- 1 -

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


                                   FORM 10-QSB


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


                For the quarterly period ended September 30, 2005

                                       OR

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

                        Commission file number 000-12382

                          VERIDICOM INTERNATIONAL, INC.
        (Exact name of small business issuer as specified in its charter)


                 Delaware                                 95-2577731
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

             21 Water Street                              V6B 1A1
       Vancouver, British Columbia                     (Postal Code)
(Address of principal executive offices)

                                 (604) 696-0633
              (Registrant's telephone number, including area code)

          (Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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


There were 15,903,477 shares outstanding of registrant's Common Stock, par value
$.001 per share, as of November 7, 2005.

--------------------------------------------------------------------------------


<PAGE>
                                     - 2 -


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                         VERIDICOM INTERNATIONAL, INC.
                                               FORM 10-QSB INDEX
------------------------------------------------------------------------------------------------------------

                                                                                                     PAGE
------------------------------------------------------------------------------------------------------------
<S>           <C>                                                                                 <C>
PART I        FINANCIAL INFORMATION                                                                3

Item 1        Financial Statements (Unaudited):                                                    3

a.            Consolidated Balance Sheet as of September 30, 2005                                  3

b.            Consolidated Statements of Operations and Other Comprehensive Income (Loss)          4
              for the three and nine months ended September 30, 2005 and 2004

c.            Consolidated Statements of Cash Flows for the nine                                   5
              months ended September 30, 2005 and 2004

d.            Notes to Unaudited Consolidated Financial Statements                                 6

Item 2        Management's Discussion and Analysis of Financial Condition                          18
              and Results of Operations

Item 3        Controls and Procedures                                                              37

PART II       OTHER INFORMATION                                                                    38

Item 1        Legal Proceedings                                                                    38

Item 2        Unregistered Sales of Equity Securities and Use of Proceeds                          38

Item 3        Defaults Upon Senior Securities                                                      42

Item 4        Submission of Matters to a Vote of Security Holders                                  43

Item 5        Other Information                                                                    43

Item 6        Exhibits                                                                             43

SIGNATURES                                                                                         44
------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>
                                     - 3 -

PART I - FINANCIAL INFORMATION

ITEM 1   FINANCIAL STATEMENTS

                 VERIDICOM INTERNATIONAL, INC. AND SUBSIDIARIES
                     (FORMERLY KNOWN AS ALPHA VIRTUAL, INC.)
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                     ASSETS
                                                                  September 30
                                                                      2005
                                                                  ------------
                                                                  (UNAUDITED)
<S>                                                               <C>
Current assets
   Cash                                                           $    571,025
   Accounts receivable                                                  74,216
   Accounts receivable, related party                                  159,684
   Inventory                                                           359,651
   Due from convertible notes holders                                  280,000
   Other current assets                                                 36,466
                                                                  ------------
      Total current assets                                           1,481,042

Property and equipment                                                 188,134
Patents                                                                200,000
Goodwill                                                             4,728,546
Deferred finance costs, net                                            894,076
Other assets                                                             3,306
                                                                  ------------
Total assets                                                      $  7,495,104
                                                                  ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Accounts payable                                               $  1,183,417
   Accrued expenses                                                    579,794
   Due to related party                                                402,928
   Notes payable                                                        80,050
   Notes payable, related party                                         53,000
   Convertible notes payable, current portion                          637,074
   Other current liabilities                                            52,304
                                                                  ------------
      Total current liabilities                                      2,988,567

Notes payable related party, net of current                            366,214
Convertible notes payable, net of discount                             849,337
Other liabilities                                                       90,326
                                                                  ------------
Total liabilities                                                    4,294,444

Non-controlling interest                                                14,136
Stockholders' equity
   Common stock, $.001 par value, 60,000,000
   authorized; 15,903,477 issued and outstanding                        15,903
   Preferred stock, $.001 par value 2,000,000
   authorized; NIL issued and outstanding                                   --
   Additional paid in capital                                       20,053,846
   Other comprehensive loss                                           (246,983)
   Deficit                                                         (16,636,242)
                                                                  ------------
      Stockholders' equity                                           3,186,524
                                                                  ------------
Total liabilities and stockholders' equity                        $  7,495,104
                                                                  ============
</TABLE>

         SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>
                                     - 4 -

                 VERIDICOM INTERNATIONAL, INC. AND SUBSIDIARIES
                     (FORMERLY KNOWN AS ALPHA VIRTUAL, INC.)
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS [UNAUDITED]

<TABLE>
<CAPTION>
                                              Three months         Three months         Nine months          Nine months
                                                  Ended                Ended                Ended                Ended
                                              September 30,        September 30,        September 30,        September 30,
                                                  2005                 2004                 2005                 2004
                                              ------------         ------------         ------------         ------------
<S>                                           <C>                  <C>                  <C>                  <C>
Revenues
   Revenue                                    $    130,879         $     86,944         $    339,686         $    395,436
   Cost of goods sold                               27,215               19,472              172,728              207,367
                                              ------------         ------------         ------------         ------------
   Gross profit                                    103,664               67,472              166,958              188,069
Expenses
   General and administrative                      789,673              901,142            2,597,551            2,658,774
   Research and development                        387,349              163,836              944,243              298,146
   Depreciation                                     21,087               12,099               56,043               32,814
                                              ------------         ------------         ------------         ------------
Loss from operations                            (1,094,445)          (1,009,605)          (3,430,879)          (2,801,665)
Other income (expense):
   Other income (loss)                             157,880                  (21)             261,556                  725
   Interest expense                             (1,000,454)             (28,603)          (2,067,461)             (60,931)
   Gain on forgiveness of debt                     281,489                   --              396,792                   --
   Relocation charges                                   --                   --                   --              (31,575)
                                              ------------         ------------         ------------         ------------
Loss before non-controlling interest            (1,655,530)          (1,038,229)          (4,839,992)          (2,893,446)
Non-controlling interest                            12,668              (32,413)               4,562              (23,327)
                                              ------------         ------------         ------------         ------------
Net loss                                        (1,642,862)          (1,070,642)          (4,835,430)          (2,916,773)
Other comprehensive loss:
   Foreign currency translation                   (128,855)              74,617             (102,288)             (73,925)
                                              ------------         ------------         ------------         ------------
Comprehensive loss                            $ (1,771,717)        $ (1,145,259)        $ (4,937,718)        $ (2,990,698)
Loss per share:
   Basic and fully diluted loss
   Per common share                           $      (0.10)        $      (0.07)        $      (0.34)        $      (0.21)
   Weighted average common shares
   Outstanding basic and fully diluted          15,654,000           14,999,000           14,250,000           14,045,000
</TABLE>


         SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>
                                     - 5 -


                 VERIDICOM INTERNATIONAL, INC. AND SUBSIDIARIES
                     (FORMERLY KNOWN AS ALPHA VIRTUAL, INC.)
                CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]

<TABLE>
<CAPTION>
                                                                                  Nine months          Nine months
                                                                                     Ended                Ended
                                                                                 September 30,        September 30,
                                                                                     2005                  2004
                                                                                  -----------          -----------
<S>                                                                               <C>                  <C>
Operating activities
Net loss from operations                                                          $(4,835,430)         (2,916,773)

Adjustments to reconcile net loss to net cash used in operating activities
   Amortization of property and equipment                                              56,043              32,814
   Amortization of deferred financing costs                                            66,321                  --
   Stock based compensation                                                           572,630             251,370
   Common stock issued for services                                                   140,000             106,250
   Common stock issued for interest expense                                            14,438                  --
   Gain on forgiveness of debt                                                       (396,792)                 --
   Accretion of interest expense on convertible debt                                  478,218                  --
   Interest expense on beneficial conversion features                               1,293,040                  --
   Non-controlling interest                                                            (4,562)             23,327

Change in operating assets and liabilities:

   (Increase) in accounts receivable                                                  (58,425)            (35,190)
   (Increase) decrease in related party receivables                                  (127,652)             29,056
   (Increase) decrease in inventory                                                  (286,858)             27,215
   Decrease (Increase) in other assets                                                 38,542             (10,938)
   (Decrease) increase in accounts payable                                           (220,688)            520,019
   (Decrease) in accrued expenses                                                    (204,059)            (15,723)
   (Decrease) increase in due to related parties                                     (218,552)            103,904
   Increase in other current liabilities                                              104,831                  --
                                                                                  -----------         -----------
Net cash used in operating activities                                              (3,588,955)         (1,884,669)
                                                                                  -----------         -----------
Investing activities

   Cash acquired through merger and acquisition                                            --             164,791
   Purchase of property and equipment                                                 (37,480)            (27,877)
                                                                                  -----------         -----------
Net cash provided by (used in) investing activities                                   (37,480)            136,914

Financing activities

   Proceeds from notes payable                                                      4,820,000             380,000
   Payment on notes payable                                                          (609,689)           (100,000)
   Deferred finance costs                                                            (420,818)                 --
   Proceeds from sale of common stock and warrants, net of
   offering costs                                                                     515,650           1,435,262
                                                                                  -----------         -----------
Net cash provided by financing activities                                           4,305,143           1,715,262
                                                                                  -----------         -----------
Effect of exchange rate changes on cash                                              (161,549)            (76,532)
                                                                                  -----------         -----------
Net increase (decrease) in cash                                                       517,159            (109,025)
Cash, beginning of period                                                              53,866             126,367
                                                                                  -----------         -----------
Cash, end of period                                                               $   571,025         $    17,342
                                                                                  ===========         ===========
Supplemental disclosures of cash flow information
   Interest paid                                                                      130,071              22,676
   Income taxes paid                                                                       --                  --

Non cash financing activities
   Deferred financing costs from issuance of notes payable                            466,145         $        --
   Common stock issued for services                                                   140,000                  --
   Common stock issued for interest expense                                            14,438                  --
</TABLE>

         SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>
                                     - 6 -


                 VERIDICOM INTERNATIONAL, INC. AND SUBSIDIARIES
                     (FORMERLY KNOWN AS ALPHA VIRTUAL, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

Veridicom  International,  Inc., (the Company,  formerly known as Alpha Virtual,
Inc. ("Alpha") is a Delaware  Corporation  formerly  headquartered in California
that was formed on  September  9, 1987.  The name of the  Company was changed to
Veridicom  International,  Inc. in February 2004. The Company  consolidated  its
corporate  offices in Seattle,  Washington,  and Vancouver,  British Columbia in
April 2004.

The legal entity, Alpha Virtual, Inc. ("Alpha"),  retained its name until it was
changed to Veridicom International, Inc. in February 2004. In May 2005, the name
of the  subsidiary  company  in  Pakistan  was  changed  to  Veridicom  Pakistan
(Private.) Limited.

The  Company  operates  as one  operating  segment  which  is  the  development,
manufacture and sale of capacitive fingerprint sensors, computer peripherals and
software related to the use of its fingerprint authentication technology.

On January 21, 2004 Veridicom  International  (Canada) Inc. was formed to be the
Canadian  operating company to disburse expenses and payroll costs in Canada for
the public company.

The Company has five  subsidiaries:  Esstec  Inc.("Esstec"),  Veridicom Pakistan
(Private) Limited ("Pakistan"), Veridicom Inc., Cavio Corporation ("Cavio"), and
Veridicom International (Canada) Inc. ("Canada Inc").

Esstec  is  a   professional   services   company  that  focuses  on  e-commerce
initiatives,  interactive  multimedia,  and  mobile  software  applications  for
clients  in   various   industries,   including   the   telecommunications   and
entertainment  industries.  Since  2004,  Esstec  has not  had  any  significant
revenues or incurred any significant expenses.

Pakistan  was  incorporated  on April 19,  2000 to  establish  the  business  of
software  development for the  international  markets and to export software and
technology. Esstec owns approximately 63.4% of Pakistan.

Veridicom Inc. designs, manufactures and delivers hardware and software products
that enable strong  authentication  solutions  based on fingerprint  biometrics.
Veridicom  Inc.  markets a complete  fingerprint  biometrics  platform  on which
applications can be built.

Cavio  produces   technology   tools  designed  to  protect  users  from  fraud,
misrepresentation,   security   and  privacy   issues  by   allowing   users  to
biometrically  authenticate  themselves  to secure  control  access and  confirm
identity across a number of industries.

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.  The Company has incurred a net
loss of  $4,835,430  for the nine  months  ended  September  30,  2005 and has a
working  capital  deficit of $1,507,526  as of September 30, 2005,  which raises
substantial doubt about its ability to continue as a going concern.  The Company
is  currently  devoting  its  efforts to raising  additional  capital to finance
on-going  operations  and for  transitioning  from research and  development  to
manufacturing and sales of its products.  The Company's ability to continue as a
going  concern is dependent  upon its ability to develop  additional  sources of
capital,  and  ultimately,   achieve  profitable  operations.  The  accompanying
financial  statements do not include any adjustments  that might result from the
outcome of these uncertainties.


<PAGE>
                                     - 7 -


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim  financial  information and with the instructions to Form
10-QSB and Item 310 of Regulation S-B.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles  for complete  financial  statements.  These  unaudited  consolidated
financial statements reflect all adjustments that, in the opinion of management,
are  considered  necessary for a fair  presentation  of the financial  position,
results of operations,  and cash flows for the periods presented. The results of
operations  for such  periods  are not  necessarily  indicative  of the  results
expected  for the full fiscal year or for any future  period.  The  accompanying
consolidated financial statements should be read in conjunction with the audited
financial  statements included in Form 10-KSB for the fiscal year ended December
31, 2004.

The  historical  results for the three and nine months ended  September 30, 2005
and 2004 include the Company and all its  subsidiaries.  The historical  results
for the three and nine months ended  September  30, 2004 include  Cavio from the
merger date of February 20, 2004.

Principles of Consolidation

These consolidated  financial statements include the accounts of the Company and
its subsidiaries  Esstec,  Pakistan,  Veridicom Inc., Cavio, and Canada Inc. All
significant  intercompany  balances and  transactions  have been eliminated upon
consolidation.    Non-controlling    interest    reflects   the   ownership   of
non-controlling  shareholders  in  the  issued  share  capital  of  Pakistan,  a
consolidated subsidiary less than wholly-owned.

Cash and Cash Equivalents

For  purposes of  reporting  cash flows,  the Company  considers  all funds with
original maturities of three months or less to be cash equivalents.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles used 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 financial  statements and revenues and expenses during the reporting period.
Actual results could differ from those estimates.


<PAGE>
                                     - 8 -


Inventory

Inventory  consists  primarily of various  sensors,  including VKIs,  combos and
parallel port units. Inventory is valued at lower of cost (first-in,  first-out)
or market.

Inventory also includes work in process, at cost, which consists of actual costs
incurred by the Company to September 30, 2005, in respect of  manufacturing  and
production  costs for fingerprint  sensors and VKIs which were in production and
unfinished as at September 30, 2005.

Furniture and Equipment

Furniture  and  equipment are recorded at cost.  Depreciation  and  amortization
expense is provided on a straight-line basis using estimated useful lives of 3-7
years.  Depreciation  expense was $56,043 and $32,814 for the nine months  ended
September 30, 2005 and 2004,  respectively.  Maintenance and repairs are charged
to expense as incurred and expenditures for major  improvements are capitalized.
When assets are retired or  otherwise  disposed  of, the  property  accounts are
relieved of costs and accumulated depreciation and any resulting gain or loss is
credited or charged to operations.

Fair Value of Financial Instruments

The carrying  amounts of cash,  accounts  receivable,  notes  payable,  accounts
payable,  and  accrued  expenses  approximate  fair  value  because of the short
maturity of these items.

Concentrations of Credit Risk

Financial instruments, which potentially expose the Company to concentrations of
credit risk, consist primarily of trade accounts receivable. Aggregate potential
credit losses have so far not exceeded management's expectations.

Advertising Expenses

Advertising  costs are charged to operations as incurred.  During the nine month
periods ended  September  30, 2005 and 2004,  the Company  incurred  $68,445 and
$12,162 for marketing and advertising costs, respectively.

Long Lived Assets

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets",  the Company  tests  long-lived  assets or asset groups for
recoverability  when  events or changes  in  circumstances  indicate  that their
carrying  amount may not be  recoverable.  Circumstances  which could  trigger a
review  include,  but are not limited to:  significant  decreases  in the market
price of the asset; significant adverse changes in the business climate or legal
factors;  accumulation of costs significantly in excess of the amount originally
expected for the acquisition or  construction of the asset;  current period cash
flow or  operating  losses  combined  with a history of losses or a forecast  of
continuing losses associated with the use of the asset; and current  expectation
that the  asset  will more  likely  than not be sold or  disposed  significantly
before the end of its estimated useful life.

Recoverability  is assessed  based on the  carrying  amount of the asset and its
fair value which is generally  determined  based on the sum of the  undiscounted
cash flows  expected  to result  from the use and the  eventual  disposal of the
asset, as well as specific appraisal in certain instances. An impairment loss is
recognized when the carrying amount is not recoverable and exceeds fair value.


<PAGE>
                                     - 9 -


Foreign Currency Transactions/Balances

The Company  translates  the  financial  statements of foreign  subsidiaries  in
accordance  with  SFAS  No.  52,  "Foreign  Currency  Translation".  Assets  and
liabilities  of  foreign  subsidiaries  denominated  in foreign  currencies  are
translated  into US dollars at rates of exchange in effect at the balance  sheet
date.  Average  rates for the year are used to translate  revenues and expenses.
Resulting  translation gains and losses are accumulated in a separate  component
of stockholders' equity as accumulated other comprehensive income or loss.

Pakistan  considers  the  Pakistan  Rupee to be the  functional  currency of its
operations.  Cavio  and  Canada  Inc.  consider  the  Canadian  Dollar to be the
functional  currency of their operations.  The reporting currency of the Company
is  the  U.S.  dollar;  accordingly,  all  amounts  included  in  the  financial
statements have been translated into U.S. dollars.

--------------------------------------------------------------------------------
                                          For the period        For the period
                                              Ending                Ending
Exchange Rates                          September 30, 2005    September 30, 2004
--------------------------------------------------------------------------------
Rupee Average                                 .01673                .01729
Rupee Period end                              .01676                .01689
Canadian Dollar Average                       .84918                .75300
Canadian Dollar Period end                    .86125                .79120
--------------------------------------------------------------------------------

Patents

At the acquisition of Veridicom  Inc., the Company  evaluated the unused patents
and determined the costs to secure the patents outweighed their intended use and
were unable to find a party  interested in purchasing  the patents.  The patents
were  originally  recorded at cost and were being  amortized on a  straight-line
basis over 15 years. The patents are being carried at a fair value of $200,000.

Goodwill

Goodwill represents the excess of the purchase price of acquired assets over the
fair  values  of the  identifiable  assets  acquired  and  liabilities  assumed.
Pursuant to SFAS No. 141, the Company does not amortize goodwill,  but tests for
impairment  of goodwill on an annual basis and at any other time if events occur
or  circumstances  indicate  that the  carrying  amount of  goodwill  may not be
recoverable. Circumstances that could trigger an impairment test include but are
not limited to: a significant  adverse  change in the business  climate or legal
factors;  an  adverse  action  or  assessment  by  a  regulator;   unanticipated
competition and loss of key personnel.  Goodwill is tested for impairment  using
present value  techniques  of estimated  future cash flows;  or using  valuation
techniques  based on multiples of earnings.  If the carrying  amount of goodwill
exceeds the implied fair value of that goodwill,  an impairment  loss is charged
to operations.


<PAGE>
                                     - 10 -


Revenue Recognition

Revenues from software sales are recorded in accordance  with SOP 97-2 `Software
Revenue  Recognition',  which  requires  that revenue  recognized  from software
arrangements be allocated to the various  elements of the  arrangement  based on
the relative  fair market  values of the  elements,  such as software  products,
upgrades,   enhancements,   post  contract  customer  support,  installation  or
training.  Revenue from product  services is  recognized  at the time service is
provided.

Pakistan    recognizes    revenue   at   the    point/time   the   software   is
delivered/exported.

Veridicom Inc. recognizes revenues at the point of shipment of products.

Stock Based Compensation

Stock  options  granted to employees and  non-employees  are accounted for under
Statement of Financial  Accounting Standards No. 123 "Accounting for Stock-Based
Compensation"  (SFAS  123),  which  establishes  a fair  value  based  method of
accounting for stock-based awards, and recognizes  compensation expense based on
the fair  value of the  stock  award or fair  value of the  goods  and  services
received, whichever is more reliably measurable.

Unless otherwise  disclosed,  all stock based  transactions  entered into by the
Company have been valued at the market value of our common stock on the date the
transaction was entered into or have been valued using the  Black-Scholes  Model
to estimate the fair market value.

Stock Option Plan

In April 2004 the Company  adopted the 2004 Stock Option,  Deferred  Stock,  and
Restricted Stock Plan (the Plan) effective June 25, 2004, which provides for the
granting  of  options  to  officers,  directors,  consultants,   employees,  and
advisors.  2,000,000  shares of common stock are reserved under the Plan for the
granting of options.  The Plan is in effect until June 25, 2014. The options are
exercisable  to purchase  stock for a period of up to ten years from the date of
grant. The stock options vest monthly over a thirty-six-month period.

On February 7, 2005, the Board of Directors of the Company approved the granting
of 1,025,000  shares to officers,  directors  and employees of the Company under
the Plan.

On April 22, 2005,  the Board of Directors of the Company  approved the granting
of an additional 130,000 shares to employees of the Company under the Plan.

The fair value of the vested  options of  $178,257  for the three  months  ended
September 30, 2005 was estimated  using the  Black-Scholes  option pricing model
with an expected life of five years,  a risk-free  interest rate of 2.43% and an
expected  volatility of 209%.  The fair value of vested  options during the year
has been expensed as stock based compensation.

The Company  recognized  $572,630 as stock based  compensation  to employees and
directors of the Company for the nine months ended September 30, 2005.

Income Taxes

The Company  recognizes  deferred  tax assets and  liabilities  for the expected
future  income  tax  consequences  of events  that have been  recognized  in the
Company's  financial  statements.  Under this  method,  deferred  tax assets and
liabilities are determined based on temporary  differences between the financial
carrying  amounts and the tax bases of assets and liabilities  using enacted tax
rates in effect in the periods in which the temporary  differences  are expected
to reverse.  Valuation  allowances  are  established  when  necessary  to reduce
deferred tax assets to the amount  expected to be  realized.  Income tax expense
represents  the tax  payable for the  current  period and the change  during the
period in deferred tax assets and liabilities.


<PAGE>
                                     - 11 -


Comprehensive Loss

The Company utilizes  Statement of Financial  Accounting  Standards ("SFAS") No.
130 "Reporting  Comprehensive  Income." This statement establishes standards for
reporting  comprehensive  loss  and its  components  in a  financial  statement.
Comprehensive loss as defined includes all changes in equity (net assets) during
a  period  from  non-owner  sources.   Examples  of  items  to  be  included  in
comprehensive  loss, which are excluded from net loss,  include foreign currency
translation  adjustments and unrealized  gains and losses on  available-for-sale
securities.   Comprehensive  loss  presented  in  these  consolidated  financial
statements resulted from translations of foreign currency financial statements.

Software Development Costs

Costs  related to the  development  of software are  expensed as incurred  until
technological feasibility in the form of a working model has been established in
accordance with SFAS No. 86,  "Accounting for the Costs of Computer  Software to
be  Sold,   Leased  or  Otherwise   Marketed".   The  time  period  between  the
establishment of technological feasibility and completion of product development
is expected to be short,  therefore the Company has not  capitalized any product
development costs during the period.

Earnings Per Common Share

The  Company  computes  earnings  (loss) per  common  share in  accordance  with
Statement of Financial  Accounting  Standards No. 128,  Earnings Per Share (SFAS
No. 128).  This statement  simplifies  the standards for computing  earnings per
share (EPS)  previously  found in  Accounting  Principles  Board Opinion No. 15,
Earnings  Per  Share,  and  makes  them more  comparable  to  international  EPS
standards.  SFAS  No.  128  replaces  the  presentation  of  primary  EPS with a
presentation of basic EPS. In addition, the Statement requires dual presentation
of basic and diluted EPS on the face of the income  statement  for all  entities
with complex capital  structures and requires a reconciliation  of the numerator
and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation.

Recent Accounting Pronouncements

In June 2005, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standard  No.  154, "  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
Statement No. 3, Reporting  Accounting Changes in Interim Financial Statements "
("SFAS  154").  The  Statement  applies to all  voluntary  changes in accounting
principles  used, and changes the  requirements for accounting for and reporting
of a  change  in  an  accounting  principle.  SFAS  154  requires  retrospective
application  to prior  periods'  financial  statements of a voluntary  change in
accounting principle unless it is impracticable. SFAS 154 requires that a change
in  method  of   depreciation,   amortization,   or  depletion  for  long-lived,
non-financial assets be accounted for as a change in accounting estimate that is
affected by a change in accounting  principle.  Opinion 20  previously  required
that such a change be reported as a change in accounting principle.  SFAS 154 is
effective for accounting  changes and corrections of errors made in fiscal years
beginning   after   December  15,  2005.  The  Company  does  not  believe  this
pronouncement will have a material impact in its financial results.


<PAGE>
                                     - 12 -


In June 2005,  the  Emerging  Issues  Task Force  ("EITF")  issued No.  05-6,  "
Determining the Amortization Period for Leasehold  Improvements " ("EITF 05-6").
The pronouncement  requires that leasehold  improvements  acquired in a business
combination  or purchase  subsequent  to the  inception  of the lease  should be
amortized over the lesser of the useful life of the asset or the lease term that
includes  reasonably  assured  lease  renewals as  determined on the date of the
acquisition of the leasehold improvement.  The Company does not have unamortized
leasehold improvements from acquisitions or business combinations and therefore,
does not  believe  this  pronouncement  will  have an  impact  in its  financial
results.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- An  Amendment  of APB  Opinion No.  29".  The  guidance in APB Opinion No. 29,
"Accounting  for  Nonmonetary  Transactions",  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that Opinion,  however,  included certain
exceptions to that  principle.  SFAS No. 153 amends  Opinion No. 29 to eliminate
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial  substance.  A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result  of the  exchange.  The  provisions  of SFAS No.  153 are  effective  for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005.  Early  application  is permitted  and  companies  must apply the standard
prospectively.  The adoption of this standard is not expected to have a material
effect on the Company's results of operations or financial position.

In December  2004,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial  Accounting  Standard  (SFAS) No.  123R,  "Share  Based
Payment".  SFAS 123R is a revision of SFAS No. 123  "Accounting  for Stock-Based
Compensation",  and supersedes APB Opinion No. 25,  "Accounting for Stock Issued
to Employees" and its related  implementation  guidance.  SFAS 123R  establishes
standards for the accounting for  transactions in which an entity  exchanges its
equity  instruments  for goods or services.  It also addresses  transactions  in
which an entity  incurs  liabilities  in exchange for goods or services that are
based  on the fair  value  of the  entity's  equity  instruments  or that may be
settled by the issuance of those equity instruments. SFAS 123R focuses primarily
on accounting for transactions in which an entity obtains  employee  services in
share-based payment transactions.  SFAS 123R requires a public entity to measure
the cost of  employee  services  received  in  exchange  for an award of  equity
instruments  based on the  grant-date  fair  value of the  award  (with  limited
exceptions).  That cost  will be  recognized  over the  period  during  which an
employee  is  required  to  provide  service  in  exchange  for the  award - the
requisite  service period (usually the vesting period).  SFAS 123R requires that
the compensation cost relating to share-based payment transactions be recognized
in financial  statements.  That cost will be measured based on the fair value of
the equity or liability  instruments issued.  Public entities that file as small
business  issuers  will be required  to apply SFAS 123R in the first  interim or
annual  reporting  period that begins after  December 15, 2005.  The adoption of
this standard is not expected to have a material effect on the Company's results
of operations or financial position.

In March 2005,  the SEC staff  issued  Staff  Accounting  Bulletin No. 107 ("SAB
107") to give  guidance on the  implementation  of SFAS 123R.  The Company  will
consider SAB 107 during implementation of SFAS 123R.


<PAGE>
                                     - 13 -


Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform  to the  current  period  presentation.  Cost of goods sold for the nine
months ended  September  30, 2005 includes  $29,491 which has been  reclassified
from research and development  expenses incurred in the three months ended March
31, 2005.

NOTE 3 - BUSINESS ACQUISITION

On January 16, 2004,  the Company  entered into an Agreement  and Plan of Merger
with Cavio Corporation,  a privately held Washington corporation ("Cavio").  The
merger  became  effective  on February 20, 2004  following a special  meeting of
Cavio's  stockholders.  In  accordance  with the merger,  on February  20, 2004,
through its wholly-owned  subsidiary,  A/VII Acquisition  Corporation,  a Nevada
corporation,  acquired  Cavio in exchange for 5,119,140  shares of common stock.
The Company  recorded  goodwill of $3,792,019 for this acquisition as there were
no other identifiable assets acquired.

The following assets and liabilities were acquired at their fair values

     Cash                                                $   164,791
     Receivables                                              14,043
     Stock subscription receivable                           129,821
     Prepaid expenses                                          4,874
     Property and equipment, net                             109,473
                                                         -----------
                                                             423,002
                                                         -----------
     Less liabilities assumed:
          Accounts payable and accrued expenses             (694,009)
          Loans payable                                      (28,693)
                                                         -----------
                                                            (722,702)
                                                         -----------
     Net liabilities assumed                             $  (299,700)
                                                         ===========
     Net liabilities assumed                             $   299,700
     Fair value of common stock issued for acquisition       299,700
     Fair value of common stock issued into escrow         3,192,619
                                                         -----------
     Excess purchase price (goodwill)                    $ 3,792,019
                                                         ===========

The following unaudited proforma condensed  consolidated statement of operations
for the year ended December 31, 2004 gives effect to the above transaction as if
it had occurred on January 1, 2004.

<TABLE>
<CAPTION>
                       Veridicom
                     International       Cavio Corporation
                   Inc. Consolidated       for the period
                  for the year ended   from November 01, 2003        Proforma              Proforma
                  December 31, 2004      to February 19, 2004      Adjustments           Consolidated
                     -----------            -----------            ------------           -----------
<S>               <C>                   <C>                        <C>                   <C>
 Revenues            $   384,853            $        --            $         --           $   384,853
(Expenses)            (4,196,622)              (481,715)                     --            (4,678,337)
 Other                    91,508                 (3,367)                     --                88,141
                     -----------            -----------            ------------           -----------
 Net loss            $(3,720,261)           $  (485,082)           $         --           $(4,205,343)
                     ===========            ===========            ============           ===========
</TABLE>

<PAGE>
                                     - 14 -


NOTE 4 - ACCOUNTS RECEIVABLE, RELATED PARTY

The Company inadvertently repaid a note of $82,501 that was previously converted
to equity. This amount is fully collectible as of September 30, 2005.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

--------------------------------------------------------------------------------
                                                                   September 30,
                                                                       2005
--------------------------------------------------------------------------------
Tooling equipment                                                    $161,595
Furniture and fixtures                                                 33,932
Office equipment                                                       31,891
Computer hardware                                                     288,000
Computer software                                                     163,162
Vehicles                                                               27,422
                                                                   ----------
                                                                      706,002
Less accumulated depreciation and amortization                        517,868
                                                                   ----------
Net carrying value                                                   $188,134
--------------------------------------------------------------------------------

NOTE 6 - NOTES PAYABLE TO RELATED PARTY

During the nine months  ended  September  30, 2005,  the Company  reached a full
settlement  with a lender in respect of a  short-term  loan of $100,000  and the
interest due thereon.  A director of the Company is an associate of the lender's
parent  company.  Under the settlement  terms,  the total  interest  payable was
limited to a maximum of $20,000.  The Company  paid,  in full,  the principal of
$100,000 and all the accrued interest owed to the lender of $10,000. The Company
also issued 25,000 shares of the Company's common stock to this lender as a loan
fee valued at $106,250.

In March 2005, the Company repaid $50,000 of its unsecured loan of $416,214 from
Global  Ventures  Advisors,  a company  controlled  by a former  director of the
Company's  subsidiary in Pakistan.  The loan bears interest at 12% per annum and
is due on or before June 30, 2007,  with an option to convert to common stock in
the event of default in repayment by the Company.  The outstanding  loan balance
of $366,214 is shown as notes payable net of current portion.

Also  included in notes payable to related party are $25,000 due to an affiliate
of one of the subsidiaries of the Company and $28,000 due to ten former officers
of the Company.

NOTE 7 - COMMON STOCK

Common Stock Issued during the nine months ended September 30, 2005

During the nine month period ended September 30, 2005 the Company issued a total
of 122,370  shares of common  stock.  A total of 61,000  shares  were issued for
$100,650 in cash less offering costs of $5,000. A total of 50,000 shares, having
a fair value of $140,000, were issued for payment of legal services rendered. In
July 2005,  the Company  issued 11,370  shares as  compensation  for  converting
$14,438 of interest owed to note holders of a private placement.


<PAGE>
                                     - 15 -


The following  table  summarizes  the  continuity  of the Company's  warrants to
acquire additional shares:

<TABLE>
<CAPTION>
                                                                                                Weighted average
                                                                                 Number of       exercise price
                                                                                 Warrants              $
================================================================================================================
<S>                                                                              <C>            <C>
Balance, December 31, 2004                                                          1,146,634           $2.44
Issued                                                                             10,746,261           $3.88
Exercised                                                                                  --              --
--------------------------------------------------------------------------------------------------------------
Lapsed                                                                                     --              --
--------------------------------------------------------------------------------------------------------------
Outstanding, September 30, 2005                                                    11,892,895           $3.74
================================================================================================================
</TABLE>

As at September 30, 2005, the outstanding  warrants have a weighted average life
of 3.37 years

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Employment Agreement

The Company  entered into an employment  agreement  with its President and Chief
Executive  Officer  effective  February 20, 2004 for one year  providing  for an
annual salary of $175,000, a ten-year stock option to purchase 150,000 shares of
the  Company's  common stock at $3.50 per share,  and an annual bonus of $20,000
for every $1.5  million in gross  consolidated  revenue of the  Company for said
year. The agreement is automatically renewable.

The stock options vest monthly over a twenty-four  month period.  The fair value
of the  current  year  vested  options  of  $323,190  was  estimated  using  the
Black-Scholes  option  pricing  model with an  expected  life of five  years,  a
risk-free  interest rate of 2.79% and an expected  volatility of 293%.  The fair
value of vested  options during the year has been charged to operations as stock
based compensation.

Litigation

Five former  employees of Veridicom,  Inc. have filed claims against the Company
with the Labor  Commissioner  in the State of California.  The former  employees
allege that the Company owes unpaid wages, salaries and vacation pay for various
periods  between July 2000 and November  2003  amounting to a total of $111,651.
The Company has accrued for this  liability in its  financial  statements  as at
September 30, 2005.

On March 21, 2005 one of the  claimants  signed a letter of agreement to convert
his claim of $ 61,054  into stock based on the  closing  price of the  Company's
common stock on that day of $2.40 per share, or a total of 25,439 shares for his
entire claim.  However,  this settlement is subject to obtaining certain waivers
and documents  from the holders of the Company's  Callable  Secured  Convertible
Notes.

In October 2002 the Company had  licensed  its OneView  software to Global Alpha
Corporation  ("GAC").  In July 2003, the Company  entered into an asset purchase
agreement  with  GAC to sell  the  OneView  software  and  related  patents  for
$435,000,  being the amount equal to the Restated  Multiple  Advance  Promissory
Note dated  July 9, 2002,  which had been  executed  by the  Company in favor of
GAC.In July 2003,  the Company also entered into a five-year  License  Agreement
with GAC for an exclusive  license to commercialize the OneView software system.
On September  22, 2005 GAC filed a claim  against the Company for unpaid  annual
license  fees and also to enforce  the Put Right  granted to GAC to re-sell  the
OneView  software back to the Company for  $200,000.The  Company has accrued the
liability  for the minimum  annual  license  fees for the last two years to date
amounting to $50,000 in its financial  statements as at September 30, 2005.  The
Company is seeking legal advice to defend the claim filed by GAC. The outcome of
this litigation cannot be determined at this time.


<PAGE>
                                     - 16 -


On March 28,  2003 the  Company and one of the  company's  stockholders  filed a
lawsuit in Superior Court in the State of California against a former CEO of the
Company. The lawsuit alleges a breach of fiduciary duty,  negligence,  fraud and
breach of contract  claiming the CEO did not devote his efforts to the Company's
product  development  and  market  strategies  or  maximize  the  profit  of the
business.  An amount of damages has not been  determined and the outcome of this
lawsuit cannot be determined at this time.

In addition, the Company is a party to a number of other lawsuits arising in the
normal course of business. In the opinion of management, the resolution of these
matters will not have a material  adverse  effect on the  Company's  operations,
cash flows or financial position.

NOTE 9 - GAIN ON FORGIVENESS OF DEBT

In the nine month period ended September 30, 2005, the Company recorded $115,303
for gain on  forgiveness  of debt  after  reaching  settlement  agreements  with
certain vendors,  to cancel old accounts  payable for reduced cash payment,  and
cancellations  of certain  pre-merger  accounts  payable for which no collection
efforts were made by vendors over the last four years.

NOTE 10 - LONG-TERM DEBT

On August 16, 2005,  the Company  completed the third of three equal rounds of a
private  placement  having  previously  completed the first and second rounds in
previous  quarter,  whereby  the  Company  issued  an  aggregate  of  $5,100,000
($280,000  receivable  as at September  30, 2005) worth of 10% callable  secured
notes  convertible  into shares of common  stock of the Company and  warrants to
purchase up to an aggregate of 10,200,000  shares of common stock of the Company
to certain accredited investors.  The warrants are exercisable at any time for a
period of five years from the date of  issuance.  The Series A Warrants  have an
exercise  price of $3.00 per share and the  Series B Warrants  have an  exercise
price of $5.00 per share. As  consideration  for the placement agent services in
connection  with the  private  placement,  the  Company  is  obligated  to issue
warrants  to purchase  up to 107,087  shares of its common  stock at an exercise
price of $1.27 per share and cash commissions in the amount of $136,000 for each
round of the private placement. Also, the Company was obligated, and has issued,
one time  warrants to purchase  up to 100,000  shares of its common  stock at an
exercise price of $3.50 per share.

The Notes are convertible  into the Company's common stock at a conversion price
equal to $1.27,  which is seventy  percent (70%) of the initial  market price of
$1.81 as  defined  in the  agreement  using the Volume  weighted  Average  Price
("VWAP");  provided however, that if an event of default shall have occurred and
be continuing,  the  conversion  price shall be equal to the lesser of (i) fifty
percent (50%) of the initial market price or (ii) the variable conversion price,
defined as the  applicable  percentage  multiplied by the average of the average
daily  prices for the  common  stock for the five (5) days prior to the date the
conversion  notice is sent by the holder of the notes to the Company.  The Notes
have a term of 36 months and bear  interest  at 10% per annum,  which is payable
monthly;  provided,  however,  that the interest  rate shall reset at 0% for any
monthly  period in which the  Company's  stock price is greater than 125% of the
"Initial Market Price," which is defined as 100% of the volume weighted  average
of the Company's common stock for the five days immediately prior to closing, as
reported  on the  Over-the-Counter  Bulletin  Board.  Since  October 1, 2005 the
Company is in default in making  repayments  of  principal  and  interest due on
these Notes.


<PAGE>
                                     - 17 -


As an inducement to participate in the Private  Placement,  the Company  granted
the Note Holders a security interest in all of its intellectual property.

The fair value of the beneficial  conversion feature for these convertible notes
and warrants issued was estimated using the  Black-Scholes  option pricing model
with an expected life of five years,  a risk-free  interest rate of 2.43% and an
expected  volatility  of 187%,  185% and 187% for the  first,  second  and third
rounds of the private placement,  respectively. The fair value of the beneficial
conversion feature of $3,806,960 has been capitalized as a discount on notes and
is  being  amortized  over  the  three-year  term  of  the  Notes.  The  monthly
amortization  of  $105,749  is  being  recorded  as  interest  expense  over the
three-year term of the notes.

The Company also recorded a one time interest expense of $402,269,  $294,368 and
$596,403 related to the beneficial conversion features for the first, second and
third rounds, respectively.

The Company  incurred a total of $493,707 in legal  expenses and  commissions to
complete  all  three  rounds of the  private  placement.  These  costs are being
capitalized and amortized over the three-year term of the Notes.

The Company also recorded,  as deferred finance costs, the fair value of 321,261
warrants issued as  consideration  for the three completed rounds of the private
placement.  The fair value of these warrants was estimated at $539,579 using the
Black-Scholes  option  pricing  model with an  expected  life of five  years,  a
risk-free  interest rate of 2.43% and an expected  volatility of 187%,  185% and
187%  for  the  first,  second  and  third  rounds  of  the  private  placement,
respectively.

The fair value of the deferred finance costs have been capitalized and are being
amortized over the three-year term of the Notes.

NOTE 11 - OFFICE CLOSING

On April 15, 2004 the Company permanently closed the offices of Veridicom,  Inc.
in Sunnyvale,  California and has integrated and  consolidated  its software and
hardware  product  divisions  at its  offices in  Vancouver,  British  Columbia,
Canada.  The direct costs incurred by the Company  during 2004,  with respect to
the closure and relocation of the Sunnyvale operations, amounted to $31,575.

NOTE 12 - SEGMENT DISCLOSURES

The  Company  operates  as one  operating  segment  which  is  the  development,
manufacture and sale of capacitive fingerprint sensors, computer peripherals and
software related to the use of its fingerprint  authentication  technology.  The
Chief Executive  Officer is the Company's Chief Operating  Decision Maker (CODM)
as defined by SFAS 131,  "Disclosure about Segments of an Enterprise and Related
Information."  The CODM allocates  resources and assesses the performance of the
Company based on the results of operations.


<PAGE>
                                     - 18 -


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

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

The  following  discussion  should  be read in  conjunction  with our  Financial
Statements, including the related notes thereto, and other financial information
included  herein.  The  information  in  this  Report  includes  forward-looking
statements.  In addition,  past operating results are not necessarily indicative
of the results to be expected for future periods.

OVERVIEW

We  were   incorporated  in  Delaware  on  September  9,  1987  under  the  name
Perceptronics,  Inc. From our inception  through fiscal 2000, we were engaged in
the design, development and manufacture of computer-based simulation systems for
training and decision support. These systems included both hardware and software
and are used to train  personnel in the use of various  military and  commercial
equipment.  Much of our simulator  business was in the foreign defense industry.
The  tightening  of defense  budgets  worldwide,  combined  with the  continuing
consolidation and competition in the defense industry,  negatively  impacted the
growth and profit  opportunities  for small companies such as ours. As a result,
in July 2000, we refocused our business. In connection with the refocus, we sold
the assets related to our computer based simulation system line of business to a
developer and manufacturer of specialized defense simulation  products.  We then
commenced   development   of  commercial   products  in  the  area  of  Internet
collaboration.

However, we lacked the funds necessary to exploit our developed  products.  As a
result,  in October  2002,  we entered  into a license  agreement  with our then
principal  stockholder,  Global Alpha Corporation  ("GAC") pursuant to which GAC
was granted an exclusive  license to our software and systems commonly  referred
to as the "IC3D Framework" (the "System"). The System encompassed  substantially
all of our software  including  software  developed to support multi-user online
collaborative  interactivity  in a broad  variety of  applications  employing  a
variety of virtual  media over a number of networks  including  the Internet and
intra-nets. Under the license agreement, GAC agreed to pay the Company a license
fee of 10% of the  revenue  generated  from the sale or use of the  System up to
$1.0 million, 9% up to $2.0 million, 8% up to $3.0 million and,  thereafter,  7%
of the revenue generated.

In  connection  with  the  license  agreement,  in  October  2002 we  terminated
substantially all of our employees, and except for our license agreement, ceased
all of our prior operating activities.  Our principal activities became directed
to reducing our  liabilities  and seeking  possible  acquisitions.  Management's
objective was to acquire an operating  company that has  experienced  management
and the potential for profitable growth in exchange for our securities.

On April 28, 2003,  we entered into an Agreement and Plan of Merger with EssTec,
Inc., a privately-held  Nevada  corporation  ("EssTec").  In accordance with the
merger,  on  May  8,  2003,  we,  through  our  wholly-owned  subsidiary,  Alpha
Acquisition Corporation,  a Nevada corporation,  acquired EssTec in exchange for
4,276,162  shares of our  Common  Stock.  The  transaction  contemplated  by the
agreement  was  intended  to be a  "tax-free"  reorganization  pursuant  to  the
provisions of Section 351 and 368(a)(1)(A) of the Internal Revenue Code of 1986,
as amended.


<PAGE>
                                     - 19 -


On May 8, 2003, in connection with the EssTec merger, we changed our fiscal year
end from March 31 to December 31.

On November  25,  2003,  we entered  into an  Agreement  and Plan of Merger with
Veridicom,  Inc., a  privately-held  California  corporation  ("Veridicom").  In
accordance with the merger,  on November 25, 2003, we, through our  wholly-owned
subsidiary,  A/V  Acquisition  Corporation,   a  Nevada  corporation,   acquired
Veridicom in exchange for 3,500,000 shares of our Common Stock; 3,250,000 shares
were issued to the  holders of  Veridicom  stock and 250,000  shares were issued
into escrow to cover  indemnification  obligations,  if any, of  Veridicom.  The
transaction  contemplated  by the  agreement  was  intended  to be a  "tax-free"
reorganization pursuant to the provisions of Section 351 and 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended.

On January 16, 2004,  we entered into an Agreement and Plan of Merger with Cavio
Corporation,  a privately-held  Washington corporation ("Cavio").  In accordance
with the merger, on February 20, 2004, we, through our wholly-owned  subsidiary,
A/VII  Corporation,  a  Nevada  corporation,  acquired  Cavio  in  exchange  for
5,119,140  shares of our  Common  Stock.  The  transaction  contemplated  by the
agreement  was  intended  to be a  "tax-free"  reorganization  pursuant  to  the
provisions of Section 351 and 368(a)(1)(A) of the Internal Revenue Code of 1986,
as amended.

Description of the Company Post-Merger

Following  the merger with Cavio,  we  appointed  the  following  officers,  key
employees and advisors:

         Paul Mann, President, Chief Executive Officer and Director
         Bashir Jaffer, Chief Financial Officer
         Terry Laferte, VP, Technical Operations (resigned in June 2005)
         Cameron  Adams,  VP,  Strategic  Development  and  Sales  (resigned  in
November 2005)
         Hamid Baradaran, VP, Hardware Development and Manufacturing

We also realigned our business  strategy to leverage the core operations of each
of our subsidiaries. The Company has five operational subsidiaries: Esstec Inc.,
Veridicom  Pakistan (Private) Limited  ("Pakistan"),  Veridicom Inc., Cavio, and
Veridicom International (Canada) Inc. ("Canada Inc.").

Our core strategy is to build a comprehensive  authentication  suite of products
and services, with market-specific  applications that leverage the core identity
management  infrastructure.  We  believe  there  is a  significant  need  for an
auditable,  scalable  product  solution  capable of linking an  individual  to a
specific  electronic  event or transaction -- a strong  authentication  solution
that safeguards legitimate interests and adheres to emerging electronic commerce
legislation.  Our identity management solutions employ public key infrastructure
and a "virtual  token"  based  technology  to  control,  audit and  monitor  the
identification processes for electronic events and transactions.

We will focus on  transforming  the market for biometrics and growing the market
beyond traditional security applications. In particular, the strategy will be to
expand the traditional  security  offerings to include  security and convenience
value propositions for commercial or point-of-sale  transactions.  By developing
customizable   applications  as  well  as  authentication   technology,  we  are
endeavoring  that  our  brand  become  synonymous  with  secure,   authenticated
transactions.


<PAGE>
                                     - 20 -


We offer a solution that we believe not only addresses an organization's current
requirements for stronger and more scalable  authentication  and  authorization,
but  also  addresses  a  future  vision  for  security,  via  a  combination  of
centralized and distributed  identity  repositories  and  administration  tools.
Utilizing biometric technology,  we provide organizations with an authentication
solution that also provides  users with  increased  convenience  by reducing the
reliance on passwords.

The Company has a strong team with combined  experience in sales and  marketing,
vertical  market  knowledge,  technology  development,  and hardware  integrated
circuit  design.  In  addition,  we are  continuing  our  efforts  to appoint an
advisory  board  with   significant   expertise  in  the  areas  of  technology,
government, security and financial service to provide the Company with strategic
direction for products and services.

There  are  several   factors  that   management   believes   will  provide  new
opportunities  or present new  challenges  for us. We believe  that  regulatory,
technological, and cultural changes will create new opportunities. International
distribution  arrangements are currently in place,  while new channels are being
developed.

Since March 1, 2004,  the Company has undertaken a  comprehensive  review of all
pre-merger  operations.   This  on-going  review  has  included  all  facets  of
operations, including the supply chain, product development,  previous sales and
marketing agreements,  internal controls,  and reporting systems. As part of the
reorganization, we closed our Sunnyvale, California offices on April 15, 2004 in
favor of a more cost  effective and  efficient  development  environment  in the
Pacific Northwest.

Since 2004, Veridicom  International has prioritized the process of streamlining
its manufacturing  operations.  In addition, we have re-aligned our product line
in anticipation of customer  requirements  for stronger  security  solutions and
secure  devices.  As  such,  we have  worked  with  our  suppliers  to  identify
opportunities  for  efficiencies,  reduced costs,  improved quality and improved
capacity.

We expect to begin manufacturing a new revision of our FPS200 fingerprint sensor
which includes a number of enhancements to the previous version.

We have several patents and pending patent  applications for its technology,  an
important  factor in  today's  competitive  landscape.  We  expect to  receive a
decision to grant for our previously  announced  European  Patent for the use of
biometric  technology in conjunction  with  encryption and the use of public and
private keys. We believe that this is a significant  patent for the company,  as
it covers a range of devices utilizing encryption technology and biometrics. The
VKI-V is an example of this patent and technology used in a device.

We do not  announce  all sales  orders  received  either due to  confidentiality
provisions or because sales are conducted  indirectly  through a growing base of
channel partners. We currently have outstanding sales orders of approximately $8
million.

We intend to continue the  transition of our Company from research & development
to the manufacturing and sales of our products. An initial delivery of 1000 VKIs
has been  completed to a client in Europe.  We are also currently in the process
of   manufacturing   approximately   18,000  ICs   (integrated   circuits)   and
approximately 10,000 VKIs with varying memory sizes.

Because  of  heightened  demand  from other  manufacturers  of  products  in the
electronic  and  biometric  industry,  and because  some  present and  potential
competitors have financial,  marketing and manufacturing  resources greater than
we have,  the lead  times and  delivery  times  from  suppliers  for some of the
components  required  for  the  manufacture  of our  products  are  longer  than
anticipated.  However,  we expect that we will be able to  complete  our current
manufacturing  cycle for the 18,000 ICs and 10,000 VKIs and have these available
for delivery by the end of December 2005.

We  officially   changed  our  name  from  Alpha  Virtual,   Inc.  to  Veridicom
International, Inc. on February 23, 2004.


<PAGE>
                                     - 21 -


Following  the name  change,  shares of our common  stock are  traded  under the
symbol "VRDI" on the OTC Bulletin Board (the "OTCBB").

Recent Events

On April 25,  2005 we  announced  the launch of VKI-V,  an  identity  device for
personal authentication and secure transactions for enterprise and consumers.

On May 2, 2005, we announced the selection of an Atmel Corporation processor for
inclusion in our portable biometric identity product line.

On May 9, 2005,  we announced the receipt of an initial sales order from Fook Vo
Holdings Ltd. of Macau.

On June 2, 2005 we announced the presenting of the Company's  roadmap for strong
authentication,  data  security  and  identity  management  to a select group of
government and business leaders at the Beijing International Convention Center.

On June 27, 2005 we announced a strategic  marketing and  development  agreement
with Leviton  Manufacturing  Corporation , a major  provider of home  automation
equipment.

On July 25, 2005 we issued a performance update to our shareholders.

On September 21, 2005, we announce our  participation  and  presentation  of our
range of biometric products and solutions at the Gitex-IT exhibition held at the
Dubai International Convention and Exhibition Centre.

On October 12, 2005,  we announced our  participation  and  presentation  of our
portfolio of our identity  management  products and solutions at Biometrics 2005
trade show held at the Queen Elizabeth II Conference Centre in London, UK.

On October 13, 2005 we announced the latest release of VPAS,  our  comprehensive
suite of authentication software, with added features.

Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim  financial  information and with the instructions to Form
10-QSB and Item 310 of Regulation S-B.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles  for  complete  financial  statements.   The  accompanying  unaudited
consolidated  financial  statements reflect all adjustments that, in the opinion
of management, are considered necessary for a fair presentation of the financial
position,  results of operations,  and cash flows for the periods presented. The
results of  operations  for such periods are not  necessarily  indicative of the
results  expected  for  the  full  fiscal  year or for any  future  period.  The
accompanying  consolidated  financial  statements  should be read in conjunction
with the  audited  financial  statements  included in Form 10-KSB for the fiscal
year ended December 31, 2004.

The  historical  results for the three and nine months ended  September 30, 2005
and 2004 include the Company and all its  subsidiaries.  The historical  results
for the three and nine months ended September 30, 2004 include Cavio Corporation
("Cavio") from the merger date of February 20, 2004.


<PAGE>
                                     - 22 -


Critical Accounting Policies

The Company's  critical  accounting  policies are particularly  important to the
portrayal  of  financial  position  and  results of  operations  and require the
application  of  significant   judgments  by  management.   As  a  result,   the
consolidated   financial  statements  are  subject  to  an  inherent  degree  of
uncertainty.  In  applying  those  policies,  management  uses its  judgment  to
determine the appropriate assumptions to be used in the determination of certain
estimates.  These  estimates are based on the Company's  historical  experience,
terms  of  existing  contracts,   observance  of  trends  in  the  industry  and
information  available  from outside  sources,  as  appropriate.  The  Company's
critical accounting policies are described below:

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 financial  statements and
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Long Lived assets

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets",  the Company  tests  long-lived  assets or asset groups for
recoverability  when  events or changes  in  circumstances  indicate  that their
carrying  amount may not be  recoverable.  Circumstances  which could  trigger a
review  include,  but are not limited to:  significant  decreases  in the market
price of the asset; significant adverse changes in the business climate or legal
factors;  accumulation of costs significantly in excess of the amount originally
expected for the acquisition or  construction of the asset;  current period cash
flow or  operating  losses  combined  with a history of losses or a forecast  of
continuing losses associated with the use of the asset; and current  expectation
that the  asset  will more  likely  than not be sold or  disposed  significantly
before the end of its estimated useful life.

Recoverability  is assessed  based on the  carrying  amount of the asset and its
fair value which is generally  determined  based on the sum of the  undiscounted
cash flows  expected  to result  from the use and the  eventual  disposal of the
asset, as well as specific appraisal in certain instances. An impairment loss is
recognized when the carrying amount is not recoverable and exceeds fair value.

Goodwill

Goodwill represents the excess of the purchase price of acquired assets over the
fair  values  of the  identifiable  assets  acquired  and  liabilities  assumed.
Pursuant to SFAS No. 141, the Company does not amortize goodwill,  but tests for
impairment  of goodwill on an annual basis and at any other time if events occur
or  circumstances  indicate  that the  carrying  amount of  goodwill  may not be
recoverable. Circumstances that could trigger an impairment test include but are
not limited to: a significant  adverse  change in the business  climate or legal
factors;  an  adverse  action  or  assessment  by  a  regulator;   unanticipated
competition and loss of key personnel.  Goodwill is tested for impairment  using
present value  techniques  of estimated  future cash flows;  or using  valuation
techniques  based on multiples of earnings.  If the carrying  amount of goodwill
exceeds the implied fair value of that goodwill,  an impairment  loss is charged
to operations.


<PAGE>
                                     - 23 -


Revenue Recognition

Sales of services are recorded  when  performed in  accordance  with  contracts.
Revenues from software sales are recorded in accordance  with SOP 97-2 `Software
Revenue  Recognition',  which  requires  that revenue  recognized  from software
arrangements be allocated to the various  elements of the  arrangement  based on
the relative  fair market  values of the  elements,  such as software  products,
upgrades,   enhancements,   post  contract  customer  support,  installation  or
training.  Revenue from product  services is  recognized  at the time service is
provided.

Pakistan    recognizes    revenue   at   the    point/time   the   software   is
delivered/exported.

Veridicom Inc. recognizes revenues at the point of shipment of products.

Stock Based Compensation

Stock  options  granted to employees and  non-employees  are accounted for under
Statement of Financial  Accounting Standards No. 123 "Accounting for Stock-Based
Compensation"  (SFAS  123),  which  establishes  a fair  value  based  method of
accounting for stock-based awards, and recognizes  compensation expense based on
the fair  value of the  stock  award or fair  value of the  goods  and  services
received, whichever is more reliably measurable.

Unless otherwise  disclosed,  all stock based  transactions  entered into by the
Company have been valued at the market value of our common stock on the date the
transaction was entered into or have been valued using the  Black-Scholes  Model
to estimate the fair market value.

Software Development Costs

Costs  related to the  development  of software are  expensed as incurred  until
technological feasibility in the form of a working model has been established in
accordance with SFAS No. 86,  "Accounting for the Costs of Computer  Software to
be  Sold,   Leased  or  Otherwise   Marketed".   The  time  period  between  the
establishment of technological feasibility and completion of product development
is expected to be short,  therefore the Company has not  capitalized any product
development costs during the period.

Recent Accounting Pronouncements

In June 2005, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standard  No.  154, "  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
Statement No. 3, Reporting  Accounting Changes in Interim Financial Statements "
("SFAS  154").  The  Statement  applies to all  voluntary  changes in accounting
principles  used, and changes the  requirements for accounting for and reporting
of a  change  in  an  accounting  principle.  SFAS  154  requires  retrospective
application  to prior  periods'  financial  statements of a voluntary  change in
accounting principle unless it is impracticable. SFAS 154 requires that a change
in  method  of   depreciation,   amortization,   or  depletion  for  long-lived,
non-financial assets be accounted for as a change in accounting estimate that is
affected by a change in accounting  principle.  Opinion 20  previously  required
that such a change be reported as a change in accounting principle.  SFAS 154 is
effective for accounting  changes and corrections of errors made in fiscal years
beginning   after   December  15,  2005.  The  Company  does  not  believe  this
pronouncement will have a material impact in its financial results.


<PAGE>
                                     - 24 -


In June 2005,  the  Emerging  Issues  Task Force  ("EITF")  issued No.  05-6,  "
Determining the Amortization Period for Leasehold  Improvements " ("EITF 05-6").
The pronouncement  requires that leasehold  improvements  acquired in a business
combination  or purchase  subsequent  to the  inception  of the lease  should be
amortized over the lesser of the useful life of the asset or the lease term that
includes  reasonably  assured  lease  renewals as  determined on the date of the
acquisition of the leasehold improvement.  The Company does not have unamortized
leasehold improvements from acquisitions or business combinations and therefore,
does not  believe  this  pronouncement  will  have an  impact  in its  financial
results.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- An  Amendment  of APB  Opinion No.  29".  The  guidance in APB Opinion No. 29,
"Accounting  for  Nonmonetary  Transactions",  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that Opinion,  however,  included certain
exceptions to that  principle.  SFAS No. 153 amends  Opinion No. 29 to eliminate
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial  substance.  A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result  of the  exchange.  The  provisions  of SFAS No.  153 are  effective  for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005.  Early  application  is permitted  and  companies  must apply the standard
prospectively.  The adoption of this standard is not expected to have a material
effect on the Company's results of operations or financial position.

In December  2004,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial  Accounting  Standard  (SFAS) No.  123R,  "Share  Based
Payment".  SFAS 123R is a revision of SFAS No. 123  "Accounting  for Stock-Based
Compensation",  and supersedes APB Opinion No. 25,  "Accounting for Stock Issued
to Employees" and its related  implementation  guidance.  SFAS 123R  establishes
standards for the accounting for  transactions in which an entity  exchanges its
equity  instruments  for goods or services.  It also addresses  transactions  in
which an entity  incurs  liabilities  in exchange for goods or services that are
based  on the fair  value  of the  entity's  equity  instruments  or that may be
settled by the issuance of those equity instruments. SFAS 123R focuses primarily
on accounting for transactions in which an entity obtains  employee  services in
share-based payment transactions.  SFAS 123R requires a public entity to measure
the cost of  employee  services  received  in  exchange  for an award of  equity
instruments  based on the  grant-date  fair  value of the  award  (with  limited
exceptions).  That cost  will be  recognized  over the  period  during  which an
employee  is  required  to  provide  service  in  exchange  for the  award - the
requisite  service period (usually the vesting period).  SFAS 123R requires that
the compensation cost relating to share-based payment transactions be recognized
in financial  statements.  That cost will be measured based on the fair value of
the equity or liability  instruments issued.  Public entities that file as small
business  issuers  will be required  to apply SFAS 123R in the first  interim or
annual  reporting  period that begins after  December 15, 2005.  The adoption of
this standard is not expected to have a material effect on the Company's results
of operations or financial position.

In March 2005,  the SEC staff  issued  Staff  Accounting  Bulletin No. 107 ("SAB
107") to give  guidance on the  implementation  of SFAS 123R.  The Company  will
consider SAB 107 during implementation of SFAS 123R.

Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform  to the  current  period  presentation.  Cost of goods sold for the nine
months ended  September  30, 2005 includes  $29,491 which has been  reclassified
from research and development  expenses incurred in the three months ended March
31, 2005


<PAGE>
                                     - 25 -


Results of Operations - Nine and Three Months Ended September 30, 2005 and 2004

Net Revenue

Net revenue for the nine months ended  September 30, 2005 of $339,686  decreased
by $55,750  compared  to net  revenue of  $395,436  for the same period in 2004.
Revenues in the third  quarter of 2005 are mainly in respect of VKI, a USB flash
drive with finger print sensor.  All other revenues for the comparative  periods
are in respect of sales of capacitive fingerprint sensors,  computer peripherals
and software related to the use of our fingerprint authentication technology.

Cost of Goods Sold

Cost of goods sold is mainly for product components purchased from suppliers and
the cost of  finished  products  from  existing  inventory.  These  amounted  to
$172,728 for the nine months ended  September  30, 2005 compared to $207,367 for
the same period in 2004.

Gross Profit

The gross  profit for the nine months ended  September  30, 2005 of $166,958 was
49% of net sales compared to gross profit of $188,069 which was 48% of net sales
for the same period in 2004.

General and Administrative Expenses

General  and  administrative   expenses,  which  include  non-cash  compensation
expenses  of  $572,630,  amounted  to  $2,597,551  for the  nine  months  ending
September 30, 2005 compared to $2,658,774  for the same period in 2004.  The net
decrease of $61,223 is mainly in respect of:

    o   A decrease in  consulting  expenses  from  $710,000  for the nine months
        ended September 30, 2004 to $441,000 for the nine months ended September
        30, 2005.  After the merger of  Sunnyvale,  the Company  hired full time
        employees for services which were  previously  provided by  consultants.
        This reduced consulting expenses.

    o   Commissions and fees which decreased to $50,000 in the nine months ended
        September  30, 2005  compared  to $135,000  for the same period in 2004.
        This  decrease  is  because  the  Company  paid  commissions  for equity
        investments in 2004.

    o   A decrease in travel  expenses  from  $191,000 for the nine months ended
        September  30, 2004 to $131,000 for the nine months ended  September 30,
        2005. It is expected that travel expenses for 2005 fiscal will be at the
        same  level or  higher  than  those of 2004 as a  result  of  continuing
        marketing and sales activities.

    o   Stock based compensation, which increased to $572,630 in the nine months
        ended  September  30, 2005  compared to $251,370  for the same period in
        2004 as a result of new stock based  compensation  vested for  employees
        and directors of the Company in accordance  with the options  granted in
        February 2005, under the 2004 Stock Option Plan.

    o   Marketing and advertising  expenses  increased from $12,000 for the nine
        months  ended  September  30, 2004 to $68,000 for the nine months  ended
        September  30, 2005.  This is due to costs  incurred for  attendance  of
        trade shows in 2005.


<PAGE>
                                     - 26 -


    o   Office  administration  expenses  also  increased by $38,000 in the nine
        months  ended  September  30, 2005  compared to the same period in 2005.
        This is due to normal increase in operational activities.

Research and Development

Research and development  expenditure  for the nine months ending  September 30,
2005 was  $944,243,  compared  to  $298,146  for the same  period in 2004.  Such
expenditures are related to salaries paid to research and development  staff and
on-going product, hardware and software enhancements.

Interest Expense

Interest  expense for the nine months  ending  September  30, 2005  amounting to
$2,067,461 was for  amortization of notes discount and accrued interest on notes
payable,  compared to  interest  expense of $60,931 for the same period in 2004.
The significant  increase in interest expense in the nine months ended September
30, 2005 is mainly due to interest expense of beneficial  conversion feature and
amortization of deferred  finance charges  resulting from the convertible  notes
issued in 2005.

Liquidity and Capital Resources

On  February  25,  2005,  we  completed  the first of three  rounds of a private
placement  whereby we have issued up to an aggregate of $5,100,000  worth of 10%
callable secured notes  convertible into shares of common stock, and warrants to
purchase up to an aggregate of 10,200,000  shares of our common stock to certain
accredited  investors.  The first of three equal  installments of $1,700,000 was
received in March, 2005.

Subsequently  in April,  2005,  the Company  completed  the second  round of the
private placement resulting in aggregate proceeds amounting to $1,700,000.

On August 16, 2005 the third closing of the private placement was completed.  As
at September 30, 2005  $1,420,000  of the  aggregate  proceeds were received and
$280,000 of the aggregate proceeds are receivable.

Since  October 1, 2005 we are in default in making  repayments  of principal and
interest at the default rate of 15% per annum on the callable secured notes.

We need to seek and secure  additional  financing to fund our current and future
operations.  If we are successful in obtaining this additional financing, we may
not be able to do so on terms that are not excessively  dilutive to our existing
stockholders  or less  costly than  existing  sources of  financing.  Failure to
secure  additional  financing  in a timely  manner and on  favorable  terms when
needed in the  future  could  have a material  adverse  effect on our  financial
performance,  balance  sheet and stock  price and require us to  implement  cost
reduction initiatives and curtail or cease operations.

If we are able to raise the required additional  financing and if we are able to
generate funds from  operations by fulfillment of orders and product  deliveries
in the fourth quarter of this year, we expect to have  sufficient  funds to meet
our operating requirements for the remainder of this year.

In addition,  if the holders of the private  placement  financing notes exercise
their option to convert  these into common  stock of our  company,  we would not
then be required to repay the  principal  and  interest on these notes and would
therefore enhance our cash flow by approximately $550,000 per quarter.  However,
the  noteholders  are not under any  obligation  to  convert  the notes into our
common stock.


<PAGE>
                                     - 27 -


Off-Balance Sheet Arrangements

None

Dividends and Distributions

We have not paid any cash  dividends  to date.  We intend to retain  our  future
earnings, if any, and we do not anticipate paying cash dividends on either class
of our stock in the foreseeable future.

RISK FACTORS

Risks related to our financial results

Our stock price is volatile and could decline in the future.

The price of our  common  stock has been  volatile  in the past and will  likely
continue to fluctuate in the future.  The stock market in general and the market
for shares of technology  stocks in  particular  has  experienced  extreme stock
price fluctuations. In some cases, these fluctuations have been unrelated to the
operating  performance  of  the  affected  companies.   Many  companies  in  the
technology  and related  industries,  including  us, have  experienced  dramatic
volatility in the market prices of their common stock.

We have an accumulated deficit, are not currently profitable and expect to incur
significant expenses in the future as we implement our new business model, which
may reduce our profitability.

We have  incurred  a  cumulative  net loss  since  inception  and are  currently
experiencing  negative cash flow.  We expect to continue to experience  negative
cash flow and operating losses for the foreseeable future as we continue to make
significant  expenditures for acquisitions,  sales and marketing,  international
expansion,  infrastructure development and general and administrative functions,
in light of our new  business  model.  As a  result,  we will  need to  generate
significant revenues to achieve profitability.  If our revenues grow more slowly
than we anticipate,  or if our operating  expenses exceed  expectations,  we may
experience reduced profitability.

Our prior auditors have indicated  substantial  doubt  concerning our ability to
continue operations as a going concern.

Our prior auditors have substantial  doubt concerning our ability to continue as
a going concern as of the most recent audited  financial  statements.  We cannot
assure you that our ability to obtain additional  customers or financing sources
will be  impaired  as a result of this  qualification.  Additionally,  we cannot
assure you that our proposed projects and services,  if fully developed,  can be
successfully  marketed  or that we will ever  achieve  significant  revenues  or
profitable margins and therefore remain a going concern.

We will be required to raise additional capital to fund our operations.

We just  completed  the last of three rounds of a private  placement to raise an
aggregate of $5,100,000. The first of three equal installments of $1,700,000 was
received in February,  2005,  the second was received in May, 2005 and the third
closing of  $1,700,000  was  cpompleted  on August 16, 2005.  If we cannot raise
additional  needed funds on acceptable  terms, we will not be able to develop or
enhance our  products,  take  advantage  of future  opportunities  or respond to
competitive  pressures  or  unanticipated  requirements.  To the extent we raise
additional capital by issuing equity securities, our stockholders may experience
substantial  dilution.  Also, any new equity securities may have greater rights,
preferences or privileges than our existing common stock. A material shortage of
capital  will  require us to take  drastic  steps such as reducing  our level of
operations,  disposing of selected assets or seeking an acquisition  partner. If
cash is insufficient, we will not be able to continue operations.


<PAGE>
                                     - 28 -


If we fail to maintain effective internal controls over financial reporting, the
price of our Common Stock may be adversely affected.

Our  internal  controls  over  financial   reporting  may  have  weaknesses  and
conditions  that  need to be  addressed,  the  disclosure  of which  may have an
adverse  impact on the price of our common  stock.  We are required to establish
and maintain appropriate internal controls over financial reporting.  Failure to
establish  those  controls,  or any failure of those controls once  established,
could adversely impact our public disclosures regarding our business,  financial
condition or operating  results.  In addition,  management's  assessment  of our
internal  controls  over  financial   reporting  may  identify   weaknesses  and
conditions  that need to be addressed in our internal  controls  over  financial
reporting or other matters that may raise concerns for investors.  Any actual or
perceived  weaknesses and  conditions  that need to be addressed in our internal
controls over financial reporting,  disclosure of management's assessment of our
internal  controls  over  financial   reporting  or  disclosure  of  our  public
accounting  firm's  attestation to or report on  management's  assessment of our
internal  controls over  financial  reporting may have an adverse  impact on the
price of our common stock.

Risks related to our business

We face intense  competition from other biometric security solution providers as
well as identification and security systems providers.

A significant  number of established and startup companies have developed or are
developing  hardware  for  fingerprint   biometric  security  applications  that
currently  compete  or will  compete  directly  with  those  products  designed,
developed and sold by us. Other  companies  have developed or are developing and
marketing  biometric  security  applications for the recognition of fingerprints
that currently compete or will compete with those products  designed,  developed
and sold by us. Some of these  companies  have  developed or are  developing and
marketing  semiconductor  or optically  based direct contact  fingerprint  image
capture devices.  Other companies have developed or are developing and marketing
other methods of biometric  identification  such as retinal blood vessel or iris
pattern, facial structure, or voice recognition.

If one or more of these technologies or approaches were widely adopted, it would
significantly  reduce the potential  market for our products.  Our products also
compete with  non-biometric  technologies  such as certificate  authorities  and
traditional keys, cards,  surveillance  systems and passwords.  Many competitors
offering  products  that are  competitive  with our products  and services  have
significantly  more cash and resources than us. The biometric security market is
a rapidly  evolving  and  intensely  competitive  market,  and we  believe  that
additional  competitors  may enter the market and become  significant  long-term
competitors.

We  expect  competition  to  increase  and  intensify  in the  near  term in the
biometrics markets.  Companies competing with us may introduce products that are
competitively priced, have increased performance or functionality or incorporate
technological advances not yet developed or implemented by us.


<PAGE>
                                     - 29 -


Some present and potential competitors have financial,  marketing, research, and
manufacturing resources substantially greater than we have.

In order to compete effectively in this environment, we must continually develop
and market new and  enhanced  products at  competitive  prices and must have the
resources   available  to  invest  in  significant   research  and   development
activities.  The  failure to do so could have a material  adverse  effect on its
business operations, financial results and stock price.

We will need to raise additional equity or debt financing in the future.

We will  need to  raise  financing  in the  future  to fund our  operations.  If
successful in raising additional financing, we may not be able to do so on terms
that are not  excessively  dilutive to our existing  stockholders or less costly
than existing sources of financing.  Failure to secure additional financing in a
timely manner and on favorable terms if and when needed in the future could have
a material adverse effect on our financial performance,  balance sheet and stock
price and  require  us to  implement  cost  reduction  initiatives  and  curtail
operations.

Our business will not grow unless the market for our security  solutions expands
both domestically and internationally.

A large  portion of our revenues is derived  from the sale of security  products
and services.  We cannot  accurately  predict the future growth rate, if any, or
the ultimate  size of the  biometric  technology  market.  The  expansion of the
market for our products and services depends on a number of factors, including:

    o   the cost,  performance  and reliability of its products and services and
        the products and services of our competitors;
    o   customers' perception of the benefit of biometric security solutions;
    o   public  perceptions  of the  intrusiveness  of these  solutions  and the
        manner in which firms are using the biometric information collected;
    o   public perceptions regarding the confidentiality of private information;
    o   customers' satisfaction with our products and services; and
    o   marketing efforts and publicity regarding these products and services.

Certain groups have publicly objected to the use of biometric  products for some
applications  on civil  liberties  grounds and  legislation has been proposed to
regulate the use of biometric security products.  From time to time, fingerprint
recognition  and  other   biometrics   technologies   have  been  the  focus  of
organizations  and individuals  seeking to curtail or eliminate the use of these
technologies  on the  grounds  that these  technologies  may be used to diminish
personal  privacy  rights.  In  the  event  that  such  initiatives   result  in
restrictive legislation,  the market for fingerprint recognition products may be
adversely  affected.  Even if biometric markets develop as we hope, our products
and services  may not gain wide market  acceptance.  Even if biometric  security
solutions  gain wide  market  acceptance,  our  products  and  services  may not
adequately address the market requirements.

The  biometrics  industry is  characterized  by rapid  technological  change and
evolving industry standards, which could render our existing products obsolete.

Our future  success  will depend  upon our  ability to develop  and  introduce a
variety of new products and services and  enhancements to these new products and
services  in  order to  address  the  changing  and  sophisticated  needs of the
marketplace.  Frequently,  technical  development  programs  in  the  biometrics
industry require  assessments to be made of the future  directions of technology
and technology market generally, which are inherently difficult to predict.


<PAGE>
                                     - 30 -


Delays in introducing new products,  services and  enhancements,  the failure to
choose correctly among technical alternatives or the failure to offer innovative
products  and  services  at  competitive  prices may cause  customers  to forego
purchases of our products and services and purchase those of our competitors.

The  development  of new or  enhanced  products  and  services  is a complex and
uncertain  process that requires the accurate  anticipation of technological and
market trends. We may experience development,  marketing and other technological
difficulties  that may delay or limit our  ability to  respond to  technological
changes,  evolving  industry  standards,  competitive  developments  or customer
requirements. You should also be aware that:

    o   Our technology may become obsolete upon the  introduction of alternative
        technologies;
    o   We may incur  substantial  costs if we need to modify our  products  and
        services to respond to these alternative technologies;
    o   We  may  not  have  sufficient  resources  to  develop  or  acquire  new
        technologies  or to  introduce  new  products  or  services  capable  of
        competing with future technologies;
    o   We may be unable to acquire the rights to use the intellectual  property
        necessary to implement new technology; and
    o   When introducing new or enhanced products or services,  we may be unable
        to effectively manage the transition from older products and services.

Continued  participation  by us in the market for  biometric  products  that are
linked to forensic  quality  databases  under the  jurisdiction  of governmental
agencies may require the  investment  of resources in upgrading our products and
technology  in order for us to  compete  and to meet  regulatory  and  statutory
standards.  We may  not  have  adequate  resources  available  to us or may  not
adequately  keep  pace with  appropriate  requirements  in order to  effectively
compete in the marketplace.

Defects in our products and services could diminish  demand for our products and
services, which may harm our business.

Because our  products  and  services  are  complex,  they may contain  errors or
defects that are not found until after they are used by our customers. Errors or
defects that  subsequently  arise could  seriously  harm our  reputation and its
ability to generate sales to new or existing customers.

Our products and  services  are used in systems  with other  vendors'  products.
These  products  and  services  can be  adequately  tested  only  when  they are
successfully  integrated with these systems. Errors may be found in new products
or releases  after  shipment  and our  products  and services may not operate as
expected. Errors or defects in our products and services could result in:

    o   loss of revenues and increased service and warranty costs;
    o   delay in market acceptance;
    o   loss of salaries; and
    o   injury to our reputation.

We may be subject to loss in market share and market  acceptance  as a result of
manufacturing errors, delays or shortages.

Performance failure in our products or certain of our services may cause loss of
market share, delay in or loss of market acceptance, additional warranty expense
or product recall, or other contractual  liabilities.  The complexity of certain
of the  fingerprint  recognition  systems makes the  manufacturing  and assembly
process of such products,  especially in volume,  complex. This may in turn lead
to delays or  shortages in the  availability  of certain  products,  or, in some
cases, the unavailability of certain products. The negative effects of any delay
or failure could be  exacerbated  if the delay or failure  occurs in products or
services  that  provide  personal  security,  secure  sensitive  computer  data,
authorize significant financial  transactions or perform other functions where a
security breach could have significant consequences.


<PAGE>
                                     - 31 -


If a product or service  launch is delayed or is the subject of an  availability
shortage  because of problems  with our ability to  manufacture  or assemble the
product or service  successfully  on a timely basis,  or if a product or service
otherwise fails to meet performance  criteria, we may lose revenue opportunities
entirely  and/or  experience  delays in revenue  recognition  associated  with a
product or service in addition to incurring higher operating expenses during the
period  required  to  correct  the  defects.   We  may  be  subject  to  repair,
replacement,  reimbursement  and liability claims for products that fail to work
or to meet applicable performance criteria.

There is a risk that for  unforeseen  reasons  we may be  required  to repair or
replace a  substantial  number of products in use or to reimburse  customers for
products that fail to work or meet strict  performance  criteria.  We attempt to
limit  remedies for product or service  failure to the repair or  replacement of
malfunctioning  or  noncompliant  products  or  services,  and also  attempts to
exclude or minimize exposure to product and related  liabilities by including in
our standard agreements  warranty  disclaimers and disclaimers for consequential
and related damages as well as limitations on our aggregate liability. From time
to time,  in certain  complex  sale or licensing  transactions,  each entity may
negotiate liability provisions that vary from such standard forms.

Our existing and proposed  international business exposes us to additional risks
that may  result in future  additional  costs or limit the  market  for  product
sales.

Products  and services  provided to our  international  customers  account for a
significant  part of our  revenues.  In addition,  key component of our business
plan is to expand our reach in our foreign markets.  Conducting business outside
of the United States subjects us to additional risks, including:

    o   changes in regulatory requirements;
    o   reduced protection of intellectual property rights;
    o   evolving privacy laws;
    o   tariffs and other trade barriers;
    o   difficulties in staffing and managing foreign operations;
    o   problems in collecting accounts receivable; and
    o   difficulties in authenticating customer information.

We will face risks  inherent  to new  ventures in each new market that we enter,
including  a lack  of  acceptance  of our  business  model.  We may  also  incur
substantial  costs  related  to  entering  into new  markets,  which  may not be
recoverable if we are  unsuccessful  in these markets.  Failure to recover these
costs and expenses may materially  adversely impact our cash flow and ability to
meet our  regular  operating  expenses,  which may,  in turn harm our ability to
serve our customers and our competitive position to obtain new customers.

In  addition,  a portion  of our  technology  base is in  Pakistan.  We could be
adversely affected by any major hostilities involving Pakistan,  which result in
the  interruption  or  curtailment  of trade  between  Pakistan  and its trading
partners.  For  example,  if the United  States or any of its  trading  partners
reinstitutes  the recently lifted trade  sanctions,  it may adversely impact our
ability to continue our Pakistani operations.


<PAGE>
                                     - 32 -


If we fail to attract and retain employees,  our growth could be limited and our
costs could increase,  which may adversely  affect our results of operations and
financial position.

Our future success depends in large part upon our ability to attract,  train and
retain  highly  skilled  executive-level  management  and creative and technical
personnel.  The  competition  in the  technology  industry for such personnel is
intense,  and we  cannot  be sure  that we will  be  successful  in  attracting,
training and  retaining  such  personnel.  Some of our  employees  and executive
officers have joined our company recently,  and all employees are subject to "at
will" employment.  High turnover resulting in additional  training expense would
decrease its profitability.  We cannot guarantee that we will be able to replace
any of our management personnel in the event their services become unavailable.

Our failure to maintain the proprietary  nature of our technology,  intellectual
property and manufacturing processes could have a material adverse effect on our
business,  operating  results  and  financial  condition  and on our  ability to
compete effectively.

We principally rely upon patent, trademark, copyright, trade secret and contract
law to establish and protect our proprietary rights. There is a risk that claims
allowed on any  patents or  trademarks  that we hold may not be broad  enough to
protect  our  technology.   In  addition,  our  patents  or  trademarks  may  be
challenged,  invalidated or circumvented  and management  cannot be certain that
the rights  granted  thereunder  will  provide us with  competitive  advantages.
Moreover,  any current or future issued or licensed patents,  or trademarks,  or
currently  existing or future developed trade secrets or know-how may not afford
sufficient   protection  against   competitors  with  similar   technologies  or
processes, and the possibility exists that certain of our already issued patents
or trademarks may infringe upon third party patents or trademarks or be designed
around by others.

In addition,  there is a risk that others may independently  develop proprietary
technologies and processes,  which are the same as, substantially  equivalent or
superior to those  possessed by us or become  available in the market at a lower
price.

There is a risk that we have infringed or in the future will infringe patents or
trademarks owned by owners,  that we will need to acquire licenses under patents
or trademarks belonging to others for technology potentially useful or necessary
to us and that licenses will not be available on acceptable terms, if at all.

We may have to litigate to enforce our patents or trademarks or to determine the
scope and validity of other parties'  proprietary  rights.  Litigation  could be
very  costly  and  divert  management's  attention.  An  adverse  outcome in any
litigation may have a severe negative effect on our financial  results and stock
price.  To determine the priority of  inventions,  we may have to participate in
interference  proceedings  declared by the United  States  Patent and  Trademark
Office or  oppositions  in foreign  patent and  trademark  offices,  which could
result in  substantial  cost to us and  limitations on the scope or validity our
patents or trademarks.

We also rely on trade secrets and proprietary know-how, which we seek to protect
by confidentiality agreements with our employees, consultants, service providers
and third parties.  There is a risk that these  agreements may be breached,  and
that the remedies  available to us may not be adequate.  In addition,  our trade
secrets  and  proprietary   know-how  may  otherwise   become  known  to  or  be
independently discovered by others.

<PAGE>
                                     - 33 -


Failure to  increase  our brand  awareness  could  limit our  ability to compete
effectively.

If the  marketplace  does  not  associate  us  with  high-quality  products  and
services, we may be unable to keep our existing customers, attract new customers
or  successfully  introduce  new products and  services.  Competitive  and other
pressures may require us to increase our marketing expenses to promote our brand
name, and the benefits associated with brand creation may not outweigh the risks
and costs associated with  establishing our brand name. Our failure to develop a
strong  brand  name  or  the  incurrence  of  excessive  costs  associated  with
establishing our brand name may harm our business.

We have a lengthy sales and  implementation  cycle,  which increases the cost of
completing sales and renders completion of sales less predictable.

If we are unable to license our  products  and  services to new  customers  on a
timely  basis or if our  existing and  proposed  customers  and their  end-users
suffer delays in the  implementation  and adoption of its services,  our revenue
may be limited and business and  prospects  may be harmed.  Our  customers  must
evaluate our  technology  and  integrate  our  products  and  services  into the
products and services they provide. In addition, our customers may need to adopt
a comprehensive  sales,  marketing and training  program in order to effectively
implement  some  of its  products.  For  these  and  other  reasons,  the  cycle
associated  with  establishing  licenses  and  implementing  our products can be
lengthy.

Our success  depends on our ability to grow and develop our direct and  indirect
distribution  channels and the inability to do so could adversely  affect future
operating results.

Our  failure to grow and  develop our direct  sales  channel or to increase  the
number of our  indirect  distribution  channels  could have a  material  adverse
effect on its  business,  operating  results and  financial  condition.  We must
continue to develop  relationships  with existing  channel  partners or they may
choose to devote greater resources to supporting the products of competitors.

We may be  adversely  impacted  by the  events of and  actions  in  response  to
September  11,  2001.  A  recurrence  of  terrorist  attacks may have a material
adverse impact on our business plan, operations and financial condition.

We may be adversely affected by the events of September 11, 2001, and the war in
Iraq. At this time,  the long term effects of these events,  or other similar or
related events that may occur in the future,  on the  biometrics  industry or on
worldwide economic conditions. We cannot assure you that our business plan, will
not be  adversely  impacted  by future  terrorist  attacks or  actions  taken in
response to those attacks.

Risks relating to our current financing arrangement

There are a large number of shares  underlying our callable secured  convertible
notes,  and warrants that may be available for future sale and the sale of these
shares may depress the market price of our common stock.

As of November 7, 2005,  we had  15,903,477  shares of common  stock  issued and
outstanding and callable secured  convertible notes outstanding or an obligation
to issue  callable  secured  convertible  notes  that may be  converted  into an
estimated  8,050,513  shares of  common  stock at  current  market  prices,  and
outstanding  warrants or an obligation to issue warrants to purchase  10,200,000
shares  of common  stock.  In  addition,  the  number of shares of common  stock
issuable upon conversion of the outstanding  callable secured  convertible notes
may increase if there is an event of default.  All of the shares,  including all
of the shares  issuable  upon  conversion  of the notes and upon exercise of our
warrants,  may be sold  without  restriction.  The  sale  of  these  shares  may
adversely affect the market price of our common stock.


<PAGE>
                                     - 34 -


As there is an event of default,  the continuously  adjustable  conversion price
feature of our callable secured convertible notes become applicable, which could
have a depressive effect on the price of our common stock.

Upon an event of default the callable secured  convertible notes are convertible
into shares of our common  stock at a 50%  discount to the trading  price of the
common stock prior to the conversion.  The significant  downward pressure on the
price of the common stock as the selling stockholder converts and sells material
amounts of common  stock  could have an adverse  effect on our stock  price.  In
addition,  not only the sale of shares  issued  upon  conversion  or exercise of
notes, warrants and options, but also the mere perception that these sales could
occur, may adversely affect the market price of the common stock.

The issuance of shares upon conversion of the callable secured convertible notes
and  exercise  of  outstanding  warrants  may cause  immediate  and  substantial
dilution to our existing stockholders.

The issuance of shares upon conversion of the callable secured convertible notes
and exercise of warrants may result in substantial  dilution to the interests of
other  stockholders  since the selling  stockholders may ultimately  convert and
sell the full amount issuable on conversion.  Although the selling  stockholders
may not convert their callable secured  convertible  notes and/or exercise their
warrants if such  conversion or exercise would cause them to own more than 4.99%
of our outstanding  common stock,  this restriction does not prevent the selling
stockholders  from converting  and/or exercising some of their holdings and then
converting  the rest of their  holdings.  In this way, the selling  stockholders
could sell more than this limit while never holding more than this limit.  There
is no upper limit on the number of shares that may be issued which will have the
effect of further diluting the proportionate equity interest and voting power of
holders of our common stock, including investors in this offering.

If we are  required  for any reason to repay our  outstanding  callable  secured
convertible  notes,  we would be required to deplete  our  working  capital,  if
available,  or raise additional funds. Our failure to repay the callable secured
convertible  notes, if required,  could result in legal action against us, which
could require the sale of substantial assets.

On February 25, 2005, we entered into a Security  Purchase  Agreement  involving
the sale of an  aggregate of  $5,100,000  principal  amount of callable  secured
convertible  notes and stock purchase  warrants to buy 10,200,000  shares of our
common stock. The callable secured  convertible notes are due and payable,  with
10% interest,  three years from the date of issuance,  unless  sooner  converted
into shares of our common stock. We currently have $4,820,000  callable  secured
convertible notes outstanding.  the investor is obligated to purchase additional
callable  secured  convertible  notes in the  aggregate  amount of $280,000.  In
addition, any event of default as our failure to repay the principal or interest
when due,  our failure to issue shares of common  stock upon  conversion  by the
holder,  our  failure  to  timely  file a  registration  statement  or have such
registration   statement   declared   effective,   breach   of   any   covenant,
representation  or  warranty in the  Securities  Purchase  Agreement  or related
convertible  note,  the  assignment  or  appointment  of a receiver to control a
substantial  part of our property or business,  the filing of a money  judgment,
writ or similar process against us in excess of $100,000,  the commencement of a
bankruptcy, insolvency,  reorganization or liquidation proceeding against us and
the  delisting  of our common  stock could  require the early  repayment  of the
callable secured convertible notes,  including a default interest rate of 15% on
the  outstanding  principal  balance  of the notes if the  default  is not cured
within the  specified  grace period.  We anticipate  that the full amount of the
callable secured  convertible  notes will be converted into shares of our common
stock, in accordance with the terms of the callable secured  convertible  notes.
If we are required to repay the callable secured  convertible notes, we would be
required to use our limited  working capital and raise  additional  funds. If we
were unable to repay the notes when  required,  the note holders could  commence
legal  action  against us and  foreclose  on all of our  assets to  recover  the
amounts due. Any such action would require us to curtail or cease operations.


<PAGE>
                                     - 35 -


Risks related to our common stock

There is no assurance  of an  established  public  trading  market,  which would
adversely  affect  the  ability  of  investors  in our  company  to  sell  their
securities in the public markets.

Although our common stock trades on the  Over-the-Counter  Bulleting  Board (the
"OTCBB"),  a regular  trading  market for the securities may not be sustained in
the future.  The NASD has enacted  recent  changes that limit  quotations on the
OTCBB to  securities of issuers that are current in their reports filed with the
Securities  and  Exchange  Commission.  The  effect on the  OTCBB of these  rule
changes and other proposed  changes cannot be determined at this time. The OTCBB
is an inter-dealer,  Over-The-Counter  market that provides  significantly  less
liquidity  than  the  NASD's  automated  quotation  system  (the  "NASDAQ  Stock
Market").  Quotes  for  stocks  included  on the  OTCBB  are not  listed  in the
financial  sections  of  newspapers  as are those for The Nasdaq  Stock  Market.
Therefore,  prices for securities traded solely on the OTCBB may be difficult to
obtain and holders of common stock may be unable to resell their  securities  at
or near their  original  offering  price or at any price.  Market prices for our
common stock will be influenced by a number of factors, including:

    o   the issuance of new equity securities;
    o   changes in interest rates;
    o   competitive developments, including announcements by competitors of new
        products or services or significant contracts, acquisitions, strategic
        partnerships, joint ventures or capital commitments;
    o   variations in quarterly operating results;
    o   change in financial estimates by securities analysts;
    o   the depth and liquidity of the market for our common stock;
    o   investor perceptions of our company and the technologies industries
        generally; and
    o   general economic and other national conditions.

The limited prior public market and trading  market may cause  volatility in the
market price of our common stock.

Our common stock is currently  traded on a limited  basis on the OTCBB under the
symbol  "VRDI." The  quotation  of our common stock on the OTCBB does not assure
that a meaningful, consistent and liquid trading market currently exists, and in
recent years such market has experienced  extreme price and volume  fluctuations
that have particularly affected the market prices of many smaller companies like
us. Our common stock is thus subject to volatility.  In the absence of an active
trading market:

    o   investors may have difficulty buying and selling or obtaining market
        quotations;
    o   market visibility for our common stock may be limited; and
    o   a lack of visibility for our common stock may have a depressive effect
        on the market for our common stock.


<PAGE>
                                     - 36 -


Our common stock could be considered a "penny stock."

Our common stock could be  considered  to be a "penny  stock" if it meets one or
more of the definitions in Rules 15g-2 through 15g-6  promulgated  under Section
15(g) of the Securities Exchange Act of 1934, as amended.  These include but are
not limited to the  following:  (i) the stock  trades at a price less than $5.00
per share; (ii) it is NOT traded on a "recognized"  national exchange;  (iii) it
is NOT quoted on The Nasdaq Stock  Market,  or even if so, has a price less than
$5.00 per share;  or (iv) is issued by a company with net  tangible  assets less
than $2.0 million,  if in business more than a continuous  three years,  or with
average  revenues  of less than  $6.0  million  for the past  three  years.  The
principal  result  or  effect  of  being  designated  a  "penny  stock"  is that
securities  broker-dealers cannot recommend the stock but must trade in it on an
unsolicited basis.

Broker-dealer requirements may affect trading and liquidity.

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2
promulgated thereunder by the SEC require broker-dealers dealing in penny stocks
to provide  potential  investors  with a document  disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the document
before effecting any transaction in a penny stock for the investor's account.

Potential  investors  in our  common  stock are  urged to  obtain  and read such
disclosure  carefully before  purchasing any shares that are deemed to be "penny
stock." Moreover,  Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for  transactions  in such stocks before selling any
penny stock to that investor.  This procedure  requires the broker-dealer to (i)
obtain from the investor information  concerning his or her financial situation,
investment  experience and investment  objectives;  (ii)  reasonably  determine,
based on that  information,  that  transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written  statement  setting forth the basis on which
the  broker-dealer  made the  determination  in (ii) above;  and (iv)  receive a
signed and dated copy of such  statement from the investor,  confirming  that it
accurately reflects the investor's  financial situation,  investment  experience
and investment  objectives.  Compliance with these requirements may make it more
difficult  for  holders  of our  common  stock to resell  their  shares to third
parties or to otherwise dispose of them in the market or otherwise.

Shares  eligible  for future sale may  adversely  affect the market price of our
common stock, as the future sale of a substantial amount of our restricted stock
in the public marketplace could reduce the price of our common stock.

From time to time,  certain of our  stockholders  may be eligible to sell all or
some of their shares of common stock by means of ordinary brokerage transactions
in the open market  pursuant to Rule 144,  promulgated  under the Securities Act
("Rule 144"), subject to certain limitations.  In general, pursuant to Rule 144,
a stockholder (or stockholders  whose shares are aggregated) who has satisfied a
one-year  holding  period  may,  under  certain  circumstances,  sell within any
three-month  period a number of securities  which does not exceed the greater of
1% of the then outstanding  shares of common stock or the average weekly trading
volume of the class during the four calendar weeks prior to such sale.  Rule 144
also permits, under certain circumstances,  the sale of securities,  without any
limitations,  by a  non-affiliate  of our company that has  satisfied a two-year
holding period. In addition, we completed the first of three rounds of a private
placement  in February  2005,  whereby we granted the  investors  in the private
placement certain registration rights with respect to the shares of common stock
underlying  their  securities.  Any substantial sale of common stock pursuant to
Rule 144 or pursuant to any resale  prospectus may have an adverse effect on the
market price of our securities.


<PAGE>
                                     - 37 -


Certain provisions of our Certificate of Incorporation and Delaware law may make
it more difficult for a third party to effect a change-in-control.

Our Certificate of  Incorporation  authorizes the Board of Directors to issue up
to 2,000,000 shares of preferred stock. The preferred stock may be issued in one
or more series,  the terms of which may be determined at the time of issuance by
the Board of Directors without further action by the  stockholders.  These terms
may include voting rights  including the right to vote as a series on particular
matters,  preferences  as  to  dividends  and  liquidation,  conversion  rights,
redemption  rights and sinking fund  provisions.  The issuance of any  preferred
stock could  diminish the rights of holders of our common  stock,  and therefore
could  reduce the value of such  common  stock.  In  addition,  specific  rights
granted to future  holders of  preferred  stock  could be used to  restrict  our
ability to merge  with,  or sell  assets to, a third  party.  The ability of the
Board of Directors to issue preferred stock could make it more difficult, delay,
discourage,   prevent   or  make  it  more   costly  to   acquire  or  effect  a
change-in-control.

In  addition,  we are  also  subject  to  Section  203 of the  Delaware  General
Corporation  Law that,  subject  to  certain  exceptions,  prohibits  a Delaware
corporation  from  engaging  in any  business  combination  with any  interested
stockholder  for a period of three years following the date that the stockholder
became an interested stockholder. The preceding provisions of our Certificate of
Incorporation,  as well as Section 203 of the Delaware General  Corporation Law,
could  discourage   potential   acquisition   proposals,   delay  or  prevent  a
change-in-control  and prevent  changes in our  management,  even if such things
would be in the best interests of our stockholders.

ITEM 3.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  As of September 30, 2005, the
Company's  management  carried out an evaluation,  under the  supervision of the
Company's  Chief  Executive  Officer  and the Chief  Financial  Officer,  of the
effectiveness  of the design and operation of the Company's system of disclosure
controls  and  procedures  pursuant to the  Securities  and  Exchange Act , Rule
13a-15(d) and 15d-15(d) under the Exchange Act. Based upon that evaluation,  the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure  controls  and  procedures  were  effective,  as of the date of their
evaluation,  for the purposes of recording,  processing,  summarizing and timely
reporting material  information required to be disclosed in reports filed by the
Company under the Securities Exchange Act of 1934.

Changes in Internal Controls

There have been no changes in our  internal  control  over  financial  reporting
identified in connection  with the evaluation  required by paragraph (d) of Rule
13a-15 or 15d-15 under the Exchange Act that  occurred  during the quarter ended
September 30, 2005 that has  materially  affected,  or is  reasonably  likely to
materially affect, our internal control over financial reporting.


<PAGE>
                                     - 38 -


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Five former  employees of Veridicom,  Inc. have filed claims against the Company
with the Labor  Commissioner  in the State of California.  The former  employees
allege that the Company owes unpaid wages, salaries and vacation pay for various
periods  between July 2000 and November  2003  amounting to a total of $111,651.
The Company has accrued for this  liability in its  financial  statements  as at
September 30, 2005.

On March 21, 2005 one of the  claimants  signed a letter of agreement to convert
his claim of $ 61,054 into stock based on the closing  price of our common stock
on that day of $2.40 per  share,  or a total of  25,439  shares  for his  entire
claim.  However,  this  settlement is subject to obtaining  certain  waivers and
documents from the holders of our Callable Secured Convertible Notes.

In October 2002 the Company had  licensed  its OneView  software to Global Alpha
Corporation  ("GAC").  In July 2003, the Company  entered into an asset purchase
agreement  with  GAC to sell  the  OneView  software  and  related  patents  for
$435,000,  being the amount equal to the Restated  Multiple  Advance  Promissory
Note dated  July 9, 2002,  which had been  executed  by the  Company in favor of
GAC.In July 2003,  the Company also entered into a five-year  License  Agreement
with GAC for an exclusive  license to commercialize the OneView software system.
On September  22, 2005 GAC filed a claim  against the Company for unpaid  annual
license  fees and also to enforce  the Put Right  granted to GAC to re-sell  the
OneView  software back to the Company for  $200,000.The  Company has accrued the
liability  for the minimum  annual  license  fees for the last two years to date
amounting to $50,000 in its financial  statements as at September 30, 2005.  The
Company is seeking legal advice to defend the claim filed by GAC. The outcome of
this litigation cannot be determined at this time.

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

During the period ended  September  30,  2005,  we issued the  following  equity
securities:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
             Name                    Title of Securities         Date of Sale      Amount of Securities      Consideration
                                                                                           Sold
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                          <C>                 <C>                     <C>
AJW Offshore,                    Callable Secured             February, 2005      Principal of $450,000   $450,000 cash
Ltd.                             Convertible Notes and                            and 900,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Qualified Partners, LLC      Callable Secured             February, 2005      Principal of $390,000   $390,000 cash
                                 Convertible Notes and                            and 780,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Partners, LLC                Callable Secured             February, 2005      Principal of $140,000   $140,000 cash
                                 Convertible Notes and                            and 280,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
New Millennium Capital           Callable Secured             February, 2005      Principal of $20,000    $20,000 cash
Partners II, LLC                 Convertible Notes and                            and 40,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Alpha Capital                    Callable Secured             February, 2005      Principal of $200,000   $200,000 cash
                                 Convertible Notes and                            and 400,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                     - 39 -


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
             Name                    Title of Securities         Date of Sale      Amount of Securities      Consideration
                                                                                           Sold
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                          <C>                 <C>                     <C>
Enable Growth Partners,          Callable Secured             February, 2005      Principal of $100,000   $100,000 cash
L.P.                             Convertible Notes and                            and 200,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Whalehaven Capital Fund Limited  Callable Secured             February, 2005      Principal of $200,000   $200,000 cash
                                 Convertible Notes and                            and 400,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Meadowbrook Opportunity Fund     Callable Secured             February, 2005      Principal of $120,000   $120,000 cash
LLC                              Convertible Notes and                            and 240,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
TCMP3 Partners                   Callable Secured             February, 2005      Principal of $80,000    $80,000 cash
                                 Convertible Notes and                            and 160,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Philip Benanti                   Common Stock Purchase        February, 2005      38,829 shares           For services
                                 Warrants                                                                 provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
GunnAllen Financial              Common Stock Purchase        February, 2005      16,567                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Joseph Stevens & Co., Inc.       Common Stock Purchase        February, 2005      77,657                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Michele Markowitz                Common Stock Purchase        February, 2005      10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Fabio Migliaccio                 Common Stock Purchase        February, 2005      4,005                   For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Patricia Sorbara                 Common Stock Purchase        February, 2005      10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Anthony St. Clair                Common Stock Purchase        February, 2005      38,829                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Anthony Varbero                  Common Stock Purchase        February, 2005      10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Sichenzia Ross Friedman          Common Stock                 April, 2005         50,000 shares           For legal services
Ference LLP                                                                                               provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                     - 40 -


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
             Name                    Title of Securities         Date of Sale      Amount of Securities      Consideration
                                                                                           Sold
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                          <C>                 <C>                     <C>
AJW Offshore,                    Callable Secured             April, 2005         Principal of $450,000   $450,000 cash
Ltd.                             Convertible Notes and                            and 900,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Qualified Partners, LLC      Callable Secured             April, 2005         Principal of $390,000   $390,000 cash
                                 Convertible Notes and                            and 780,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Partners, LLC                Callable Secured             April, 2005         Principal of $140,000   $140,000 cash
                                 Convertible Notes and                            and 280,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
New Millennium Capital           Callable Secured             April, 2005         Principal of $20,000    $20,000 cash
Partners II, LLC                 Convertible Notes and                            and 40,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Alpha Capital                    Callable Secured             April, 2005         Principal of $200,000   $200,000 cash
                                 Convertible Notes and                            and 400,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Enable Growth Partners,          Callable Secured             April, 2005         Principal of $100,000   $100,000 cash
L.P.                             Convertible Notes and                            and 200,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Whalehaven Capital Fund Limited  Callable Secured             April, 2005         Principal of $200,000   $200,000 cash
                                 Convertible Notes and                            and 400,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Meadowbrook Opportunity Fund     Callable Secured             April, 2005         Principal of $120,000   $120,000 cash
LLC                              Convertible Notes and                            and 240,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
TCMP3 Partners                   Callable Secured             April, 2005         Principal of $80,000    $80,000 cash
                                 Convertible Notes and                            and 160,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Philip Benanti                   Common Stock Purchase        April, 2005         38,829 shares           For services
                                 Warrants                                                                 provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
GunnAllen Financial              Common Stock Purchase        April, 2005         16,567                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Joseph Stevens & Co., Inc.       Common Stock Purchase        April, 2005         77,657                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Michele Markowitz                Common Stock Purchase        April, 2005         10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                     - 41 -


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
             Name                    Title of Securities         Date of Sale      Amount of Securities      Consideration
                                                                                           Sold
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                          <C>                 <C>                     <C>
Fabio Migliaccio                 Common Stock Purchase        April, 2005         4,005                   For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Patricia Sorbara                 Common Stock Purchase        April, 2005         10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Anthony St. Clair                Common Stock Purchase        April, 2005         38,829                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
Anthony Varbero                  Common Stock Purchase        April, 2005         10,400                  For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
AJW Offshore,                    Common stock                 May, 2005           3,009 shares            Interest expense of
Ltd.                                                                                                      $3,821.92
-------------------------------------------------------------------------------------------------------------------------------
AJW Qualified Partners, LLC      Common stock                 May, 2005           2,608 shares            Interest expense of
                                                                                                          $3,312.33
-------------------------------------------------------------------------------------------------------------------------------
AJW Partners, LLC                Common stock                 May, 2005           936 shares              Interest expense of
                                                                                                          $1,189.04
-------------------------------------------------------------------------------------------------------------------------------
New Millennium Capital           Common stock                 May, 2005           134 shares              Interest expense of
Partners II, LLC                                                                                          $169.86
-------------------------------------------------------------------------------------------------------------------------------
Alpha Capital                    Common stock                 May, 2005           1,338 shares            Interest expense of
                                                                                                          $1,698.63
-------------------------------------------------------------------------------------------------------------------------------
Enable Growth Partners,          Common stock                 May, 2005           669 shares              Interest expense of
L.P.                                                                                                      $849.32
-------------------------------------------------------------------------------------------------------------------------------
Whalehaven Capital Fund Limited  Common stock                 May, 2005           1,338 shares            Interest expense of
                                                                                                          $1,698.63
-------------------------------------------------------------------------------------------------------------------------------
Meadowbrook Opportunity Fund     Common stock                 May, 2005           803 shares              Interest expense of
LLC                                                                                                       $1,019.18
-------------------------------------------------------------------------------------------------------------------------------
TCMP3 Partners                   Common stock                 May, 2005           535 shares              Interest expense of
                                                                                                          $679.45
-------------------------------------------------------------------------------------------------------------------------------
Joseph Stevens & Co., Inc.       Common Stock Purchase        August, 2005        107,087                 For services
                                 Warrants                                         shares                  provided to the
                                                                                                          Registrant
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                     - 42 -


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
             Name                    Title of Securities         Date of Sale      Amount of Securities      Consideration
                                                                                           Sold
-------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                          <C>                 <C>                     <C>
AJW Offshore,                    Callable Secured             August, 2005        Principal of $450,000   $450,000 cash
Ltd.                             Convertible Notes and                            and 900,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Qualified Partners, LLC      Callable Secured             August, 2005        Principal of $390,000   $390,000 cash
                                 Convertible Notes and                            and 780,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
AJW Partners, LLC                Callable Secured             August, 2005        Principal of $140,000   $140,000 cash
                                 Convertible Notes and                            and 280,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
New Millennium Capital           Callable Secured             August, 2005        Principal of $20,000    $20,000 cash
Partners II, LLC                 Convertible Notes and                            and 40,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Enable Growth Partners,          Callable Secured             August, 2005        Principal of $100,000   $100,000 cash
L.P.                             Convertible Notes and                            and 200,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Whalehaven Capital Fund Limited  Callable Secured             August, 2005        Principal of $200,000   $200,000 cash
                                 Convertible Notes and                            and 400,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
Meadowbrook Opportunity Fund     Callable Secured             August, 2005        Principal of $120,000   $120,000 cash
LLC                              Convertible Notes and                            and 240,000 shares
                                 Common Stock Purchase
                                 Warrants
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

All of the above offerings and sales were deemed to be exempt under Section 4(2)
of  the  Securities  Act  of  1933,  as  amended.   No  advertising  or  general
solicitation  was employed in offering the  securities.  The offerings and sales
were made to a limited number of persons, all of whom were accredited investors,
business  associates  of our company or executive  officers of our company,  and
transfer was restricted by our company in accordance  with the  requirements  of
the   Securities   Act  of  1933.   In  addition  to   representations   by  the
above-referenced  persons,  we have made independent  determinations that all of
the  above-referenced  persons were accredited or sophisticated  investors,  and
that they were  capable of analyzing  the merits and risks of their  investment,
and  that  they   understood  the  speculative   nature  of  their   investment.
Furthermore,  all of the  above-referenced  persons were provided with access to
our Securities and Exchange Commission filings.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Since  October  1,  2005 the  Company  is in  default  in making  repayments  of
principal and interest due on the 10% callable convertible secured notes.


<PAGE>
                                     - 43 -


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

On June 17, 2005,  the Company held its annual  meeting of  shareholders  in Las
Vegas, Nevada. The Company's shareholders voted on the following two items:

    o   The Company's shareholders elected Paul Mann, Saif Mansour, Bill Cheung,
        Jeremy Coles and Shannon McCallum as directors to hold office until
        their successors are elected and qualified.

    o   The Company's shareholders did not ratify the Board of Directors'
        selection of AJ Robbins, PC as Veridicom's independent public
        accountants.

ITEM 5.  OTHER INFORMATION

Resignations of Officers of the compay:

Terry Laferte, VP, Technical Operations (resigned in June 2005)
Cameron Adams, VP, Strategic Development and Sales (resigned in November 2005)



ITEM 6.  EXHIBITS

  31.1     Certification of Chief Executive Officer pursuant to Item 601(b)(31)
           of Regulation S-B, as adopted pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002.

  31.2     Certification of Chief Financial Officer pursuant to Item 601(b)(31)
           of Regulation S-B, as adopted pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002.

  32.1     Certification of Chief Executive Officer pursuant to 18 U.S.C.
           Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
           Act of 2002.*

  32.2     Certification of Chief Financial Officer pursuant to 18 U.S.C.
           Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
           Act of 2002.*

   *       This exhibit shall not be deemed "filed" for purposes of section 18
           of the Securities Exchange Act of 1934 or otherwise subject to the
           liabilities of that section, no shall it be deemed incorporated by
           reference in any filing under the Securities Act of 1933 or the
           Securities Exchange Act of 1934, whether before or after the date
           hereof and irrespective of any general incorporation language in any
           filings.


<PAGE>
                                     - 44 -


                                   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

         VERIDICOM INTERNATIONAL, INC.

         Date: November 7, 2005

                                  /s/ Paul Mann
                                  ----------------------------
                                  Paul Mann

                                  President and Chief Executive Officer
                                  (Duly Authorized Officer and
                                  Principal Executive Officer)


                                  /s/ Bashir Jaffer
                                  -----------------------------
                                  Bashir Jaffer

                                  Chief Financial Officer
                                  (Duly Authorized Officer and
                                  Principal Financial and Accounting Officer)