SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)

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

                  For the quarterly period ended June 30, 2004

                                       Or

[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              For the transition period from ________ to _________

                       COMMISSION FILE NUMBER: 000-161570

                         VELOCITY ASSET MANAGEMENT, INC.
        (Exact name of Small Business Issuer as Specified in its Charter)


                DELAWARE                                  65-0008442
      (State or Other Jurisdiction                       (IRS Employer
    of Incorporation or Organization)                 Identification No.)


              48 S. Franklin Turnpike, 3rd Floor, Ramsey, NJ 07446
                    (Address of Principal Executive Offices)

                                 (201) 760-1030
                (Issuer's Telephone Number, Including Area Code)

         Check whether the issuer (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.

                                 Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of August 16, 2004, the registrant
had 13,585,345 shares of common stock outstanding.

<PAGE>

                    VELOCITY ASSET MANAGEMENT SERVICES, INC.

                                   FORM 10-QSB
                       For the Quarter Ended June 30, 2004

                                      Index
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                          Number
PART I              FINANCIAL INFORMATION
<S>                 <C>                                                                     <C>
Item 1              Condensed Consolidated Balance Sheets as at December 31, 2003
                    and June 30, 2004 (unaudited for June 30, 2004 period)...................1

                    Condensed Consolidated Statements of Income (Loss) for the
                    three and six month periods ended June 30, 2004 and 2003
                    (unaudited) .............................................................3

                    Condensed Consolidated Statements of Stockholders Equity
                    (Deficit) as of December 31, 2003 and for the six months ended
                    June 30, 2004 (unaudited for June 30, 2004)..............................4

                    Consolidated Statements of Cash Flows for the six month
                    Periods ended June 30, 2004 and 2003 (unaudited).........................5

                    Notes to Consolidated Financial Statements...............................6

Item 2              Management's Discussion and Analysis or Plan of Operation ..............14

Item 3              Controls and Procedures.................................................16

PART II

Item 1              Legal Proceedings.......................................................18
Item 2              Changes in Securities...................................................18
Item 3              Defaults Upon Senior Securities.........................................18
Item 4              Submission of Matters to a Vote of Security Holders.....................18
Item 5              Other Information.......................................................18
Item 6              Exhibits and Reports on Form 8 - K......................................18
Signature           ........................................................................20
Certifications      ........................................................................21
Exhibit 32.1        ........................................................................25
Exhibit 32.2        ........................................................................26
</TABLE>

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION


                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                      (Formerly known as Tele-Optics, Inc.)

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                       June 30,     December 31,
                     ASSETS                             2004           2003
                                                     (Unaudited)        *
                                                     -----------    ------------

CURRENT ASSETS
   Cash and Cash Equivalents                         $1,336,126     $   540,427
   Accounts Receivable                                   14,944         207,971
   Property Inventory Owned                           1,716,210       1,139,670
   Deposits on Properties                                30,000         127,500
   Tax Certificates Held and Accrued Interest
      Receivable, Net of Discounts                      789,075       1,009,073
   Finance Receivables                                2,114,791       1,767,166
                                                     ----------      ----------

      Total Current Assets                            6,001,146       4,791,807

PROPERTY AND EQUIPMENT, net of accumulated
   depreciation                                          11,749              --
                                                     ----------      ----------

      Total Assets                                   $6,012,895     $ 4,791,807
                                                     ==========     ===========

* Condensed from audited financial statements.

              The accompanying notes are an integral part of these
                   condensed consolidated financial statements

                                       1
<PAGE>
<TABLE>
<CAPTION>
                        VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                              (Formerly known as Tele-Optics, Inc.)

                              CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                       June 30,     December 31,
        LIABILITIES AND STOCKHOLDERS' DEFICIT                            2004          2003
                                                                     (Unaudited)         *
                                                                     -----------   -------------

<S>                                                                  <C>            <C>
CURRENT LIABILITIES
   Accrued Expenses                                                  $   274,915    $   191,622
   Short-Term Borrowings Under Line of Credit                            905,477        705,477
   Current Portion of Long-Term Debt                                   2,206,036      2,306,036
   Income Taxes Payable                                                    2,567          2,567
   Installment Payable                                                    41,121             --
   Current Portion of Obligations Under Capital Leases                   290,788        436,752
   Due to Related Party                                                  500,000             --
                                                                     -----------    -----------

      Total Current Liabilities                                        4,220,904      3,642,454
                                                                     -----------    -----------

LONG-TERM LIABILITIES
   Obligations Under Capital Lease, less current portion                 691,389        742,413
   Long-Term Debt, less current portion                                  499,020        499,020
                                                                     -----------    -----------

      Total Long-Term Liabilities                                      1,190,409      1,241,433
                                                                     -----------    -----------

      Total Liabilities                                                5,411,313      4,883,887
                                                                     -----------    -----------

STOCKHOLDERS' EQUITY (DEFICIT)
   Common Stock, $0.001 par value, 40,000,000 shares Authorized,
      9,500,621 shares Issued and Outstanding and $1.00 par value,
      100 shares Authorized, 33 shares Issued and Outstanding,
      respectively                                                         9,501             33
   Additional Paid In Capital                                            583,187            967
   Retained Earnings (Deficit)                                             8,894        (93,080)
                                                                     -----------    -----------

   Total Stockholders' Equity (Deficit)                                  601,582        (92,080)
                                                                     -----------    -----------

      Total Liabilities and Stockholders' Equity (Deficit)           $ 6,012,895    $ 4,791,807
                                                                     ===========    ===========
</TABLE>

* Condensed from audited financial statements.

                 The accompanying notes are an integral part of
               these condensed consolidated financial statements

                                        2
<PAGE>
<TABLE>
<CAPTION>
                                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                                     (Formerly known as Tele-Optics, Inc.)

                               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                                  (Unaudited)


                                                For the Three Months Ended       For the Six Months Ended
                                                         June 30,                        June 30,
                                                ---------------------------    ----------------------------
                                                   2004            2003            2004            2003
                                               ------------    ------------    ------------    ------------

<S>                                            <C>             <C>             <C>             <C>
REVENUES
   Sale of Real Property                       $  1,511,207    $  1,419,256    $  1,674,573    $  1,639,256
   Collections on Credit Card Receivables
      and Interest Income                           383,361         197,233         598,402         233,541
                                               ------------    ------------    ------------    ------------

      Total Revenues                              1,894,568       1,616,489       2,272,975       1,872,797
                                               ------------    ------------    ------------    ------------

OPERATING EXPENSES
   Cost of Real Property                          1,444,258       1,103,454       1,643,382       1,284,606
   Sales Commissions                                     --         151,379              --         169,719
   Consulting Fees                                    1,000          36,875           8,611          39,731
   Professional Fees                                 61,895         102,413         170,400         140,840
   Collection Costs                                      --          28,835              --          28,835
   Lien Searches                                     11,081          26,238          11,081          26,238
   General and Administrative Expenses               36,973          (1,570)        121,993           4,242
                                               ------------    ------------    ------------    ------------

      Total Operating Expenses                    1,555,207       1,447,624       1,955,467       1,694,211
                                               ------------    ------------    ------------    ------------

      Income from Operations                        339,361         168,865         317,508         178,586
                                               ------------    ------------    ------------    ------------

OTHER INCOME (EXPENSE)
   Interest Expense                                (135,449)        (80,462)       (232,199)       (188,438)
   Other Income                                      88,294              --         112,631              --
                                               ------------    ------------    ------------    ------------

      Total Other Income (Expense)                  (47,155)        (80,462)       (119,568)       (188,438)
                                               ------------    ------------    ------------    ------------

Income (Loss) Before Tax Provision                  292,206          88,403         197,940          (9,852)

Provision for Income Taxes                            4,730              --           4,730              --
                                               ------------    ------------    ------------    ------------

Net Income (Loss)                              $    287,476    $     88,403    $    193,210    $     (9,852)
                                               ============    ============    ============    ============

Weighted Average Common Shares - Basic           17,456,610             100      40,268,247             100
                                               ============    ============    ============    ============

Net Income (Loss) per Common Share - Basic     $       0.02    $     884.03    $       0.00    $     (98.52)
                                               ============    ============    ============    ============

Weighted Average Common Shares - Diluted         53,022,110             100      58,149,244             100
                                               ============    ============    ============    ============

Net Income (Loss) per Common Share - Diluted   $       0.01    $     884.03    $       0.00    $     (98.52)
                                               ============    ============    ============    ============
</TABLE>

                 The accompanying notes are an integral part of
               these condensed consolidated financial statements

                                        3
<PAGE>
<TABLE>
<CAPTION>
                                          VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                                                (Formerly known as Tele-Optics, Inc.)

                                 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                             For the Six Months Ended June 30, 2004 and the Year Ended December 31, 2003


                                                             Common Stock                                                Total
                                                     -----------------------------    Additional        Retained      Stockholders'
                                                      Number of                         Paid in         Earnings         Equity
                                                       Shares         Par Value         Capital         (Deficit)       (Deficit)
                                                     ------------   --------------   -------------   --------------   --------------

<S>                                                          <C>    <C>              <C>             <C>              <C>
*  BALANCES, January 1, 2003                                 100    $         100    $         900   $    (122,748)   $    (121,748)

Shares Cancelled                                             (67)             (67)              67              --               --

Member Withdrawal                                             --               --               --          (1,000)          (1,000)

Net Income for the Year Ended
   December 31, 2003                                          --               --               --          30,668           30,668
                                                      -----------   -------------    -------------   --------------   -------------
*  BALANCES, December 31, 2003                                33               33              967         (93,080)         (92,080)

Issuance of Common Stock for the acquisition
   of Tele-Optics, Inc. (reverse acquisition)
   inclusive of the net income for the
   subsidiary (i.e. Tele-Optics, Inc.)
   through February 3, 2004 (Date of
   Acquisition) including accumulated deficit
   (also included in the initial issuance of
   common stock was the sale of 7,312,500
   shares of common stock for $500,000 with
   $7,312 allocated to par value and the
   remaining $492,688 allocated to additional
   paid in capital)                                   99,999,967           99,967          491,721         (91,236)         500,452

Amendment of Certificate of Incorporation
   effective April 8, 2004, authorizing a 13:1
   Reverse Stock Split and the issuance of
   23,505,000 additional shares of common
   stock (pre-stock split number of shares)          (90,499,379)         (90,499)          90,499              --               --

Net Income for the Six Months Ended
   June 30, 2004                                              --               --               --         193,210          193,210
                                                      ----------    -------------    -------------   --------------   -------------
** BALANCES, June 30, 2004                             9,500,621    $       9,501    $     583,187   $       8,894    $     601,582
                                                      ==========    =============    =============   ==============   =============
</TABLE>

*  - Audited
** - Unaudited

                 The accompanying notes are an integral part of
                these condensed consolidated financial statements

                                        4
<PAGE>
<TABLE>
<CAPTION>
                               VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                                     (Formerly known as Tele-Optics, Inc.)

                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (Unaudited)

                                                                                For the Six      For the Six
                                                                                Months Ended     Months Ended
                                                                                  June 30,         June 30,
                                                                                   2004             2003
                                                                               -------------    --------------

<S>                                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income (Loss)                                                           $     193,210    $      (9,852)
   Adjustments to reconcile net income (loss) to net cash used  by
   operating activities
   Depreciation                                                                        1,146               --
   (Increase) Decrease in:
      Accounts Receivable                                                            193,027          304,026
      Tax Certificates Held and Accrued Interest Receivable, Net of Discount         219,998          554,080
      Property Inventory Owned                                                      (576,540)        (256,159)
      Finance Receivables                                                           (347,625)        (449,665)
      Deposits on Properties                                                          97,500          (20,000)
   Increase (Decrease) in:
      Installment Payable                                                             41,121               --
      Accrued Expenses                                                                83,293           21,320
                                                                               -------------    -------------
         Net Cash Used by Operating Activities                                       (94,870)         143,750
                                                                               -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of Property and Equipment                                                (12,895)              --
   Cash Received from Reverse Merger                                                     452               --
                                                                               -------------    -------------
      Net Cash Provided from Investing Activities                                    (12,443)              --
                                                                               -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
   New Borrowings:
      Short-Term                                                                     450,000          828,394
      Long-Term                                                                      500,000          499,020
   Debt Reduction:
      Short-Term                                                                          --       (1,103,413)
      Long-Term                                                                     (546,988)        (281,000)
   Proceeds Received from Private Placement Stock Sale                               500,000               --
   Capital Withdrawal                                                                     --           (1,000)
                                                                               -------------    -------------
      Net Cash Provided From Financing Activities                                    903,012          (57,999)
                                                                               -------------    -------------

Net Increase (Decrease) in Cash and Cash Equivalents                                 795,699           85,751

Cash and Cash Equivalents, Beginning of Period                                       540,427           35,942
                                                                               -------------    -------------

Cash and Cash Equivalents, End of Period                                       $   1,336,126    $     121,693
                                                                               =============    =============
</TABLE>

                 The accompanying notes are an integral part of
               these condensed consolidated financial statements

                                        5
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

The accompanying unaudited condensed consolidated financial statements have been
prepared by Velocity Asset Management, Inc. (the "Company") in accordance with
the rules and regulations of the Securities and Exchange Commission (the "SEC")
for interim financial statements and accordingly do not include all information
and footnotes required under generally accepted accounting principles for
complete financial statements. The financial statements have been prepared in
conformity with the accounting principles and practices disclosed in, and should
be read in conjunction with, the annual financial statements of the Company
included in the Company's Fiscal year 2003 Form 10-KSB filing dated March 12,
2003 (File No. 000-16157) and the Company's Form 8-K filing dated February 18,
2004. In the opinion of management, these interim financial statements contain
all adjustments necessary for a fair presentation of the Company's financial
position at June 30, 2004 and December 31, 2003 and the results of operations
for the six months ended June 30, 2004 and 2003, respectively.

Nature of Operations
--------------------

On February 3, 2004, Tele-Optics, Inc. (the "Company"), through its wholly owned
subsidiary TLOP Acquisition Company, L.L.C. ("TLOP"), entered into a reverse
acquisition (the "Reverse Merger") with STB, Inc. and its subsidiaries. On
February 3, 2004, STB, Inc. became a wholly owned subsidiary of TLOP. As a
result of the Reverse Merger, the Company operates all of its current business
activities through its wholly-owned subsidiary TLOP.

Effective April 8, 2004, the Company changed its name from Tele-Optics, Inc. to
Velocity Asset Management, Inc. The entities that are included in these
financial statements are as follows:

Velocity Asset Management, Inc. (formerly known as Tele-Optics, Inc). - Velocity
Asset Management, Inc. (the "Company") was incorporated in the State of Delaware
on December 31, 1986. In 1987, the Company issued shares of its common stock
pursuant to a public offering. The Company was engaged in the manufacture of
optical products until 1991 when all assets and operations were sold.

The Company was inactive from 1992 through 1998. Commencing in 1999, the Company
devoted its activities to raising capital, becoming current on all previously
delinquent regulatory reporting obligations, and sought to effect a merger or
acquisition with a company that management believed to have significant growth
potential. On February 3, 2004 (the "Effective Date"), the Company acquired STB,
Inc., a New Jersey corporation ("STB"). Accordingly, the Company was classified
as a Development Stage Enterprise, effective January 1, 1999 through February 3,
2004.

TLOP Acquisition Company, L.L.C. - TLOP Acquisition Company, LLC ("TLOP") was
incorporated in New Jersey as a limited liability company. TLOP is a
wholly-owned subsidiary of the Company and pursuant to the Reverse Merger owns
100% of STB, Inc.

STB, Inc. - STB, Inc. ("STB") was incorporated in New Jersey in 2003. Its
primary purpose was to act as a holding company for three subsidiaries J.
Holder, Inc., VOM, LLC and Velocity Investments, LLC.

J. Holder, Inc. - J. Holder, Inc. ("J. Holder") was formed in 1998 to invest in,
and maximize the return on real property being sold at sheriff's foreclosure
sales and judgment execution sales, defaulted mortgages, partial interests in
real property and the acquisition of real property with clouded title. These
investments are made at discounts to fair market value focusing on acquiring the
property for re-sale or perfecting the partial interest and/or clouded title for
resale.

                                        6
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS (Continued)


VOM, L.L.C. - VOM, LLC ("VOM") was formed in 2002 to invest in and maximize the
return on New Jersey Municipal Tax Liens. VOM focuses on maximization of profit
through legal collections and owned real estate opportunities presented by the
current tax lien environment.

Velocity Investment, L.L.C. - Velocity Investments, LLC ("Velocity") was
established in 2002 to invest in, and maximize the return on, consumer debt
purchased on the secondary market. Velocity purchases consumer debt portfolios
at a discount and then liquidates these portfolios through legal collection
means. Velocity employs advanced technology and extensive management experience
to plan, execute against and exceed desired business objectives.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reverse Acquisition
-------------------

For the purposes of these financial statements, the purchase of STB, Inc. by
Velocity Asset Management, Inc.'s wholly-owned subsidiary TLOP Acquisition
Company, LLC is treated as a reverse acquisition under the purchase method of
accounting, as outlined in Accounting Principles Board Opinion No. 16. For
accounting purposes, STB, Inc. is considered the acquirer in the reverse
acquisition. The statement of operations for Velocity Assets Management, Inc.
for the six months ended June 30, 2004, includes six months of revenues and
expenses of STB, Inc and its subsidiaries combined with the revenues and
expenses for Tele-Optics, Inc. and its subsidiary for the period from the date
of acquisition, February 3, 2004, through June 30, 2004.

Principles of Consolidation
---------------------------

For the purposes of the accompanying financial statements, STB, Inc. is
considered the accounting "Parent" company and Tele-Optics, Inc. is considered
the subsidiary. Therefore, these financial statements include the combined
assets and liabilities of STB, Inc. and its subsidiaries as of June 30, 2004.
The statement of operations includes the income and expenses of STB, Inc. and
its subsidiaries for the complete six months ended June 30, 2004 and the income
and expenses of Tele-Optics, Inc. for the period from February 3, 2004 through
June 30, 2004. All material intercompany payables, receivables, revenues and
expenses have been eliminated for purposes of this consolidation.

Use of Estimates
----------------

The preparation of the 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 amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

Cash Equivalents
----------------

All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents.

                                       7
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investments and Revenue Recognition
-----------------------------------

Investments in real property purchased by the Company for resale are carried at
the lower of cost or market value. This included the cost to purchase the
property and repairs or other costs required to get the property ready for
resale. The Company recognizes income and related expenses from the sale of real
property investments at the date the sale closes.

The Company records its investments in New Jersey municipal tax liens at cost
plus accrued interest. Interest revenue is recognized on the accrual basis of
accounting, based on the face value of the tax certificates at the stated rate
of 18% per annum. The initial portfolios of liens were purchased at a 2%
discount. As required by Accounting Principals Board, Opinion No. 21, "Interest
on Receivables and Payables," the discount is recognized over the estimated life
of the liens using the interest method.


The Company purchases distressed credit card portfolios at a substantial
discount. Therefore, no interest is accrued and discount is not accreted as
these loans are distressed and collection is not assured. Accordingly, interest
and discount accretion is accounted for on the cash-basis, using the
cost-recovery method for partial collections.

Allowance for Credit Card Portfolio Losses
------------------------------------------

Provisions for credit losses are charged to income in amounts sufficient to
maintain the allowance at a level considered adequate to cover the losses of
principle, net of discount, in the existing portfolio. The Company's charge-off
policy is to charge-off the principle balance of loans when all collection
efforts have been exhausted.

Fair Value of Financial Instruments
-----------------------------------

Financial instruments, including cash, receivables, accounts payable, and notes
payable are carried at amounts which reasonably approximate their fair value due
to the short-term nature of these amounts or due to variable rates of interest
which are consistent with market rates. At present, the Company does not have
any receivables, accounts payable or notes payable.

Income Taxes
------------

The Company follows the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.

Earnings per Share
------------------

The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share" (SFAS No. 128) which establishes standards for computing
and presenting earnings per share ("EPS") and requires the presentation of both
basic and diluted EPS. As a result, primary and fully diluted EPS have been
replaced by basic and diluted EPS. EPS is calculated by dividing net income by
the weighted-average number of outstanding shares of Common Stock for each year.

                                       8
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income
--------------------

Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income," (SFAS 130), requires that total comprehensive income be reported in the
financial statements. There were no components of comprehensive income;
consequently, no separate statement of comprehensive income has been presented.


NOTE 3 - INVESTMENTS

Investments in Real Property
----------------------------

As discussed in Note 1, investments in real property are made at a discount to
fair market value with the focus on acquiring the property for resale or to
perfect the partial interest and/or clouded title for resale. Purchases of party
are funded by a line of credit from a shareholder, see Note 4.

Investments in Municipal Tax Liens
----------------------------------

Investments in New Jersey municipal tax liens consist of the following:

                                                      December 31,
                                    June 30, 2004        2003
                                    -------------    -------------

            Tax lien certificates   $     522,420    $     679,528
            Discount on purchase           (4,925)          (4,925)
            Accrued interest              271,580          334,470
                                    -------------    -------------

                                    $     789,075    $   1,009,073
                                    =============    =============

Interest accrues at 18% per annum based on the lien balance.

NOTE 4 - FINANCE RECEIVABLES

Finance receivables consist of the following:

                                                       December 31,
                                     June 30, 2004        2003
                                     -------------    -------------

            Credit card portfolios   $  13,223,611    $  10,171,860
            Discount on portfolios     (11,108,820)      (8,404,694)
                                     -------------    -------------

                                     $   2,114,791    $   1,767,166
                                     =============    =============

The Company does not accrue interest income and discount amortization on
accounts due to the irregularity of collections and no assurance of collections.
All loans are distressed and past due.

                                       9
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 5 - LINE OF CREDIT

The Company has a $2,000,000 line of credit with a shareholder, which expires
May 2005, for the purpose of financing the Company's investments in real
property. Interest at 10% per annum is due upon sale of the real property, based
on the number of days the funds are committed to the investment. Each investment
is presented on a case-by-case basis for funding approval and, if approved, the
asset purchased is assigned as collateral to the shareholder for the funds
advanced until the property is sold. Funds advanced are held and disbursed from
an attorney trust account. At June 30, 2004 and December 31, 2003, there was
$1,094,523 and $1,294,523, respectively, available under this line of credit.
Interest expense for the six months ended June 30, 2004 and the year ended
December 31, 2003 was $46,213 and $66,237, respectively.

NOTE 6 - LONG-TERM DEBT

Notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                          June 30, 2004       2003
                                                                          -------------   -------------
<S>                                                                       <C>             <C>
            Note payable to an officer and a related trust, interest at
            10% per annum, secured by tax lien certificates and all
            other assets of the Company. Principal and interest
            payable quarterly or, if not quarterly, at such time as the
            Company's cash flow allows, due July 17, 2004                 $   1,506,036   $   1,506,036

            Notes payable to an officer, interest at 8% per annum,
            unsecured. All notes originated during the period of
            January-May of 2003 and are each due in five years
            Principal and interest are due on the anniversary of each
            note except for the first year, which payment shall be
            optional and otherwise added to the second year payment             499,020         499,020

            Note payable to Michael Kelly, interest at 8% per annum
            payable semi-annually; at the expiration of one year, upon
            30 days notice to the Company, the note may be payable
            upon demand, secured by first position upon all corporate
            assets                                                              300,000         300,000

            Note payable to Richard Cavanaugh, interest at 6% per
            annum payable semi-annually, upon 30 days notice to the
            Company, the note may be payable upon demand and is
            unsecured                                                           250,000              --

            Note payable to Richard Cavanaugh, interest at 8% per
            annum payable semi-annually, upon 30 days notice to the
            Company, the note may be payable upon demand and is
            unsecured                                                           150,000         500,000
                                                                          -------------   -------------
                                                                              2,705,056       2,805,056
                                                                              2,206,036       2,306,036
                                                                          -------------   -------------
                                                                          $     499,020   $     499,020
                                                                          =============   =============
</TABLE>

                                       10
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 6 - LONG-TERM DEBT (Continued)

Maturities of notes payable are as follows:

        2004                $  2,206,036
        2005                     199,608
        2006                      99,804
        2007                      99,804
        2008                      99,804
                            ------------

                            $  2,705,056
                            ============

Certain of the above listed indebtedness was converted into equity of the
Company effective as of July 1, 2004. See Note 14, "Subsequent Events."


NOTE 7 - OBLIGATIONS UNDER CAPITAL LEASE

Capital lease obligations consist of the following:

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                  June 30, 2004         2003
                                                                  -------------    -------------
<S>                                                               <C>              <C>
        Capital lease payable to Unifund Portfolio E, LLC, in
        monthly payments of $45,238, including interest at 5.75%
        with a balloon payment due November 2005, secured by
        corresponding investment portfolios.                      $     982,177    $   1,179,165
                                                                  =============    =============
</TABLE>

        2004                $    290,788
        2005                     691,389
                            ------------

                            $    982,177
                            ============


NOTE 8 -RELATED PARTY TRANSACTIONS

Interest payments on the line of credit, Note 5, were made to a director and
shareholder of the Company in the amounts of $46,213 and $66,237 for the six
months ended June 30, 2004 and the year ended December 31, 2003, respectively.
In addition, the Company paid the director and shareholder consulting fees of
$5,812 and $103,389 for the six months ended June 30, 2004 and the year ended
December 31, 2003, respectively.

The Company paid legal consulting fees to an entity related to a director and
shareholder in the amount of $14,680 and $128,147 for the six months ended June
30, 2004 and the year ended December 31, 2003, respectively. This related entity
provided office space and administrative support to the Company at no cost.

The Company paid legal research fees to an entity related to a shareholder in
the amount of $96,273 for the year ended December 31, 2003.

At June 30, 2004 and December 31, 2003, the Company had a receivable from a
related party in the amount of $14,944 and $16,872, respectively.

On April 19, 2004, the Company borrowed $500,000 from an entity related to a
shareholder. The promissory note is unsecured and due in full within one year
along with interest at a rate of 6% per annum plus 2% of the loaned amount.

                                       11
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 9 - INCOME TAXES

The provision for corporate income taxes for the six months ended June 30, 2004
and the year ended December 31, 2003 consists of the following:

                                                    For the Year
                                    For the Six        Ended
                                    Months Ended    December 31,
                                   June 30, 2004        2003
                                   -------------   -------------
               Current:
                    Federal        $          --   $          --
                    State                  4,730           2,567
                                   -------------   -------------

                           Total   $       4,730   $       2,567
                                   =============   =============


Deferred income taxes relating to the tax benefit of the Company's net operating
loss was offset by a valuation allowance due to the uncertainty of profitable
operations in the future. Also, as a result of the Company's change of control,
the net operating losses which can be utilized each year will be limited under
the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as
amended.

The Company's net operating loss carryforward of approximately $1,680,000, which
expires from the year 2006 through 2017, may be carried forward for tax
purposes, to offset taxable income.


NOTE 10 - REVERSE STOCK SPLIT AND CHANGE IN NUMBER OF SHARES OF CAPITAL STOCK
AUTHORIZED

On April 8, 2004, the Company amended its certificate of incorporation to (a)
effect a 13-for-1 reverse split of the Company's then issued and outstanding
shares of common stock and (b) change the total authorized shares of capital
stock to 50,000,000 shares, of which 40,000,000 are classified as common stock,
par value $.001 per share and 10,000,000 are classified as preferred stock, par
value $.001 per share. As of June 30, 2004, the total common stock issued and
outstanding was 9,500,621 with a par value of $9,501 and there was no preferred
stock issued or outstanding. All references to share numbers or earnings or loss
per share contained in the financial statements to which these notes relate give
effect to the Reverse Split.


NOTE 11 - OUTSTANDING WARRANTS

At June 30, 2004, the Company had outstanding warrants to purchase 3,199,500
shares of the Company's common stock at a price of $1.04 per share. The warrants
were granted pursuant to the Merger Agreement effective February 3, 2004 and
expire after a period of five years.


NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

Cash was expended for interest in the amount of $232,199 and $262,217 for the
six months ended June 30, 2004 and the year ended December 31, 2003,
respectively. Cash was expended for income taxes in the amount of $4,730 and
$2,892 for six months ended June 30, 2004 and the year ended December 31, 2003,
respectively.

                                       12
<PAGE>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
                          (Formerly Tele-Optics, Inc.)

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2004


NOTE 13 - CONCENTRATIONS OF CREDIT RISK

The consolidated entities maintain cash balances at one institution located in
central New Jersey. The amounts at this institution are insured by the Federal
Deposit Insurance Corporation up to $100,000 per entity. The amount at risk at
June 30, 2004 and December 31, 2003 was $236,835 and $335,948, respectively. The
Company's consider the risk to be minimal.


NOTE 14 - SUBSEQUENT EVENTS

Subsequent to the date of the financial statements, holders of $3,676,252 of the
Company's indebtedness (the "Obligations") exchanged such indebtedness for
4,084,724 shares of the Company's common stock, par value $.001 per share, at a
rate of one share per $0.90 of the Obligations. The effective date of this
conversion of debt to equity is retroactive to July 1, 2004.

                                       13
<PAGE>

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

Overview
--------

The Company was incorporated in Delaware under the name Tele-Optics, Inc. in
December 1986 for the purpose of acquiring all of the capital stock of a company
engaged in the development, manufacture and marketing of a variety of products
for use in the medical and defense industries. In September 1991, the Company
sold all of the assets related to such business to a third party. Since that
sale and until February 3, 2004 (the "Effective Date"), when the Company
acquired STB, Inc., a New Jersey corporation ("STB"), the Company has had no
active business operations. On November 21, 1997, new investors, including the
Company's management prior to the Effective Date, purchased approximately 62% of
the Company's then issued and outstanding capital stock. Between November 21,
1997 and February 3, 2004, those investors and others have provided additional
funds as equity investment and loans to ensure the Company's viability and
permit the Company to continue its limited operations and pursue business
opportunities.

On the Effective Date, the Company entered into and consummated an Agreement and
Plan of Merger (the "Merger Agreement") by and among the Company's wholly owned
subsidiary, TLOP Acquisition Company, L.L.C., a New Jersey limited liability
company ("Newco"), STB and the stockholders of STB, John C. Kleinert, W. Peter
Ragan, Sr. and W. Peter Ragan, Jr. (collectively, the Stockholders"). Pursuant
to the Merger Agreement, on the Effective Date, STB was merged with and into
Newco (the "Merger"), and the Company issued to the Stockholders in exchange for
all of the common stock of STB issued and outstanding (a) an aggregate of
79,682,500 shares of the Company's common stock, (b) the right to receive an
aggregate of 23,505,000 additional shares of the Company's common stock upon
amendment to the Company's certificate of incorporation to increase the total
number of shares of capital stock that the Company is authorized to issue, and
(c) warrants to purchase for a period of five years an aggregate of 31,681,000
shares of common stock at an exercise price of $.08 per share. The details of
the Merger are set forth in the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission on February 18, 2004. The 79,682,500
shares of common stock issued to the Stockholders represented approximately 80%
of the then total issued and outstanding shares of the Company's common stock.
The Merger Agreement also provided that upon amendment to the Company's
certificate of incorporation to authorize the Company to issue a series of
preferred stock having certain terms and conditions, John C. Kleinert would
convert all of the debt owed by the Company to him, including debt under a line
of credit and other secured loans, into shares of such preferred stock.

In connection with the Merger, the Company completed a private placement to an
accredited investor of 7,312,500 shares of the Company's common stock and a
warrant exercisable for five years to purchase an aggregate of 7, 312, 500
shares of common stock at $.08 per share in exchange for $500,000. The proceeds
of such private placement are being used for working capital.

As a result of the Merger, the Company now carries on business through its
wholly owned subsidiary, Newco, which maintains its executive offices at 48 S.
Franklin Turnpike, 3rd Floor, Ramsey, NJ, and its business offices at 3100 Route
138 West, Wall, NJ 07719.

                                       14
<PAGE>

Effective April 8, 2004, the Company amended its certificate of incorporation to
(a) change its corporate name to Velocity Asset Management, Inc., (b) effect a
13 for one reverse split of the Company's then issued and outstanding shares of
common stock, and (c) change the total authorized shares of its capital stock to
50,000,000 shares, of which 40,000,000 are classified as common stock, par value
$.001 per share, and 10,000,000 are classified as preferred stock, par value
$.001 per share, issuable in such series with such powers, designations,
preferences and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thererof, as the Company's Board of
Directors may fix from time to time by resolution or resolutions. As a result of
such amendment, the Company had sufficient authorized shares of common stock to
enable it to issue to the Stockholders the additional shares of common stock and
warrants as provided in the Merger Agreement, and the Company has effected such
issuance. In addition, the Company's Board of Directors is now authorized to
designate a class of convertible preferred stock into which Mr. Kleinert and two
other parties (holding an aggregate of approximately $3,676,000 of indebtedness
as of June 30, 2004) have agreed to convert all of their indebtedness into. In
lieu of such conversion, effective July 1, 2004, Mr. Kleinert and such parties
converted all the Company's indebtedness held by them into an aggregate of
4,084,724 shares of the Company's Common Stock on the basis of one share per
$.90 of indebtedness.

Prior to the Merger, STB was a New Jersey corporation that was formed in 2003.
Its primary purpose was to act as a holding company for three subsidiaries, J.
Holder, Inc. ("JHI"), VOM, LLC ("VOM") and Velocity Investments, LLC
("Velocity"). JHJ was formed in 2002 and invests, at a discount from fair market
value, in real property being sold at sheriff's foreclosure and judgment
execution sales, defaulted mortgages, partial interests in real property and the
acquisition of real property with clouded title. VOM was formed in 2002 and
invests in New Jersey municipal tax liens with the focus on profit through legal
collection and owned real estate opportunities presented by the current tax
environment. Velocity was formed in 2002 and invests in consumer debt purchased
on the secondary market at a discount from face value and then liquidates these
debt portfolios through legal collection means.

As discussed below, the three-month period ended June 30, 2004, was
characterized by a substantial increase in revenues partially offset by an
increase in operating expenses, resulting in a net profit for the period of
$287,476 as compared to a net profit of $88,403 during the same period in the
prior year.


Results of Operations
---------------------

Revenues

Revenues in the three-month period ended June 30, 2004 (the "2004 Second
Quarter") were $1,894,568 as compared to $1,616,489 in the same period in the
prior year (the "2003 Second Quarter"), representing a 17.2% increase. Revenues
in the six-month period ended June 30, 2004 (the "2004 Period") were $2,272,975
as compared to $1,872,797 in the same period in the prior year (the "2003
Period"), representing a 21.3% increase. The increase in revenues for both
periods was primarily attributable to the increased operations and focused
efforts of the Company and the maturation of its portfolios. Revenues from the
sale of real property and the collection of credit card receivables and interest
income derived from debt instruments owned by the Company represented
approximately 80% and 20%, respectively, during the 2004 Second Quarter as

                                       15
<PAGE>

compared to approximately 73% and 13% during the 2003 Second Quarter, and
approximately 88% and 12% during the 2004 Period as compared to approximately
87% and 13% during the 2003 Period. Management does not believe that the mix of
revenues on a comparative basis is necessarily indicative of any trend but is
more related to factors beyond the Company's control, such as maturity dates,
court decisions and other similar events the affect the timing of revenue
recognition.

Operating Expenses

Total operating expenses in the 2004 Second Quarter were $1,555,207 as compared
to $1,447,624 in the 2003 Second Quarter, representing a 7.4% increase. Total
operating expenses for the 2004 Period were $1,955,467 as compared to $1,694,211
in the 2003 Period, representing a 15.4% increase. The increase in total
operating expenses for both periods was primarily attributable to the related
increase in revenues during such periods, as well as increased professional fees
and fixed costs associated with the Merger and related matters, and being a
reporting issuer during the 2004 Second Quarter and the 2004 Period.

Other Income (Expense)

Interest expense in the 2004 Second Quarter was $135,449 as compared to $80,462
in the 2003 Second Quarter, representing a 68.3% increase. Interest expense in
the 2004 Period was $232,199 as compared to $188,438 in the 2003 Period,
representing a 23.2% increase. The increase in interest expense for both periods
was primarily attributable to increases in the amount and structure of the
Company's debt. During the 2004 Second Quarter and the 2004 Period the Company
also recognized other income of $88,294 and $112,631, respectively, all of which
was derived from other JHI operations.

Net Income (Loss)

Net income in the 2004 Second Quarter was $287,476 as compared to $193,210 in
the 2003 Second Quarter, representing a 48.8% increase. Net income for the 2004
Period was $193,210 as compared to a net loss of $9,852 in the 2003 Period. The
increase in net income for both periods is primarily attributable to expansion
of its credit cards receivable business. Results of operations are likely to
fluctuate from quarter to quarter depending on the mix of revenue sources and
other factors beyond the Company's control as indicated above. Accordingly,
comparisons of quarter to quarter results may not be meaningful.

The Company is not presently aware of any known trends that may have a material
impact on its revenues from operations.

Liquidity and Capital Resources
-------------------------------

At June 30, 2004, the Company had $1,336,126 in cash and cash equivalents and
trade accounts payable in the amount of $274,915. Management believes that such
funds, together with the revenues expected to be generated from operations will
be sufficient to finance operations for the foreseeable future.

In order to expand operations by, among other things, purchasing additional
portfolios of receivables, the Company is seeking to raise additional capital
through the sale of equity or debt instruments and/or by way of a bank line of

                                       16
<PAGE>

credit. In July 2004, the Company entered into a Letter of Intent with a
national financial institution which provides for a line of credit to the
Company of $12,500,000 to be used for the purchase of portfolios of unsecured
receivables. The line of credit is subject to the fulfillment of various
conditions, including the execution of definitive documents, as well as the
Company securing significant additional equity capital. If the line of credit is
obtained , the Company may incur significant increases in interest expense and
may be subject to covenants restricting certain of its activities. The Company
is negotiating with various parties and institutions to provide the additional
require equity capital. No assurance can be given, however, that the additional
equity capital will be obtained on terms acceptable to the Company or at all
and, even if obtained, that the other conditions precedent to obtaining the line
of credit will be fulfilled. The raising of additional equity capital by the
sale of shares of the Company's Common Stock may result in dilution of existing
stockholders.

         Item 3            Controls and Procedures.

         (a) Evaluation of Disclosure Controls and Procedures.
             ------------------------------------------------

         Within the 90 days prior to the date of this report, Velocity Asset
Management, Inc. ("the Company") carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective in timely alerting
him to material information required to be included in the Company's periodic
SEC filings relating to the Company (including its consolidated subsidiaries).

         (b) Changes in Internal Controls.
             ----------------------------

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect these internal controls
subsequent to the date of our most recent evaluation.

FORWARD LOOKING STATEMENTS
--------------------------

This Form 10-QSB and other reports filed by the Company from time to time with
the Securities and Exchange Commission (collectively the "Filings") contain or
may contain forward looking statements and information that are based upon
beliefs of and information currently available to the Company's management as
well as estimates and assumptions made by the Company's management.

When used in the Filings the words "anticipate", "believe", "estimate",
"expect", "future", "intend", "plan" and similar expressions as they relate to
the Company or the Company's management identify forward looking statements.
Such statements reflect the current view of the Company with respect to future
events and are subject to risks, uncertainties and assumptions relating to the
Company's operations and results of operations and any businesses that may be
acquired by the Company. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may differ significantly from those anticipated, believed, estimated,
intended or planned.

                                       17
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1       Legal Proceedings

             None

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

             2.1.1    Agreement and Plan of Merger, dated as of February 3,
                      2004, by and among Tele-Optics, Inc., TLOP Acquisition
                      Company, L.L.C., STB, Inc., John C. Kleinert, W. Peter
                      Ragan, Sr. and W. Peter Ragan, Jr. *

             10.1     Business Advisory Agreement, dated as of February 5, 2004,
                      by and between Lomond International, Inc. and Registrant**

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

             31.2     Certification of Principal financial Officer pursuant to
                      Section 302 of the Sarbanes-Oxley Act of 2002.

             32.1     Certification of Principal Executive Officer pursuant to
                      18 U.S.C. Section 1350

             32.2     Certification of Principal Financial Officer pursuant to
                      18 U.S.C. Section 1350.

                                       18
<PAGE>

             --------------------

             *        Incorporated by reference to Registrant's Current Report
                      on Form 8-K filed with the Securities and Exchange
                      Commission on February 18, 2004.

             **       Incorporated by reference to Schedule 13D filed by Lomond
                      International, Inc. with the Securities and Exchange
                      Commission on March 10, 2004.

             (b) Reports on Form 8-K

                 None

                                       19
<PAGE>

                                   SIGNATURES

         In accordance with 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 hereunto duly authorized.



                                      VELOCITY ASSET MANAGEMENT, INC.

Dated:  August 19, 2004               By: /s/ JOHN C. KLEINERT
                                          --------------------------------------
                                          John C. Kleinert
                                          Chief Executive Officer and President

                                       20