UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q

                                   (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, 2007

                                       OR


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER: 0-25658


                       SECURED DIGITAL APPLICATIONS, INC.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                   84-1357927
           --------                                   ----------
(STATE OR OTHER JURISDICTION OF          (IRS EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION)


                 Park 80 West, Plaza One, Saddle Brook, NJ 07663
                 -----------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                  201 843 0222
                                  ------------
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                       N/A
                                       ---
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                          IF CHANGED SINCE LAST REPORT)


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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer __     Accelerated filer __    Non Accelerated filer X


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                   Yes _ No X

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:



           Class                    Number of shares outstanding at May 14, 2007
------------------------------      --------------------------------------------
Common stock, $.00001 par value                    130,246,814




<PAGE>

FORM 10-Q
1ST QUARTER
<TABLE>
<CAPTION>

                                      INDEX

                                                                                                            Page

<S>                                                                                                          <C>
PART I  - FINANCIAL INFORMATION

         ITEM 1. FINANCIAL STATEMENTS

         Consolidated balance sheets as at March 31, 2007 (Unaudited)                                       3 - 4
         and December 31, 2006 (Audited)

         Consolidated statements of income and comprehensive income for the three-month
         periods ended March 31, 2007 and 2006 (Unaudited)                                                  5 - 6

         Condensed consolidated statements of cash flows for the three-month
         periods ended March 31, 2007 and 2006 (Unaudited)                                                    7

         Notes to consolidated financial statements (Unaudited)                                             8 - 14

         ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS                                                      15 - 19

         ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                   20

         ITEM 4. CONTROLS AND PROCEDURES                                                                     20

PART II - OTHER INFORMATION

         ITEM 1. LEGAL PROCEEDINGS                                                                           21

         ITEM 1A. RISK FACTORS                                                                               21

         ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                 21

         ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                             21

         ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                         21

         ITEM 5. OTHER INFORMATION                                                                           21

         ITEM 6. EXHIBITS                                                                                    21

         SIGNATURES                                                                                          22

</TABLE>
SAFE HARBOR STATEMENT

This Form 10-Q and other reports filed by the Company from time to time with the
Securities and Exchange  Commission,  as well as the Company's  press  releases,
contain or may contain forward-looking statements and information that are based
upon the beliefs  of, and  information  currently  available  to, the  Company's
management,  as  well  as  estimates  and  assumptions  made  by  the  Company's
management. The Company is including this cautionary statement in this Form 10-Q
to make  applicable and to take  advantage of the safe harbor  provisions of the
Private  Securities  Litigation  Reform  Act of  1995  for  any  forward-looking
statements made by or on behalf of the Company.  Forward-looking  statements can
be  identified by the use of  forward-looking  terminology  such as  "believes",
"may", "should", "anticipates",  "estimates",  "expects", "future", "objective,"
"plan,"  "predict,"  "project,"  "seek," "will,"  "would," "will likely result,"
"will  continue,"  "will be,"  "intends,"  "hopes"  or  "plans" or the  negative
thereof.  Such  forward-looking  statements  involve  known and  unknown  risks,
uncertainties  and other factors that could cause actual  results of the Company
to vary materially from historical  results or from any future results expressed
or implied in such  forward-looking  statements.  Such  factors  include,  among
others,  the  following:  the  revocation  of the  Company's  broadband  network
operator's license, the inability to successfully  implement its business plans,
the  cancellation or postponement of contracts that the Company has entered into
in connection  with its business,  the inability to obtain  products or services
provided by other companies,  the inability of the Company to raise capital on a
timely basis, existing and future government regulations,  the failure to retain
qualified personnel,  competitive pressures and potentially adverse tax and cash
flow consequences resulting from operations in multiple countries with different
laws and  regulations,  and the general  economic  and  business  conditions  in
Malaysia,  the United  States and the other  countries  in which we do business,
primarily in Asia.  The Company does not undertake to update,  revise or correct
any forward-looking statements.



                                       2
<PAGE>

Introductory Note

The  information  contained in this  quarterly  report on Form 10-Q reflects the
effect of a  reorganization  during 2006 of the  Company's  principal  operating
subsidiaries   and  the  disposition  of  certain  other  assets  and  operating
subsidiaries.   As  a  result,  certain  results  of  prior  periods  have  been
reclassified to reflect certain  operations,  previously  reported as continuing
operations,   as  having  been  discontinued.   The  reclassification  of  these
operations, primarily related to the Company's former operations as the operator
of retail computer stores and a secured  shipping  subsidiary,  are described in
more  detail  in the  financial  statements  and  notes  thereto,  as well as in
Management's Discussion and Analysis.



PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

               SECURED DIGITAL APPLICATIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 MARCH 31, 2007

<TABLE>
<CAPTION>

                                                                                  March 31,       December 31,
                                                                                     2007            2006
                                                                                ---------------   ---------------
                                                                                 (Unaudited)
                                     ASSETS


<S>                                                                                     <C>             <C>
Current assets:
     Cash                                                                        $        11,366  $          8,335
     Trade and other accounts receivables
       less allowance for doubtful accounts of $26,549 and $26,006                     9,309,202         8,547,364
     Prepaid expenses                                                                     12,002            14,142
                                                                                 ---------------  ----------------
      Total current assets                                                             9,332,570         8,569,841
Property and equipment, net                                                              941,984           992,538
Long-term receivables, related party                                                      84,835           108,247
Customer list and customer relationships                                                  21,450            26,403
Goodwill                                                                                 471,260           471,260
                                                                                 ---------------  ----------------
                                                                                 $    10,852,099  $     10,168,289
                                                                                 ===============  ================

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Current portion of capital lease obligations                                $        34,154  $        33,455
     Accounts payable (includes related parties of $102,495 and $100,396)              1,020,583        1,028,771
     Accrued expenses                                                                     98,939           69,881
     Amount due to an affiliated company                                                  53,872           17,927
     Amount due to a director                                                             10,965           10,578
     Income tax payable                                                                   80,666           11,045
                                                                                 ---------------  ---------------
              Total current liabilities                                                1,299,179        1,171,657
Deferred tax                                                                             208,171          208,723
Deferred gain                                                                             84,835          108,247
                                                                                 ---------------  ---------------
              Total liabilities                                                        1,592,185        1,488,627
                                                                                 ---------------  ---------------

</TABLE>
                                  (continued)

                                       3
<PAGE>



               SECURED DIGITAL APPLICATIONS, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (CONTINUED)
                                 MARCH 31, 2007
<TABLE>
<CAPTION>


                                                                                   March 31,        December 31,
                                                                                     2007               2006
                                                                                 ---------------  ---------------
                                                                                    (Unaudited)


<S>                                                                                      <C>              <C>
Minority interest                                                                        190,860          180,866
                                                                                 --------------- ----------------
Commitments and contingencies

Shareholders' equity:
     Series B convertible preferred stock, $0.10 par value;                               10,000           10,000
             1,000,000 shares authorized; 100,000 shares issued and
         outstanding, liquidation preference $2,500,000

     Common stock, $.00001 par value; 350,000,000 shares authorized; 141,822,594
        and 141,572,594 shares issued in 2007 and 2006, respectively;
        129,496,814 and 128,721,391 shares outstanding
        in 2007 and 2006, respectively                                                     1,295            1,287
     Additional paid-in capital                                                        6,864,943        6,746,129
     Common treasury stock, 12,325,780 and 12,851,203 shares at cost
         in 2007 and 2006, respectively                                                       --               --
     Options                                                                             105,064          101,904
     Warrants                                                                            827,067          784,875
     Deferred compensation                                                               (11,542)         (48,175)
     Retained earnings                                                                   968,484          657,384
     Accumulated other comprehensive income                                              303,743          245,392
                                                                                 --------------- ----------------
              Total shareholders' equity                                               9,069,054        8,498,796
                                                                                 --------------- ----------------
              Total liabilities and shareholders' equity                          $   10,852,099    $  10,168,289
                                                                                 =============== ================
</TABLE>


           See accompanying notes to consolidated financial statements


                                       4
<PAGE>



               SECURED DIGITAL APPLICATIONS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                   Three months ended
                                                                      March 31,
                                                                2007             2006
                                                           --------------- ----------------
<S>                                                                <C>              <C>
Revenues:

Services:
  Related parties                                          $       301,882 $         82,112
  Others                                                        10,068,920        8,320,213
                                                           --------------- ----------------
                                                                10,370,802        8,402,325
                                                           --------------- ----------------
Cost of revenues:

Services:
  Related parties                                                   90,564           24,633
  Others                                                         9,589,611        7,920,204
                                                           --------------- ----------------
                                                                 9,680,175        7,944,837
                                                           --------------- ----------------
Gross profit                                                       690,627          457,488
                                                           --------------- ----------------

Operating expenses:
     Sales and marketing                                             3,994            2,360
     General and administrative:
       Related parties                                              36,835           36,419
       Others                                                      405,310          555,036
                                                           --------------- ----------------
Total operating expenses                                           446,139          593,815
                                                           --------------- ----------------
Income (loss) from operations                                      244,488         (136,327)
                                                           --------------- ----------------
Other income (expense):
     Interest expense                                                   --             (742)
     Gain on foreign currency transactions                         110,952           53,728
     Previously deferred gain on sale of
       technology - related party                                   25,290           23,805
     Other income                                                       --            5,847
                                                           --------------- ----------------
                                                                   136,242           82,638
                                                           --------------- ----------------
Income (loss) before provision for income taxes
    and minority interest                                          380,730          (53,689)

Provision for income taxes                                         (63,509)         (39,853)
                                                           --------------- ----------------

Income (loss) before minority interest                             317,221          (93,542)

Minority interest                                                   (6,121)          (9,391)

                                                           --------------- ----------------
Income (loss) from continuing operations                           311,100         (102,933)
                                                           --------------- ----------------

     Income from discontinued
     operations - net of minority interest and
     income taxes                                                       --          487,504

                                                           --------------- ----------------
Income from discontinued operations                                     --          487,504
                                                           --------------- ----------------


           See accompanying notes to consolidated financial statements

                                       5
<PAGE>

               SECURED DIGITAL APPLICATIONS, INC. AND SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (CONTINUED)
                                   (Unaudited)


                                                                Three months ended
                                                                     March 31,
                                                           --------------------------------
                                                                 2007               2006
                                                           --------------- ----------------

Net income                                                 $       311,100 $        384,571
                                                           =============== ================

Net income applicable to common shareholders               $       311,100 $        384,571
                                                           =============== ================

COMPREHENSIVE INCOME

Net income                                                 $       311,100 $        384,571

Other comprehensive income:

Foreign currency translation adjustments                            58,351          137,712
                                                           --------------- ----------------
Comprehensive income                                       $       369,451 $        522,283
                                                           =============== ================
Net income per common share:
     Basic and diluted **                                  $          *    $              *
                                                           =============== ================
Weighted average shares outstanding:
     Basic                                                     129,236,089      131,372,312
                                                           =============== ================
     Diluted                                                   151,023,144      131,841,423
                                                           =============== ================

</TABLE>
* Less than $.01 per share
**  Net income per common share for discontinued operations is less than $.01
    per share and not presented separately.


           See accompanying notes to consolidated financial statements


                                       6
<PAGE>



               SECURED DIGITAL APPLICATIONS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                        Three Months Ended
                                                                                     March 31,        March 31,
                                                                                       2007             2006
                                                                                 --------------- ----------------
<S>                                                                              <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES
     Change in operating assets and liabilities of continuing operations         $        69,186 $        486,299
     Change in operating assets and liabilities of discontinued operations                    --         (585,473)
                                                                                 --------------- ----------------
         Net cash provided by (used in) operating activities                              69,186          (99,174)
                                                                                 --------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from disposal of equipment of discontinued operations                           --           18,566
     Purchase of equipment                                                                (1,409)            (160)
     Purchase of equipment of discontinued operations                                         --             (365)
                                                                                 --------------- ----------------
         Net cash provided by (used in) investing activities                              (1,409)          18,041
                                                                                 --------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from issuance of common stock                                                   --           80,000
     Net proceeds from (repayment of) advances from affiliated company                    35,726          (25,282)
     Net proceeds from (repayment of) advances from a director                               219          (34,429)
     Payments of obligations under capital leases                                             --           (3,418)
     Financing activities of discontinued operations                                          --           75,118
                                                                                 --------------- ----------------
           Net cash provided by financing activities                                      35,945           91,989
                                                                                 --------------- ----------------

FOREIGN CURRENCY TRANSLATION ADJUSTMENT - continuing activities                         (100,691)         (71,717)
  - discontinued activities                                                                   --           33,749
                                                                                 --------------- ----------------
Net increase (decrease) in cash                                                            3,031          (27,112)
Cash, beginning of period                                                                  8,335           36,559
                                                                                 --------------- ----------------
Cash, end of period                                                              $        11,366 $          9,447
                                                                                 =============== ================
Supplemental disclosure of cash flow information:

Cash paid for interest     -   continuing operations                             $            -- $            742

                           -   discontinued operations                                        --           19,478
                                                                                 =============== ================
                                                                                              --           20,220
                                                                                 =============== ================

Cash paid for income taxes - continuing operations                              $             -- $          4,614
                             - discontinued operations                                        --              268
                                                                                 =============== ================
                                                                                              --            4,882
                                                                                 =============== ================



</TABLE>

           See accompanying notes to consolidated financial statements

                                       7
<PAGE>


                       SECURED DIGITAL APPLICATIONS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements of Secured Digital
Applications,  Inc.  (the  "Company")  have been  prepared  in  accordance  with
generally accepted accounting  principles for interim financial  information and
with Item 10-1 of Regulation  S-X.  Accordingly,  they do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the three months ended
March 31,  2007,  are not  necessarily  indicative  of the  results  that may be
expected for the year ending  December 31, 2007.  These  unaudited  consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and footnotes thereto included in the Company's Form 10-KSB
for the year ended  December 31, 2006, as filed with the Securities and Exchange
Commission.


2.   SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

Revenue represents the net invoiced value of:

o    goods sold;
o    fees earned from the  production  of  multimedia  programs and Intranet and
     management  and  consulting  services; and
o    fees earned from provision of information technology related services.

The  Company  recognizes  revenue  from the  sales of goods in the  period  when
significant  risks and rewards of ownership  have  transferred to its customers.
The Company recognizes revenue from the services provided in the period in which
the  services  are  performed  and  when  there  is no  significant  uncertainty
regarding  the  consideration  to be  received  and the  associated  costs to be
incurred.

ACCOUNTS RECEIVABLE AND CREDIT POLICIES

The Company grants credit,  generally without collateral,  to its customers. The
Company  continuously  monitors  collections and payments from its customers and
maintains  an  allowance  for  estimated   uncollectible   accounts  based  upon
historical  experience and specific  customer  collection  issues that have been
identified.

INVENTORIES

Inventories,  which are comprised of peripherals for  surveillance  and wireless
communication,  information technology hardware,  software and accessories,  are
stated at the lower of cost or net  realizable  value.  Cost is  determined on a
first-in-first-out basis. The value of the inventories was written down to $0 as
it was deemed to be unsaleable.

GOODWILL AND INTANGIBLE ASSETS

Goodwill,  arising from the purchase of a Malaysian  subsidiary,  represents the
purchase  price paid and  liabilities  assumed in excess of the  estimated  fair
value of tangible assets acquired.


Customer  relationships  with a cost of $59,423 were acquired on April 30, 2005,
and are being  amortized using the straight line method over an expected life of
three years.  Amortization  expense for each of the three months ended March 31,
2007 and 2006 was $4,953.  The  accumulated  amortization  at March 31, 2007 and
December 31, 2006 was $37,973 and $33,020, respectively.

INCOME TAXES

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
related  primarily to differences  between the recorded book basis and tax basis
of assets and liabilities  for financial and income tax reporting.  The deferred
tax assets and liabilities represent the future tax return consequences of those
differences,  which will  either be taxable  or  deductible  when the assets and
liabilities  are recovered or settled.  Deferred  taxes are also  recognized for
operating  losses that are  available to offset  future  taxable  income and tax
credits that are available to offset future federal income taxes.

For the three months ended March 31, 2007 and 2006,  provision  for income taxes
amounted to $63,509  and $39,853  respectively.  The  provisions  are net of the
benefit of any  available net  operating  losses,  for income tax payable on its
operations in Malaysia.


                                       8
<PAGE>

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

COMPREHENSIVE INCOME

The Company has adopted Statement of Financial  Accounting Standards (SFAS) 130,
"Reporting  Comprehensive Income", which establishes requirements for disclosure
of comprehensive  income including  certain items previously not included in the
statements of operations,  including minimum pension  liability  adjustments and
foreign  currency  translation  adjustments,  among others.  The Company's  only
components of comprehensive income are foreign currency translation adjustments.

The functional  currency of the Company's  subsidiaries is the Malaysian Ringgit
("RM").  The financial  statements of these  subsidiaries  are  translated  into
United States dollars  ("USD") using  period-end rate of exchange for assets and
liabilities,  and the  average  rate of  exchange  for the period for  revenues,
costs, and expenses.  Translation gains and losses are treated as a component of
shareholders' equity. The reporting currency used in the financial statements is
USD unless otherwise stated.


TREASURY STOCK

The Company records treasury stock purchases at cost. The Company reissues stock
from the treasury on a first-in, first-out basis.

NET INCOME PER COMMON SHARE

Basic net income per share is  calculated  by dividing net income  applicable to
common  shareholders by the weighted average number of common shares outstanding
for the three months ended March 31, 2007 and 2006.  Diluted income per share is
computed using the weighted  average  number of shares  determined for the basic
computations  plus the  number of shares of common  stock  that  would be issued
assuming all  contingently  issuable shares having a dilutive effect on earnings
per share were outstanding for the period.  The calculation of basic and diluted
income per share is as follows (in thousands, except per-share amounts):
<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                 --------------------------------
                                                                                     March 31,       March 31,
                                                                                      2007             2006
                                                                                 --------------- ----------------
<S>                                                                              <C>             <C>
Net income                                                                       $           311 $            385
                                                                                 =============== ================

Weighted average shares outstanding - basic                                              129,236          131,372
                                                                                 =============== ================

Net income per share - basic **                                                  $             * $              *
                                                                                 =============== ================

*  Less than $.01 per share
** Net income per common share for  discounted  operations is less than $.01 per
   share and not presented separately.


                                                                                        Three Months Ended
                                                                                    March 31,         March 31,
                                                                                      2007              2006
                                                                                 --------------- ----------------

Weighted average shares outstanding - basic                                              129,236          131,372
Common stock issuable to consultant                                                        1,138              469
Convertible preferred stock                                                               20,000               --
Dilutive stock options and warrants                                                          649               --
                                                                                 --------------- ----------------
Weighted average shares outstanding - diluted                                            151,023          131,841
                                                                                 =============== ================

Net income per share - diluted **                                                $             * $              *
                                                                                 =============== ================

</TABLE>
*  Less than $.01 per share
** Net income per common share for  discounted  operations is less than $.01 per
   share and not presented separately.

For the three  months  ended  March 31,  2007 and 2006,  1,080,000  options  and
4,600,000  warrants were excluded from the calculation of earnings per share, as
their issuance prices were in excess of the average market price for the period.


                                       9
<PAGE>


2. SIGNIFICANT ACCOUNTING POLICIES (continued)

STOCK-BASED COMPENSATION

The Company  adopted  SFAS No.  123R,  "Share-Based  Payments",  effective  from
January 1, 2006, utilizing the "modified prospective" method as described in the
standard.  Under  the  "modified  prospective"  method,   compensation  cost  is
recognized for all share-based payments granted after the effective date and for
all unvested awards granted prior to the effective date. The Company  recognized
$3,160 and $4,947 in total  stock-based  compensation  expense  during the three
months ended March 31, 2007 and 2006,  respectively.  Total unvested stock-based
compensation  expense  was  $11,985 at March 31,  2007 and had a total  weighted
average remaining term of 2.42 years.

The Company did not issue any options to employees and officers during the three
months ended March 31, 2007.

ESTIMATES

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


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2006,  the  Financial  Accounting  Standards  Board  (FASB)  issued FASB
Interpretation  No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48) an
interpretation of FASB Statement No. 109,  "Accounting for Income Taxes",  which
clarifies the  accounting for  uncertainty in income taxes.  FIN 48 prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  The  Interpretation  requires  that the Company  recognize  in the
financial  statements,  the impact of a tax  position,  if that position is more
likely than not of being  sustained on audit,  based on the technical  merits of
the position.  FIN 48 also provides  guidance on  de-recognition of a previously
recognized tax position,  classification,  interest and penalties, accounting in
interim  periods  and  disclosures.  The  provisions  of FIN  48  are  effective
beginning January 1, 2007 with the cumulative effect of the change in accounting
principle recorded as an adjustment to the opening balance of retained earnings.
The Company does not expect this  pronouncement to have a material effect on the
financial position or results of operations of the Company.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
Statement  defines fair value,  establishes a framework for measuring fair value
in generally  accepted  accounting  principles and expands disclosure about fair
value measurement. SFAF No. 157 is effective for financial statements issued for
fiscal years  beginning  after  November 15, 2007.  The  implementation  of this
guidance  is not  expected  to have any  impact  on the  Company's  consolidated
financial statements.

In  addition,  in  September  2006,  the FASB issued  SFAS No. 158,  "Employers'
Accounting for Defined Benefit Pension Plans and Other Postretirement Plans - an
amendment of FASB Statements No. 87, 88, 106 and 132(R)." This standard requires
recognition in the balance sheet of the funded status of pension  plans,  rather
than footnote  disclosure which is current  practice.  Publicly traded companies
are to reflect the new standard in financial  statements  ending after  December
15, 2006 and  non-public  companies are to apply it in  statements  ending after
June 15, 2007. As the Company does not maintain a defined  benefit  pension plan
and has no plans to do so,  this  standard  should  not have any  impact  on the
Company's financial position or results of operations.


In September  2006, the SEC issued Staff  Accounting  Bulletin  ("SAB") No. 108,
"Considering   the  Effects  of  Prior  Year   Misstatements   when  Quantifying
Misstatements  in Current  Year  Financial  Statements"  (SAB  108),  to provide
guidance  on the  consideration  of the effects of prior year  misstatements  in
quantifying  current  year  misstatements  for  the  purpose  of  a  materiality
assessment. Under SAB 108, companies should evaluate a misstatement based on its
impact on the current year income statement, as well as the cumulative effect of
correcting  such  misstatements  that  existed in prior  years  existing  in the
current  year's  ending  balance  sheet.  SAB 108 will become  effective for the
Company in its fiscal  year  ending  June 30,  2007.  The  Company is  currently
evaluating the impact of the provisions of SAB 108 on its consolidated financial
statements.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and Financial  Liabilities."  SFAS No. 159 permits entities to
choose to measure eligible  financial  instruments at fair value. The unrealized
gains and  losses on items for which  the fair  value  option  has been  elected
should be reported in  earnings.  The decision to elect the fair value option is
determined  on an instrument  by  instrument  basis,  it should be applied to an
entire  instrument,  and it is irrevocable.  Assets and liabilities  measured at
fair value  pursuant to the fair value option  should be reported  separately in
the balance sheet from those  instruments  measured  using  another  measurement
attributes.  SFAS No. 159 is effective  as of the  beginning of the first fiscal
year that begins after November 15, 2007. The Company is currently analyzing the
potential  impact of  adoption  of SFAS No.  159 to its  consolidated  financial
statements.


                                       10
<PAGE>


3.   DISCONTINUED OPERATIONS

During  the  third  quarter  of 2006,  the  Company  reorganized  the  Company's
operating subsidiaries.  Under the reorganization plan, substantially all of the
assets and liabilities of our principal  operating  subsidiary,  Secured Digital
Applications  (M)  Sdn  Bhd  ("SDAM"),  were  transferred  to  a  newly  created
subsidiary,  DigitalApps  Sdn Bhd  ("DASB").  DASB  thus  became  our  principal
operating  subsidiary with  substantially the same assets and liabilities as the
former SDAM.

Through   reorganization,   the  Company  disposed  of  a  number  of  operating
subsidiaries.  The assets and  liabilities  of  Gallant  Service  Centre Sdn Bhd
("GSC"),  through  which the  Company  owned a majority  interest in the Gallant
group of  companies,  and Armor  Multi  Systems  Sdn Bhd ("AMS") and Armor Multi
Services Sdn Bhd ("AMSSB") were sold to the third party on September 18, 2006.

On September  18, 2006,  the Company sold all the shares of SDAM which  included
its subsidiary  companies,  AMS,  AMSSB, a 60% owned  subsidiary of AMS, GSC and
other Gallant  subsidiaries,  to a third party and recognized a gain on disposal
of  $46,472.  The  receivable  from the sale is due in one year or less from the
date of  sale  unless  extended  by the  parties  and the  receivable  bears  no
interest.  At March 31, 2007 and December 31, 2006, the Company was owed $46,472
and such amount is included in trade and other accounts receivables.


The results of operations of SDAM and its subsidiaries  have been  retroactively
restated as discontinued  operations  pursuant to SFAF No. 144,  "Accounting for
the Impairment or Disposal of Long-Lived Assets."

Results of discontinued operations for the three months ended March 31, 2006 are
as follows:

Revenue                                                   $    1,372,382
Cost of revenues                                                 501,020
                                                          --------------
Gross profit                                                     871,362
Operating expenses                                               139,308
                                                          --------------
Income from operations                                           732,054
Other income (expenses)                                          (66,284)
                                                          --------------
Income before tax                                                665,770
Income tax                                                      (217,984)
                                                          --------------
Income before minority interest                                  447,786
Minority interest                                                 39,718
                                                          --------------
Income from discontinued operations                       $      487,504
                                                          ==============



4. RELATED PARTY ACTIVITY

LSH ASSET HOLDINGS SDN BHD ("LSH"):

LSH is a company  wholly-owned by the Company's Chief Executive  Officer and his
wife. LSH billed the Company management fees totaling $30,000 for the respective
three months ended March 31, 2007 and 2006. LSH also billed DASB and SDAM $6,835
and $6,419 for the three months ended March 31, 2007 and 2006, respectively, for
administrative  and clerical  charges.  LSH also made short term advances to the
Company from time to time for working capital purposes. As of March 31, 2007 and
December 31, 2006, the amount due to LSH was $53,872 and $17,927,  respectively.
This amount is  unsecured,  bears no interest,  has no fixed terms of repayment,
and is  recorded in the  financial  statements  as "Amount due to an  affiliated
company".


SYNERVEST SDN BHD ("SSB")

A director of one of the Company's  Malaysian  subsidiaries is a director of SSB
and  holds a 60%  equity  interest  in SSB.  At  December  31,  2006,  long-term
receivables,  related parties, consisted of $108,247 due from (SSB). This amount
primarily arose in the year ended December 31, 1998 when the Company sold to SSB
assets used in the operations of a subsidiary. These assets, comprised of analog
video hardware and peripherals and a patent for image display,  were sold to SSB
for a total sum of  $1,661,175.  Due to the  uncertainty  of  collection  of the
related receivable, a related gain on the sale of the assets was deferred and is
to be  recognized  only after all costs have been  recovered and as payments are
received.  During the year ended  December  31, 2002,  payments  received by the
Company  exceeded all remaining  costs. The Company received $25,290 and $23,805
of the outstanding  receivable  during the three months ended March 31, 2007 and
2006,  respectively,  resulting  in a  realization  of gain  on sale of  assets,
related party for those periods. The deferred gain included in the balance sheet
has been reduced accordingly. As of March 31, 2007, accounts receivable from the
related entity totaled $84,835.


                                       11
<PAGE>


4. RELATED PARTY ACTIVITY (CONTINUED)


MY ARCHITECT ("MYA")

A director of one of the Company's Malaysian subsidiaries is a principal partner
of MYA.  During the three  months  ended  March 31,  2007 and 2006,  the Company
received fees of $301,882 and $82,112,  respectively,  from consulting contracts
that it entered into with MYA.  The terms of  repayment  for the amount due from
MYA are similar to terms accorded to the Company's other existing customers.  At
March 31, 2007 and December 31, 2006, there was no balance owed by MYA.

CHIEF EXECUTIVE OFFICER

As of March 31, 2007 and December 31, 2006, the Company owed the Chief Executive
Officer of the Company  $10,965 and $10,578,  respectively,  for short-term cash
advances made to the Company for working capital purposes from time to time. The
amount owing to the Chief Executive Officer is unsecured, bears no interest, has
no fixed  terms of  repayment  and is recorded in the  financial  statements  as
"Amount due to a director".

DIRECTORS OF MALAYSIAN SUBSIDIARY

On September 18, 2006,  one of the  Company's  Malaysian  subsidiaries  acquired
1,050,000  shares  of  another  Malaysian  subsidiary  from  such  subsidiaries'
directors,  Mustaffar Yacob and Dato' Wan Abdul Razak, for a total consideration
of RM567,500 (approx. $154,000). The balance is due in one year or less from the
date of purchase unless extended by the parties and such debt bears no interest.
At March  31,  2007 and  December  31,  2006,  the  Company  owes the  directors
RM354,500  ($102,495  at March 31, 2007 and  $100,396 at December  31, 2006) and
such amount is included in accounts payable.


5. PREFERRED STOCK

On October 23, 2006, the Company  executed a share  exchange  agreement with LSH
whereby LSH exchanged  20,000,000  shares of the Company's  common stock held by
LSH in exchange  for 100,000  shares of the  Company's  newly  created  Series B
Voting  Convertible   Preferred  Stock  (the  "Voting   Preferred"),   which  is
convertible into shares of common stock at a fixed ratio of 200 shares of common
stock for 1 share of Voting Preferred stock. The 20,000,000 shares were returned
to treasury and are  available  for  re-issuance  at a future  date.  The Voting
Preferred  stock is entitled to receive  dividends in preference to any dividend
on the common  stock,  as,  when and upon such terms as may be  declared  by the
Company.


6. COMMON STOCK

The Company signed a compensation  agreement with a consultant on April 15, 2006
under  which the Company is to issue an  aggregate  of  1,000,000  shares of its
common stock to the consultant for services to be rendered for the  twelve-month
period ending April 15, 2007.  The Company issued 250,000 shares of common stock
on each of the following dates;  October 16, 2006, November 22, 2006 and January
15, 2007. The Company issued the final 250,000 shares on April 20, 2007.

On November 28, 2006, the Company issued  1,500,000  shares of common stock to a
consultant  pursuant to a compensation  agreement dated November 1, 2006,  under
which the Company is to issue an  aggregate  of  2,000,000  shares of its common
stock for  services to be rendered  for the  six-month  period  ending April 30,
2007. On April 20, 2007,  the Company  reissued from its treasury  stock 500,000
shares of common stock as final issue of shares.

On December 5, 2006, the Company reissued from its treasury stock 200,000 shares
of common  stock to a  consultant  pursuant to a  compensation  agreement  dated
December 4, 2006,  under which the Company is to issue an  aggregate  of 600,000
shares of its common  stock to the  consultant  as payment  for  services  to be
rendered  to the  Company  for the  six-month  period  ending  June 4, 2007.  On
February 9, 2007, the Company reissued from its treasury stock 100,000 shares of
common stock. This agreement was terminated on March 31, 2007.


                                       12
<PAGE>



6.   COMMON STOCK (CONTINUED)

On February 6, 2007, the Company reissued from its treasury stock 425,423 shares
of common stock to a consultant as payment for services  rendered to the Company
for total consideration of $26,376 based on the market value of $0.062 per share
on the date of issuance.

The Company  signed a  compensation  agreement  with a consultant on May 1, 2007
under which the Company is to issue an aggregate of 400,000 shares of its common
stocks to the consultant for services to be rendered for the twelve-month period
ending April 30, 2008. The Company shall issue to the consultant  100,000 shares
of treasury stock on each quarter in advance commencing May 1, 2007.

On October 21, 2006, the Company approved an award of incentive  compensation to
the Chief  Executive  Officer and  Chairman,  Patrick Lim, of 500,000  shares of
common stock per year if the Company in that year  achieves a compounded  growth
of at least fifteen (15) percent.  In 2006, the Company achieved the growth rate
and  accrued  compensation  expense of $33,000 for the year ended  December  31,
2006. The shares will be issued in 2007.



7.   STOCK OPTIONS

On April 5, 2007, the Company signed an agreement with a consultant under which
the Company granted stock options for an aggregate of 2,000,000 shares of its
common stocks to the consultant as a performance incentive for services to be
rendered for a two year period ending April 4, 2009. The options are exercisable
on a quarterly basis over the two year term of the contract in the following
manner:
<TABLE>
<CAPTION>

   Trading Period                  Market capitalization Vesting Date        No. of options   Exercise Price
                                        ($'Million)                                           Per Share ($/sh)
<S>      <C>      <C>                      <C>                <C>                <C>                <C>
   April 5 - July 4, 2007                  13.53         July 5, 2007            250,000            0.10
   July 5 - October 4, 2007                20.29         October 5, 2007         250,000           0.125
   October 5 - January 4, 2008             30.44         January 5, 2008         250,000            0.15
   January 5- April 4, 2008                45.63         April 5, 2008           250,000           0.175
   April 5- July 4, 2008                   57.04         July 5, 2008            250,000            0.20
   July 5 - October 4, 2008                71.30         October 5, 2008         250,000           0.225
   October 5 - January 4, 2009             89.12         January 5, 2009         250,000            0.25
   January 5 - April, 2009                 111.40        April 5, 2009           250,000            0.30
</TABLE>

The stock options may only be exercisable subject to the consultant meeting the
following conditions:

(1)  progressively  increasing SDA's market capitalization between April 5, 2007
     and April 4, 2008 by at least 50% over the previous trading period.
(2)  progressively  increasing SDA's market capitalization between April 5, 2008
     and April 4, 2009 by at least 25% over the previous  trading  period.  This
     increase shall be maintained for at least five (5) consecutive trading days
     during the material trading period; and
(3)  SDA's average  daily trading  volume  exceeding  500,000  shares during the
     material trading period.



8.   WARRANTS

On October 21, 2006,  the Company  approved the issuance to the Chief  Executive
Officer  warrants to purchase  6,300,000 shares of the Company's common stock at
110 percent of the market  price at the close of  business on October 23,  2006,
such warrants to be issued in three equal annual  installments  and which may be
exercised on or before October 21, 2011. Black-Scholes valuations were performed
on the warrants. The initial value of the warrants was $257,518. These costs are
being amortized over three years based on the estimate of the expected term. The
Company  recognized  compensation  expense of $42,192 for the three months ended
March 31, 2007.


                                       13
<PAGE>

9.   SIGNIFICANT CONCENTRATIONS OF CREDIT RISK


The Company grants credit, generally without collateral, to its customers. Two
customers in the Company's applications segment accounted for the following
revenue:


                                            Three Months Ended
                                       March 31,              March 31,
                                         2007                   2006
                                   -----------------      -----------------

Customer 1                                49%                     48%
Customer 2                                48%                     46%

                                   -----------------      ----------------
Total                                     97%                     94%
                                   =================      ================

At March 31, 2007, the two customers  accounted for  substantially  all of trade
accounts receivable.  The large concentration of revenues with the two customers
is a result of the Company's  strategy of using the two customers as contractors
to service certain accounts with certain  long-standing  accounts established by
the Company,  reducing  credit risk and carrying  costs.  Allowance for doubtful
accounts  receivable  was $26,549 at March 31, 2007 and $26,006 at December  31,
2006.  The Company will continue to pursue  vigorously the collection of all its
outstanding accounts receivable.

Three  suppliers  accounted for  substantially  all cost of revenues  during the
three months ended March 31, 2007 and March 31, 2006, respectively.  The Company
is not dependent  upon one supplier to provide the services that it requires but
made a  strategic  decision  to engage the  services  of only a small  number of
suppliers after taking into consideration the quality of service and competitive
pricing being offered.  Should the need arise, the Company believes that it will
be able to utilize alternative suppliers for the services that it requires.



10.  SUBSEQUENT EVENT

On May 7, 2007,  the Company  announced that it has been engaged to supply a new
generation  RFID  Real  Time  Location  System to a  Malaysian  food  processing
manufacturer. The contract valued at $1.65 million, is scheduled to be completed
by September 2007. When  completed,  the system will use RFID ("radio  frequency
identification")  technology to permit the  manufacturer  to track real time raw
materials,  finished goods,  fixed and movable assets and processing  equipment.
The system will utilize a new  generation  of EPC Gen2 RFID chip with a built-in
antenna to transmit location and other information to reader or writer. The chip
is operable in different frequencies and can be used worldwide.


                                       14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

THE FOLLOWING ANALYSIS OF THE OPERATIONS AND FINANCIAL  CONDITION OF THE COMPANY
SHOULD  BE  READ  IN  CONJUNCTION  WITH  THE  CONDENSED  CONSOLIDATED  FINANCIAL
STATEMENTS,  INCLUDING THE NOTES THERETO,  OF THE COMPANY CONTAINED ELSEWHERE IN
THIS FORM 10-Q.


OVERVIEW

Secured  Digital  Applications,  Inc.  ("SDA" or the "Company") is a provider of
subcontracted business services. These include media production,  which develops
content  for  various  technologies,  including  television,  the  Internet  and
free-standing  displays. We also provide information technology services in such
areas as biometric  technology  and security  systems.  We are in the process of
developing a broad  platform of outsourced  core business  services that will be
offered  to  companies  in  the  United  States,   including   digital  document
management,  accounts  receivable  and  payables  management,   bookkeeping  and
purchasing services. We anticipate that we will begin offering those services in
late 2007 or early 2008.  We  generate  revenue  through our  majority or wholly
owned subsidiary companies located in the United States and Malaysia.

Since SDA became a publicly held company through a reverse  acquisition in 1999,
the Company  has evolved in its  operations.  We expanded  our initial  lines of
business as a broadband communications operator and Internet content provider by
acquiring  majority  interests in regional  companies  that are believed to have
superior  potential for growth and profitability as a member of the SDA Group of
Companies.  Acquisitions  have  been made  based on  management's  criteria  for
acquisition,   which  include   acquisition   costs,   growth   potential,   and
compatibility with SDA's existing subsidiaries. During this acquisition process,
we developed a centralized management and support structure provided by our home
office in Petaling Jaya, Malaysia to support our operating  subsidiaries and the
ability of  potential  acquisitions  to benefit  from our  management  structure
became a significant consideration in making acquisitions.

Reorganization of Operating Subsidiaries

During the third quarter of 2006, the Company determined that it was in the best
interests of the business to restructure its operating subsidiaries.  The intent
of the  reorganization  was to  improve  administrative  efficiency  and  profit
margins as well as to dispose of  certain  assets or  subsidiaries  that did not
meet  management's  criteria  for  continued  inclusion  in  the  SDA  group  of
companies.  In particular,  we determined that our subsidiaries  involved in the
developing  business  of secured  shipping  and in the  established  business of
operating  retail  computer  outlets  did not meet the  Company's  criteria  for
profitability   and/or  fit  within  the  Company's   organization.   Under  the
reorganization  plan,  substantially  all of the assets and  liabilities  of our
principal  operating  subsidiary,  Secured  Digital  Applications  (M)  Sdn  Bhd
("SDAM"),  were transferred to a newly created  subsidiary,  DigitalApps Sdn Bhd
("DASB"). DASB thus became our principal operating subsidiary with substantially
the same assets and liabilities as the former SDAM.

Through reorganization, we reduced the number of operating subsidiaries and
disposed of the companies associated with our Gallant IT operations, which
operated retail computer stores in metropolitan Kuala Lumpur. We also disposed
of the companies through which we had been seeking to develop a secured shipping
business.

In connection with the reorganization,  we incorporated a new subsidiary,  DASB,
which will act as the  principal  holding  company  for the  Corporation's  four
operating   subsidiaries:   Perwimas   Telecommunications   Sdn  Bhd   ("PTSB");
DigitalApps  Technologies  Sdn Bhd ("DAT")  (formerly  Secured  Shipping Sdn Bhd
("SSSB"));  Digital  Image ID Sdn Bhd  ("DID")  and  DigitalsApps  Media Sdn Bhd
("DAM"). DAT owns 55 percent of Ispec Sdn Bhd ("ISS") (formerly Innospective Sdn
Bhd).  DID will own 100 percent of Digital  Kiosk  Technologies  Sdn Bhd ("DKT")
(formerly Century Jubilee Sdn Bhd ("CJSB")),  a newly  incorporated  subsidiary.
The assets and  liabilities of Gallant  Service Centre Sdn Bhd ("GSC"),  through
which we owned a majority interest in the Gallant group of companies,  and Armor
Multi Systems Bhd ("AMS") and Armor Multi  Services Sdn Bhd ("AMSSB")  were sold
to the third party.

SDA's core line of business  is  outsourced  media  production  and  information
technology  applications,  which  account for the majority of our  revenue.  Our
operating subsidiaries offer products in diverse lines of business including the
development of Internet  content,  digital security and biometric  products.  We
conduct our principal  operations in Malaysia.  Our subsidiaries as of March 31,
2007 are the following companies:

-    China Sea Trade Company,  Inc. ("CST") (f/k/a Eystar Media, Inc.), a wholly
     owned subsidiary of SDA Worldwide,  Inc.,  organized under Delaware law and
     based in Saddle Brook, NJ. CST offers consulting and management services to
     regional  firms in Asia  seeking to develop  markets in the United  States.
     These include  contract sales  representation,  the contract  management of
     joint venture  companies  and advice and  consulting on funding and mergers
     and  acquisitions  within the United States.  CST began operations in early
     2006 and did not generate any revenue.

                                       15
<PAGE>

-    SDA  Worldwide,  Inc.  ("SDAW")  (f/k/a  SDA  America,  Inc.) an 80%  owned
     subsidiary,  organized under Delaware law and based in Saddle Brook, NJ, is
     in the process of developing and  commercializing  a platform of outsourced
     business  services  that will be  offered  primarily  to small  and  medium
     enterprises  in the United States.  The company was originally  formed as a
     wholly-owned corporation used as a special vehicle to secure a $6.5 million
     funding from Laurus Master Fund Ltd. (the "Master  Fund")  through  private
     placement of securities  consisting of convertible  preferred  stock of SDA
     America.  As a result of the early  retirement  of the  Laurus  investment,
     management  determined to use the corporation as the vehicle to develop the
     company's  international  trade  consulting  business in the United States.
     SDAW began operations in 2005 and did not generate any revenue.

-    DASB, is a wholly- owned Malaysian  subsidiary  that designs,  develops and
     produces  multimedia content and provides  consulting  services for website
     development,  network  engineering  and  project  management  in IT related
     projects.  In addition to its  activities as a multimedia  developer and IT
     consultant, DASB provides centralized management and back-office support to
     SDA's other subsidiaries from its office in Petaling Jaya, Malaysia.


-    Perwimas  Telecommunications  Sdn  Bhd  ("PTSB"),  a  95%  owned  Malaysian
     subsidiary of DASB,  provides  broadband  and  application  services  under
     licenses  granted by the  government of Malaysia.  Digital Image ID Sdn Bhd
     ("DID") (f/k/a Vista  Positive Sdn Bhd),  DASB's  wholly-owned  subsidiary,
     from the date of acquisition on July 5, 2006.

-    Digital Kiosk Technologies Sdn Bhd ("DKT") (f/k/a Century Jubilee Sdn Bhd),
     DID's wholly-owned subsidiary, from the date of acquisition on September 4,
     2006.

-    Ispec Sdn Bhd ("ISS") (f/k/a  Innospective Sdn Bhd), a 55% owned subsidiary
     of DigitalApps Technologies Sdn Bhd ("DAT") (f/k/a Secured Shipping Sdn Bhd
     ("SSSB")),  is a  systems  integration  firm  specializing  in the  design,
     development  and  implementation  of wireless  applications  and electronic
     solutions.

-    DigitalApps Media Sdn Bhd ("DAM"), DASB's wholly-owed subsidiary,  from the
     date of incorporation on July 7, 2006.


In addition, as part of the reorganization,  we increased our equity interest in
PTSB from 86 percent to 95 percent by purchasing  minority interests held by two
of our  directors,  Dato' Wan  Abdul  Razak and  Mustaffar  Yacob for  aggregate
consideration of approximately $154,000.

The  accompanying  consolidated  financial  statements  include the  accounts of
Secured Digital Applications, Inc. and its subsidiaries.

For the three months ended March 31, 2007 and 2006, the Company's revenue was
generated primarily from the following activities:

1.   Designing,  producing,  hosting and distribution of interactive  multimedia
     content, websites, programs and applications.

2.   Developing and producing  e-commerce  programs and Internet-based  security
     applications and solutions.

3.   Providing  project  consulting  services on  broadband  communications  and
     networking systems for property development projects.



                                       16
<PAGE>


Significant Business Developments and Plan of Operation

We plan to operate in the United States during 2007  primarily  through SDAW and
CST and to provide outsourced business services to small and medium sized United
States  business  as well as  consulting  services to Asian  companies  that are
seeking  to  establish  a  presence  in  the US  markets.  In  addition,  we are
developing  a sales  organization  for our  media  production  business  and are
seeking to establish a client base within the United States.


We plan to continue to devote the bulk of our  resources to core  operations  in
Asia,  particularly  Malaysia,  as management  believes that the growth of Asian
economies has been favorable and is likely to continue. The company continues to
review  potential  acquisitions  in Asia,  primarily  of regional  companies  in
Malaysia,  Thailand,  and the  People's  Republic  of China in an  effort to add
operations  that  will  meet   management's   standards  and  provide   superior
opportunities for growth after  acquisition.  We plan to attempt to benefit from
the high  levels  of trade  between  the  United  States  and Asia  through  the
establishment of consulting  businesses serving Asian  manufacturers  seeking to
develop markets in the United States.

The Company anticipates that it will continue to seek the rights to new products
and services  through  contractual  arrangements  or through the  acquisition of
other  business  entities  that provide  compatible  products or  services.  The
Company expects to continue to market its products and services  through a sales
force and through  its  Internet  websites  located at  www.digitalapps.net  and
www.eystar.com.

The Company has determined to exit from its limited involvement in the broadband
business in Malaysia as a backhaul provider of telecommunications  services. The
decision to exit the broadband business,  which was forecast to constitute about
2 percent of the  Company's  revenue in the current year, is not material to the
Company's  operations  or assets.  The decision to end the  Company's  broadband
business was approved by the Board of Directors  and intended to permit and exit
from a non-core line of business upon favorable terms.

We anticipate  that we will incur  additional  operating  expense in introducing
through SDAW our business process  outsourcing product and in seeking to develop
a customer base in the United States for our media  production  and  information
technology  products.   We  expect  to  incur  these  costs  in  completing  the
acquisition  and  development  of the  technology  used in the business  process
outsourcing  product and for marketing,  sales and  administrative  expenses for
personnel  employed in the United States. Our strategy is to utilize the Company
experience in the central  administration of multiple operating subsidiaries and
staff  located  in our  home  office  in  Petaling  Jaya to  provide  labor  for
outsourced business  processes.  We will incur additional expense to assure that
adequate  personnel are employed in the home office,  which may not be offset by
the revenue  generated by sales in the United  States.  Although  management  is
optimistic that a significant  market exists for outsourced  business  processes
and that the Company can compete in that market,  there can be no assurance that
we will be able to operate such a business profitably.


Strategic Contractual Relationships

The Company seeks to enter strategic agreements,  both formal and informal, with
other  providers of goods or services  that are  compatible  with the  Company's
existing businesses. Such arrangements include license agreements,  requirements
contracts and service agreements.  The Company may also seek to acquire business
enterprises that offer goods and services that are of benefit to the Company and
its shareholders.  We cannot forecast whether these strategic relationships will
generate significant revenue in 2007.


Results of Operations

The following  discussion and analysis of our financial condition and results of
operations  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes.

The following table sets forth certain operating data for Secured Digital
Applications and subsidiaries for the periods as indicated below.
<TABLE>
<CAPTION>


                                                              Three Months Ended March 31,
                                                          ----------------------------------
                                                             2007                    2006
<S>                                                             <C>                  <C>
Revenues                                                 $ 10,370,802         $    8,402,325
Gross profit                                                  690,627                457,488
Sales and marketing                                             3,994                  2,360
General and administrative                                    442,145                591,455
Gain on disposal of assets-related parties                     25,290                 23,805
Income (loss) from continuing operations                      311,100               (102,933)
Net income                                                    311,100                384,571
</TABLE>




                                       17
<PAGE>

COMPARISON  OF THE THREE MONTHS  ENDED MARCH 31, 2007 TO THE THREE MONTHS ENDED
MARCH 31, 2006


REVENUES

Revenues  increased by  $1,968,477  or 23% to  $10,370,802  for the three months
ended March 31, 2007  ("2007") as compared to  $8,402,325  for the three  months
ended March 31, 2006 ("2006").

The  increase in total  revenue in 2007 as compared to 2006 was mainly due to an
increase in fees earned from the production of multimedia  programs and business
contracts.  The increase in revenue from the  production of multimedia  programs
was the result of  sub-contract  work from the  Company's  two major  customers.
Revenue for project  consulting  services was generated  from contracts that the
Company  secured in 2001 through 2003. In 2007, two customers  accounted for 49%
and 48% of  total  revenue,  respectively.  In  2006,  the  same  two  customers
accounted for 48% and 46% of total revenue, respectively.

On May 7, 2007,  the Company  announced that it has been engaged to supply a new
generation  RFID  Real  Time  Location  System to a  Malaysian  food  processing
manufacturer. The contract valued at $1.65 million, is scheduled to be completed
by September 2007. When  completed,  the system will use RFID ("radio  frequency
identification")  technology to permit the  manufacturer  to track real time raw
materials,  finished goods,  fixed and movable assets and processing  equipment.
The system will utilize a new  generation  of EPC Gen2 RFID chip with a built-in
antenna to transmit location and other information to reader or writer. The chip
is operable in different frequencies and can be used worldwide.

GROSS PROFIT

Gross profit increased to $690,627 in 2007 compared to $457,488 in 2006.

The gross profit  percentage  increased  to 6.7% in 2007 from 5.4% in 2006.  The
increased  in  gross  profit  percentage  in  2007  was due to  higher  revenue,
particularly  consulting revenue, which has a higher margin than production work
and incurring lesser subcontractor costs. The Company is striving to improve its
quality of services and  efficiency  with objective to increase its gross profit
percentage.  The  outsourcing of content  production work enabled the Company to
develop  a team of  contractors  that  will  assist  the  Company  in  producing
multimedia  content and  applications  that are  crucial to its future  business
operation.


SALES AND MARKETING EXPENSES

Sales and  marketing  expenses  increased  by  $1,634 or 69%,  to $3,994 in 2007
compared  to $2,360 in 2006,  primarily  as a result  of an  increase  in travel
expenses.


GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses relating to non-related parties decreased to
$405,310 in 2007 compared to $555,036 in 2006.

The decrease was primarily  attributable to a decrease in compensation expenses,
investor  relations  expenses and  professional  fees, in  particular  legal and
accounting   fees  incurred  in  connection  with  a  restatement  of  financial
statements during the first quarter of 2006.

In 2007, general and administrative expenses consisted of the following: 18% was
for  depreciation  of tangible  assets,  15% was for consulting fee, 15% was for
employee payroll,  13% was for fees for professional and auditing services,  30%
was for  compensation  expenses and 9% was for rent,  utilities,  general office
supplies, communications and corporate insurance expenses. For 2006, 11% was for
depreciation of tangible assets, 8% was for employee  payroll,  21% was for fees
for professional and auditing  services,  1% was for investor relation expenses,
48% was for  compensation  expenses  and 11% was for  rent,  utilities,  general
office supplies, communications and corporate insurance expenses.

General  and  administrative  expenses  - related  parties in 2007 and 2006 were
$36,835 ands $36,419, respectively.  These expenses included management fees and
administrative expenses payable by the Company to a company in which Mr. Patrick
Lim, the Chairman and Chief  Executive  Officer of the Company,  has a financial
interest.  In 2007 and 2006, the related  company,  LSH Assets  Holdings Sdn Bhd
("LSH")   billed  the   Company's   Malaysian   subsidiaries,   DASB  and  SDAM,
administrative expenses of $6,835 and $6,419,  respectively,  for administration
and clerical fees  incurred by LSH on behalf of DASB and SDAM.  The Company also
incurred  management  fees of $30,000 in 2007 and 2006.  The  management fee was
charged  on the  basis  of time  spent  for the  administration  and  management
services provided to the Company.



                                       18
<PAGE>

PREVIOUSLY DEFERRED GAIN ON SALE OF TECHNOLOGY - RELATED PARTY

In 2007 and 2006, the Company included recognition of a previously deferred gain
of $25,290 and $23,805,  respectively,  related to a similar  amount the Company
received from its long-term  receivable,  related party. The receivable  balance
and total  deferred  gain was $108,247,  respectively,  as of December 31, 2006.
These  amounts  arose in the year ended  December 31, 1998 when the Company sold
assets used in the operations of a subsidiary to a related  company.  Due to the
uncertainty of collection of the related receivable,  a related gain on the sale
of the assets was  deferred  and is to be  recognized  only after all costs have
been  recovered and to the extent the  receivable is collected.  During the year
ended December 31, 2002, payments received by the Company exceeded all remaining
costs.  As a result,  the  Company's  long-term  receivable - related  party and
deferred  gain balances  were reduced to $84,835  respectively,  as of March 31,
2007.


LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2007, the Company had net cash of $11,366.

In 2007,  operations were funded  primarily from internally  generated funds and
working  capital  advanced  from  time  to time  by the  principal  shareholder,
director and officer of the Company. These advances bear no interest and have no
fixed terms of repayment.

As of March 31, 2007,  the Company owed  Patrick  Lim, the  Company's  principal
shareholder, Chief Executive Officer ("CEO") and Chairman $10,965. Additionally,
as of March 31, 2007,  the Company owed an  affiliated  company in which Mr. Lim
has a  financial  interest,  $53,872  for  short-term  cash  advances  made to a
subsidiary of the Company for working capital purposes from time to time and for
management fees. These amounts are unsecured, bear no interest and have no fixed
terms of repayment.

Net cash  provided by operating  activities of $69,186 in 2007 was primarily the
result  of income  and  noncash  expenses  net of  increases  in trade and other
accounts receivable.

Net cash used in  investing  activities  totaled  $1,409 was for the purchase of
equipment.

Net cash provided by financing  activities totaled $35,945 was mainly due to the
borrowings from an affiliated company totaling $35,726.

For 2007,  the  Company  will be  expanding  into new  businesses  that  include
provision of outsourced  business support and supply chain management  services.
The Company expects to incur further expenses to acquire  technologies  that are
synergistic  to the new  businesses and will help the Company to rollout the new
businesses in the shortest time  possible.  The Company  estimates  that it will
require  $3.5  million to finance  the set-up  cost of its new  businesses.  The
Company  also expects that it will require a further $2.0 million to finance the
set-up cost and working capital of its new businesses.

The Company will continuously evaluate its financing requirements and may decide
to consider alternative modes of financing.



                                       19
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Currency Exchange Rates

The  Company  has  intercompany  debt  denominated  in US  dollars,  whereas the
functional  currency of the Company's  subsidiaries  is the  Malaysian  Ringgit,
which results in the Company  recording  other  income/loss  associated  with US
dollars as a function of relative changes in foreign exchange rates. The Company
is unable to predict  whether it will  experience  future gains or future losses
from such  exchange-related  risks on the receivables and payables.  The Company
does not have a program  in place to manage  the  volatility  relating  to these
exposures.

Revenue

Substantially  all of the  Company's  revenue  is earned  outside  of the United
States.

ITEM 4. CONTROLS AND PROCEDURES

As of  the  end of  the  period  covered  by  this  report,  we  carried  out an
evaluation,  under the supervision and with the participation of our management,
including our Chief Executive Officer and our Chief Accounting  Officer,  of the
effectiveness of the design and operation of the Company's  "disclosure controls
and procedures" (as defined in Rule 13a-15(e) under the Securities  Exchange Act
of 1934, as amended).  Based upon that evaluation,  our Chief Executive  Officer
and our Chief  Accounting  Officer  concluded that our  disclosure  controls and
procedures are effective to ensure that information  required to be disclosed by
us in  reports  that we file or submit  under  the  Exchange  Act are  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities  and Exchange  Commission  (the "SEC")  rules and forms,  and include
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by  us in  such  reports  is  accumulated  and  communicated  to  our
management,  including  our Chief  Executive  Officer  and our Chief  Accounting
Officer, as appropriate to allow timely decisions regarding required disclosure.


There has been no change in our internal control over financial reporting during
the quarter ended March 31, 2007 that has materially affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

                                       20
<PAGE>


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      None.


ITEM 1A. RISK FACTORS

The Company's business,  financial  condition,  operating results and cash flows
can be  impacted  by a number  of  factors,  any one of which  could  cause  the
Company's  actual  results to vary  materially  from recent  results or from the
Company's anticipated future results. For a discussion  identifying risk factors
and important  factors that could cause actual results to differ materially from
those  anticipated,  see  the  discussion  in  Part  II,  Item  6  "Management's
Discussion  and Analysis" in the Company's  Annual Report on Form 10-KSB for the
year ended December 31, 2006.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

        None.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.


ITEM 5. OTHER INFORMATION

        None.


ITEM 6. EXHIBITS

       (a) Exhibits

          31.1 Certification  by Chief Executive  Officer Required Under Section
               302 of Sarbanes-Oxley Act of 2002

          31.2 Certification by Chief Accounting  Officer Required Under Section
               302 of Sarbanes-Oxley Act of 2002

          32.1 Certification  by Chief Executive  Officer Required Under Section
               906 of Sarbanes-Oxley Act of 2002

          32.2 Certification by Chief Accounting  Officer Required Under Section
               906 of Sarbanes-Oxley Act of 2002


                                       21
<PAGE>





                                   SIGNATURES


     In accordance  with the  requirements of the Securities and Exchange Act of
1934,  the  Registrant  has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




                                      SECURED DIGITAL APPLICATIONS, INC.
                                                (Registrant)



DATE: MAY 14, 2007                    BY: /s/ Patrick Soon-Hock Lim
                                      ------------------------------
                                      Patrick Soon-Hock Lim
                                      Chairman & Chief Executive Officer



DATE: MAY 14, 2007                    BY: /s/ Voon Fui Yong
                                      ------------------------------
                                      Voon Fui Yong
                                      Chief Accounting Officer




                                       22