UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                               AMENDMENT NO. 3 TO
                                   FORM 10-QSB

[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the quarterly period ended September 30, 2003

[ ]   Transition Report pursuant to 13 or 15(d) of the Securities Exchange
      Act of 1934

      For the transition period                  to

                         Commission File Number 0-26709


                        Y3K SECURE ENTERPRISE SOFTWARE, INC.
       -----------------------------------------------------------------
       (Exact name of small Business Issuer as specified in its charter)


           Nevada                                         98-0201259
 ---------------------------------             --------------------------------
 (State or other jurisdiction of              (IRS Employer Identification No.)
  incorporation or organization)

                800 Bellevue Way NE, Suite 600, Bellevue, WA  98004
                ----------------------------------------------------
                     (Address of principal executive offices)

                                 (253) 284-2935
                                 --------------
                 Issuer's telephone number, including area code

                                       N/A
              -------------------------------------------------------
             (Former name, former address and former fiscal year, if
                        changed since last report)


Check  whether the issuer (1) 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 issuer was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days [X] Yes [ ] No

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:  56,919,850 shares of $0.001 par value
common stock outstanding as of October 30, 2003.


<PAGE>


                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)


                        CONSOLIDATED FINANCIAL STATEMENTS


                               SEPTEMBER 30, 2003
                                    RESTATED






                                       1
<PAGE>


                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                                SEPTEMBER 30          JUNE 30
                                                                                    2003                2003
--------------------------------------------------------------------------------------------------------------------

<S>                                                                          <C>                 <C>
ASSETS

CURRENT
     Cash                                                                    $         24,380    $            653
     Lease security deposit                                                             3,165                   -

CAPITAL ASSETS                                                                          3,585               4,769
                                                                             ---------------------------------------

                                                                             $         31,130    $          5,422
====================================================================================================================

LIABILITIES

CURRENT
     Accounts payable and accrued liabilities                                $        689,357    $        697,337
     Loans payable Note 3                                                             951,166             884,166
     Current portion of capital lease obligations                                     121,565             121,565
                                                                             ---------------------------------------
                                                                                    1,762,088           1,703,068
                                                                             ---------------------------------------

SHAREHOLDERS' DEFICIENCY

SHARE CAPITAL
     Authorized:
         200,000,000 common shares, par value $0.001 per share

    Issued and outstanding:
          56,919,850 common shares at September 30, 2003 and 52,050,605
          common shares at June 30, 2003                                               56,920              52,050

   Share subscriptions receivable                                                        (571)               (571)

    Additional paid-in capital                                                      2,929,387           2,741,023

DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                                   (4,716,694)         (4,490,148)
                                                                             ---------------------------------------
                                                                                   (1,730,958)         (1,697,646)
                                                                             ---------------------------------------

                                                                             $         31,130    $          5,422
====================================================================================================================
</TABLE>


                                       2
<PAGE>

                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)

                CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                               THREE MONTHS ENDED                   INCEPTION TO
                                                                    SEPTEMBER 30                    SEPTEMBER 30
                                                              2003                 2002                 2003
---------------------------------------------------------------------------------------------------------------------

<S>                                                   <C>                  <C>                  <C>
REVENUES                                              $              --    $              --    $        138,833

EXPENSES                                                        216,548              166,831          (4,779,594)
                                                      ---------------------------------------------------------------

OPERATING LOSS                                                 (216,548)            (166,831)         (4,640,760)

OTHER INCOME (EXPENSE)                                           (9,998)                   0             (50,190)
                                                      ---------------------------------------------------------------

NET LOSS FOR THE PERIOD                               $        (226,546)   $        (166,831)   $     (4,690,950)
=====================================================================================================================


NET LOSS PER SHARE                                    $             .01    $            .01
===============================================================================================


WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING         54,485,225          42,518,500
===============================================================================================
</TABLE>


                                       3
<PAGE>




                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                      THREE MONTHS ENDED       INCEPTION
                                                                                                MARCH 19
                                                                                                 1999 TO
                                                                        SEPTEMBER 30           SEPTEMBER 30
                                                                     2003           2002           2003
-----------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                    $  (226,546)   $  (166,831)   $(4,690,951)

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING
  ACTIVITIES
     Fair value of unpaid compensation                                    --             --         96,000
     Depreciation and amortization                                     1,184          1,184         39,927
     Write off leasehold improvements                                     --             --         14,881
     Write off Karunga note guarantee                                                              400,000
     Write off notes receivable                                           --             --         48,000
     Write off investment                                                 --             --         25,000
     Loss from default under equipment leases                             --             --        142,955
     Stock issued for other than cash                                143,844             --        444,238
     Lease Deposit                                                    (3,165)            --         (3,165)
     Change in assets and liabilities:
         Accounts payable and accrued liabilities                     (7,980)       161,955        748,391
                                                                 -----------------------------------------
                                                                     (92,663)        (3,692)    (2,734,724)
                                                                 -----------------------------------------
 CASH FLOWS FROM INVESTING ACTIVITIES
                                                                          --             --       (151,470)
     Purchase of equipment and property
                                                                          --             --        (40,000)
     Advances on notes receivable
                                                                          --             --        (25,000)
     Investment in Humanicom, Inc.
                                                                 -----------------------------------------
                                                                          --             --       (216,470)
                                                                 -----------------------------------------


CASH FLOWS FROM FINANCING ACTIVITIES
                                                                      67,000             --        551,166
       Loans payable
                                                                          --             --           (571)
       Share Subscriptions receivable
                                                                          --             --        (20,970)
       Principal payments on capital lease obligations
                                                                      49,390             --        254,316
       Issuance of common stock for cash
                                                                          --             --      2,116,633
       Issuance of preferred stock
                                                                          --             --         75,000
       Capital Contribution by Shareholder
                                                                 -----------------------------------------
                                                                     116,390             --      2,975,574
                                                                 -----------------------------------------


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  23,727         (3,692)        24,380

                                                                         653         10,722             --
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                                                 -----------------------------------------

                                                                 $    24,380    $     7,030    $    24,380
CASH AND CASH EQUIVALENTS, END OF PERIOD
==========================================================================================================
</TABLE>


                                       4
<PAGE>

                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

1.    BASIS OF PRESENTATION

      The unaudited consolidated financial statements as of September 30, 2003
      included herein have been prepared without audit pursuant to the rules and
      regulations of the Securities and Exchange Commission. Certain information
      and footnote disclosures normally included in financial statements
      prepared in accordance with United States generally accepted accounting
      principles have been condensed or omitted pursuant to such rules and
      regulations. In the opinion of management, all adjustments (consisting of
      normal recurring accruals) considered necessary for a fair presentation
      have been included. It is suggested that these consolidated financial
      statements be read in conjunction with the June 30, 2003 audited financial
      statements and notes thereto.


2.    ACQUISITION OF SUBSIDIARY

      Effective March 22, 2002, Y3K Secure Enterprise Software, Inc. acquired
      100% of the issued and outstanding shares of Y3K Incorporated by issuing
      13,100,000 common shares. In addition, the former shareholders of Y3K
      Incorporated received an additional 4,981,374 common shares in a separate
      transaction.

      A summary of the transaction is as follows:

      The total number of outstanding shares of Zeballos prior to the
      acquisition was 27,688,500. Y3K, Inc., shareholders had common shares of
      12,789,792 and preferred shares of 5,291,582 for a total conversion of
      common shares from Zeballos of 18,081,374. In order for Y3K, Inc.,
      shareholders to receive 18,081,374 shares of Zeballos, 13,100,000 newly
      issued shares were issued and 4,981,374 shares were received from existing
      issued and outstanding shares (part of the 27,688,500 common shares issued
      and outstanding to Zeballos shareholders) of Zeballos common shares.

      The transaction resulted in the Zeballos shareholders holding a total of
      22,707,126, or 56% of the total issued and outstanding shares of
      40,788,500 and Y3k, Inc., shareholders having a total of 18,081,374, or
      44% of the total issued and outstanding shares after the close of the
      acquisition. Even though Y3k shareholders ended up with 44% of the total
      issued and outstanding shares after the acquisition the former
      shareholders of Y3K Incorporated did have control as outlined in items
      (b), (c), and (d) of paragraph 17 of SFAS 14.

      -     the existence of a large minority voting interest in the combined
            entity

      -     control of the board of the combined entity

      -     domination of the senior management of the combined entity


                                       5
<PAGE>

                      Y3K SECURE ENTERPRISE SOFTWARE, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003


      Accordingly, the transaction, which is referred to as a "reverse
      take-over", has been treated for accounting purposes as an acquisition by
      Y3K Incorporated of the net assets and liabilities of Y3K Secure
      Enterprise Software, Inc. Under this purchase method of accounting, the
      results of operations of Y3K Secure Enterprise Software, Inc. are included
      in these consolidated financial statements from March 22, 2002.

      Y3K Secure Enterprise Software, Inc. had a net asset deficiency at the
      acquisition date; therefore, the 13,100,000 shares issued on acquisition
      were issued at fair value of $0 with the net asset deficiency of $25,743
      charged to deficit. Y3K Incorporated is deemed to be the purchaser for
      accounting purposes. Accordingly, its net assets are included in the
      consolidated balance sheet at their previously recorded amounts.

      The acquisition is summarized as follows:

      Current Liabilities
          Accounts payable                      $  25,743
                                                ---------

      Net Asset Deficiency                      $ (25,743)
                                                =========

3.    LOANS PAYABLE

      The Loans Payable are due to various entities and individuals as follows:


      Loans from shareholders with unsecured demand notes
      at 12% per annum                                                $322,500
      Loan due to bank - defaulted in year 2001 (unsecured)            155,666
      Loan due to Cornell Capital, Inc. *                               50,000
      Loan due to private party                                         20,000
      Loan due as guarantor to creditor of Karunga Technologies, Inc.  400,000
---------------------------------------------------------------------
                                                                      --------
           Total Loans Payable                                        $951,166
                                                                      ========

     * 1,555,556 common shares were issued to Cornell Capital, Inc., as security
     for $50,000 that was funded in September 2003.


                                       6
<PAGE>

Item 2. Management's Discussion and Analysis

During the year ended June 30, 2002, we completed our  acquisition of Y3K, Inc.,
a private  Washington  State company that owns FusionPak,  a suite of enterprise
business  software designed for the  telecommunications,  banking and government
sectors.

Plan of Operation

During the three month period ended  September  30, 2003,  we attempted to raise
the necessary funds to continue to conduct our business plan. We were successful
in obtaining  two new  short-term  loans of $50,000 and $20,000 and  converted a
$3,000 note payable to equity at a pre-determined price per share.  Further, the
Company sold  1,067,311  common  shares for cash  proceeds of $46,389 and issued
2,079,711 shares for services in the amount of $143,844. The Company also issued
1,555,556  common  shares to Cornell  Capital as  collateral  for their  already
funded loan of $50,000,  and to secure the funding of an additional  $100,000 in
the 2nd fiscal quarter.

Our plan of  operations  for the next twelve months is to complete the following
objectives within the time period specified, subject to our obtaining additional
financing for the continued development of Y3K, Inc.'s business:

     -   We  plan  to   undertake   an   advertising,    marketing,  and   sales
         campaign to market the bundled services of FOX  communication for which
         the Company has signed a Joint Operations Agreement effective September
         10, 2003. The monthly minimum is $50,000 and we anticipate that we will
         be out of pocket for up to 5 months  before we  realize  cash flow from
         our efforts. Once sales are sufficient from the bundled services,  YTHK
         will  not  be  required  to  use  its  own  funds  for  marketing.  Our
         anticipated  out of pocket  for these  expenses  will be  approximately
         $250,000.

     -   We plan to purchase and lease additional  equipment for our business at
         an approximate cost of $50,000

     -   With adequate  funding,  we anticipate our monthly operating costs will
         be  approximately  $150,000  per month in order to achieve  our planned
         operations  compared  to a minimum of $50,000 per month just to sustain
         minimum operations.

     -   We anticipate the possible  purchase of the ICS  technology,  which was
         developed  by  Karunga  Technologies   Corporation  for  Y3K.  We  have
         continued  to advance  joint  development  costs to Karunga.  The funds
         being  advanced  are for the  continued  co-development  of the current
         version of the ICS. We currently have a license  agreement with Karunga
         that will expire on October 30, 2003,  however,  we anticipate that the
         agreement  will  be  extended  for  additional  periods.  There  is  no
         guarantee that we will be able to conclude an agreement with Karunga to
         acquire  the  ICS  technology,  but do  expect  that  we  will  receive
         additional extensions of the license agreement.

In order to explore the  possible  bundling of services  with other  proprietary
software,  the  Company  has  signed an  agreement  with  xSides,  a  Washington
Corporation  that is the developer of a secure platform that allows companies to
control content displayed on the PC desktop.  The 2 year agreement gives Y3K the
opportunity to introduce and populate the space with their software applications
that  will  interoperate  with the  xSides  technology  and  allows  Y3K to sell
(license) the xSides  product to enterprise  level  customers.  xSides  patented
technology  manages data  delivered to and  displayed on a computer and can even
create an  alternate  start  menu or a  completely  new  secure  space  residing
directly on the desktop.


                                       7
<PAGE>

     -   As part of the xSides Agreement,  effective  September 3, 2003, Y3k has
         leased  office space to  accommodate  employees  of xSides.  The office
         space is located at 100 South King Street, Suite 535, Seattle, WA 98104
         and  comprises  2,302 sq. ft. of rentable  space.  The lease is for one
         year with a base rent of $3,165 per month.

     -   Y3K has also entered into  consulting  agreements with key employees of
         xSides,  which will allow them to  continue to develop  their  existing
         software as well as integrate  with the  existing  bundling of services
         provided by Y3k Fusion Pak.  These new  consultants to Y3k will provide
         expertise and experience to the team  implementing  and integrating the
         products of Y3K and Fox  Communications  into the secure desktop space.
         All  of  the  complete  end-to-end  communications  platforms  will  be
         integrated and launched from the PC desktop within the xSides space.

     - The consultants and their responsibilities are as follows:

         1. Jason Smith -

             -    Develop  the  version  of  the  application   integrating  Y3K
                  applications  into  the  xSides  space  based  on the  project
                  schedule  outlined  with  approval of YTHK and  acceptance  by
                  Jason Smith

             -    Advise  Y3K  on  xSides  technology  and  implementation  with
                  contracts outlined by Business Development.

         2. Scott Owen -

             -    Manage  the  Quality   Assurance  process  with  internal  and
                  external resources for the combined technologies of xSides and
                  Y3K Products and Services
             -    Develop and manage test plans creation for black box and white
                  box test
             -    Act  as  a  project  manager  as  situations  dictate  in  the
                  development of the bundled products and services.

          3. Michael Secright -

             -    Deploy and manage  network  supporting  y3k  integration/
                  development teams
             -    Manage and support  development  efforts that require sever
                  integration and  development
             -    Support of corporate IT operations for xSides and Y3k -
                  Introduce third party relationships to Y3K and nurture those
                  relationships
             -    Evaluate third party technology and report findings.
             -    Responsible for administrative duties and budget for IT xSides
                  and Y3k operations

On June 6, 2003 Y3K announced a new strategic partnership with InteractNetworks.
Under this partnership Y3K signed a reseller's  agreement that allows Y3K to add
InteractNetworks  Lockdown(TM) Vulnerability Management Appliance (VMA) to Y3K's
comprehensive line of security solutions products.

Lockdown(TM)  Vulnerability  Management Appliances (VMA) automates vulnerability
assessment  auditing and reporting  for 50 to 25,000 IP addresses.  All auditing
and reporting is managed through a secure web interface. This simple, automated,
and  scalable  architecture  significantly  reduces  the  cost of  vulnerability
auditing  and  reporting.  Reporting,  from  up  to  50  Lockdown(TM)  VMAs,  is
consolidated,  providing a comprehensive  solution for large enterprise networks
and global deployments. Additionally, detailed reporting ensures compliance with
Enterprise,   HealthCare  (HIPPA),   Financial  Institutions  (GLB),  and  other
government, federal and state agency security guidelines.

This is a stand-alone product and not part of the Fusion Pak product line.


                                       8
<PAGE>

On August 15,  2002 we entered  into the Equity  Line of Credit  Agreement  with
Cornell  Capital,  Inc.,  ("Cornell")  which provides the  opportunity for us to
obtain up to $7,000,000 in equity financing through August 15, 2004. In order to
have  access  to the funds  available  under  the  equity  line of credit we are
required  to  register  the shares that we sell to Cornell so that it can resell
those shares  without  restriction.  We are  preparing a Form SB-2  Registration
Statement  seeking to  register  30,000,000  shares of our common  stock that we
believe will be sufficient  for us to obtain the entire  $7,000,000 in financing
made  available  to us under the Equity Line of Credit  Agreement.  We expect to
have the  registration  statement filed in the second quarter of fiscal 2004. In
the  interim  period  prior to our filing the SB-2,  the  Company  has issued to
Cornell Capital, Inc., 1,555,556 shares of common stock to be held as collateral
for a loan  commitment of $150,000.  In September 2003 Cornell funded an initial
$50,000  against  the loan  agreement  and we expect an  additional  $100,000 is
expected to be funded by Cornell Capital, Inc., to the Company in the 2nd fiscal
quarter.

This additional  funding allowed us to complete the SB-2 registration  statement
which was filed in  October  2003 and,  when and if it becomes  effective,  will
allow us to drawn down on our Equity Line of Credit with Cornell  Capital,  Inc.
From these  proceeds,  the Company will repay its short-term  loan proceeds from
Cornell  Capital,  Inc., and continue with equity funding under the terms of the
Equity Line of Credit as funds are deemed necessary by the Company.

If we do not raise additional funds by selling our shares or obtaining loans, or
if we are unable to generate sufficient revenue our business will fail.

With  additional  revenues,  we plan to retain  staffing  levels  sufficient  to
achieve our goals. This additional  staffing may include full-time and part-time
employees, and consultants. Without sufficient revenues, we will continue
limiting our employees to our president, vice-president/secretary, officemanager
and receptionist.

Completion of our plan of operation is subject to obtaining adequate  financing.
However, we cannot assure investors that adequate financing will be obtained. In
the absence of our projected revenues, we may be unable to proceed with our plan
of operation.  Even without significant  revenues within the next twelve months,
we still anticipate being able to continue with our present  activities,  but we
will require  financing to potentially  achieve our goal of profit,  revenue and
growth.

The  foregoing  represents  our best estimate of our cash needs based on current
planning and business conditions.  The exact allocation,  purposes and timing of
any  monies  raised in  subsequent  private  financings  may vary  significantly
depending upon the exact amount of funds raised and status of our business plan.

In the event we are not  successful  in reaching  our initial  revenue  targets,
additional  funds may be required  and we would then not be able to proceed with
our business plan for the development and marketing of the our core products and
services.  Should  this occur,  we would  likely seek  additional  financing  to
support the continued operation of our business.


Results of Operations

During the year ended June 30, 2002, we completed our  acquisition  of Y3K, Inc.
The transaction, which is referred to as a "reverse take-over", has been treated
for accounting  purposes as an acquisition by Y3K Incorporated of the net assets
and  liabilities  of Y3K Secure  Enterprise  Software,  Inc. Under this purchase
method of  accounting,  the  results  of  operations  of Y3K  Secure  Enterprise
Software,  Inc. are included in these  consolidated  financial  statements  from
March  22,  2002.  The  financial   statements  presented  herein  compares  the
three-month periods ended September 30, 2003 and September 30, 2002 based on the
operations  of Y3K,  Inc.  for the prior  year and  accordingly,  our  financial
statements are now prepared on a  consolidated  basis and include the operations
of Y3K, Inc.


                                       9
<PAGE>

In the  three-month  period ended  September 30, 2003, we incurred a net loss of
$226,546. This loss consisted of business operation and administrative expenses,
with the largest  single  expense  resulting from the completion of payment of a
$280,000 commitment fee to Cornell Capital Partners,  L.P. under the Equity Line
of Credit Agreement with Cornell. The Company issued 1,555,546 shares to Cornell
to complete  the  payment.  The total  expense for this  issuance  was valued at
$113,333. This amount was determined by the total contract price of $280,000 for
which  $166,667  was  expensed  in the prior year with the  initial  issuance of
shares of 1,666,667 common shares.  During this three month period,  we realized
revenue of $nil.

Since  incorporation,  we have funded our operations  through  private loans and
equity financings. As at September 30, 2003, our assets were recorded at $31,130
consisting  of cash of  $24,380,  a lease  deposit  on new space of  $3,165  and
capital assets of $3,585. Our liabilities totaled $1,762,088, consisting of
$689,357 in accounts payable and accrued liabilities, loans payable of $951,166,
including the note to the Karunga  creditor that was  guaranteed by the Company,
and lease  obligations  of  $121,565  from a prior  office  space  leased by the
Company.

The bank loan is an obligation of Y3K, Inc., our wholly owned subsidiary,  which
was unable to payoff the promissory note when it came due. The bank assigned the
promissory note to a collection  agency in 2001,  which sent out a notice of the
assignment  and calling for payment to it in the amount of $155,666.  Since that
time there has been no further  contact from the bank or the collection  agency.
The obligation is unsecured.

The $121,565 in equipment lease obligations are the obligation of our subsidiary
Y3K, Inc. Y3K, Inc. had leased  furniture and fixtures for the leased offices it
previously  occupied in Tacoma,  WA. The equipment lessor removed all equipment,
furniture and computers from the offices and liquidated these items as an offset
against the total lease obligations.  The lessor subsequently sued Y3K, Inc. for
the  remaining  balance  due after  offsetting  the  amounts  realized  from the
liquidation  sale.  Because  Y3K,  Inc.  did not have  resources  to defend  the
collection  action,  the  lessor  was able to obtain a default  judgment  in the
amount of $121,565  against the Y3K.,  Inc. The judgment  bears  interest at the
statutory rate of 12% per annum and is unsecured.

Y3K, Inc. has also defaulted on the lease for the premises it formerly  occupied
in Tacoma,WA. Y3K, Inc's. total obligation under the premises lease is estimated
at $239,475. The landlord was able to find a new tenant for the premises and the
estimated  amount due is based on the total amount of payments due from the time
of Y3K,  Inc.'s  default until the new tenant began to occupy the  premises.  At
this time the  landlord has taken no action to collect any amounts owed to it by
Y3K, Inc. under the lease.

The  $328,500  in  shareholder  loans  were  made  to  the  Company  by  private
individuals  under  promissory  notes which bear interest at the rate of 12% per
annum until paid. The notes are demand notes and unsecured. At this time no note
holder has made any  demands  for either  interest  or  principal  payments  and
therefore none of these obligatios are in default. It is the Company's intention
to  payoff  these  obligations  as soon as funds are  available  to do so. It is
expected  that  proceeds  that we  receive  under  the  Equity  Line  of  Credit
arrangement  with Cornell  Capital will be the primary  source for  repayment of
these loans.

The bank loan, defaulted equipment lease judgment,  and office lease obligations
are the  obligations of Y3K, Inc. All of these  obligations  are unsecured.  Y3K
Secure  Enterprise  Software,  Inc., has not  guaranteed or otherwise  obligated
itself for any of the obligations of Y3k, Inc


                                       10
<PAGE>

Item 3.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive  Officer and its Chief  Financial  Officer,  after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as defined in the  Securities  Exchange Act of 1934 Rules 13a-14 (c) and 15d-14
(c)) as of the end of the period covered by this quarterly report on Form 10-QSB
(the  "Evaluation  Date")),  have concluded that, as of the Evaluation Date, the
Company's  disclosure  controls and  procedures  were  adequate and effective to
ensure that material  information  relating to the Company and its  consolidated
subsidiaries  is recorded,  processed,  summarized and reported by management of
the Company on a timely basis in order to comply with the  Company's  disclosure
obligations  under  the  Securities  Exchange  Act of 1934  and  the  SEC  rules
thereunder.

Changes in Internal Controls

There were no significant changes in the Company's internal controls or in other
factors that could  significantly  affect the Company's  disclosure  control and
procedures  subsequent to the Evaluation Date, nor any significant  deficiencies
or material  weaknesses in such  disclosure  controls and  procedures  requiring
corrective actions.


PART II- OTHER INFORMATION

Item 1. Legal Proceedings


We are the plaintiff in a lawsuit filed in Pierce County,  Washington,  Superior
Court,  which we commenced in October 2002. In this  litigation we are asserting
claims against a corporation and one of its apparent principals related to their
alleged  breach of  contract  to  provide  debt  financing  to the  Company.  In
addition, the Company is seeking compensation for the damages it suffered as the
result of the defendants'  attempts to dispose of shares of the Company's common
stock that had been pledged to secure the promised,  but undelivered  financing.
The  defendants  have asserted a counterclaim  against the company,  pursuant to
which they seek a money judgment  against us in an unspecified  amount.  We have
been  advised by the  attorney  representing  us in the lawsuit that he believes
that the  counterclaim has little or no merit. The Company is not a party to any
other  pending  legal  proceeding.  Management  is not  aware of any  threatened
litigation, claims or assessments.


                                       11
<PAGE>

Item 2.  Changes in Securities

         During the quarter, the Company issued common shares as follows:

         1,067,311  shares of common  stock  were  issued  for cash and  166,667
         shares of common stock were issued in exchange for the  cancellation of
         a $3,000 note.  The shares were issued at prices  ranging from $.018 to
         $.14 per share. The following table summarizes these transactions

        <TABLE>
        <CAPTION>
        =============================================================================================================
                                     Number of                                Date of
        Person/Class                  Shares       Cash Consideration       Transaction        Other Consideration
        -------------------------------------------------------------------------------------------------------------
        <S>                           <C>             <C>                 <C>               <C>

        Accredited Individual            200,000        $7,595.00          July 24, 2003
        Accredited Individual            200,000        $7,595.00          July 24, 2003
        Accredited Individual            131,597        $5,000.00          July 24, 2003
        Accredited Individual            200,000        $3,600.00          Aug  22, 2003
        Accredited Individual            200,000        $3,600.00          Aug  22, 2003
        Accredited Individual            166,667                           Sept 26, 2003     Cancellation  of $3,000
                                                                                              note
        Accredited Individual            100,000       $14,000.00          Sept 26, 2003
        Accredited Individual             35,714        $5,000.00          Sept 26, 2003
                                       ----------      ----------
                                       1,233,978       $46,390.00                            $3,000.00

        ==============================================================================================================
        </TABLE>

         2,079,711 shares of common stock were issued for services  amounting to
         $143,844  at prices  ranging  from $.03 to $.08 per share.  The largest
         recipient of shares  issued for services was to Cornell  Capital,  Inc.
         1,555,556  shares  valued at $113,333  were  issued to Cornell  Capital
         Partners, L.P.on September 18, 2003 to complete payment of a commitment
         fee owed to Cornell under terms of the Equity Line of Credit  Agreement
         between the  Company and  Cornell.  The  Company had  committed  to pay
         Cornell a  commitment  fee of $280,000 by issuing it a fixed  number of
         shares  (3,111,111)  at a valuation  of $280,000 to Cornell at the time
         the  agreement  was  entered  into in August  2002.  In fiscal 2003 the
         Company issued  1,666,667  shares to Cornell at a valuation of $.10 per
         share.  It  concluded  payment  of the fee  with  the  issuance  of the
         1,555,556  shares which were valued at $133,333 based on the difference
         between the total fee of $280,000 and the $166,667  payment  previously
         recorded.

         The table below summarizes the common shares issued for services:

        <TABLE>
        <CAPTION>
        =============================================================================================================
                                   Number of       Consideration/Value          Date of            Description of
        Person/Class                Shares             of Services            Transaction        Services Rendered
        -------------------------------------------------------------------------------------------------------------
        <S>                           <C>             <C>               <C>                    <C>
        Individual                        30,000       $    900.00       August 22, 2003        Introduction to
                                                                                                Software Company
        Corporation                      270,155       $ 24,812.00       August 22, 2003        Promotional campaign
        Individual                        24,000       $  1,200.00       August 22, 2003        Technical Services
        Attorney                         100,000       $  1,800.00       August 26, 2003        Legal Fees
        Attorney                         100,000       $  1,800.00       August 26, 2003        Legal Fees
        Cornell Capital                1,555,556       $113,332.00       Sept   16, 2003         Commitment Fee
                                       ---------       -----------
                                       2,079,711       $143,844.00
        =============================================================================================================
        </TABLE>


                                       12
<PAGE>

         An additional  1,555,556  shares of common stock were issued to Cornell
         Capital  Partners,  L.P. as security for a $50,000 loan provided to the
         Company by  Cornell.  These  shares are  expected to be returned to the
         treasury of the Company upon  repayment  of the loan from  proceeds the
         Company anticipates receiving under the Equity Line of Credit.

         All of  these  shares  were  issued  pursuant  to the  exemptions  from
         registration  under  Sections 4(2) and/or 4(6) of the Securities Act of
         1933 and Regulation D.

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


Exhibit No.  Description                                       Location
-----------  -----------                                       --------

10.1         Agreement dated September 3, 2003 between Y3      Provided herewith
             Secure Enterprise Software, Inc. and xSides
             Corporation

10.2         Agreement dated June 6, 2003 between Y3           Provided herewith
             Secure Enterprise Software, Inc. and
             InteractNetworks, Inc.

10.3         Consulting Agreement dated September 8, 2003      Provided herewith
             Provided herewith between Y3K Secure Enterprise
             Software, Inc. and Jason M. Smith

10.4         Consulting Agreement dated September 8, 2003      Provided herewith
             Provided herewith between Y3K Secure Enterprise
             Software, Inc. and Michael K. Secright

10.5         Consulting Agreement dated September 8, 2003      Provided herewith
             Provided herewith between Y3K Secure Enterprise
             Software, Inc. and Scott Owen

31.1         Certification of the Chief Executive Officer      Provided herewith
             Provided herewith Pursuant to Section 302 of the
             Sarbanes-Oxley Act of 2002

31.2         Certification of The Chief Financial Officer      Provided herewith
             Pursuant to Section 302 of the Sarbanes-Oxley
             Act of 2002

32.1         Certification by King Cole Pursuant to            Provided herewith
             Section 906 of the Sarbanes-Oxley Act of 2002

32.2         Certification by Leon Caldwell Pursuant to        Provided herewith
             Section 906 of the Sarbanes-Oxley Act of 2002


                                       13
<PAGE>

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                           Y3K SECURE ENTERPRISE SOFTWARE, INC.

DATE:  May 7, 2004                         /s/ King Cole
                                           --------------------------------
                                           King Cole, President and CEO and
                                           Authorized Signer





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