**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, 2005


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
              incorporation
                or organization)
            (I.R.S.
                Employer Identification No.)2801
                Trade Center Drive, Suite 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.


þ Yes  ̈ No




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)




 ̈ Yes   þ No




As
      of
      November 11, 2005 there were 50, 180,502 shares of the registrant’s common stock
      outstanding.


Transitional
      Small Business Disclosure Format:


 ̈ Yes   þ No









1





GVI
      Security Solutions,
      Inc.


**FORM
      10-QSB**




**TABLE
      OF CONTENTS**


**PART
                  I.****FINANCIAL
                  INFORMATION**
              **3**Item
                  1. Financial Statements.
              3Item
                  2. Management’s Discussion and Analysis or Plan of
                  Operation.
              10Item
                  3. Controls and Procedures.
              15**PART
                  II.OTHER INFORMATION**
              **15**Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              15Item
                  6. Exhibits.
              15







2


**PART
      I. FINANCIAL INFORMATION**






**Item
      1. Financial Statements.**




**GVI
      Security Solutions, Inc.**


**Condensed** **Consolidated
      Balance Sheet**


**(unaudited)**




(In
                thousands, except share and per share amounts)
              
              
              
              **September
                  30,
                  2005**ASSETSCurrent
                  AssetsCash
              
              
              
              
              $
              4,137Accounts
                  receivable, net
              
              
              
              
              
              9,264Inventory
              
              
              
              
              
              11,831Other
                  receivables
              
              
              
              
              
              965Prepaid
                  expenses and other current assets
              
              
              
              
              
              848Refundable
                  income taxes
              
              
              
              
              
              643Total
                  Current Assets
              
              
              
              
              
              27,688Property
                  and Equipment, Net
              
              
              
              
              
              1,328Other
                  AssetsDeferred
                  loan origination fee, net of accumulated amortization
              
              
              
              
              
              959Intangibles,
                  net
              
              
              
              
              
              1,109Investment
              
              
              
              
              
              250Other
              
              
              
              
              
              34Total
                  Assets
              
              
              
              
              $
              31,368LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  LiabilitiesAccounts
                  payable
              
              
              
              
              $
              5,909Debt
              
              
              
              
              
              2,103Accrued
                  expenses
              
              
              
              
              
              804Total
                  Current Liabilities
              
              
              
              
              
              8,816Debt,
                  Non-current portion
              
              
              
              
              
              10,913Total
                  Liabilities
              
              
              
              
              
              19,729Commitments
                  and Contingencies
              
              
              
              
              
              --Stockholders'
                  EquityPreferred
                  stock, undesignated, $.001 par value, 3,000,000
                shares
                  authorized, none issued or outstanding
              
              
              
              
              
              --Common
                  stock, $.001 par value, 75,000,000 shares authorized; 50,180,502
                  shares
                  issued and outstanding
              
              
              
              
              
              50Additional
                  paid-in capital
              
              
              
              
              
              22,807Accumulated
                  deficit
              
              
              
              
              
              (11,218
              )Total
                  Stockholders' Equity
              
              
              
              
              
              11,639Total
                  Liabilities and Stockholders' Equity
              
              
              
              
              $
              31,368





The
      Notes
      to Consolidated Financial Statements are an integral part of these
      statements













3




GVI
      Security Solutions,
      Inc.


**Condensed** **Consolidated
      Statements of Operations**


**(unaudited)**


(In
                    thousands, except per share amounts)
                
                Three
                    Months EndedSeptember
                    30,
                
                Nine
                    Months Ended September
                    30,2005
                
                
                2004
                
                
                2005
                
                
                2004Revenues
                
                $
                10,642
                
                $
                15,882
                
                $
                44,982
                
                $
                45,905Cost
                    of Revenues
                
                
                8,561
                
                
                13,051
                
                
                37,638
                
                
                38,389Gross
                    Profit
                
                
                2,081
                
                
                2,831
                
                
                7,344
                
                
                7,516Selling,
                    General And Administrative Expenses
                
                
                4,322
                
                
                3,597
                
                
                12,530
                
                
                10,300Operating
                    Income (Loss)
                
                
                (2,241
                )
                
                (766
                )
                
                (5,186
                )
                
                (2,784
                )Other
                    Expenses:Interest
                    Expense
                
                
                315
                
                
                166
                
                
                708
                
                
                418Other
                    non-operating expense
                
                
                --
                
                
                150
                
                
                --
                
                
                150Total
                    Other Expenses
                
                
                315
                
                
                316
                
                
                708
                
                
                568Income
                    (Loss) Before Taxes
                
                
                (2,556
                )
                
                (1,082
                )
                
                (5,894
                )
                
                (3,352
                )Income
                    Tax Expense (Benefit)
                
                
                32
                
                
                2
                
                
                55
                
                
                (632
                )Net
                    Income (Loss)
                
                $
                (2,588
                )
                $
                (1,084
                )
                $
                (5,949
                )
                $
                (2,722
                )Income
                    (Loss) Per ShareBasic
                
                $
                (0.05
                )
                $
                (0.04
                )
                $
                (0.12
                )
                $
                (0.09
                )Diluted
                
                $
                (0.05
                )
                $
                (0.04
                )
                $
                (0.12
                )
                $
                (
                    0.09
                )Shares
                    Used In Calculation Of Net Income (Loss) Per ShareBasic
                
                
                50,125
                
                
                29,604
                
                
                50,125
                
                
                29,604Diluted
                
                
                50,125
                
                
                29,604
                
                
                50,125
                
                
                29,604








The
      Notes
      to Consolidated Financial Statements are an integral part of these
      statements










4


GVI
      Security Solutions,
      Inc.


**Condensed** **Consolidated
      Statements of Cash Flows**


**(unaudited)**







(In
                thousands)
            
            Nine
                Months Ended September 30,2005
            
            2004Cash
                Flows From (Used) by Operating ActivitiesNet
                Income (Loss)
            
            $
            (5,949
            )
            $
            (2,722
            )Adjustments
                to Reconcile Net Income (Loss) to Net Cash Used InOperating
                ActivitiesDepreciation
            
            
            759
            
            
            339Amortization
                of deferred loan origination fee
            
            
            450
            
            
            167Amortization
                of intangibles
            
            
            111
            
            
            --Changes
                in Assets and LiabilitiesAccounts
                receivable
            
            
            (698
            )
            
            1,693Inventory
            
            
            732
            
            
            (4,849
            )Other
                receivables
            
            
            437
            
            
            269Prepaid
                and other current assets
            
            
            (468
            )
            
            (1,347
            )Accounts
                payable
            
            
            (5,422
            )
            
            5,694Accrued
                expenses
            
            
            (1,297
            )
            
            159Deposits
            
            
            --
            
            
            (99
            )Federal
                income tax payable
            
            
            --
            
            
            (1,099
            )Net
                Cash UsedinOperating Activities
            
            
            (11,345
            )
            
            (1,795
            )Cash
                Flows From (Used) by Investing ActivitiesPurchase
                of property and equipment
            
            
            (346
            )
            
            (1,371
            )Purchase
                of investment
            
            
            --
            
            
            (250
            )Net
                Cash Used in Investing Activities
            
            
            (346
            )
            
            (1,621
            )Cash
                Flows From (Used) by Financing ActivitiesProceeds
                from Subordinated Notes Payable
            
            
            --
            
            
            159Repayment
                of Subordinated Notes Payable
            
            
            --
            
            
            (159
            )Proceeds
                of Loan/Lines of Credit
            
            
            20,434
            
            
            13,785Proceeds/Repayments
                of Prior Lines of Credit
            
            
            (17,877
            )
            
            (8,650
            )Repayment
                of Capital Lease
            
            
            (126
            )
            
            (52
            )Loan
                Origination Fee
            
            
            --
            
            
            (1,609
            )Net
                Cash Provided by Financing Activities
            
            
            2,431
            
            
            3,474Net
                (Decrease) Increase in Cash
            
            
            (9,260
            )
            
            58Cash,
                Beginning of Period
            
            
            13,397
            
            
            69Cash,
                End of Period
            
            $
            4,137
            
            $
            127SUPPLEMENTAL
                SCHEDULE OF NONCASH INVESTING ANDFINANCING
                ACTIVITIESPreferred
                Stock conversion into Common Stock
            
            $
            --
            
            $
            2Liabilities
                assumed in acquisition and recapitalization
            
            $
            --
            
            $
            1,819Conversion
                of related party note and loan payable and accrued interest into
                Preferred
                Series D Stock
            
            $
            --
            
            $
            1,517Capital
                lease equipment acquisition
            
            $
            --
            
            $
            501Loan
                origination fee compensation cost for warrant issued
            
            $
            --
            
            $
            112Debt
                principal payment converted to common stock
            
            $
            67
            
            $
            --Restricted
                cash paid to satisfy stock repurchase obligation
            
            $
            10,000
            
            $
            --Teitelbaum
                stock settlement
            
            $
            --
            
            $
            150




The
      Notes
      to Consolidated Financial Statements are an integral part of these
      statements








5





**GVI
      Security Solutions, Inc.**


**Notes** **to** **Condensed** **Consolidated Financial Statements**





NOTE
      1 ~
      BASIS OF PRESENTATION





These
      consolidated 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, 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.





In
      order
      to present comparative Earnings Per Share information for the three and nine
      months ended September 30, 2005, the shares used in the calculations of net
      income (loss) per share have been adjusted as if the preferred stock conversions and
      the
      one-for-65 reverse common stock split occurred as of January 1,
      2004.





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.





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, net income
      (loss) for the nine month
      periods ended September 30, 2005 and 2004, would have been on a pro forma basis
      as follows (in thousands):





2005
            
            2004Net
                income (loss), as reported
            
            $
            (5,981
            )
            $
            (2,722
            )Stock-based
                employee compensation expense, net ofrelated
                tax effects
            
            
            (142
            )
            
            (93
            )Net
                Income (loss), pro forma
            
            $
            (6,123
            )
            $
            (2,815
            )





The
      weighted average fair value of options granted during 2005 and 2004 was
      $ 1.24 and
      $1.62 respectively.


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
            
            
            3.5
            %
            
            3.02
            %Option
                lives in years
            
            
            3.0
            
            
            5.0Annual
                volatility of stock price
            
            
            74
            %
            
            55
            %Dividend
                yield
            
            
            --
            %
            
            --
            %










6


****NOTE
      3 ~
      CREDIT FACILITIES





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 the prior 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 also issued 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,
      2005, $3.7 million in principal was outstanding under the Term Loan and $9.1
      million in principal was outstanding under the accounts receivable facility.
      The
      agreements with Laurus prohibit the payment of dividends on the Company’s common
      stock, and contain other customary affirmative and negative
      covenants.




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. Amortizing payments of principal on the term loan commenced September
      1, 2004, with a final payment due on May 27, 2007 as set forth in the table
      below.




Period
              Principal
                  AmountJune
                  2005 through May 2006
              $150,000
                  per monthJune
                  2006 through April 2007
              $190,000
                  per monthMay
                  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
      the common stock, at the end of the month, in excess of the conversion price
      under the Term Note.





Amounts
      outstanding under the Term Note were convertible into common stock at Laurus's
      option at a conversion price initially equal to $2.70 per share. In December,
      2004 the conversion price was reduced to $1.91 under the terms of the
      anti-dilution feature of the Term Note. In addition, subject to (i) having
      an
      effective registration statement with respect to the shares of common stock
      underlying the Term Note, (ii) the market price of the common stock being in
      excess of 110% of the conversion price under the Term Note, and (iii)
      limitations based on trading volume of the common stock, scheduled principal
      and
      interest payments under the Term Note are to 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, 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.


**** Amounts
      outstanding under the receivable facility were convertible to common stock
      at
      Laurus's option at a conversion price initially equal to $3.38 per share. In
      December, 2004 the conversion price was reduced to $2.22 under the terms of
      the
      anti-dilution feature of the facility. 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 $3.5 million). Prior
      to
      an amendment to the receivable facility entered into in June 2005, borrowings
      based on eligible inventory had been limited to $2.0 million.





7








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 and further extended to December 31, 2004. In
      consideration for extending the deadlines, the Company issued Laurus additional
      seven-year warrants to purchase an aggregate of 400,000 shares of common stock
      at a price of $3.50 per share. The Company’s common stock began being quoted on
      the NASD Over the Counter Bulletin Board on December 13, 2004. Compensation
      expense of approximately $16,000 was recorded for the issuance of these
      warrants.




Loan
      Origination Fees





The
      loan
      origination and finders fees of $1.8 million for the Laurus loans and 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
      four capital leases for a trade show booth, warehouse racking, and two office
      furniture leases that have a total value of approximately $519,000. These leases
      will be paid over terms ranging from 24 to 60 months and payments will be
      allocated to debt and interest expense over the term of the leases.





Amortization
      Table: ($ in thousands)





2005
            
            2006
            
            2007
            
            2008
            
            2009Capital
                Leases
            
            $
            44
            
            $
            118
            
            $
            77
            
            $
            51
            
            $
            12








NOTE
      4 ~
      COMMITMENTS & 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 estimates that any liability that it may have for
      sales
      taxes would not have a material effect on its financial condition or results
      of
      operations.





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.





Licensing
      Agreement





The
      Company entered into a licensing agreement that commenced on January 1, 2005
      with Cybasec LTD. Under the agreement, which has an initial term of three years,
      but can be cancelled after the first year, Cybasec grants the Company the
      exclusive license to use, sell, market, distribute, service and customize the
      Cybasec Enterprise Security Platform hardware and software applications in
      exchange for the Company committing to purchase required amounts of products
      and
      paying related agreed upon fees. Minimum required payments under this licensing
      agreement are $1,047,000 for the year ending December 31, 2005.  The
      Company gave notice on October 4, 2005 to Cybasec of its intent to cancel the
      agreement after the first year.





Settlement
      Agreement with William Teitelbaum and Stock Repurchase





Pursuant
      to a Settlement Agreement entered into in October 2004, on January 4, 2005
      the
      Company completed the purchase of 6,666,667 shares from William A. Teitelbaum
      for $10 million. The December 31, 2004 balance sheet included restricted cash
      and a liability, each in the amount of $10,000,000, and a reduction of
      stockholders’ equity, for the purchase of these shares.





8


ESI
      Alliance Agreement





Pursuant
      to a Memorandum of Understanding (the "MOU") entered into November 5, 2004,
      the
      Company has entered into an Alliance Agreement with E&S International
      Enterprises, Inc. (“ESI”), and its subsidiary, SSC, Inc. Consistent with the
      MOU, and pursuant to the Alliance Agreement ESI
      (through SSC) acts as the Company’s exclusive distributor to retailers of
      consumer security products purchased by the Company from manufactures. ESI
      purchases these products from the Company at an initial price equal to 108%
      of
      the base cost to the Company, subject to downward adjustment if ESI’s gross
      margins fall below certain specified levels. The Company is responsible for
      all
      warranty obligations with respect to the products, including servicing and
      supporting such products. The Alliance 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 days 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 Alliance Agreement.





Pursuant
      to the MOU, the Company issued ESI a warrant to purchase 3,000,000 share of
      the
      Company’s common stock at a price of $1.50 per share. Inc addition, ESI and its
      affiliates may be issued up to an additional 3,000,000 shares of common stock
      upon attaining certain sales goals provided for in the Subscription Agreement
      entered into between the Company and ESI.





Directors
      Compensation





On
      July
      21, 2005, the Board of Directors of the Company approved compensation arrangements
      for nonemployee directors of the Company. Under these arrangements, nonemployee
      directors of the Company receive a monthly payment of $2,000 in cash and
      an
      award of shares of common stock of the Company with an aggregate fair market
      value of $1,000 under the Company’s Nonemployee Directors’ Stock Plan adopted in
      October 2005. For purposes of these compensation arrangements, Howard Safir,
      the Company’s
      Chairman, has been deemed not to be a nonemployee director of the Company.





NOTE
      5 ~
      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 2004,
      the Company granted options under the Plan to purchase 2,675,000 shares of
      common stock at $2.60 per share and 2,821,452 shares of common stock at $0.3185
      per share. In January 2005, the Company granted options under the Plan to
      purchase 837,500 shares of common stock at $1.50 per share. No stock based
      compensation cost is reflected in expense as all options granted under the
      plan
      had an exercise price equal to the fair value of the underlying stock on the
      date of grant.





Note
      6 ~
      NON-QUALIFIED STOCK OPTIONS





In
      July
      2005, the Company granted non-qualified stock options to purchase 575,000 shares
      of common stock at $.85


per
      share. No stock based compensation cost will be reflected in expense as all
      options granted had an exercise
      price equal to the fair value of the underlying stock on the date of
      grant.





Note
      7 ~
      OPERATING LOSSES





For
      the
      nine months ended September 30, 2005, the Company reported a net loss of
      approximately ($5,981,000) and for the year ended December 31, 2004, the Company
      reported a net loss of approximately ($7,178,000). Additionally, the Company
      had
      an accumulated deficit of approximately ($11,218,000) at September 30, 2005.
      The
      Company’s financial statements have been presented on the basis that it is a
      going concern, which contemplates the realization of assets and satisfaction
      of
      liabilities in the normal course of business.




In
      management’s opinion, cash flows from operations and borrowing capacity combined
      with cash on hand will provide adequate flexibility for funding the Company’s
      working capital obligations for the next twelve months. There may be
      circumstances that would accelerate its use of liquidity resources, including
      but not limited to, its ability to implement a profitable business model, which
      may include further restructuring charges. If this occurs, the Company, may
      from
      time to time, incur additional indebtedness or issue, in public or private
      transactions, equity or debt securities. The Company believes that its
      continuing focus on cost reductions, and the more efficient management of its
      inventory and accounts receivable balances and the continued growth in sales
      of
      professional products and by its Enterprise Solutions Group, will result in
      an
      improved financial condition in future periods. However, there can be no
      assurance that the Company will be profitable in future periods or that
      suitable debt or equity financing will be available to the Company.







9





**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;
      uncertainty of future profitability, 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 2004 Annual Report on Form 10-KSB.*




*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, 2005 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30,
      2004**




**REVENUES**


Revenues
      decreased $5.3 million or 33.0% to approximately $10.6 million in the three
      months ended September
      30 ,
      2005
      from approximately $15.9 million in the three months ended September
      30 ,
      2004.
      The decrease was primarily the result of negative sales of our retail products
      in the amount of approximately $(85,000) during the three months ended September
      30, 2005 (i.e., there were returns of our retail products from customers and
      no
      sales), compared to approximately $6.2 million in sales of our retail products
      during the three months ended September 30, 2004, a decrease of $6.3 million
      or
      101.4%. The decrease in retail sales was offset in part by increases of
      $ 629,064, or 6.6%,
      in sales of our professional products, and $408,975, or 213.1% in sales of
      our
      enterprise solutions products as compared to the three months ended September
      30, 2004.





The
      sole
      customer for our retail products is our exclusive distributor, E&S
      International Enterprises, Inc. (“ESI”), through its subsidiary, SSC, Inc. ESI
      made no purchases of our products during the quarter primarily because of a
      lack
      of a demand for our products from the major retailer that accounted for
      approximately 98% of our retail sales in the year ended December 31, 2004.
      The
      reduced demand resulted from (i) the replacement by that retailer of certain
      of
      our “do it yourself kits” with a competitor’s brand in approximately 50% of its
      retail outlets, (ii) the accumulation of our products in that retailer’s
      inventory, and (iii) a defect in certain retail products manufactured for us
      by
      Samsung Electronics.





In
      addition, our agreement with Samsung Electronics to be the exclusive distributor
      of its retail products to this retailer will terminate by its terms on December
      31, 2005, an upon such termination, ESI would be entitled to terminate its
      distribution agreement with us. To date, we have been unable to negotiate an
      extension of our exclusive retail distribution agreement with Samsung, and
      we
      are unsure that we will be able to do so. Although historically substantially
      all of our retail revenues have been attributable to sales of Samsung products,
      we are also party to an exclusive agreement to distribute in North America
      retail products manufactured by LG. We are currently attempting to replace
      sales
      of our Samsung retail products with similar products manufactured by LG.





10


The
      increase in sales of our professional products reflected increased sales to
      distributors, integrators and installers of a variety of products manufactured
      by Samsung Electronics as well as other manufacturers. Increased sales of our
      enterprise solutions products reflect revenues from the Drug Enforcement
      Administration under our contract to supply it with our Rapid Access
      Portals.





**COST
      OF REVENUES**


Cost
      of
      revenues decreased 34.4% to approximately $8.6 million for the three months
      ended September
      30 ,
      2005
      from approximately $13.1 million for the three months ended September
      30 ,
      2004.
      This decrease was due to the decrease in sales of our retail products resulting
      in a decrease in costs of approximately $5.9 million, offset by increased costs
      of approximately $1.3 million associated with increased sales of our
      professional and enterprise solutions products, as well as increases in tech
      support costs and warranty costs of approximately $100,000. In addition, for
      the
      three months ended September 30, 2004 our cost of revenues were reduced as
      a
      result of a one time reimbursement of $600,000 from a major supplier relating
      to
      costs associated with a defective product sold in a prior period. There was
      no
      comparable reimbursement in the three months ended September 30, 2005.





As
      a
      result of the changes described above in revenues and cost of revenues, gross
      profit in the three months ended September
      30 ,
      2005
      decreased to approximately $2.1 million from approximately $2.8 million in
      the
      three months ended September
      30 ,
      2004.
      Gross profit as a percentage of revenues increased to 19.6% for the three months
      ended September
      30 ,
      2005
      compared with 17.8% for the three months ended September
      30 ,
      2004.
      This increase was a result of the increase in sales of our professional and
      enterprise solutions products, which generate higher gross margins relative
      to
      sales of our retail products, together with a decrease in sales of our lower
      margin retail products.





Gross
      margins on sales of our professional products (excluding sales of our enterprise
      solutions products), adjusted for the one time reimbursement of costs associated
      with the product defect in the three months ended September 30, 2004 as
      described above, was 18.5% compared to 18.4% for the three months ended
      September 30, 2004. Gross margins on sales of our professional products in
      the
      three months ended September 30, 2005 have been negatively impacted by
      competitive pressures, which resulting in us providing rebates and pricing
      credits in the aggregate amount of approximately $95,000 to certain customers.
      These factors did not impact us in the three months ended September 30, 2004.
      Gross margins on sales of our enterprise solutions products increased
      significantly to 35.6% for the three months ended September 30, 2005 compared
      to
      18.3% for the same three months ended September 30, 2004, primarily as a result
      of increased sales of those products.





**SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES**


Selling,
      general and administrative expenses increased 19.4% to approximately $4.3
      million in the three months ended September
      30 ,
      2005
      from approximately $3.6 million in the three months ended September
      30 ,
      2004.





**Sales
      and Marketing** .
      Sales
      and marketing expenses increased 31.6% to approximately $2.5 million in the
      three months ended September
      30 ,
      2005
      from approximately $1.9 million in the three months ended September
      30 ,
      2004.
      The increase was primarily due to (i) increased conference and trade show
      expenses of approximately $400,000, (ii) $200,000 related to payments made
      to
      Cybasec, Ltd. under a licensing agreement  for
      a
      network video system which was entered into January 1, 2005, (iii) approximately
      $100,000 in increased commissions resulting from higher sales of our
      professional and enterprise products and (iv) increases of approximately
      $100,000 in advertising costs for print media and trade journals, offset by
      decreased travel and entertainment costs.





**General
      and Administrative** .
      General
      and administrative expenses increased 5.9% to approximately $1.8 million in
      the
      three months ended September
      30 ,
      2005
      compared to approximately $1.7 million for the three months ended September
      30,
      2004.





**INTEREST
      EXPENSE**


Interest
      expense in the three months ended September
      30 ,
      2005
      increased 90 %
      to
      approximately $315,000 from approximately $ 166,000 in the
      three months ended September
      30 ,
      2004.
      The increase was due to higher average interest rate during the three months
      ended September
      30 ,
      2005 .
      The
      amount of interest expense for the three months ended September 30, 2005
      reflects an offset of approximately $ 23,000
      of
      interest income earned on bank balances during the period. No interest income
      was earned during the three months ended September 30, 2004.





**INCOME
      TAX EXPENSE (BENEFIT)**


The
      provision for federal, state and local income tax is an expense of approximately
      $ 3 2,000
      for
      the three months ended September 30, 2005 compared to an
      expense of approximately $2,000 for the three months ended September
      30 ,
      2004.
      The $ 32,000
      expense relates to state franchise taxes that are not determined based on net
      income. Any provision for federal and state tax benefits due to our loss for
      the
      three months ended September 30, 2005 would be offset by an equal increase
      in a
      valuation allowance. **** We
      established this allowance because, in light of our history, including our
      losses following our merger in February 2004, there is uncertainty under
      generally accepted accounting principles as to whether we will have future
      income against which we can offset our losses to reduce our tax expense in
      future periods.





11


**NET
      LOSS**


As
      a
      result of the items discussed above there was a net loss of approximately
      $ 2.6 million
      in the three months ended September
      30 ,
      2005,
      compared with a net loss of approximately $1.1 million in the three months
      ended September
      30 ,
      2004.








**NINE
      MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
      2004**




**REVENUES**





Revenues
      decreased approximately $900,000, or 2.0 %
      to
      approximately $45.0 million in the nine months ended September
      30 ,
      2005
      from approximately $ 45.9 million
      in the nine months ended September
      30 ,
      2004.
      While sales of professional products increased approximately $4.0 million,
      or
      15.6%, and enterprise solutions revenues increased $1.0 million, or 290.8%,
      these increases were more than offset by a decrease in retail revenues of $5.9
      million, or 30.1% to approximately $13.8 million. As discussed above, we had
      negative sales of retail products in the three months ended September 30, 2005
      due to the lack of demand for those products from the primary retailer that
      sells these products, as a result of (i) the replacement by that retailer of
      certain of our “do it yourself kits” with a competitor’s brand in approximately
      50% of its retail outlets, (ii) the accumulation of our products in that
      retailer’s inventory, and (iii) a defect in certain retail products manufactured
      for us by Samsung. These factors also impacted sales of our retail products
      in
      the three month period ended June 30, 2005. As discussed above, our agreement
      with Samsung Electronics to be the exclusive distributor of their retail
      products to a major retailer will terminate on December 31, 2005, and in the
      event of such termination, ESI would be entitled to terminate its distribution
      agreement with us. To date, we have been unable to negotiate an extension of
      our
      exclusive retail distribution agreement with Samsung, and we are unsure that
      we
      will be able to do so.





The
      increase in sales of our professional products reflected increased sales to
      distributors, integrators and installers of a variety of products manufactured
      by Samsung Electronics as well as other manufacturers. Increased sales of our
      enterprise solutions products reflect additional revenues from the Drug
      Enforcement Administration under our contract to supply it with our Rapid Access
      Portals.




**COST
      OF REVENUES**





Cost
      of
      revenues decreased 2.0% to approximately $37.6 million for the nine months
      ended September
      30 ,
      2005
      from approximately $38.4 million for the nine months ended September
      30 ,
      2004.
      This decrease was due to the decrease in sales of our retail products resulting
      in a decrease in costs of $4.7 million, offset by increased costs of
      approximately $3.9 million associated with increased sales of our professional
      and enterprise solutions products. Costs of revenues for the nine months ended
      September 30, 2005 include increases in tech support costs and warranty
      costs of approximately $400,000.





As
      a
      result of the changes described above in revenues and cost of revenues, gross
      profit in the nine months ended September
      30 ,
      2005
      decreased slightly to approximately $7.3 million from approximately $7.5 million
      in the nine months ended September
      30 ,
      2004.
      Gross profit as a percentage of revenues was 16.3% for the nine months ended September
      30 ,
      2005
      compared with 16.4% for the three months ended September
      30 ,
      2004.





Gross
      margins on sales of our professional products decreased slightly to 20.1% in
      the
      nine months ended September 30, 2005 compared to 20.3% in the same nine month
      period of 2004. Gross margins on sales of our enterprise solutions products
      significantly increased to 32.4% in the nine months ended September 30, 2005
      compared to 21.9% for the same nine month period ended September 30, 2004,
      primarily as a result of increased sales of those products.




**SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES**





Selling,
      general and administrative expenses increased 21.4% to approximately $12.5
      million in the nine months ended September
      30 ,
      2005
      from approximately $ 10.3 million
      in the nine months ended September
      30 ,
      2004.





12


**Sales
      and Marketing:** Sales
      and
      marketing expenses increased 45.9% to approximately $7.3 million in the nine
      months ended September
      30 ,
      2005
      from approximately $5.0 million in the nine months ended September
      30 ,
      2004.
      The increase was primarily due to (i) increased conference and trade show
      expenses of $700,000, (ii) approximately $600,000 related to payments made
      to
      Cybasec Ltd. under a licensing agreement for a network video system which was
      entered into January 1, 2005, (iii) approximately $400,000 in increased
      commissions resulting from increased sales of our professional and enterprise
      products, as well increased commissions on sales subject to commissions by
      our
      independent sales representatives of approximately $200,000, (iv) increases
      of
      approximately $200,000 in advertising costs for print media and trade journals
      and (v) increased sample and demo expenses of approximately
      $300,000.





**General
      and Administrative:** General
      and administrative expenses decreased 1.9% to approximately $5.2 million in
      the
      nine months ended September
      30 ,
      2005
      from approximately $5.3 million in the nine months ended September
      30 ,
      2004.
      The decreased general and administrative expense was due to a decrease of
      approximately $600,000 in administrative staff salaries offset by (i) an
      approximately $100,000 increase in office rent, (ii) approximately $100,000
      of
      depreciation expense in the nine months ended September 30, 2005 related to
      assets acquired in the Rapor acquisition in December 2004, with no comparable
      expense in the nine months ended September 30, 2004, (iii) an increase of
      approximately $200,000 in legal, accounting, and professional fees, and (iv)
      an
      increase of approximately $100,000 in other office expenses, including
      utilities, telephone expenses, and consumables.




**INTEREST
      EXPENSE**





Interest
      expense in the nine months ended September
      30 ,
      2005
      increased 69.4 %
      to
      approximately $708,000 from approximately $ 418,000 in the
      nine months ended September
      30 ,
      2004.
      The increase was due to higher outstanding borrowings and a higher average
      interest rate during the nine months ended September
      30 ,
      2005
      and the amortization of $450,000 of loan origination fees during the nine months
      ended September 30 ,
      2005
      compared to amortization of $167,000 during the nine months ended
      September 30 ,
      2004.
      The amount of interest expense for the nine months ended September 30, 2005
      reflects an offset of approximately $120,000 of interest income earned on bank
      balances during the period. No interest income was earned during the nine months
      ended September 30, 2004.





**INCOME
      TAX EXPENSE (BENEFIT)**





The
      provision for federal, state and local income tax is an expense of approximately
      $ 55,000
      for the nine months ended September 30, 2005 compared to a benefit
      of approximately $632,000 for the nine months ended September
      30 ,
      2004.
      The $ 55,000
      expense relates to state franchise taxes that are not determined based on net
      income. Any provision for federal and state tax benefits due to our loss for
      the
      nine months ended September 30, 2005 would be offset by an equal increase in
      a
      valuation allowance. **** We
      established this allowance because, in light of our history, including our
      losses following our merger in February 2004, there is uncertainty under
      generally accepted accounting principles as to whether we will have future
      income against which we can offset our losses to reduce our tax expense in
      future periods.





**NET
      LOSS**





As
      a
      result of the items discussed above there was a net loss of approximately $5.9
      million in the nine months ended September
      30 ,
      2005
      compared with a net loss of approximately $2.7 million in the nine months ended September
      30 ,
      2004.





**LIQUIDITY
      AND CAPITAL RESOURCES**





Historically,
      we have funded our operations primarily through cash generated from operations
      as well as borrowings under secured revolving credit facilities. On May 27,
      2004, we closed a $15 million convertible debt financing with Laurus Master
      Fund, Ltd. under which we were provided with a $5 million term loan and a $10
      million accounts receivable loan facility. At closing, we 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 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. We issued a similar warrant to purchase 94,000 shares of common stock
      to
      the finder at a price of $3.50 per share. Borrowings under the Laurus financing
      are secured by all of our assets.




13


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. Amortizing payments of principal on the term loan commenced September
      1, 2004. Remaining monthly payments at September 30, 2005 are set forth in
      the
      table below.







Period
              Principal
                  AmountJune
                  2005 through May 2006
              $150,000
                  per monthJune
                  2006 through April 2007
              $190,000
                  per monthMay
                  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, and currently
      equal to $1.91 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) the market price of the common stock being in excess of
      110%
      of the conversion price under the Term Note, and (iii) limitations based on
      trading volume of the common stock, scheduled principal and interest payments
      under the Term Note are to 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. If the market price of common stock is below the 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, and
      currently equal to $2.22 per share. To the extent we repay loans outstanding
      under the receivable facility and/or Laurus converts loans under the receivable
      facility into common stock, we 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
      $3.5 million).  Prior
      to
      an amendment to the receivable facility entered into in June 2005, borrowings
      based on eligible inventory had been limited to $2.0 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) in accordance with a formula
      specified under our agreements with Laurus.




From
      time
      to time we deposit cash collateral with financial institutions to secure letters
      of credit issued to vendors to purchase products. At September 30, 2005, we
      had
      no letters of credit outstanding.




On
      December 27, 2004, we completed a private placement of approximately 22,620,000
      shares of common stock at a price of $1.50 per share, for aggregate gross
      consideration of $33.9 million. Net
      cash
      proceeds were approximately $31.5 million after compensation to a financial
      advisor and other costs of the placement. Approximately $4.7 million of the
      proceeds were used to repay borrowings from Laurus, and $1.15 million of the
      proceeds were used to repay notes issued in an October 2004 bridge financing.
      Pursuant to a Settlement Agreement between us and William A. Teitelbaum, a
      stockholder of the Company, entered into in October 2004, we used an additional
      $10 million of the net proceeds of the private placement to repurchase 6,666,667
      shares of common stock from Mr. Teitelbaum in January 2005.




14


At
      September 30, 2005, we had cash and cash equivalents of approximately $4.1
      million, working capital of approximately $18.8 million, an outstanding balance
      of $ 3.7
      million under the Laurus Term Loan, and outstanding accounts receivable loans
      from Laurus of approximately $ 9.1
      million, with additional borrowing availability under such facility of
      approximately $ 500,000 . In
      comparison, at December 31, 2004, we had cash and cash equivalents of
      approximately $13.4 million, working capital of approximately $21.7 million,
      an
      outstanding balance of $4.7 million under the Laurus Term Loan, and outstanding
      accounts receivable loans from Laurus of approximately $5.5 million, with
      additional borrowing availability under such facility of approximately $3.9
      million.




Cash
      decreased from $13.4 million at December 31, 2004 to $4.1 million at September
      30, 2005 primarily as a result of (i) a decrease in accounts payable from $11.3
      million at December 31, 2004 to $5.9 million at September 30, 2005, primarily
      as
      a result of cash payments we made to reduce our obligations to Samsung in
      accordance with the terms of our distribution agreement, and (ii) an increase
      in
      accounts receivable from $8.3 million at December 31, 2004 to $9.3 million
      at
      September 30, 2005, and (iii) operating losses through the nine months ended
      September 30, 2005.




Management
      believes that the net proceeds from the private placement we completed in
      December 2004 together with cash generated from operations and borrowings
      available under our agreements with Laurus, will be sufficient to meet our
      cash
      requirements for the remainder of calendar 2005. The Company has
      taken
      steps both to
      reduce inventory
      and to more
      actively pursue the collection of outstanding accounts
      receivable . The Company also intends
      to continue to monitor its cost levels,
      and where appropriate, make further reductions in
      general and administrative expenses. In addition, the Company anticipates the
      continued growth in sales of its professional and enterprise solution products,
      which generate higher gross margins as compared to sales of the Company’s retail
      products. These steps may result
      in an improved financial condition in future periods ,
      including increased cash balances available to fund the Company’s
      operations . However,
      there can be
      no assurance that the Company will be profitable in any future
      period or
      successful in its cash management plans .






**Item
      3. Controls and Procedures.**




Nazzareno
      Paciotti, our Chief Executive and Chief Financial Officer has concluded, based
      on his evaluation as of September
      30, 2005,
      that our disclosure controls and procedures are effective to reasonably 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.




There
      were no significant changes in our internal controls over financial reporting
      that occurred during our first fiscal quarter that has materially affected,
      or
      is reasonably likely to materially affect, our internal control over financial
      reporting.




**PART
      II. OTHER INFORMATION**




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**




In
      July,
      2005 the Company issued options to purchase an aggregate of 580,000 shares
      of
      common stock at a price of $.85 per share to a consultant and four employees
      of
      the Company. The transactions were exempt from registration under Section 4(2)
      of the Securities Act.











15





Item
      6. Exhibits.




Number
            
            Description31
            
            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. 1350.











16





**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
                14,2005
            By:/s/
                Nazzareno E. PaciottiName:
                Nazzareno E. Paciotti
              Title:
                Chief Financial Officer








17





**EXHIBIT
        INDEX**





Number
              
              Description31
              
              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. 1350.
 
 18