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UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-KSB

ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2002

Commission file No. 0-29501

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Com-Guard.com, Inc.(Exact name of registrant as specified in its charter)

(A
Development Stage Entity)

NEVADA(State or other jurisdiction of
incorporation or organization)

33-0879853(IRS Employer ID No.)2075 Corte del Nogal, Suite R
Carlsbad, California 92009
(760) 431-2206(Address and telephone number of principal executive offices)


Securities registered under Section 12(b) of the Exchange Act:NONE

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value

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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. o Yes    ý 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. ý

At
September 24, 2001, there was no market value of the voting stock of the Registrant as, to date, there has been no trading on any stock exchange in the Registrant's common
stock,

At
September 24, 2002, there were 10,322,000 shares of the registrant's Common Stock, $0.001 par value, issued and outstanding.

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Forward Looking Statements

In addition to historical information, this Annual Report on Form 10-KSB may contain forward-looking statements that involve a number of risks
and uncertainties, including those discussed below at "Risks and Uncertainties." While this outlook represents management's current judgment on the future direction of the business, such risks and
uncertainties could cause actual results to differ materially from any future performance suggested below. Readers are cautioned not to place undue reliance on the forward-looking statements, which
speak only as of the date of this Annual Report. The Company undertakes no obligation to publicly release any revisions to forward-looking statements to reflect events or circumstances arising after
the date of this document. See "Risks and Uncertainties." References in this Annual Report on Form 10-KSB to "Com-Guard.com" and the "Company" are to
Com-Guard.com, Inc.

PART I

Item 1.    Description of Business.

Com-Guard.com, Inc. (the "Registrant" or the "Company") was incorporated as e-World Security, Inc. in the State of Nevada on
October 7, 1998. The Company's name was changed to Com-Guard.com, Inc. and filed on April 16, 1999.

The
Registrant has limited operating history. The principal business of the Registrant is the exploitation of niche products for the microcomputer industry that provide enhanced system
security for both individual users and network administrators. The Company's primary products are:

1.    Com-Guard,
which includes unique software that enables an authorized user to prohibit use of their computer, record events, and protect and deny
access to stored files and

2.    Com-Guard
Pro, combines Com-Guard software with a patented Sensor-Card hardware PC board to
provide the data security mentioned above with expanded system level security that guards against physical tampering, theft, site access, and unauthorized use of computers.

Com-Guard
is able to hide, encrypt, and lock down data files in what can be considered a virtual "Computer Safe" so that if there is a security violation
attempt, locally or on the net, the intruder will not be able to access the files in the Com-Guard protected area. The Company's Web-Guard product
keeps unauthorized users from using their browser and therefore limit their access to the Internet.

The
Registrant's present business address is 2075 Corte del Nogal, Suite R, Carlsbad, California 92009.

Overview.

Com-Guard.com, Inc. provides a group of products:

Com-Guard,
provides users of personal computers with (1) Internet security, (2) file and hardware security, and (3) internal facility
security.

The
Com-Guard Pro system monitors a computer or network and detects, through proprietary software and hardware, unauthorized attempts to use, tamper with, or
remove data or equipment. The system is designed to generate an alarm and a message, which can be sent to pagers, telephones, other computers, PDA's and other electronic receiving devices.

The
market for Com-Guard's products consists of individual users and industry. The popularity of the Internet has created a need for both data security and access
limitations. Limiting access to sensitive and/or confidential files has grown to be a need for all users of microcomputers.

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Home
automation, including systems to provide "internal" security to certain areas of a home or office, represents an additional market for Com-Guard. The system, installed
in a PC, has the ability to function as an internal home security system, controlling a series of sensors to protect against theft and intrusion, and can be utilized for child safety, etc.

The
Company is managed by experienced individuals who have worked in the microcomputer industry for many years.

The Product.



Com-Guard
products are offered in several configurations depending upon the need of the individual customer. Com-Guard will initially offer three products:
(1) Com-Guard Pro version, including Com-Guard's patented Sensor-Card hardware and Soft-Guard software;
(2) Com-Guard-network version, including Com-Guard hardware, Soft-Guard, and network client/server software; (3) Com-Guard-software only;
and (4) Web-Guarda software package to provide limiting access to the browser will be free.

The Market.

The U.S. personal computer industry consists of thousands of computer manufacturers, assemblers, OEMs, and peripheral/parts producers. Their products are sold and
supported by a variety of distributors, resellers, systems integrators, retail merchants, and service companies. Saturating markets and increasing competition is forcing vendors to seek new users in
homes, small businesses and

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classrooms with revamped marketing strategies and lower cost computers. The information on the size of the PC Computer Industry and network market is considered pertinent because the Registrant
cannot sell and install a Com-Guard board and its related software unless there are Personal Computers that are installed.

In
2001 the worldwide number of PCs-in-use topped 600 Million units. In the next six years this number will nearly double to over 1.15 Billion
PCs-in-use by year-end 2007 for a compound annual growth of 11.4%. The U.S. has the largest number of PCs-in-use with 175 Million at
year-end 2001, and will increase by 6.2% per year to reach 251 Million units in 2007. Despite yearly PC sales of over 40 Million units in the U.S., the annual increase in
PCs-in-use will grow by over 13 Million per year due to over 70% PC replacement rates.

Networking
continues to have a profound effect on the PC industry, from local area networks (LANs) and wide area networks (WANs) to the Internet and Intranets. Networking and
client/server technologies have enabled the personal computer to play a greater role in mission-critical business functions. This expands the value of the PC to companies and reduces the status of
legacy mainframe and midrange systems, while, at the same time, exposing a company and/or its data to Cyber-attacks. LAN functions are graduating from traditional print sharing, file transfer, and
e-mail uses to transaction processing, management support, and Internet access applications. Users are also seeking to link LANs to wider areas to accommodate regional offices and to
provide remote access to home workers.

This
"connectivity" fuels the growing concern regarding file and data security. According to International Data Corporation ("IDC"), over half of business PCs in the United States are
now connected via a LAN. This number reaches as high as 80 percent when speaking about organizations with more than 100 employees. The Internet is, in a sense, the widest area network and is
creating a revolution in the way PCs are used both by businesses and individuals.

The
PC security industry has come into prominence recently, as a result of the newly recognized threat of cyber-terrorism. Corporate data, once reasonably secure when companies used
their own internal computers and networks, have come under increasing threats as more transactions and communications between companies take place over the Internet and Wide Area Networks (WANs). Mike
McConnell, former Director of the U.S. National Security Agency, expresses the point concisely in a July 2001 Red Herring Special Report on Digital Security when he speaks to the need for
improved security of computers and data from cyber-attacks stating that "The United States is more networked than anyone else, and more vulnerable".

The
Internet security software market has been robust with sales of security software in 2000, rising 33 percent to $5.1 Billion, outpacing the general software market, which grew
12 percent for the year. The Internet has made access to corporate data easier making the threat of data theft and or tampering a real and rising issue for businesses large and small alike.
Forbes magazine reported that 85 percent of US corporations had at least one "network" breach costing a total of at least $10 Billion, aggregately.

Fueled
by the proliferation of the personal computer and Internet use, the market for Com-Guard's products is substantial. In 2000, over $5.1 Billion was spent on Internet
Security software by individual computer users and corporate entities. According to International Data Corporation, this number is expected to grow to $14 Billion by the year 2005, a compounded annual
growth rate of 23%.

Major
vendors are beginning to target small businesses, which form the least penetrated, fastest growing business sector. Market drivers include the improved availability of PCs in
consumer outlets at attractive prices and new efforts by major vendors to address the problems faced by these companies, most of which have limited resources and technical know-how. Sales
to the more than 6 million firms with less than 100 employees in the United States constitute the largest share of shipments to the

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business sector, rising to an estimated 42 percent by the year 2000. The small business sector represents more than 60 percent of business employees.

A
recent IDC survey of businesses revealed that security is of paramount concern in the enterprise. Increased use of the Internet and corporate growth are among the most significant
business drivers for adding security; and there was little evidence that these pressures would change over the next several years.

The
IDC survey also covered the priority given by respondents to securing assets. Other than virus protection, which has been addressed by dozens of products over the past few years, the
most important concern was corruption of data and unwanted disclosure of data.

Finally,
the IDC report indicated a general dissatisfaction with the usability and integration of current security technologies, which represents an opportunity for Com-Guard
and associated technologies.

Business Strategy.

The Company's fundamental strategy is to position its Com-Guard product as a preferable method of PC security to end-users, businesses,
and institutions worldwide. Com-Guard.com intends to be the leader in:



Production
of the product and inventory procurement have been arranged with the original Korean developer/manufacturer. The Korean developer/manufacturer will be used to manufacture the
Com-Guard product, assuming that price and delivery will be agreed to by both parties. Management believes that its costs will remain competitive with alternative sources of supply. In any
case, the Company does not, at this time, plan to build its own manufacturing capability and will continue to outsource Com-Guard inventories. The principal supplier as mentioned, will be
Guardtec, Inc. The Company believes that there are many contract manufacturing companies that would bid on manufacturing the Com-guard product.

End-user
marketing will focus on providing a limited version of the product over the Company's Internet site. In this way, the product is exposed to a broad sector of the
market that would match the profile of our consumer. Customers could order broadened feature sets of the product direct from the Company, or from resellers, who might stock the product in stores.

Com-Guard
will be made available to selected resellers either as a branded product or under private-label arrangements. The product would be merchandised for sale with new
computer systems or as an add-on product to existing PC owners. The Company intends to use standard distribution such as major distributors, specialty distributors in the enterprise area
and computer resellers located throughout the United States.

The
Company's sales force will be primarily comprised of manufacturer's representative firms throughout the US and Europe. They will be responsible for selling direct to business and
commercial accounts' principally Fortune 1000 companies and the like whose needs for the product have been validated by the research.

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The
Company will plan and execute an integrated advertising public relations campaign to promote Com-Guard, including participation in trade shows and seminars, and frequent
use of consumer and trade publications.

Competition.

While many security products for the PC are available, most are either inadequate or too costly for general consumption and use. Most products are either costly
"firewall" systems for Internet management, or software products that rely on complex encryption technologies or password protection, which has proven both cumbersome and inadequate. Furthermore,
existing technologies do not combine the features of data security as well as theft protection; and no PC product combines the features of Com-Guard along with an interior security system
(for home or office).

Firewall
products are designed to keep out potential intruders and encryption products are used to scramble or otherwise render data "unreadable." Com-Guard was designed to
detect an intrusion and notify the owners. The Soft-Guard product coupled with Com-Guard will detect unauthorized use, report the intrusion and prevent the unauthorized
intruder from accessing data in the Com-Guard protected area, using Soft-Guard.

Consequently,
the Company believes that Com-Guard is well-positioned in features and price, which can provide it a competitive position in a market of
considerable size.

The
Company's management has extensive experience in outsourcing computer hardware products and believes that there is a lot of competition for manufacturing computer related hardware
boards. The components on Com-Guard hardware boards are widely available from multiple manufactures.

Companies
generally compete by advertising product features and having products tested by independent product reviewers and testing companies. The Company will pursue these avenues for
competing with their products.

Intellectual Property.

The Company has a patent in the United States (Application number 09/030,993), which covers the implementation of Com-Guard hardware. Copyright
applications will be filed on all software developed for the system. The Intellectual Property covers the use of a hardware board which has a device to determine when the computer had been moved or
tampered with. The Company has spent approximately $862,000 on research and development.

Employees.

The Company is in the development stage. However, the Company has engaged a total of (11) consultants at June 30, 2002, of whom three were in
corporate administration and finance, two in engineering and research and development, three in sales and marketing and three as advisory consultants.

Reports to security holders.

The Company is fully reporting. The Company will deliver this Form 10-KSB as its annual report to its shareholders. The Company reports its
quarterly and annual financial results to the Securities and Exchange Commission ("SEC"). The last report filed by the Company was for the period ended March 31, 2002.

Accordingly,
the public may read and copy any materials filed by the Company with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public
may obtain information on the operation of the Public Reference Room by calling the SEC at

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1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC (http://www.sec.gov). The Company's Internet address is www.com-guard.com.

Risks and uncertainties.

Lack of Operations and Profitability.The Company is in the development-stage and commenced pre-operating
activities approximately one year ago. It has no history of operations or profits in the industries in which it participates.

Uncertainty of Commercial Success and Changing Technology.Although the Company is optimistic about its revenue and
profitability prospects, there can be no assurance of commercial success of its Com-Guard product. Furthermore, the computer industry is characterized by rapid change and growth. There can
be no assurance that the Company will be able to keep up with the pace of technological change or fund its growth.

Competition.The Company is subject to competition from other companies that may try to emulate or compete with similar
products or services. These competitors have been in the business longer than the Company and may have large executive and operating staffs. There can be no assurance that the Company's prospects will
not be adversely affected by competition from these companies.

Need for Additional Financing.The Company will require additional financing in order to establish profitable, ongoing
operations; there is no assurance that such financing will be available or, if available, that it can be obtained on terms favorable to the Company.

Dependence on Management.The Company is largely dependent upon the efforts and abilities of Dr. Edward W. Savarese
and there can be no assurance that the Company can be successful in operating the Company should the services of Dr. Savarese be unavailable. Dr. Savarese has had extensive experience in
marketing, sales and financing. He has managed for Hewlett-Packard and has extensive contacts in the computer industry.

Dividends.The Company has never paid a cash dividend on its common stock. The Company is not obligated to pay a dividend on
its common stock and does not anticipate payment of any dividends for the foreseeable future. The Company anticipates retaining its earnings to finance its operations, growth, and expansion.

No Assurance of Public Market; Potential Volatility of Stock Price.There currently is no public trading market for the
Company's common stock. There can be no assurance that an active public trading market can be established or sustained. Furthermore, if a public market for the common stock is established, the shares
could be subject to significant fluctuations in response to operating results and other factors, many of which are not within the control of the Company.

Dependence on Proprietary Technology; Risks of Third Party Infringement Claims.Although the Company has received patent
protection, there can be no assurance that the Company's measures to protect its current proprietary rights will be adequate to prevent misappropriation of such rights or that the Company's
competitors will not independently develop or patent technologies that are substantially equivalent to or superior to the Company's technologies. Additionally, although the Company believes that its
products and technologies do not infringe upon the proprietary rights of any third parties, there can be no assurance that third parties will not assert infringement claims against products and
technologies that the Company licenses, or has the rights to use, from third parties. Any such claims, if proved, could materially and adversely affect the Company's business and results of
operations. In addition, though any such claims may ultimately prove to be without merit, the necessary management

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attention to, and legal costs associated with litigation or other resolution of such claims could materially and adversely affect the Company's business and results of operations.

Item 2.    Description of Property.

The Company occupies approximately 1,800 square feet of space in a facility located at 2075 Corte del Nogal, Suite B, Carlsbad, CA 92002, at a monthly rental rate
of $1,466. The lease expires on November 30, 2002. Monthly rental on this facility is subject to annual rent adjustments based on the Consumer Price Index (CPI). The Company owns no real
property. Management has negotiated a new lease agreement for 2,075 of new corporate office space located at 2075 Corte del Nogal, Suite R, Carlsbad, CA. The Company plans to move to this new space
during October. The new lease expires in August 2005.

Item 3.    Legal Proceedings.

None.

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

None.

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PART II

Item 5.    Market for Common Equity and Related Stockholder Matters.

There currently is no established public trading market for the Company's common stock. The Company is currently taking steps to have its common stock traded on a
public exchange.

1,050,000
shares of the Company's common stock is subject to outstanding options or warrants to purchase, or securities convertible into the Company's common stock. There are 1,050,000
of shares of common stock reserved for outstanding options and warrants to purchase common stock.

By
virtue of Rule 3a51-1 of the Securities Act of 1934 (the "Act"), if the Company's common stock has a price of less than $5.00 per share it will be considered a
"penny stock." The perquisites required of broker-dealers engaging in transactions involving "penny stocks" have discouraged, or even barred, many brokerage firms from soliciting orders for certain
low priced stocks.

Still
further, with respect to the trading of penny stocks, broker-dealers have an obligation to satisfy certain special sales practice requirements pursuant to
Rule 15g-9 of the Act, including a requirement that they make an individualized written suitability determination for the purchase and receive the purchaser's written consent prior
to the transaction.

Still
even further, such broker-dealers have additional disclosure requirements as set forth in the Securities Enforcement Act Remedies and Penny Stock Reform Act of 1990. These
disclosure requirements include the requirement for a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document that provides information about penny
stocks and the risks of the penny stock market.

Still
even further, a broker-dealer must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each penny stock held in the customer's account.

Accordingly,
the above penny stock regulations and the associated broker-dealer requirements may have an adverse effect on the market liquidity of the Company's common stock and the
ability of any present and prospective shareholder investors to sell their securities on the secondary market.

However,
regardless of the price of the Registrant's stock, in the event the Company has net tangible assets in excess of $2,000,000 and if the Company has been in continuous operation
for at least three (3) years, or net tangible assets of $5,000,000, if the Company has been in continuous operation for less than three (3) years, Rule 3a51-1(g) of
the Act will preclude the Company's common stock from being classified as a "penny stock."

Dividends.

The Company has never paid any cash dividends on its capital stock. The Company currently anticipates that it will retain all available earnings for use in the
operation and expansion of its business, and does not anticipate paying any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities.

The Company has had several stock issuances. All such shares were sold by the Company, by its officers and directors, and no underwriters were utilized. Reference
is made to the financial statements and notes to the financial statements from Inception through June 30, 2002 incorporated in this Form 10-KSB.

During
the period from Inception to June 30, 1999, the Company issued 9,094,500 shares of its common stock. Of these, 5,000,000 shares were issued for a total offering of $5,000
cash, 1,024,500

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were issued for cash ($0.20 to $1.00 per share) pursuant to a Regulation D, Rule 504 offering, 560,000 shares were issued for the purchase of research of development ($0.20 to $1.00 per
share), and 2,510,000 were issued for services rendered to the Company ($0.02 to $1.00 per share).

During
the period from June 30, 1999 to June 30, 2000, the Company issued 786,500 shares of its common stock. Of these, 550,000 were issued for cash ($1.00 to $1.50 per
share) pursuant to a Regulation D, Rule 504 offering. 26,500 shares of common stock were issued for services ($1.00 per share), and 210,000 shares of common stock were issued to convert
outstanding notes payable and interest ($1.00 per share).

During
the period from June 30, 2000 to June 30, 2001, the Company issued 441,000 shares of its common stock. Of these, 180,000 were issued for cash ($1.00 per share)
pursuant to a Regulation D, Rule 504 offering. 111,000 shares of common stock were issued for services ($1.00 per share), and 150,000 shares of common stock were issued for intangible
asset ($1.00 per share).

With
respect to the issuance of the common shares above, such issuances were made in reliance on the private placement exemptions provided by Section 4(2) of the Securities Act of
1933 as amended, (the "Act"), SEC Regulation D, Rule 504 of the Act and Nevada Revised Statutes Sections 78.211, 78.215, 78.3784, 78.3785 and 78.3791 (collectively the "Nevada
Statutes").

The
Company has relied upon the private placement exemptions from registration provided by Section 4(2) of the Securities Act of 1933 as amended (the "Act"), which exempts from
registration transactions by an issuer not involving a public offering. This offering exemption is available to any issuer but prohibits general solicitation or advertising. Prospective purchasers
must have access to information about the issuer. The Company utilized this Section 4(2) exemption by providing prospective purchasers with such sufficient information and required that all
such purchasers be financially sophisticated; have a certain net worth and have the ability to bear the risk of loss of their respective investments.

Item 6.    Management's Discussion and Analysis or Plan of Operation.

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Annual Report on
Form 10-KSB. The discussion of the Company's business contained in this Quarterly Report on Form 10-KSB may contain certain projections, estimates and other
forward-looking statements that involve a number of risks and uncertainties, including those discussed above at "Risks and Uncertainties." While this outlook represents management's current judgment
on the future direction of the business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested below. The Company undertakes no obligation
to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.

Overview.

The Company was incorporated as e-World Security, Inc. in the State of Nevada on October 7, 1998. The Company's name was changed to
Com-Guard.com, Inc. and filed on April 16, 1999.

The
Company has limited operating history and is in the development stage. It's principal business is the exploitation of niche products for the microcomputer industry that provide
enhanced system security for both individual users and network administrators. The Company's initial product, Com-Guard, includes unique software and hardware that enables users to protect
and limit access to data; and to provide a security system against tampering and unauthorized use of computers.

The
Com-Guard system monitors a computer or network and detects, through proprietary software and hardware, unauthorized attempts to use, tamper with, or remove data or
equipment. The system is

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designed to generate an alarm, which can be sent to any receiving device, including pagers, telephones, and other computers.

The
market for Com-Guard consists of individual users and industry. The popularity of the Internet has created a need for both data security and access limitations. Limiting
access to sensitive and/or confidential files has grown to be a need for all users of microcomputers.

Home
automation, including systems to provide "internal" security to certain areas of a home or office, represents an additional market for Com-Guard. The system, installed
in a PC, has the ability to function as an internal home security system, controlling a series of sensors to protect against theft and intrusion, and child safety.

The
Company's business continues to be the development phase. Accordingly, quarter-to-quarter financial comparisons may be of limited usefulness now and for the
next several quarters as the Company prepares to launch and market its first products.

The
Company's current strategy is to develop, commercialize and distribute its products. To successfully execute its strategy, the Company will need to improve its working capital
position. The Company needs to raise additional funds to fully develop its business. There can be no assurance, however, that the Company will be able to complete any additional debt or equity
financing on favorable terms or at all, or that any such financings, if completed, will be adequate to meet the Company's capital requirements. Any additional equity or convertible debt financings
could result in substantial dilution to the Company's stockholders. If adequate funds are not available, the Company will be required to delay, reduce or eliminate some or all of its planned
activities. The Company's inability to fund its
capital requirements would have a material adverse effect on the Company. Also See "Risks and Uncertainties" in Part I of this Annual Report on Form 10-KSB.

Results of Operations.

Consulting Fees.

For the year ended June 30, 2002, consulting fees were $979,895 and $721,563 for the year ended June 30, 2001 an increase of $258,322 or 35.80%.
This increase was due to additional consultants used during the year.

Provision to Write Down Inventories.

During the year ended June 30, 2002, the Company wrote-down inventories based on management's planned marketing, distribution, and pricing
strategies of the related products.

Other General and Administrative Expenses.

Other general and administrative expenses for the year ended June 30, 2002 were $194,056. Other general and administrative expenses for the year ended
June 30, 2001 were $197,242 a decrease of $3,186 or 1.6%. Overall expenses for general corporate functions remained accentually the same as the prior year.

Research and Development Expenses.

For the year ended June 30, 2002, research and development expenses were $139,700. For the year ended June 30, 2001, research and development
expenses were $140,200 a decrease of $500. Overall costs during the year remained the same as the prior year.

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Professional Fees.

Professional fees for the year ended June 30, 2002 were $141,432 and $72,017 for the year ended June 30, 2000 an increase of $69,415 or 96.27%. This
increase was due mainly to additional legal and accounting fees during the year.

Liquidity and Capital Resources.

The Company is in the development stage and has financed its operations primarily through cash generated from the sale of its stock.

As
of June 30, 2002, the Company had a working capital deficit of $2,952,095 as compared to a working capital deficit of $1,080,987 at June 30, 2001. The increase of
$1,871,108 in the working capital deficit is due primarily to increased accrued consulting fees and the write down of its inventory. The Company has accumulated operating losses totaling $5,388,552
since inception.

The
Company's auditors have expressed their uncertainty as to the Company's ability to continue as a going concern. They cite the minimal capital resources available to meet existing and
anticipated obligations. In order to address this uncertainty, the Company has taken steps to raise additional funds to finance its operations.

During
July 2002, the Company commenced a private placement offering for the sale of a maximum of 6,000,000 shares of common stock and 3,000,000 warrants in order to raise working
capital. As of the date of this report the offering was open. The Company sold 4,125,003 common shares and 2,062,501 warrants for net proceeds of $1,240,838 to date.

At
June 30, 2002 the Company had no material commitments for capital expenditures.

Item 7.    Financial Statements.

Independent Auditor's Report

12Balance Sheet

13Statements of Operations

14Statements of Changes in Stockholders' Deficiency

15Statements of Cash Flows

16Notes to Financial Statements

17


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Independent Auditors' Report

To
the Board of Directors of:
Com-Guard.com, Inc.
(A development stage company)

We
have audited the accompanying balance sheet of Com-Guard.com, Inc. (a development stage company) as of June 30, 2002 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the years ended June 30, 2002 and 2001 and for the period from October 7, 1998 (Inception) to June 30, 2002.
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 financial position of Com-Guard.com, Inc. (a development stage
company) as of June 30, 2002 and the results of its operations and its cash flows for the years ended June 30, 2002 and 2001 and for the period from October 7, 1998 (Inception) to
June 30, 2002 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 discussed in Note 12 to the financial statements, the
Company has suffered a
loss from operations of $2,102,755, has a working capital deficiency of $2,952,095, an accumulated deficit of $5,388,552 and has negative cash flows from operating activities of $283,363. These
matters raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 12. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

WEINBERG &
COMPANY, P.A.

Los
Angeles, California
September 3, 2002

12

---



COM-GUARD.COM, INC.  (A Development Stage Company)        BALANCE SHEET

|                                               |                                                                                                        | June 30, 2002 |                               
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------- | ------------------------------
|ASSETS                                         |                                                                                                        |               |                               
|Current assets                                 |                                                                                                        |               |                               
|                                               | Cash                                                                                                   |               | $                             
|                                               | Inventory                                                                                              |               |                               
|                                               | Related party receivable                                                                               |               |                               
|                                               |                                                                                                        |               |                               
|                                               |                                                                                                        |               | Total current assets          
|Property and equipment, net                    |                                                                                                        |               | 11,786                        
|Other Assets                                   |                                                                                                        |               |                               
|                                               | Deferred offering costs                                                                                |               |                               
|                                               |                                                                                                        |               |                               
|Total assets                                   |                                                                                                        | $             | 407,595                       
|                                               |                                                                                                        |               |                               
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY       |                                                                                                        |               |                               
|Current liabilities                            |                                                                                                        |               |                               
|                                               | Loan payablebank                                                                                      |               | $                             
|                                               | Accounts payable and accrued liabilites                                                                |               |                               
|                                               | Accrued consulting                                                                                     |               |                               
|                                               | Notes payable                                                                                          |               |                               
|                                               | Notes payablestockholders                                                                             |               |                               
|                                               |                                                                                                        |               |                               
|                                               |                                                                                                        |               | Total current liabilities     
|Long term liabilities                          |                                                                                                        |               |                               
|                                               | Notes payablestockholders                                                                             |               |                               
|                                               |                                                                                                        |               |                               
|Total Liabilities                              |                                                                                                        |               | 92,443                        
|Commitments and Contingencies                  |                                                                                                        |               |                               
|Stockholders' Deficiency                       |                                                                                                        |               |                               
|                                               | Common stock, $.001 par value, 100,000,000 shares authorized; 10,322,000 shares issued and outstanding |               |                               
|                                               | Common stock to be issued, $.001 par value, 35,000 shares                                              |               |                               
|                                               | Additional paid-in capital                                                                             |               |                               
|                                               | Deficit accumulated during development stage                                                           |               |                               
|                                               |                                                                                                        |               |                               
|                                               |                                                                                                        |               | Total stockholders' deficiency
|                                               |                                                                                                        |               |                               
|Total Liabilities and Stockholders' Deficiency |                                                                                                        | $             | 407,595                       
|                                               |                                                                                                        |               |                               

See
accompanying notes to financial statements

13

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COM-GUARD.COM, INC.  (A Development Stage Company)        STATEMENTS OF OPERATIONS

|                                                                   |                                      | For the
Year ended
June 30, 2001 |                              | For the
Year ended
June 30, 2002 |   | For the period
from October 7,
1998 (Inception)
to June 30, 2002 |        
|------------------------------------------------------------------ | ------------------------------------ | -------------------------------- | ---------------------------- | -------------------------------- | - | ---------------------------------------------------------------- | -------
|Sales                                                              |                                      | $                                |                             |                                  | $ | 10,028                                                           |        
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Costs and expenses                                                 |                                      |                                  |                              |                                  |   |                                                                  |        
|                                                                   | Consulting fees                      |                                  |                              | 721,563                          |   |                                                                  | 979,895
|                                                                   | Inventory write down                 |                                  |                              | 319,084                          |   |                                                                  | 464,330
|                                                                   | Other general and administrative     |                                  |                              | 197,242                          |   |                                                                  | 194,056
|                                                                   | Research and development             |                                  |                              | 140,200                          |   |                                                                  | 139,700
|                                                                   | Impairment of intangible asset       |                                  |                              |                                 |   |                                                                  | 150,000
|                                                                   | Professional fees                    |                                  |                              | 72,017                           |   |                                                                  | 141,432
|                                                                   | Depreciation                         |                                  |                              | 12,784                           |   |                                                                  | 11,996 
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|                                                                   |                                      |                                  | Total operating expenses     |                                  |   | 1,462,890                                                        |        
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Loss from operations                                               |                                      |                                  | (1,462,890                   | )                                |   | (2,071,381                                                       | )      
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Other income (expense)                                             |                                      |                                  |                              |                                  |   |                                                                  |        
|                                                                   | Interest expense                     |                                  |                              | (6,557                           | ) |                                                                  | (31,048
|                                                                   | Interest Income                      |                                  |                              | 82                               |   |                                                                  | 474    
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|                                                                   |                                      |                                  | Total other income (expense) |                                  |   | (6,475                                                           | )      
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Loss before provision for income taxes                             |                                      |                                  | (1,469,365                   | )                                |   | (2,101,955                                                       | )      
|Provision for income taxes                                         |                                      |                                  | 800                          |                                  |   | 800                                                              |        
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Net loss                                                           |                                      | $                                | (1,470,165                   | )                                | $ | (2,102,755                                                       | )      
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|                                                                   | Net loss per sharebasic and diluted |                                  | $                            | (0.15                            | ) | $                                                                | (0.20  
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        
|Weighted average common shares during the periodbasic and diluted |                                      |                                  | 10,100,526                   |                                  |   | 10,329,107                                                       |        
|                                                                   |                                      |                                  |                              |                                  |   |                                                                  |        

See
accompanying notes to financial statements.

14

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COM-GUARD.COM, INC.  (A Development Stage Company)        STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY

|                       |                                               |            |           |   |        | Common
Stock To
Be Issued |        |        |   |    |    | Deficit
Accumulated
During
Development
Stage |           |         |  
|---------------------- | --------------------------------------------- | ---------- | --------- | - | ------ | ------------------------- | ------ | ------ | - | -- | -- | -------------------------------------------- | --------- | ------- | -
|
|
|
|                       | Stock issued for cash                         |            | 6,024,500 |   | $      | 6,025                     |        |       |   |    |   |                                              | $         | 433,975 |  
|                       | Stock issued for services                     |            | 2,510,000 |   |        | 2,510                     |        |       |   |    |   |                                              |           | 96,290  |  
|                       | Stock issued for R & D                        |            | 560,000   |   |        | 560                       |        |       |   |    |   |                                              |           | 359,440 |  
|                       | Contributed services                          |            |          |   |        |                          |        |       |   |    |   |                                              |           | 30,000  |  
|                       | Stockholder loans/advances                    |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       | Net loss                                      |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       |                                               |            |           |   |        |                           |        |        |   |    |    |                                              |           |         |  
|Balance, June 30, 1999 |                                               | 9,094,500  |           | $ | 9,095  |                           |       |        |   |   |    | $                                            | 919,705   |         | $
|                       | Stock issued for cash                         |            | 550,000   |   |        | 550                       |        |       |   |    |   |                                              |           | 699,450 |  
|                       | Stock issued for services                     |            | 26,500    |   |        | 26                        |        |       |   |    |   |                                              |           | 26,474  |  
|                       | Stock issued for Conversion of notes          |            | 210,000   |   |        | 210                       |        |       |   |    |   |                                              |           | 209,790 |  
|                       | Contributed services                          |            |          |   |        |                          |        |       |   |    |   |                                              |           | 30,000  |  
|                       | Stockholder loans/advances                    |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       | Net loss                                      |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       |                                               |            |           |   |        |                           |        |        |   |    |    |                                              |           |         |  
|Balance, June 30, 2000 |                                               | 9,881,000  |           | $ | 9,881  |                           |        |        |   |    |    | $                                            | 1,885,419 |         | $
|                       | Stock issued for cash                         |            | 180,000   |   |        | 189                       |        |       |   |    |   |                                              |           | 179,820 |  
|                       | Stock issued for services                     |            | 111,000   |   |        | 111                       |        |       |   |    |   |                                              |           | 110,889 |  
|                       | Stock issued for Intangible asset             |            | 150,000   |   |        | 150                       |        |       |   |    |   |                                              |           | 149,850 |  
|                       | Stockholder loans/advances repaid             |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       | Net loss                                      |            |          |   |        |                          |        |       |   |    |   |                                              |           |        |  
|                       |                                               |            |           |   |        |                           |        |        |   |    |    |                                              |           |         |  
|Balance, June 30, 2001 |                                               | 10,322,000 |           | $ | 10,322 |                           |       |        |   |   |    | $                                            | 2,325,978 |         | $
|                       | Stock to be issuedcash                       |            |          |   |        |                          |        | 35,000 |   | $  | 35 |                                              |           | 6,965   |  
|                       | Beneficial conversion feature on note payable |            |          |   |        |                          |        |       |   |    |   |                                              |           | 17,500  |  
|                       | Net loss                                      |            |          |   |        |                          |        |       |   |    |   |                                              |           |         |  
|                       |                                               |            |           |   |        |                           |        |        |   |    |    |                                              |           |         |  
|Balance, June 30, 2002 |                                               | 10,322,000 |           | $ | 10,322 |                           | 35,000 |        | $ | 35 |    | $                                            | 2,350,443 |         | $
|                       |                                               |            |           |   |        |                           |        |        |   |    |    |                                              |           |         |  

See accompanying notes to financial statements.

15

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COM-GUARD.COM, INC.  (A Development Stage Company)        STATEMENT OF CASH FLOWS

|                                                                            |                                              | For the
Year ended
June 30, 2001      |                                           | For the
year ended
June 30, 2002 |          | For the period
from October 7,
1998 (Inception) to
June 30, 2002 |         
|--------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------- | ----------------------------------------- | -------------------------------- | -------- | ---------------------------------------------------------------- | --------
|Cash flows from operating activities                                        |                                              |                                       |                                           |                                  |          |                                                                  |         
|Net loss                                                                    |                                              | $                                     | (1,470,165                                | )                                | $        | (2,102,755                                                       | )       
|Adjustments to reconcile net loss to net cash used in operating activities: |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | Depreciation                                 |                                       |                                           | 12,784                           |          |                                                                  | 11,996  
|                                                                            | Stock issued for services                    |                                       |                                           | 111,000                          |          |                                                                  |        
|                                                                            | Stock issued for research and development    |                                       |                                           |                                 |          |                                                                  |        
|                                                                            | Contributed services                         |                                       |                                           |                                 |          |                                                                  |        
|                                                                            | Provision for inventory write-down           |                                       |                                           | 319,084                          |          |                                                                  | 464,330 
|                                                                            | Impairment of intangible asset               |                                       |                                           |                                  |          |                                                                  | 150,000 
|                                                                            | Beneficial conversion on note feature        |                                       |                                           |                                  |          |                                                                  | 17,500  
|                                                                            | Changes in operating assets and liabilities |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | (Increase) decrease in:                      |                                       |                                           |                                  |          |                                                                  |         
|                                                                            |                                              | Inventories                           |                                           |                                  | (600,000 | )                                                                |         
|                                                                            | Increase (Decrease) in:                      |                                       |                                           |                                  |          |                                                                  |         
|                                                                            |                                              | Related party receivable              |                                           |                                  |         |                                                                  |         
|                                                                            |                                              | Deferred offering costs               |                                           |                                  |         |                                                                  |         
|                                                                            |                                              | Accounts payable and accrued expenses |                                           |                                  | 543,916  |                                                                  |         
|                                                                            |                                              | Accrued Consulting                    |                                           |                                  | 620,300  |                                                                  |         
|                                                                            |                                              | Accrued Interest                      |                                           |                                  | 698      |                                                                  |         
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            |                                              |                                       | Net cash from operating activities        |                                  |          | (462,383                                                         | )       
|Cash flows from investing activities                                        |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | Purchase of property and equipment           |                                       |                                           | (9,713                           | )        |                                                                  | (2,420  
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            |                                              |                                       | Net cash Used in Investing Activities     |                                  |          | (9,713                                                           | )       
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|Cash flows from financing activities                                        |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | Proceeds from issuance of common stock       |                                       |                                           | 180,000                          |          |                                                                  |        
|                                                                            | Proceeds from commons stock to be issued     |                                       |                                           |                                  |          |                                                                  | 7,000   
|                                                                            | Proceeds (repayments) from loan payablebank |                                       |                                           | 24,000                           |          |                                                                  | (1,964  
|                                                                            | Proceeds from issuance of notes payable      |                                       |                                           | 227,859                          |          |                                                                  | 87,628  
|                                                                            | Note payablestockholders                    |                                       |                                           | 34,393                           |          |                                                                  | (273,410
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            |                                              |                                       | Net cash provided by financing activities |                                  |          | 466,252                                                          |         
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|Net increase (decrease) in cash and cash equivalents                        |                                              |                                       | (5,844                                    | )                                |          | 80,291                                                           |         
|Cash and cash equivalents                                                   |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | Beginning of period                          |                                       |                                           | 7,834                            |          |                                                                  | 1,990   
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         
|                                                                            | End of period                                |                                       | $                                         | 1,990                            |          | $                                                                | 82,281  
|                                                                            |                                              |                                       |                                           |                                  |          |                                                                  |         

Supplemental disclosure of non-cash investing and financing activities:

No
interest or taxes were paid during the years June 30, 2002 and 2001

During
December 2000 the Company acquired $150,000 of software by issuing 150,000 shares of its common stock. Such software was subsequently impaired in 2002.

As
of June 30, 2002, notes payable and accrued interest to stockholders aggregating $188,685 were offset against stockholder loans/advances.

On
June 30, 2000, notes and accrued interest totaling $210,000 were converted into common stock at $1.00 per share. In conjunction with this conversion, warrants to purchase
200,000 shares at $1.00 per share were issued, and remain outstanding.

See
accompanying notes to financial statements.

16

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COM-GUARD.COM, INC.  (A Development Stage Company)        NOTES TO FINANCIAL STATEMENTS  AS OF JUNE 30, 2002

NOTE 1    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A)Organization

Com-Guard.com, Inc.
was formed and incorporated in the state of Nevada on October 7, 1998 as E-WORLD SECURITY, INC. On April 16, 1999
the Company changed its name to COM-GUARD.COM, INC. (the "Company"). Planned principal operations of the Company have not yet commenced. The Company is in the development stage and
activities to date have been limited to forming the Company, assembling a management and consulting team, identifying markets, developing products, and obtaining initial capitalization. The Company
intends to sell products that afford security protection to computer hardware and software in microcomputers. The Company's initial product, Com-Guard, includes unique software and
hardware that enables users to protect and limit access to data; and to provide a security system against tampering and unauthorized use of computers.

(B)Use of Estimates

In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

(C)Cash and Cash Equivalents

For
purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash
equivalents.

(D)Inventory

Inventory
is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of work-in-process.

(E)Property and Equipment

Property
and equipment are stated at cost and depreciated using the straight-line method over the estimated economic useful lives of 3 to 7 years. Expenditures for
maintenance and repairs are charged to expense as incurred. Major improvements are capitalized.

(F)Stock Options and Warrants

In
accordance with Statement of Financial Accounting Standards No. 123, ("SFAS 123") the Company has elected to account for Stock Options issued to employees under
Accounting Principles Board Opinion No. 25 ("APB Opinion No. 25") and related interpretations. The Company accounts for stock options issued to non-employees under the fair
value method of SFAS 123.

(G)Revenue Recognition

The
Company recognizes revenue upon shipment of products. There was no cost of sales related to the sales for the year ended June 30, 2002 because all of the inventory sold had
been previously written off in 2001.

17

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(H)Income Taxes

The
Company accounts for income taxes under the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("Statement
109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.

The
Company has made no current provision (benefit) for Federal income taxes because of financial statement and tax losses since its inception. A valuation allowance has been used to
offset the recognition of any deferred tax assets arising from net operating loss carryforwards due to the uncertainty of future realization. The use of any tax loss carryforward benefits may also be
limited as a result of changes in Company ownership.

(I)Research and Development

Research
and development, which includes purchased research and development and internal costs incurred on the technology are expenses as incurred. Statement of Financial Accounting
Standards No. 86 (SFAS-86, "Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed") does not materially effect the Company because the Company has
elected to expense as research and development all such costs prior to establishing technological feasibility as required by SFAS-86. Management expects technological feasibility to be
established upon completion of beta testing.

(J)Fair Value of Financial Instruments

Statement
of Financial Accounting Standards No. 109, "Disclosures about Fair Value of Financial Instruments", requires disclosures of information about the fair value of certain
financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The
carrying amounts of the Company's financial instruments, including sundry receivable, accounts payable, accrued expenses, and notes and loan payable, approximate fair value due to
the relatively short period to maturity for these instruments.

(K)New Accounting Pronouncements

The
Financial Accounting Standards Board has recently issued several new Statements of Financial Accounting Standards. Statement No. 141, "Business Combinations" supersedes APB
Opinion 16 and various related pronouncements. Pursuant to the new guidance in Statement No. 141, all business combinations must be accounted for under the purchase method of accounting; the
pooling-of-interests method is no longer permitted. SFAS 141 also establishes new rules concerning the recognition of goodwill and other intangible assets arising in a
purchase business combination and requires disclosure of more information concerning a business combination in the period in which it is completed. This statement is generally effective for business
combinations initiated on or after July 1, 2002.

Statement
No. 142, "Goodwill and Other Intangible Assets" supercedes APB Opinion 17 and related interpretations. Statement No. 142 establishes new rules on accounting for
the acquisition of intangible assets not acquired in a business combination and the manner in which goodwill and all other intangibles should be accounted for subsequent to their initial recognition
in a business combination accounted for under SFAS No. 141. Under SFAS No. 142, intangible assets should be

18

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recorded at fair value. Intangible assets with finite useful lives should be amortized over such period and those with indefinite lives should not be amortized. All intangible assets being amortized
as well as those that are not, are both subject to review for potential impairment under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". SFAS No. 142 also requires that goodwill arising in a business combination should not be amortized but is subject to impairment testing at the
reporting unit level to which the goodwill was assigned to at the date of the business combination.

SFAS
No. 142 is effective for fiscal years beginning after December 15, 2002 and must be applied as of the beginning of such year to all goodwill and other intangible
assets that have already been recorded in the balance sheet as of the first day in which SFAS No. 142 is initially applied, regardless of when such assets were acquired. Goodwill acquired in a
business combination whose acquisition date is on or after July 1, 2002, should not be amortized, but should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS
No. 142 has not yet been adopted. However, previously acquired goodwill should continue to be amortized until SFAS No. 142 is first adopted.

Statement
No. 143 "Accounting for Asset Retirement Obligations" establishes standards for the initial measurement and subsequent accounting for obligations associated with the
sale, abandonment, or other type of disposal of long-lived tangible assets arising from the acquisition, construction, or development and/or normal operation of such assets. SFAS
No. 143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged.

In
August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This statement addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and supercedes FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." The provisions of the statement are effective for financial statements issued for fiscal years beginning after December 15, 2001.

The
adoption of these pronouncements will not have a material effect on the Company's financial position or results of operations.

(L)Business Segments

The
Company applies Statement of Financial Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and Related Information". The Company operates in one segment
and therefore segment information is not presented.

(M)Loss Per Share

Basic
and diluted net loss per common share for the years ended June 30, 2002 and 2001 and for the period from October 7, 1998 (inception) to June 30, 2002 is
computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, "Earnings Per Share". Common stock equivalents have not been included in
the computation of diluted loss per share since the effect would be anti-dilutive. At June 30, 2002 there were 1,050,000 common stock options and 188,685 warrants issued and
outstanding that could potentially dilute earnings per share in future periods.

NOTE 2    INVENTORIES

Inventory at June 30, 2002 consisted of work in process in the amount of $300,000 (See Note 8(C)).

19

---

NOTE 3    PROPERTY AND EQUIPMENT

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

Equipment

$
41,509Furniture and fixtures


2,816Computers


2,42046,745Less: Accumulated depreciation


34,959Property and equipmentnet

$
11,786


Depreciation
expense for the years ended June 30, 2002 and 2001 was $11,996 and $12,784, respectively.

NOTE 4    INTANGIBLE ASSET

On December 25, 2000, the Company acquired from Guardtec, Inc. (formerly Kyungki System Co., Ltd. (See Note 10(E)), a Korean
corporation, the rights, title and interest to GTC Firewall, including copyrights, trademarks, patents, object codes, source codes, enhancements, and updates or other modifications and user manuals.
The product's function was to prevent unauthorized entry into a network and to safeguard files by means of encryption. As consideration for acquisition of this technology, the Company issued 150,000
shares of its common stock with a fair value of $150,000. At June 30, 2002, this technology was considered to be impaired under SFAS No. 121 because management has deemed that such
technology is not marketable at this time.

NOTE 5    LOAN PAYABLEBANK

The loan payablebank represents a $22,036 cash advance taken by the Company from its bank credit card in June 2001. The loan bears interest at
11.75% per annum.

NOTE 6    NOTES PAYABLE

During March and April of 2002, the Company received $27,500 evidenced by two notes payable at an interest rate of 7.5% and due one year from the date of the
notes.

On
June 21, 2002, the Company received $100,000 evidenced by a three-month convertible note due September 21, 2002 and bearing interest at 10% per annum. The note is
convertible into the Company's common stock at a conversion price of $.29787 per share. The Company has expensed as financing costs any excess of the fair market value of the common stock at the note
issuance date over the conversion price which amounted to $17,500.

NOTE 7    NOTES PAYABLESTOCKHOLDERS

During 2002, the Company received $273,410 from three stockholders in the form of six notes payable with varying due dates. Two of the three stockholders are
related parties to the majority stockholder (See Note 8 (E)).

NOTE 8    RELATED PARTY TRANSACTIONS

(A)Consulting Services

During
the period ended June 30, 2002 and 2001, the Company incurred consulting fees for various corporate and administrative services performed by officers, directors, and
stockholders.

20

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(B)Legal Counsel

The
Company's legal counsel is a stockholder of the Company.

(C)Inventory

During
the years ended June 30, 2001 and 2000, the Company purchased work in process inventory in the amount of $600,000 and $638,169 from a vendor whose owner is a stockholder of
the Company. As of June 30, 2002 and 2001, the Company has recorded a provision of $497,042 and $319,084, respectively to reduce the inventory to the lower of cost or market. At June 30,
2002, accounts payable includes the $600,000 due to the related party vendor which was due in June 2001 and is still outstanding at the date of this report.

(D)Stockholder Loans and Advances

From
time to time, the Company loans or advances monies to officers and directors for travel, personal expenditures, and other matters. At June 30, 2002, the loans and advances
totaled $8,528. These loans are non-interest bearing and have no specified terms of repayment.

(E)Related Party Notes Payable

During
2002, the Company received $260,910 from two related parties in the form of five notes payable with varying due dates. These notes bear interest ranging from 7.0% to 7.5% and
three of the notes totaling $168,467 are due before June 30, 2003 and the other two notes totaling $92,443 are due in November 2003.

NOTE 9    COMMITMENTS AND CONTINGENCIES

(A)Leases

The
Company leases corporate office space under an operating lease, expiring in August 2002. Management has negotiated a new lease agreement for new corporate office space. The
new lease expires in August 2005.

Future
minimum lease payments for the new operating lease are as follows:

2003

$
24,9602004


26,1962005


27,432


Rent
expense for the years ended June 30, 2002 and 2001 amounted to $22,374 and $20,814, respectively.

(B)Consulting Agreements

On
July 1, 1999, the Company entered into two-year consulting agreements with seven individuals. On June 22, 2001 the agreements were renewed for one year and
the number of consultants was increased to eleven. The terms of the agreements call for the individuals to provide the following services:

Public
relations, shareholder relations, and general management consulting.

Market
research and materials, vendor relations.

Research
and development, product planning and technical staff evaluations.

Corporate
planning and strategic alliances.

Fundraising
and strategic planning.

21

---

General
corporate governance.

At
June 30, 2002 and 2001, the Company had $1,119,595 and $1,133,800 respectively, of consulting expense under such agreements and the accrued liability at June 30, 2002
under such agreements aggregated $2,155,850.

NOTE 10    STOCKHOLDERS' DEFICIENCY

(A)Stock Options and Warrants

The
Company issued 188,685 warrants during fiscal 2001 at an exercise price of $1 per share in conjunction with the satisfaction of convertible notes (See Note 6). The exercise
price of the warrants was equal to the fair value of the common stock at the time of grant based on recent sales of the Company's common stock.

During
the year ended June 30, 2000 the Company granted 200,000 non-qualified stock options having an exercise price of $1 upon conversion of notes payable to certain
note holders. All of the options vested immediately upon grant and their exercise price was equal to the fair value of the common stock at the time of grant based upon recent sales of the Company's
common stock.

The
Company did not recognize any stock-based compensation during the years ended June 30, 2001 and 2000. There would be no material difference to compensation costs had the
compensation costs been computed under SFAS 123.

A
summary of the options issued to certain advisors, consultants and directors as of June 30, 2001 is presented below:

Number of
Options

Weighted
Average Exercise
PriceStock OptionsBalance, June 30, 2000

1,055,000

$
.30Granted




Exercised




Forfeited




Balance, June 30, 2001

1,055,000


.30Granted




Exercised




Forfeited

(5,000
)

1.00Balance, June 30, 2002

1,050,000

$
.30Weighted average fair value of options granted during the period



$



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

Options Outstanding

Options ExercisableRange Of
Exercise Price

Number
Outstanding
At June 30,
2002

Weighted
Average
Remaining
Contractual
Life

Weighted
Average
Exercise
Price

Number
Exercisable
At June 30,
2002

Weighted
Average
Exercise
Price$
.021.00

1,050,000

3 years

$
.30

1,050,000

$
.30


22

---

(B)Conversion of Notes into common Stock

During
the year ended June 30, 2000, notes and interest aggregating $210,000 were converted into 210,000 common shares. These shares were valued at the fair market value on the
conversion date and no gain or loss was realized on this transaction.

(C)Issuance of Common Stock for Services

During
the years ended June 30, 2001, 2000 and 1999, 111,000, 26,500 and 2,510,000 common shares, respectively, were issued for services to various consultants and outside
contractors. The shares were valued at $110,000, $26,500 and $98,800, respectively, the fair market value for financial reporting purposes based on concurrent cash offering prices at the date of
issuance.

(D)Issuance of Common Stock for Research and Development

On
January 14, 1999, the Company acquired from Guardtec, Inc. (formerly Kyungki System Co., Ltd. (See Note 8(E)), a Korean corporation, the right, title and
interest to certain technology including copyrights, trademarks, patents, object codes, source codes, enhancements, and updates or other modifications and user manuals. As consideration for this
acquisition of technology, the Company issued 560,000 shares of its common stock. The acquisition of technology is reflected in the accompanying financial statements as research and development
because technological feasibility was not established and the technology has no alternative future use. On July 20, 1999, the U.S. Patent and Trademark Office issued a patent on the technology
acquired for common stock.

Research
and development costs are charged to operations when incurred and are included in operating expenses. The amounts charged in 2002 and 2001 were $139,700 and $140,200,
respectively.

(E)Issuance of Common Stock for Intangible Asset

During
the year ended June 30, 2001, the Company issued 150,000 common shares of stock to acquire GTC Firewall software technology. The shares were valued at $150,000, the fair
market value for financial reporting purposes based on concurrent cash offering prices at the date of issuance. In 2002 the asset was considered impaired and $150,000 was written off (See
Note 4).

(F)Contributed Capital

The
majority stockholder (Chief Executive Officer) elected to forgo his salary through December 31, 1999. The value of the services, determined as equal to his total forgone
salary of $60,000, has been treated as contributed capital in 1999 and 2000.

NOTE 11    INCOME TAXES

Income tax expense (benefit) for the year ended June 30, 2002 for the company is summarized as follows:

2002

2001Current:Federal

$


$
State


800


800Deferred-Federal and State





Change in Valuation Allowance





Income tax expense (benefit)

$
800

$
800


23

---

The
Company's tax expense differs from the "expected" tax expense for the year ended June 30, 2002, as follows:

2002

2001U.S. Federal income tax provision (benefit)

$
(698,853
)
$
(490,536
)Effect of research and development costs and amortization of organization cost


28,435


28,605Effect of net operating loss carryback





Tax benefit


(670,418
)

(461,931
)Valuation allowance


670,418


461,931$


$



The
tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at June 30, 2002 are as follows:

2002

2001Deferred tax assets:Research and development costs

$
282,485

$
235,000Start-up costs


31,124


57,174Net operating loss carryforward


1,169,029


520,046Total gross deferred tax assets


1,482,638


812,220Less valuation allowance


(1,482,638
)

(812,220
)Net deferred tax assets

$


$



At
June 30, 2002, the Company had net operating loss carryforwards of approximately $4,293,000 for U.S. Federal income tax purposes available to offset future taxable income
expiring on various dates through 2021.

The
valuation allowance at July 1, 2002 and 2001 was $1,482,638 and $812,220, respectively. The net    change in the valuation allowance during the year ended
June 30, 2002 was an increase of approximately $670,418.

NOTE 12    GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a net loss of $2,102,755
and negative cash flows from operating activities of $283,363, has an accumulated deficit of $5,388,552 and a working capital deficiency of $2,952,095 at June 30, 2002. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.

In
view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent
upon the Company's ability to meet its working capital requirements, and the success of its future operations. Management's plans include the issuance of a private placement memorandum to raise
additional funds through the sale of common stock (See Note 13). Management believes that the action presently being taken to revise the Company's operating and financial requirements provide
the opportunity for the Company to continue as a going concern.

24

---

NOTE 13    SUBSEQUENT EVENTS

(A)Private Placement Memorandum

During
July 2002, the Company commenced a private placement offering for the sale of a maximum of 6,000,000 shares of common stock and 3,000,000 warrants in order to raise working
capital. As of the date of this report the offering was open. The Company sold 4,125,003 common shares and 2,062,501 warrants for net proceeds of $1,240,838 to date.

PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons.

|Name               |  | Age |  | Position                              |  | Term   |  | Served Since 
|------------------ |  | --- |  | ------------------------------------- |  | ------ |  | -------------
|Edward W. Savarese |  | 55  |  | President and Chief Executive Officer |  | Annual |  | Inception    
|Edward H. Currie   |  | 61  |  | Director                              |  | Annual |  | June 25, 1999

Dr. Edward
W. Savarese is the founder of the Company and has been a director and Chairman of the Board of Directors since its inception. He held the position of Chief Executive
Officer of Imaging Technologies Corporation (formerly Personal Computer Products, Inc.) from 1982 to 1998. From 1981 to 1982, he was director of sales for SofTech Microsystems. His
responsibilities included establishing and supervising an international sales organization for marketing a microcomputer operating system. From 1978 to 1981, Dr. Savarese was employed by
Hewlett Packard Company, first as a sales representative for computer products, and later as district sales manager supervising a sales force in the marketing of mini- and microcomputers.
Dr. Savarese holds a Doctorate degree from Columbia University, Teacher's College, with specialization in educational technology and software and systems design. He also holds a Master of
Science in administration and management from Pace University.

Dr. Edward
H. Currie has been a director of the Company since June 25, 1999. He has more than twenty years of senior management experience in domestic and international
microcomputer-related software publishing and hardware manufacturing. Since 1988, Dr. Currie has been president and chief executive officer of ImageSoft, Inc., an international software
publisher. From 1981 to 1988, he was chairman, president, and chief executive officer of Lifeboat, a software publishing company. From 1978 to 1981, Dr. Currie served as vice president of
product management for the Microsystems Division of Pertec Computer Corp., a supplier of magnetic tape storage devices and microcomputer peripherals. From 1975 to 1978, he was Executive Vice President
and General Manager for MITS, the creator of the first microcomputer personal computer, which was subsequently acquired by Pertec. Dr. Currie is a co-founder of PC Magazine, the
largest circulation magazine on the personal computer. He also is the founder of C++ Journal and publisher of The PostScript Journal. He has published many articles,
including technical articles in U.S. and international trade magazines. He holds BSEE, MS Physics, and Ph.D. Physics from the University of Miami.

Dr. Savarese
will be employed on a full time basis for the Registrant. Mr. Currie will serve on a part time as needed basis.

Item 10.    Executive Compensation.

Other than Dr. Savarese, there was no executive or director who has received compensation in excess of $100,000 since the incorporation date of the
Company.

25

---

Summary Compensation Table

|                     |  | Annual Compensation |  | Long Term Compensation  |  |                
|-------------------- |  | ------------------- |  | ----------------------- |  | ---------------
|
|
|Edward Savarese, CEO |  | 2002
2001
2000      |  | 180,000
120,000
110,000 |  | -0-
-0-
145,000

The Registrant has no agreements with its directors for the payment of director fees. No officer of the Company has an employment agreement with
the Company.

Option/SAR Values

|Name               |  | Shares
Acquired on
Exercise |  | Value
Realized |  | Number of Securities Underlying
Unexercised Options/SARs
at FY-End |     | Value of Unexercised In-
the-Money Options/SARs
at FY-End
|------------------ |  | --------------------------- |  | -------------- |  | ------------------------------------------------------------------ | --- | ---------------------------------------------------------
|Edward W. Savarese |  | -0-                         |  | -0-            |  | 500,000                                                            | (1) | $                                                        
|Edward H. Currie   |  | -0-                         |  | -0-            |  | 50,000                                                             | (1) | $                                                        

---

Item 11.    Security Ownership of Certain Beneficial Owners and Management.

Title of Class

Name and Address of
Beneficial Owner

Amount and Nature
of Beneficial
Relationship

Percent of
ClassCommon

Edward W. Savarese(1)
2075 Corte del Nogal
Carlsbad, CA 92009

4,000,000

38.7
%Common

Edward H. Currie(2)
6-57 158th Street
Whitestone, NY 11357

75,000

0.7
%Common

Directors and officers as a group (2 persons)

4,075,000

39.4
%


---

Item 12.    Certain Relationships and Related Transactions.

(A)Consulting Services

During
the period ended June 30, 2002 and 2001, the Company incurred consulting fees for various corporate and administrative services performed by officers, directors, and
stockholders.

26

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(B)Legal Counsel

The
Company's legal counsel is a stockholder of the Company.

(C)Inventory

During
the years ended June 30, 2001 and 2000, the Company purchased work in process inventory in the amount of $600,000 and $638,169 from a vendor whose owner is a stockholder of
the Company. As of June 30, 2002 and 2001, the Company has recorded a provision of $497,042 and $319,084, respectively to reduce the inventory to the lower of cost or market. At June 30,
2002, accounts payable includes the $600,000 due to the related party vendor which was due in June 2001 and is still outstanding at the date of this report.

(D)Stockholder Loans and Advances

From
time to time, the Company loans or advances monies to officers and directors for travel, personal expenditures, and other matters. At June 30, 2002, the loans and advances
totaled $8,528. These loans are non-interest bearing and have no specified terms of repayment.

(E)Related Party Notes Payable

During
2002, the Company received $260,910 from two related parties in the form of five notes payable with varying due dates. These notes bear interest ranging from 7.0% to 7.5% and
three of the notes totaling $168,467 are due before June 30, 2003 and the other two notes totaling $92,443 are due in November 2003.

Item 13.    Exhibits and Reports on Form 8-K.

None.

27

---

Exhibits.

| |  | (3a)  | Articles and Bylaws of the Company incorporated by reference to Exhibits 2 and 2.3 of Form 10-SB/A1 dated April 11, 2000.                                                                                            
| |  | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (3b)  | Certificate of Amendment of Articles of Incorporation of e-World Security, Inc. incorporated by reference to Exhibit 2.1 of Form 10-SB/A1 dated April 11, 2000.                                                      
| |  | (10a) | Technology Purchase Agreement incorporated by reference to Exhibit 6.1 of Form 10-SB/A1 dated April 11, 2000.                                                                                                        
| |  | (10b) | Consulting Agreement incorporated by reference to Exhibit 6.2 of Form 10-SB/A1 dated April 11, 2000.                                                                                                                 
| |  | (10c) | Consulting Agreement between the Company and Edward Savarese, dated October 1, 2000, effective July 1, 1999 incorporated by reference to Form 10-K dated January 30, 2001 and March 30, 2001 (for subsequent events).
| |  | (10d) | Consulting Agreement between the Company and Edward Currie, dated March 13, 2001, effective July 1, 1999 incorporated by reference to Form 10-K dated January 30, 2001 and March 30, 2001 (for subsequent events).   
| |  | (10e) | Consulting Agreement between the Company and Joseph Sigismonti, October 1, 2000, effective July 1, 1999 incorporated by reference to Form 10-K dated January 30, 2001 and March 30, 2001 (for subsequent events).    
| |  | (10f) | Share Purchase Agreement between the Company and Guardtec, Inc., dated December 19, 2000 incorporated by reference to Form 10-K dated January 30, 2001 and March 30, 2001 (for subsequent events).                   
| |  | (10g) | Technology License Agreement between the Company and Guardtec, Inc., dated December 25, 2000 incorporated by reference to Form 10-K dated January 30, 2001 and March 30, 2001 (for subsequent events).               

28

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|Dated: September 26, 2002 |  |                                                                                                   
|------------------------- |  | --------------------------------------------------------------------------------------------------
|COM-GUARD.COM, INC.       |  |                                                                                                   
|By:                       |  | /s/EDWARD W. SAVARESEEdward W. Savarese Chief Executive Officer                                   
|                          |  |                                                                                                   
|By:                       |  | /s/GERRY B. BERGGerry B. Berg Chief Financial Officer
(Principal Financial and Accounting Officer)

29

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Supplemental Information to be Furnished With Reports Filed  Pursuant to Section 15(d) of the Exchange Act By Non-reporting Issuers

The Company has not, to date, provided an annual report or proxy statement to its shareholders. The Company plans to provide a copy of this
Form 10-KSB to its shareholders within ninety (90) days of its filing with the SEC.

30

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