SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

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

   For the fiscal year ended June 30, 2002

                                       OR

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

   For the transition period from ________ to ________

                        COMMISSION FILE NUMBER 000-31779

                    SECURITY INTELLIGENCE TECHNOLOGIES, INC.
              Exact name of registrant as specified in its charter)

                   Florida                                 65-0928369

(State or other jurisdiction of formation)     (IRS Employer Identification No.)

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

        Registrant's telephone number, including area code (914) 654-8700

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

   Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

   Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [ ]

   The Registrant's revenues for the fiscal year ended June 30, 2002
were $5,609,557.

   State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the
price at which the common equity was sold, or the average bid and
asked price of such common equity, was $877,088 at September 30, 2002.

   The number of shares of common stock $.0001 par value, of the
Registrant issued and outstanding as of September 30, 2002 was
17,059,346.
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                       DOCUMENTS INCORPORATED BY REFERENCE

   None

                                TABLE OF CONTENTS

                                                                     Page Number

   PART I                                                                     1

   BUSINESS                                                                   1

   PROPERTIES                                                                12

   LEGAL PROCEEDINGS                                                         12

   SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS                        13

   PART II                                                                   13

   MARKET FOR RESISTRANT'S COMMON EQUITY
    AND RELATED STOCKHOLDER MATTERS                                          13


   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            15

   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                               18

   CHANGES IN AND DISAGREEMENT WITH
    ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                       18

   PART III

   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
    COMPLIANCE WITH SECTION 16 (a)
     OF THE EXCHANGE ACT OF THE REGRISTRANT                                  19

   EXECUTIVE COMPENSATION                                                    20

   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT            22

   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                            23

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

   We design, assemble, market and sell security products. Our
products and services are used throughout the world by military, law
enforcement and security personnel in the public and private sectors,
as well as governmental agencies, multinational corporations and
non-governmental organizations. Our products include a broad range of
professional, branded law enforcement and consumer equipment such as
covert audio and video intercept, electronic countermeasures, video,
photo, and optical systems, radio communication, explosive contraband
detection, armored vehicles and clothing, nuclear, biological and
chemical masks and protective clothing, voice stress analysis lie
detection, and global positioning systems ("GPS"), used for tracking,
locating and recovering vehicles and fleet management.
   Our products are marketed under CCS International, Ltd. ("CCS"),
G-Com Technologies, Ltd. and The Counter Spy Shops of Mayfair,
London(R) brand names and are sold primarily through a worldwide
network of more than 300 sales agents, including four retail stores in
the United States and two overseas.
   Our trained, multilingual and experienced security personnel work
closely with clients to create and implement solutions to complex
security problems. These services include security planning, advice
and management, security systems integration, intellectual property
asset protection, due diligence investigations and training programs
in counterintelligence, counter surveillance, advanced driving
techniques and ballistics.
   We are a Florida corporation organized under the name
Hipstyle.com, Inc. in June 1999. Our principal executive offices are
located at 145 Huguenot Street, New Rochelle, New York 10801,
telephone (914) 654-8700. Our website is www.spyzone.com. Neither the
information nor other statements contained in our website nor the
information contained in any other Internet website is a part of this
annual report on Form 10-KSB.
   On April 17, 2002, pursuant to an agreement and plan of merger
among us, CCS International, Ltd., a Delaware corporation ("CCS"), and
CCS Acquisition Corp., a Delaware corporation ("Acquisition Corp"),
Acquisition Corp. was merged into CCS, with the result that CCS became
our wholly-owned subsidiary. As a result of the merger:

    --  We issued an aggregate of 11,900,000 shares of common stock,
        3,500,000 shares of series A preferred stock and 1,500,000
        shares of series B preferred stock to the former stockholder
        of CCS, with each share of series A preferred stock and series
        B preferred stock being convertible into one share of common
        stock if the Company has either annual net revenue of
        $10,000,000 or net income of at least $1,000,000 prior to
        October 25, 2008, each share of series A preferred stock
        having 15 votes per share, and each share of series B
        preferred stock having no voting rights except as required by
        law.

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<PAGE>

    --  Outstanding options and warrants to purchase a total of
        1,800,500 shares of CCS' common stock were converted into
        options and warrants to purchase an equal number of shares of
        our common stock at exercise prices of $.50 to $1.00 per
        share.

    --  Our corporate name was changed from HipStyle.com, Inc. to
        Security Intelligence Technologies, Inc.

    --  Our officers and directors resigned.

    --  Ben Y. Jamil, Menachem Cohen, Tom Felice and Nomi Om, who were
        officer of CCS prior to the merger, were elected as our
        directors and offices, and Sylvain Naar, who was a director of
        CCS, was elected as a director.

    --  We entered into a three-year employment agreement with Mr.
        Jamil and granted him a non-qualified stock option to purchase
        1,000,000 shares of common stock at $2.00 per share pursuant
        to the employment agreement. The terms of Mr. Jamil's
        employment agreement are described under "Item 10. Executive
        Compensation."

   RISK FACTORS

   We require significant working capital in order to fund our
operations. At June 30, 2002, we had cash of approximately $32,000 and
a working capital deficit in excess of $2.1 million. In order to
develop and market our products and pay our current liabilities, we
require additional working capital. The merger did not provide us with
any working capital and we have not been able to raise any capital
since the completion of the merger. In the event that we are unable to
raise the necessary funding we may be unable to continue operations.

   Our accounts payable and accrued expenses increased from $615,000
at June 30, 2001 to $2.1 million at June 30, 2002, reflecting our
inability to pay creditors currently. We also had customer deposits
and related deferred revenue of $1.4 million, which relate to payments
on orders which had not been filled at that date. We have used our
advance payments to continue our operations. If our vendors do not
extend us necessary credit we may not be able to fill current or new
orders, which may affect the willingness of our clients to continue to
place orders with us.

     Our bank credit line terminated on November 1, 2002. Our only
source of financing other than advances from our chief executive
officer was our bank credit facility of $200,000 which was secured by
all of our assets and guaranteed by our chief executive officer. This
facility terminated on November 1, 2002, at which time all of the
principal and interest on our obligations to the bank became due. On
November 1, 2002 we reduced the outstanding balance to $100,000 and
began discussions with the lender to extend the terms or to convert the
balance to a term loan. To date, we do not have an agreement with
respect to an extension with our existing lender or an agreement to
convert the $100,000 outstanding balance to a term loan, or any
agreements with any replacement lender. Our failure to obtain either an
extension of our credit facility, a conversion of the outstanding
balance to a term loan, or a facility with another lender could
materially impair our ability to continue in operation, and we cannot
assure you that we will be able to obtain the necessary financing.

   We have been operating at a loss, and our losses are continuing.
We sustained losses of $2.4 million, or $.19 per share (basic and
diluted), for the fiscal year ended June 30, 2002, $326,000, or $.03
per share (basic and diluted), for the fiscal year ended June 30,
2001, and our losses are continuing. We cannot give any assurance that
we can or will ever operate profitably.

   Our independent auditors have included an explanatory paragraph in
their report as to our ability to continue as a going concern. As a
result of our continuing and significant losses and our working
capital deficiency, our independent auditors have included in their
report an explanatory paragraph as to our ability to continue as a
going concern.

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   Because of our stock price and our history of losses, we may have
difficulty in raising necessary funding for our business. Since the
completion of the merger we have sought, and been unsuccessful, in our
efforts to obtain funding for our business. Because of our losses, we
are not able to increase our borrowing, and our present bank line is
guaranteed by Ben Jamil, our chief executive officer. Because of both
our low stock price and our losses, we have not been able to raise
funds through the sale of our equity securities. We may not be able to
obtain any additional funding, and, if we are not able to raise
funding, we may be unable to continue in business. Furthermore, if we
are able to raise funding in the equity markets, our stockholders will
suffer significant dilution and the issuance of securities may result
in a change of control.

   If we do not have access to the most current technology, we may
not be able to market our products and services. The security industry
is constantly changing to meet new requirements, which result from
both new threats to government and industry, both from potential
threats to persons and property to industrial and governmental
espionage, as well as general concern about personal and family
safety. In order to meet these needs we will both have to anticipate
problems and develop methods or reducing the potential risk. Our
failure to anticipate our potential clients' requirements or to be
able to provide them with the most current technology may impair our
ability to sell our products. If we are unable to fund any significant
research and development and product development effort, we may not be
able to offer products based on new and developing technologies.

   Because of our limited resources, we may not be able to develop or
implement a successful marketing program. Our ability to implement an
expanded marketing program is dependent upon our ability to fund the
program. If we are not able to obtain necessary financing, we may be
unable to market our products. Furthermore, our financial condition
may inhibit potential customers from purchasing our equipment and our
competitors may use our financial condition in marketing to the same
customers.

   We are subject to government regulations, which if violated, could
prohibit us from conducting a significant portion of our export
business. The United States and other governments have strict
regulations concerning the exporting and importing of security
devices, may restrict sales of certain products to bona fide law
enforcement agencies or may restrict the sale of certain products from
the United States. If we violate any of these laws, we may be subject
to civil or criminal prosecutions. If we are charged with any such
violations, regardless of whether we are ultimately cleared, we may be
unable to sell our products. During the fiscal year ended June 30,
2002, we incurred significant expense and our reputation was impaired
as a result of charges against our employees, including one of our
officers, even though the charges were dismissed.

   Because we are dependent on our management, the loss of key
executive officers could harm our business. Our business is largely
dependent upon our senior executive officers, Messrs. Ben Jamil, chief
executive officer, Chris R. Decker, chief financial officer, Menachem
Cohen, vice president, Tom Felice, vice president and Ms. Nomi On,
vice president. Although we have an employment agreement with Mr.
Jamil, the employment agreement does not guarantee that he will
continue with us. Since we do not have an agreement with Messrs.
Decker, Cohen, Felice or Ms. Om, each of these officers has the right
to terminate his or her employment. Our business may be adversely
affected if any of our key management personnel or other key employees
left our employ.

   Because we lack patent or copyright protection, we cannot assure
you that others will not be able to use our proprietary information in
competition with us. We have no patent or copyright protection for our
proprietary software, and we rely on non-disclosure agreements with
our employees. Since our business is dependent upon our proprietary
products, the unauthorized use or disclosure of this information could
harm our business.

                                       3
<PAGE>

   Major corporations may be able to develop and fund marketing
efforts that could enable them to dominate the market. Because there
are a number of major companies that can both offer security products
to governments and industry and fund a product development and
marketing program, these companies have the financial ability to
dominate the market, to effectively set a standard which may be
incompatible with our technology and to use their financial resources
and government and industry contacts to successfully compete against
us in all major markets, regardless of whether their technology is
superior or inferior to ours.

   Our growth may be limited if we cannot make acquisitions. A part
of our growth strategy is to acquire other businesses that are related
to our current business. Such acquisitions may be made with cash or
our securities or a combination of cash and securities. To the extent
that we require cash, we may have to borrow the funds or issue equity.
Our stock price may adversely affect our ability to make acquisitions
for equity or to raise funds for acquisition through the issues of
equity securities. If we fail to make any acquisitions, our future
growth may be limited. Furthermore, because of our stock price, the
issuance of any stock or other equity securities in connection with
any acquisition may result is significant dilution to our stockholders
and may result in a change of control. As of the date of this report
we do not have any agreement or understanding, either formal or
informal, as to any acquisition.

   If we make any acquisitions, they may disrupt or have a negative
impact on our business. If we make acquisitions, we could have
difficulty integrating the acquired companies' personnel and
operations with our own. In addition, the key personnel of the
acquired business may not be willing to work for us, and our officers
may exercise their rights to terminate their employment with us. We
cannot predict the affect expansion may have on our core business.
Regardless of whether we are successful in making an acquisition, the
negotiations could disrupt our ongoing business, distract our
management and employees and increase our expenses.

   We do not anticipate paying dividends on our common stock.

   The rights of the holders of common stock may be impaired by the
potential issuance of preferred stock. Our certificate of
incorporation gives our board of directors the right to create new
series of preferred stock. As a result, the board of directors may,
without stockholder approval, issue preferred stock with voting,
dividend, conversion, liquidation or other rights which could
adversely affect the voting power and equity interest of the holders
of common stock. Preferred stock, which could be issued with the right
to more than one vote per share, could be utilized as a method of
discouraging, delaying or preventing a change of control. The possible
impact on takeover attempts could adversely affect the price of our
common stock. Although we have no present intention to issue any
additional shares of preferred stock or to create any new series of
preferred stock, we may issue such shares in the future.

   Shares may be issued pursuant to our stock plans which may affect
the market price of our common stock. We may issue stock upon the
exercise of options or pursuant to stock grants covering an aggregate
of 2,000,000 shares of common stock pursuant to our stock incentive
plans, including options to purchase 1,783,000 shares subject to
options which were outstanding on June 30, 2002. The exercise of these
options and the sale of the underlying shares of common stock and the
sale of stock issued pursuant to stock grants may have an adverse
effect upon the price of our stock.

   Because we are subject to the "penny stock" rules, stockholders
may have difficulty in selling our common stock. Our common stock is
presently subject to the Securities and Exchange Commission's
penny-stock regulations which impose additional sales practice
requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally
those with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For transactions
covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to
the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the
transaction, of a risk disclosure document mandated by the Commission
relating to the penny stock market. The broker-dealer must also
disclose the commission payable to both the broker-dealer and the
registered representative, current quotations for the securities and,
if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the
"penny stock" rules may restrict the ability of broker-dealers to sell
the our common stock and may negatively affect the ability of
purchasers of the our common stock to sell such securities.

                                       4

<PAGE>

   There may be claims that a third party owns stock which is held by
our chief executive officer. In connection with an agreement between
Mr. Ben Y. Jamil and two financial consultants entered into prior to
the reverse merger, the consultants or their designees were to
purchase a 30% interest in five of our subsidiaries, and that 30% was
to have been exchanged for 1,500,000 shares of series B preferred
stock. Mr. Jamil has advised the consultants and their designees that,
as a result of their failure to pay the consideration for the shares,
the agreement is terminated and they have no interest in the series B
preferred stock or the stock in the five subsidiaries. It is possible
that the consultants or their designees may claim that they own the
series B preferred stock or the stock in the five subsidiaries and we
can give no assurance that their claim will not be upheld.

   Forward-Looking Statements

   Statements in this Form 10-KSB report may be "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not
limited to, statements that express our intentions, beliefs,
expectations, strategies, predictions or any other statements relating
to our future activities or other future events or conditions. These
statements are based on current expectations, estimates and
projections about our business based, in part, on assumptions made by
management. These statements are not guarantees of future performance
and involve risks, uncertainties and assumptions that are difficult to
predict. Therefore, actual outcomes and results may, and probably
will, differ materially from what is expressed or forecasted in the
forward-looking statements due to numerous factors, including those
described above and those risks discussed from time to time in this
Form 10-KSB report, including the risks described under "Risk Factors"
and in other documents which we file with the Securities and Exchange
Commission. In addition, such statements could be affected by risks
and uncertainties related to our financial condition, factors which
affect the security industry, market and customer acceptance,
competition, government regulations and requirements and pricing, as
well as general industry and market conditions and growth rates, and
general economic conditions. Any forward-looking statements speak only
as of the date on which they are made, and we do not undertake any
obligation to update any forward-looking statement to reflect events
or circumstances after the date of this Form 10-KSB.

   INDUSTRY OVERVIEW

   We design and assemble security products and market to military,
law enforcement, security and corrections personnel, by providing
specialized security services to multinational corporations and
governmental agencies and by manufacturing and installing ballistic
and blast protected armoring systems for commercial vehicles.
Increasingly, governments, including the military, businesses and
individuals have recognized the need for security products and
services to protect them from the risks associated with terrorism,
physical attacks, threats of violence, white-collar crime and fraud.

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<PAGE>

   The United States has been the target of several deadly terrorist
attacks directed towards its citizens and facilities around the world.
As a result, institutions, including the United States Department of
Defense and other government agencies and multinational corporations
are redefining strategies to protect against and combat terrorism.

   As a company in the security products industry, we market our
products in two markets - the law enforcement security market and the
specialized security services market.

   Law Enforcement Security Products Market. In response to an
increased emphasis on safety and protection, the number of active
police officers has increased significantly over the past several
years. By 1999 there were more than 900,000 law enforcement personnel
in the United States. We expect an increase in law enforcement
personnel as a partial response to the September 11, 2001, attacks
which, we believe, will lead to increased demand for security products
and we are seeking to participate in this demand.

   Specialized Security Services Market. Corporations are
increasingly contracting experienced private companies to handle all
or a portion of their security services. Industry studies reflect a
growth rate in the market for worldwide security services market at a
rate of 8.0% annually from 1995 to 2000, and we believe that the
market is continuing to grow. We believe that demand by multinational
corporations and governmental agencies operating in developing nations
for security services such as risk assessment, crisis management,
guard force management, security force organization and executive
protection is likely to increase as these entities continue to
establish operations and manufacturing facilities in developed and
developing countries. In addition, there are risks related to
white-collar crime and fraud. Demand for corporate investigative
services continues to grow as corporations react to the need to
protect their assets against the growing threat of fraud,
counterfeiting and piracy of intellectual property.

   GROWTH STRATEGY

   We believe that the following strengths are critical to our
success as a provider of surveillance and security products, and
security risk management services.

   Broad Portfolio of Products and Services. We believe that a broad
range of products, strong branding, a consistently growing customer
base, and an extensive distribution network is critical to our success
as a provider of security products and services. We are able to offer
across-the-board security consulting, services, equipment, and systems
that enable us to provide comprehensive solutions to our customers'
security needs. Many who contact us for answers to their security
problems have neither the time nor the ability to research solutions.
Our clients anticipate and appreciate a one-stop-source of expertise
and product for a wide variety of categories that fall under the
umbrella of "security." Our goal is to strengthen our capabilities as
a single source provider of global security systems and services. Our
international infrastructure enables us to assist government buyers
and multinational corporate clients who are expanding their
geographical spheres. Similarly, our visibility is being enhanced
through the expansion of our product distribution network that in turn
will expand our customer base.

   Strong and Recognized Brands. We believe that our brand names are
recognized in our markets and that our market recognition, combined
with what we believe is a high level of performance has contributed to
our developing market positions in a number of the product categories
in which we compete.

   Strong Client Base and Extensive Distribution Network. We have a
broad, full-service network of approximately 300 sales representatives
and international distributors to sell and service our equipment. Our
products are currently sold to customers in 45 countries and we serve
a client base representing governmental and non-governmental agencies
as well as multinational corporations worldwide. We believe that the
diversity of our clients' end markets, the continued globalization of
our clients and the strength of our distribution relationships
minimize our dependence on any particular product, market, or
customer.

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<PAGE>

   We believe that the demand for both security and surveillance
products, and security risk management services will continue to grow.
We will address this growth by offering a comprehensive array of
premium security risk management products and services. By
establishing a critical mass of products and services and a broad base
of customers, we believe that we have developed the capacity to
perform multiple aspects of our clients' threat analyses and security
provisions on a comprehensive basis. We will continue to seek to
implement this growth strategy primarily through internal expansion of
our existing businesses and through strategic acquisitions of
businesses offering complementary services, markets, and customer
bases. However, because of our financial condition and the low price
of our stock, we may not be able to acquire any businesses or
implement our growth strategy. The following elements define our
growth strategy:

   Capitalize on Exposure to Military Programs. The events of
September 11, 2001, are likely to result in additional spending by the
Department of Defense. We expect several of our product categories may
be positively affected. These include our remote track, view and hear
technologies, and voice, phone, cellular and data interception. We are
well positioned to participate in these programs.

   Expand Distribution Network and Product Offerings. We will
continue to leverage our distribution network by expanding our range
of branded law enforcement equipment by investing in the development
of new and enhanced products, which complement our existing offerings.
If we are able to develop a broader product line we believe that it
will strengthen our relationships with distributors, and allow us to
add additional quality distributors, enhancing our brand appeal with
military, law enforcement and other end users.

   Capitalize on Increased Homeland Security Requirements. We believe
that we are well positioned to provide products, services and
specialized training essential to establishing a sustainable homeland
security infrastructure. After the September 11, 2001 terrorist
attacks on the United States, the U.S. government has created the
Office of Homeland Security. Although this Office's mandate is still
being finalized, a homeland security infrastructure will be developed.
We believe that we are well equipped to provide products that
additional military, law enforcement, security and corrections
personnel require to combat terrorism and threats to our homeland.

Increase Global Position in High Fright Areas. We expect to offer
to service the heightened security concerns of governments, agencies
and corporations in existing high fright areas and will seek to
leverage our global expertise and reputation for providing security
products and services in newly developing high fright areas. We target
regions with economic and political instability as well as regions
with increased regulation. We also grow the scope of our existing
product and service offerings by servicing existing customers who
expand geographically.

   Products and Services

   We distribute a wide range of specialized products and systems
covering security, privacy, home and personal protection, confidential
business communications, lie detection, cellular phone privacy, drug
and bomb contraband detection, miniaturized covert audio and video
surveillance and protection, digital, the Internet, global systems for
mobile communications ("GSM"), personal communication systems ("PCS"),
time division mobile access ("TDMA") and code division multiple access
("CDMA") satellite technologies and wireless communications.

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   Products

   We offer the following products.

     -    Covert audio and video logging systems to monitoremployees and
          household surveillance.
     -    Scramblers, data and fax transmission systems to protect and secure
          communications.
     -    Fax managers that log the activities of outgoing and incoming faxes.
     -    Armored and bulletproof clothing and automobiles.
     -    Counter-surveillance, wiretap detection and electronic
          counter-measures.
     -    Night vision, electro-optic devices and infrared scopes and cameras.
     -    Anti-hacking and secure remote computing to protect computer networks.
     -    Bomb and weapons and other contraband  detection for airport security,
          business, and home.
     -    Personal Protection Products
     -    Voice stress  analyzers  and lie  detection to evaluate the honesty of
          employees or vendors
     -    Tracking and recovery and fleet management systems
     -    Cellular telephone tracking systems for 911 emergency programs.

   We develop and market integrated systems for the surveillance of
global system for mobile communications and other communications. With
the recent explosion in communication technologies, there are numerous
fundamental systems underlying digital wireless communications
throughout the world. Intelligence professionals require the ability
to monitor, intercept and block various global systems for mobile
communications, personal communication systems and other systems using
a variety of communications access and monitoring systems. Our
customers for our global systems for mobile communications usually
request us to custom design a system to meet their communications
surveillance requirements and are based on extensive engineering
studies of the existing communications systems in each customer's
country, along with an in-depth analysis of the various individual
needs of the customer. We have an exclusive license for proprietary
software we can modify for the specific purposes needed, along with
the ability to install and train personnel for system management.
Examples of our global systems for mobile communications intercept
systems are the GSM 2060, a passive off-the-air intercept system which
allows a user to target a specific cellular transmission and listen to
both incoming and outgoing conversations and the GSM 4000, which was
designed for an international west European security group and is a
multi-channel monitoring system capable of intercepting various band
transmissions simultaneously, while recording multiple conversations.

   In addition to our global system for mobile communications
intercept systems, we have developed and we market cellular
interception for operation on analog advanced mobile phone systems,
digital advanced mobile phone system, and time division multiple
access systems, as well as various other equipment for wireless and
hard-wired communications surveillance for voice, fax and data. We are
currently involved in the development of new tracking technology for
fleet management. As we design new products based on our core
technologies and enhance existing products with new functionalities
and performance, many of the older systems, which can only be legally
sold to government and law enforcement agencies, may become available
to business and private purchasers.

   We offer a configurable emergency rescue, theft recovery, fleet
management or freight management system. Our system uses the
well-known global positioning system ("GPS") satellite tracking system
which can combine with an optional sophisticated location prediction
algorithm software package that takes over position reporting
functions whenever the vehicle enters a dead satellite access zone.
This unique and rugged system supplies real time position and status
information from the customer's location to one of several possible
call center configurations. The call center can track the location of
a customer's vehicle and has features to report theft, breakdowns, and
rescue requests. Optional configurations allow the end user to perform
an analysis of driver's performance, manage public transportation
lines routes, perform automated fleet and freight management for
commercial trucking, and dispatch police, ambulance, and taxicabs.

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<PAGE>

   Services

   We offer comprehensive security training programs in
counterintelligence and counter-surveillance in Miami, New York,
Mexico, London and Hong Kong, and we intend to introduce such services
in Beijing and Shanghai China as well as in Seoul, Korea. This
training, offered to United States government agencies, friendly
nations, and clients in the private sector in the United States and in
foreign countries, includes methods of recognizing, deterring, and
minimizing security risks. We have conducted seminars for intelligence
personnel, crime fighting associations and their associated membership
societies, from CIA to FBI to United States Customs, United States
Coast Guard, military branches, police departments from New York
City's strategic command to police chiefs from innumerable cities and
towns across the country.

   We have scheduled a series of seminars to be held throughout the
world during the first half of fiscal 2003. These seminars will
provide opportunities for qualified and authorized buyers to learn
about our basic global system for mobile communications technology and
our proposed solutions to intercepting and monitoring these
communications.

   We offer the design, integration, application analysis and
technical support of sophisticated electronic and computer driven
surveillance, monitoring, tracking and recovery and secure
communication equipment. We offer site surveys and security solutions
that include consultations and law enforcement training by experienced
security personnel who act as advisors and instructors. Our
consultants oversee in-country installations and train the client's
personnel in the installation, use and maintenance of their security
equipment. These clients are from the corporate world as well as
governmental, public and private agencies.

Marketing and Distribution

   We have a network of approximately 300 sales representatives and
international distributors who sell and service our law enforcement
equipment. Our distributors and we currently operate in a number of
countries and serve a client base representing governmental and
non-governmental agencies as well as multinational corporations
worldwide. However, during the past year we have been in litigation
with four of our distributors. See "Item 3. Legal Proceedings.

   When first entering a foreign market, we seek to promote a
comprehensive range of products and services by seeking qualified
sales representatives with local ties and existing relationships
within the country's business and governmental communities. We try to
tailor our marketing strategy to each geographic area of the world,
and further to tailor our product offering by country. There are
opportunities for cross marketing of military and law enforcement
products, which strengthen the image of each product group and further
enhance our position as an integrated provider of a wide selection of
such products and services.

   We employ a variety of marketing programs in support of our
reseller's channels to make our target markets aware of the value of
our integrated systems and technology and to help create pre-sales
demand for our resellers. These programs include trade shows;
advertising campaigns, seminars, direct mailings, brochures and other
promotional efforts designed to generate sales leads. Training
programs are an integral part of our customer service. In addition to
enhancing customer satisfaction, we believe that they also help breed
customer loyalty and brand awareness, so that we may sell additional
products to the same customer. We also use our website to generate
brand awareness.

   Although we are focusing on clients in high growth industries
where the need for investigation, brand protection and other security
services are critical to success; we are also broadening our efforts
to expand our end-user marketplace. We are developing an additional
website designed to market an inexpensive line of security equipment
that is not in competition with our recognized brand products.
However, we cannot assure you that we will be successful in either
developing the website or generating any significant sales through the
website.

                                       9
<PAGE>

Product Design and Installation

   Our engineering staff of design, mechanical and electronic
engineers involved in both developing new systems made possible by the
advances in technology and continually improving the production
process and reducing the cost of the products. While the software
being developed by engineers for our systems is based on proprietary
technology, the components for such systems are often commercially
available from third parties. As our customizing allows for
outsourcing components, we have developed stable relationships with
other manufacturers, cutting down the need for stockpiling of costly
inventories, also reducing the hours and labor necessary for
completing orders in a timely manner.

   Although our products come with operating instructions when
applicable, installation tasks are performed for the more
sophisticated global system for mobile communications systems.
Installation phases may include site surveys, identification of
central command site location, supervision of the installation of site
interfaces, and training personnel to manage systems. We generally
provide maintenance and support services for the first three to twelve
months following installation of a system, depending on the terms of
each particular contract. Thereafter, long-term service is provided on
a service-contract basis.

   Global system for mobile communications systems currently under
development will require differing levels of local, on-site
installation. For example, one system is largely a mobile
communications intelligence gatherer requiring only local training,
while another might require construction of a central command center,
intercepts towers and installation at remote sites. We do not install
but we provide supervisory assistance for a field installation crew
comprised of both employees and independent contractors,
supplemented by local labor, for on-site construction and
installation. We also provide training for use and maintenance of
equipment, and subsequent hot-line assistance.

   We assemble our products from components that are readily
available from a number of suppliers. We do not have any long-term
supply contracts.

   Competition

   The security industry includes companies that offer a range of
products and services, such as access control, personnel protection,
surveillance, counter-surveillance, computer security, vehicular
security, night vision, fiber optics and communications. In order to
meet the needs of a prospective customer, we believe that it is
necessary to offer integrated solutions across industry lines rather
than to offer a range of devices. Although there are a large number of
companies who offer products or services aimed at one or more segments
of the security industry. However, we believe that as the severity of
the problem or potential problem increases governments and major
corporations, including financial institutions, are less concerned
with the price of the products than with such factors as:

- The perceived ability of the vendor to treat the identity of the client,
  the scope of the work and the solution in confidence.

- The ability of the vendor to offer an integrated approach that seeks to
  address the problem by offering a wide range of products and services
  rather than to offer solutions based on a small range of products and
  services.

- On the other hand, major clients are concerned about the financial
  condition of the vendor, and our financial condition, including our
  significant working capital deficiency and our history of losses, may raise
  questions as to our ability to perform under the purchase order and to
  provide the necessary support following delivery. Competitors may use our
  financial condition and their stronger financial condition, resources and
  relationships in marketing their products and services regardless of
  whether their products and services are better than ours. As discussed
  below, many of our competitors are substantially stronger than we are
  financially and are very well known in the industry and have significant
  government and industry contacts and relationships.

                                       10
<PAGE>

   We seek to address the competition in the industry by a
three-tiered approach -- we offer a broad range of products and
services, we offer what we believe are strong brands and we have a
strong client base with an extensive distribution network.

   The marketplace for manufacturers and vendors for security and
surveillance products and systems is highly competitive and consists
of numerous organizations ranging from internet-based mail-order firms
to former military armament manufacturers such as, Lockheed, Martin,
Harris, and others. Other aerospace manufacturers have rushed into the
arena of bomb detection and other Explosive Ordinance Disposal ("EOD")
products. The security marketplace continues to favor the more
established and reliable manufacturers such as Nice (Israel) and
Thompson C.S.F. now a part of Thales Group (France) with proven
technology, over newcomers with low cost innovations. Siemens
(Germany), and Rohde & Schwartz (Germany), are manufacturers of
"simulated" base stations.

   Currently there is growing competition in the cellular
interception and monitoring systems market. Although many competitors
have greater financial, technical and other resources, we believe that
at present our technology gives us a competitive advantage. In all of
these areas, the major corporations have the ability to develop
competitive products and fund a marketing effort that enable them to
compete successfully against us regardless of whether their products
are superior.

Research and Development

   Because of our financial condition our research and development
effort has been limited to the development of certain new products and
improvement of existing products. Because of our working capital
limitations, we have not been able to expand our research and
development effort. During the past two years we did not expend any
significant amount on research and development activities.

Intellectual Property Rights

   We have no patents or copyrights on our products, and we rely on
non-disclosure agreements with our employees. Since our business is
dependent upon our proprietary products, the unauthorized use or
disclosure of this information could harm our business. We currently
own a number of United States trademark registrations.

Government Regulation

   The United States and other governments have strict regulations
concerning the exporting and importing of certain security devices
that may restrict sales of certain products to bona fide law
enforcement agencies or may restrict the sale of products in or from
the United States We are subject to federal licensing requirements
with respect to the sale in foreign countries of certain of our
products. In addition, we are obligated to comply with a variety of
federal, state, local and foreign regulations that govern our
operations and the workplace. We are also subject to certain
regulations promulgated by, among others, the United States
Departments of Commerce and State.

                                       11
<PAGE>

Employees

   As of September 30, 2002, we had a total of approximately 51
employees, of which approximately 27 were employed at our main office
and 24 were employed at our sales offices. None of our employees are
represented by unions or covered by any collective bargaining
agreements. We have not experienced any work stoppages or employee
related slowdowns and believe our relationship with our employees is
good.

Item 2. PROPERTIES

   We lease approximately 9,840 square feet of executive offices and
warehouse at 145 Hugeunot Street, New Rochelle, NY 10801 under a lease
that expires on October 31, 2010. The annual rent is approximately
$125,000, and is subject to annual increases. We also lease
approximately 6,000 square feet for four of our sales offices and
retail locations in Miami, Florida, New York City, Washington, DC and
Beverly Hills, CA under leases that expire from 2003 to 2010 at a
current annual rent of $456,000, subject to annual increases. We
believe that our present facilities are adequate to meet our immediate
requirements and that any additional space we may require will be
available on reasonable terms.

Item 3. LEGAL PROCEEDINGS

   Because of our financial position, actions have been commenced or
threatened by creditors.

   On May 2, 2002, Menachem Cohen, vice president and a director, and
two other employees of one of our subsidiaries were arrested pursuant
to a criminal complaint filed in the United States District Court of
the Southern District of Florida. The complaint alleges that such
individuals violated federal law in that they intentionally
manufactured, assembled, possessed or sold a device used for the
surreptitious interception of electronic communications and that the
device was sent through the mail or transmitted in intrastate or
foreign commerce. On September 4, 2002, the United States District
Court of the Southern District of Florida entered an order dismissing
all charges against Menachem Cohen, vice president and director, and
the two other employees of one of the Company's subsidiaries.

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

   On or about May 25, 2001, an action was commenced against CCS in
the United States District Court for the Southern District of New
York, captioned Shenzen Newtek v. CCS International Ltd. The plaintiff
seeks to recover $91,500, which was paid to CCS in connection with a
distributorship agreement between the parties, plus costs and
interest. We have denied the material allegations of the plaintiff's
claim and have raised affirmative defenses thereto. We have also
asserted a counterclaim seeking damages of $500,000 based upon the
plaintiff's alleged breach of the distributorship agreement. This
action was settled between the parties on July 10, 2002.

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

                                       12
<PAGE>

   In June 2001, a former product distributor of CCS brought suit in
Circuit Court, Palm Beach, Florida captioned Allan L. Dunterman, Jr. v.
CCS International, Ltd. The plaintiff claims that CCS engaged in breach
of contract, among other allegations. CCS has moved the complaint to
the U. S. District Court for the Southern District of Florida, where it
is pending. In its answer to the complaint, CCS has denied any
wrongdoing and has asserted numerous affirmative defenses. The parties
have exchanged initial written discovery.

   In June 1998, a photographer formerly retained by CCS filed suit
in U. S. District Court for the Southern District of New York captioned
Frank Ross and Julietta Vassilkioti v. CCS International, Ltd. The
plaintiff is seeking damages for alleged copyright infringement. The
judge in the case has granted the plaintiff partial summary judgment
and a hearing to determine damages has not yet been scheduled. Under
federal judicial rules, the Company is unable to contest the granting
of partial summary judgment until a final judgment has been rendered.
The Company believes that it has substantial defenses to the claim
asserted in the lawsuit.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

Not applicable.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

   Our common stock is traded on the OTC Bulletin Board under the
symbol SITG. The following table sets forth the range of high and low
bid quotations for our common stock from December 31, 2001, when
trading in our stock commenced, until June 30, 2002, as reported by
OTC Bulletin Board. On April 17, 2002, we acquired CCS, with the
result that our business changed to the business of CCS, and the
business conducted by us under the name Hipstyle.com, Inc. was
discontinued. Accordingly, stock price information for periods prior
to April 17, 2002 do not reflect our present business.

   The quotes represent inter-dealer prices without adjustment or
mark-ups, markdowns or commissions and may not necessarily represent
actual transactions. The trading volume of our securities fluctuates
and may be limited during certain periods. As a result, the liquidity
of an investment in the Company's securities may be adversely
affected. Because of our stock price, our common stock is subject to
the SEC's penny stock rules, which adversely affects the ability of
persons to purchase or sell our stock.

                                       13
<PAGE>

                    COMMON STOCK

                    High    Low
Fiscal 2002

Quarter ended
December 31, 2001  $0.35  $0.15

Quarter ended
March 31, 2002     $2.55  $0.15

Quarter ended
June 30, 2002      $2.05  $0.30

   On September 30, 2002, the final quoted price by the OTC Bulletin
Board was $.17 per share of common stock.

   As of September 30, 2002 there were 17,059,346 shares of Common
Stock outstanding, held of record by approximately 210 record holders
and beneficial owners.

   The following table sets forth information as to equity
compensation plans pursuant to which we may issue our equity
securities.

<TABLE>
<CAPTION>
                                                                                                    Number of securities
                                                                                                    remaining available
                                                                                  Weighted average  for future issuance
                                                          Number of securities to exercise price of under equity
                                                           be issued upon         outstanding       compensation plans
                                                           exercise of            options, warrants (excluding
                                                           outstanding options,   and rights        securities reflects
                                                           warrants and rights   (b)                in columns (a))
                                                          (a)                                      (c)
------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>           <C>                      <C>
Equity compensation plans approved by security holders                -0-            N.A.                    -0-
------------------------------------------------------------------------------------------------------------------------
Equity compensation plans not approved by security holders     3,400,000           $1.02                217,000
------------------------------------------------------------------------------------------------------------------------
    Total                                                      3,400,000           $1.02                217,000
------------------------------------------------------------------------------------------------------------------------
</TABLE>

   As of January 21, 2002, our board of directors adopted the 2002
Stock Plan, which provided for the grant of non-qualified stock
options to purchase a maximum of 2,000,000 shares of common stock. The
2002 Plan provides for the grant of incentive stock options and
nonqualified stock options to purchase shares of Common Stock, to
directors, employees, officers, agents, consultants and independent
contractors who perform services for the Company. Any incentive stock
options which may be granted pursuant to this plan are subject to
stockholder approval of the plan. As of the date of this annual report
on Form 10-KSB, stockholder approval of the 2002 stock plan has not
been obtained, and all options granted under the plan are
non-qualified stock options.

                                       14
<PAGE>

   We granted a non-qualified stock option to Mr. Ben Jamil, chief
executive officer and a director, to purchase 1,000,000 shares of
common stock at $2.00 per share. Mr. Jamil's employment agreement is
described under "Item 10. Executive Compensation."

   During the fiscal year ended June 30, 2002, we issued the
following securities in transactions that were not registered pursuant
to the Securities Act of 1933, as amended.

   (a) In April 2002, in connection with the acquisition of CCS, we
issued the following securities:

    --  We issued an aggregate of 11,900,000 shares of common stock,
        3,500,000 shares of series A preferred stock and 1,500,000
        shares of series B preferred stock to the former stockholder
        of CCS, with each share of series A preferred stock and series
        B preferred stock being convertible into one share of common
        stock if the Company has either annual net revenue of
        $10,000,000 or net income of at least $1,000,000 prior to
        October 25, 2008, each share of series A preferred stock
        having 15 votes per share, and each share of series B
        preferred stock having no voting rights except as required by
        law.

    --  We granted options to purchase a total of 1,800,500 shares of
        common stock at exercise prices of $.50 to $1.00 per share.
        These shares were issued pursuant to the 2002 stock plan.

    --  We issued warrants to purchase a total 400,000 shares of
        common stock at an exercise price of $.50 per share to a
        consultant in connection with the reverse merger.

    --  We granted Ben Jamil a non-qualified stock option to purchase
        1,000,000 shares of common stock at $2.00 per share pursuant
        to his employment agreement.

     -- We sold 75,000 shares of common stock to Michael Farkas, the
        beneficial owner of Atlas Equity Group Inc. ("ATLAS EQUITY"),
        a principal stockholder of the Company prior to the reverse
        merger for $75,000.

   These issuances were exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities Act. No
underwriting or other compensation was paid in connection with these
transactions.

   (b) On April 25, 2002 we issued 17,346 shares of common stock to
an accredited investor as full payment of trade payables in the amount
of $25,297. This issuance was exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act. No underwriting or other compensation was paid in
connection with this transaction.

   (c) In May and June 2002, we issued 400,000 shares of common stock
to an accredited investor for which the investor agreed to the
cancellation of trade accounts payable in the amount of $322,953. In
connection with the stock issuance, the investor agreed to hold the
stock for one year, and if the sales proceeds were less than the
amount of the trade payables that were cancelled, we would pay the
investor the difference. These issuances were exempt from the
registration requirements of the Securities Act pursuant to Section
4(2) of the Securities Act. No underwriting or other compensation was
paid in connection with these transactions.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

GENERAL OVERVIEW.

                                       15
<PAGE>

   The following discussion should be read in conjunction with the
financial statements and notes thereto of the Company. Such financial
statements and information have been prepared to reflect the Company's
financial position as of June 30, 2002.

   Historical results and trends should not be taken as indicative of
future operations. Management's statements contained in this report
that are not historical facts are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results may differ materially from those included in the
forward-looking statements. The Company intends such forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and is including this statement for
purposes of complying with those safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," "prospects" or similar
expressions. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain.

RESULTS OF OPERATIONS - Year ended June 30, 2002 and year ended June 30, 2001

   Revenues. Revenues for fiscal 2002 were $5,609,557 a decrease of
$619,687 or 10.0%, from revenues of $6,229,244 in fiscal 2001. The
decrease is primarily a consequence of a decrease in advertising and
promotional expenditures and attendance at fewer international trade
shows caused by limited resources. In addition, our financial
condition and losses may have affected the willingness of customers to
purchase products from us.

   Cost of Sales. Cost of sales decreased by $393,236 or 15.0%, to
$2,230,969 in fiscal 2002 from $2,624,205 in fiscal 2001. Cost of
sales as a percentage of product sales decreased to 44.5% in fiscal
2002 from 47.6% in fiscal 2001 reflecting an improvement in product
mix.

   Compensation and benefits. Compensation and benefits increased by
$ 238,896, or 12.0% to $2,236,191 in fiscal 2002 from $1,997,295 in
fiscal 2001 reflecting increased expenditures to enhance the
infrastructure of the Company by adding personnel to the marketing
department and the sales department in anticipation of increased sales
which did not materialize. We anticipate this trend of increased
expenditures will continue in Fiscal 2003 as we add additional
personnel to the sales department.

   Professional fees and legal settlements. Professional fees and
legal settlements increased by $725,807, or 179.9% to $1,130,848 in
fiscal 2002 from $405,041 in fiscal 2001 primarily due to (i)
increased litigation, (ii) costs of $285,000 associated with defending
criminal charges filed against our employees, including an officer and
director, the related representation in a potential investigation by
the United States Customs Service, and (iii) fees related to the
reverse merger. The fees incurred in connection with the reverse
merger and the criminal proceeding were one-time charges which we do
not expect to be significant in fiscal 2003. However, because of our
financial problems, it is possible that we will continue to incur
significant litigation expenses arising from creditor actions.

   Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $648,178, or 43.5% to $2,139,123
in fiscal 2002 from $1,490,945 in fiscal 2001. The significant changes
were (i) an increase in rent expense of $218,037, or 81.3% to $491,728
in fiscal 2002 from $268,158 in fiscal 2001 resulting from a
non-recurring settlement of rent in fiscal 2001 of $203,840, (ii) an
increase in insurance expense of $49,276, or 50.1% to $146,102 in
fiscal 2002 from $96,826 in fiscal 2001, due to increased coverage and
(iii) an increase in website and internet related costs of $41,525, or
287.6% to $55,963 in fiscal 2002 from $14,438 in fiscal 2001 expended
to increase website sales and improve communications.

   Unrealized loss on derivatives. Unrealized loss on derivatives of
$150,953 in fiscal 2002 is attributable to the decrease in market
value relating to our price guarantees on common stock which we issued
during fiscal 2002 in payment of trade payables. There were no similar
transactions in fiscal 2001.

                                       16
<PAGE>

   Depreciation and amortization. Depreciation and amortization
decreased by $2,607, or 3.0% to $84,774 in fiscal 2002 from $87,381 in
fiscal 2001 primarily as a consequence of the certain assets becoming
fully-depreciated in fiscal 2001.

   Interest expense. Interest expense increased by $13,654, or 26.4%
to $65,358 in fiscal 2002 from $51,704 in fiscal 2001 as a result of a
continued increase in the ordinary course of business of the Company's
outstanding debt prior to the repayment of $200,000 of outstanding
bank loan principal in the fourth quarter of fiscal 2002

   Income tax benefit. The income tax benefits of $101,000 in fiscal
2001 and $29,000 in fiscal 2002 represent refundable taxes expected
to be recovered through net operating loss carry-back claims, offset
by current state income tax expense of $4,000 and $5,000 in fiscal
2002 and fiscal 2001, respectively.

   As a result of the forgoing, our net loss increased by $2,073,332,
or 635.4% to $2,399,659, $.19 per share, in fiscal 2002 from $326,327,
$.03 per share, in fiscal 2001 as a result of the factors described
above.

LIQUIDITY AND CAPITAL RESOURCES

   We require significant working capital to fund our future
operations. At June 30, 2002 we had cash of $32,344 and a working
capital deficit of $2,143,592. The aggregate amount of accounts
payable and accrued expenses at June 30, 2002 was $2,030,866. As a
result of our continuing losses, our working capital deficiency has
increased.

   We funded our losses through loans from our chief executive
officer. At June 30, 2002, we owed our chief executive officer
$876,554, of which $457,554 was incurred during fiscal 2002. We also
utilized vendor credit and customer deposits. Because we have not been
able to pay our trade creditors in a timely manner, we have been
subject to litigation and threats of litigation from our trade
creditors and we have used common stock to satisfy our obligations to
trade creditors. When we issue common stock, we have provided that if
the stock does not reach a specified price level one year from
issuance, we will pay the difference between that price level and the
actual price. As a result, we have contingent obligations to our some
of these creditors. With respect to 400,000 shares of common stock
issued during fiscal 2002, the market value of the common stock on
June 30, 2002 was approximately $150,953 less than the guaranteed
price.

   Our accounts payable and accrued expenses increased from $615,584
at June 30, 2001 to $2,030,866 at June 30, 2002 reflecting our
inability to pay creditors currently. We also had customer deposits
and deferred revenue of $1,395,963 which relate to payments on orders
which had not been filled at that date. We have used our advance
payments to continue our operations. If our vendors do not extend us
necessary credit we may not be able to fill current or new orders,
which may affect the willingness of our clients to continue to place
orders with us.

     We require substantial funds to support our operations. Since the
completion of the merger we have sought, and been unsuccessful, in our
efforts to obtain funding for our business. Because of our losses, we
are not able to increase our borrowing. Our bank facility terminated on
November 1, 2002. On November 1, 2002 we reduced the outstanding
balance to $100,000 and began discussions with the lender to extend the
terms or to convert the balance to a term loan. To date, we do not have
an agreement with respect to an extension with our existing lender or
an agreement to convert the $100,000 outstanding balance to a term
loan, or any agreements with any replacement lender. Our failure to
obtain either an extension of our credit facility, a conversion of the
outstanding balance to a term loan, or a facility with another lender
could materially impair our ability to continue in operation, and we
cannot assure you that we will be able to obtain the necessary
financing. Our main source of funds other than the bank facility has
been from loans from our chief executive officer. Because of both our
low stock price and our losses, we have not been able to raise funds
through the sale of our equity securities. We may not be able to obtain
any additional funding, and, if we are not able to raise funding, we
may be unable to continue in business. Furthermore, if we are able to
raise funding in the equity markets, our stockholders will suffer
significant dilution and the issuance of securities may result in a
change of control. The merger agreement relating to the reverse merger
provided, as a condition to CCS' obligation to close, that we closed on
a private sale from which the we realized proceeds of $1,000,000. This
condition was not met at closing, and CCS completed the reverse merger
without the Company having received any proceeds from a private
placement. At the closing of the reverse merger, we entered into a
stock pledge agreement with ATLAS EQUITY, a Florida corporation and
principal stockholder of the Company, pursuant to which ATLAS EQUITY
was to have pledged 1,500,000 shares of common stock. Atlas Equity
never delivered the shares to be held pursuant to the pledge agreement.
The pledge agreement stipulated the pledged shares were to be returned
to ATLAS EQUITY if we sold shares of unregistered common stock
sufficient to generate net cash proceeds of $925,000 to us prior to
June 1, 2002, which date was subsequently extended to June 14, 2002. To
date, ATLAS EQUITY has not delivered the shares to be pledged and we
have not received any financing. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
Management's plans with respect to these matters include its attempts
to settle vendor payables wherever possible, a reduction in operating
expenses, and financing from the chief executive officer in the absence
of other sources of funds. Management cannot provide any assurance that
its plans will be successful in alleviating its liquidity concerns and
bringing the Company to the point of sustained profitability. The
accompanying financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

                                  17
<PAGE>


Item 7. FINANCIAL STATEMENTS

        The financial statements begin on Page F-1.

Item 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

   On April 18, 2002, our board of directors dismissed Salibello &
Broder LLP as our independent public accountants and selected
Schneider & Associates LLP to serve as our independent public
accountant for the fiscal year ending June 30, 2002. At no time since
its engagement has Schneider & Associates LLP had any direct or
indirect financial interest in or any connection with us or any of our
subsidiaries other than as independent accountant.

   Our financial statements for the fiscal year ended June 30, 2001
were audited by Salibello & Broder LLP, whose report on such financial
statements did not include any adverse opinion, or disclaimer of
opinion, nor was the report qualified or modified as to audit scope or
accounting principles. The report however was modified as to our
ability to continue as a going concern. There were no disagreements with
Salibello & Broder LLP on any matter of accounting principles or
practices, financial statement disclosures, or auditing scope or
procedures in connection with the audit for the fiscal year ended June
30, 2001 and financial statements filed on Form 10-QSB for subsequent
interim periods preceding their dismissal on April 18, 2002

   On December 8, 2000, Berenfeld, Spritzer, Shechter and Sheer, our
independent public accountants resigned as our independent auditors
and our board of directors selected Salibello & Broder LLP to serve as
our independent public accountants for the fiscal year ending June
30, 2001. At no time since its engagement has Salibello & Broder LLP
had any direct or indirect financial interest in us or any connection
with any of our subsidiaries other than as independent accountant.

   Our financial statements for the fiscal year ended June 30, 2000
and for the period June 22, 1999 (inception) to June 30, 1999 were
audited by Berenfeld, Spritzer, Shechter and Sheer whose report on
such financial statements did not contain any adverse opinion, or
disclaimer of opinion, nor was the report qualified or modified as to
audit scope or accounting princilples. The report however was modified
as to our ability to continue as a going concern. There were no
disagreements with Berenfeld, Spritzer, Shechter and Sheer on any
matter of accounting principles or practices, financial statement
disclosures, or auditing scope or procedures in connection with the
audit for the fiscal year ended June 30, 2000 and the period June 22,
1999 (inception) to June 30, 1999 and financial statements filed on
Form 10-QSB for subsequent interim periods preceding their resignation
on December 8, 2000.

                                       18
<PAGE>

   ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

   DIRECTORS, EXECUTIVE OFFICERS AND KEY PERSONNEL

   Set forth below is information concerning our directors and
executive officers.

<TABLE>
<CAPTION>

            Name                  Age           Position
---------------------------- --------------     ----------------------------------------------
<S>                                     <C>     <C>
Ben Y. Jamil                            69      Chairman of the board, chief executive officer
                                                and director
Chris R. Decker                         55      Chief financial officer and director
Tom Felice                              41      Vice president sales and director
Manchem Cohen                           50      Vice president and director
Nomi Om                                 41      Vice president and director
Sylvain Naar                            61      Director
</TABLE>

   Ben Y. Jamil has been chairman of the board, president, chief
executive officer and a director of CCS since its organization in July
1992. He assumed such positions with us upon completion of the merger.
Mr. Jamil has more than 40 years experience in government, military,
law enforcement and business security, specializing in the design, and
marketing of sophisticated, hi-tech systems for communication, voice
and data privacy, surveillance and monitoring.

   Chris R. Decker, a certified public accountant, joined us in April
2002 and became chief financial officer in August 2002. Prior to that
he was controller for Trumarkets LLC, a broker dealer, from June 1,
2001 until April 2002, an independent consultant from April 1999 until
June 2001, was vice president corporate controller for County Seat
Stores, Inc., a retailer of specialty apparel, from January 1998 until
April 1999 and for three years prior thereto, was executive vice
president, chief financial officer of All American Food Group, Inc. a
franchising company in the specialty food sector.

   Tom Felice has been vice president and a director of CCS since
October 2001. He assumed these positions with us upon completion of
the merger, at which time he was also elected chief operating officer.
He joined CCS at its inception as vice president of consumer sales. He
took a leave of absence in November 2000 to consult for a family
business and returned to CCS in October 2001.

   Menachem Cohen has been vice president for Latin American sales
and a director of CCS since January 2002 and became our vice president
and a director upon completion of the merger. He was a consultant to
CCS from its inception in 1992 until 2002.

   Nomi Om has been vice president of international marketing for CCS
since 1995 and a director since January 2002. She became our vice
president and a director upon completion of the merger. Starting with
CCS in 1992 as production manager, Ms. Om became director of special
projects as a sales engineer, and in 1995 was appointed Vice President
of International Marketing and Director of our Asian Market.

                                       19
<PAGE>

   Sylvain Naar has been a director of CCS since March 2002 and
became one of our directors upon completion of the merger. From 1990
to February 2002, Mr. Naar was vice president for product and business
development at Copytele, a developer of advanced flat panel displays
and secure communication products. With over 30 years experience in
telecommunications, Mr. Naar has held numerous executive positions at
Hazeltine, Thomson, CSF, and Alcatel.

ITEM 10. EXECUTIVE COMPENSATION

   Set forth below is information with respect to compensation paid
or accrued by us for fiscal years ended June 30, 2002, 2001 and 2000
to our chief executive officer. No other officer received compensation
of $100,000 during any of those fiscal years.


<TABLE>
<CAPTION>
   SUMMARY COMPENSATION TABLE

                                                                 Long-Term
                                                                 Compensation (Adwards)
                                 Fiscal                          Options, SARs
Name and Principal Position       Year      Salary       Bonus              (Number)
------------------------------- --------- ----------- -----------------------------------------
<S>                                 <C>     <C>               <C>                    <C>
Ben Jamil, chief executive          2002    $143,223          $-                     1,000,000
officer                             2001     135,200           -
                                    2000     135,200           -
</TABLE>

Employment Agreement

   In April 2002, in connection with the completion of the reverse
merger, we entered into a three-year employment agreement with Ben
Jamil pursuant to which Mr. Jamil agreed to serve as our president and
chief executive officer. The agreement calls for an annual base
compensation of $250,000 and may be increased on each anniversary date
commencing May 1, 2003 by 10% if we achieve certain performance
criteria. In addition to the base salary, Mr. Jamil is eligible to
receive an annual discretionary bonus commencing June 30, 2003, at the
sole discretion of the board of directors. Pursuant to the agreement,
we granted Mr. Jamil a non-qualified stock option to purchase
1,000,000 shares of common stock at an exercise price of $2.00 per
share. The option vests upon our attaining $10,000,000 of annual
revenue and expires on April 17, 2007.

Stock Options

   As of January 21, 2002, our board of directors adopted the 2002
Stock Plan, which provided for the grant of non-qualified stock
options to purchase a maximum of 2,000,000 shares of common stock. The
2002 Plan provides for the grant of incentive stock options and
nonqualified stock options to purchase shares of Common Stock, to
directors, employees, officers, agents, consultants and independent
contractors who perform services for the Company. Any incentive stock
options which may be granted pursuant to this plan are subject to
stockholder approval of the plan. As of the date of this annual report
on Form 10-KSB, stockholder approval of the 2002 stock plan has not
been obtained, and all options granted under the plan are
non-qualified stock options.

                                       20
<PAGE>

Option Exercises and Outstanding Options

   The following table sets forth information concerning the exercise
of options during the fiscal year ended June 30, 2002 and the fiscal
year-end value of options held by our chief executive officer, who is
the only officer named in the summary compensation table. No stock
appreciation rights have been granted.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value

                                 Number of
                                 Securities    Value of
                                 Underlying    Unexercised
                                 Unexercised   In-the-Money
                                 Options at    Options at
                                 Fiscal Year   Fiscal Year
                                 End           End
               Shares   Value
               Acquired Realized Exercisable/  Exercisable/
               Upon              Unexercisable Unexercisable
      Name     Exercise
 -----------------------------------------------------------
   Ben Jamil         --       -- --/1,000,000        --/--


   The following table sets forth information concerning options
granted during the fiscal year ended June 30, 2002 to our chief
executive officer.

   Option Grants in Fiscal Year Ended June 30, 2002

<TABLE>
<CAPTION>

                     Percent of                       Potential Realizable Value
                     Total                            an Annual Rates of Stock
          Number of  Options                          Price Appreciation for
          Shares     Granted to                       Option Term
          Underlying Employees  Exercise              --------------------------
          Options    in Fiscal  Price Per   Expiration
 Name     Granted    Year       Share          Date         5%    10%
--------------------------------------------------------------------------------
 <S>         <C>       <C>             <C>       <C>    <C>
Ben Jamil 1,000,000   100.0%    $2.00     April 2007      $ *    $ *
</TABLE>

   * The potential realizable value is not included since the options
are exercisable at $2.00 per share, which is in excess of the fair
market value at the date of grant. These options were granted to Mr.
Jamil pursuant to his employment agreement.

                                       21
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The following table and discussion provides information as to the
shares of common stock benefically owned on September 30, 2002 by:

   - each director;

   - each officer named in the executive compensation table;

   - each person owning of record or known by us based on information
     provided to us by the persons named below, to own beneficially at
     least 5% of our common stock; and

   - all officers and directors as a group.


                                     Shares of Common   Percentage of
                                   Stock Benefically    Outstanding
               Name                      Owned          Common Stock
---------------------------------- ------------------   --------------
Ben Jamil                                 11,900,000             68.7%
145 Huguenot Street
New Rochelle, NY 10801
Michael Farkas                             1,347,000              7.8%
1221 Brickell Avenue
Miami, FL 33131

Chris R. Decker                                    -                -
Menachem Cohen                                     -                -
Tom Felice                                   250,000              1.4%
Nomi Om                                            -                -
Sylvain Naar                                       -                -
All directors and officers as a           12,150,000             70.2%
group (6 individuals)

   Except as otherwise indicated each person has the sole power to
vote and dispose of all shares of common stock listed opposite his
name. Stockholders are deemed to own shares of common stock issuable
upon the exercise of options or upon conversion of convertible
securities which are exercisable or convertible within 60 days of September
30, 2002.

   The shares beneficially owned by Michael Farkas represents 75,000
shares of common stock owned by him, 468,000 shares of common stock
owned by Mr. Farkas' wife, Rebecca Farkas, as to which he disclaims
beneficial ownership, and 804,000 shares of common stock owned by
ATLAS EQUITY, which is beneficially owned by Mr. Farkas.

     ATLAS EQUITY agreed to pledge 1,500,000 shares of common stock,
which shares are to be released to ATLAS EQUITY if we raise $925,000 by June
14, 2002. As of the date of this report, ATLAS EQUITY has not delivered
the shares to be pledged and we have not received any financing.

   The shares beneficially owned by Mr. Felice represent shares of
common stock issuable upon exercise of options held by him.

                                       22
<PAGE>

   In connection with an agreement between Mr. Ben Jamil and two
financial consultants entered into prior to the reverse merger, the
consultants or their designees were to purchase a 30% interest in five
of our subsidiaries, and that 30% was to have been exchanged for
1,500,000 shares of series B preferred stock. Mr. Jamil has advised
the consultants and their designees that, as a result of their failure
to pay the consideration for the shares, the agreement is terminated
and they have no interest in the series B preferred stock or the stock
in the five subsidiaries. It is possible that the consultants or their
designees may claim that they own the series B preferred stock or the
stock in the five subsidiaries.

     Item 12. Certain Relationships and Related Transactions

     On April 17, 2002, pursuant to an agreement and plan of merger
among us, CCS and our wholly-owned subsidiary, the subsidiary was
merged into CCS, with the result that CCS became our wholly-owned
subsidiary. As a result of the merger:

     -    We issued an aggregate of 11,900,000 shares of common stock,
          3,500,000 shares of series A preferred stock and 1,500,000
          shares of series B preferred stock to the former stockholders
          of CCS, with each share of series A preferred stock and
          series B preferred stock being convertible into one share of
          common stock if the Company has either annual net revenue of
          $10,000,000 or net income of at least $1,000,000 prior to
          October 25, 2008, each share of series A preferred stock
          having 15 votes per share, and each share of series B
          preferred stock having no voting rights except as required by
          law. The series A and B preferred stock was issued to Mr. Ben
          Jamil.

     -    Outstanding options and warrants to purchase a total of
          1,800,500 shares of CCS' common stock were converted into
          options and warrants to purchase an equal number of shares of
          our common stock at exercise prices of $.50 to $1.00 per
          share.

     -    Our officers and directors resigned.

     -    Ben Y. Jamil, Menachem Cohen, Tom Felice and Nomi Om, who
          were officer of CCS prior to the merger, were elected as our
          directors and offices, and Sylvain Naar, who was a director
          of CCS, was elected as a director.

     -    We entered into a three-year employment agreement with Mr.
          Jamil and granted him a non-qualified stock option to
          purchase 1,000,000 shares of common stock at $2.00 per share
          pursuant to the employment agreement. The terms of Mr.
          Jamil's employment agreement are described under "Item 10.
          Executive Compensation."


   Item 13. EXHIBITS AND REPORTS ON FORM 8-KSB

   (a) Reports on Form 8-KSB

   (1) Current Report on Form 8-K filed on April 24, 2002 with
       respect to Items 1 and 2.
   (2) Current Report on Form 8-K filed on May 6, 2002 with respect
       to Item 5.
   (3) Current Report on Form 8-K/A filed on July 1, 2002 with
       respect to Item 1, 2 and 7.
   (4) Current Report on Form 8-K filed on October 24, 2002 with
       respect to Item 4.
   (5) Current Report on Form 8-K filed on October 29, 2002 with
       respect to Item 4.

   (b) Exhibits

   Exhibit

   No. Description

   2.1 Agreement and Plan of Merger dated as of February 28, 2002
       among the Registrant, CCS International, Ltd., and CCS Merger Corp.(1)

   3.1 Articles of incorporation (2)

   3.2 Articles of Amendment to Articles of Incorporation

   3.3 By-laws (2)

  10.1 Employment Agreement, dated as of April 17, 2002, by and
       between the Registrant and Ben Jamil. (3)
  10.2 Form of pledge Agreement, dated as of April 17, 2002, by and
       between the Registrant and ATLAS EQUITY (3)

  10.3 2002 Stock Plan

  10.4 Lease dated June 1, 2000 between Rotterdam Ventures, Inc. d/b/a
       Galesi Enterprises and the Registrant.

  21.1 List of Subsidiaries

(1) Filed as an exhibit to the Registrant's Form 8-K with a report
date of February 28, 2002 and which was filed with the Commission on
March 5, 2002, and incorporated herein by reference.

(2) Filed as an exhibit to the Registrant's Form 10SB12G which was
filed with the Commission on October 17, 2000, and incorporated herein
by reference.

(3) Filed as an exhibit to the Registrant's Form 8-K with a report
date of April 17, 2002 and which was filed with the Commission on
April 25, 2002, and incorporated herein by reference.

                                       23
<PAGE>

   INDEX TO FINANCIAL STATEMENTS

   Independent Auditors Report                                             F - 1

   Consolidated Balance Sheet June 30, 2002                                F - 2

   Statements of Operations for the years ended June 30, 2002
    (consolidated basis) and June 30, 2001 (combined basis)                F - 3

   Statement of Stockholder's Deficit for the years ended June
    30, 2002 (consolidated basis) and June 30, 2001 (combined basis)       F - 4

   Statements of Cash Flow for the years ended June 30, 2002
    (consolidated basis) and June 30, 2001 (combined basis)                F - 5

   Notes to financial statements                                  F - 6 - F - 23

                                       24
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Security Intelligence Technologies, Inc.

   We have audited the accompanying consolidated balance sheet of
Security Intelligence Technologies, Inc. and subsidiaries as of June
30, 2002, and the related statements of operations, changes in
stockholders' deficit and cash flows for the years ended June 30, 2002
(consolidated basis) and June 30, 2001 (combined basis). These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

   We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

   In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of Security Intelligence Technologies, Inc. and subsidiaries as of
June 30, 2002, and the results of their operations and their cash
flows for the years ended June 30, 2002 (consolidated basis) and June
30, 2001 (combined basis) in conformity with accounting principles
generally accepted in the United States of America.

   The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully
described in Note1, the Company has incurred operating losses in
fiscal 2002 and 2001, negative cash flows from operations, and has
limited cash and other resources to fund future operations. In
addition, the Company is involved in material litigation, the costs of
which have significantly impacted liquidity. Management's plans
concerning these matters are also discussed in Note 1. The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.

Jericho, New York
October 17, 2002

                                       F-1


                    SECURITY INTELLIGENCE TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2002



ASSETS
Current Assets:
      Cash                                                    $32,344
     Inventory                                              2,190,187
     Other current assets                                     185,515
                                                           -----------
        Total current assets                                2,408,046

Property and Equipment, at cost less accumulated
 depreciation and amortization of $390,938                    227,113

Other assets                                                   47,733
                                                           -----------

 Total assets                                              $2,682,892
                                                           ===========


LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
     Note payable - bank                                     $200,000
     Accounts payable and accrued expenses                  2,030,866
     Note payable - CEO/stockholder                           876,554
     Customer deposits                                      1,049,772
     Deferred revenue                                         346,191
     Deferred rent payable                                     48,255
                                                           -----------
          Total current liabilities                         4,551,638
                                                           -----------

Commitments and contingencies - See Notes

Stockholders' deficit:
     Preferred stock, $.0001 par value, 10,000,000 shares
      authorized:
          Series A Convertible-$1.00 per share liquidation
           preference, 3,500,000 sharesauthorized, issued and
           outstanding                                            350
          Series B Convertible-$1.00 liquidation
           preference, 1,500,000 shares 1,500,000 shares
           authorized, issued and outstanding                     150
     Common stock, $.0001 par value, 100,000,000 shares
      authorized, 16,992,346 issued and outstanding             1,699
     Additional paid in capital                               418,417
     Accumulated deficit                                   (2,289,362)
                                                           -----------
       Total stockholders' deficit                         (1,868,746)
                                                           -----------

Total liabilities and stockholders' deficit                $2,682,892
                                                           ===========

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

                                       F-2
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                            STATEMENTS OF OPERATIONS



                                                    Year Ended
                                            --------------------------
                                                     June 30,
                                            --------------------------
                                                  2002        2001
                                            -------------- -----------
                                            (Consolidated) (Combined)


   Sales                                       $5,609,557  $6,229,244
                                            -------------- -----------

Costs and expenses:
   Cost of sales                                2,230,969   2,624,205
   Compensation and benefits                    2,236,191   1,997,295
   Professional fees and legal settlements      1,130,848     405,041
   Selling, general and administrative
    expenses                                    2,139,123   1,490,945
   Unrealized loss on derivatives                 150,953           -
   Depreciation and amortization                   84,774      87,381
                                            -------------- -----------
                                                7,972,858   6,604,867
                                            -------------- -----------

Operating loss                                 (2,363,301)   (375,623)

Interest expense                                   65,358      51,704
                                            -------------- -----------

Loss before income tax benefit                 (2,428,659)   (427,327)

Income tax benefit                                (29,000)   (101,000)
                                            -------------- -----------

Net loss                                      $(2,399,659)  $(326,327)
                                            ============== ===========


Loss per share, basic and diluted                  $(0.19)     $(0.03)
                                            ============== ===========

Weighted average number of shares              12,896,403  11,900,000
                                            ============== ===========

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

                                      F-3
<PAGE>


<TABLE>
<CAPTION>


       Security Intelligence Technologies, Inc. and Subsidiaries
             Statement of Changes in Stockholders' Deficit
                   Years Ended June 30, 2002 and 2001


                                                                                                 Retained
                                       Convertible Preferred                         Additional  Earnings      Total
                                     Series A          Series B       Common Stock    Paid-in  (Accumulated Stockholders'
                                Shares    Amount   Shares    Amount  Shares   Amount  Capital    Deficit)     Deficit
                            --------------------------------------------------------------------------------------------

<S>            <C>                     <C>   <C>         <C>    <C>     <C>   <C>          <C>    <C>          <C>
Balances, July 1, 2000                  -    $-            -    $-      5,100 $5,100         -    $436,624     $441,724

Net loss                                -     -            -     -          -      -         -    (326,327)    (326,327)
                            --------------------------------------------------------------------------------------------

Balances,
 June 30, 2001 (combined)               -     -            -     -      5,100  5,100         -     110,297      115,397

Issuance of preferred stock
 to CEO/stockholder in
 exchange for common
 stock of affiliated
 companies                      3,500,000   350    1,500,000   150     (4,100)(4,100)    3,600           -            -

11,900 for 1 forward common
 stock split and change in par value
 to $.0001 per share                    -     -            -     - 11,899,000    190      (190)          -            -

Sale of common stock                    -     -            -     -     75,000      7    74,993           -       75,000

Issuance of common stock
   to settle debt                       -     -            -     -    417,346     42   348,248                  348,290

Issuance of common stock
 and elimination of
 accumulated deficit
 of legal acquirer in
 reverse merger                         -     -            -     -  4,600,000    460   (44,814)          -      (44,354)

Amortization of deferred
   compensation                         -     -            -     -          -      -    36,580           -       36,580

Net loss                                -     -            -     -          -      -         -  (2,399,659)  (2,399,659)
                            --------------------------------------------------------------------------------------------

Balances,
 June 30, 2002 (consolidated)   3,500,000  $350    1,500,000  $150 16,992,346 $1,699  $418,417 $(2,289,362) $(1,868,746)
                            ============================================================================================
</TABLE>

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

                                       F-4
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS

                                                    Year Ended
                                             -------------------------
                                                     June 30,
                                             -------------------------
                                                   2002       2001
                                             -------------- ----------
                                             (Consolidated) (Combined)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                    $(2,399,659) $(326,327)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
      Depreciation and amortization                 84,774     87,381
      Unrealized loss on derivatives               150,953          -
      Amortization of deferred compensation         36,580          -
      CHANGES IN OPERATING ASSETS AND
       LIABILITIES:
        (Increase) in inventory                   (190,751)  (109,411)
        (Increase) in other current
         assets                                    (70,127)   (95,811)
        Increase (decrease) in accounts
         payable and accrued expenses            1,568,265   (587,135)
        Increase in customer deposits              754,275    295,497
        (Decrease) increase in deferred
         revenue                                  (258,673)   505,509
        Increase in deferred rent payable           18,597     29,658
                                             -------------- ----------
Net cash used in operating activities             (305,766)  (200,639)
                                             -------------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment               (2,166)   (26,393)
   (Increase) in other assets                      (10,500)       (22)
                                             -------------- ----------
Net cash used in investing activities              (12,666)   (26,415)
                                             -------------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock           75,000          -
   Borrowings under note payable - bank                  -    300,000
   Repayments of note payable - bank              (200,000)         -
   Borrowings under note payable -
    CEO/stockholder                                607,554          -
   Repayments of note payable -
    CEO/stockholder                               (150,000)   (90,224)
                                             -------------- ----------
Net cash provided by financing activities          332,554    209,776
                                             -------------- ----------
Net increase (decrease) in cash                     14,122    (17,278)

Cash, beginning of year                             18,222     35,500
                                             -------------- ----------
Cash, end of year                                  $32,344    $18,222
                                             ============== ==========

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

                                     F - 5
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

CCS International, Ltd. and its wholly-owned subsidiaries ("CCS")
are engaged in the design, manufacture and sale of security and
surveillance products and systems. CCS is a Delaware corporation,
organized in 1992. The Company purchases finished items for resale
from independent manufacturers, and also assembles off-the-shelf
electronic devices and other components into proprietary products and
systems at its own facilities. The Company generally sells to
businesses, distributors, government agencies and consumers through
four retail outlets located in Miami, Florida; Beverly Hills,
California; Washington, DC; and New York City, and from its showroom
in New Rochelle, New York. On April 17, 2002, CCS merged with Security
Intelligence Technologies, Inc., a Florida corporation ("SIT")
(collectively the "Company") and became a wholly owned subsidiary of
SIT. The merger has been accounted for as a reverse acquisition, since
the management and stockholder of CCS obtained control of the merged
entity after the transaction was completed (See Note 6). Under reverse
acquisition accounting, CCS is considered the accounting acquirer and
SIT is considered the accounting acquiree. Inasmuch as SIT had no
substantive assets or operations at the date of the transaction, the
merger has been recorded as an issuance of CCS stock to acquire SIT,
accompanied by a recapitalization, rather than as a business
combination.

Principles of Consolidation and Basis of Financial Statement Presentation

Prior to January 31, 2002, the Company's CEO, Ben Jamil owned all
of the outstanding stock of CCS International, Ltd. and five other
affiliated companies comprising CCS. Accordingly, the accompanying
financial statements for the year ended June 30, 2001 have been
presented on a combined basis and include the accounts of CCS
International, Ltd., and the following Affiliated Companies: Spy Shop,
Ltd. d/b/a Counter Spy Shop of Delaware, a Delaware corporation
(retail store); Security Design Group, Inc., a New York corporation
(formerly a manufacturing operation, currently inactive); Counter Spy
Shop of Mayfair London, Ltd., a District of Columbia corporation
(retail store); CCS Counter Spy Shop of Mayfair London, Ltd., a
California corporation (retail store); and Counter Spy Shop of
Mayfair, Ltd., a Florida corporation (retail store). During fiscal
2002, CCS recapitalized and became a consolidated group (see Note 6).
Accordingly, the financial statements for the year ended June 30, 2002
have been presented on a consolidated basis. The accounts and
operations of SIT are included from the merger date (April 17, 2002)
only.

The financial statements of the Company have been prepared
assuming the Company will continue as a going concern, which
contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred net
losses of $2,399,659 and $326,327 for the years ended June 30, 2002
and

                                       F-6
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Principles of Consolidation and Basis of Financial Statement Presentation
- Continued

June 30, 2001 respectively. In addition, at June 30, 2002, the
Company had a working capital deficit of $2,143,592 and a deficiency
in stockholders' equity of $1,868,746. The Company is also a defendant
in material and costly litigation, which has significantly impacted
liquidity. See Note 14.

   The Company requires additional financing which may not be readily
available. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans with respect
to these matters include its attempts to settle vendor payables
wherever possible, a reduction in operating expenses, and financing
from the chief executive officer in the absence of other sources of
funds. Management cannot provide any assurance that its plans will be
successful in alleviating its liquidity concerns and bringing the
Company to the point of sustained profitability. The accompanying
financial statements do not include any adjustments that might result
from the outcome of these uncertainties.

Use of estimates

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

Inventories

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

Property and equipment

Assets are stated at cost. Depreciation is computed over the
estimated useful life of the assets generally using the straight-line
method over periods ranging from five to seven years. Additions and
major renewals and betterments are capitalized and depreciated over
their estimated useful lives. Repairs and maintenance are charged to
operating expenses as incurred.

Long-lived assets

The Company records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets may
be impaired and the undiscounted cash flows estimated to be generated
by those assets are less than their carrying amounts.

                                       F-7
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Revenue recognition

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

Stock Based Compensation

The Company accounts for stock-based compensation in accordance
with APB Opinion No. 25, "Accounting for Stock Issued to Employees"
and FASB Interpretation 44, "Accounting for Certain Transactions
Involving Stock Compensation". Pursuant to these accounting standards,
the Company records deferred compensation for stock options granted to
employees at the date of grant based on the difference between the
exercise price of the options and the market value of the underlying
shares at that date. Deferred compensation is amortized to
compensation expense over the vesting period of the underlying
options. No compensation expense is recorded for fixed stock options
that are granted to employees and directors at an exercise price equal
to the fair market value of the common stock on the date of the grant.
Employee stock options exchanged in the reverse merger are subject to
variable accounting pursuant to the provisions of EITF Issue 00-23,
Issue No.1 because the exchange resulted in an increase in intrinsic
value. For variable stock options, compensation expenses are
recognized over the vesting period based on the difference, if any,
between the quoted market price of the Company's stock on the last
trading day of each reporting period and the exercise price of the
option. Variable accounting will continue until the date of exercise,
forfeiture or expiration.

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

Income taxes

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

                                       F-8
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Advertising

Advertising costs are expensed as incurred. The Company incurred
advertising expenses of approximately $341,000 and $430,000 during the
years ended June 30, 2002 and 2001 respectively.

Derivatives

Certain shares issued by the Company to settle debt obligations
contain a price guarantee that requires the Company to settle in cash
any difference between the original face amount of the debt and
proceeds from the creditor's subsequent sale of the shares. The
Company accounts for these transactions by recording the debt at fair
value with periodic mark-to-market adjustments until the guarantee is
settled. Unrealized gains or losses resulting from changes in fair
value are included in earnings and accrued expenses.

Fair Value of Financial Instruments

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

New accounting pronouncements

In July 2001, the Financial Accounting Standards Board issued
Statements No. 141, "Business Combinations" ("FAS No. 141") and No.142
"Goodwill and Other Intangible Assets" ("FAS No. 142"). FAS No. 141
supersedes APB Opinion No. 16, "Business Combinations" and FAS
Statement No. 38, "Accounting for Pre-acquisition Contingencies of
Purchased Enterprises". SFAS 141 is effective for fiscal years
beginning after June 30, 2001 and requires that all business
combinations be accounted for by a single method, the purchase method.
SFAS 142 supersedes APB Opinion No. 17, "Intangible Assets". SFAS 142,
is effective for fiscal years beginning after December 15, 2001 and
provides that all existing and newly acquired goodwill and intangible
assets with indefinite lives will no longer be amortized but will be
tested for impairment annually and written down only when impaired.
The adoption of these pronouncements is not expected to have a
material impact on the Company's financial position or results of
operations.

In August 2001, the Financial Accounting Standards Board ("FASB")
issued FAS No.143, "Accounting for Asset Retirement Obligations." This
statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. It applies to all entities and
legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and/or
normal operation of long-lived assets, except for certain obligations
of lessees. This statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company
does not expect the adoption of SFAS 143 to have a material impact on
its financial statements.

                                       F-9
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

New accounting pronouncements - continued

In August 2001, the FASB issued FAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." FAS No.144 addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. FAS No. 144 supersedes FAS No. 121, "Accounting for
the Impairment of Long-Lived Assets," and the accounting and reporting
provisions of APB Opinion No. 30, "Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events
and Transactions," for the disposal of a segment of a business (as
previously defined in that Opinion). The provisions of FAS No. 144 are
effective for financial statements issued for fiscal years beginning
after December 15, 2001, with early application encouraged and
generally are to be applied prospectively. The Company does not expect
the adoption of SFAS 143 to have a material impact on its financial
statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS
No. 4, 44 and 64, Amendment of SFAS Statement No. 13, and Technical
Corrections." This statement rescinds the following statement of SFAS
4, "Reporting Gains and Losses from Extinguishment of Debt," and its
amendment SFAS No. 64, "Extinguishments of Debt Made to Satisfy
Sinking Fund Requirements," as well as, SFAS No. 44, "Accounting for
Intangible Assets of Motor Carriers." The statement also amends SFAS
No. 13, "Accounting for Leases", by eliminating an inconsistency
between the required accounting for sale-leaseback transactions and
the required accounting for certain lease modifications that have
economic effects that are similar to sale leaseback transactions. SFAS
No. 145 is effective for fiscal years beginning after May 15, 2002.
The Company does not expect the adoption of SFAS 145 to have a
material impact on its financial statements.

In June 2002, the FASB issued SFAS 146, "Accounting for Cost
Associated with Exit or Disposal Activities". SFAS 146 requires
companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. This statement supercedes the
guidance provided by Emerging Issues Task Force 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a
Restructuring)". SFAS 146 is required to be adopted for exit or
disposal activities initiated after December 31, 2002. The Company
does not expect the adoption of SFAS 146 to have a material impact on
its financial statements.

Concentration of credit risk

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash balances.
The Company limits the amount of credit exposure to any one financial
institution. The Company generally does not grant credit to domestic
or foreign customers.

Research and development costs

Research and development costs are charged to expense as incurred.

                                      F-10
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Continued:

Earnings (Loss) Per Share

   The Company calculates earnings per share in accordance with SFAS
No. 128, Earnings Per Share, and SEC Staff Accounting Bulletin No. 98.
Accordingly, basic loss per share is computed using the weighted
average number of shares of common stock outstanding and diluted loss
per share is computed based on the weighted average number of shares
of common stock and all dilutive common stock equivalents outstanding
during the period. Common stock equivalents consist of shares issuable
upon the exercise of stock options and warrants using the treasury
stock method. Stock options and preferred stock that are convertible
into common stock based on the Company's attainment of performance
goals are not includible in the calculation of earnings per share
until the specified targets are met. The following securities have
been excluded from the diluted computation for fiscal 2002 because
they are contingently issuable and/or antidilutive:

   Series A Convertible Preferred Stock     3,500,000
   Series B Convertible Preferred Stock     1,500,000
   Stock options                            1,783,000
   Warrants                                   400,000

The calculation of earnings per share for the year ended June 30,
2001 gives retroactive effect to the recapitalization and forward
stock split described in Note 6.

Reclassifications

Certain reclassifications have been made to the prior year
financial statements in order to conform to the current year
presentation.

2. INVENTORY


Inventories consist of the following at June 30, 2002:

Small components and supplies                               $424,594
Finished goods                                             1,800,354
                                                          -----------
                                                          $2,224,948
                                                          ===========
                                      F-11
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

   3. PROPERTY AND EQUIPMENT

   Property and equipment consists of the following at June 30, 2002:


Office furniture and equipment                               $206,973
Leasehold improvements                                        411,078
                                                             ---------
                                                              618,051
Accumulated depreciation and amortization                    (390,938)
                                                             ---------
                                                             $227,113
                                                             =========

Depreciation and amortization expense was $84,774 and $87,381 for
the years ended June 30, 2002 and 2001, respectively.

4. NOTE PAYABLE - BANK

Prior to June 1, 2002, the Company had a bank credit agreement
pursuant to which it could borrow up to $400,000 with interest at the
bank's price plus 1%. On June 1, 2002, the available credit was
reduced to $200,000 and the interest rate was increased to the bank's
prime rate plus 2.5%. The Note is secured by substantially all of the
assets of the Company, and personal assets and a guaranty of the chief
executive officer. The bank also requires the Company to maintain
average monthly compensating balances of $60,000 and will assess
additional interest at the prime rate plus 2.5% (7.25% at June 30,
2002) on any shortfall. The credit facility expires on November 1,
2002, when all unpaid principal and interest shall be due in full.
Management cannot provide assurance that the line of credit will be
renewed or that, if necessary, it will be able to replace the line
with alternative financing on similar terms.

5. NOTE PAYABLE - CEO/Stockholder

This amount represents an unsecured note payable to the Company's
chief executive officer and bears interest at the rate of 5% per
annum. The note is subject to a bank subordination agreement which
requires the note to remain at a balance of at least $569,000 until
all bank obligations have been paid in full. The loan balance
requirement was temporarily reduced by the bank to $419,000 for the
period from June 30, 2001 to December 31, 2001.

6. STOCKHOLDERS' EQUITY; REVERSE MERGER

Corporate recapitalization and reorganization

On February 28, 2002. CCS completed a recapitalization and entered
into an agreement of merger with a publicly-

                                      F-12
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

6. STOCKHOLDERS' EQUITY; REVERSE MERGER (continued)

Corporate recapitalization and reorganization (continued)

traded company, as described below. Effective February 28, 2002,
CCS amended and restated its certificate of incorporation, increasing
the number of authorized shares of common stock from 1,500 shares, no
par value to 50,000,000 shares, par value $.0001 per share, and
created a class of 10,000,000 shares of preferred stock, par value
$.0001 per share. CCS directors have the right to determine the rights,
preferences and privileges and restrictions and limitations of the
preferred shares.

The board of directors has authorized two series of preferred
stock, the Series A Preferred stock, consisting of 3,500,000 shares,
and the Series B Preferred stock, consisting of 1,500,000 shares. Both
Series A and Series B preferred shares have a liquidation preference
of $1.00 per share and are each convertible into one share of common
stock if CCS has either consolidated annual net revenue of at least
$10,000,000 or annual consolidated net income of at least $1,000,000
prior to October 15, 2008. Each share of Series A Preferred stock has
15 votes per share; Series B Preferred stock is nonvoting except as
required by law.

     On February 28, 2002, pursuant to an Exchange Agreement dated
February 25, 2002, Mr. Jamil exchanged all of his shares in the
Affiliated Companies for 3,500,000 shares of CCS Series A Preferred
stock and 1,500,000 shares of CCS Series B Preferred stock. See Note 15
with respect to a potential claim relating to the shares of Series B
Preferred Stock that were issued to Mr. Jamil. Also on February 28,
2002, the CCS Board of Directors approved an 11,900 for 1 forward stock
split of common stock.

Reverse Merger

As of February 28, 2002, CCS, SIT (then known as HipStyle.Com,
Inc.), a Florida corporation, and CCS Acquisition Co., a Delaware
corporation ("MergerSub"), entered into an Agreement and Plan of
Merger, as amended (the "Merger Agreement"), pursuant to which on
April 17, 2002 (the "Effective Date"), MergerSub was merged with and
into CCS, and CCS became a wholly-owned subsidiary of SIT. Pursuant
to the merger, on the Effective Date, Mr. Jamil, as holder of
3,500,000 shares of Series A Preferred stock, 1,500,000 shares of
Series B Preferred stock and 11,900,000 shares of CCS common stock,
received an equal number of SIT shares, respectively. In addition,
outstanding CCS options to purchase 1,800,500 shares of common stock
and warrants to purchase 400,000 shares of common stock were exchanged
for similar SIT securities. Further, the existing board of directors
and officers of SIT resigned and were replaced by the board of
directors and officers of CCS. Following the merger, Mr. Jamil owned
approximately 72% of the 16,575,000 shares of SIT common stock then
outstanding, and 100% of the outstanding shares of Series A and Series
B Preferred Stock. The merger transaction has been accounted for as a
reverse acquisition, since the management and stockholder of CCS
obtained control of the merged entity after the transaction was
completed. Inasmuch as SIT had no substantive assets or operations at
the date of the transaction, the merger has been recorded as an
issuance of CCS stock to acquire SIT, accompanied by a
recapitalization, rather than as a business combination.

                                      F-13
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

7. STOCK OPTIONS

2002 Stock Option Plan

As of January 21, 2002, the board of directors of the Company
adopted the 2002 Stock Plan, which provided for the grant of incentive
and non-qualified stock options to purchase a maximum of 2,000,000
shares of common stock to directors, employees, officers, agents,
consultants and independent contractors who perform services for the
Company. In connection with the reverse merger outstanding options to
purchase a total of 1,800,500 shares of CCS' common stock were
converted into options to purchase an equal number of shares of the
Company's common stock at an exercise price of $.50 to $1.00 per
share, which was the same exercise price as the options under the CCS
plan.

A summary of changes in common stock options during fiscal 2002
and 2001 follows:

<TABLE>
<CAPTION>
                                           Number of   Weighted Average Exercisable
                                            Shares     Exercise Price     Shares
                                          ----------- ----------------- -----------

<S>                                              <C>                <C>        <C>
Outstanding at June 30, 2000                       -                $-
   Granted                                         -
   Cancelled                                       -
   Exercised                                       -
                                          -----------
Outstanding at June 30, 2001                       -                             -

   Granted                                 1,850,500             $0.60
   Cancelled                                 (67,500)            $1.18
   Exercised                                       -                 -
                                          -----------
Outstanding at June 30, 2002               1,783,000                       755,000
                                          ===========                   ===========

</TABLE>

FASB Statement 123, "Accounting for Stock-Based Compensation,"
requires the Company to provide pro forma information regarding net
income (loss) and income (loss) per share as if compensation cost for
the Company's stock option issuances had been determined in accordance
with the fair value based method prescribed in FASB Statement 123. The
Company estimates the fair value of each stock option at the grant
date by using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants in fiscal 2002:
dividend yield of 0%, risk-free interest rate of 3.38%, expected lives
of eight years, and expected volatility of 120%. Under the accounting
provisions of SFAS Statement 123, the Company's net loss and loss per
share for 2002 and 2001 would have been the pro forma amounts
indicated below:

                                      F-14
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

7. STOCK OPTIONS (continued)

2002 Stock Option Plan (continued)

                                                  Year Ended June 30,
                                              ------------------------
                                                    2002        2001
                                              ------------ -----------
Net (loss):
  As reported                                 $(2,399,659)  $(326,327)
  FAS 123 effect                                 (510,443)          -
                                              ------------ -----------
  Proforma net loss                           $(2,910,102)  $(326,327)
                                              ============ ===========

(Loss) per share:
  As reported                                      $(0.19)     $(0.03)
  Proforma                                         $(0.23)     $(0.03)

Basis and diluted weighted average number
  of shares outstanding                        12,896,403  11,900,000
                                              ============ ===========


The following table summarizes information about stock options
outstanding at June 30, 2002


                                 Weighted
                 Number          Average              Number
    Exercise   Outstanding      Remaining          Exercisable
      Price      6/30/2002    Life (Months)         at 6/30/02
    --------- ------------- ------------------ --------------------
       $0.50     1,651,000                116              755,000
       $1.00        72,000                118                    -
       $1.90        10,000                118                    -
       $2.45        50,000                118                    -
              -------------
                 1,783,000
              =============

At June 30, 2002 there were 217,000 options available for future grant
under the 2002 Stock Plan.

                                      F-15
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

7. STOCK OPTIONS (continued)

Other Option Grant

Pursuant to the chief executive officer's employment agreement,
the Company granted to him a non-qualified stock option to purchase
1,000,000 shares of common stock at an exercise price of $2.00 per
share. These options vest upon achievement by the Company of
$10,000,000 of annual revenues. Due to the uncertainty of reaching the
stipulated performance target, the Company has not established a
measurement date for the option. Upon determination that the
achievement of the revenue threshold is probable, the Company will
value the option on the measurement date using the intrinsic value
method, and will record the resulting charge, if any, over the
remaining vesting period.

Common Stock Purchase Warrants

In connection with the reverse merger, warrants to purchase a
total of 400,000 shares of CCS common stock issued to a consultant
were converted into warrants to purchase an equal number of shares of
the Company's common at an exercise price of $.50 per share, subject
to an anti-dilution provision, as defined. The warrants vest on April
17, 2003. The Company has valued the warrants at $157,000 using the
Black-Scholes option pricing model. This amount is being amortized to
earnings over the vesting period.

8. PLEDGE AGREEMENT

The merger agreement relating to the reverse merger provided, as a
condition to CCS' obligation to close, that the Company closed on a
private sale from which the Company realized proceeds of $1,000,000.
This condition was not met at closing, and CCS completed the reverse
merger without the Company having received any proceeds from a public
offering. At the closing of the reverse merger, the Company entered
into a stock pledge agreement ("Pledge Agreement") with Atlas Equity
Group, Inc., a Florida corporation and stockholder of the Company
("Atlas Equity"), pursuant to which Atlas Equity was to have pledged
1,500,000 shares of common stock of the Company (the "Pledged
Shares"). Atlas Equity never delivered the shares to be held pursuant
to the pledge agreement. The Pledge Agreement stipulated the pledged
shares were to be returned to Atlas Equity if the Company sold shares
of its unregistered common stock sufficient to generate net cash
proceeds of $925,000 to the Company prior to June 1, 2002,
subsequently extended to June 14, 2002. To date Atlas Equity has not
delivered the shares to be pledged and the Company has not received
any financing.

9. RECENT SALES OF UNREGISTERED SECURITIES

On April 17, 2002 the Company sold 75,000 shares of common stock
to Michael Farkas, the beneficial owner of Atlas Equity Group, a
principal stockholder of the Company prior to the merger for $75,000.
On April 25, 2002 the Company issued 17,346 shares of restricted
common stock in full payment of trade payables of $25,297.

                                      F-16
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

9. RECENT SALES OF UNREGISTERED SECURITIES (continued)

On May 21, 2002 the Company entered into an agreement under which
it issued 250,000 shares of restricted common stock in full payment,
subject to certain terms, of trade payables of $172,953. On June 28,
2002 the Company entered into an agreement under which it issued
150,000 shares of restricted common stock in full payment, subject to
certain terms, of trade payables of $150,000 to the same accredited
investor. The shares were issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). The
agreements provide the investor will, after a one year waiting period,
commence selling the shares of common stock. Once all of the shares of
common stock have been sold the investor will provide the Company with
documentation of the proceeds of the sales. If the proceeds do not
meet or exceed the original amount of the trade payables of $322,953
then the Company will, within 5 days, pay to the accredited investor
the difference. The Company has classified the price guarantee
arrangements as derivatives, which require mark-to-market accounting
with changes in fair value recorded in earnings. As of June 30, 2002,
the Company has reported an unrealized loss of $150,953.

                                      F-17
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2002

10. INCOME TAXES

The income tax benefit consists of the following:


                                                         June 30,
                                                --------------------------
                                                      2002           2001
                                                -----------  -------------

 Currently payable (refundable):
   Federal                                        $(33,000)     $(106,000)
   State and local                                   4,000          5,000
                                                -----------  -------------
                                                   (29,000)      (101,000)
                                                -----------  -------------
 Deferred:
   Federal                                               -              -
   State and local                                       -              -
                                                -----------  -------------
                                                         -              -
                                                -----------  -------------
 Income tax benefit                               $(29,000)     $(101,000)
                                                ===========  =============


 Following is a reconciliation of the income tax benefit
 with income taxes on the federal statutory
  rate:

 Federal tax at statutory rate                   $(826,000)     $(145,000)
 State and local taxes, net of federal effect      (92,500)       (21,000)
 Rate differential relating to net operating             -
    loss carrybacks                                      -         26,000
 Nondeductible items                                50,500         10,000
 Change in valuation allowance                     839,000         29,000
                                                -----------  -------------
Income tax benefit                                $(29,000)     $(101,000)
                                                ===========  =============

                                      F-18
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2002

10. INCOME TAXES


  Components of deferred taxes at June 30, 2002 are as follows:
  Deferred tax assets:
    Net operating
     losses                                            $746,300
    Deferred rent payable                                19,200
    Reserves and allowances                             115,900
    Stock based compensation                             14,000
                                                    ------------
                                                        895,400
  Deferred tax
   liability:
    Property and equipment                                6,400
                                                    ------------
                                                        889,000
  Less valuation allowance                             (889,000)
                                                    ------------
  Net deferred taxes                                  $       -
                                                    ============

The Company has recorded valuation allowances to offset tax
benefits arising from deferred tax items because their realization is
uncertain. The Company has federal net operating loss carry-forwards
of approximately $1,900,000 available to offset future federal taxable
income. These losses expire in 2021 and 2022.

11. 401(K) SAVINGS PLAN

The Company maintains a qualified deferred compensation plan under
section 401(k) of the Internal Revenue Code. Under the plan, employees
may elect to defer up to 15% of their salary, subject to the Internal
Revenue Service limits. The Company may make a discretionary match as
well as a discretionary contribution. The Company did not make any
contributions to the plan for the years ended June 30, 2002 and 2001.

12. RELATED PARTY TRANSACTIONS

Employment Agreement

In April 2002, in connection with the completion of the merger,
the Company entered into a three-year employment agreement with Mr.
Jamil pursuant to which he agreed to serve as the Company's president
and chief executive officer. The agreement calls for an annual base
compensation of $250,000 and may be increased on each anniversary date
commencing May 1, 2003 by 10% if the Company achieves certain
performance criteria. In addition to the base salary, the chief
executive officer is eligible to receive an annual discretionary bonus
commencing June 30, 2003, at the sole discretion of the board of
directors. Pursuant to the agreement, the Company granted the chief
executive officer a non-qualified stock option to purchase 1,000,000
shares of common stock at an exercise price of $2.00 per share. These
options vest upon achievement by the Company of $10,000,000 of annual
revenues.

                                      F-19
<PAGE>


            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2002

13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                                            Year Ended
                                                --------------------------------
                                                            June 30,
                                                --------------------------------
                                                      2002             2001
                                                --------------- ----------------
                                                (Consolidated)     (Combined)

Cash paid during the period for:
  Interest                                             $60,982          $59,561
                                                =============== ================
  Income taxes                                         $23,296         $161,621
                                                =============== ================


Non-cash financing and investing activities:
  Common stock issued to settle accounts payable      $348,290               $-
                                                =============== ================
  Accrued liabilities assumed in reverse merger        $44,354               $-
                                                =============== ================


14. COMMITMENTS AND CONTINGENCIES

Litigation

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

On or about May 25, 2001, an action was commenced against CCS in
the United States District Court for the Southern District of New
York, captioned Shenzen Newtek v. CCS International Ltd. The plaintiff
seeks to recover $91,500, which was paid to CCS in connection with a
distributorship agreement between the parties, plus costs and
interest. CCS has denied the material allegations of the plaintiff's
claim and has raised affirmative defenses thereto.

                                      F-20
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

14. COMMITMENTS AND CONTINGENCIES - Continued

Litigation - continued

CCS also asserted a counterclaim seeking damages of $500,000 based
upon the plaintiff's alleged breach of the distributorship agreement.
This matter was settled between the parties on July 10, 2002. (See
Note 15).

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

In June 1998, a photographer formerly retained by CCS filed suit
in U. S. District Court for the Southern District of New York captioned Frank
Ross and Julietta Vassilkioti v. CCS International, Ltd. The plaintiff is
seeking damages for alleged copyright infringement. The judge in the case
has granted the plaintiff partial summary judgment; a hearing to determine
damages has not yet been scheduled. Under federal judicial rules, the
Company is unable to contest the granting of partial summary judgment
until a final judgment has been rendered. The Company believes that it
has substantial defenses to the claim asserted in the lawsuit.

   In June 2001, a former product distributor of CCS brought suit in
Circuit Court, Palm Beach, Florida, captioned Allan L. Dunterman, Jr.
v. CCS International, Ltd. The plaintiff claims that CCS engaged in breach
of contract, among other allegations. CCS has moved the complaint to the
U. S. District Court for the Southern District of Florida, where it is
currently pending. In its answer to the complaint, CCS has denied any
wrongdoing and has asserted numerous affirmative defenses. The parties
have exchanged initial written discovery and are currently in settlement
discussions.

   On May 2, 2002, Menachem Cohen, vice president and a director, and
two other employees of one of the Company's subsidiaries were arrested
pursuant to a criminal complaint filed in the United States District
Court of the Southern District of Florida. The complaint alleges that
such individuals violated federal law in that they intentionally
manufactured, assembled, possessed or sold a device used for the
surreptitious interception of electronic communications and that the
device was sent through the mail or transmitted in intrastate or
foreign commerce. On September 4, 2002, the United States District
Court of the Southern District of Florida entered an order dismissing
all charges against Menachem Cohen, vice president and director, and
the two other employees of one of the Company's subsidiaries. (See
note 15).

                                      F-21
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

14. COMMITMENTS AND CONTINGENCIES - Continued

Litigation - continued

Given that litigation is subject to many uncertainties, it is
possible to predict the outcome of the litigation pending against the
Company. Accordingly, management has not made an estimate of the
amount or range of loss that could result from an unfavorable outcome
of pending cases, and the Company has not provided any amounts in the
consolidated financial statements for unfavorable outcomes, if any.
However, it is possible that the Company's business, results of
operations, cash flows or financial position could be materially
affected by an unfavorable outcome of certain pending litigation. All
such cases are being, and will continue to be vigorously defended, and
the Company believes that it has meritorious and valid defenses
against all such litigation, as well as valid bases appeal of any
adverse verdicts, should they result.

Stock Purchase Agreements

On January 31, 2002, Mr. Jamil entered into an understanding with
two financial consulting companies to sell to them 30% of his interest
in the common stock of CCS's subsidiaries, excluding Security Design,
Inc., for nominal consideration. Mr. Jamil has advised the Company
that neither the two financial consultants nor their designees have
paid the required consideration for the shares, and that he has never
formally transferred any stock ownership in the subsidiaries to the
financial consultants or their designees. Further, a total of
1,500,000 shares of the Company's Series B Preferred Stock were issued
to the chief executive officer in partial exchange for his shares in
the subsidiaries, and not to the financial consultants or their
designees as had been contemplated by agreements between the chief
executive officer and the financial consultants or their designees.
The Company cannot give any assurance that the financial consultants
will not claim that they are entitled to the Series B shares.

Operating Leases

The Company leases office space and office equipment under
non-cancelable operating leases that expire over various periods
through 2012. Rent expense under the Company's headquarters lease is
being recognized on a straight-line basis to account for rent
concessions during the lease term, resulting in deferred rent payable
of $29,658. Total rent expense for the years ended June 30, 2002 and
2001 was approximately $491,728 and $268,158 respectively. Approximate
rent expense for fiscal 2001 is net of a reversal of fiscal 2000 rent
accruals in the approximate amount of $203,840. The reversal relates
to a settlement of arrears on the Company's former headquarters in New
York City. Excluding this settlement, rent expense for fiscal 2001
would have been approximately $474,000.

                                      F-22
<PAGE>

            SECURITY INTELLIGENCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

14. COMMITMENTS AND CONTINGENCIES - Continued

Operating Leases - continued

The approximate future minimum rental commitments for all
long-term non-cancelable operating leases are as follows:



Year ending
  June 30,           Amount
------------      ------------

       2003          $512,676
       2004           447,496
       2005           404,768
       2006           163,278
       2007           160,701
Thereafter            602,105
                  ------------
                   $2,291,024
                  ============


15. SUBSEQUENT EVENTS

Litigation

   On July 10, 2002, the Company and Shenzhen Newtek entered into a
Settlement Agreement under which SIT issued 67,000 shares of its
common stock in full settlement, subject to certain terms, of the
$67,000 claim. If the market price of the Company's common stock on
July 10, 2003 is less than $1.00 per share, the Company is to pay the
plaintiff the difference between $67,000 and the value of the stock.
At September 30, 2002, the closing price of the Company's common stock
was $.17 per share.

On September 4, 2002, the United States District Court of the
Southern District of Florida entered an order dismissing all charges
against Menachem Cohen, vice president and director, and the two other
employees of one of the Company's subsidiaries. See Note 14.

                                      F-23
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

SECURITY INTELLIGENCE TECHNOLOGIES, INC.

                                         /s/ Ben Y. Jamil
                                         ----------------
                                         Ben Y. Jamil
                                         Chairman of the Board of Directors,
                                         President and Chief Executive Officer
                                         Dated: November 5, 2002

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated:

/s/ Ben Y. Jamil                            /s/ Chris R. Decker
----------------                            -------------------
Ben Y. Jamil                                Chief Financial Officer and Director
Chairman of the Board of Directors,
President and Chief Executive Officer       Dated: November 5, 2002
Dated: November 5, 2002

/s/ Menachem Cohen                          /s/ Tom Felice
------------------                          --------------
Menachem Cohen                              Tom Felice
Vice President and Director                 Vice President and Director
Dated: November 5, 2002                     Dated: November 5, 2002

/s/ Nomi Om                                 /s/ Sylvain Naar
-----------                                 ----------------
Nomi Om                                     Sylvain Naar
Vice President and Director                 Director
Dated: November 5, 2002                     Dated: November 5, 2002

<PAGE>


CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICERS

   The undersigned chief executive officer and chief financial
officer of the Registrant do hereby certify that this Annual Report of
Form 10-KSB fully complies with the requirements of Section 13(a) or
15(d) of the Securities Act of 1934, as amended, and that the
information contained in this report fairly presents, in all material
respects, the financial condition and results of operations of the
issuer at the dates and for the periods shown in such report.

                                     /s/ Ben Y. Jamil
                                     ----------------
                                     Ben Y. Jamil, Chief Executive Officer

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

   Ben Y. Jamil does hereby certify that he is the duly elected and
   incumbent chief executive officer and Chris R. Decker does hereby
   certify that he is the duly elected and incumbent chief financial
   officer of Security Intelligence Technologies, Inc. (the "issuer") and
   each of them does hereby certify, with respect to the issuer's Form
   10-KSB for the fiscal year ended June 30, 2002 (the "report") as
   follows:

1. He or she has reviewed the report;

2. Based on his or her knowledge, the report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by the report;

3. Based on his or her knowledge, the financial statements, and
other financial information included in the report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the issuer as of, and for, the periods presented in
the report;

4. He or she and the other certifying officers are responsible for
establishing and maintaining disclosure controls and procedures, as
defined in Rule 13a-14(c) of the Securities Exchange Act of 1934, as
amended, for the issuer and have:

   i. Designed such disclosure controls and procedures to ensure that
material information relating to the issuer, including its
consolidated subsidiaries, is made known to them by others within
those entities, particularly during the period in which the periodic
reports are being prepared;

   ii. Evaluated the effectiveness of the issuer's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of the report (the "Evaluation Date"); and

   iii. Presented in the report their conclusions about the
effectiveness of the disclosure controls and procedures based on the
required evaluation as of the Evaluation Date

5. He or she and the other certifying officers have disclosed to
the issuer's auditors and to the audit committee of the board of
directors (or persons fulfilling the equivalent function):

<PAGE>

   i. All significant deficiencies in the design or operation of
internal controls which could adversely affect the issuer's ability to
record, process, summarize and report financial data and have
identified for the issuer's auditors any material weaknesses in
internal controls; and

   ii. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the issuer's
internal controls; and

6. He or she and the other certifying officers have indicated in
the report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of their most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

                                        /s/ Ben Y. Jamil
                                        ----------------
                                        Ben Y. Jamil
                                        Chief Executive Officer

                                        /s/ Chris R. Decker
                                        -------------------
                                        Chris R. Decker
                                        Chief Financial Officer