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 SEPTEMBER 30, 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 November 15, 2004 was 22,492,700.
<PAGE>
            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                   FORM 10QSB

                         PERIOD ENDED September 30, 2004


                                TABLE OF CONTENTS

PART I -  FINANCIAL INFORMATION

ITEM 1.  Consolidated Financial Statements:

         Consolidated Balance Sheets as of
          September 30, 2004 (unaudited) and
          June 30, 2004                                             3

         Consolidated Statements of Operations
          (unaudited) for the three months ended
          September 30, 2004 and September 30, 2003                 4

         Consolidated Statements of Cash Flow
          (unaudited) for three months ended
          September 30, 2004 and September 30, 2003                 5

         Condensed Notes to Consolidated
          Financial Statements                                      6

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

Item 3.   Controls and Procedures                                   16

PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                          16

                                       2
<PAGE>


           SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                             September 30,
                                                2004        June 30,
                                             (Unaudited)      2004
                                             ------------ ------------
ASSETS
Current Assets:
   Cash                                          $59,471     $172,621
  Inventory                                      916,774      959,825
  Other current assets                           234,268      223,872
                                             ------------ ------------
     Total current assets                      1,210,513    1,356,318

Property and Equipment, at cost less
 accumulated depreciation
 and amortization of $174,134 and $170,969        19,083       22,248

Other assets                                      35,071       35,071
                                             ------------ ------------

 Total assets                                 $1,264,667   $1,413,637
                                             ============ ============


LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable and accrued expenses       $4,082,951   $3,722,228
  Note payable - CEO/stockholder               1,584,910    1,509,151
  Convertible notes payable                      494,000      200,000
  Customer deposits                            2,167,455    1,917,031
  Deferred revenue                             1,209,052    1,408,679
                                             ------------ ------------
    Total current liabilities                  9,538,368    8,757,089
                                             ------------ ------------

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, 22,462,700 and
   22,306,816 issued and outstanding
   at September 30, 2004, and
   June 30, 2004 respectively                      2,246        2,231
  Additional paid in capital                   6,287,119    3,808,283
  Accumulated deficit                        (14,547,680) (11,136,871)
  Accumulated other comprehensive loss           (15,886)     (17,595)
                                             ------------ ------------
    Total stockholders' deficit               (8,273,701)  (7,343,452)
                                             ------------ ------------

Total liabilities and stockholders' deficit   $1,264,667   $1,413,637
                                             ============ ============


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

                                       3
<PAGE>


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


                                                 Three Months Ended
                                              ------------------------
                                                     September 30,
                                              ------------------------
                                                   2004         2003
                                              ------------ -----------
Sales                                            $527,318    $936,686
                                              ------------ -----------

Costs and expenses:
 Cost of sales                                    160,296     367,370
 Compensation and benefits                        550,495     622,610
 Professional fees and legal matters               91,544     116,672
 Debt issuance expense                          2,304,455           -
 Stock based compensation                         119,957      75,507
 Selling, general and administrative
  expenses                                        349,069     414,392
 Unrealized loss (gain) on financial
  guarantees                                      328,764    (254,440)
 Depreciation and amortization                      3,165      13,351
                                              ------------ -----------
                                                3,907,745   1,355,462
                                              ------------ -----------

Operating loss                                 (3,380,427)   (418,776)

Interest expense                                   30,382      19,681
                                              ------------ -----------

Net loss                                      $(3,410,809)  $(438,457)
                                              ============ ===========

Net loss per above                            $(3,410,809)  $(438,457)
Other comphrensive loss - translation
 adjustment                                       (15,886)     (8,508)
                                              ------------ -----------
                                              $(3,426,695)  $(446,965)
                                              ============ ===========

Loss per share, basic and diluted                  $(0.15)     $(0.02)
                                              ============ ===========

Weighted average number of shares              22,354,006  18,727,378
                                              ============ ===========


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

                                       4
<PAGE>

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

                                                 Three Months Ended
                                               -----------------------
                                                    September 30,
                                               -----------------------
                                                  2004        2003
                                               ------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                      $(3,410,809) $(438,457)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation and amortization                      3,165     13,351
  Unrealized loss (gain) on financial
   guarantees                                      328,764   (254,440)
  Debt issuance expense                          2,304,455          -
  Amortization of deferred compensation            107,957     75,507
  Stock issued to employee for services             12,000          -
  Discount on common stock issued for services      12,000          -
  Decrease in other comphrensive loss                1,709          -
  Noncash compensation - CEO/stockholder            14,100          -
  Noncash interest expense - CEO/stockholder        17,739     10,881
  CHANGES IN OPERATING ASSETS AND LIABILITIES:
   Decrease in inventory                            43,051     86,176
   (Increase)  in other current assets             (10,396)   (56,547)
   Increase in accounts payable and accrued
    expenses                                        74,398    103,467
   Increase (decrease) in customer deposits        250,424    (80,405)
   (Decrease) increase in deferred revenue        (199,627)    46,418
                                               ------------ ----------
Net cash used in operating activities             (451,070)  (494,049)
                                               ------------ ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowings under convertible credit facility      294,000          -
 Borrowings under note payable -
  CEO/stockholder                                   43,920          -
 Proceeds from issuance of common stock                  -    525,000
                                               ------------ ----------
Net cash provided by financing activities          337,920    525,000
                                               ------------ ----------

Net (decrease) increase in cash                   (113,150)    30,951

Cash, beginning of period                          172,621     21,638
                                               ------------ ----------
Cash, end of period                                $59,471    $52,589
                                               ============ ==========

Supplemental Disclosures of Cash Flow
 Information:
 Interest paid                                      $5,259     $3,562
                                               ============ ==========

 Taxes paid                                         $4,573     $2,720
                                               ============ ==========

Non-cash financing and investing activities:
 Common stock issued to settle accounts payable    $42,440   $(22,780)
                                               ============ ==========

 Accrued interest and deferred salary credited
  to note payable -
  CEO/stockholder                                  $31,839    $10,881
                                               ============ ==========


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

                                       5
<PAGE>
            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 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, 2004
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, assembly 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 sales offices located in Miami, Florida; Beverly Hills, California;
Washington, DC; Hong Kong, its executive offices located in New Rochelle, New
York and through its retail store/service center in London, England.

Principles of Consolidation

The consolidated financial statements include the accounts of SIT and its
wholly-owned subsidiaries, CCS, Spy Shop, Ltd. d/b/a Counter Spy Shop of
Delaware, a Delaware corporation (formerly a retail store closed on January 31,
2004); Security Design Group, Inc., a New York corporation (formerly a
manufacturing operation, currently inactive); Counter Spy Shop of Mayfair
London, Ltd., a District of Columbia corporation (formerly a retail store closed
on July 1, 2003); CCS Counter Spy Shop of Mayfair London, Ltd., a California
corporation (formerly a retail store closed on January 1, 2004); Counter Spy
Shop of Mayfair, Ltd., a Florida corporation (formerly a sales office/retail
store that ceased operations on March 31, 2004); and Homeland Security
Strategies (UK), Ltd. (formerly Counter Spy Shop of Mayfair Limited, a United
Kingdom corporation that operates a retail store/service center. The financial
statements for the three months ended September 30, 2004 include the operations
of Homeland Security Strategies, Inc., a New York corporation, that commenced
operations on August 20, 2003; Homeland Security Strategies of California, Inc.,
a California corporation, that operates a sales office that commenced operations
on December 26, 2003; and Homeland Security Strategies Inc of Florida, Inc., a
Florida corporation, that operates a sales office that commenced operations on
January 30, 2004. All significant intercompany 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



                                       6
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003
                                   (Unaudited)

Basis of Financial Statement Presentation - continued:

Company incurred net losses of $3,410,809 and $438,457 for the three months
ended September 30, 2004 and September 30, 2003 respectively. In addition, at
September 30, 2004, the Company had a working capital deficit of $8,327,855 and
a deficiency in stockholders' equity of $8,273,701. The Company is also a
defendant in material and costly litigation, which has significantly impacted
liquidity. See Note 6. 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 Company's chief
executive officer, customer deposits and proceeds from convertible notes
payable. (See Notes 2 and 3). 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 store 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.

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 CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003
                                   (Unaudited)

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 the following weighted-average assumptions used for grants in fiscal 2004,
2003 and 2002: dividend yield of 0%, risk-free interest rate of 3.38%, expected
lives of eight 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 2004 Quarter and the 2003 Quarter would have been the pro forma amounts
indicated below:



                                                 Three Months Ended
                                                    September 30,
                                               -----------------------
Net loss:                                         2004        2003
                                               ------------ ----------
 As reported                                   $(3,410,809) $(438,457)
 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                         (33,289)   (25,365)
                                               ------------ ----------
                                               $(3,444,098) $(463,822)
                                               ============ ==========

Loss per share, basic and diluted:
 As reported                                        $(0.15)    $(0.03)
 Proforma                                           $(0.15)    $(0.03)

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 CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003
                                   (Unaudited)

Reclassifications

Cetain prior year balances have been reclassified to conform to the current year
presentation.

2. Note Payable - CEO/stockholder

     This amount  represents a note  payable to the  Company's  chief  executive
officer  and  includes  deferred  salary of  $210,371  and  accrued  interest of
$156,481  based on an  interest  rate of 5% per  annum.  The Note is  secured by
substantially all of the assets of the Company and is due on demand.

3. Notes Payable Convertible Credit Facility; Debt Issuance Expense

On June 10, 2004 the Company entered into a convertible credit agreement with
private investors, including Michael D. Farkas, Ostonian Securities Limited,
Kesef Equity Group, Inc., and GSM Communications, Inc. that provides for the
Company to borrow up to $500,000 upon the attainment of certain performance
criteria prior to September 15, 2004. At September 30, 2004 the Company had
borrowed $494,000 under this agreement. The notes bear interest at the rate of
10% per annum, are convertible into the Company's common stock at $.10 per share
and mature on June 30, 2005. The conversion feature was valued at $2,619,788
using the Black-Scholes option-pricing model. $315,333 of this amount was
expensed during the year ended June 30, 2004 and $2,304,455 was expensed during
the three months ended September 30, 2004 as debt issuance expense.

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 months ended  September  30, 2004 and  September 30, 2003 because they are
contingently issuable and/or antidilutive:


                                                   Three Months Ended
                                                      September 30,
                                                 2004              2003
                                               ---------        ---------

Series A Convertible Preferred Stock           3,500,000        3,500,000
Series B Convertible Preferred Stock           1,500,000        1,500,000
Stock options                                  2,609,500        1,992,500
Warrants                                         400,000          400,000




                                       9
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003
                                   (Unaudited)

5.  Income taxes

         The Company did not incur any income tax liabilities during the
three-month periods ended September 30, 2004 and 2003 due to operating losses.
As of September 30, 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 September 2004 quarter because management is
uncertain as to their ultimate realization.

6.  Legal Matters

Litigation

Settled matters

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.  In August 2004,  Micronel Safety, Inc. found another
buyer for the products and on August 16, 2004 the case was dismissed.

Pending Matters

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,
Florida 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. The case
appears to be going to trial, however, a trial date has not been set.

The Company is also the defendant in three actions arising out of 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. On August 3, 2004, the Court granted the
plaintiff's claim which, together with accrued interest, totaled $120,223. The
Company believes that it has a valid basis for appeal of the court's verdict,
but it can give no assurance the court verdict will not be upheld.

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 submitted a demand for arbitration
to the American Arbitration Association in New York City 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's claim which, together with accrued interest, totaled
$223,620. The Company believes that it has a valid basis for appeal of the
arbitrator's award, but it can give no assurance the American Arbitration
Association will not uphold the award.




                                       10
<PAGE>
            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003




Litigation - Continued:

Pending Matters

On July 1, 2002, the Company's London subsidiary, Homeland Security Strategies
(UK), Ltd. (formerly Counter Spy Shop of Mayfair Limited) ("HSS of UK"), entered
into an agreement to assume the business operations of another United Kingdom
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 HSS of
UK as a defendant in the case. The Company, in consultation with counsel,
believes that the Predecessor has valid defenses to the claim, and that HSS of
UK has valid defenses against any action that may be brought against it.

Because of our financial position, actions have been commenced or threatened by
creditors. As of September 30, 2004 we are defending lawsuits for the collection
of approximately $894,167 and have been unable to satisfy approximately $167,000
of judgments previously rendered in actions by creditors.

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.



                                       11
<PAGE>
Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL OVERVIEW.

         The following discussion should be read in conjunction with the
financial statements and notes thereto of the Company for the fiscal year ended
June 30, 2004, which are included in our Annual Report on Form 10-KSB for such
fiscal year. Historical results and trends should not be taken as indicative of
future operations. Management's statements contained in this report include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities 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.

         We are operating under a heavy financial burden as reflected in our
substantial working capital deficiency and our continuing losses and negative
cash flow from operations. We have sought to address these problems during
fiscal 2004 by closing three of our retail operations and converting two of them
to sales offices with lower operating costs, and entering into a credit
agreement with an investor group pursuant to which we had borrowed $494,000 at
September 30, 2004. We have no further availability under the credit agreement.

         Our working capital deficiency has made it difficult for us to attract
new business and maintain relations with our customers and suppliers. Other than
our credit agreement and loans from our chief executive officer, our main source
of funds has been our customer deposits which we use for our operations.

         If we are unable to increase our sales and pay our note holders and
other creditors, it may be necessary for us to cease business and seek
protection under the Bankruptcy Code.

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. See Note 1 of Notes to Consolidated Financial Statements
for further discussion of significant accounting policies.

Use of estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the combined financial statements, and the reported amounts of revenue and
expenses during the reporting periods. Actual results could differ from those
estimates.

Inventories

         Inventories are valued at the lower of cost (first-in, first-out) or
market.

Revenue recognition


                                       12
<PAGE>
         The Company recognizes revenue from 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

             We periodically grant stock options to employees in accordance
with the provisions of our 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. We account 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. We adopted the disclosure only alternative under FAS No. 123, which
requires us to disclose the proforma 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 the 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.

Income taxes
         We use the liability method to determine 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
our ability to generate sufficient taxable income in the future. Because of our
losses we did not incur any income tax expense during the three months ended
September 30, 2004 or September 30, 2003.
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.

Fair Value of Financial Instruments

         The fair values of financial instruments recorded on the balance sheet
are not significantly different from their carrying amounts due to the
short-term nature of those instruments, or because they are accounted for at
fair value.

Joint Venture Agreements
         We are party to three joint venture agreements with technology
companies. In connection with these agreements we and our joint venture partner
formed new entities whose ownership and share of operating results are equally
owned.


                                       13
<PAGE>
The joint venture agreements grant the new entities exclusive marketing
rights to the joint venture partner's products, except in the countries in which
the joint venture partners are domiciled. We account for investments in the
joint ventures using the equity method because our ownership is greater than 20%
and we have the ability to exercise significant influence over the operating,
investing and financing decisions of the joint venture entities. Under the
equity method, we will record our share of joint venture income or losses and
adjust the basis of its investment accordingly. As of September 30, 2004, the
joint ventures have not generated any revenues and did not engage in any other
significant business activity.

Foreign Currency Translation

         The functional currency of our United Kingdom subsidiary is the local
currency. Accordingly, we translate 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. Translation adjustments were $15,886 as of September 30,
2004. Gains and losses resulting from foreign currency transactions are
recognized in the consolidated statement of operations in the period they occur.


RESULTS OF OPERATIONS - Three Months Ended September 30, 2004 and 2003

Revenues. Revenues for the three months ended September 30, 2004 (the "2004
Quarter") were $527,318 a decrease of $409,368 or 43.7%, from revenues of
$936,686 for the three months ended September 30, 2003 (the "2003 Quarter").
During fiscal 2004, we closed our retail stores in New York, Beverly Hills,
Miami, and Washington, DC and converted our operations in Beverly Hills, Miami
and Washington, DC from retail stores to sales offices. These closures resulted
in a decrease of $462,790 from these four locations, representing a 88.2%
decline is sales from $524,748 in the 2003 Quarter to $61,958 in the 2004
quarter. Our London office also experienced a decrease in revenues of $68,714 or
24.6% from revenues of $279,496 in the 2003 Quarter to $210,782 in the 2004
Quarter. These decreases were offset by increased revenues from our operations
in New Rochelle, New York.

Cost of Sales. Cost of sales decreased by $207,074 or 56.4%, to $160,296 in the
2004 Quarter from $367,370 in the 2003 Quarter. Cost of sales as a percentage of
product sales decreased to 30.4% in the 2004 Quarter from 39.2% in the 2003
Quarter reflecting an improvement in product mix.

Compensation and benefits. Compensation and benefits decreased by $72,115, or
11.6% to $550,495 in the 2004 Quarter from $622,610 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 $56,718, and (ii) decreases in our Beverly Hills
and Washington DC operations where we converted from retail stores to sales
offices and reduced these expenses by $50,432 both partially offset by an
increase in our New Rochelle operation resulting from an increase in our
marketing and sales staff.

Professional fees and legal matters. Professional fees and legal matters
decreased by $25,128, or 21.5% to $91,544 in the 2004 Quarter from $116,672 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. Because of our financial position, we are subject to claims,
which may result in litigation from our creditors. As a result we expect that we
will continue to incur attorney's fees and the use of management resources to
defend these claims and litigation.

Debt issuance expense. Debt issuance expense is attributable to debt we incurred
that is convertible into shares of common stock at prices below the market price
of our common stock on the date we incurred the debt. The potential shares of
common stock were valued at $2,304,455 using the Black-Scholes option-pricing
model and was expensed during the 2004 Quarter. There were no similar
transactions in the 2003 Quarter.

Stock based compensation. Stock based compensation is attributable to the grant
of options and warrants to consultants and common stock which we issued to
employees in payment of accrued wages at a discount from the market price.


                                       14
<PAGE>
These items were valued at $119,957 using the Black-Scholes option-pricing model
and were expensed during the 2004 Quarter. Comparable expense in the 2003
Quarter was $75,507.

Selling, general and administrative expenses. Selling, general and
administrative decreased by $65,323, or 15.8% to $349,069 in the 2004 Quarter
from $414,392 in the 2003 Quarter. The decrease was primarily due to a decrease
in rent expense of $76,213, or 47.4% to $84,741 in the 2004 Quarter from
$160,954 in the 2003 Quarter due to lower rents in relocated sales offices
partially offset by an increase in travel and attendance at trade shows.

Unrealized loss (gain) on financial guarantees. Unrealized loss (gain) 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 loss (gain) on financial guarantees changed
$583,204 or 229.2%, to a loss of $328,764 in the 2004 Quarter from a gain of
$254,440 in the 2003 Quarter.

Depreciation and amortization. Depreciation and amortization decreased by
$10,168, or 76.3% to $3,165 in the 2004 Quarter from $13,351 in the 2003 Quarter
as a consequence of certain assets becoming fully depreciated in fiscal 2004.

Interest expense. Interest expense increased by $10,701 or 54.4% to $30,382 in
the 2004 Quarter from $19,681 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 factors described above, our net loss increased by
$2,972,352, or 677.9% to $3,410,809, $.15 per share, in the 2004 Quarter from
$438,457, $.02 per share, in the 2003 Quarter.

LIQUIDITY AND CAPITAL RESOURCES

We require significant working capital to fund our future operations. At
September 30, 2004 we had cash of $59,471 and a working capital deficit of
$8,327,855. During the 2004 Quarter, we had a negative cash flow from operations
of $451,070. Our accounts payable and accrued expenses at September 30, 2004
were $4,082,951. As a result of our continuing losses, our working capital
deficiency has increased. We funded our losses through the issuance of
convertible notes. 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 1,351,459
shares of common stock issued during the fiscal 2004, 2003 and 2002, the market
value of the common stock on September 30, 2004 was approximately $489,776 less
than the guaranteed price.

Our accounts payable and accrued expenses increased from $3,722,228 at June 30,
2004 to $4,082,951 at September 30, 2004 an increase of $360,723. After a
decrease in the market value of our common stock held by trade creditors of
$328,764 our other accounts payable and accrued expenses increased by $31,959
reflecting our inability to pay creditors currently. We also had customer
deposits and deferred revenue of $3,376,507 which relate to payments on orders
which had not been filled at that date. We have used our advance payments to
fund 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.

During the past three years 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 bank. In
June 2004 we entered into a convertible credit agreement with private investors
that permits us to borrow up to $500,000 upon the attainment of certain
performance criteria. At September 30, 2004 we had borrowed $494,000 and no more
funds are available under this agreement. Our obligations to these lenders
become due in June 2005. We do not presently have the resources to pay the
lenders. Unless we are either able to raise equity or debt capital, which is
unlikely based on our financial condition and history of losses which are
continuing, or the lenders extend the maturity date or convert their debt into
equity, we are unlikely to be able to pay the notes. If the lenders seek to
enforce their notes, it may be necessary for us to seek protection under the
Bankruptcy Code. Our failure to obtain financing would materially impair our
ability to continue in business, and we cannot assure you that we will be
able to obtain the necessary financing.  Our main source of funds other than the
private


                                       15
<PAGE>
investors has been from loans from our chief executive officer, customer
deposits and vendor credit. During fiscal 2004 we raised $813,000 resulting from
the exercise of options to buy our common stock and the sale of our common
stock. Management cannot provide any assurance that 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 our ability to continue as a going concern. Our
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.

Item 3.  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.

                            PART II OTHER INFORMATION


Item  6.          EXHIBITS  AND  REPORTS  OF  FORM  8K

(a)     Exhibits
31.1     Certificate of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.
31.2     Certificate of Chief Financial Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.
32.1     Certificate of Chief Executive  Officer and Chief Financial  Officer
         pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002.


(b) Reports on Form 8-K

None
                                   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:  November 19, 2004

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