SECURITIES AND EXCHANGE COMMISSION

                         WASHINGTON, D.C. 20549

                                FORM 10-Q

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

                For the quarterly period ended June 30, 2000

                       Commission File Number:  1-13427



                         STRATESEC INCORPORATED

State of Incorporation:  Delaware              I.R.S. Employer I.D.:  22-2817302

                            105 Carpenter Drive
                         Sterling, Virginia 20164
                               (703) 709-8686


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter periods that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past ninety days.


                     Yes      X                No
                        ------------             ----------


There  were  8,278,298  shares  of Common  Stock,  par  value  $0.01 per  share,
outstanding at August 14, 2000.


<PAGE>




                                                         2

STRATESEC INCORPORATED

Quarter ended June 30, 2000

Index


                                                                       Page

Part I.  Financial information

     Item 1.  Financial Statements.........................................3

         Balance Sheets as of December 31, 1999 and June 30, 2000
         (unaudited).......................................................3

         Statements of Operations for the three months ended
         June 30, 1999 and 2000 and the six months ended
         June 30, 1999 and 2000 (unaudited)................................4

         Statements of Cash Flows for the six months ended
         June 30, 1999 and 2000 (unaudited)................................5

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

     Item 2.  Management's Discussion and Analysis of
               Financial Condition and Results of Operations...............7

Part II.  Other information

     Item 4.  Submission of Matters to a Vote of Security Holders.........12

     Item 6.   Exhibits and Reports on Form 8-K...........................12

     Signature............................................................13


<PAGE>





PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                                               STRATESEC INCORPORATED
                                                   BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                   December 31      June 30,
                                                                                       1999*          2000
                                                                                  -------------  --------------
                                                                                                   (Unaudited)
<S>                                                                              <C>             <C>
        ASSETS
Current assets:
   Cash and cash equivalents..................................................   $        2,831  $      430,811
   Accounts receivable, net of allowance for doubtful
     accounts of $675,000 in 1999 and 132,000 in 2000.........................        2,233,262       4,542,495
   Costs and estimated earnings in excess of billings of
     uncompleted contracts....................................................        2,865,886       3,527,676
   Inventory, net of allowance of 40,000 in 1999 and 2000.....................          245,903         706,940
   Prepaid expenses...........................................................            4,490          15,278
                                                                                 --------------  --------------
        Total currents assets.................................................        5,352,372       9,223,200
Property and equipment, net...................................................          546,520         554,988
Other assets  ................................................................           74,576          78,126
                                                                                 --------------  --------------
                                                                                 $    5,973,468  $    9,856,314
                                                                                 ==============  ==============

        LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Line of credit.............................................................   $      771,532  $    1,425,436
   Current maturities of capital lease obligations............................           72,860          88,000
   Accounts payable...........................................................        2,931,260       3,432,063
   Billings in excess of costs and estimated earnings on
     uncompleted contracts....................................................          234,338         257,819
   Accrued expenses and other.................................................          627,156         607,393
                                                                                 --------------  --------------
        Total current liabilities.............................................   $    4,637,146  $    5,810,711

Long-term liabilities:
   Capital lease obligations, less current maturities.........................           94,570          37,426

Shareholders' equity:
   Common  stock,  $0.01 par  value per  share;  authorized  20,000,000  shares;
     6,890,189  issued and  6,638,189  outstanding  shares in 1999  and8,628,377
     issued and
     8,278,298 outstanding in 2000............................................           68,902          86,284
   Treasury stock 252,000 shares in 1999 and
     350,079 shares in 2000...................................................        (409,564)       (612,814)
   Additional paid-in capital.................................................       22,315,957      24,905,856
   Accumulated deficit........................................................     (20,733,543)    (20,371,149)
                                                                                 -------------   --------------
     Total shareholders' equity...............................................        1,241,752       4,008,177
                                                                                 --------------  --------------
     Total liabilities & shareholders' equity.................................   $    5,973,468  $    9,856,314
                                                                                 ==============  ==============
* Derived from audited financial statements as of December 31, 1999.
</TABLE>


<PAGE>



                                               STRATESEC INCORPORATED
                                              STATEMENTS OF OPERATIONS
                                                     (Unaudited)

<TABLE>
<CAPTION>

                                                       Three Months Ended               Six Months Ended
                                                            June 30,                        June 30,
                                                     1999             2000           1999             2000
                                                 -------------   -------------   -------------   -------------
<S>                                              <C>             <C>             <C>             <C>
Earned Revenues................................  $   2,180,293   $   4,746,773   $   3,690,891   $   8,413,803
Cost of earned revenue.........................      1,402,699       3,380,586       2,584,096       5,612,574
                                                 -------------   -------------   -------------   -------------

  Gross profit.................................        777,594       1,366,187       1,106,795       2,801,229

Selling, general and administrative
   expenses....................................      1,031,343       1,013,373       1,609,365       2,243,816
                                                 -------------   -------------   -------------   -------------

  Operating income (loss)......................      (253,749)         352,814       (502,570)         557,413

Interest and financing fees....................       (60,298)       (115,527)       (116,287)       (200,897)
Interest and other income......................          1,074           5,405          13,240           5,878
                                                 -------------   -------------   -------------   -------------
  Net income (loss)............................  $   (312,973)   $     242,692   $   (605,617)   $     362,394
                                                  ============    ============    ============    ============

Net income (loss) per share--basic..............         (0.05)            0.03          (0.10)           0.05
                                                  =============   =============   =============   ============

Net income per share--diluted...................         (0.05)   $        0.03          (0.10)           0.04
                                                  =============    ============   =============   ============

Weighted average common shares
   Outstanding-basic...........................      5,980,621       8,019,260       5,980,621       8,019,260
                                                 =============   =============   =============   =============

Weighted average common shares
   Outstanding-diluted.........................      5,980,621       8,457,021       5,980,621       8,457,021
                                                 =============   =============   =============   =============
</TABLE>




<PAGE>



                                               STRATESEC INCORPORATED
                                              STATEMENTS OF CASH FLOWS
                                                     (Unaudited)
<TABLE>
<CAPTION>

                                                                                        Six Months Ended
                                                                                            June 30,
                                                                                     1999            2000
                                                                                --------------  --------------
<S>                                                                             <C>             <C>
Cash flows from operating activities:
   Net income (loss).........................................................   $    (605,618)  $      362,394
                                                                                --------------  --------------
Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
     Depreciation and amortization...........................................           74,993         101,234
     Amortization of debt discount...........................................           23,798
Changes in operating assets and liabilities:
   Restricted cash...........................................................        1,900,000              --
   Accounts receivable.......................................................        (212,292)     (2,309,233)
   Costs and estimated earnings in excess of
     billings on uncompleted contracts.......................................         (47,479)       (661,790)
   Inventory.................................................................        (188,937)       (461,037)
   Prepaid expenses..........................................................          116,633        (10,788)
   Other assets..............................................................               73         (3,550)
   Accounts payable..........................................................          (8,066)         500,803
   Billings in excess of costs and estimated
     earnings on uncompleted contracts.......................................         (12,672)          23,481
   Accrued expenses and other................................................           39,572        (19,763)
                                                                                --------------  --------------
       Total adjustments.....................................................        1,685,623     (2,840,643)
                                                                                --------------  --------------
       Net cash from (used in) operating activities..........................        1,080,005     (2,478,249)
Cash flows from investing activities:
   Acquisition of plant and equipment........................................        (105,495)       (109,702)
                                                                                --------------  --------------
   Net cash provided (used) by investing activities..........................        (105,495)       (109,702)
                                                                                --------------  --------------
Cash flows from financing activities:
   Proceeds from line of credit..............................................               --         653,904
   Proceeds from private placement of common stock...........................               --       2,607,281
   Principal payments on debentures..........................................        (920,000)              --
   Principal payments on capital lease obligations...........................         (15,326)        (42,004)
   Purchase of treasury stock................................................        (201,670)       (203,250)
                                                                                --------------  --------------
   Net cash provided by (used in) financing activities.......................      (1,136,996)       3,015,931
                                                                                --------------  --------------
Net (decrease) in cash and cash equivalents..................................        (162,486)         427,980
Cash and cash equivalents at beginning of period.............................          442,582           2,831
                                                                                --------------  --------------
Cash and cash equivalents at end of period...................................   $      280,096  $      430,811
                                                                                ==============  ==============
Supplemental Disclosures of Cash Flow Information:
   Cash paid for:
     Interest expense........................................................   $      116,287  $      200,897
     Income tax..............................................................   $           --  $           --

</TABLE>


<PAGE>



                                            NOTES TO FINANCIAL STATEMENTS

1.  Basis of Presentation

         The unaudited balance sheet as of June 30, 2000 and unaudited statement
of  operations  and  statement of cash flows for the three months ended June 30,
1999 and 2000 are condensed financial statements prepared in accordance with the
rules and  regulations of the Securities and Exchange  Commission.  Accordingly,
they omit certain  information  included in complete  financial  statements  and
should be read in conjunction  with the financial  statements and notes included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the Securities and Exchange Commission on March 30, 2000.

         In the opinion of the Company,  the unaudited  financial  statements at
June 30,  2000 and for the three and six  months  ended  June 30,  1999 and 2000
include  all  adjustments,  consisting  only  of  normal  recurring  adjustments
necessary  for a fair  presentation  of the  financial  position  and results of
operations for such periods.  Results of operations for the three and six months
ended June 30, 2000 are not necessarily indicative of results to be expected for
the full year.

2.  Cost and Estimated Earnings on Uncompleted Contracts

         Cost and estimated  earnings on  uncompleted  contracts at December 31,
1999 and June 30,  2000  which  are  expected  to be  collected  within  year as
follows:
<TABLE>
<CAPTION>

                                                          December 31, 1999                    June 30, 2000
                                                          -------------------                -------------------
<S>                                                       <C>                                <C>
Cost Incurred On Contracts                                $        26,431,919                $        31,950,597
Estimated Earnings                                                  8,412,885                         10,090,284
                                                          -------------------                -------------------
                                                                   34,844,804                         42,040,881
Less Billings To Date                                              32,213,256                         38,771,073
                                                          -------------------                -------------------
                                                                    2,631,548                          3,269,808
                                                          ===================                ===================
</TABLE>





<PAGE>



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

         This discussion and analysis of the Company's  financial  condition and
historical  results  of  operations  should  be read  in  conjunction  with  the
condensed financial  statements and the related notes included elsewhere in this
report.

Overview

         The   Company   is   a   single-source   provider   of   comprehensive,
technology-based   security  solutions  for  medium  and  large  commercial  and
government  facilities  in the United  States and abroad.  The Company  offers a
broad  range  of  services,   including:   (i)  consulting  and  planning;  (ii)
engineering  and design;  (iii) systems  integration;  and (iv)  maintenance and
technical support.

     During the second  quarter,  the Company  continued  to expand its business
development  strategy of  identifying  additional  opportunities  with  existing
national/corporate  clients.  The Company was notified of several  multi-million
dollar  opportunities  from its existing  clients that the Company expects to be
awarded  prior to the end of 2000.  In  addition,  the  Company  added three new
national  level  accounts  during the quarter.  Backlog and follow-on  work with
existing  clients  exceeded  $20  million  at the end of the  quarter.  Based on
currently  identified  backlog and  opportunities,  the Company  expects to show
significantly higher revenue and profitability for the entire year.

         The Company derives its revenues primarily from long-term,  fixed-price
contracts.  Earnings are  recognized  based upon the Company's  estimates of the
cost and percentage of completion of individual contracts. Earned revenues equal
the project's  total contract  amount  multiplied by the proportion  that direct
project  costs  incurred on a project bear to  estimated  total  project  costs.
Project costs include direct labor and benefits,  direct  material,  subcontract
costs, project related travel and other direct expenses.

         Clients  are  invoiced  based upon  negotiated  payment  terms for each
individual contract. Terms usually include a 25% down payment and the balance as
stages of the work are  completed.  Maintenance  contracts  are billed either in
advance,  monthly,  or quarterly.  As a result, the Company records as an asset,
costs and estimated earnings in excess of billings, and as a liability, billings
in excess of costs and estimated earnings.



<PAGE>



Results of Operations

         The  following  table sets  forth the  percentages  of earned  revenues
represented  by  certain  items   reflected  in  the  Company's   statements  of
operations:
<TABLE>
<CAPTION>

                                                               Three Months Ended         Six Months Ended
                                                                    June 30,                  June 30,
                                                            ------------------------  ------------------------
                                                               1999         2000          1999         2000
                                                            -----------  -----------  -----------  -----------
<S>                                                         <C>          <C>          <C>          <C>
Earned revenues...........................................      100.0%       100.0%       100.0%        100.0%
Cost of earned revenues...................................        64.3         71.2         70.0          66.7
                                                            ----------   ----------   ----------   -----------
   Gross profit...........................................        35.7         28.8         30.0          33.3
Selling general and administrative expenses...............        47.3         21.3         43.6          26.6
                                                            ----------   ----------    ---------   -----------
   Operating income (loss)................................      (11.6)          7.5       (13.6)           6.7
Interest and financing fees...............................       (2.8)        (2.4)        (3.2)         (2.4)
Interest and other income.................................         0.0          0.0          0.4           0.0
                                                            ----------   ----------   ----------   -----------

   Net income (loss)......................................     (14.4)%         5.1%      (16.4)%          4.3%
                                                            ==========   ==========   ==========   ===========
</TABLE>

Three Months Ended June 30, 2000 Compared With Three Months Ended June 30, 1999

         Revenues  increased by 118% from $2.2 million in the three months ended
June 30,  1999 to $4.7  million in the three  months  ended June 30,  2000.  The
increase was due primarily to revenue of new  customers  and  increased  revenue
from existing customers. The increase in revenue was primarily due to the growth
of large commercial accounts such as MCI Worldcom and Nokia.

         Cost of earned revenues increased from $1.4 million in the three months
ended June 30, 1999 to $3.4  million in the three  months  ended June 30,  2000,
primarily due to the increase in revenues.  Gross margin decreased from 35.7% in
the  1999  period  to  28.8%  in  2000.  Second  quarter revenue  had  a  larger
proportionate number of price-competitive contracts than the historical average.
As the ratio of non-competitive  contracts to price-competitive  contracts moves
back to the norm, margins will increase.

         Selling,  general and administrative expenses decreased 1.7% from $1.03
million in the three  months  ended June 30, 1999 to $1.01  million in the three
months  ended  June  30,  2000.  The  decrease  was  primarily  due  to  Company
initiatives  to  control the  selling,  general  and  administrative  expenses.

         Interest expense and financing fees increased from $0.06 million in the
three months ended June 30, 1999 to $0.12 million in the three months ended June
30, 2000.  The growth in interest and financing  fees was  proportionately  less
than the growth in revenue thereby decreasing the interest and financing fees as
a percentage of revenue.

         Net  income  improved  from a net loss of $0.3  million  in 1999 to net
income of $0.2  million  in 2000.  The  improvement  was due to  improved  gross
margins,  constrained growth in selling, general and administrative expenses and
dramatically improved revenue.

Six Months Ended June 30, 2000 Compared With Six Months Ended June 30, 1999

         Revenues  increased  by 128% from $3.7  million in the six months ended
June 30,  1999 to $8.4  million  in the six  months  ended  June 30,  2000.  The
increase was due primarily to revenue of new  customers  and  increased  revenue
from existing customers. The increase in revenue was primarily due to the growth
of large commercial accounts such as MCI Worldcom and Nokia.

         Cost of earned  revenues  increased from $2.6 million in the six months
ended  June 30,  1999 to $5.6  million in the six  months  ended June 30,  2000,
primarily due to the increase in revenues.  Gross margin increased from 30.0% in
the 1999 period to 33.3% in 2000.  Margins improved due to improved pricing from
key vendors on several large projects and higher rates for labor.

         Selling,  general and  administrative  expenses increased 39% from $1.6
million in the six months  ended June 30, 1999 to $2.2 million in the six months
ended June 30, 2000.  The increase was primarily due to Company  initiatives  to
increase business development,  and to manage the increased business. The growth
in selling,  general and administrative  expenses was proportionately  less than
the growth in  revenues  thereby  decreasing  the  expenses as a  percentage  of
revenues.

         Interest expense and financing fees increased from $0.12 million in the
six months ended June 30, 1999 to $0.20 million in the six months ended June 30,
2000.  The growth in interest and financing fees was  proportionately  less than
the growth in revenue  thereby  decreasing  the interest and financing fees as a
percentage of revenue.

         Net  income  improved  from a net loss of $0.6  million  in 1999 to net
income of $0.3  million  in 2000.  The  improvement  was due to  improved  gross
margins,  constrained growth in selling, general and administrative expenses and
dramatically improved revenue.


Liquidity and Capital Resources

         In October 1997, the Company  completed its initial public  offering of
Common  Stock,  which  resulted in net proceeds to the Company of  approximately
$9.7 million  after payment of offering  expenses by the Company.  In the fourth
quarter of 1997, the Company  received  proceeds of  approximately  $0.7 million
upon the  exercise of warrants to  purchase  269,382  shares of Common  Stock by
employees.  In October  1997,  the Company used  proceeds of the initial  public
offering to repay $3.4 million of outstanding notes payable.

         During April 1998,  the Board of Directors  approved the issuance of up
to $2.0 million of  convertible  subordinated  debentures to provide  additional
working capital.  As of May 13, 1998, the Company had issued and sold $1,450,000
of  debentures.  The Company sold an  additional  $400,000 of  debentures  as of
August  25,  1998.  The  debentures  had an  interest  rate of 10%,  were due on
December 31, 1999 and were convertible into Common Stock of the Company at $8.50
per share. In addition,  the holders were issued 100 warrants for each $1,000 of
investment with an exercise price of $2.50 and a term of three years.  The value
of the warrants of $71,394 was determined based upon the Black Scholes Valuation
Model and was recorded as additional paid-in capital.

         During February 1999, the $1.9 million the Company was required to post
as  collateral  for a bond pending its appeal of a lawsuit was released when the
trial  court's  judgment was  reversed.  In February  1999,  the Company  repaid
$920,000 of the outstanding debentures.

         During  September  1999 all of the holders of the  company's 10% senior
notes  totaling  $930,000 due December 31, 1999,  have agreed to exchange  their
notes for the Company's common stock valued at $1.50 per share. Additionally, to
support the  significant  increase  in  business,  the board  approved a private
placement of 500,000 shares at $1.50 per share, which was subsequently increased
to 1,204,855 shares. The board also approved the sale of up to 21% equity in the
Company to a  minority  partner.  Netcom  Solutions  International  subsequently
purchased  approximately 8% or 700,000 shares of the Company at $1.50 per share.
As of March 23, 2000, all of these transactions had been completed.  In summary,
$930,000 of debt was  converted  to equity,  $1.8  million  was  received by the
private  placement and $1.05  million in the form of cash and a short-term  note
was received from the sale of a minority interest.

         During the six months ended June 30, 2000,  approximately  $2.5 million
of cash was used in operating activities. This was a result of net income offset
by  increases  in  acounts  receivables,  inventories,  and costs and  estimated
earnings in excess of billings on  uncompleted  contracts due to the increase in
business during the period.

         As of June 30,  2000,  the Company had cash of $0.4 million and working
capital of $3.4  million.  The  Company is pursuing  obtaining  financing/credit
facilities  to increase  working  capital to fund a  significant  ramp up of new
business.

         This Form 10-Q  includes  certain  statements  that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act. All statements,  other than statements of historical fact, included in this
Form 10-Q that addresses  activities,  events,  or developments that the Company
expects,  projects,  believes,  or anticipates  will or may occur in the future,
including matters having to do with existing or future contracts,  the Company's
ability to fund its operations and repay debt,  business  strategies,  expansion
and growth of operations and other such matters, are forward-looking statements.
These  statements  are based on certain  assumptions  and  analyses  made by our
management in light of its experience  and its perception of historical  trends,
current conditions,  expected future developments, and other factors it believes
are appropriate in the  circumstances.  These statements are subject to a number
of assumptions, risks and uncertainties, including general economic and business
conditions,  the business  opportunities (or lack thereof) that may be presented
to  and  pursued  by the  Company,  the  Company's  performance  on its  current
contracts and its success in obtaining new contracts,  the Company's  ability to
attract and retain  qualified  employees,  and other factors,  many of which are
beyond the  Company's  control.  You are  cautioned  that these  forward-looking
statements are not guarantees of future  performance  and that actual results or
developments may differ materially from those projected in such statements.

PART II.  OTHER INFORMATION

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

         The Company held its annual meeting of  shareholders  on June 12, 2000.
At the meeting, the shareholders elected the following individuals as members of
the Board of  Directors:  Wirt D. Walker,  III,  Barry W.  McDaniel,  Charles W.
Archer,  Mishal Yousef Saud Al Sabah,  Robert B. Smith, Jr., James A. Abrahamson
and Emmit J. McHenry.

         The voting  results of the election of directors  and the other matters
voted upon at the meeting are as follows:



<PAGE>



Election of Directors:
                                                         Votes        Withheld
                                                          For         Authority
                       Nominee:
Wirt D. Walker, III.................................     4,937,639        3,000
Barry W. McDaniel...................................     4,937,639        3,000
Charles W. Archer...................................     4,937,189        3,450
Mishal Yousef Saud Al Sabah.........................     4,937,639        3,000
Robert B. Smith, Jr.................................     4,937,189        3,450
James A. Abrahamson.................................     4,937,639        3,000
Emmit J. McHenry....................................     4,937,639        3,000

Other Matters:
<TABLE>
<CAPTION>

                                                                                               Abstentions
                                                                                                   and
                    Description of                              Votes            Votes           Broker
                        Matter                                   For            Against         Non-Votes
<S>                                                        <C>                  <C>          <C>
Approval of an amendment to the Company's
  1997 Stock Option Plan   .............................    2,896,797             8,450        2,035,392
</TABLE>

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits

         11.1     Calculation of Net Income (Loss) Per Share

         27.1     Financial Data Schedule

b.       Reports on Form 8-K.

         None

Signature

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

STRATESEC INCORPORATED


 /s/BARRY MCDANIEL

Barry McDaniel
Chief Operating Officer


August 14, 2000