SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A
                         Amendment No. 1 to 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 March 31, 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 May 14, 2004, the registrant had
7,692,331 shares of common stock outstanding.

<PAGE>

                    VELOCITY ASSET MANAGEMENT SERVICES, INC.

                                   FORM 10-QSB
                      For the Quarter Ended March 31, 2004

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

                Condensed Consolidated Statements of Operations for the three
                Months ended March 31, 2004 and 2003 (unaudited).....................................2

                Condensed Consolidated Statements of Stockholders Equity
                (Deficit) as of December 31, 2003 and for the three months ended
                March 31,2004 (unaudited for March 31, 2004..........................................3

                Consolidated Statements of Cash Flows for the three months
                ended March 31, 2004 and 2003 (unaudited)............................................4

                Notes to Consolidated Financial Statements...........................................5

Item 2          Management's Discussion and Analysis or Plan of Operation...........................12

Item 3          Controls and Procedures.............................................................14

PART II

Item 1          Legal Proceedings...................................................................15
Item 2          Changes in Securities...............................................................15
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
Signature       ....................................................................................18
Certifications  ....................................................................................19
Exhibit 32.1    ....................................................................................21
Exhibit 32.2    ....................................................................................22
</TABLE>

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1     Financial Statements

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

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  March 31,      December 31,
           LIABILITIES AND STOCKHOLDERS' DEFICIT                    2004             2003
                                                                 (Unaudited)          *
                                                                 ------------    ------------
<S>                                                              <C>             <C>
CURRENT LIABILITIES
Accounts Payable                                                 $     39,999    $         --
Accrued Expenses                                                      174,804         191,622
Short-Term Borrowings Under Line of Credit                            905,477         705,477
Current Portion of Long-Term Debt                                   1,956,036       2,306,036
Income Taxes Payable                                                    2,567           2,567
Current Portion of Obligations Under Capital Leases                   408,981         436,752
                                                                 ------------    ------------

Total Current Liabilities                                           3,487,864       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                                                   4,678,273       4,883,887
                                                                 ------------    ------------

STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $0.001 par value, 100,000,000 shares Authorized,
   Issued and Outstanding and $1.00 par value, 100 shares
   Authorized, 33 shares Issued and Outstanding, respectively         100,000              33
Additional Paid In Capital                                            492,688             967
Retained Deficit                                                     (278,672)        (93,080)
                                                                 ------------    ------------

Total Stockholders' Equity (Deficit)                                  314,016         (92,080)
                                                                 ------------    ------------

Total Liabilities and Stockholders' Equity (Deficit)             $  4,992,289    $  4,791,807
                                                                 ============    ============
</TABLE>

* Condensed from audited financial statements.

                                       1

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

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

               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                   (Unaudited)

                                                  For the Three    For the Three
                                                  Months Ended     Months Ended
                                                    March 31,        March 31,
                                                      2004             2003
                                                  ------------     ------------
REVENUES
  Sale of Real Property                           $    163,366     $    220,000
  Collections on Credit Card Receivables               161,378           10,324
  Interest Income                                       53,573           25,984
                                                  ------------     ------------

Total Revenues                                         378,317          256,308
                                                  ------------     ------------

OPERATING EXPENSES
  Cost of Real Property                                199,124          181,152
  Sales Commissions                                         --           18,340
  Consulting Fees                                        7,611            2,856
  Professional Fees                                    108,505           38,427
  General and Administrative Expenses                   85,020            5,812
                                                  ------------     ------------

      Total Operating Expenses                         400,260          246,587
                                                  ------------     ------------

Income (Loss) from Operations                          (21,943)           9,721
                                                  ------------     ------------

OTHER INCOME (EXPENSE)
Interest Expense                                       (96,750)        (107,976)
Other Income                                            24,337               --
                                                  ------------     ------------

     Total Other Income (Expense)                      (72,413)        (107,976)
                                                  ------------     ------------

Loss Before Tax Provision                              (94,356)         (98,255)

Provision for Income Taxes                                  --               --
                                                  ------------     ------------

Net Loss                                          $    (94,356)    $    (98,255)
                                                  ============     ============


Weighted Average Common Shares - Basic              63,333,345              100
                                                  ============     ============

Net Loss per Common Share - Basic                 $      (0.00)    $    (982.55)
                                                  ============     ============

Weighted Average Common Shares - Diluted            63,333,345              100
                                                  ============     ============

Net Loss per Common Share - Diluted               $      (0.00)    $    (982.55)
                                                  ============     ============

                                       2

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

<PAGE>

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

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

<TABLE>
<CAPTION>
                                               Common Stock
                                        ----------------------------                                      Total
                                                                         Additional                    Stockholders'
                                         Number of                        Paid in         Retained        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

Net Loss for the Three Months
   Ended March 31, 2004                           --              --              --        (94,356)        (94,356)
                                        ------------    ------------    ------------   ------------    ------------

** BALANCES, March 31, 2004              100,000,000    $    100,000    $    492,688   $   (278,672)   $    314,016
                                        ============    ============    ============   ============    ============
</TABLE>

* - Audited

** - Unaudited

                                       3

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

<PAGE>

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

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              For the Three   For the Three
                                                                              Months Ended    Months Ended
                                                                                March 31,       March 31,
                                                                              ------------    ------------
<S>                                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                                                      $    (94,356)   $    (98,255)
Adjustments to reconcile net loss to net cash used by
  operating activities
  (Increase) Decrease in:
     Accounts Receivable                                                           193,024              --
     Tax Certificates Held and Accrued Interest Receivable, Net of Discount        116,263         137,145
     Property Inventory Owned                                                     (719,614)        (11,199)
     Finance Receivables                                                            52,078        (329,571)
     Deposits on Properties                                                         55,000              --
     Other Current Assets                                                          (13,000)             --
  Increase (Decrease) in:
     Accounts Payable                                                               39,999              --
     Accrued Expenses                                                              (16,818)         54,496
                                                                              ------------    ------------
        Net Cash Used by Operating Activities                                     (387,424)       (247,384)
                                                                              ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash Received from Reverse Merger                                                    452              --
                                                                              ------------    ------------
        Net Cash Provided from Investing Activities                                    452              --
                                                                              ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  New Borrowings:
     Short-Term                                                                    200,000              --
     Long-Term                                                                          --         183,500
  Debt Reduction:
     Long-Term                                                                    (428,796)             --
  Proceeds Received from Private Placement Stock Sale                              500,000              --
                                                                              ------------    ------------
    Net Cash Provided From Financing Activities                                    271,204         183,500
                                                                              ------------    ------------

Net Decrease in Cash and Cash Equivalents                                         (115,768)        (63,884)

Cash and Cash Equivalents, Beginning of Period                                     540,427         382,429
                                                                              ------------    ------------

Cash and Cash Equivalents, End of Period                                      $    424,659    $    318,545
                                                                              ============    ============
</TABLE>

                                       4

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

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 March 31, 2004 and December 31, 2003 and the results of operations
for the three months ended March 31, 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.

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.

                                       5
<PAGE>

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 quarter ended March 31, 2004, includes three 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 March 31, 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 March 31, 2004.
The statement of operations includes the income and expenses of STB, Inc. and
its subsidiaries for the complete three months ended March 31, 2004 and the
income and expenses of Tele-Optics, Inc. for the period from February 3, 2004
through March 31, 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.

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.

                                       6
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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,
                                   March 31, 2003         2003
                                   --------------    --------------

           Tax lien certificates   $      585,500    $      679,529
           Discount on purchase            (4,925)           (4,925)
           Accrued interest               312,235           334,470
                                   --------------    --------------

                                   $      892,810    $    1,009,074
                                   ==============    ==============

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

                                       7
<PAGE>

NOTE 4 - FINANCE RECEIVABLES

Finance receivables consist of the following:


                                                       December 31,
                                    March 31, 2004         2003
                                    --------------    --------------

           Credit card portfolios   $    9,913,738    $   10,171,860
           Discount on portfolios       (8,198,649)       (8,404,694)
                                    --------------    --------------

                                    $    1,715,089    $    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.


NOTE 5 - LINE OF CREDIT

The Company has a $2,000,000 line of credit with a shareholder, which expires
May 2004, 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 March 31, 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 three months ended March 31, 2004 and the year ended
December 31, 2003 was $1,311 and $66,237, respectively.


NOTE 6 - LONG-TERM DEBT


Notes payable consist of the following:

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                       March 31, 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 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
                                                                       --------------   --------------

                                                                            2,455,056        2,805,056

         Less: Current Portion                                              1,956,036        2,306,036
                                                                       --------------   --------------

                                                                       $      499,020   $      499,020
                                                                       ==============   ==============
</TABLE>

Maturities of notes payable are as follows:


         2004          $  1,956,036
         2005               199,608
         2006                99,804
         2007                99,804
         2008                99,804
                       ------------

                       $  2,455,056
                       ============

                                       9
<PAGE>

NOTE 7 - OBLIGATIONS UNDER CAPITAL LEASE

Capital lease obligations consist of the following:

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                    March 31, 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                        $    1,100,370   $    1,179,165
                                                                    ==============   ==============
</TABLE>

         2004          $    408,981
         2005               691,389
                       ------------

                       $  1,100,370
                       ============

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 $1,311 and $66,237 for the three
months ended March 31, 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 three months ended March 31, 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 $5,970 and $128,147 for the three months ended
March 31, 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 March 31, 2004 and December 31, 2003, the Company had a receivable from a
related party in the amount of $14,947 and $16,872, respectively.

NOTE 9 - INCOME TAXES

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

                                                    For the Year
                                  For the Three        Ended
                                   Months Ended     December 31,
                                  March 31, 2004        2003
                                  --------------   --------------
              Current:
                   Federal        $           --   $           --
                   State                      --            2,567
                                  --------------   --------------

                          Total   $           --   $        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.

                                       10
<PAGE>

NOTE 10 - OUTSTANDING WARRANTS

At March 31, 2004, the Company had outstanding warrants to purchase 38,993,500
shares of the Company's common stock at a price of $.08 per share. The warrants
were granted pursuant to the Merger Agreement effective February 3, 2004 and
expire after a period of five years.


NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION

Cash was expended for interest in the amount of $44,097 and $262,217 for the
three months ended March 31, 2004 and the year ended December 31, 2003,
respectively. Cash was expended for income taxes in the amount of $-0- and
$2,892 for three months ended March 31, 2004 and the year ended December 31,
2003, respectively.


NOTE 12 - 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
March 31, 2004 and December 31, 2003 was $236,835 and $335,948, respectively.
The Company's consider the risk to be minimal.


NOTE 13 - SUBSEQUENT EVENTS

The following events occurred subsequent to the date of these financial
statements:

(a)   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.

(b)   Subsequent to the date of the financial statements, the Company forgave
$3,676,252 of its existing indebtedness ("the Obligations") in exchange 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.


NOTE 14 - RESTATEMENT OF MARCH 31, 2004 FINANCIAL STATEMENTS

The accompanying financial statements, as of March 31, 2004 and for the three
months then ended, have been restated to correct errors made resulting from the
incorrect omission of an operating bank account which was opened during the
quarter then ended. Included in the activity of the incorrectly omitted bank
account was the receipt of $500,000 of funds received from a private placement
stock sale which occured on February 3, 2004 and the repayment of note payable
for $350,000. The effect of the restatement was an increase to Additional Paid
in Capital of $492,688 and an increase to the retained deficit of $89,970.

                                       11
<PAGE>

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

Overview
--------

The Company was incorporated 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
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.

                                       12
<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 has 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 is in the process
of effecting such issuance. In addition, the Company's Board of Directors is now
authorized to designate a class of preferred stock into which Mr. Kleinert and
two other parties (holding an aggregate of approximately $2,800,000 of
indebtedness as of March 31, 2004) have agreed to convert all of their
indebtedness into, and the Board of directors intends to effect such designation
and conversion as soon as practicable.

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 March 31, 2004 was
characterized by a substantial increase in revenues offset by a substantial
increase in operating expenses, resulting in a net loss for the period of
$37,073 as compared to a net loss of $98,255 during the same period in the prior
year.

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

Total revenues for the three-month period ended March 31, 2003 (the "2003 First
Quarter) of $256,308 increased to $378,317 for the three-month period ended
March 31,2004 (the "2004 First Quarter"), a 47.60% increase. Such increase is
primarily attributable to the increased operations and focused efforts of
Velocity and the maturation of its portfolios. Revenues from the sale of real
property, the collection of credit card receivables and interest income derived
from debt instruments owned by the Company represented approximately 86%, 4% and
10%, respectively, of total revenues in the 2003 First Quarter, as compared to
approximately 43%, 43% and 14%, respectively, of total revenues in the 2004
First Quarter. Revenue from sales of real property decreased in the 2004 First
Quarter from $220,000 to $163,366, representing a __% decrease. Such decrease is
primarily attributable to the timing of sale dates. Management does not believe
that the mix of revenues on a quarterly 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.

                                       13
<PAGE>

Total operating expenses for the 2003 First quarter of 246,587 increased to
$341,059 for the 2004 First Quarter, a 38.31% increase. Such increase is
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 becoming a reporting issuer during the 2004 First Quarter.

Interest Expense for the 2003 First Quarter of $107,976 decreased to $98,668 for
the 2004 First Quarter, an 8.62% decrease. Such decrease is primarily
attributable to the increase in revenues during the 2004 First Quarter that
reduced the Company's borrowing needs. During the 2004 First Quarter the Company
also recognized other income of $24,337 that was derived from other JHI
operations.

Net loss for the First Quarter of 2003 of $98,255 decreased to a net loss of
$37,073 for the 2004 First Quarter, a 62.26% decrease. Such decrease is
primarily attributable to the increase in revenues during such periods. 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 continuing operations.

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

         At March 31, 2004, the Company had $333,860 in cash and cash
equivalents and trade accounts payable in the amount of $79,891. Management
believes that such funds, together with the revenues expected to be generated
from operations as well as the impending conversion of all outstanding
indebtedness into preferred stock, 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 or by way of a bank line
of credit. Although the Company is negotiating with various parties and
institutions, no assurance can be given that additional capital will be obtained
on terms acceptable to the Company or at all.

         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.

                                       14
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1       Legal Proceedings

             None

Item 2       Changes in Securities

             During the period covered by this Report, no securities were sold
             by the Registrant that were not registered under the Securities Act
             of 1933, as amended (the "Act"), except as set forth below. All
             references to numbers of shares and exercise prices do not reflect
             the 13 for one reverse stock split effected by the Registrant on
             April 8, 2004.

             1.   On February 3, 2004, Registrant issued 39,841,250, 19,920,625
                  and 19,920,625 shares of its common stock, par value $.001
                  (the "Common Stock"), and warrants exercisable for a period of
                  five years to purchase15, 849,500 shares of common stock at
                  $.0 per share to John C. Kleinert ("JCK"), W. Peter Ragan, Sr.
                  ("PRS") and W. Peter Ragan, Jr. ("PRJ"), respectively,
                  pursuant to an Agreement and Plan of Exchange, dated as of
                  February 3, 2004, among the Registrant, TLOP Acquisition
                  Company, L.L.C., STB, Inc. ("STB"), JCK, PRS and PRJ, in
                  exchange for all of the stock in STB owned by such
                  individuals. Each of such individuals was an accredited
                  investor. The exchange ratio was arbitrarily determined by
                  negotiations among the parties and no value was assigned to
                  the shares or the warrants issued. The shares and warrants
                  were issued in reliance upon the exemption provided by Section
                  4(2) of the Act.

             2.   On February 3, 2004, Registrant issued 7,312,500 shares of its
                  Common Stock and a warrant to purchase 7,312,500 shares of its
                  Common Stock exercisable for a period of five years at $.08
                  per share to David Granatell in consideration of the payment
                  of $500,000 in cash. Mr. Granatell was an accredited investor.
                  The shares and warrant were issued in reliance upon the
                  exemption provided by Section 4(2) of the Act.

             3.   On February 5, 2004, Registrant issued a warrant to purchase
                  2,600,000 shares of its Common Stock exercisable for a period
                  of five years commencing December 31, 2004 at $.08 per share
                  to Lomond International, Inc. ("Lomond"), pursuant to and as
                  an inducement to Lomond to enter into a Business Advisory
                  Agreement, dated as of February 2004, with the Registrant. No
                  value was assigned to the warrant by the parties. Lomond was
                  an accredited investor. The warrant was issued in reliance
                  upon the exemption provided by Section 4(2) of the Act.

                                       15

<PAGE>

With respect to issuances of securities referred to above, investors were
furnished with information regarding the Registrant and AIS and the offering and
issuance, and each had the opportunity to verify information supplied.
Additionally, Registrant or AIS, as the case may be, obtained a representation
from each investor of such investor's intent to acquire the securities for the
purpose of investment only, and not with a view toward the subsequent
distribution thereof. The securities bear appropriate restrictive legends, and
Registrant has issued stop transfer instructions to its transfer agent.


Item 3       Defaults Upon Senior Securities

             None

Item 4       Submission of Matters to a Vote of Security Holders

             None  Majority consents

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.

              --------------------
              *      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.

                                       16
<PAGE>

             (b)     Reports on Form 8-K

                         On February 18, 2004, Registrant filed a Current Report
                     on Form 8-K reporting a change in control and the
                     acquisition of all of the issued and outstanding shares of
                     common stock of STB, Inc., a New Jersey corporation
                     ("STB"). Such report included the financial statements of
                     STB for the periods specified in Rule 3-05(b) of Regulation
                     S-X and the pro forma financial information required
                     pursuant to Article 11 of Regulation S-X.

                                       17
<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 17, 2004                By: /s/ JOHN C. KLEINERT
                                           -------------------------------------
                                           John C. Kleinert
                                           Chief Executive Officer and President

                                       18