SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For The Quarterly Period Ended September 30, 2005


                           Commission File No. 0-29804


                          SecureCARE Technologies, Inc.
               --------------------------------------------------
               (Exact name of registrant as specified in charter)


                                     Nevada
            --------------------------------------------------------
            (State or jurisdiction of incorporation or organization)


                                   82-0255758
                      ------------------------------------
                      (I.R.S. Employer Identification No.)


               3001 Bee Caves Road, Suite 150, Austin Texas 78746
               --------------------------------------------------
                    (Address of principal executive offices)


                                 (512) 439-3900
                ------------------------------------------------
                (Issuer's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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

         Indicate by check mark whether the registrant is a shell company (as
defined by Rule 12b-2 of the Exchange Act)
                                                                  Yes [ ] No [X]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

As of October 31, 2005, there were 20,004,000 shares of Common Stock, $.001 par
value of the registrant issued and outstanding.

Transitional Small Business Disclosure Format (check one) YES [ ] NO [X]

<PAGE>

                          SECURECARE TECHNOLOGIES, INC.
                                   FORM 10-QSB
                                    CONTENTS


                                                                        Page No.
                                                                        --------
PART I          FINANCIAL INFORMATION

      Item 1.   Financial Statements

                Balance Sheets at September 30, 2005(unaudited) and
                December 31, 2004                                            2

                Statements of Operations (unaudited) for the three months
                ended September 30, 2005 and 2004                            3

                Statements of Operations (unaudited) for the nine months
                ended September 30, 2005 and 2004                            4

                Statements of Cash Flows (unaudited) for the nine months
                ended September 30, 2005 and 2004                            5

                Notes to Interim Financial Statements (unaudited)            6

      Item 2.   Management's Discussion and Analysis of Financial
                Condition and Results of Operations                         11

      Item 3.   Controls and Procedures                                     15


PART II         OTHER INFORMATION

      Item 1.   Legal Proceedings                                           16

      Item 2.   Changes in Securities and Use of Proceeds                   16

      Item 3.   Defaults Upon Senior Securities                             16

      Item 4.   Submission of Matters to a Vote of Security Holders         16

      Item 5.   Other Information                                           16

      Item 6.   Exhibits and Reports on Form 8-K                            16


SIGNATURES                                                                  17

CERTIFICATIONS                                                              18

                                        1
<PAGE>
<TABLE>
<CAPTION>

                          SECURECARE TECHNOLOGIES, INC.
                                 BALANCE SHEETS
              September 30, 2005 (unaudited) and December 31, 2004

                                     ASSETS
                                     ------
                                                                                   2005
                                                                               (Unaudited)         2004
                                                                               ------------    ------------

<S>                                                                            <C>             <C>
Current assets
  Cash and cash equivalents                                                    $     34,108    $     50,847
  Accounts receivable - trade, net of allowance for doubtful
  accounts of $11,000                                                                54,486          25,537
  Deposits - current portion                                                         62,358              --
  Prepaid expenses                                                                       --          26,513
                                                                               ------------    ------------
         Total current assets                                                       150,952         102,897

Property and equipment, net of accumulated depreciation of
  $340,115 and $283,076, respectively                                               115,196         172,236
Deferred financing fees, net of accumulated amortization of
  $70,035 and $40,949, respectively                                                  14,511          43,597
Deposits                                                                             68,211         130,568
                                                                               ------------    ------------

         Total assets                                                          $    348,870    $    449,298
                                                                               ============    ============

                      LIABILITIES AND SHAREHOLDERS' DEFICIT
                      -------------------------------------

Current Liabilities
  Current portion of notes payable, including $108,898 and
    $27,224 to a related party, respectively, net of debt
    discount of $10,833 and $5,000, respectively                               $  1,181,565    $    122,224
  Accounts payable - trade                                                          190,885          96,732
  Accrued payroll tax liabilities                                                   142,301          47,444
  Deferred revenue                                                                   19,669              --
  Other accrued liabilities                                                         214,541          83,045
                                                                               ------------    ------------
         Total current liabilities                                                1,748,961         349,445

Notes payable, less current portion including $435,592 and
  $517,266 to related parties, respectively, net of debt
  discount of $4,866 and $30,333, respectively                                      480,726       1,006,933

Commitments and contingencies

Shareholders' deficit
  Preferred stock - $0.001 par value; 15,000,000 shares authorized:
    Series A preferred stock - 1,955,000 shares issued and outstanding
       (liquidation preference of $1.00 per share)                                    1,955           1,955
    Series B preferred stock - 1,427,273 and 181,818 shares issued
       and outstanding (liquidation preference of $1.10 per share)                    1,427             182
    Common stock - $0.001 par value;  50,000,000 shares authorized,
       20,004,000 shares issued and outstanding                                      20,004          20,004
    Additional paid-in capital                                                   12,572,142      10,945,695
    Receivable for the purchase of equity                                            (2,000)         (2,000)
    Accumulated deficit                                                         (14,474,345)    (11,872,916)
                                                                               ------------    ------------
         Total shareholders' deficit                                             (1,880,817)       (907,080)
                                                                               ------------    ------------

         Total liabilities and shareholders' deficit                           $    348,870    $    449,298
                                                                               ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       2
<PAGE>
<TABLE>
<CAPTION>

                          SECURECARE TECHNOLOGIES, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
               For the Three Months Ended September, 2005 and 2004

                                                                         2005           2004
                                                                     ------------   ------------
<S>                                                                  <C>            <C>
Revenues                                                             $    108,774   $     65,462

Operating expenses
   Cost of revenues                                                       203,926        131,225
   Selling, general and administrative                                    699,899        476,850
                                                                     ------------   ------------

   Operating loss                                                        (795,051)      (542,613)

Other income (expense)
   Gain on debt settlement                                                     --         14,662
   Interest expense (including $6,644 and $4,430 to a
     related party, respectively)                                         (74,713)       (37,838)
                                                                     ------------   ------------

   Net loss                                                          $   (869,764)  $   (565,789)
                                                                     ============   ============
Net loss per common share -
   basic and diluted                                                 $      (0.04)  $      (0.03)
                                                                     ============   ============
Weighted average number of common shares outstanding -
   basic and diluted                                                   20,004,000     19,734,725
                                                                     ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                          SECURECARE TECHNOLOGIES, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
              For the Nine Months Ended September 30, 2005 and 2004

                                                                         2005           2004
                                                                     ------------   ------------
<S>                                                                  <C>            <C>
Revenues                                                             $    266,878   $    151,434

Operating expenses
   Cost of revenues                                                       640,489        316,395
   Selling, general and administrative                                  1,871,203      1,156,365
                                                                     ------------   ------------

   Operating loss                                                      (2,244,814)    (1,321,326)

Other income (expense)
   Gain on debt settlement                                                     --         14,662
   Other                                                                       --          8,494
   Interest expense (including $19,933 and $4,430 to a
     related party, repsectively)                                        (151,851)       (97,455)
                                                                     ------------   ------------

   Net loss                                                            (2,396,665)    (1,395,625)
   Deemed dividend upon issuance of convertible preferred stock          (204,765)            --
                                                                     ------------   ------------

  Net loss available to common shareholders                          $ (2,601,430)  $ (1,395,625)
                                                                     ============   ============
Net loss per common share -
  basic and diluted                                                  $      (0.13)  $      (0.07)
                                                                     ============   ============
Weighted average number of common shares outstanding -
  basic and diluted                                                    20,004,000     19,528,601
                                                                     ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>

                          SECURECARE TECHNOLOGIES, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
              For the Nine months ended September 30, 2005 and 2004

                                                               2005           2004
                                                           ------------   ------------
<S>                                                        <C>            <C>
Cash flows from operating activities
    Net (loss)                                             $ (2,396,664)  $ (1,395,625)
    Adjustments to reconcile net loss to net cash used
      in operating activities:
       Depreciation and amortization                             57,040          2,717
       Bad debt expense                                          29,045          4,200
       Common stock issued for directors compensation                --          2,850
       Amortization of deferred compensation                      2,867         50,945
       Amortization of deferred financing fees                   29,086         28,809
       Amortization of debt discount                             24,500         15,167
       Other non-cash interest expense                           23,187             --
    Increases and decreases in working capital accounts:
       Accounts receivable - trade                              (57,994)       (26,648)
       Prepaid expenses                                          26,513             --
       Other current assets                                          (1)       (40,227)
       Deferred financing fees                                       --        (71,975)
       Other assets                                                  --          5,851
       Deferred revenue                                          19,669             --
       Accounts payable - trade                                  94,153        (91,944)
       Accrued liabilities                                      230,166        (23,257)
                                                           ------------   ------------
            Cash used in operating activities                (1,918,433)    (1,539,137)

Cash flows from investing activities
    Purchases of property and equipment                              --         (2,484)
    Capitalization of product development                            --       (110,000)
                                                           ------------   ------------
            Cash used in investing activities                        --       (112,484)

Cash flows from financing activities
    Borrowings on notes payable                                 600,000        594,800
    Payments on notes payable                                   (36,500)      (140,800)
    Capital contribution                                        100,000             --
    Proceeds from issuance of preferred stock                 1,238,194      1,713,615
                                                           ------------   ------------
       Cash provided by financing activities                  1,901,694      2,167,615

Net increase (decrease) in cash and cash equivalents            (16,739)       515,994

Cash and cash equivalents, beginning of period                   50,847          2,500
                                                           ------------   ------------

Cash and cash equivalents, end of period                   $     34,108   $    518,494
                                                           ============   ============
</TABLE>

                                       5
<PAGE>

                          SECURECARE TECHNOLOGIES, INC.
                NOTES TO INTERIM FINANCIAL STATEMENTS (Unaudited)

NOTE 1.  NATURE OF OPERATIONS

SecureCARE Technologies, Inc. (the Company or SCTI), formerly eClickMD, Inc.,
was originally incorporated in Idaho in 1961. During 1998, the Company changed
its domicile to the State of Nevada and is now a Nevada Corporation.

The Company provides Internet-based document exchange and e-signature solutions
for the healthcare industry. The Company's customers include physicians, clinics
and home healthcare, hospice and durable medical equipment providers.
SecureCARE's technology eliminates paper, while enhancing the physicians ability
to capture fees for otherwise unbilled time and services, uniquely and directly
impacting the physicians revenue. SecureCARE.net is a secure, HIPAA-ready
(Health Insurance and Portability Act) tracking and reporting tool that
streamlines operations while providing physicians with additional revenue
opportunities. The Company markets its services to customers throughout the
United States, currently operating from its Austin, Texas-based corporate
headquarters.

BASIS OF PRESENTATION

The unaudited financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and in accordance with the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
financial information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Results of operations for the
nine-month period ended September 30, 2005, are not necessarily indicative of
the results that may be expected for the year ending December 31, 2005.

These financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2004.

GOING CONCERN

The financial statements for the nine months ended September 30, 2005 were
prepared on the assumption that the Company will continue as a going concern.
The Company sustained a net loss of $2,396,665 for the nine months ended
September 30, 2005. The Company has accumulated losses through September 30,
2005 of $14,474,345. Cash used in operating activities for the nine-month period
ended September 30, 2005 totaled $1,918,433. Total liabilities at September 30,
2005 of $2,229,687 exceed total assets of $348,870. The Company's continued
existence depends upon the success of management's efforts to raise additional
capital necessary to meet the Company's obligations as they come due, and to
obtain sufficient capital to execute its business plan. The Company intends to
obtain capital primarily through issuances of debt or equity. There can be no
degree of assurance that the Company will be successful in completing additional
financing transactions. Failure to generate additional revenues, raise
additional capital or manage discretionary spending will have a material adverse
effect on the Company's ability to continue as a going concern and to achieve
its intended business objectives. The accompanying unaudited financial
statements do not include any adjustments to reflect the possible effects on the
recoverability and classification of assets or classification of liabilities
which may result from the inability of the Company to continue as a going
concern.

NOTE 2.  SUMMARY OF SIGNFICANT ACCOUNTING PRINCIPLES

REVENUE RECOGNITION

The Company derives its revenues from the following home healthcare provider
sources - recurring monthly service and maintenance fees, one-time training and
set-up fees and integration and customization services as contracted. The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
104, Revenue Recognition (SAB 104). SAB 104 generally requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred or services have been
rendered; (3) the fee is fixed and determinable; and (4) collectibility is
reasonably assured. Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the fee charged for
services rendered and the collectibility of those fees. Should changes in
conditions cause management to determine these criteria are not met for certain
sales, revenue recognized for any reporting period could be adversely affected.
In instances when any one of the four criteria is not met, the Company will
either defer recognition of the monthly service fees until the criteria are met
or will recognize the recurring monthly service fees on a ratable basis.
Recognition of revenue resulting from one-time training and set up fees, which
is billed upfront, is deferred and amortized over the life of the corresponding
arrangements and is included in deferred revenue in the accompanying financial
statements.

SOFTWARE AND SOFTWARE DEVELOPMENT COSTS

The Company capitalizes costs related to computer software developed or obtained
for internal use in accordance with the American Institute of Certified Public
Accountants Statement of Position (SOP) 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" and depreciates these
costs using the straight-line method over the estimated useful life of the
software, generally two to three years. SOP 98-1 provides guidance on
determining whether computer software is internal-use software and guidance on
accounting for proceeds of computer software originally developed or obtained
for internal use and then subsequently sold to the public. It also provides

                                       6
<PAGE>

guidance on capitalization of the costs incurred for computer software developed
or obtained for internal use.

LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to the undiscounted future net
cash flows expected to be generated by the asset. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the net asset exceeds the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less costs to sell.

STOCK-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees", and complies with the disclosure
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" as amended
by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure -- an Amendment of FASB Statement No. 123". Under APB Opinion No. 25,
compensation expense for employees is based on the excess, if any, on the date
of grant, between the fair value of the Company's stock over the exercise price.

Had the Company determined compensation based on the fair value at the grant
date for its stock options under SFAS No. 123, as amended by SFAS No. 148, net
loss, and loss per share would have been changed, as indicated below:
<TABLE>
<CAPTION>

                                                       Nine months     Nine months    Three months    Three months
                                                          ended           ended           ended           ended
                                                      September 30,   September 30,   September 30,   September 30,
                                                          2005            2004            2005            2004
                                                      -------------   -------------   -------------   -------------
<S>                                                   <C>             <C>             <C>             <C>
Net loss attributable to common stockholders,
  as reported                                         $  (2,601,430)  $  (1,395,625)  $    (869,764)  $    (565,789)
Add: Stock-based employee compensation
  expense included in reported in net loss                    2,867          53,795           2,867          10,848
Deduct: Stock-based employee compensation expense
  determined under fair value based method                 (485,510)        (53,795)       (151,997)        (10,848)
                                                      -------------   -------------   -------------   -------------
Pro forma net loss -- attributable to
  common shareholders                                 $  (3,084,073)  $  (1,395,625)  $  (1,018,894)  $    (565,789)
                                                      =============   =============   =============   =============
Net loss per share

  Basic and diluted:
  As reported                                         $        (.13)  $        (.07)  $        (.04)  $       (0.03)
                                                      =============   =============   =============   =============
  Pro forma                                           $        (.15)  $        (.07)  $        (.05)  $       (0.03)
                                                      =============   =============   =============   =============
</TABLE>

Compensation cost is reflected over the options' vesting period of 2 years with
the exception of stock options granted to directors totaling 200,000 options of
which 50% vest immediately and 50% vest one year from the grant date.

The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of SFAS No. 123, as amended, and Emerging Issues
Task Force (EITF) Issue No. 96-18, "Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services". All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. The measurement
date of the fair value of the equity instrument issued is the earlier of the
date on which the counterparty's performance is complete or the date on which it
is probable that performance will occur.

COMMITMENTS AND CONTINGENCIES

On April 7, 2005 a lawsuit was filed by Norman K. Best, a former officer of the
Company, against SecureCARE Technologies, Inc. The lawsuit is identified as
cause number GN501073 and was filed in the 353rd Judicial District Court of
Travis County, Texas as "Norman K. Best versus SecureCARE Technologies, Inc."
The lawsuit alleges that the Company breached the terms of its agreements with
Mr. Best by failing to tender 50,000 shares of common stock of SecureCARE
Technologies, Inc. which were granted to him. The Company responded to this
lawsuit on May 13, 2005, by filing a general denial, denying all the allegations
raised by the Plaintiff. On July 8, 2005, the Company filed a series of
responses to the plaintiff's request for admission. Although no loss can be
estimated in regard to this lawsuit we do not believe that the outcome of this
matter will have a material effect on our financial position, operating results
or cash flows. However, there can be no assurance that this legal proceeding
will not have a material impact.

                                       7
<PAGE>

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the Financial Statements and the reported amount of
revenues and expenses during the reporting period. The Company's most
significant estimates relate to revenue recognition, capitalization of software
development costs, assessing impairment, and depreciation of fixed assets.
Actual results could differ from these estimates.

NOTE 3. NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
123(R), "Share-Based Payment," which is a revision of SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion 25, "Accounting for Stock
Issued to Employees". SFAS 123R focuses primarily on share-based payments for
employee services, requiring these payments to be recorded using a
fair-value-based method. The use of APB 25's intrinsic value method of
accounting for employee stock options will no longer be allowed. As a result,
the fair value of stock options granted to employees in the future will be
required to be expensed. The impact on the results of operations of the Company
will be dependent on the number of options granted and the fair value of those
options. The Company will adopt FASB 123R effective January 1, 2006 using the
modified prospective method.

The Company is evaluating the impact of adopting SFAS 123R and expects that it
will record substantial non-cash stock compensation expenses. The adoption of
SFAS 123R is not expected to have a significant effect on the Company's
financial condition or cash flows but is expected to have a significant effect
on the Company's results of operations. The future impact of the adoption of
SFAS 123R cannot be predicted at this time because it will depend on the levels
of share-based payments granted by the Company in the future. However, had the
Company adopted SFAS 123R in prior periods, the impact of the standard would
have approximated the impact of SFAS 123 as described in the pro forma net loss
attributable to common shareholders included in the Stock-Based Compensation
policy footnote.

                                       8
<PAGE>

NOTE 4. NOTES PAYABLE

Notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                               September 30,                 December 31,
                                                                                   2005                          2004
                                                                        --------------------------    --------------------------
                                                                        Short Term      Long Term      Short Term     Long Term
<S>                                                                     <C>            <C>            <C>            <C>
  Note payable to related party bearing interest at 5%,
       matures September 30, 2009, secured by a security
       interest in the assets and intellectual property
       of the Company; interest payments only commence
       September 1, 2004; principal and interest payments
       commence October 1, 2005                                         $   108,898    $   435,592    $    27,224    $   517,266

  Note payable to Phoebe Holdings, Inc. at 7.5%,
       principal and interest due May 1, 2005, unsecured                     63,500             --        100,000             --

  Note payable to investors bearing interest at 10%
       principal and interest due November 27, 2005, unsecured               50,000             --             --             --

  Note payable to investors bearing interest at 12%
       principal and interest due October 28, 2005, unsecured                75,000             --             --             --

  Note payable to investors bearing interest at 12%
       principal and interest due October 29, 2005, unsecured               150,000             --             --             --

  Note payable to investors bearing interest at 12%
       principal and interest due December 2,  2005, unsecured              125,000             --             --             --

  Note payable to investors bearing interest at 12%
       principal and interest due December 4,  2005, unsecured               50,000             --             --             --

  Note payable to investors bearing interest at 12%
       principal and interest due December 15,  2005, unsecured              50,000             --             --             --

  Note payable to investors bearing interest at 7.5%
       principal and interest due February 13, 2006, unsecured              220,000             --             --        220,000

  Note payable to investors bearing interest at 7.5%
       principal and interest due March 2, 2006, unsecured                  150,000             --             --        150,000

  Note payable to investors bearing interest at 7.5%
       principal and interest due March 9, 2006, unsecured                  150,000             --             --        150,000

Convertible bridge note payable bearing interest at 12%
       Principal and interest due October 31, 2006, unsecured                    --         50,000             --             --
                                                                        -----------    -----------    -----------    -----------

                                                                          1,192,398        485,592        127,224      1,037,266

       Less: unamortized debt discount                                      (10,833)        (4,866)        (5,000)       (30,333)
                                                                        -----------    -----------    -----------    -----------
       Total notes payable                                              $ 1,181,565    $   480,726    $   122,224    $ 1,006,933
                                                                        ===========    ===========    ===========    ===========
</TABLE>

During February and March 2004, in conjunction with the 7.5% senior subordinated
notes payable to investors, the Company issued 520,000 shares of common stock.
These shares were valued at $0.10 per share resulting in a total fair value of
$52,000. This amount was recorded as debt discount and is being amortized as a
component of interest expense over the life of the notes (two-years).

In November 2004, in conjunction with the 7.5% senior subordinated note payable
to Phoebe Holdings, Inc., the Company issued 50,000 shares of common stock.
These shares were valued at $0.15 per share resulting in a total fair value of
$7,500. This amount was recorded as debt discount and was amortized as a
component of interest expense over the life of the note (six months).

On July 27, 2005, the Company issued a 60 day note payable to an investor,
bearing interest at 10%; effective November 8, 2005, the investor agreed to
extend the note an additional 60 days to November 27, 2005.

In September 2005, in conjunction with the 12% convertible bridge notes payable
issued pursuant to agreement with Argilus Capital Partners, the Company issued
10,000 warrants to purchase one share of common stock at a price equal to the
lesser of 75% of the per share purchase price on the closing date or $0.75 per
share. These warrants were valued at $0.487 per warrant resulting in a total
fair value of $4,866. This amount was recorded as a debt discount and is being
amortized as a component of interest expense over the life of the note (thirteen
months). Future maturities of notes payable at September 30, 2005 are as
follows:

                                       9
<PAGE>

          2006               $  1,192,398
          2007                    158,898
          2008                    108,898
          2009                    108,898
          2010                    108,898
                             ------------
         Total               $  1,677,990
                             ============

NOTE 5.  DEFERRED FINANCING FEES

Deferred financing fees related to the notes payable to investors are amortized
on a straight-line basis over the term of the related notes payable which is two
years.

NOTE 6. SHAREHOLDERS' DEFICIT

From January 1, 2005 through September 30, 2005, and pursuant to a Consulting
Agreement with a related party, Gryphon Financial Securities Corporation, Inc.
(the Placement Agent), the Company received funds through a private placement
(the Placement). The Company issued an aggregate of 1,245,455 shares of Series B
preferred stock, with a $1.10 per share stated value, initially convertible into
one share of the Company's common stock, par value $.001 per share, for net
proceeds of approximately $1,238,000. The Placement Agent and the investors in
the financing received warrants to purchase an aggregate of 281,818 shares of
common stock at an exercise price of $1.25 per share for each $5.00 of Series B
preferred stock purchased, with 32,727 warrants issued to the Placement Agent
and 249,091 warrants issued to the investors. These warrants expire in January
through June of 2010. After allocating a portion of the net proceeds received to
the fair value of the warrants received, it was determined that a beneficial
conversion feature existed to the purchasers of the Series B preferred stock at
the time of issuance. Accordingly, a beneficial conversion amount totaling
$204,765 was recorded as a deemed dividend since the Series B preferred stock
was immediately convertible into shares of the Company's common stock.

The holders of the Series B preferred stock are entitled to vote upon all
matters upon which holders of the common stock have the right to vote, and shall
be entitled to the number of votes equal to the largest number of full shares of
common stock into which the shares of preferred stock, pursuant to certain
conversion and anti-dilution rights, could be converted on the appropriate
record date. The holders of the Company's Series B preferred stock are not
entitled to receive any dividends. In the event of a liquidation, dissolution or
winding-up of the Company, either voluntary or involuntary, the holders of the
shares of the Company's Series A preferred stock and the Series B preferred
stock then issued and outstanding are entitled to be paid out of the assets of
the Company available for distribution to its shareholders on a pari passu
basis, before any payment is made to the holders of shares of common stock or
upon any other series of preferred stock of the Company that is junior to the
Series A preferred stock and the Series B preferred stock, an amount per share
equal to the stated value.

On September 16, 2005, in order to provide immediate working capital of $100,000
to the Company, the Company structured a special terms agreement with Gryphon
Opportunities Fund, I LLC ("Gryphon"), the majority shareholder of the Company,
and four outside investors in which these investors would immediately contribute
$100,000 to the Company. In return, Gryphon agreed to contribute 303,031
outstanding common shares to be purchased by these four investors at a purchase
price equal to 50% of the closing price of the Company's common stock on that
day, which was quoted on the NASD Over the Counter Bulletin Board, at $0.66. In
addition, each investor received warrants to purchase common stock, also issued
by Gryphon, equal to the number of shares purchased. These warrants have an
exercise price of $1.50 per share and a five-year life. This offering was
initially limited to $100,000, with a total issuance by Gryphon of 303,031
common stock shares and 303,031 warrants to purchase common stock. The Company
recognized a total capital contribution from Gryphon of $100,000.

On September 26, 2005, the holder of a 30-day, $50,000 promissory note agreed to
convert the principle, accrued interest and late fees, totaling $53,183 into
110,000 shares of the Company's common stock. Gryphon Opportunities Fund I, LLC,
a majority shareholder of the Company, contributed 110,000 shares of common
stock to Company, at $0.70 cents per share, effecting a $77,000 capital
contribution. The exchange of the note, totaling $53,193 in principle, accrued
interest and penalties, into 110,000 shares of common stock of the Company,
resulted in the Company's recognition of a deemed interest expense of $23,188.

                                       10
<PAGE>

ITEM 2. MANGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

                           Forward Looking Statements

This Quarterly Report on Form 10-QSB contains "forward-looking" statements as
such term is defined in the Private Securities Litigation Reform Act of 1995 and
information relating to the Company that are based on the beliefs of the
Company's management as well as assumptions made by and information currently
available to the Company's management. When used in this report, the words
"anticipate," "believe," "estimate," "expect" and "intend" and words or phrases
of similar import, as they relate to the Company or Company management, are
intended to identify forward-looking statements. Such statements reflect the
current risks, uncertainties and assumptions related to certain factors
including, without limitations, competitive factors, general economic
conditions, customer relations, relationships with vendors, the interest rate
environment, governmental regulation and supervision, seasonality, distribution
networks, product introductions and acceptance, technological change, changes in
industry practices, onetime events and other factors described herein and in
other filings made by the company with the Securities and Exchange Commission.
Based upon changing conditions, should any one or more of these risks or
uncertainties materialize, or should any underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

OVERVIEW

Management believes that the Company is the leading provider of Internet-based
document exchange and e-signature solutions for the healthcare industry. Built
with state-of-the art development tools from the Microsoft dotNET development
solutions, SecureCARE.net is tailored to the needs of physicians, clinics and
home healthcare, hospice and durable medical equipment providers. These
end-to-end solutions offer a revolutionary approach to accessing information and
managing time-consuming forms and authorizations. SecureCARE's easy to use
technology eliminates paper, while enhancing the physicians ability to capture
fees for otherwise unbilled time and services, uniquely and directly impacting
the physicians revenue. SecureCARE.net is a highly secure, HIPAA-ready tracking
and reporting tool that streamlines operations while providing physicians with
additional revenue opportunities. The Company markets its services to customers
throughout the United States, currently operating from its Austin, Texas-based
corporate headquarters.

The Company intends to utilize the Internet to provide browser initiated
healthcare document exchange and e-signature solutions that facilitate the
confidential, on-line exchange of healthcare information for many participants
in the healthcare industry. Based on the technology and products in place, other
applications can be developed that will enhance the Company's position in both
the physician's office, home health agencies, and other providers such as
nursing homes, pharmacies, durable medical equipment providers, and information
sites. These services using Internet technology in the healthcare industry are
subject to risks, including but not limited to those associated with competition
from existing companies offering similar services, rapid technological change,
development risks, management of growth and a minimal previous record of
operations or earnings.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

The discussion and analysis of our financial condition and results of operations
are based on our unaudited financial statements, which have been prepared
according to U.S. generally accepted accounting principles. In preparing these
financial statements, we are required to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses and
related disclosures of contingent assets and liabilities. We evaluate these
estimates on an on-going basis. We base these estimates on historical experience
and on various other assumptions that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities. Actual results may differ from
these estimates under different assumptions or conditions. We consider the
following accounting policies to be the most important to the portrayal of our
financial condition and that require the most subjective judgment.

REVENUE RECOGNITION

The Company derives its revenues from the following home healthcare provider
sources - recurring monthly service and maintenance fees, one-time training and
set-up fees and integration and customization services as contracted. The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
104, Revenue Recognition (SAB 104). SAB 104 generally requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred or services have been
rendered; (3) the fee is fixed and determinable; and (4) collectibility is
reasonably assured. Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the fee charged for
services rendered and the collectibility of those fees. Should changes in
conditions cause management to determine these criteria are not met for certain
sales, revenue recognized for any reporting period could be adversely affected.
In instances when any one of the four criteria is not met, the Company will
either defer recognition of the monthly service fees until the criteria are met
or will recognize the recurring monthly service fees on a ratable basis.
Recognition of revenue resulting from one-time training and set up fees, which
are billed upfront, is deferred and amortized over the life of the corresponding
arrangements and is included in deferred revenue in the accompanying financial
statements.

                                       11
<PAGE>

SOFTWARE AND SOFTWARE DEVELOPMENT COSTS

The Company capitalizes costs related to computer software developed or obtained
for internal use in accordance with the American Institute of Certified Public
Accountants Statement of Position (SOP) 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" and depreciates these
costs using the straight-line method over the estimated useful life of the
software, generally two to three years. SOP 98-1 provides guidance on
determining whether computer software is internal-use software and guidance on
accounting for proceeds of computer software originally developed or obtained
for internal use and then subsequently sold to the public. It also provides
guidance on capitalization of the costs incurred for computer software developed
or obtained for internal use.

LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to the undiscounted future net
cash flows expected to be generated by the asset. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the net asset exceeds the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less costs to sell.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS 123(R), "Share-Based Payment," which is a
revision of SFAS 123 "Accounting for Stock-Based Compensation" and supersedes
APB Opinion 25, "Accounting for Stock Issued to Employees". SFAS 123(R) focuses
primarily on share-based payments for employee services, requiring these
payments to be recorded using a fair-value-based method. The use of APB 25's
intrinsic value method of accounting for employee stock options will no longer
be allowed. As a result, the fair value of stock options granted to employees in
the future will be required to be expensed. The impact on the results of
operations of the Company will be dependent on the number of options granted and
the fair value of those options. The Company will adopt FASB 123R effective
January 1, 2006 using the modified prospective method.

The Company is evaluating the impact of adopting SFAS 123R and expects that it
will record substantial non-cash stock compensation expenses. The adoption of
SFAS 123R is not expected to have a significant effect on the Company's
financial condition or cash flows but is expected to have a significant effect
on the Company's results of operations. The future impact of the adoption of
SFAS 123R cannot be predicted at this time because it will depend on the levels
of share-based payments granted by the Company in the future. However, had the
Company adopted SFAS 123R in prior periods, the impact of the standard would
have approximated the impact of SFAS 123 as described in the pro forma net loss
attributable to common shareholders included in the Stock-Based Compensation
policy footnote.

RESULTS OF OPERATIONS

Three months ended September 30, 2005 compared to three months ended September
30, 2004

Revenues for the three months ended September 30, 2005 were $108,774 compared to
$65,462 for the three months ended September 30, 2004. This 66 percent increase
in revenue reflects a significant return on the investments the Company made in
the latter part of 2004 and in 2005 to expand its sales-force and its related
sales and marketing activities. This strong marketplace momentum is reflected in
the Company's signed and billable home healthcare provider locations, totaling
136 locations at the end of September 2005.

Management believes that revenues will grow significantly over the next twelve
to eighteen months if the Company is able to raise the additional capital
required to execute its marketing and sales strategy.

Costs of revenues were $203,926 for the three months ended September 30, 2005
compared to $131,225 for the three months ended September 30, 2004. This 55%
increase in cost of revenues was primarily attributable to increased operating
lease expense and higher amortization expense. In February 2005, the Company
entered into an operating lease for hardware and related software to upgrade its
entire production application and corporate infrastructure. This resulted in an
increase in operating lease expense of approximately $49,000. Also, in February,
2005, the Company completed development of approximately $170,000 in internal
use software, resulting in an increase in amortization expense in 2005 of
$21,250.

Selling, general and administrative expenses were $699,899 for the three months
ended September 30, 2005 compared to $476,850 for the three months ended
September 30, 2004. This 47% increase in expenses was primarily attributable to
an increase in headcount and overall salaries for the three-month period,
resulting in higher payroll, payroll-related, employee benefit and recruiting
expenses for the quarter of approximately $166,000. With an increased active
customer base, an expanded sales and marketing strategy, and successful
fundraising, the Company increased the employee total to position the Company to
accomplish management's objectives. In the third quarter of 2005, the Company
incurred approximately $45,000 in penalties and interest that were assessed on
payroll taxes owed. Financial consulting expenses increased approximately

                                       12
<PAGE>

$18,000, primarily due to placement agent and financial advisory fees incurred
in 2005 and the Company's investor relations program that commenced in August,
2004. Other corporate general and administrative expenses, including building
rent, bad debt expense and insurance expenses increased $62,000 in 2005.
Partially offsetting these higher expenses were lower legal and related fees of
$26,000, lower stock compensation expense of $11,000, lower software consulting
expenses of $11,000 and lower stock transfer agent fees of $6,400. In addition,
travel and entertainment expenses and employee-related computer costs were
$8,000 lower in 2005.

Management expects that operating expenses will increase over the next twelve to
eighteen months if the Company is able to raise the additional capital required
to make the necessary investments in technology enhancements and in its planned
marketing, sales and support programs.

Interest expense for the three months ended September 30, 2005 was $74,713
compared to $37,839 in 2004, primarily due to a higher debt load in 2005. This
resulted in higher interest expense of approximately $17,000. In addition, On
September 26, 2005, the holder of a 30-day, $50,000 promissory note agreed to
convert the principle, accrued interest and late fees, totaling $53,183 into
110,000 shares of the Company's common stock. Gryphon Opportunities Fund I, LLC,
a majority shareholder of the Company, contributed 110,000 shares of common
stock to Company, at $0.70 cents per share, effecting a $77,000 capital
contribution. The exchange of the note, totaling $53,193 in principle, accrued
interest and penalties, into 110,000 shares of common stock of the Company,
resulted in the Company's recognition of a deemed interest expense of $23,188.

Nine months ended September 30, 2005 compared to nine months ended September 30,
2004

Revenues for the nine months ended September 30, 2005 were $266,878 compared to
$151,434 for the nine months ended September 30, 2004. This 76 percent increase
in sales reflects a significant return on the investments the Company made in
the latter part of 2004 and in 2005 to expand its sales-force and its related
sales and marketing activities. This strong marketplace momentum is reflected in
the Company's signed and billable home healthcare provider locations, totaling
136 locations at the end of September 2005. In April through September of 2005
the Company billed $25,757 in up-front, one-time training and set up fees,
recognizing revenue of $6,088 and deferring revenue of $19,669 to be amortized
over the life of the corresponding arrangements.

Management believes that revenues will grow significantly over the next twelve
to eighteen months if the Company is able to raise the additional capital
required to execute its marketing and sales strategy.

Costs of revenues were $640,489 for the nine months ended September 30, 2005
compared to $316,395 for the nine months ended September 30, 2004. This 102%
increase in cost of revenues was primarily attributable to an increase in
headcount in the technology and customer support departments, resulting in
higher payroll, payroll-related and employee benefits expense for the period of
approximately $141,000. These investments were made in order to complete the
initial development and on-going enhancements and maintenance of the Company's
SecureCARE.net application, and to increase the resources deployed within
customer support and training to support significant revenue growth during the
period. In February 2005, the Company entered into an operating lease for
hardware and related software to upgrade its entire production application and
corporate infrastructure. This resulted in an increase in operating lease
expense of approximately $131,000. Also, in February, 2005, the Company
completed development of $170,000 in internal use software, resulting in an
increase in amortization expense in 2005 of $56,000.

Selling, general and administrative expenses were $1,871,203 for the nine months
ended September 30, 2005 compared to $1,156,365 for the nine months ended
September 30, 2004. This 62% increase in expenses was primarily attributable to
an increase in headcount and overall salaries for the six-month period,
resulting in higher payroll, payroll-related, employee benefit and recruiting
expenses for the period of approximately $495,000. With an increased active
customer base, an expanded sales and marketing strategy, and successful
fundraising, the Company increased the employee total to position the Company to
accomplish management's objectives. The expanded sales force and aggressive
marketing strategy attributed to higher marketing and travel and business
development expenses of approximately $42,000 and $56,000, respectively in 2005.
Financial consulting expenses increased approximately $53,000, primarily due to
placement agent and financial advisory fees incurred in 2005 and the Company's
investor relations program that commenced in August, 2004. In the third quarter
of 2005, the Company incurred approximately $45,000 in penalties and interest
that were assessed on payroll taxes owed. Other corporate general and
administrative expenses, including building rent, bad debt expense and insurance
expenses increased $165,000 in 2005. Partially offsetting these higher expenses
were lower stock compensation expense of $54,000, lower legal and related fees
of $53,000 and lower software consulting expenses of $11,000.

Management expects that operating expenses will increase over the next twelve to
eighteen months if the Company is able to raise the additional capital required
to make the necessary investments in technology enhancements and in its planned
marketing, sales and support programs.

Interest expense for the nine months ended September 30, 2005 was $151,851
compared to $97,455 in 2004, primarily due to a higher debt load in 2005. This
resulted in higher interest expense of approximately $12,000. In addition, On
September 26, 2005, the holder of a 30-day, $50,000 promissory note agreed to
convert the principle, accrued interest and late fees, totaling $53,183 into
110,000 shares of the Company's common stock. Gryphon Opportunities Fund I, LLC,
a majority shareholder of the Company, contributed 110,000 shares of common
stock to Company, at $0.70 cents per share, effecting a $77,000 capital
contribution. The exchange of the note, totaling $53,193 in principle, accrued
interest and penalties, into 110,000 shares of common stock of the Company,
resulted in the Company's recognition of a deemed interest expense of $23,188.
Also contributing to higher interest expense in 2005 is the amortization of the
deferred financing fees and the debt discount associated with the debt that was
issued in the first quarter of 2004 and a note payable that was issued in
November 2004, totaling approximately $24,000.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Net cash used by operating activities for the nine months ended September 30,
2005 and 2004 totaled $1,918,433 and $1,539,137, respectively. Increased net
uses of cash in 2005 resulted primarily from higher operating expenses due to
hiring and expansion of the Company's sales and marketing programs.

Net cash provided by financing activities was $1,901,694 for the nine months
ended September 30, 2005 and consisted of the issuance of the Company's Series B
Convertible Preferred Stock and borrowings on notes payable, offset partially by
payments on notes payable. Net cash provided by financing activities was
$2,167,615 for the nine months ended September 30, 2004 and consisted primarily
of the issuance of the Company's Series A Convertible Preferred Stock and
borrowings on notes payable.

From January 1, 2005 through September 30, 2005, and pursuant to a Consulting
Agreement with a related party, Gryphon Financial Securities Corporation, Inc.
(the Placement Agent), the Company received funds through a private placement
(the Placement). The Company issued an aggregate of 1,245,455 shares of Series B
preferred stock, with a $1.10 per share stated value, initially convertible into
one share of the Company's common stock, par value $.001 per share, for net
proceeds of approximately $1,238,000. The Placement Agent and the investors in
the financing received warrants to purchase an aggregate of 281,818 shares of
common stock at an exercise price of $1.25 per share for each $5.00 of Series B
preferred stock purchased, with 32,727 warrants issued to the Placement Agent
and 249,091 warrants issued to the investors. These warrants expire in January
through July of 2010.

In the third quarter of 2005, the Company issued a series of short-term notes
payable totaling $550,000. Of this debt offering, $450,000 was sold through a
series of promissory notes with a 90-day term and interest of 1% per month. On
the maturity date, each of the note holders have the option to convert the total
principle amount and accrued interest due on the promissory note to equity at a
conversion price equal to the price established and approved by the Board of
Directors on the next round of debt or equity financing. If the principle and
interest remain unpaid after 90 days, the interest rate will increase to 1.5% as
long as any portion of the note remains outstanding.

The additional $100,000 of this debt offering was structured under separate
terms. $50,000 was sold as a 60-day note, with a flat interest rate of 10% to be
paid at the end of the term. If the principle and interest remain unpaid for 10
days or more following the end of the term, an additional late penalty
equivalent to 5% of such payment will be assessed. The remaining $50,000 was
sold as a 30-day note, with a flat interest rate of 2.5% to be paid at the end
of the term. As of September 30, 2005, the principle and interest remained
unpaid on this note 10 days following the end of the 30-day term. Accordingly, a
late penalty of $2,563, 5% of the $51,250 outstanding balance, was assessed. On
September 26, 2005 the holder of this 30-day, $50,000 promissory note agreed to
convert the principle, accrued interest and late fees, totaling $53,183 into
110,000 shares of the Company's outstanding common stock. As per the conversion
agreement, Gryphon Opportunities Fund I, LLC, a majority shareholder,
contributed the 110,000 outstanding common shares on September 26, 2005, with a
market price of $0.70 per share, which represented a capital contribution to the
Company of $77,000. The exchange of the $53,813 principle and accrued interest
and penalty into 110,000 common shares resulted in the Company's recognition of
a deemed interest expense of $23,188.

On September 16, 2005, in order to provide immediate working capital of $100,000
to the Company, the Company structured a special terms agreement with Gryphon
Opportunities Fund, I LLC ("Gryphon"), the majority shareholder of the Company,
and four outside investors in which these investors would immediately contribute
$100,000 to the Company. In return, Gryphon agreed to contribute 303,031
outstanding common shares to be purchased by these four investors at a purchase
price equal to 50% of the closing price of the Company's common stock on that
day, which was quoted on the NASD Over the Counter Bulletin Board, at $0.66. In
addition, each investor received warrants to purchase common stock, also issued
by Gryphon, equal to the number of shares purchased. These warrants have an
exercise price of $1.50 per share and a five-year life. This offering was
initially limited to $100,000, with a total issuance by Gryphon of 303,031
common stock shares and 303,031 warrants to purchase common stock. The Company
recognized a total capital contribution from Gryphon of $100,000.

On September 26, 2005, the holder of a 30-day, $50,000 promissory note agreed to
convert the principle, accrued interest and late fees, totaling $53,183 into
110,000 shares of the Company's common stock. Gryphon Opportunities Fund I, LLC,
a majority shareholder of the Company, contributed 110,000 shares of common
stock to Company, at $0.70 cents per share, effecting a $77,000 capital
contribution. The exchange of the note, totaling $53,193 in principle, accrued
interest and penalties, into 110,000 shares of common stock of the Company,
resulted in the Company's recognition of a deemed interest expense of $23,188.

                                       14
<PAGE>

On September 27, 2005 the officers and directors of the Company structured a 12%
convertible bridge note placement agreement with Argilus Capital Partners (the
"Placement Agent"). Under the terms of the agreement (the "Placement"), the
Company may draw up to $500,000 in four installments of $125,000 each, dependent
on its ability to raise matching funds, dollar-for-dollar, and show satisfactory
performance versus budget in the fourth quarter of 2005. All notes sold under
this agreement, either to Argilus Capital Partners or through the raising of
matching funds, are 13-month, 12% convertible promissory notes attached to 3
year warrants to purchase common shares equal to 20% of the investment, with a
an exercise price of the lesser of 75% of the per share purchase price on the
closing date or $0.75 per share. Pursuant to the agreement with Argilus, on
September 26, 2005, the Company sold $50,000, 12% convertible bridge notes
representing a portion of the matching funds necessary to draw on the first
$125,000 installment from Argilus. 10,000 warrants to purchase common stock at
$0.525, 75% of $0.70, the per share purchase price on September 26, 2005, were
attached to the convertible bridge note.

The Company has limited cash resources and intends to raise additional capital
through the issuance of debt or equity. The Company believes the additional
capital will allow it to continue its marketing efforts in its core products and
develop and add new functional enhancements to the browser-based versions of its
products. The availability of cash through such resources is not assured and if
the Company is not able to raise enough cash, the Company might be forced to
limit its operations and marketing activities, or ultimately cease operations.
The financial statements for the nine months ended September 30, 2005 were
prepared on the assumption that the Company will continue as a going concern.
The Company sustained a net loss of $2,396,665 for the nine months ended
September 30, 2005. The Company has accumulated losses through September 30,
2005 of $14,705,830. Cash used in operating activities for the nine-month
periods ended September 30, 2005 and 2004 totaled $1,918,433 and $1,539,137,
respectively. Total liabilities at September 30, 2005 of $2,229,687 exceed total
assets of $348,870. The Company's continued existence depends upon the success
of management's efforts to raise additional capital necessary to meet the
Company's obligations as they come due, and to obtain sufficient capital to
execute its business plan. The Company intends to obtain capital primarily
through issuances of debt or equity. There can be no degree of assurance that
the Company will be successful in completing additional financing transactions.
Failure to generate additional revenues, raise additional capital or manage
discretionary spending could have a material adverse effect on the Company's
ability to continue as a going concern and to achieve its intended business
objectives. The accompanying unaudited financial statements do not include any
adjustments to reflect the possible effects on the recoverability and
classification of assets or classification of liabilities which may result from
the inability of the Company to continue as a going concern.

RELATED PARTY TRANSACTIONS

As of September 30, 2005 and 2004, the Company had principal amounts of $544,490
and $610,490, respectively, in notes payable to a related party, Gryphon
Opportunities Fund I, LLC. During the nine-month periods ended September 30,
2005 and 2004, there were no principal repayments on these notes payable.

At September 30, 2005, the required monthly interest payments on these notes
payable, due to commence on September 1, 2004, were not made by the Company to
Gryphon Opportunities Fund I, LLC. Gryphon Opportunities Fund I, LLC waived the
Company's non-compliance with the terms of the note payable agreements as of
September 30, 2005 and through October 1, 2006.

ITEM 3. CONTROLS AND PRODCECURES

Members of our management, including Neil Burley, our Chief Financial Officer
and Principal Accounting and Financial Officer, have evaluated the effectiveness
of our disclosure controls and procedures, as defined by paragraph (e) of
Exchange Act Rules 13a-15 or 15d-15, as of September 30, 2005, the end of the
period covered by this report. Based upon that evaluation, Mr. Burley concluded
that our disclosure controls and procedures are effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting or in
other factors identified in connection with the evaluation required by paragraph
(d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter
ended June 30, 2005 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

                                       15
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1. Legal Proceedings

         On April 7, 2005 a lawsuit was filed by Norman K. Best, a former
         officer of the Company, against SecureCARE Technologies, Inc. The
         lawsuit is identified as cause number GN501073 and was filed in the
         353rd Judicial District Court of Travis County, Texas as "Norman K.
         Best versus SecureCARE Technologies, Inc." The lawsuit alleges that the
         Company breached the terms of its agreements with Mr. Best by failing
         to tender 50,000 shares of common stock of SecureCARE Technologies,
         Inc. which were granted to him. The Company responded to this lawsuit
         on May 13, 2005, by filing a general denial, denying all the
         allegations raised by the Plaintiff. On July 8, 2005, the Company filed
         a series of responses to the plaintiff's request for admission.
         Although no loss can be estimated in regard to this lawsuit we do not
         believe that the outcome of this matter will have a material effect on
         our financial position, operating results or cash flows. However, there
         can be no assurance that this legal proceeding will not have a material
         impact.

Item 2. Changes in Securities

         None.

Item 3. Defaults Upon Senior Securities

         None.

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

         None.


Item 5. Other Information

         None.

Item 6. Exhibits and Reports on Form 8-K

         a)       EXHIBITS

         4.1      Form of 30 Day Promissory Note

         4.2      Form of 60 Day Promissory Note

         4.3      Form of 90 Day Promissory Note

         31.1     Certification of the Chief Executive Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         31.2     Certification of the Chief Financial Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         32.1     Certification of the Chief Executive Officer pursuant to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002

         32.2     Certification of the Chief Financial Officer pursuant to 18
                  U.S.C Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002


                                       16
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                       SecureCare Technologies, Inc.
                                       (Registrant)


Date:  November 16, 2005               By: /s/ ROBERT WOODROW
                                         ---------------------------------------
                                         Robert Woodrow
                                         President, Chief Executive Officer
                                         And Director


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


NAME                           TITLE                           DATE
----                           -----                           ----

/s/ ROBERT WOODROW             President, Chief Executive      November 16, 2005
-------------------------      Officer and Director
Robert Woodrow


/s/ NEIL BURLEY                Chief Financial Officer         November 16, 2005
-------------------------      (Principal Financial and
Neil Burley                    Accounting Officer)


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