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

                                   FORM 10-QSB
                                   (Mark One)

  |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

                  For the quarterly period ended June 30, 2004

  |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

      For the transition period from _________________ to _________________

                        Commission file number 001-12536

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

               Delaware                                11-2964894
   (State or other jurisdiction of         (IRS Employer Identification No.)
    incorporation or organization)



                     1175 North Service Road West, Suite 214
                        Oakville, Ontario, Canada L6M 2W1
                    (Address of principal executive offices)
                                 (905) 339-3439
                           (Issuer's telephone number)



              (Former name, former address and former fiscal year
                         if changed since last report)

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of July 30, 2004 the issuer had
outstanding 17,198,844 shares of its common stock, par value $.0001 per share.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

<PAGE>


                                TABLE OF CONTENTS

                               FORM 10-QSB REPORT

                                  June 30, 2004


PART I - FINANCIAL INFORMATION
                                                                            PAGE
    Item 1. Financial Statements (unaudited)

        Condensed Consolidated Balance Sheets
            June 30, 2004 (unaudited) and December 31, 2003..................  2

        Condensed Consolidated Statements of Operations
            for the six and three months ended June 30, 2004 (unaudited).....  3

        Condensed Consolidated Statement of Changes in Stockholders' Equity
            for the six months ended June 30, 2004 (unaudited)...............  4

        Condensed  Consolidated Statement of Cash Flows
            for the six months ended June 30, 2004 (unaudited)...............  5

        Notes to Condensed Consolidated Financial Statements (unaudited).....  6

    Item 2. Management's Discussion and Analysis or Plan of Operation........ 12

    Item 3. Controls and Procedures.......................................... 15


PART II - OTHER INFORMATION

    Item 2. Changes in Securities and Small Business Issuer Purchases
            of Equity Securities............................................. 16

    Item 6. Exhibits and Reports on Form 8-K................................. 17


SIGNATURES................................................................... 18


                                       1
<PAGE>


PART I - FINANCIAL INFORMATION.

                      SECURED SERVICES, INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2004 (Unaudited) AND DECEMBER 31, 2003

                                                       June 30,     December 31,
                                                         2004           2003
                                                     -----------    -----------

                                     ASSETS
Current assets:
   Cash and cash equivalents                         $ 5,666,151    $   203,677
   Accounts receivable, net of allowance for
     doubtful accounts of $58,650 and $32,400            530,690        435,881
   Loans receivable from related parties               1,020,039        471,166
   Due from stockholders                                  14,800         15,200
   Prepaid expenses and other current assets              49,915         22,325
                                                     -----------    -----------
         Total current assets                          7,281,595      1,148,249

Computer equipment, net of accumulated
   depreciation of $29,805 and $13,103                   100,145         63,677
Note receivable - employee                                38,000
Goodwill                                               2,808,429      2,808,429
Other intangible assets, net of accumulated
   amortization of $240,000 and $120,000                 480,000        600,000
                                                     -----------    -----------

         Totals                                      $10,708,169    $ 4,620,355
                                                     ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of note payable                   $   355,493    $   345,013
   Accounts payable                                      302,910        343,681
   Accrued expenses                                      762,750        182,346
   Deferred revenues                                     223,216         38,372
                                                     -----------    -----------
         Total current liabilities                     1,644,369        909,412

Dividends payable in common stock                         30,000         33,423
Note payable, net of current portion                     408,220        590,309
                                                     -----------    -----------
         Total liabilities                             2,082,589      1,533,144
                                                     -----------    -----------

Commitments

Stockholders' equity:
   Preferred stock; par value $.0001 per share;
     5,000,000 shares authorized; 2,000,000 shares
     of Series A convertible preferred stock
     issued and outstanding                                  200            200
   Common stock; par value $.0001 per share;
     50,000,000 shares authorized; 17,198,844 and
     9,299,723 shares issued and outstanding               1,720            930
   Additional paid-in capital                         12,182,861      4,682,571
   Subscriptions receivable                             (652,100)      (525,000)
   Accumulated deficit                                (2,907,718)    (1,075,945)
   Accumulated other comprehensive income                    617          4,455
                                                     -----------    -----------
         Total stockholders' equity                    8,625,580      3,087,211
                                                     -----------    -----------

         Totals                                      $10,708,169    $ 4,620,355
                                                     ===========    ===========

See Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    SIX AND THREE MONTHS ENDED JUNE 30, 2004
                                   (Unaudited)

                                                     Six Months     Three Months
                                                        Ended          Ended
                                                       June 30,       June 30,
                                                         2004           2004
                                                     -----------    -----------


Revenues - sales and services                        $   936,928    $   405,863

Cost of revenues                                         347,547        200,045
                                                     -----------    -----------

Gross profit                                             589,381        205,818
                                                     -----------    -----------

Operating expenses:
     Selling, general and administrative               1,879,117      1,136,558
     Research and development                            333,988        207,079
     Depreciation of computer equipment                   16,807          7,185
     Amortization of intangible assets                   120,000         60,000
                                                     -----------    -----------
     Totals                                            2,349,912      1,410,822
                                                     -----------    -----------

Loss from operations                                  (1,760,531)    (1,205,004)
                                                     -----------    -----------
Interest income                                          (13,738)       (12,519)
Interest expense                                          24,980         12,114
                                                     -----------    -----------
Net interest (income) expense                             11,242           (405)
                                                     -----------    -----------

Net loss                                              (1,771,773)    (1,204,599)

Preferred stock dividend requirements                     60,000         30,000
                                                     -----------    -----------

Net loss applicable to common stock                  $(1,831,773)   $(1,234,599)
                                                     ===========    ===========

Loss per common share - basic and diluted            $     (0.16)   $     (0.08)
                                                     ===========    ===========


Weighted average common shares outstanding            11,677,534     14,633,458
                                                     ===========    ===========


See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                Series A                                                                    Accumulated
                              Convertible                                                                      Other
                            Preferred Stock       Common Stock     Additional                                 Compre-
                           -----------------  -------------------    Paid-in    Subscriptions  Accumulated    hensive
                             Shares   Amount    Shares     Amount    Capital      Receivable     Deficit      Income       Total
                           ---------  ------  ----------   ------  -----------  -------------  -----------  ----------  -----------
<S>                        <C>         <C>     <C>         <C>     <C>            <C>          <C>            <C>       <C>
Balance, January 1, 2004   2,000,000   $200    9,299,723   $  930  $ 4,682,571    $(525,000)   $(1,075,945)   $  4,455  $ 3,087,211

Shares sold through
  private placements, net
  of costs of $934,980                         7,831,090      783    7,413,097     (792,100)                              6,621,780

Proceeds from
  subscriptions receivable                                                          665,000                                 665,000

Shares issued for payment
  of accrued dividends on
  preferred stock                                 28,031        3       59,997                                               60,000

Dividends declared on
   preferred stock                                                                                 (60,000)                 (60,000)

Shares issued in exchange
  for services                                    40,000        4       27,196                                               27,200

Net loss                                                                                        (1,771,773)              (1,771,773)

Foreign currency
  translation adjustments                                                                                       (3,838)      (3,838)
                           ---------   ----   ----------   ------  -----------    ---------    -----------    --------  -----------

Balance, June 30, 2004     2,000,000   $200   17,198,844   $1,720  $12,182,861    $(652,100)   $(2,907,718)   $    617  $ 8,625,580
                           =========   ====   ==========   ======  ===========    =========    ===========    ========  ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>


                                SECURED SERVICES, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         SIX MONTHS ENDED JUNE 30, 2004
                                   (Unaudited)

Operating activities:
   Net loss                                                         $(1,771,773)
   Adjustments to reconcile net loss to net cash used in
      operating activities:
      Depreciation                                                       16,807
      Amortization of intangible assets                                 120,000
      Provision for bad debts                                            26,250
      Deferred revenues                                                 184,844
      Common stock issued for services                                   27,200
      Changes in operating assets and liabilities:
         Accounts receivable                                           (121,059)
         Prepaid expenses and other current assets                      (27,590)
         Accounts payable                                               (40,771)
         Accrued expenses                                               576,981
                                                                    -----------
               Net cash used in operating activities                 (1,009,111)
                                                                    -----------

Investing activities:
   Loans to related parties, net                                       (548,873)
   Loan to employee                                                     (38,000)
   Purchases of computer equipment                                      (53,170)
                                                                    -----------
               Net cash used in investing activities                   (640,043)
                                                                    -----------

Financing activities:
   Repayments of note payable                                          (171,609)
   Proceeds from loan payable to stockholder                            250,050
   Repayment of loan payable to stockholder                            (250,050)
   Proceeds from private placements of common stock, net              6,621,780
   Proceeds from subscriptions receivable for common stock              665,000
                                                                    -----------
             Net cash provided by financing activities                7,115,171
                                                                    -----------
Effect of foreign currency translation on cash                           (3,543)
                                                                    -----------

Net increase in cash and cash equivalents                             5,462,474

Cash and cash equivalents, beginning of period                          203,677
                                                                    -----------

Cash and cash equivalents, end of period                            $ 5,666,151
                                                                    ===========

Supplementary disclosure of cash flow information:

Interest paid                                                       $    24,980
                                                                    ===========


See Notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Basis of presentation:

         In the opinion of management, the accompanying unaudited condensed
         consolidated financial statements reflect all adjustments, consisting
         of normal recurring adjustments, necessary to present fairly the
         financial position of Secured Services, Inc. ("SSI") and its subsidiary
         (the "Company") as of June 30, 2004, and the Company's results of
         operations for the six and three months then ended and changes in
         stockholders' equity and cash flows for the six months then ended.
         Information included in the condensed consolidated balance sheet as of
         December 31, 2003 has been derived from the audited consolidated
         financial statements of the Company as of December 31, 2003 and the
         period from April 28, 2003 (date of inception) to December 31, 2003
         included in the Company's Annual Report on Form 10-KSB (the "10-KSB")
         for the year ended December 31, 2003 that was previously filed with the
         United States Securities and Exchange Commissions (the "SEC"). Pursuant
         to the rules and regulations of the SEC, certain information and
         disclosures normally included in financial statements prepared in
         accordance with accounting principles generally accepted in the United
         States of America have been condensed in or omitted from these
         financial statements. Accordingly, these unaudited condensed
         consolidated financial statements should be read in conjunction with
         the audited consolidated financial statements included in the 10-KSB.

         As further explained in Notes 1 and 3 to the audited consolidated
         financial statements in the 10-KSB, SSI was a privately-held company
         that had been formed in September 2002 and was inactive until it was
         capitalized and commenced operations on April 28, 2003. Such operations
         were initially limited to activities related to negotiating the
         acquisitions of two operating businesses and obtaining the financing to
         acquire those businesses. SSI completed those acquisitions and certain
         related transactions on, effectively, July 18, 2003. The acquisitions
         of those businesses were accounted for as purchases by SSI. Under the
         purchase method of accounting, the results of operations of those
         businesses were combined with the results of operations of SSI
         commencing on July 1, 2003, which was deemed to be the effective date
         for the completion of the acquisitions for accounting purposes.
         Accordingly, comparative statements of operations for the six and three
         months ended June 30, 2003 and cash flows for the six months ended June
         30, 2003 are not presented in this quarterly report.

         The results of operations for the six and three months ended June 30,
         2004 are not necessarily indicative of the results to be expected for
         the year ending December 31, 2004 or any other subsequent period.

Note 2 - Business operations:

         The Company provides security software solutions that securely manage
         identities and their access to enterprise information assets. The
         Company's products help companies ensure that only those people or
         business processes that are entitled to access corporate resources and
         applications can access them. They also enable customers to manage
         their user population that need to access those resources and
         applications. In addition, the Company's products provide a more
         automated way to grant, modify or revoke account access to applications
         and resources.

                                       6
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - Business operations (concluded):

         The Company's revenues are derived primarily from its core product,
         IDENTIPRISE, which provides identity and access management to a broad
         range of technology environments. The Company also offers various
         levels of consulting and support services that enable customers to
         identify and manage security issues and practices.

         The Company's products are generally sold on a perpetual license basis.
         Customers enter into an annual support agreement for their software
         license at the time of initial purchase and typically renew this
         support agreement annually. The support agreement entitles customers to
         software upgrades and support. The Company's professional services
         group provides customers with project management, architecture and
         design, custom development services and training.


Note 3 - Earnings (loss) per common share:

         The Company presents "basic" earnings (loss) per common share and, if
         applicable, "diluted" earnings per common share pursuant to the
         provisions of Statement of Financial Accounting Standards No. 128,
         "Earnings per Share". Basic earnings (loss) per common share is
         calculated by dividing net income or loss applicable to common stock by
         the weighted average number of common shares outstanding during each
         period. The calculation of diluted earnings per common share is similar
         to that of basic earnings per common share, except that the weighted
         average number of common shares outstanding is increased to include the
         number of additional common shares that would have been outstanding if
         all potentially dilutive common shares, such as those issuable upon the
         exercise of stock options and warrants and the conversion of
         outstanding convertible preferred stock, were issued during the period,
         with appropriate adjustments for the application of the treasury stock
         method with respect to options and warrants assumed to have been
         exercised and the elimination of any dividends on the preferred shares
         assumed to have been converted from net income or loss.

         Since the Company had net losses for the six and three months ended
         June 30, 2004, the assumed effects of the exercise of options and
         warrants outstanding at June 30, 2004 for the purchase of 3,804,551
         shares of common stock and the conversion of 2,000,000 shares of Series
         A convertible preferred stock into an equivalent number of shares of
         common stock would have been anti-dilutive.


Note 4 - Related party transactions and balances:

         The Company had loans receivable of $1,020,039 as of June 30, 2004
         arising from aggregate cash advances made to companies in which a
         stockholder/executive of the Company holds indirect ownership
         interests. During the six and three months ended June 30, 2004, the
         Company had sales of $147,404 and $46,731, respectively, to one of the
         related companies. At June 30, 2004, the company had accounts
         receivable of $363,678 from one of the related companies. As of June
         30, 2004, accounts payable to the related companies were not
         significant. The balances receivable from the related companies as of
         June 30, 2004 are noninterest bearing

                                       7
<PAGE>


         and are expected to be repaid within one year in the ordinary course of
         business and, accordingly, they have been classified as current assets
         in the accompanying condensed consolidated balance sheet as of June 30,
         2004.

         During the three months ended June 30, 2004, a principal stockholder
         charged a consulting fee to the Company in the amount of $350,000 for
         services performed in connection with the private placement completed
         by the Company on May 10, 2004 (see note 5).

         A loan payable to a stockholder of $250,050 that arose from borrowings
         during the three months ended March 31, 2004 was repaid during the
         three months ended June 30, 2004 together with interest at 6%.

         During the three months ended June 30, 2004, the Company loaned $38,000
         to an employee. The loan is evidenced by a promissory note and is
         scheduled to be repaid on September 30, 2005. The loan bears interest
         at the rate of 6%.

Note 5 - Stockholders' equity:

         Preferred stock:

         As of June 30, 2004, the Company was authorized to issue up to
         5,000,000 shares of preferred stock with a par value of $.0001 per
         share. Under the Company's Articles of Incorporation, the Board of
         Directors, within certain limitations and restrictions, can fix or
         alter preferred stock dividend rights, dividend rates, conversion
         rights, voting rights and terms of redemption, including redemption
         prices and liquidation preferences.

         During the period from April 28, 2003 to December 31, 2003, the Company
         issued 2,000,000 shares of Series A convertible preferred stock as part
         of the consideration for the purchase of a business (see Note 3 in the
         10-KSB). Each share can be converted to one share of common stock and
         has voting rights similar to common stock.

         In addition, each share of Series A convertible preferred stock earns a
         quarterly dividend of 6% which is payable in shares of the Company's
         stock based on the average trading price of the Company's common stock
         over a specified period.

         As of December 31, 2003, the Company had accrued dividends on preferred
         shares of $30,000 payable in common stock. During the six months ended
         June 30, 2004, the Company accrued $60,000 of additional dividends on
         its outstanding shares of preferred stock and paid $60,000 of dividends
         by the issuance of 28,031 shares of common stock. The accrued balance
         of dividends payable of $30,000 at June 30, 2004 will be paid through
         the issuance of approximately 16,000 shares in the third quarter of
         2004.

Note 5 - Stockholders' equity (concluded):

         Private placements of common stock and warrants:

         During the six months ended June 30, 2004, the Company sold common
         stock and warrants through two private placements intended to be exempt
         from registration under the Securities Act of 1933 (the "Act").

         The Company sold 599,489 units at $2.25 per unit, consisting of three
         shares of common stock and one warrant to purchase one share of common
         stock, exercisable at $1.50 per share through March 2006. The Company
         also sold 1,346,156 units at $5.20 per unit, consisting of four shares
         of common stock and one warrant to purchase one share of common stock,
         exercisable at $1.96 per share through May 2009.


                                       8
<PAGE>

         As a result, the Company issued a total of 7,831,090 shares of common
         stock and warrants to purchase 1,997,513 shares of common stock in
         connection with the private placements from which the gross proceeds
         were $8,348,860. The gross proceeds were reduced to initial net
         proceeds of $6,621,780 by consulting fees and other costs of $934,980,
         of which $350,000 was charged by a princial stockholder of the Company
         and paid through an offset against an equivalent balance of a
         previously outstanding subscription receivable, and by additional
         subscriptions receivable from purchasers of units of $792,100.

         The Company had subscriptions receivable of $525,000 as of December 31,
         2003. Subscriptions receivable were increased by $1,142,100 from sales
         of units and reduced by $1,015,000 ($665,000 through cash payments and
         $350,000 through the offset against offering costs) during the six
         months ended June 30, 2004. As a result, the Company had subscriptions
         receivable of $652,100 at June 30, 2004, which are offset against
         stockholders' equity in the accompanying condensed consolidated balance
         sheet.

         Shares issued for services:

         During the six months ended June 30, 2004, the Company issued 40,000
         shares of common stock to key employees for services and recognized
         compensation expense of $27,200 based on the fair value of the shares
         issued. The issuances of these shares were noncash transactions and,
         accordingly, they are not reflected in the accompanying condensed
         consolidated statement of cash flows.

Note 6 - Stock options and warrants:

         Information related to the Company's stock options is included in Note
         8 in the 10-KSB. A summary of stock option activity during the six
         months ended June 30, 2004 follows:


                                                                       Weighted-
                                                                        Average
                                                                       Exercise
                                                           Shares        Price

         Outstanding January 1, 2004                     326,619         $2.34

         Granted                                         283,000         $1.84

         Forfeited                                       (15,722)        $5.81
                                                         -------
         Outstanding, June 30, 2004                      593,897         $1.99
                                                         =======
         Exercisable, June 30, 2004                       37,897         $4.81
                                                         =======         =====

                                       9
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 6 - Stock options and warrants (continued):

         Statement of Financial Accounting Standards No. 123, "Accounting for
         Stock-Based Compensation" ("SFAS 123"), provides for the use of a fair
         value based method of accounting for employee stock compensation.
         However, SFAS 123 also allows an entity to continue to measure
         compensation cost for stock options granted to employees using the
         intrinsic value method of accounting prescribed by Accounting
         Principles Board Opinion No. 25, "Accounting for Stock Issued to
         Employees" ("APB 25"), which only requires charges to compensation
         expense for the excess, if any, of the fair value of the underlying
         stock at the date a stock option is granted (or at an appropriate
         subsequent measurement date) over the amount the employee must pay to
         acquire the stock. The Company has elected to continue to account for
         employee stock options using the intrinsic value method under APB 25.
         By making that election, it is required by SFAS 123 and SFAS 148,
         "Accounting for Stock-Based Compensation -- Transition and Disclosure"
         ("SFAS 148"), to provide pro forma disclosures of net loss and loss per
         common share as if a fair value based method of accounting had been
         applied, if such amounts differ materially from the historical amounts.

         Since the Company has elected to continue to use the intrinsic value
         method of accounting prescribed by APB 25 in accounting for its stock
         options granted to employees and the exercise price of all of the
         options granted to employees has been equal to or greater than the fair
         market value at the date of grant, no earned or unearned compensation
         cost has been recognized in the accompanying condensed consolidated
         financial statements for stock options granted to employees. However,
         there was no material difference between the Company's historical net
         loss applicable to common stock and loss per common share and pro forma
         net loss applicable to common stock and loss per share for the six
         months and three months ended June 30, 2004 assuming compensation cost
         had been determined based on the fair value of the options at the date
         of grant and amortized over the vesting period consistent with the
         provisions of SFAS 123.

         To determine pro forma net loss applicable to common stock, the fair
         value of each option granted was estimated on the date of grant using
         the Black-Scholes option-pricing model. The following weighted-average
         assumptions were used for determining the fair value of options granted
         during the six and three months ended June 30, 2004:


         Risk-free interest rate                                         4%

         Expected option lives                                          10 years

         Expected volatility                                            41%

         Expected dividend yields                                        0%


                                       10
<PAGE>


                      SECURED SERVICES, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 6 - Stock options and warrants (concluded):

         A summary of warrant activity for the six months ended June 30, 2004
         follows:

                                                                        Weighted
                                                                        Average
                                                                        Exercise
                                                       Amount            Price
                                                     ----------         --------

         Outstanding, January 1, 2004                $1,188,476          $1.79

         Issued in conjunction with private
             placements (Note 5)                      1,997,513          $1.81
                                                     ----------
                Outstanding, June 30, 2004            3,185,989          $1.70
                                                     ==========          =====

Note 7 - Income taxes:

         As of June 30, 2004, the Company had Federal and Canadian net operating
         loss carryforwards of approximately $1,865,000 and $152,000,
         respectively. The net operating loss carryforwards are available to
         reduce future Federal and Canadian taxable income through their
         expiration in 2023 and 2009, respectively. Due to uncertainties related
         to, among other things, the timing and amount of future taxable income
         and potential changes in control, the Company offset net deferred tax
         assets of $800,000 arising primarily from the benefits of net operating
         loss carryforwards by an equivalent valuation allowance as of June 30,
         2004. The Company had also offset such benefits through a valuation
         allowance in the period from April 28, 2003 (date of inception) to
         December 31, 2003 (see Note 9 in the 10-KSB). Accordingly, the Company
         did not recognize any credits for income taxes in the accompanying
         condensed consolidated statements of operations to offset its pre-tax
         losses.

                                       11
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO
THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS QUARTERLY REPORT. THE
FOLLOWING DISCUSSION REGARDING US AND OUR BUSINESS AND OPERATIONS CONTAINS
FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS CONSIST OF ANY STATEMENT OTHER THAN
A RECITATION OF HISTORICAL FACT AND CAN BE IDENTIFIED BY THE USE OF SUCH
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "EXPECT," "ANTICIPATE," "ESTIMATE" OR
"CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON, OR COMPARABLE
TERMINOLOGY. THE READER IS CAUTIONED THAT ALL FORWARD-LOOKING STATEMENTS ARE
NECESSARILY SPECULATIVE AND THERE ARE CERTAIN RISKS, UNCERTAINTIES THAT COULD
CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE REFERRED TO IN
SUCH FORWARD-LOOKING STATEMENTS.

OVERVIEW

         Secured Services, Inc. provides security software solutions that
securely manage access to enterprise information assets by persons and business
processes. Our software help companies ensure that only those people or business
processes that are entitled to access corporate resources and applications can
access them. In addition, our products provide an automated way to grant, modify
or revoke account access to applications and resources. Our core product, the
IDENTIPRISE(TM) software system, provides identity and access management to a
broad range of technology environments, including all Web, client server and
mainframe environments. It specifically allows one user-id and password to grant
access to all of a customer's applications.

         We also offer various levels of consulting and support services that
enable our customers to identify and manage security issues and practices. As
part of these services our professional services group provides customers with
architecture and design, custom development services, training and project
management for projects for seeking to protect their information assets.

         Our software products are generally sold on a perpetual license basis.
Customers enter into an annual support agreement for their software license at
the time of initial purchase and typically renew this support agreement
annually. Our support agreement entitles customers to software upgrades and
support.

         As further explained in Notes 1 and 3 to the audited consolidated
financial statements in the 10-KSB, SSI was a privately-held company that had
been formed in September 2002 and was inactive until it was capitalized and
commenced operations on April 28, 2003. Such operations were initially limited
to activities related to negotiating the acquisitions of two operating
businesses and obtaining the financing to acquire those businesses. SSI
completed those acquisitions and certain related transactions on, effectively,
July 18, 2003. The acquisitions of those businesses were accounted for as
purchases by SSI. Under the purchase method of accounting, the results of
operations of those businesses were combined with the results of operations of
SSI commencing on July 1, 2003, which was deemed to be the effective date for
the completion of the acquisitions for accounting purposes. Accordingly,
comparative statements of operations and cash flows for the three months ended
June 30, 2003 are not presented in this quarterly report.

RESULTS OF OPERATIONS

         The following table sets forth for the period presented the statement
of consolidated operations data as an approximate percentage of revenues:

                                             SIX MONTH ENDED  THREE MONTHS ENDED
                                              JUNE 30, 2004      JUNE 30, 2004
Revenues                                          100.0%             100.0%
Cost of revenues                                   37.1%              49.3%
Gross profit                                       62.9%              50.7%
Selling, general and administrative expense       200.6%             280.0%
Research and development                           35.6%              51.0%
Depreciation and amortization                      14.6%              16.6%
Total operating costs and expenses                250.8%             347.6%
Loss from operations                              187.9%             296.9%
Interest expense, net                               1.2%               0.1%
Net loss                                          189.1%             296.8%

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<PAGE>


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The preparation of the consolidated financial statements requires
management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and the related disclosure of
contingent assets and liabilities. Management bases its estimates and judgments
on historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Management continuously evaluates its
estimates and judgments, and actual results may differ from these estimates
under different assumptions or conditions.

         Those estimates and judgments that were most critical to the
preparation of the financial statements involved revenue recognition,
recognition of impairment and software development costs as further explained in
our Annual Report on Form 10-KSB for the period from April 28, 2003 (date of
inception) to December 31, 2003.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In January, 2003, the FASB issued FASB Interpretation No. 46R ("FIN
46R") "Consolidation of Variable Interest Entities." In general, a variable
interest entity is a corporation, partnership, trust, or any other legal
structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. A
variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in activities on behalf of another company.
Until the adoption of FIN 46R, a company generally had included another entity
in its consolidated financial statements only if it controlled the entity
through voting interests. Fin  46R changes that by requiring a variable
interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's activities or
is entitled to receive a majority of the residual returns or both. FIN 46R's
consolidation requirements apply immediately to variable interest entities
created or acquired after January 31, 2003. The requirements of FIN 46R applied
to all financial statements issued after December 15, 2004 regardless of when
the variable interest entity was established. The adoption of FIN 46R is not
expected to have a material effect on the Company's consolidated financial
position and results of operations.

         In May 2003, the Financial Accounting Standards Board issued SFAS No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS No. 150 changes the accounting for certain
financial instruments that, under previous guidance, issuers could account for
as equity. The new statement requires that those instruments be classified as
liabilities in statements of financial position. Most of the guidance in SFAS
No. 150 is effective for all financial instruments entered into or modified
after May 31, 2003. The adoption of this statement did not have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.

RESULTS OF OPERATIONS.

         REVENUES. The revenues for the six and three months ended June 30, 2004
totaled $937,000 and $406,000 respectively. IDENTIPRISE revenues totaled
$502,000 and other services totaled $435,000 for the six months ended June 30,
2004 and revenues for the three months ended June 30, 2004 were $248,000 for

                                       13
<PAGE>


IDENTIPRISE and $158,000 for other services. We believe that as spending on
Information Technology (IT) increases, together with our increased investment in
sales and marketing efforts and recent release of our new version of IDENTIPRISE
we are well positioned for growth in the future.

         COST OF REVENUES. Cost of Revenues was $348,000 or 37% of our revenues
for the six months, and $200,000 or 49% of our revenues for the three months,
ended June 30, 2004. Cost of Revenues mainly consists of payroll and related
expenses associated with our consulting services and software maintenance in
connection with previously installed IDENTIPRISE licenses.

         GROSS PROFIT. Our Gross Profit approximated $589,000 or 63% for the six
months ended June 30, 2004 and $206,000 or 51% for the three months ended June
30, 2004. The decline in the gross profit percentage in the last three months is
due to a shortfall in sales in the quarter while maintaining a relatively fixed
cost base in our service delivery manpower. We believe that this manpower base
can handle the anticipated growth in sales and services in 2004.

         RESEARCH AND DEVELOPMENT. The cost associated with our research and
development efforts totaled $334,000 and $207,000 for the six and three months
ended June 30, 2004. These costs represent approximately 36% and 51% of our
revenues for the six and three months ended June 30, 2004, respectively, and
enabled us to improve our IDENTIPRISE product as our customers highlight future
requirements. We believe that Research and Development costs in the future will
increase to further enhance our IDENTIPRISE software system in response to our
customers' request.

         SELLING, GENERAL AND ADMINISTRATIVE. Selling, General and
Administrative expenses totaled $1,879,000 and $1,136,000 for the six and three
months ended June 30, 2004, respectively. These costs include a rapid build-up
of compensation costs for sales and marketing personnel together with the
initial marketing costs for developing sales literature to maximize our new
sales and marketing initiatives. We believe that this cost as a percentage of
revenue will decrease in future periods as our fixed expense growth decreases as
sales increase.

         DEPRECIATION AND AMORTIZATION. The costs for depreciation and
amortization amounted to $136,807 and $67,185 for the six and three months ended
June 30, 2004, respectively, and represented primarily amortization of
intangible assets acquired in connection acquisition of our business operations
in July 2003.

         INTEREST EXPENSE. Interest expense during the six and three months
ended June 30, 2004 approximated $25,000 and $12,100, respectively, and related
primarily to the obligation owed to VASCO Data Security International, Inc. in
accordance with the terms of the purchase of our IDENTIPRISE software system.
Interest expense was offset by interest income of $13,800 and $12,500 received
during the six and three months ended June 30, 2004, respectively.

         NET LOSS. Our net loss for the six and three months ended June 30, 2004
amounted to $1,771,000 and $1,205,000 and represents the cost to maintain
current revenue streams while investing in the rapid growth of selling,
marketing and research and development costs in order to reach our expansion
goals. Net loss applicable to common stock for the six and three months ended
June 30, 2004 amounted to $1,831,773 and $1,204,599 after preferred stock
dividend requirements of $60,000 and $30,000, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2004, we had current assets totaling $7,282,000. These
include cash and cash equivalents in the amount of $5,666,000, accounts
receivable of $ 531,000, and amounts due from affiliated companies of $1,020,000
and other receivables of $65,000. Cash investments are limited to investment
grade marketable securities with maturities of less than 12 months.

         Net cash used in operating activities totaled approximately $1,009,000
for the six months ended June 30, 2004 due primarily to our net loss which
reflected our increasing investment in our sales and marketing efforts.

                                       14
<PAGE>


         Net cash used in investing activities approximated $640,000 of which
$549,000 was advanced to a related entity for working capital and professional
fees, $53,000 was used to acquire computer equipment, and $38,000 was loaned to
an employee.

         Net cash provided by financing activities for the six months ended June
30, 2004 totaled $7,115,000 which included proceeds from sales of 7,931,350
shares of common stock and warrants to purchase 1,997,513 shares of common stock
through private placements reduced by related fees and repayments of notes
payable. Private placements of common stock and warrants generated net proceeds
of $6,622,000 consisting of gross proceeds of approximately $8,349,000 reduced
by subscriptions receivable of $792,000 and fees of $935,000 incurred in
connection with the private placements. Collections of subscriptions receivable
amounted to $665,000. Repayments of principal amounts due under the note payable
to VASCO amounted to $172,000. The cash provided by financing activities will be
used to fund working capital requirements and to expand our sales and marketing
initiatives for IDENTIPRISE.

         We believe that this financing is sufficient to allow us to establish a
successful enterprise in the intended market. We expect the agreements with our
current business partners to produce revenues in the year ending December 31,
2004 and we are currently in discussions with several additional companies to
provide services. There is no assurance, however, that our IDENTIPRISE software
system will be launched as planned.

         We believe that our current cash balances, the anticipated cash
generated from operations, including the realization of deferred revenue which
is recorded as a current liability, deposits that will be received in future
quarters on orders and the impact of obtaining additional equity financing, will
be sufficient to meet our anticipated cash needs over the next twelve months.

         There is substantial risk, however, that we may not be able to either
obtain additional financing or that revenue growth and cash receipts will not be
sufficient to generate the funds needed to repay the debt to VASCO within the
terms of the existing agreement. If we are unable to meet our revenue and cash
goals and also unable to either renegotiate the terms of the agreement with
VASCO, we may need to significantly reduce our workforce, sell certain of its
assets, enter into strategic relationships or business combinations, discontinue
some or all of our operations, or take other similar restructuring actions.
While we expect that these actions would result in a reduction of recurring
costs, they also may result in a reduction of recurring revenues and cash
receipts. It is also likely that we would incur substantial non-recurring costs
to implement one or more of these restructuring actions.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Secured Services' management,
with the participation of its chief executive officer and the chief financial
officer, carried out an evaluation of the effectiveness of Secured Services'
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of
the period covered by this quarterly report (the "Evaluation Date"). Based upon
that evaluation, its chief executive officer and the chief financial officer
concluded that, as of the Evaluation Date, Secured Services' disclosure controls
and procedures are effective, providing them with material information relating
to Secured Services as required to be disclosed in the reports Secured Services
files or submits under the Exchange Act on a timely basis.

         CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no
changes in Secured Service's internal controls over financial reporting, known
to the chief executive officer or the chief financial officer that occurred
during the three months ended June 30, 2004 that has materially affected, or is
reasonably likely to materially affect, Secured Services' internal control over
financial reporting.

                                       15
<PAGE>


                           PART II--OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
         SECURITIES.

RECENT SALES OF UNREGISTERED SECURITIES

         In January, 2004, we sold an aggregate of 186,757 shares of our common
         stock as follows:

         (i)      40,000 to our Chief Financial Officer for services rendered.
                  The sale of these shares was exempt from registration, as it
                  was a non-public offering made pursuant to Sections 4(2) and
                  4(6) of the Securities Act of 1933, as amended;

         (ii)     14,757 shares to VASCO Data Security International, Inc, in
                  payment of dividend due on the outstanding shares of our
                  Series A Convertible Preferred Stock for the quarter ended
                  December 31, 2003. The sale of these shares was exempt from
                  registration, as it was a non-public offering made pursuant to
                  Sections 4(2) and 4(6) of the Securities Act of 1933, as
                  amended; and

         (iii)    108,000 shares to Corporate Capital Management and 24,000
                  shares to Capital Market Relations as compensation for
                  consultation services rendered. The sale of these shares was
                  exempt from registration, as it was a non-public offering made
                  pursuant to Section 4(2) of the Securities Act of 1933, as
                  amended.

         In March, 2004, we sold an aggregate of 467,823 units at $2.25 per
unit, in our January 2004 private placement, raising gross proceeds of
approximately $913,000. Each unit consists of 3 shares of our common stock and
one 3-year common stock purchase warrant with an exercise price of $1.50. The
sale of these shares was exempt from registration, as it was a non-public
offering made pursuant to Regulation D, Regulation S and Sections 4(2) and 4(6)
of the Securities Act of 1933, as amended. During this month, we also issued
31,000 shares of our common stock to Corporate Capital Management as
compensation for services rendered. The sale of these shares was exempt from
registration, as it was a non-public offering made pursuant to Section 4(2) of
the Securities Act of 1933, as amended.

         In April, 2004, we issued (i) 13,274 of our common stock, to VASCO Data
Security International in payment of dividends due on the outstanding shares of
our series A Convertible Preferred stock for the quarter ended March 31, 2004;
(ii) 50,000 shares of our common stock to Corporate Capital Management for
services rendered; and (iii) 24,000 shares of common stock to Capital Market
Relations for services rendered. The issuance of the shares to Capital Market
Relations was made pursuant to an exemption from registration pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the "Act"). In addition,
the issuances to VASCO and Corporate Capital Management were also exempt
pursuant to Section 4(6) of the Act. Additionally, on April 9, 2004 we raised an
additional $296,000 in our January 2004 private placement through the sale of
131,667 units at $2.25 per unit. Each unit consists of 3 shares of our common
stock and one 3-year common stock purchase warrant with an exercise price of
$1.50 the sale of these shares was exempt from registration as it was a
non-public offering made pursuant to Regulation D and Sections 4(2) and 4(6) of
the Act.

         On May 10, 2004, we raised approximately $7 million from funds managed
by 033 Asset Management, L.L.C. and 8 other institutional accredited investors
through the sale of 5,384,623 shares of common stock and 5-year warrants to
purchase 1,346,156 shares of common stock at $1.96 per share. The proceeds of
this financing will be used for sales and marketing, research and development,
government certification, finance and administration and working capital. The
securities were sold pursuant to exemptions from registration under the Act
pursuant to Section 4(2) and Regulation D, thereunder. At the same time, we
issued 100,000 shares of our common stock to Frank Fanzilli for services
rendered. The issuance to Frank Fanzilli was made pursuant to an exemption from
registration pursuant to Sections 4(2) and 4(6) of the Act.

         In June 2004, we issued an aggregate of 311,000 shares of common stock
as compensation for consulting services rendered to us as follows: (i) 134,485
shares to Corporate Capital Management, LLC; (ii) 86,500 shares to Corporate
Capital Partners, LLC; (iii) 59,000 shares to Corporate Capital Consultants,
LLC; and (iv) 31,015

                                       16
<PAGE>


shares to Daniel Ryweck. The issuance of these shares was made pursuant to an
exemption from registration pursuant to Sections 4(2) and 4(6) of the Act.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a.       Exhibits:

         EXHIBIT NO.        DESCRIPTION

         31.1     Chief Executive Officer Certification pursuant to section 302
                  of the Sarbanes-Oxley Act of 2002*

         31.2     Chief Financial Officer Certification pursuant to section 302
                  of the Sarbanes-Oxley Act of 2002*

         32.1     Chief Executive Officer Certification pursuant to section 906
                  of the Sarbanes-Oxley Act of 2002*

         32.2     Chief Financial Officer Certification pursuant to section 906
                  of the Sarbanes-Oxley Act of 2002*

b.       Reports on Form 8-K:

         On May 14, 2004, we filed a Current Report on Form 8-K pursuant to
Items 5 and 7.

                                       17
<PAGE>


                                   SIGNATURES

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

                                           SECURED SERVICES, INC
                                           (Registrant)

Date       August 13, 2004                 /s/ King T. Moore
       ------------------------------      -----------------
                                           King T. Moore
                                           President and Chief Executive Officer

Date       August 13, 2004                 /s/ John G. Day
       ------------------------------      -----------------
                                           John G. Day
                                           Chief Financial Officer
                                           (Principal Financial Officer)


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