United States Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB

                                   (Mark One)
              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR
             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
                              EXCHANGE ACT OF 1934
                        For the transition period from to

                        Commission file number 000-31779

                    SECURITY INTELLIGENCE TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)


                      Florida                                65-0928369
                 -----------------------                    ------------
               (State or other jurisdiction of            (IRS Employer
               incorporation or organization)             Identification No.)


                145 Huguenot Street, New Rochelle, New York 10801
                    (Address of principal executive offices)

                                 (914) 654-8700
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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

The number of shares of common stock $.0001 par value, of the Registrant issued
and outstanding as of May 14, 2004 was 21,185,389.




<PAGE>




            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                   FORM 10QSB

                           PERIOD ENDED March 31, 2004

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

PART I -          FINANCIAL INFORMATION

Item 1.           Condensed Financial Statements:

<S>                                                                                                                        <C>
                  Consolidated Balance Sheets                                                                              3

                  Statements of Operations for the three and nine months ended March 31, 2004
                     and March 31, 2003                                                                                    4

                  Statements of Cash Flow for three and nine months ended March 31, 2004
                    and March 31, 2003                                                                                     5

                  Condensed Notes to Financial Statements                                                                  6

Item 2.           Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                                                                            12

Item 3.           Quantitative and Qualitative Disclosures About Market Risk                                              17

Item 4.           Controls and Procedures                                                                                 17


PART II -         OTHER INFORMATION

Item 1.           Legal Proceedings.                                                                                      17

Item 6.           Exhibits and Reports on Form 8-K                                                                        18



</TABLE>

                                       2
<PAGE>



                    SECURITY INTELLIGENCE TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                               March 31,
                                                                 2004          June 30,
                                                              (Unaudited)        2003
                                                             -------------  ------------
ASSETS
Current Assets:
<S>                                                              <C>            <C>
   Cash                                                          $104,196       $21,638
  Inventory                                                     1,255,923     1,448,314
  Other current assets                                            177,296        52,442
                                                             -------------  ------------
     Total current
      assets                                                    1,537,415     1,522,394

Property and Equipment, at cost less accumulated depreciation
   and amortization of $186,390 and $431,541                       25,233       122,390

Other assets                                                       35,071        54,946
                                                             -------------  ------------

 Total assets                                                  $1,597,719    $1,699,730
                                                             =============  ============


LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable and accrued expenses                        $3,878,481    $3,563,776
  Note payable - CEO/stockholder                                1,565,091     1,451,620
  Customer deposits                                             1,369,127     1,277,695
  Deferred revenue                                              1,568,071     1,035,074
                                                             -------------  ------------
     Total current
      liabilities                                               8,380,770     7,328,165
                                                             -------------  ------------

Commitments and contingencies - See Notes

Stockholders' deficit:
  Preferred stock, $.0001 par value, 10,000,000 shares
   authorized:
     Series A Convertible-$1.00 per share liquidation
      preference, 3,500,000 shares authorized, issued
        and outstanding                                               350           350
     Series B Convertible-$1.00 per share liquidation
      preference, 1,500,000 shares authorized, issued
        and outstanding                                               150           150
  Common stock, $.0001 par value, 100,000,000 shares
   authorized, 21,185,389 and 17,471,389 issued and outstanding
      at March 31, 2004, and June 30, 2003 respectively             2,119         1,741

  Additional paid in capital                                    1,959,815       507,123
  Accumulated deficit                                          (8,725,836)   (6,137,799)
  Other comprehensive loss                                        (19,649)            -
                                                             -------------  ------------
    Total stockholders' deficit                                (6,783,051)   (5,628,435)
                                                             -------------  ------------

Total liabilities and stockholders' deficit                    $1,597,719    $1,699,730
                                                             =============  ============

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

</TABLE>



                                       3
<PAGE>

<TABLE>
<CAPTION>
            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                                         Three Months Ended        Nine Months Ended
                                                                      ------------------------ -------------------------
                                                                             March 31,                 March 31,
                                                                      ------------------------ -------------------------
                                                                         2004         2003         2004         2003
                                                                      ------------ ----------- ------------ ------------

<S>                                                                      <C>         <C>        <C>          <C>
Sales                                                                    $548,303    $986,595   $2,249,665   $3,069,443
                                                                      ------------ ----------- ------------ ------------

Costs and expenses:
  Cost of sales                                                           208,787     389,717      836,511    1,212,461
  Compensation and benefits                                               547,191     679,594    1,722,214    1,888,471
  Professional fees and legal matters                                     372,941      71,270      642,296      268,101
  Selling, general and administrative expenses                            850,605     446,116    1,736,989    1,544,071
  Unrealized (gain) loss on financial guarantees                         (136,450)     51,930     (266,809)     175,290
  Depreciation and amortization                                             2,984      19,098       97,157       55,910
                                                                      ------------ ----------- ------------ ------------
                                                                        1,846,058   1,657,725    4,768,358    5,144,304
                                                                      ------------ ----------- ------------ ------------

Operating loss                                                         (1,297,755)   (671,130)  (2,518,693)  (2,074,861)

Interest expense                                                           26,400      20,324       69,344       63,771
                                                                      ------------ ----------- ------------ ------------

Net loss                                                              $(1,324,155)  $(691,454) $(2,588,037) $(2,138,632)
                                                                      ============ =========== ============ ============


Loss per share, basic and diluted                                          $(0.07)     $(0.04)      $(0.13)      $(0.12)
                                                                      ============ =========== ============ ============

Weighted average number of shares                                      19,746,309  17,470,417   19,353,636   17,254,753
                                                                      ============ =========== ============ ============

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

</TABLE>


                                       4
<PAGE>

<TABLE>
<CAPTION>


                      SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Unaudited)

                                                                                                   Nine Months Ended
                                                                                               -------------------------
                                                                                                        March 31,
                                                                                               -------------------------
                                                                                                   2004         2003
                                                                                               ------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                            <C>          <C>
 Net loss                                                                                      $(2,588,037) $(2,138,632)
 Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization                                                                     97,157       55,910
  Unrealized (gain) loss on financial guarantees                                                  (266,809)     175,290
  Amortization of deferred compensation                                                            598,458       (6,410)
  Common stock issued for services                                                                  69,956            -
  Noncash compensation - CEO/stockholder                                                            33,500       73,419
  Noncash interest expense - CEO/stockholder                                                        43,220       29,684
  CHANGES IN OPERATING ASSETS AND LIABILITIES:
   Decrease in inventory                                                                           192,391      304,585
   (Increase) decrease in other current assets                                                    (124,854)      93,512
   Decrease (increase) in security deposits                                                         19,875       (7,213)
   Increase in accounts payable and accrued expenses                                               628,521      797,992
   Increase in customer deposits                                                                    91,432      224,860
   Increase in deferred revenue                                                                    532,997      395,837
                                                                                               ------------ ------------
Net cash used in operating activities                                                             (672,193)      (1,166)
                                                                                               ------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock                                                            718,000            -
 Repayments of notes payable - bank                                                                      -     (200,000)
 Borrowings under note payable - CEO/stockholder                                                    36,751      239,573
                                                                                               ------------ ------------
Net cash provided by financing activities                                                          754,751       39,573
                                                                                               ------------ ------------

Net increase in cash                                                                                82,558       38,407

Cash, beginning of period                                                                           21,638       32,344
                                                                                               ------------ ------------
Cash, end of period                                                                               $104,196      $70,751
                                                                                               ============ ============


Supplemental Disclosures of Cash Flow Information:
 Interest paid                                                                                     $26,124      $34,087
                                                                                               ============ ============

 Taxes paid                                                                                         $2,620       $3,656
                                                                                               ============ ============

Non-cash financing and investing activities:
 Common stock issued to settle accounts payable                                                    $66,656      $93,447
                                                                                               ============ ============

 Accrued interest and deferred salary credited to note payable -
  CEO/stockholder                                                                                  $76,720     $103,103
                                                                                               ============ ============

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

</TABLE>


                                       5
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)




Note 1 - Interim Financial Statements

         The accompanying unaudited financial statements of Security
Intelligence Technologies, Inc. and subsidiaries (the "Company") have been
prepared pursuant to generally accepted accounting principles for interim
financial statements and the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to those rules and regulations. These financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's latest audited financial statements for the year ended June 30, 2003
filed on Form 10-KSB.

         In the opinion of management, all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of the Company's
financial condition, results of operations and cash flows for the periods
presented have been included. The Company's quarterly results presented herein
are not necessarily indicative of results for a full year.

Organization and Nature of Business

         Security Intelligence Technologies, Inc. ("SIT"), a Florida Corporation
and its wholly owned subsidiaries (collectively the "Company") are engaged in
the design, manufacture and sale of security and surveillance products and
systems. The Company purchases finished items for resale from independent
manufacturers, and also assembles off-the-shelf electronic devices and other
components into proprietary products and systems at its own facilities. The
Company generally sells to businesses, distributors, government agencies and
consumers through five retail outlets located in Miami, Florida; Beverly Hills,
California; Washington, DC; New York City, and London, England and from its
showroom in New Rochelle, New York. On April 17, 2002, CCS International, Ltd.
("CCS"), a Delaware corporation, and its wholly-owned subsidiaries, merged with
SIT and became a wholly owned subsidiary of SIT. The merger has been accounted
for as a reverse acquisition, since the management and stockholder of CCS
obtained control of the merged entity after the transaction was completed. Under
reverse acquisition accounting, CCS is considered the accounting acquirer and
SIT (then known as Hipstyle.com, Inc.) is considered the acquired company.
Inasmuch as SIT had no substantive assets or operations at the date of the
transaction, the merger has been recorded as an issuance of CCS stock to acquire
SIT, accompanied by a recapitalization, rather than as a business combination.

Principles of Consolidation

         The consolidated financial statements include the accounts of SIT and
its wholly-owned subsidiaries. All significant inter-company balances and
transactions have been eliminated in consolidation.

Basis of Financial Statement Presentation

         The financial statements of the Company have been prepared assuming the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company incurred net losses of $2,588,037 and $2,138,632 for the nine months
ended March 31, 2004 and March 31, 2003 respectively. In addition, at March 31,
2004, the Company had a working capital deficit of $6,843,355 and a deficiency
in stockholders' equity of $6,783,051. The Company is also a defendant in
material and costly litigation, which has significantly impacted liquidity. See
Note 8. The Company requires additional financing which may not be readily
available. The Company's bank facility has terminated, and the only source of
funds other than operations has been loans from the


                                       6
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)



1.  Basis of Financial Statement Presentation (continued)

Company's chief executive officer, customer deposits and proceeds from the
issuance of common stock. (See Notes 2, 3, 5 and 6). These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans with respect to these matters include to settle vendor
payables wherever possible, a reduction in operating expenses, and continued
financing from the chief executive officer in the absence of other sources of
funds. Management cannot provide any assurance that its plans will be successful
in alleviating its liquidity concerns and bringing the Company to the point of
profitability. The accompanying financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

Revenue recognition

         The Company recognizes revenue from product sales upon the delivery of
merchandise to a customer. Non-refundable advance payments received under
marketing and distribution arrangements are deferred and either applied as
payments towards customer purchases made pursuant to the terms of the respective
agreements, or recognized as income at the termination of the agreement if
specified purchase quotas have not been met by the customer. Customer deposits
are initially recorded as liabilities and recognized as revenue when the related
goods are shipped.

Financial Guarantees

Certain shares issued by the Company to settle debt obligations contain a price
guarantee that requires the Company to settle in cash any difference between the
original face amount of the debt and proceeds from the creditor's subsequent
sale of the shares. The Company accounts for these transactions by recording the
debt at fair value with periodic mark-to-market adjustments until the guarantee
is settled. Unrealized gains or losses resulting from changes in fair value are
included in earnings and accrued expenses. As a result, we have contingent
obligations to our some of these creditors. With respect to 706,000 shares of
common stock issued during the fiscal 2004, 2003 and 2002, the market value of
the common stock on March 31, 2004 was approximately $30,584 less than the
guaranteed price.

Stock-based Compensation

            The Company periodically grants stock options to employees in
accordance with the provisions of its stock option plans, with the exercise
price of the stock options being set at the closing market price of the common
stock on the date of grant. The Company accounts for stock-based compensation
plans under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", and accordingly accounts for employee stock-based
compensation utilizing the intrinsic value method. FAS No. 123, "Accounting for
Stock-Based Compensation", establishes a fair value based method of accounting
for stock-based compensation plans. The Company has adopted the disclosure only
alternative under FAS No. 123, which requires disclosure of the pro forma
effects on earnings and earnings per share as if FAS No. 123 had been adopted as
well as certain other information.

            Stock options granted to non-employees are recorded at their fair
value, as determined in accordance with SFAS No. 123 and Emerging Issues Task
Force Consensus No. 96-18, and recognized over the related service period.
Deferred charges for options granted to non-employees are periodically
re-measured until the options vest.




                                       7
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)


1.  Stock-based Compensation (continued)

     In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure. SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation. Although it does not require use of
fair value method of accounting for stock-based employee compensation, it does
provide alternative methods of transition.
     It also amends the disclosure provisions of SFAS No.123 and APB No. 28,
Interim Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting policy with respect
to stock-based employee compensation on reported net income and earnings per
share in annual and interim financial statements. SFAS No. 148's amendment of
the transition and annual disclosure requirements is effective for fiscal years
ending after December 15, 2002. The amendment of disclosure requirements of APB
No. 28 is effective for interim periods beginning after December 15, 2002. We
adopted SFAS No. 148 and APB No.28 on January 1, 2003.
     FASB Statement 123, "Accounting for Stock-Based Compensation," requires the
Company to provide pro forma information regarding net income (loss) and income
(loss) per share as if compensation cost for the Company's stock option
issuances had been determined in accordance with the fair value based method
prescribed in FASB Statement 123. The Company estimates the fair value of each
stock option at the grant date by using the Black-Scholes option-pricing model
with weighted-average assumptions used for grants in fiscal 2003 and 2002 of:
dividend yield of 0%, risk-free interest rate of 3.38%, expected lives of eight
years, and expected volatility of 120%, and weighted average assumptions used
for grants in fiscal 2004 of dividend yield of 0%, risk-free interest rate of
1.47%, expected lives of 1.6 years, and expected volatility of 120%. Under the
accounting provisions of SFAS Statement 123, the Company's net loss and loss per
share for the three and nine months ended March 31, 2004 and March 31, 2003
would have been the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                                                         Three Months Ended        Nine Months Ended
                                                                             March 31,               March 31,
                                                                       ----------------------- -------------------------
Net loss:                                                                 2004         2003         2004         2003
                                                                       ------------ ---------- ------------ ------------
<S>                                                                    <C>          <C>        <C>          <C>
 As reported                                                           $(1,324,155) $(691,454) $(2,588,037) $(2,138,632)
 Add: Stock based employee compensation expense
    included in reported net loss                                                -          -            -            -
 Deduct: Total stock based employee compensation
    expense determined under the fair value based
      method for all awards                                               (148,758)   (40,968)    (197,623)    (250,998)
                                                                       ------------ ---------- ------------ ------------
                                                                       $(1,472,913) $(732,422) $(2,785,660) $(2,389,630)
                                                                       ============ ========== ============ ============

Loss per share, basic and diluted:
 As reported                                                                $(0.07)    $(0.04)      $(0.13)      $(0.12)
 Proforma                                                                   $(0.07)    $(0.04)      $(0.14)      $(0.14)
</TABLE>

Foreign Currency Translation

         The functional currency of the Company's UK subsidiary is the local
currency. Accordingly, the Company translates all assets and liabilities into
U.S. dollars at current rates. Revenues, costs, and expenses are translated at
average rates during each reporting period. Gains and losses resulting from the
translation of the consolidated financial statements are excluded from results
of operations and are reflected as a translation adjustment and a separate
component of stockholders' deficit. Gains and losses resulting from foreign
currency transactions are recognized in the consolidated statement of operations
in the period they occur.



                                       8
<PAGE>



            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)


2.  Note Payable - Bank

         Prior to June 1, 2002, the Company had a bank credit agreement pursuant
to which it could borrow up to $400,000 with interest at the bank's price plus
1%. On June 1, 2002, the available credit was reduced to $200,000 and the
interest rate was increased to the bank's prime rate plus 2.5%. The Note was
secured by substantially all of the assets of the Company, and personal assets
and a guaranty of the chief executive officer. The credit facility expired on
November 1, 2002, when all unpaid principal and interest became due in full. The
unpaid principal and interest was paid in December 2002. To date, management has
been unable to renew or to replace the line with alternative financing on
similar terms.

3. Note Payable - CEO/stockholder

         This amount represents a note payable to the Company's chief executive
officer and includes deferred salary of $200,899 and accrued interest of
$126,075 and bears interest at the rate of 5% per annum. The Note is secured by
substantially all of the assets of the Company and is due on demand.


4.  Loss Per Share

         The Company calculates earnings per share in accordance with SFAS No.
128, Earnings Per Share, and SEC Staff Accounting Bulletin No. 98. Accordingly,
basic and diluted loss per share is computed using the weighted average number
of shares of common stock outstanding and excludes all common stock equivalents
outstanding during the period. Common stock equivalents consist of shares
issuable upon the exercise of stock options and warrants using the treasury
stock method. Stock options and preferred stock that are convertible into common
stock based on the Company's attainment of performance goals are not includible
in the calculation of earnings per share until the specified targets are met.
The following securities have been excluded from the diluted computation for the
three and nine months ended March 31, 2004 and 2003, because they are
contingently issuable and/or antidilutive:
<TABLE>
<CAPTION>

                                                                           Nine Months Ended
                                                                           -----------------
                                                                                March 31,
                                                                           2004            2003
                                                                       ---------        ---------

<S>                                                                    <C>              <C>
Series A Convertible Preferred Stock                                   3,500,000        3,500,000
Series B Convertible Preferred Stock                                   1,500,000        1,500,000
Stock options                                                          1,992,500        1,999,000
Warrants                                                                 400,000          400,000
</TABLE>

5.  Consulting Agreements

            In July 2003 the Company formalized consulting contracts with
Michael Farkas and two additional financial consultants relating to acquisition
services, financial public relations and operational performance services. In
connection therewith the Company granted a total of 2,600,000 fully vested
options, including 1,700,000 options granted to Michael Farkas, to purchase
shares of common stock at prices ranging from $.10 per share to $1.00 per share.
In January 2004 the Company reduced the price of 340,000 options issued to one
of the financial consultants from $.50 per share to $.10 per share resulting in
an additional expense of $72,832. As of March 31, 2004 the consultants have
exercised 2,300,000 options for a total amount of $559,000, including 1,700,000
options exercised by Michael Farkas for $400,000. On March 30, 2004 the Company
sold 1,000,000 shares of common stock to the other financial consultant at a
price of $.15 per share and issued warrants to purchase 500,000 shares of common
stock at an exercise price of $.15 per share. The warrants vest immediately,
have cashless exercise rights and a life of three years.


                                       9
<PAGE>



            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)



5. Consulting Agreements (continued)

These options and warrants were valued at $398,458 using the Black-Scholes
option-pricing model and were expensed during the nine months ended March 31,
2004. In addition the Company has expensed $200,000 representing the difference
between market value and the actual price paid for the 1,000,000 shares of
common stock.

6. Stockholder's Equity:

Common Stock

During the nine months ended March 31, 2004 the Company issued 170,000 shares of
common stock in payment of $62,956 of consulting services.

In January 2004 the Company issued 35,000 shares of common stock to an officer
and director in payment of deferred salary.

During the nine months ended March 31, 2004 the Company sold 90,000 shares of
common stock at a price of $.15 per share for $9,000.

During the nine months ended March 31, 2004 the Company issued 179,000 shares of
common stock in full settlement, subject to certain terms, of $70,770 of accrued
professional fees. If the proceeds from the sale of the common stock are less
than $70,770 the Company will pay to the creditors the difference between the
$70,770 and the proceeds from the sale of the common stock. At March 31, 2004
the market value of the 179,000 shares of common stock was $128,880.

2003 Stock Incentive Plan

         As of July 3, 2003 our board of directors adopted the 2003 Stock
Incentive Plan (the "2003 Plan") which provided for the grant of non-qualified
stock options to purchase a maximum of 320,000 shares of common stock or the
grant of shares to directors, employees, officers, agents, consultants and
independent contractors who perform services for the Company. As of the date of
this quarterly report on Form 10-QSB, stockholder approval of the 2003 Plan has
not been obtained.

2004 Stock Incentive Plan

         As of January 23, 2004 our board of directors adopted the 2004 Stock
Incentive Plan (the "2004 Plan") which provided for the grant of non-qualified
stock options to purchase a maximum of 650,000 shares of common stock or the
grant of shares to directors, employees, officers, agents, consultants and
independent contractors who perform services for the Company. As of the date of
this quarterly report on Form 10-QSB, stockholder approval of the 2004 Plan has
not been obtained.

7.  Income taxes

         The Company did not incur any income tax liabilities during the three
and nine month periods ended March 31, 2004 and 2003 due to operating losses. As
of March 31, 2004, the Company has increased its tax valuation allowance to
offset the deferred tax benefits of net operating losses and other temporary
differences arising during the nine months ended March 31, 2004 because
management is uncertain as to their ultimate realization.



                                       10
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)




8.  Legal Matters

Litigation

Settled matters

         On or about May 25, 2001, an action was commenced against CCS in the
United States District Court for the Southern District of New York, captioned
Shenzen Newtek v. CCS International Ltd. The plaintiff had sought to recover
$91,500, which was paid to CCS in connection with a distributorship agreement
between the parties, plus costs and interest. On July 10, 2002, the Company and
Shenzhen Newtek entered into a Settlement Agreement under which SIT issued
67,000 shares of its common stock in full settlement, subject to certain terms,
of the $67,000 claim.

The Settlement Agreement granted Shenzhen Newtek a price guarantee upon sale of
the shares and, alternatively, the option after July 10, 2003 to return the
67,000 shares to the Company in return for a cash payment of $35,000. In August
2003 Shenzhen Newtek returned the 67,000 shares to the Company however to date,
no cash payment has been made.

Pending Matters

         In June 1998, a photographer and model formerly retained by CCS filed
suit in U. S. District Court for the Southern District of New York captioned
Ross & Vassilkioti v. CCS International, Ltd. seeking damages for alleged
copyright infringement and other claims. The judge in the case has granted the
plaintiff partial summary judgment as to the copyright infringement. On June 18,
2003, a jury awarded the plaintiffs $350,000 on the copyright infringement
portion of the case. Under federal judicial rules, the Company is unable to
contest the granting of partial summary judgment until a final judgment has been
rendered. The Company believes that it has meritorious and substantial defenses
against the additional claims asserted in the lawsuit and a valid basis for
appeal of the jury award of $350,000 and any additional adverse verdicts that
may occur in this case. A trial date for the remaining counts in the case has
been delayed while the parties attempt to reach a settlement.

         On November 1, 2002, a former Company supplier filed suit in the United
States District Court for the District of Maryland, captioned Micronel Safety,
Inc. v. CCS International Ltd. seeking damages of $242,400 for breach of
contract to purchase certain products. CCS has denied the material allegations
of the plaintiff's claim and has raised affirmative defenses thereto. The
Company believes that it has valid defenses to the claim.

         On or about March 13, 2003, an action was commenced against CCS and its
subsidiary in the Circuit Court of the 11th Judicial Circuit, Miami-Dade County,
FL captioned Welcome Publishing Company, Inc. v. CCS International, Ltd. and
Counter Spy Shop of Mayfair Ltd., Inc. seeking damages of $140,430 for an
alleged breach of an advertising contract. CCS has denied the material
allegations of the plaintiff's claim and has raised affirmative defenses
thereto. The Company believes that it has valid defenses to the claim. A
non-binding mediation took place on October 9, 2003 during which the parties
discussed a settlement but were unable to reach an agreement.

         The Company is also the defendant in 3 actions arising out of our
distributor agreements. On or about May 11, 2000 an action was commenced against
CCS in the Supreme Court, New York County, captioned Ergonomic Systems
Philippines Inc. v. CCS International Ltd. The plaintiff seeks to recover
$81,000, which was paid to CCS in connection with a distributorship agreement
between the parties, plus costs and interest. CCS has denied the material
allegations of the claim and has raised affirmative defenses thereto. The
Company believes that it has valid defenses to the claim.


                                       11
<PAGE>



            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)



8. Legal Matters (continued)

Litigation (continued)

Pending Matters

         On or about October 12, 2001, an action was commenced against CCS in
the United States District Court for the Southern District of New York,
captioned China Bohai Group Co., Ltd. and USA International Business Connections
Corp. v. CCS International, Ltd. The plaintiff seeks to recover $250,000 paid to
CCS in connection with a distributorship agreement between the parties, plus
$5,000,000 of punitive damages and costs and interest. CCS has denied the
material allegations of the plaintiff's claim and has raised affirmative
defenses thereto. CCS has asserted a counterclaim seeking damages in the
approximate amount of $1,150,000 based upon the plaintiff's alleged breach of
the parties' distributorship agreement. The Company believes that it has valid
defenses to the claim.

         On December 3, 2002 EHS Elektronik Sistemleri ("EHS") submitted a
demand for arbitration to the American Arbitration Association in NY, NY
claiming CCS breached a joint venture agreement it had entered into with CCS in
1994 and seeking a refund of the $200,000 it had paid to CCS. On March 4, 2004
the arbitrator awarded the plaintiff their claim and accrued interest totaling
$223,620. The Company believes that it has a valid basis for appeal of the
arbitrator's award.

         On July 1, 2002, the Company's London subsidiary, Counter Spy Shop of
Mayfair Limited ("CSS"), entered into an agreement to assume the business
operations of another UK corporation ("Predecessor") for nominal consideration.
The Predecessor is a defendant in ongoing litigation brought by a former
customer, who has sued for breach of a contract executed in 1998 and is seeking
a refund of approximately $293,000 in products and services purchased from the
Predecessor. Due to the business transfer, there is a possibility that the
plaintiff could name CSS as a defendant in the case. The Company, in
consultation with counsel, believes that the Predecessor has valid defenses to
the claim, and that CSS has valid defenses against any action that may be
brought against it.

         Given that litigation is subject to many uncertainties, it is not
possible to predict the outcome of the litigation pending against the Company.
However, it is possible that the Company's business, results of operations, cash
flows or financial position could be materially affected by an unfavorable
outcome of certain pending litigation in amounts in excess of those that the
Company has recognized. All such cases are being, and will continue to be
vigorously defended, and the Company believes that it has meritorious and valid
defenses against all such litigation, as well as a valid basis for appeal of any
adverse verdicts, should they result.





Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

The following discussion should be read in conjunction with the financial
statements and notes thereto of the Company. Such financial statements and
information have been prepared to reflect the Company's financial position as of
March 31, 2004 and June 30, 2003.

Historical results and trends should not be taken as indicative of future
operations. Management's statements contained in this report that are not
historical facts are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities


                                       12
<PAGE>

Exchange Act of 1934, as amended. Actual results may differ materially from
those included in the forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
those safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," "prospects" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Information concerning the
Company and its business, including the risks faced by us described herein and
in our most recent annual report on Form 10-KSB could materially affect the
Company's financial results. The Company disclaims any obligation to update or
announce revisions to any forward-looking statements to reflect actual events or
developments.

Critical accounting policies

         The Company prepares its financial statements in accordance with
accounting principles generally accepted in the United States of America.
Preparing financial statements in accordance with generally accepted accounting
principles requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. The
following paragraphs include a discussion of some of the significant accounting
policies and methods applied to the preparation of the Company's consolidated
financial statements. Review Note 1 to the financial statements for further
discussion of significant accounting policies.

Revenue recognition

         The Company recognizes revenue from product sales upon the delivery of
merchandise to a customer. Non-refundable advance payments received under
marketing and distribution arrangements are deferred and either applied as
payments towards customer purchases made pursuant to the terms of the respective
agreements, or recognized as income at the termination of the agreement if
specified purchase quotas have not been met by the customer. Customer deposits
are initially recorded as liabilities and recognized as revenue when the related
goods are shipped.

Stock-based Compensation

             The Company periodically grants stock options to employees in
accordance with the provisions of its stock option plans, with the exercise
price of the stock options being set at the closing market price of the common
stock on the date of grant. The Company accounts for stock-based compensation
plans under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", and accordingly accounts for employee stock-based
compensation utilizing the intrinsic value method. FAS No. 123, "Accounting for
Stock-Based Compensation", establishes a fair value based method of accounting
for stock-based compensation plans. The Company has adopted the disclosure only
alternative under FAS No. 123, which requires disclosure of the pro forma
effects on earnings and earnings per share as if FAS No. 123 had been adopted as
well as certain other information. Stock options granted to non-employees are
recorded at their fair value, as determined in accordance with SFAS No. 123 and
Emerging Issues Task Force Consensus No. 96-18, and recognized over the related
service period. Deferred charges for options granted to non-employees are
periodically re-measured until the options vest.
         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure. SFAS No. 148 amends SFAS
No. 123, Accounting for Stock-Based Compensation. Although it does not require
use of fair value method of accounting for stock-based employee compensation, it
does provide alternative methods of transition. It also amends the disclosure
provisions of SFAS No.123 and APB No. 28, Interim Financial Reporting, to
require disclosure in the summary of significant accounting policies of the
effects of an entity's accounting policy with respect to stock-based employee
compensation on reported net income and earnings per share in annual and interim
financial statements. SFAS No. 148's amendment of the transition and annual
disclosure requirements is effective for fiscal years ending after December 15,
2002. The amendment of disclosure requirements of APB No. 28 is effective for
interim periods beginning after December 15, 2002. We adopted SFAS No. 148 and
APB No.28 on January 1, 2003.


                                       13
<PAGE>

Income taxes

The Company uses the liability method to determine its income tax expense. Under
this method, deferred tax assets and liabilities are computed based on
differences between financial reporting and tax basis of assets and liabilities
and are measured using the enacted rates and laws that will be in effect when
the differences are expected to reverse. Deferred tax assets are reduced by a
valuation allowance if, based on the weight of the available evidence, it is
more likely than not that all or some portion of the deferred tax assets will
not be realized. The ultimate realization of the deferred tax asset depends on
the Company's ability to generate sufficient taxable income in the future.


RESULTS OF OPERATIONS - Three Months Ended March 31, 2004 and 2003.

Revenues. Revenues for three months ended March 31, 2004 (the "2004 Quarter")
were $548,303 a decrease of $438,292 or 44.4%, from revenues of $986,595 for the
three months ended March 31, 2003 (the "2003 Quarter"). The decrease is
primarily a result (i) a decrease in our New York retail store that we closed on
January 31, 2004 of $212,288 or 77.9% to $60,386 in the 2004 Quarter from
$272,674 in the 2003 Quarter, (ii) a decrease in our California operation where
we closed the retail store and converted the operation to a sales office on
January 1, 2004 of $200,914 or 93.9% to 13,056 in the 2004 Quarter from $213,970
in the 2003 Quarter, and (iii) a decrease in our Washington DC operation where
we closed the retail store and converted the operation to a sales office on July
1, 2003 of $143,628 or 86.3%, to $22,819 in the 2004 Quarter from $166,447 in
the 2003 Quarter all partially offset by increases in our New Rochelle and
London offices.

Cost of Sales. Cost of sales decreased by $180,930 or 46.4%, to $208,787 in the
2004 Quarter from $389,717 in the 2003 Quarter. Cost of sales as a percentage of
product sales decreased to 38.1% in the 2004 Quarter from 39.5% in the 2003
Quarter reflecting an improvement in product mix.

Compensation and benefits. Compensation and benefits decreased by $132,403, or
19.5% to $547,191 in the 2004 Quarter from $679,594 in the 2003 Quarter
primarily due to (i) a reduction in expense in our New York retail store that we
closed on January 31, 2004 of $54,735, and (ii) decreases in our California and
Washington DC operations where we converted from retail stores to sales offices
requiring less expense of $68,386.

Professional fees and legal matters. Professional fees and legal settlements
increased by $301,671, or 423.3% to $372,941 in the 2004 Quarter from $71,270 in
the 2003 Quarter. Based on a review of outstanding legal matters and unpaid
settlements, we have established, in consultation with outside counsel, reserves
for litigation costs that are probable and can be reasonable estimated. We can
provide no assurance, however, that such reserves will be sufficient to absorb
actual losses that may result from unfavorable outcomes. Moreover, it is
possible that the resolution of litigation contingencies will have a material
adverse impact on our consolidated financial condition, results of operations,
and cash flows. We also expect that we will continue to incur attorney's fees
and the use of management resources to defend pending litigation and creditor
nonpayment claims during fiscal 2004.

Selling, general and administrative expenses. Selling, general and
administrative increased by $404,489, or 90.7% to $850,605 in the 2004 Quarter
from $446,116 in the 2003 Quarter. The increase was primarily due to an increase
in amortization of deferred compensation relating to options granted consultants
of $284,658 or 1,617.4% and a $200,000 charge the Company recorded representing
the difference between the market value and the purchase price of 1,000,000
shares of common stock sold to a financial consultant, both partially offset by
a decrease in rent expense of $71,629, or 48.2% to $76,866 in the 2004 Quarter
from $148,495 in the 2003 Quarter due to lower rents in new relocations and a
renegotiation of rents previously recorded in the Company's headquarter
location.

Unrealized (gain) loss on financial guarantees. Unrealized (gain) loss on
financial guarantees is attributable to the increase or decrease in market value
relating to our price guarantees on common stock which we have issued in payment
of trade payables. Unrealized (gain) loss on financial guarantees changed
$188,380 or 362.8%, to a gain of $136,450 in the 2004 Quarter from a loss of
$51,930 in the 2003 Quarter.


                                       14
<PAGE>

Depreciation and amortization. Depreciation and amortization decreased by
$16,114, or 84.4% to $2,984 in the 2004 Quarter from $19,098 in the 2003 Quarter
primarily as a consequence of expensing the net book value of leasehold
improvements at December 31, 2003 in our Beverly Hills, CA store from where we
have relocated and our New York Store which we closed.

Interest expense. Interest expense increased by $6,076, or 29.9% to $26,400 in
the 2004 Quarter from $20,324 in the 2003 Quarter as a result of a continued
increase in the Company's interest bearing outstanding debt obligations.

As a result of the forgoing, our net loss increased by $632,701, or 91.5% to
$1,324,155, $.07 per share, in the 2004 Quarter from $691,454, $.04 per share,
in the 2003 Quarter as a result of the factors described above.

RESULTS OF OPERATIONS - Nine Months Ended March 31, 2004 and 2003.

Revenues. Revenues for nine months ended March 31, 2004 (the "2004 Period") were
$2,249,665 a decrease of $819,778 or 26.7%, from revenues of $3,069,443 for the
nine months ended March 31, 2003 (the "2003 Period"). The decrease is primarily
a result of (i) a decrease in our New York retail store that we closed on
January 31, 2004 of $408,684 or 48.4% to $435,586 in the 2004 Period from
$844,270 in the 2003 Period, (ii) a decrease in our California operation where
we closed the retail store and converted the operation to a sales office on
January 1, 2004 of $230,376 or 43.8% to $295,697 in the 2004 Period from
$526,073 in the 2003 Period, and (iii) a decrease in our Washington DC operation
where we closed the retail store and converted the operation to a sales office
on July 1, 2003 of $337,497 or 71.9%, to $132,063 in the 2004 Period from
$469,560 in the 2003 Period all partially offset by increases in our New
Rochelle and London offices.

Cost of Sales. Cost of sales decreased by $375,950 or 31.0%, to $836,511 in the
2004 Period from $1,212,461 in the 2003 Period. Cost of sales as a percentage of
product sales decreased to 37.2% in the 2004 Period from 39.5% in the 2003
Period reflecting an improvement in product mix.

Compensation and benefits. Compensation and benefits decreased by $166,257, or
8.8% to $1,722,214 in the 2004 Period from $1,888,471 in the 2003 Period
primarily due to (i) a reduction in expense in our New York retail store that we
closed on January 31, 2004 of $77,267, and (ii) decreases in our California and
Washington DC operations where we converted from retail stores to sales offices
requiring less expense of $99,126.

Professional fees and legal matters. Professional fees and legal settlements
increased by $374,195, or 139.6% to $642,296 in the 2004 Period from $268,101 in
the 2003 Period. Based on a review of outstanding legal matters and unpaid
settlements, we have established, in consultation with outside counsel, reserves
for litigation costs that are probable and can be reasonable estimated. We can
provide no assurance, however, that such reserves will be sufficient to absorb
actual losses that may result from unfavorable outcomes. Moreover, it is
possible that the resolution of litigation contingencies will have a material
adverse impact on our consolidated financial condition, results of operations,
and cash flows. We also expect that we will continue to incur attorney's fees
and the use of management resources to defend pending litigation and creditor
nonpayment claims during fiscal 2004.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $192,918, or 12.5% to $1,736,989 in the
2004 Period from $1,544,071 in the 2003 Period. The increase was primarily due
to an increase in amortization of deferred compensation relating to options
granted consultants of $404,868 or 6,316.2% and a $200,000 charge the Company
recorded representing the difference between the market value and the purchase
price of 1,000,000 shares of common stock sold to a financial consultant, both
partially offset by (i) a decrease in advertising expense of $158,615, or 73.4%
to $57,478 in the 2004 Period from $216,093 in the 2003 Period, (ii) a decrease
in rent expense of $137,086, or 28.2% to $348,863 in the 2004 Period from
$485,949 in the 2003 Period due to lower rents in new relocations and a
renegotiation of rents previously recorded in the Company's headquarter location
(iii) a decrease in public relations expense of $44,400, or 100% in the 2004
Period resulting from the expiration of a contract and (iv) a decrease in
telephone expense of $31,021, or 26.5% to $85,860 in the 2004 Period from
$116,881 in the 2003 Period due to lower rates charged by new service providers.

Unrealized (gain) loss on financial guarantees. Unrealized (gain) loss on
financial guarantees is attributable to the increase or decrease in market value
relating to our price guarantees on common stock which we have issued in payment
of trade payables. Unrealized (gain) loss on financial guarantees changed


                                       15
<PAGE>

$442,099, or 252.2% to a gain of $266,809 in the 2004 Period from a loss of
$175,290 in the 2003 Period.

Depreciation and amortization. Depreciation and amortization increased by
$41,247, or 73.8% to $97,157 in the 2004 Period from $55,910 in the 2003 Period
primarily as a consequence of expensing the net book value of leasehold
improvements in our Beverly Hills, CA store from where we have relocated and our
New York Store which we closed on January 31, 2004.

Interest expense. Interest expense increased by $5,573, or 8.7% to $69,344 in
the 2004 Period from $63,771 in the 2003 Period as a result of a continued
increase in the Company's interest bearing outstanding debt obligations.

As a result of the forgoing, our net loss decreased by $449,405, or 21.0% to
$2,588,037, $.13 per share, in the 2004 Period from $2,138,632, $.12 per share,
in the 2003 Period as a result of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

We require significant working capital to fund our future operations. At March
31, 2004 we had cash of $104,196 and a working capital deficit of $6,843,355.
The aggregate amount of accounts payable and accrued expenses at March 31, 2004
was $3,878,481. As a result of our continuing losses, our working capital
deficiency has increased. We funded our losses through the issuance of our
common stock. We also utilized vendor credit and customer deposits. Because we
have not been able to pay our trade creditors in a timely manner, we have been
subject to litigation and threats of litigation from our trade creditors and we
have used common stock to satisfy our obligations to trade creditors. In many
instances when we issue common stock, we have provided that if the stock does
not reach a specified price level one year from issuance, we will pay the
difference between that price level and the actual price. As a result, we have
contingent obligations to our some of these creditors. With respect to 706,000
shares of common stock issued during the fiscal 2004, 2003 and 2002, the market
value of the common stock on March 31, 2004 was approximately $30,584 less than
the guaranteed price.

Our accounts payable and accrued expenses increased from $3,563,776 at June 30,
2003 to $3,878,481 at March 31, 2004. This increase consists of an increase in
the market value of our common stock held by trade creditors of $266,809 offset
by other accounts payable and accrued expenses of $581,514 reflecting our
inability to pay creditors currently. We also had customer deposits and deferred
revenue of $2,937,198 which relate to payments on orders which had not been
filled at that date. We have used our advance payments to continue our
operations. If our vendors do not extend us necessary credit we may not be able
to fill current or new orders, which may affect the willingness of our clients
to continue to place orders with us.

We require substantial funds to support our operations. Since the completion of
the merger we have sought, and been unsuccessful, in our efforts to obtain
adequate funding for our business. Because of our losses, we are not able to
increase our borrowing. Our bank facility terminated on November 1, 2002 and to
date, we do not have any agreements with any replacement lender. Our failure to
obtain a credit facility with another lender could materially impair our ability
to continue in operation, and we cannot assure you that we will be able to
obtain the necessary financing. Our main source of funds other than the bank
facility has been from loans from our chief executive officer, customer deposits
and vendor credit. Because of both our low stock price and our losses, we were
not been able to raise funds through the sale of our equity securities in fiscal
2002 and 2003. During the 2004 Period our stock price increased and we raised
$718,000 resulting from the exercise of options to buy our common stock and the
sale of our common stock. Management cannot provide any assurance that our stock
price will increase or remain at its current level or that we will be able to
raise any more money through the sale of our equity securities. We may not be
able to obtain any additional funding, and, if we are not able to raise funding,
we may be unable to continue in business. Furthermore, if we are able to raise
funding in the equity markets, our stockholders might suffer significant
dilution and the issuance of securities may result in a change of control. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans with respect to these matters include its
attempts to settle vendor payables wherever possible, a reduction in operating
expenses, and financing from the chief executive officer in the absence of other
sources of funds. Management cannot provide any assurance that its plans will be
successful in alleviating its liquidity concerns and bringing the Company to the
point of sustained profitability. The accompanying financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.


                                       16
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial position,
results of operations or cash flows due to adverse changes in market prices and
rates. Our short-term debt bears interest at fixed rates; therefore our results
of operations would not be affected by interest rate changes.

Item 4.    Controls and Procedures

Evaluation of disclosure controls and procedures
Our chief executive officer and chief financial officer have supervised and
participated in an evaluation of the effectiveness of our disclosure controls
and procedures as of a date within 90 days of the date of this report, and,
based on their evaluations, they believe that our disclosure controls and
procedures (as defined in Rule 13a-14(c) of the Securities Exchange Act of 1934,
as amended) are designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. As a result of the evaluation,
there were no significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation.

Changes in internal controls

We have not made any significant changes to our internal controls subsequent to
the Evaluation Date. We have not identified any significant deficiencies or
material weaknesses or other factors that could significantly affect these
controls, and therefore, no corrective action was taken.


                           PART II - OTHER INFORMATION

Item 1.      Legal Proceedings

         In June 1998, a photographer and model formerly retained by CCS filed
suit in U. S. District Court for the Southern District of New York captioned
Ross & Vassilkioti v. CCS International, Ltd. seeking damages for alleged
copyright infringement and other claims. The judge in the case has granted the
plaintiff partial summary judgment as to the copyright infringement. On June 18,
2003, a jury awarded the plaintiffs $350,000 on the copyright infringement
portion of the case. Under federal judicial rules, the Company is unable to
contest the granting of partial summary judgment until a final judgment has been
rendered. The Company believes that it has meritorious and substantial defenses
against the additional claims asserted in the lawsuit and a valid basis for
appeal of the jury award of $350,000 and any additional adverse verdicts that
may occur in this case. A trial date for the remaining counts in the case has
been delayed while the parties attempt to reach a settlement.

         On November 1, 2002, a former Company supplier filed suit in the United
States District Court for the District of Maryland, captioned Micronel Safety,
Inc. v. CCS International Ltd. seeking damages of $242,400 for breach of
contract to purchase certain products. CCS has denied the material allegations
of the plaintiff's claim and has raised affirmative defenses thereto. The
Company believes that it has valid defenses to the claim.

         On or about March 13, 2003, an action was commenced against CCS and its
subsidiary in the Circuit Court of the 11th Judicial Circuit, Miami-Dade County,
FL captioned Welcome Publishing Company, Inc. v. CCS International, Ltd. and
Counter Spy Shop of Mayfair Ltd., Inc. seeking damages of $140,430 for an
alleged breach of an advertising contract. CCS has denied the material
allegations of the plaintiff's claim and has raised affirmative defenses
thereto. The Company believes that it has valid defenses to the claim. A
non-binding mediation took place on October 9, 2003 during which the parties
discussed a settlement but were unable to reach an agreement.

         The Company is also the defendant in 3 actions arising out of our
distributor agreements. On or about May 11, 2000 an action was commenced against
CCS in the Supreme Court, New York County, captioned Ergonomic Systems
Philippines Inc. v. CCS International Ltd. The plaintiff seeks to recover


                                       17
<PAGE>

$81,000, which was paid to CCS in connection with a distributorship agreement
between the parties, plus costs and interest. CCS has denied the material
allegations of the claim and has raised affirmative defenses thereto. The
Company believes that it has valid defenses to the claim.

         On or about October 12, 2001, an action was commenced against CCS in
the United States District Court for the Southern District of New York,
captioned China Bohai Group Co., Ltd. and USA International Business Connections
Corp. v. CCS International, Ltd. The plaintiff seeks to recover $250,000 paid to
CCS in connection with a distributorship agreement between the parties, plus
$5,000,000 of punitive damages and costs and interest. CCS has denied the
material allegations of the plaintiff's claim and has raised affirmative
defenses thereto. CCS has asserted a counterclaim seeking damages in the
approximate amount of $1,150,000 based upon the plaintiff's alleged breach of
the parties' distributorship agreement. The Company believes that it has valid
defenses to the claim.


         On December 3, 2002 EHS Elektronik Sistemleri ("EHS") submitted a
demand for arbitration to the American Arbitration Association in NY, NY
claiming CCS breached a joint venture agreement it had entered into with CCS in
1994 and seeking a refund of the $200,000 it had paid to CCS. On March 4, 2004
the arbitrator awarded the plaintiff their claim and accrued interest totaling
$223,620. The Company believes that it has a valid basis for appeal of the
arbitrator's award.

         On July 1, 2002, the Company's London subsidiary, Counter Spy Shop of
Mayfair Limited ("CSS"), entered into an agreement to assume the business
operations of another UK corporation ("Predecessor") for nominal consideration.
The Predecessor is a defendant in ongoing litigation brought by a former
customer, who has sued for breach of a contract executed in 1998 and is seeking
a refund of approximately $293,000 in products and services purchased from the
Predecessor. Due to the business transfer, there is a possibility that the
plaintiff could name CSS as a defendant in the case. The Company, in
consultation with counsel, believes that the Predecessor has valid defenses to
the claim, and that CSS has valid defenses against any action that may be
brought against it.




Item 2.      Changes in Securities           None

Item 3.      Defaults Upon Senior Securities Not Applicable

Item 4.      Submission of Matters to a Vote of Security Holders    None

Item 5.      Other Information    None

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

                 31.1   Certification Ben Jamil, CEO

                 32.1   Certification Chris R. Decker, CFO

             b. Reports on Form 8-K None.

       No reports on Form 8-K were filed for this quarter of 2004.



                                       18
<PAGE>



                                   SIGNATURES

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.


                    SECURITY INTELLIGENCE TECHNOLOGIES, INC.


                               By: /s/ Ben Jamil
                               -----------------------------------
                               Ben Jamil, Chief  Executive Officer


                               By:  /s/  Chris R. Decker
                               ----------------------------------------
                               Chris R. Decker, Chief Financial Officer

Date:  May 20, 2004



                                       19