed in principle to extend such date further to
December 31, 2004 in consideration of the issuance of additional warrants to
purchase a number of shares of Common Stock to be agreed upon by the Company and
Laurus.

LOAN ORIGINATION FEES

The loan origination and finders fees of $1.8 million for the above loan/line of
credit were capitalized and will be amortized to interest expense over three
years. Included in loan origination fees is compensation of $112,000 relating to
the issuance of warrants to purchase 1,034,000 shares of the company's common
stock.

CAPITALIZED LEASES

There are three capital leases for a trade show booth, warehouse racking, and
office furniture that have a total value of $501,319. These leases will be paid
over terms ranging from 24 to 60 months and will be amortized to interest
expense over the term of the leases.

Amortization Table: (000's)

                               2004    2005    2006    2007    2008
                               ----    ----    ----    ----    ----
Capital Leases                 $ 89   $ 169   $ 115    $ 73    $ 47

NOTE 4 ~ SUBORDINATED NOTES PAYABLE

On March 31, 2004, GVI received a total of $159,000 from the Company's Chief
Executive Officer and affiliates of two directors for subordinated convertible
notes payable, bearing interest at 10% per year, which were convertible into the
common stock of the Company at $5.10 per share (post-reverse split). These notes
were paid in full with accumulated interest on June 29, 2004.

NOTE 5 ~ RELATED PARTY TRANSACTIONS

In the normal course of business, the Company conducts certain transactions with
a company owned by William Teitelbaum, a shareholder. During the nine-month
periods ended September 30, 2004 and 2003, the Company sold security products of
approximately $12,000 and $261,000 respectively, to this company. At September
30, 2004 and 2003, amounts due from this company, which are included in accounts
receivable, were $145,000 and $209,000 respectively.

In the normal course of business, the Company pays sales commissions to a
shareholder of the Company. During the nine-month periods ended September 30,
2004 and 2003, the Company paid sales commissions to the shareholder of $272,000
and $242,000 respectively.

In October 2004, the Company entered into a Settlement Agreement and General
Release with William A. Teitelbaum, a founder and principal stockholder of the
Company. (See Note 10.)

In October 2004, certain affiliates provided financing to the Company in the
amount of $1,050,000. (See Note 10.)

NOTE 6 ~ COMMITMENTS AND CONTINGENCIES

Sales to certain consumers of video surveillance and other security products may
be subject to sales tax requirements and possible audits by state taxing
authorities.

The company has commitments to a shareholder that will be determined based on
future events, see Note 10 below.

The Company is also a party to other disputes in the normal course of business.
Management believes the ultimate resolution of such disputes will not have a
material effect on the financial statements.

In August 2004, the Company entered into a letter agreement with a financial
advisor relating to a potential private offering of up to $30 million of its
Common Stock. The terms of the proposed offering have not yet been determined.
The securities contemplated to be offered in the private offering will not be
registered under the Securities Act and will not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements. There can be no assurance that a definitive agreement
will be entered into with respect to the private offering or that the offering
will be consummated. In addition, the proposed offering may result in dilution
to existing stockholders. The proceeds of the proposed offering are intended to
fund our growth strategy and for working capital requirements. In addition,
pursuant to a Settlement Agreement and General Release between the Company and
William A. Teitelbaum, a principal stockholder, a portion of the proceeds would
be required to be used to repurchase shares of Common Stock from Mr. Teitelbaum.
If by March 31, 2005 the Company has not otherwise been required to repurchase
shares of Common Stock from Mr. Teitelbaum under the Settlement Agreement, the
Company will be required to repurchase from Mr. Teitelbaum 650,000 shares of
Common Stock at a purchase price of $1.00 per share.

NOTE 7 ~ 2004 STOCK INCENTIVE PLAN

In February 2004, the Company adopted the 2004 Long-Term Stock Incentive Plan
and reserved 5,939,913 shares of its common stock. In addition, in February, the
Company granted options for common stock exercisable under the plan of 2,675,000
at $2.60 per share and at $0.3185 per share.

NOTE 8 ~ INVESTMENT IN BIO-ACCESSID, LLC

On January 20, 2004, pursuant to a Membership Purchase Agreement by and among
John Carter, Ronald DeBerry, GVI Security Solutions, Inc., and Bio-AccessID, LLC
("Bio-Access"), the Company purchased a 5% membership interest in Bio-Access for
$250,000. As part of the agreement, the Company has the right to acquire up to
an additional 16% of Bio-Access over a three-year period after certain
agreed-upon purchase goals have been attained for a purchase price of up to an
additional $500,000.

                                       6
<PAGE>

NOTE 9 ~ UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS

The following unaudited pro forma condensed statements of operations of the
Company have been prepared to indicate how the financial statements of the
Company might have looked if the Merger with GVI and transactions related to
that Merger had occurred as of the beginning of the periods presented.

The pro forma condensed statements of operations have been prepared using the
historical financial statements of the Company and GVI for the three and nine
month periods ended September 30, 2004 and 2003. The per share information has
been adjusted as if the preferred stock conversions occurred, as applicable, and
for the one-for-65 reverse common stock split. For accounting purposes, because
the Company had become a shell company, the Merger was treated as a
recapitalization of GVI.

The pro forma condensed statements of operations should be read in conjunction
with a reading of the historical financial statements of the Company and GVI.
The pro forma condensed statements of operations are presented for illustrative
purposes only and are not intended to be indicative of actual financial
condition or results of operations had the Merger been in effect during the
periods presented, or of financial condition or results of operations that may
be reported in the future.

<TABLE>
<CAPTION>

                          GVI SECURITY SOLUTIONS, INC.
              UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                   NINE MONTH PERIOD ENDED SEPTEMBER 30, 2004
                                    UNAUDITED
                    (In Thousands, except per share amounts)

                                                    Historical                                   Pro Forma
                                          ----------------------------------       ----------------------------------
                                           GVI Security            GVI
                                            Solutions,          Security,
                                               Inc.                Inc.              Adjustments          Combined
                                          --------------      --------------       --------------      --------------

<S>                                       <C>                 <C>                  <C>                 <C>
Revenues                                  $           --      $       45,905       $           --      $       45,905

Cost Of Goods Sold                                    --              38,389                   --              38,389
                                          --------------      --------------       --------------      --------------

Gross Profit                                          --               7,516                   --               7,516

Selling, General And Administrative                   --              10,323                   --              10,323
                                          --------------      --------------       --------------      --------------
Operating Income / (Loss)                             --              (2,807)                  --              (2,807)

Interest Expense                                      --                (401)                  --                (401)
Other non-operating expense                           --                (150)                  --                (150)
                                          --------------      --------------       --------------      --------------
Income (Loss) Before Income Taxes                     --              (3,352)                  --              (3,352)
Provision (Benefit) For Income Taxes                  --                (631)                  --                (631)
                                          --------------      --------------       --------------      --------------

Net Income / (Loss)                       $           --      $       (2,722)      $           --      $       (2,722)
                                          ==============      ==============       ==============      ==============
Income / (Loss) Per Share:

      Basic                                                                                            $        (0.09)
                                                                                                        ==============
      Diluted                                                                                          $        (0.09)

Shares Used in Calculation of Net
Income / (Loss) Per Share:

      Basic                                                                                                    29,604
                                                                                                       ==============
      Diluted                                                                                                  29,604
                                                                                                       ==============

</TABLE>


                                       7
<PAGE>

<TABLE>
<CAPTION>

                          GVI SECURITY SOLUTIONS, INC.
              UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                   NINE MONTH PERIOD ENDED SEPTEMBER 30, 2003
                                    UNAUDITED
                    (In Thousands, except per share amounts)

                                                Historical                     Pro Forma
                                         ------------------------       ----------------------
                                         GVI Security      GVI
                                          Solutions,     Security,
                                            Inc.           Inc.       Adjustments     Combined
                                          --------       --------       --------      --------
<S>                                       <C>           <C>           <C>           <C>
Revenues                                  $     --       $ 37,344       $     --      $ 37,344

Cost Of Goods Sold                              --         30,923             --        30,923
                                          --------       --------       --------      --------

Gross Profit                                    --          6,421             --         6,421

Selling, General And Administrative             31          4,967             --         4,998
                                          --------       --------       --------      --------
Operating Income / (Loss)                      (31)         1,454             --         1,423

Interest Expense                               (82)          (159)            82          (159)
                                          --------       --------       --------      --------
Income (Loss) Before Income Taxes             (113)         1,295             82         1,264

Provision (Benefit) For Income Taxes            --            306             --           306
                                          --------       --------       --------      --------

Net Income / (Loss)                       $   (113)      $    989       $     82      $    989
                                          ========       ========       ========      ========
Income / (Loss) Per Share:

      Basic                                                                           $   0.03
                                                                                      ========
      Diluted                                                                         $   0.03
                                                                                      ========
Shares Used in Calculation of Net
Income / (Loss) Per Share:

      Basic                                                                             28,372
                                                                                      ========
      Diluted                                                                           28,383
                                                                                      ========
</TABLE>

The adjustments reflect the exchange of the indebtedness by the Company to
Europa by removing the related interest expense. Basic and fully diluted
earnings per share assume conversion of Series A, D, and E Preferred Stock on
January 1, 2003. Fully diluted earnings per share also assumes conversion of
exercisable options and warrants based on the terms of the agreements and the
Company's traded market price subsequent to the Merger.

NOTE 10 --SUBSEQUENT EVENTS

SETTLEMENT AGREEMENT WITH WILLIAM TEITELBAUM

In October 2004 the Company entered into a Settlement Agreement and General
Release with William A. Teitelbaum, a founder and principal stockholder of the
Company, under which Mr. Teitelbaum was issued 650,000 shares of common stock
and Mr. Teitelbaum released the Company from claims with respect to a warrant he
alleged had been issued to him by GVI Security, Inc. The Settlement Agreement
also requires the Company to use a portion of the proceeds it receives in a
placement of its securities to repurchase up to $10 million of shares of common
stock held by Mr. Teitelbaum at the purchase price of the securities sold in the
placement, except that Mr. Teitelbaum may choose not to sell his shares if the
purchase price in the placement is less than $1.75 per share. The purchase price
for Mr. Teitelbaum's shares would be paid by the combination of a cash payment
and delivery of a subordinated promissory note. If by March 31, 2005 the Company
has not otherwise been required to purchase any of Mr. Teitelbaum's shares under
the Settlement Agreement, the Company will be required to repurchase from Mr.
Teitelbaum 650,000 shares of common stock at a purchase price of $1.00 per
share. The value of the 650,000 shares of Common Stock issued to Mr. Teitelbaum
under the Settlement Agreement is recorded as other non-operating expense in the
amount of $149,500 at September 30, 2004.


                                       8
<PAGE>

TERMINATION AGREEMENT WITH THOMAS WADE

On October 19, 2004, the Company, its subsidiary, GVI Security Inc. and Thomas
Wade, the beneficial holder of approximately 14% of Common Stock and previously
the President of the Company's subsidiary, entered into a Mutual Separation
Agreement whereby the parties mutually agreed to the termination of Mr. Wade's
employment with the subsidiary. In accordance with Mr. Wade's employment
agreement, Mr. Wade will be entitled to receive severance payments equal to one
year of his annual base salary of $350,000. In addition, for a period of
one-year, Mr. Wade will continue to receive a car allowance of $800 per month,
an unaccounted for expense reimbursement of $1,200 per month, and medical
benefits. The Company has recorded $374,000 in selling, general and
administrative expense as of September 30, 2004 on account of this agreement.
The Company also agreed that Mr. Wade's options to purchase 1,975,020 shares of
our Common Stock vest in full. There was no effect on earnings for this
acceleration. Mr. Wade has agreed to release the Company in full from any and
all claims and to continue to be bound by all the terms of his employment
agreement.

AFFILIATE BRIDGE FINANCING

On October 29, 2004, in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act") pursuant to Section 4(2) of the
Act and Regulation D promulgated thereunder, the Company sold 23 "Units" for an
aggregate purchase price of $1,150,000, to a group of five purchasers, all of
whom are affiliates of the Company. Each Unit consists of (i) $50,000 principal
amount of 12% Subordinated Secured Promissory Notes (the "Notes"), and (ii) the
right to be issued warrants (the "Warrants") to purchase shares of the Company's
common stock.

The purchasers of the Units were (i) Howard Safir, the Company's Chairman of the
Board, (ii) Nazzareno E. Paciotti, a director of the Company and its Chief
Executive Officer, (iii) a corporation wholly-owned by David Weiner, a director
of the Company, (iv) a limited partnership of which Joseph Rosetti, a director
of the Company, is the principal, and (v) an equity fund managed by Fred Knoll,
a director of the Company.

ESI AGREEMENT

On November 5, 2004, the Company entered into a Memorandum of Understanding (the
"Agreement") with E&S International Enterprises, Inc. ("ESI"). Pursuant to the
Agreement, ESI will be the Company's exclusive distributor to retailers of
consumer security products purchased by the Company from manufacturers. ESI will
purchase these products from the Company at an initial price equal to 108% of
the base cost to the Company, and the Company will be responsible for all
warranty obligations with respect to the products, including servicing and
supporting such products. The Agreement is for an initial term of three years
and will automatically renew for one-year periods unless ESI provides notice to
the Company at least 90-day's prior to the then end of the term of the Agreement
of its intention not to renew the Agreement, subject to early termination rights
of ESI as set forth in the Agreement. Pursuant to the Agreement, the Company has
agreed to issue ESI warrants to purchase 3,000,000 shares of the Company's
common stock at a price equal to the lowest offering price of the common stock
in an offering of the Company's securities consummated prior to December 31,
2004 that results in gross proceeds to the Company of at least $10 million, or
if no such offering is consummated, at a price of $1.50 per share. In addition,
ESI may be issued up to an additional 3,000,000 shares of common stock upon
attaining certain goals provided for in the Agreement.

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

Statements contained in this Quarterly Report on Form 10-QSB, other than the
historical financial information, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All such
forward-looking statements involve known and unknown risks, uncertainties or
other factors which may cause actual results, performance or achievement of the
Company to be materially different from any future results, performance or
achievement expressed or implied by such forward-looking statements. Primary
risk factors include, but are not limited to: reliance on primary supplier; need
for additional funding; outstanding indebtedness; reliance on a primary retailer
for sales through the retail channel; effective integration of recently acquired
operations and personnel; expansion risks; effective internal processes and
systems; the ability to attract and retain high quality employees; changes in
the overall economy; rapid change in technology; the number and size of
competitors in its markets; law and regulatory policy; the mix of products and
services offered in the Company's target markets; and other risks described
herein and in the Company's 2003 Annual Report on Form 10-KSB.


                                       9
<PAGE>

The following discussion of results of operations and financial condition is
based upon, and should be read in conjunction with, our consolidated condensed
financial statements and accompanying notes thereto included elsewhere herein.

THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2003

REVENUES

Revenues increased 9.2% to approximately $15.9 million in the three months ended
September 30, 2004 from approximately $14.5 million in the three months ended
September 30, 2003. The increase was due to increases in sales across the range
of our products together with the introduction of several new products
manufactured by Samsung Electronics and the other manufacturers whose products
the Company distributes. Also reflected in revenues for the three months ended
September 30, 2004 is an accrual of approximately $325,000 for the negative
effect of product returns and an offsetting amount of $199,000 for the reversal
of accrued retail marketing costs.

COST OF REVENUES

Cost of revenues increased 9.4% to approximately $13.1 million for the three
months ended September 30, 2004 from approximately $12.0 million for the three
months ended September 30, 2003. The increase was due to the increased revenue
volume and higher freight costs than expected.

As a result of the changes described above in revenues and costs of revenues,
gross profit in the three months ended September 30, 2004 increased to
approximately $2.8 million from approximately $2.6 million in the three months
ended September 30, 2003, and gross profit as a percentage of revenues decreased
to 17.8% for the three months ended September 30, 2004 compared with 17.9% for
the three months ended September 30, 2003.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased 80.5% to approximately
$3.6 million in the three months ended September 30, 2004 from approximately
$2.0 million in the three months ended September 30, 2003.

SALES AND MARKETING. Sales and marketing expenses increased 104.7% to
approximately $1.87 million in the three months ended September 30, 2004 from
approximately $910,000 in the three months ended September 30, 2003. The
increase was primarily due to increased commissions, salaries related to
staffing the new Enterprise Solutions Group, contract and temporary help, and
travel-related expenses.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 60% to
approximately $1.73 million in the three months ended September 30, 2004 from
approximately $1.08 million in the three months ended September 30, 2003. The
increased general and administrative expense was primarily due to increased
salaries and wages associated with additional hires, costs associated with being
a public company, and the accrual of amounts resulting from the termination
agreement with an employee, with no corresponding type charges in the three
months ended September 30, 2003.

INTEREST EXPENSE

Interest expense in the three months ended September 30, 2004 increased 225% to
approximately $166,000 from approximately $51,000 in the three months ended
September 30, 2003. The increase was primarily related to higher outstanding
borrowings during the three months ended September 30, 2004, and the
amortization of $121,000 of loan origination fees during the three months ended
September 30, 2004 compared to amortization of $5,000 of loan fees during the
three months ended September 30, 2003.

INCOME TAX EXPENSE (BENEFIT)

The provision for federal, state and local income tax was an expense of
approximately $2,000 primarily as a result of an estimated income tax loss carry
back for the 2004 tax year compared with an expense of $230,000 for the three
months ended September 30, 2003. Prior to May 23, 2003, GVI Security, Inc.
elected to be taxed under the provisions of Sub Chapter S of the Internal
Revenue Code. As a Sub Chapter S corporation, GVI did not provide for or pay any
Federal or certain corporate or state income taxes on its income for the period
from January 1, 2003 until May 2003.

OTHER NON-OPERATING EXPENSE

The current value of shares of Common Stock issued in settlement of certain
claims pursuant to the Settlement Agreement and General Release with William A.
Teitelbaum was recorded as other non-operating expense in the amount of $149,500
in the three months ended September 30, 2004, with no corresponding type charges
in the three months ended September 30, 2003.

NET INCOME

As a result of the items discussed above there was a net loss of $1,084,000 in
the three months ended September 30, 2004 compared with a net income of $336,000
in the three months ended September 30, 2003.


                                       10
<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2003

REVENUES

Net revenues increased 22.9% to approximately $45.9 million in the nine months
ended September 30, 2004 from approximately $37.3 million in the nine months
ended September 30, 2003. The increase was due to increases in sales across the
range of our products together with the introduction of several new products
manufactured by both Samsung Electronics and the other manufacturers whose
products the Company distributes. Also reflected in revenues for the nine months
ended September 30, 2004 is an accrual of approximately $325,000 for the
negative effect of product returns and an offsetting amount of $199,000 for the
reversal of accrued retail marketing costs.

COST OF REVENUES

Cost of revenues increased 24.1% to approximately $38.4 million for the nine
months ended September 30, 2004 from approximately $30.9 million for the nine
months ended September 30, 2003. The increase was due to the increased revenue
volume, higher costs associated with initial shipments to begin fulfilling an
annual contract with a major retailer, and costs associated with a malfunction
of two specific products which have since been corrected. Additionally, during
the period the company incurred higher freight costs and changes in our product
mix. As a result of the changes in sales and costs of revenues, gross profit in
the nine months ended September 30, 2004 increased to approximately $7.5 million
from approximately $6.4 million in the nine months ended September 30, 2003, and
gross profit as a percentage of net sales decreased to 16.4% for the nine months
ended September 30, 2004 compared with 17.2% for the nine months ended September
30, 2003.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased 107.8% to approximately
$10.3 million in the nine months ended September 30, 2004 from approximately
$5.0 million in the nine months ended September 30, 2003.

SALES AND MARKETING. Sales and marketing expenses increased 109.7% to
approximately $5.0 million in the nine months ended September 30, 2004 from
approximately $2.4 million in the nine months ended September 30, 2003. The
increase was primarily due to increased commissions, salaries related to
staffing the new Enterprise Solutions Group, contract and temporary help, and
travel-related expenses.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 106.1%
to approximately $5.3 million in the nine months ended September 30, 2004 from
approximately $2.6 million in the nine months ended September 30, 2003. The
increased general and administrative expense was primarily due to increased
salaries and wages associated with additional hires, costs associated with being
a public company, and the accrual of amounts resulting from a termination
agreement with an employee, with no corresponding type charges in the nine
months ended September 30, 2003.

INTEREST EXPENSE

Interest expense in the nine months ended September 30, 2004 increased 163% to
approximately $418,000 from approximately $159,000 in the nine months ended
September 30, 2003. The increase was primarily related to higher outstanding
borrowings during the nine months ended September 30, 2004, and the amortization
of $167,000 of loan origination fees during the nine months ended September 30,
2004 compared to amortization of $13,000 of loan fees during the nine months
ended September 30, 2003.

INCOME TAX EXPENSE (BENEFIT)

The provision for federal, state and local income tax benefit was a tax benefit
of approximately $632,000 for the nine months ended September 30, 2004
(primarily as a result of an estimated tax loss carry back) compared with an
expense of $306,000 for the nine months ended September 30, 2003. Prior to May
23, 2003, GVI elected to be taxed under the provisions of Sub Chapter S of the
Internal Revenue Code. As a Sub Chapter S corporation, GVI did not provide for
or pay any Federal or certain corporate or state income taxes on its taxable
income for the period from January 1, 2003 until May 2003.

OTHER NON-OPERATING EXPENSE

The current value of shares of Common Stock issued in settlement of certain
claims pursuant to the Settlement Agreement and General Release with William A.
Teitelbaum was recorded as other non-operating expense in the amount of $149,500
in the nine months ended September 30, 2004, with no corresponding type charges
in the nine months ended September 30, 2003.

NET INCOME

As a result of the items discussed above, in the nine months ended September 30,
2004 there was a net loss of $2.72 million, compared with net income of $989,000
in the nine months ended September 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Historically, GVI has funded its operations primarily through cash generated
from operations as well as borrowings under secured revolving credit facilities.

On May 27, 2004, the Company closed a $15 million convertible debt financing
with Laurus Master Fund, Ltd. which provided a $5 million term loan and a $10
million accounts receivable loan facility. At closing, the Company borrowed $5
million under the term loan and $10 million under the receivable facility, and
used $10,016,000 of the proceeds to repay in full the indebtedness outstanding
under our subsidiary's revolving credit agreement with Comerica Bank. Additional
proceeds of the financing were used to increase working capital, pay closing
fees to Laurus in the aggregate amount of $617,500, and pay a finder's fee in
the amount of $800,000. As part of the transaction, Laurus was also issued a
seven-year warrant to purchase 940,000 shares of our Common Stock at a price of
$3.50 per share. The Company agreed to issue a similar warrant to purchase
94,000 shares of Common Stock to the finder. Borrowings under the Laurus
financing are secured by all of our assets.


                                       11
<PAGE>

The term loan is evidenced by a Secured Convertible Term Note and, subject to
monthly adjustments as set forth below, bears interest at an initial rate per
annum equal to the prime rate (as reported in the Wall Street Journal), plus two
percent. Interest on the term loan is payable monthly commencing June 1, 2004,
and amortizing payments of principal on the term loan are payable monthly on the
first day of each month commencing September 1, 2004, with a final payment due
on May 27, 2007 as set forth in the table below.

   Period                                             Principal Amount

September 2004 through December 2004                  $75,000 per month

January 2005 through May 2005                         $75,000 per month

June 2005 through May 2006                           $150,000 per month

June 2006 through April 2007                         $190,000 per month

May 2007                                             $435,000

The interest rate under the Term Note is subject to downward adjustment at the
end of each month as follows. If at the end of the applicable month the Company
has registered the shares of Common Stock underlying the Term Note with the SEC,
interest payable on the term loan will be adjusted downward by 200 basis points
(two percent) for each incremental 25 percent increase in the market price of
our Common Stock, at the end of the month, in excess of the conversion price
under the Term Note.

Amounts outstanding under the Term Note are convertible into Common Stock at
Laurus's option at a conversion price initially equal to $2.70 per share. In
addition, subject to (i) having an effective registration statement with respect
to the shares of Common Stock underlying the Term Note, and (ii) limitations
based on trading volume of the Common Stock, scheduled principal and interest
payments under the Term Note will be made in shares of Common Stock valued at
the conversion price. Prepayments under the Term Note are subject to a premium
in the amount of 20% of the principal being prepaid.

Subject to monthly adjustments as set forth below, borrowings under the
receivable facility bear interest at an initial rate per annum equal to the
prime rate minus two percent. The interest rate under the receivable facility is
subject to downward adjustment at the end of each month in the same manner as
provided for under the Term Note. In addition, on and after November 26, 2004,
if the market price of Common Stock is below the fixed conversion price at the
end of a month, the interest rate under the receivable facility will be reset to
equal the prime rate plus two percent. The receivable facility terminates, and
borrowings thereunder become due, on May 27, 2007.

Amounts outstanding under the receivable facility are convertible to Common
Stock at Laurus's option at a conversion price initially equal to $3.38 per
share. To the extent the Company repays loans outstanding under the receivable
facility and/or Laurus converts loans under the receivable facility into Common
Stock, it may re-borrow or make additional borrowings under the receivable
facility, provided that aggregate loans outstanding under the receivable
facility at any time may not exceed the lesser of $10 million or a borrowing
base equal to the sum of 90% of "eligible accounts" plus 60% of "eligible
inventory" (with borrowings based on eligible inventory limited to $2 million).

The conversion prices under the Term Note and the receivable facility are
subject to equitable adjustment for stock splits, stock dividends and similar
events, and "weighted average" adjustment for future stock issuances (other than
stock issuances in specifically excepted transactions).

The loan documents with Laurus required the Company's Common Stock to be quoted
on the NASD Over the Counter Bulletin Board by July 27, 2004, which date was
extended to September 27, 2004. In consideration for extending the deadline to
September 27, 2004, in July 2004, the Company issued Laurus an additional
seven-year warrant to purchase 150,000 shares of our Common Stock at a price of
$3.50 per share. Laurus has agreed in principle to extend the deadline further
to December 31, 2004 in consideration of the issuance of additional warrants to
purchase a number of shares of Common Stock to be agreed upon by the Company and
Laurus.

The Laurus loan documents also required the Company to have an effective
registration statement covering the Common Stock underlying the Warrants and $10
million in principal amount of the Notes, by September 27, 2004. Because the
registration statement was not declared effective until October 15, 2004, from
September 28, 2004 through October 15, 2004, the rate at which interest accrued
on $10 million in principal amount of the Notes issued to Laurus increased by
12% per annum.

During the nine months ended September 30, 2004, the Company deposited
approximately $2.4 million with a financial institution as cash collateral to
secure letters of credit issued to a vendor to purchase a new line of products
for sale in the United States and other parts of the world. At September 30,
2004, one letter of credit for $1.2 million had been drawn on to settle payments
due to the vendor, resulting in a withdrawal of the same amount from the cash
collateral account, and letters of credit for $1.2 million remained outstanding.

In August 2004, the Company entered into a letter agreement with a financial
advisor relating to a potential private offering of up to $30 million of its
Common Stock. The terms of the proposed offering have not yet been determined.
The securities contemplated to be offered in the private offering will not be
registered under the Securities Act and will not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements. There can be no assurance that a definitive agreement
will be entered into with respect to the private offering or that the offering
will be consummated. In addition, the proposed offering may result in dilution
to existing stockholders. The proceeds of the proposed offering are intended to
fund our growth strategy and for working capital requirements. In addition,
pursuant to a Settlement Agreement and General Release between the Company and
William A. Teitelbaum, a principal stockholder, a portion of the proceeds would
be required to be used to repurchase shares of Common Stock from Mr. Teitelbaum.
If by March 31, 2005 the Company has not otherwise been required to repurchase
shares of Common Stock from Mr. Teitelbaum under the Settlement Agreement, the
Company will be required to repurchase from Mr. Teitelbaum 650,000 shares of
Common Stock at a purchase price of $1.00 per share.


                                       12
<PAGE>

At September 30, 2004, the Company had cash and cash equivalents of
approximately $127,000, working capital of approximately $8.4 million, an
outstanding balance of $4.925 million under the Laurus Term Loan, and
outstanding accounts receivable loans from Laurus of approximately $8.8 million,
with additional borrowing availability under such facility of approximately $1.2
million. At September 30, 2003, GVI had cash on hand of approximately $29,000,
working capital of approximately $2.3 million including outstanding revolving
loans of approximately $3.8 million, with approximately $1.2 million of
additional availability under a Credit Agreement with GVI's prior lender.

Management believes that even if the private offering is not consummated, the
Company's existing cash position and financing with Laurus combined with
internally generated cash flow will satisfy cash requirements for the remainder
of 2004. However, failure to obtain additional financing will impede the
Company's ability to grow and may result in a reduction in the level of
operations. In particular, failure to obtain adequate funding may prevent the
Company from purchasing sufficient merchandise to supply distributors and
purchasers of the Company's products, and may prevent the Company from meeting
minimum purchase requirements under distribution agreements, and could result in
the loss of key customer and vendor accounts.

ITEM 3. CONTROLS AND PROCEDURES.

Nazzareno Paciotti, our Chief Executive and Chief Financial Officer has
concluded, based on his evaluation as of September 30, 2004, that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports we file or submit under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms.

Our management, including our Chief Executive and Chief Financial Officer, does
not expect that our disclosure controls and procedures or internal control over
financial reporting will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the system are met and cannot detect
all deviations. Because of the inherent limitations in all control systems, no
evaluation of control can provide absolute assurance that all control issues and
instances of fraud or deviations, if any, within the Company have been detected.
While we believe that our disclosure controls and procedures and our internal
control over financial reporting have been effective, in light of the foregoing,
we intend to continue to examine and refine our disclosure controls and
procedures and our internal control over financial reporting to monitor ongoing
developments in this area.

There were no significant changes in our internal control over financial
reporting subsequent to our evaluation of our internal control over financial
reporting that could materially affect or are reasonably likely to materially
affect our internal control over financial reporting.

                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K.

(a)   Exhibits

      Number                              Description
      ------                              -----------

      31          Certification of Nazzareno Paciotti, Chief Executive Officer
                  and Chief Financial Officer of the Registrant, pursuant to
                  Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act
                  Of 1934, as amended.

      32          Certification of Nazzareno  Paciotti,  Chief Executive Officer
                  and Chief Financial Officer of the Registrant,  pursuant to 18
                  U.S.C. ss.1350.

(a) The following reports on Form 8-K were filed during the quarter ended
September 30, 2004.

On July 16, 2004, we filed a Current Report on Form 8-K, Item 5, with respect to
an Agreement and Plan of Merger entered into with Rapor, Inc.

                                       13
<PAGE>

                                   SIGNATURES

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

GVI SECURITY SOLUTIONS, INC.

Date:  November 22, 2004            By: /s/ Nazzareno E. Paciotti
                                    ------------------------------------
                                    Name:  Nazzareno E. Paciotti
                                    Title:  Chief Financial Officer


                                       14
<PAGE>

EXHIBIT INDEX

(b)



Number                              Description
------                              -----------

31          Certification of Nazzareno Paciotti, Chief Executive Officer and
            Chief Financial Officer of the Registrant, pursuant to Rules
            13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as
            amended.

32          Certification of Nazzareno  Paciotti,  Chief Executive Officer
            and Chief Financial Officer of the Registrant,  pursuant to 18
            U.S.C. ss.1350.


                                       15