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

                                   FORM 10-QSB


(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                           For the quarterly period ended June 30, 2005
                                                          ----------------------


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                           For the transition period from _________ to _________

                           Commission file number 002-98748-D
                                                 -------------------------------


                         VSUS TECHNOLOGIES INCORPORATED
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter

                               Delaware 43-2033337
--------------------------------------------------------------------------------
                (State or other jurisdiction of incorporation or
                 organization) (IRS Employer Identification No.)

             444 Madison Ave., 24th Floor, New York, New York 10022
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (212) 972-1400
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


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

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 15, 2005, the issuer had
28,992,908 shares of common stock issued and outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]




                         VSUS TECHNOLOGIES INCORPORATED

                         QUARTERLY REPORT ON FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005


                                      INDEX

<TABLE>

                                                                                                             PAGE NO.
                                                                                                             --------

PART I.    FINANCIAL INFORMATION

Item.1     Financial Statements................................................................................ 4-5

           Condensed Consolidated Balance Sheet as of June 30, 2005 (unaudited)

           Condensed Consolidated Statement of Operations (unaudited)
           For the three and six months ended June 30, 2005 and 2004
           For the Period from Inception (September 21, 2000) to June 30, 2005

           Condensed Consolidated Statement of Changes in Stockholders' Equity (unaudited)
           For the six months ended June 30, 2005.............................................................. 6

           Condensed Consolidated Statement of Cash Flows (unaudited)
           For the three months ended June 30, 2005 and 2004 .................................................. 7-8

           Notes to the Condensed Consolidated Financial Statements (unaudited)  .............................. 9

Item 2.    Management's Discussion and Analysis or Plan of Operation........................................... 21

Item 3.    Controls and Procedures............................................................................. 25


PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings................................................................................... 26

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds......................................... 26

Item 3.    Defaults Upon Senior Securities..................................................................... 32

Item 4.    Submission of Matters to a Vote of Securityholders.................................................. 33

Item 5.    Other Information................................................................................... 34

Item 6.    Exhibits and Reports on Form 8-K.................................................................... 35


SIGNATURES..................................................................................................... 36
</TABLE>


                                        2





                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.



                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF JUNE 30, 2005
                                    UNAUDITED

            INDEX TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>

                                                                              PAGE
                                                                              ----

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

Condensed Consolidated Balance Sheet ...........................................4

Condensed Consolidated Statement of Operations..................................5

Condensed Consolidated Statement of Changes in Stockholders' Deficiency.........6

Condensed Consolidated Statement of Cash Flows..................................7

Notes to the Condensed Consolidated Financial Statements.................. __ - 8
</TABLE>




                                        3


                        VSUS TECHNOLOGIES, INCORPORATED
                         (A DEVELOPMENT STAGE COMPANY)
                     CONDENSED CONSOLIDATED BALANCE SHEET)
                                 (IN THOUSANDS)
<TABLE>

                                                                   June 30,
                                                                     2005
                                                                ---------------
                                                                 (Unaudited)

ASSETS:

CURRENT ASSETS
Cash and cash equivalents                                          $     20
Other receivables                                                        28
                                                                   --------
                                                                         48
                                                                   --------

Acquired technology                                                   4,522
Goodwill                                                              4,522
FIXED ASSETS, NET                                                       677
                                                                   --------
                                                                   $  9,769
                                                                   ========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
CURRENT LIABILITIES
Short-term bank credit                                                   16
Accrued expenses                                                        875
Convertible debentures (net of debt discount of$ 148)                    67
Accrued interest                                                        357
Other payables                                                          124
Related parties                                                         126
Other liabilities                                                       123
Promissory notes                                                      1,165
                                                                   --------
                                                                      2,853
                                                                   --------

LONG-TERM LIABILITIES
Related Party                                                           170
Convertible debenture                                                 3,400
CONVERTIBLE PREFERRED STOCK (350 shares issued, 310 outstanding)      1,684
                                                                   --------
                                                                      5,254
                                                                   --------

CONTINENCIES AND COMMITMENTS

STOCKHOLDERS' EQUITY

Common Stock                                                             29
Additional paid-in-capital                                           10,257
Deferred stock based compensation                                      (563)
Accumulated deficit                                                  (8,061)
                                                                   --------
                                                                      1,622
                                                                   --------
                                                                   $  9,769
                                                                   ========
</TABLE>

The accompanying notes to these financial statements form an integral part
thereof.




                                       4

                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
             CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
         (IN THOUSANDS OF U.S.DOLLARS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>

                                                                                                                 CUMULATIVE FROM
                                                                                                              (SEPTEMBER 21, 2000)
                                                 For the Three Months Ended       For the Six Months Ended       (INCEPTION) TO
                                                          June 30,                         June 30,                 JUNE 30,
                                                ----------------------------    ----------------------------     --------------
                                                    2005            2004            2005            2004              2005
                                                ------------    ------------    ------------    ------------      ------------

                                                               (UNAUDITED)                        (UNAUDITED)
Revenue                                         $       --      $        110    $       --      $        118      $      1,728

Cost of revenues                                        --                24            --                39               232
                                                ------------    ------------    ------------    ------------      ------------

     Gross profit                                       --                86            --                79             1,496

Research and development expense                         400              60             400             108             1,820
Sales and marketing                                     --               201            --               258               944
General and administrative expense                     2,222             178           2,546             363             5,706
Acquired in process technology                          --                              --                                 --
Merger expenses                                         --               113            --               219               409
                                                ------------    ------------    ------------    ------------      ------------

Operating loss                                        (2,622)           (466)         (2,946)           (869)           (7,383)

Financing expenses, net                                1,283              49           1,337             108             1,209
                                                ------------    ------------    ------------    ------------      ------------

Net loss                                        $     (3,905)   $       (515)   $     (4,283)   $       (977)     $     (8,592)
                                                ============    ============    ============    ============      ============

Basic and diluted loss per share                $      (0.16)   $      (0.04)   $      (0.23)   $      (0.07)
                                                ============    ============    ============    ============

Weighted average number of shares outstanding     24,959,694      14,427,995      19,014,698      14,197,940
                                                ============    ============    ============    ============
</TABLE>


The accompanying notes to these financial statements form an integral part
thereof.







                                       5

                         VSUS TECHNOLOGIES INCORPORATED
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                     (IN THOUSAND, EXCEPT NUMBER OF SHARES)
                                  (UNAUDITED)


<TABLE>


                                                         COMMON STOCK
                                                         -------------  ------
                                                                                 ADDITIONAL     DEFERRED
                                                                                  PAID-IN        STOCK      ACCUMULATED
                                                             SHARES      AMOUNT    CAPITAL    COMPENSATION    DEFICIT        TOTAL
                                                         -------------  ------  -----------  ------------   -----------  ----------

Balance at Janauary 1, 2005                                12,392,896    $ 12     $ 1,436           $ (51)    $ (3,778)   $ (2,381)

Value assigned to stock options issued at below
  market value                                                      -       -           5               -            -           5
Value assigned to buy back of shares from former officer            -       -       1,694          (1,694)           -           -
Excericise of stock options                                 2,531,375       3                                                    3
Common stock issued as consideration for extending the
  terms of a loan                                             124,750       -          46                                       46
Common stock issued in connection with the merger
  with 1stAlerts, Inc.                                     13,000,000      13       4,797                                    4,810
Common stock issued as payment of accrued interest            708,263       1         176                                      177
Value assigned to warrants in connection with
  1stAlerts, Inc. merger                                            -       -         377                                      377
Stock options for services rendered                                 -                 740                                      740
Warrants issued with convertible debentures                         -                  61                                       61
Value assigned to beneficial conversions                            -                 154                                      154
Deferred compensation                                               -       -         771            (771)           -           -
Amortization of deferred compensation                               -       -           -           1,953            -       1,953
Net loss-Six Months ended June 30, 2005                             -       -           -               -       (4,283)     (4,283)
                                                         -------------  ------  ----------  ----------------------------  ---------

Balance at June 30, 2005                                   28,757,284    $ 29    $ 10,257          $ (563)    $ (8,061)    $ 1,662
                                                         =============  ======  ==========  ============================  =========
</TABLE>

The accompanying notes to these financial statements form an integral part
thereof.



                                       6


                         VSUS TECHNOLOGIES INCORPORATED
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>

                                                                                                  CUMULATIVE FROM
                                                                                                  SEPETEMBER 20,
                                                                                   FOR THE            2000
                                                                                SIX MONTHS ENDED  (INCEPTION) TO
                                                                                    JUNE 30,         JUNE 30,
                                                                               ------------------ ----------------
                                                                                2005       2004       2005
                                                                               -------    ------- ----------------
                                                                                  (UNAUDITED)       (UNAUDITED)
CASH FLOWS-OPERATING ACTIVITIES

Net loss for the period                                                       ($4,283)   ($  977)   ($8,061)

Adjustments to reconcile net loss to net cash used in operating actvities:
         Depreciation and amortization                                              48          3         81
         Amortization of deferred stock-based compensation                       1,953        166      3,229
         Compensatory elements of stock issuances                                  791       --          791
         Amortization of debt discount                                             434                   434
         Accrued dividend-preferred stock                                           92       --           92
         Transfer of assets to former officer                                       49       --           49
         Interest to related party                                                   9         10         45
         Accrued interest on convertible loan                                     --           96        171
         Decrease (increase) in accounts receivable and other current assets        (6)       (28)       (12)
         Increase (decrease) in accounts payable and accrued expenses              286         76        871
         Increase in other payables                                               --          100       --
         Increase in related party                                                  70         29        249
                                                                               -------    -------    -------
              Net cash provided by (used in) operating activities                 (557)      (525)    (2,061)
                                                                               -------    -------    -------

CASH FLOWS-INVESTING ACTIVITIES
        Reverse merger                                                            --         (200)      (200)
        Purchase of fixed assets                                                   (21)       (33)      (103)
                                                                               -------    -------    -------
                                                                                   (21)      (233)      (303)
                                                                               -------    -------    -------
        Net cash provided by (used in) operating activities

CASH FLOWS-FINANCING ACTIVITIES
        Short term bank credit                                                      10          9         16
        Proceeds from notes payable                                                351                   351
        Exercise of stock options                                                    2       --            2
        Receipt of convertible loan                                                215        550      1,690
        Receipt of convertible preferred stock                                    --                     --
        Issuance of share capital                                                 --         --          325
                                                                               -------    -------    -------
        Net cash provided by financing activities                                  578        559      2,384
                                                                               -------    -------    -------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  --         (199)        20
CASH AND CASH EQUIVALENTS-
        BEGINNING OF PERIOD                                                         20        661
                                                                               -------    -------    -------

CASH AND CASH EQUIVALENTS-
        END OF PERIOD                                                          $    20    $   462    $    20
                                                                               =======    =======    =======
</TABLE>


The accompanying notes to these financial statements form an integral part
thereof.


                                       7

                         VSUS TECHNOLOGIES INCORPORATED
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>

                                                                                                              CUMULATIVE
                                                                                                                 FROM
                                                                                   FOR THE                  SEPETEMBER 20,
                                                                                  SIX MONTHS                     2000
                                                                                     ENDED                  (INCEPTION) TO
                                                                                    JUNE 30,                    JUNE 30,
                                                                            ---------------------------     ----------------
                                                                               2005           2004               2005
                                                                            ------------   ------------     ----------------
                                                                                    (UNAUDITED)                (UNAUDITED)

Supplementary disclosure of Cash Flows Information:

  Interest paid                                                                $  --          $--                $ --
                                                                               =======        =====              ======

  Income taxes paid                                                            $  --          $--                $ --
                                                                               =======        =====              ======

Non-Cash Investing and Financing Transactions:

  Common stock issued for extension of note payable                            $    46        $--                $   46
                                                                               =======        =====              ======

  Issuance of common stock in connection with 1stAlerts merger                 $ 4,810        $--                $4,810
                                                                               =======        =====              ======

Value assigned to warrants assumed in connection with the 1stAlerts merger       $ 377        $--                $  377
                                                                               =======        =====              ======

Common stock issued for payment of accrued interest                            $   177        $--                $  177
                                                                               =======        =====              ======

  Value assigned to beneficial conversion in
    connection with the 12% convertible debenture                              $   154        $--                $  154
                                                                               =======        =====              ======

  Value assigned to warrants issued to purchasers
    of convertible debentures                                                  $    61        $--                $   61
                                                                               =======        =====              ======
</TABLE>

In addition, see Note 3 for details related to the acquisition of 1stAlerts




The accompanying notes to these financial statements form an integral part
thereof.


                                       8



                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BUSINESS AND MERGER

MERGER

VSUS Technologies Incorporated was incorporated in Delaware on September 20,
2000. Following its establishment, the Company organized, at the end of 2000,
two wholly-owned subsidiaries: Safe Mail International Ltd., a company
registered in the British Virgin Islands and Safe Mail Development Ltd., a
company registered in Israel. As of August 31, 2004, the Company established two
additional wholly-owned subsidiaries: VSUS Secured Services, Inc., a Delaware
corporation and First Info Network, Inc., a Delaware corporation.

Effective as of April 13, 2005, the Company reorganized its business by
transferring substantially all of its business assets into VSUS Secured
Services, Inc., its wholly-owned subsidiary. Consequently, its two subsidiaries,
Safe Mail Development Ltd., a company organized under the laws of Israel, and
Safe Mail International Ltd., a company organized under the laws of the British
Virgin Islands, became subsidiaries of VSUS Secured Services, Inc.

On April 14, 2005, VSUS Technologies Incorporated ("the Company") acquired
1stAlerts, Inc., a Delaware corporation, when 1stAlerts, Inc. ("1stAlerts")
merged with and into the Company's wholly-owned Delaware subsidiary, First Info
Network, Inc., collectively referred to as the "1stAlerts Merger". At the time
of the 1stAlerts Merger, among other things: (i) the Company exchanged
13,000,000 shares of its common stock, and 200 shares of its Series B
Participating Preferred Stock, for all of the issued and outstanding shares of
capital stock of 1stAlerts, Inc., (ii) the Company issued warrants to purchase
1,861,841 shares of its common stock, at an exercise of $0.19 per share, in
exchange for warrants to purchase shares of common stock of 1stAlerts, Inc.,
(iii) the Company assumed $4,565,000 of promissory and convertible notes from
1stAlerts, Inc., and (iii) certain officers and directors of 1stAlerts, Inc.
became officers and directors of the Company.

Each of the 1,861,841 Class A Warrants the Company issued in connection with the
1stAlerts Merger have a term of a term of two (2)years from the effective date
of a registration statement the Company's obligated to file to register the
shares of the Company's Common Stock underlying these warrants, and an exercise
price of $0.19.

As a result of the 1stAlerts Merger, and the transfer of assets described above,
the Company became a holding company operating through its two wholly-owned
subsidiaries, VSUS Secured Services, Inc. and First Info Network, Inc.

The pre-merger stockholders of 1stAlerts have been granted the option to
purchase up to 95% of the shares of First Info Network, Inc. from the Company
under certain circumstances, pursuant to a Call Option Agreement the Company
entered into with them.

Since, at the effective time of the 1stAlerts Merger, the Company maintained (a)
a majority of the outstanding shares of common stock of the combined company,
(b) officers who ranked higher than the incoming pre-merger 1stAlerts officers,
and (c) the Company has the ability to elect and appoint a voting majority of
the governing board, the merger was treated as a forward merger with the Company
as the accounting acquirer.

The transaction was accounted for using the purchase method of accounting. The
results of 1stAlerts for the period April 14, 2005 through June 30, 2005 are
included in the condensed consolidated statement of operations for the three and
six months ended June 30, 2005.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States of America. These financial statements reflect all
adjustments, consisting of normal recurring adjustments and accruals, which are,
in the opinion of management, necessary for a fair presentation of the financial
position of the Company as of June 30, 2005, and the results of operations and
cash flows for the interim periods indicated in conformity with generally
accepted accounting principles applicable to interim periods. These financial
statements should be read in conjunction with the financial statements and notes
related thereto included the Annual Report 10-KSB for year ended December 31,
2004.

These results for the three and six months ended June 30, 2005, are not
necessarily indicative of the results to be expected for the full fiscal year.
The preparation of the unaudited condensed consolidated financial statements in
conformity with US GAAP requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

                                       9




                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

GOING-CONCERN AND MANAGEMENT'S PLAN

The accompanying unaudited condensed consolidated financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the Company as a
going concern. However, as shown in the accompanying unaudited condensed
consolidated financial statements, the Company has incurred losses from
operations since inception. Management anticipates incurring additional losses
in 2005. Further, the Company may incur additional losses thereafter, depending
on its ability to generate revenues from the licensing or sale of its
technologies and products. The Company has no revenue to date. The Company's
technologies and products have never been utilized on a large-scale commercial
basis and there is no assurance that any of its technologies or products will
receive market acceptance. As reflected in the accompanying condensed
consolidated financial statements, the Company's operations for the three months
ended June 30, 2005 and 2004, resulted in a net loss of $13,857,000 and
$515,000, respectively and for the six months ended June 30, 2005 and 2004,
resulted in a net loss of $14,235,000 and $977,000, respectively. The Company's
balance sheet reflects a net stockholders' deficit of $7,383,000. In addition
the Company is delinquent in paying its payroll taxes at June 30, 2005 in the
amount of approximately $73,000.

Management's plans in this regard include raising additional cash from current
and potential stockholders and lenders, making strategic acquisitions and
increasing the marketing of its products and services. As a result of the
Company's acquisition of 1stAlerts, and the anticipated cash flow from the
combined company's operations, the Company believes that it will have sufficient
capital to fund its operations. However, until such time as the Company
generates sufficient revenues from the sale of its products, the Company will
continue to be dependent on raising substantial amounts of additional capital
through any one of a combination of debt offerings or equity offerings. The
Company has no current arrangements with respect to any additional financing.
Consequently, there can be no assurance that any future financing will be
available to the Company when needed, and on commercially reasonable terms. The
Company's inability to derive sufficient revenues from the sale of its products,
or obtain additional financing when needed, would have a material adverse effect
on the company, requiring the Company to curtail or cease operations. In
addition, any equity financing may involve substantial dilution to the Company's
then current stockholders.

Being a development stage company, the Company is subject to all the risks
inherent in the establishment of a new enterprise and the marketing and
manufacturing of a new product, many of which risks are beyond the control of
the Company. All of these factors raise substantial doubt as to the ability of
the Company to continue as a going concern.

These unaudited condensed consolidated financial statements do not include any
adjustments relating to the recoverability of recorded asset amounts that might
be necessary as a result of the above uncertainty.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FINANCIAL STATEMENTS IN U.S. DOLLARS

The reporting currency of the Company is the U.S. dollar ("dollar").

The dollar is the functional currency of the Company and its subsidiaries.
Transactions and balances originally denominated in dollars are presented at
their original amounts. Non-dollar transactions and balances are remeasured into
dollars in accordance with the principles set forth in Statement of Financial
Accounting Standards ("SFAS") No. 52 "Foreign Currency Translation" ("SFAS
No.52"). All exchange gains and losses from remeasurement of monetary balance
sheet items resulting from transactions in non-dollar currencies are recorded in
the statement of operations as they arise.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of the
Company and its subsidiaries including the operations of 1st Alerts commencing
on April 14, 2005. All significant inter-company transactions and balances have
been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the unaudited condensed consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Significant estimates includes the
fair value of common stock of $.37 during the quarter ended June 30, 2000. See
note 3 for a discussion of this estimate.


LOSS PER COMMON SHARE

Basic loss per common share is computed based upon weighted-average shares
outstanding and excludes any potential dilution. Diluted loss per share reflects
the potential dilution from the exercise or conversion of all dilutive
securities into common stock based upon the average market price of common
shares outstanding during the period. For the six months and quarter ended June
30, 2005 and 2004, no effect has been given to outstanding options, warrants,
convertible debentures and convertible preferred stock in the diluted
computation, as their effect would be anti-dilutive.

                                       10


                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


STOCK-BASED COMPENSATION

The Company accounts for employee stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB No. 25"), and in accordance with FASB Interpretation No. 44.
Pursuant to these accounting pronouncements, the Company records compensation
for stock options granted to employees over the vesting period of the options
based on the difference, if any, between the exercise price of the options and
the market price of the underlying shares at that date.

Deferred compensation is amortized to compensation expense over the vesting
period of the options.

Had compensation cost for the Company's option plans been determined on the
basis of the fair value at the grant dates in accordance with the provisions of
SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123"), as
amended by SFAS No. 148 "Accounting for Stock-Based Compensation" ("SFAS No.
148"), the Company's net loss and basic net loss per share would not have
changed.

For purposes of estimating fair value in accordance with SFAS 123, the Company
utilized the Black - Scholes option-pricing model. The following assumptions
were utilized in such calculations for the quarter ended March 31, 2005 (all in
weighted averages):

                                                     2004
                                                     ----
         Risk-free interest rate                     3.6%
         Expected life of options                      5
         Expected dividend yield                     None
         Volatility                                    0%

Based on these assumptions there are no differences in the amount of stock-based
compensation according to FASB 123 compared to the amount measured according to
APB 25.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123 (revised 2004) "Share Based
Payments" ("SFAS 123(R)"). This Statement is a revision of FASB Statement No.
123, "Accounting for Stock-Based Compensation", which supersedes APB Opinion No.
25, "Accounting for Stock Issued to Employees" and its authoritative
interpretations. SFAS 123(R) establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services; focuses primarily on accounting for transactions in which an entity
obtains employee and directors services in share-based payment transactions; and
does not change the accounting guidance for share-based payment transactions
with parties other than employees.

SFAS 123(R) eliminates the alternative to use APB 25's intrinsic value method of
accounting that was provided in SFAS 123 as originally issued and requires
measurement of the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award. The
fair-value-based method in this Statement is similar to the fair-value-based
method in SFAS 123 in most respects. The costs associated with the awards will
be recognized over the period during which an employee is required to provide
service in exchange for the award - the requisite service period (usually the
vesting period). The grant-date fair value of employee share options and similar
instruments will be estimated using option-pricing models adjusted for the
unique characteristics of those instruments (unless observable market prices for
the same or similar instruments are available). If an equity award is modified
after the grant date, incremental compensation cost will be recognized in an
amount equal to the excess of the fair value of the modified award over the fair
value of the original award immediately before the modification.

The provisions of SFAS 123(R) apply to all awards to be granted by the Company
after June 30, 2005 and to awards modified, repurchased, or cancelled after that
date. When initially applying the provisions of SFAS 123(R), in the third
quarter of 2005, the Company will be required to elect between using either the
"modified prospective method" or the "modified retrospective method". Under the
modified prospective method, the Company is required to recognize compensation
cost for all awards granted after the adoption of SFAS 123(R) and for the
unvested portion of previously granted awards that are outstanding on that date.
Under the modified retrospective method, the Company is required to restate its
previously issued financial statements to recognize the amounts previously
calculated and reported on a pro forma basis, as if the original provisions of
SFAS 123 had been adopted. Under both methods, it is permitted to use either a
straight line or an accelerated method to amortize the cost as an expense for
awards with graded vesting.

                                       11



                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Management has recently commenced identifying the potential future impact of
applying the provisions of SFAS 123(R), including each of its proposed
transition methods, yet is currently unable to fully quantify the effect of this
Standard on the Company's future financial position and results of operations.
Nonetheless, it is expected that the adoption of SFAS 123(R) will increase the
stock-based-award expenses the Company is to record in the future in comparison
to the expenses recorded under the guidance currently applied by the Company.
The Company is required to implement SFAS 123(R) on January 1, 2006.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
an amendment of APB No. 29". This Statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general exception for exchanges of nonmonetary assets that do not have
commercial substance. The Statement specifies that a nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. This Statement is effective
for nonmonetary asset exchanges occurring in fiscal periods beginning after June
15, 2005. Earlier application is permitted for nonmonetary asset exchanges
occurring in fiscal periods beginning after the date this Statement was issued.
Retroactive application is not permitted.

NOTE 3  MERGER

On April 14, 2005, the Company consummated the acquisition of all of the issued
and outstanding shares of capital stock of 1stAlerts, through the merger
transaction discussed in Note 1.

The Company concludes that since, at the effective time of the 1stAlerts Merger,
the Company maintained (a) a majority of the outstanding shares of common stock
of the combined company, (b) officers who ranked higher than the incoming
pre-merger 1stAlerts officers, and (c) the Company has the ability to elect and
appoint a voting majority of the governing board, the merger will be treated as
a forward merger with the Company as the accounting acquirer

The transaction was accounted for using the purchase method of accounting.

The following table sets forth the calculation of the purchase price:

Value of VSUS stock issued in connection with the merger with 1stAlerts, Inc.

<TABLE>

                                                                          Estimated Fair
                                                             Shares       Value per Share       Equity
                                                                                            Consideration

Common Stock                                                  13,000,000             $.37        $4,810,000
Warrants (as determined under black scholes)                   1,861,841             $.20          $376,399
Series B Preferred Stock                                             200                   Not Determinable
Total Consideration                                           14,862,041                         $5,186,399
Total liabilities assumed, net of debt
discount of $376,399                                                                             $5,193,354
                                                                                                -----------
Total                                                                                           $10,379,753
                                                                                                ===========
</TABLE>

As required by paragraph 74 of APB No. 16, "APB 16: Business Combinations", "The
fair value of securities traded in the market is normally more clearly evident
than the fair value of an acquired company (paragraph 67). Thus, the quoted
market price of an equity security issued to effect a business combination may
usually be used to approximate the fair value of an acquired company after
recognizing possible effects of price fluctuations, quantities traded, issue
costs, and the like (paragraph 23). The market price for a reasonable period
before and after the date the terms of the acquisition are agreed to and
announced should be considered in determining the fair value of securities
issued."

APB 16 continues to state under paragraph, 75, "If the quoted market price is
not the fair value of stock, either preferred or common, the consideration
received should be estimated even though measuring directly the fair values of
assets received is difficult. Both the consideration received, including
goodwill, and the extent of the adjustment of the quoted market price of the
stock issued should be weighed to determine the amount to be recorded. All
aspects of the acquisition, including the negotiations, should be studied, and
independent appraisals may be used as an aid in determining the fair value of
securities issued. Consideration other than stock distributed to effect an
acquisition may provide evidence of the total fair value received".



                                       12




                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

In reviewing the transaction, the Company has determined that quoted market
price at April 14, 2005, is not indicative of the fair value of the stock. This
is because at the time of the merger, the Company's common stock was thinly
traded. It was not until August of 2005 that a reasonable volume of shares began
to be traded. Since the beginning of August the price ranged from about $0.30 to
$0.54. From the date of the merger to the date that a more active volume of
shares began to trade, the Company had no significant announcements or
developments in their business.

Based on the above facts, the initial fair value of the Company's Common Stock
for the purposes determining the purchase price of the 1stAlerts acquisition was
$0.37 per share. The Company intends to have its common stock and Series B
preferred stock valued by a qualified appraiser.

The fair value of the 1stAlert warrants was determined using the Black-Scholes
valuation model. To determine the fair value of these warrants, the following
assumptions were used: expected volatility of 50.0%, risk-free interest rate of
2.0%, and expected life of two years.

Since, the Series B Participating Preferred Stock has no voting rights, cannot
be converted for a period of 3 years from the Merger date (other than a
liquidity event defined above), and the number of shares of common stock which
could be issued upon conversion is not estimatable as of the merger date, the
value of the Series B Preferred stock is not determinable at this time and
therefore has not been valued.

The transaction is being accounted for using the purchase method of accounting
as required by Statement of Financial Accounting Standards ("SFAS") Statement
No. 141, "Business Combinations," with the Company's as the accounting acquirer.
Accordingly, the purchase price has been allocated to tangible and identifiable
intangible assets acquired and liabilities assumed based on their estimated fair
values at the date of the acquisition. The excess of the purchase price over the
fair value of net assets acquired was recorded as goodwill. The results of
1stAlerts for the period April 14, 2005 through June 30, 2005 are included in
the condensed consolidated statement of operations for the three and six months
ended June 30, 2005. Goodwill and identifiable intangible assets recorded in the
acquisition will be tested periodically for impairment as required by SFAS
Statement No. 142, "Goodwill and Other Intangible Assets". The allocation of the
purchase price to specific assets and liabilities is based, in part, upon
internal estimates of assets and liabilities. The Company is in the process of
beginning the independent appraisal for certain assets, and refining its
internal fair value estimates; therefore, the allocation of the purchase price
is preliminary and the final allocation will likely differ. Based on the
preliminary purchase price allocation, the following table summarizes estimated
fair values of the assets acquired.


Current assets                                       $254,820
Property and equipment                                703,743
Debt discount                                         376,399
Acquired technology                                 4,522,396
Goodwill                                            4,522,396
                                                  -----------
Total                                             $10,379,753
                                                  ===========

Based on this initial allocation of the purchase price, $9,044,791 was allocated
to amortizable intangible assets. The future amortization for this assets using
the initial valuation and assuming a five-year economic life would be $1,808,958
per year.


                                       13





                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The following unaudited pro forma information has been prepared assuming that
the acquisition of 1stAlerts had taken place at the beginning of the respective
periods presented. The unaudited pro forma information presented in the table
below represents the combined net loss and loss per share. The pro forma
financial information is not necessarily indicative of the combined results that
may occur in the future.
<TABLE>

                                                                     THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                          JUNE 30,                           JUNE 30,
                                                                  -------------------------          ------------------------
                                                                  2005                 2004          2005               2004
                                                                  -----               -----          ----               -----
                                                                                      (UNAUDITED)
                                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)

Net revenues                                                      $    --             $ 110          $   --             $ 118
Net loss from                                                     $(3,905)            $(515)         (4,283)            $(977)
Net loss available to common stockholders                          (3,905)             (515)         (4,283)            $(977)

Basic and diluted loss per common share:
   Continuing operations                                            $(.16)            $(.04)          $(.23)            $(.07)
   Net loss available to common stockholders                        $(.16)            $(.04)          $(.23)            $(.07)
</TABLE>

NOTE 4 GOODWILL AND OTHER INTANGIBLE ASSETS

In connection with the acquisition of 1stAlert on April 14, 2005, the Company
recorded goodwill and other intangible assets in accordance with SFAS No. 141,
"Business Combinations". The $9.4 million of goodwill and other intangible
assets was recorded as the excess of the purchase price of $10.4 million over
the fair value of the net amounts assigned to assets acquired and liabilities
assumed. In accordance with SFAS No. 142, "Accounting for Goodwill and Other
Intangible Assets", the Company will continue to assess on an annual basis
whether goodwill and other intangible assets acquired in the acquisition of
1stAlerts's are impaired. Additional impairment assessments may be performed on
an interim basis if the Company deems it necessary. Finite-lived intangible
assets will be amortized over their useful lives, if determinable, and
periodically reviewed for impairment. No amounts assigned to any intangible
assets are deductible for tax purposes.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2005 consisted of the following (in
thousands):


Leasehold improvements                                 $  --
Computer hardware                                         21
Assets acquired in merger                                704
                                                       -----
                                                       $ 725
Less: Accumulated depreciation                            48
                                                       -----
                                                       $ 677
                                                       =====

Depreciation expense for the three and six months ended June 30, 2005 and 2004,
amounted to $48,000 and $48,000, respectively for 2005 and $ 3,000and $1,000,
respectively for 2004. Computer hardware is being depreciated over a useful life
of three years.

NOTE 6 - TRANSACTIONS WITH RELATED PARTIES

Effective as of January 28, 2005, the Company entered into a settlement
agreement with a former officer and director. Pursuant to the settlement
agreement, among other things, (i) the former officer and director resigned from
his duties with the Company and sold all of the Company's common stock held by
him; (ii) the Company granted to the former officer and director a worldwide,
perpetual license to use and market certain of its intellectual property; (iii)
the former officer and director agreed to provide the Company with certain
customer service and support, and development services; (iv) the Company agreed
to reimburse the former officer and director for certain amounts paid by him on
behalf of the Company, and sell him, or a company founded by him, certain assets
with a carrying

                                       14


                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

value of $49,000 without additional consideration; (v) the former officer and
director agreed to forfeit certain amounts due to him from the Company; and (vi)
the Company canceled an aggregate of 1,840,000 options to purchase shares of its
common stock, at exercise prices ranging between $0.001 and $0.01 per share,
which the Company previously granted to him under its 2003 Stock Option Plan,
and replaced them with an aggregate of 1,183,750 non-plan options to purchase
shares of the Company's common stock, at exercise prices ranging between $0.001
and $0.01 per share.

Pursuant to the Settlement Agreement (described above), among other things,
5,038,000 shares of our Common Stock held and controlled by the former officer
and director were sold to the Company's newly appointed President and director,
for an aggregate purchase price of $170,000 (the "Purchase Price"). The Purchase
Price was negotiated as part of our settlement with the former officer and
director, and, therefore, does not necessarily represent the fair market value
of our Common Stock on the date of the transaction. As a result of this
transaction and an employment agreement with the Company's newly appointed
President dated April 28, 2005, the Company recorded a charge of $2,601,000 to
reflect the excess of the fair value of the shares purchased over the $170,000
during the quarter ended June 30, 2005.

Effective January 28, 2005, the Company signed a promissory note of $62,384 with
a former officer of the Company to reimburse him for expenses paid by him on
behalf of the Company. Principal and accrued interest are payable on or prior to
the one year anniversary of the date of this Note. The loan bears an interest
rate of 12% per annum.

NOTE 7 - CONVERTIBLE LOAN

In November 2003, the Company signed two loan agreements. Pursuant to the first
loan agreement, the Company was to receive loans from several lenders in the
total amount of $1,500,000. The Company issued promissory notes in this amount.
Principal and accrued interest at the rate of 12% per annum were payable in full
after one year. As of December 31, 2003, a total of $900,000 was received, and
an aggregate amount of $475,000 was received during 2004. Pursuant to the second
loan agreement, the Company was to receive a loan from a lender in the total
amount of $200,000. The loan amount bears interest at the non-negotiable rate of
24% per annum. During 2004, the Company received $100,000.

Pursuant to those two loan agreements, the loans, in the aggregate amount of
$1,750,000 million (the "Loan"), are convertible into 350 units of the Company's
securities (the "Units"), at a purchase price of $5,000 per Unit (the "Original
Purchase Price"). Each Unit will consist of: (i) one share of the Company's
Series A Convertible Preferred Stock (the "Convertible Preferred Stock"); (ii)
5,000 Class A Warrants; (iii) 5,000 Class B Warrants; and (iii) 5,000 Class C
Warrants (the Class A Warrants, Class B Warrants and Class C Warrants are
hereinafter sometimes referred to collectively as the "Warrants"). The Company
expects to pay accrued and unpaid interest on the Loan to the lenders in cash,
with the exception of $50,000 in interest due according to the second loan
agreement, which has been integrated into the amount of the Loans.

On November 3, 2004 (the "Closing Date"), the Loan was converted into 350 Units,
at a purchase price of $5,000 per Unit.

Due to the immaterial value of the Warrants as of November 3, 2004, the whole
amount of the converted loan was allocated to the Convertible Preferred Stock.


During, the quarter ended June 30, 2005 the lenders paid $66,334 to a former
stockholder of Formula Footwear, Inc., the Company's former parent, and the
predecessor filer, to settle all outstanding amounts due.

The amount of the Convertible Preferred Stock presented in the Financial
Statements is net of $158,666 of loans, which were not received by the Company
through June 30, 2005.

Without the written consent or affirmative vote of the holders of a majority of
the then outstanding shares of Series A Preferred Stock, given in writing or by
vote at a meeting, consenting or voting (as the case may be) separately as a
class, the Company shall not:

          (i) create or issue any new class of shares or securities with equal
or superior rights to the rights of the Series A Preferred Stock or entering
into any other transaction, including any amendment of the Company's Certificate
of Incorporation, that adversely affects the holders of the Series A Preferred
Stock as a class, for which with respect to securities with equal rights to the
rights of the Series A Preferred Stock consent shall not be unreasonably
withheld;


                                       15


                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

          (ii) declare or pay any dividend on any shares of capital stock other
than the Series A Preferred Stock;

          (iii) repurchase or redeem any shares of Common Stock except from an
employee upon termination of employment with the Company;

          (iv) repurchase or redeem any shares of Series A Preferred Stock
except as provided in Section 5(b) hereof;

          (v) effect any transaction that would constitute a Liquidity Event;

          (vi) effect a sale, transfer or other disposition (excluding inventory
and other sales in the ordinary course of business) in any transaction or series
of related transactions of more than 25% of the fair market value of the
Company's consolidated assets.

          (vii) increase or decrease the number of authorized shares of any
series of Preferred Stock, for which consent shall not be unreasonably withheld;

          (viii) amend, alter or repeal any preferences, rights, powers or other
terms of the Series A Preferred Stock so as to adversely affect the Series A
Preferred Stock;

          (ix) increase the size of the Board of Directors;

          (x) voluntarily liquidate or wind-up the Company;

          (xi) amend the Company's Certificate of Incorporation;

          (xii) enter into any transaction with senior management or other
affiliates except for any arms-length employment agreements; and

          (xiii) enter into any debt or lease transaction, other than working
capital loans, equipment leases and other similar transactions in the ordinary
course of business, except for, such debt or lease transaction that, in the
aggregate, do not exceed $100,000.

The holders of the Convertible Preferred Stock (the "Holders") have certain
preferential dividend and liquidation rights including cumulative preferred
dividends of 12% per annum. In addition, the Convertible Preferred Stock is
redeemable: (i) at the election of any Holder after thirteen months following
the Closing Date, subject to the Holder's option to have the Company redeem the
Convertible Preferred Stock from the proceeds of any offering of the Company's
securities resulting in gross proceeds of $5,000,000 or more (a "Qualified
Offering"), at a purchase price equal to the Original Purchase Price, plus any
accrued and unpaid dividends; or (ii) at the Company's election after sixteen
months following the Closing Date, at a purchase price equal to 130% of the
Convertible Preferred Stock's Original Purchase Price, plus any accrued and
unpaid dividends. Also, each of the 350 shares of Convertible Preferred Stock
outstanding is convertible into such number of shares of the Company's Common
Stock as is determined by dividing $5,000, by $0.51. At June 30, 2005, the
Company had recorded approximately $113,000 of preferred stock dividends. Since
the preferred stock was classified as a liability, the preferred stock dividends
are included in financing expenses in the accompanying consolidated statements
of operations.

Each of the 1,750,000 Class A Warrants the Company issued in connection with
this transaction have a term of one year from the effective date of issuance,
and an exercise price of $0.38. Each of the 1,750,000 Class B Warrants the
Company issued in connection with this transaction have a term of three years
from the date of issuance, and an exercise price of $0.68. Each of the 1,750,000
Class C Warrants the Company issued in connection with this transaction have a
term of five years from the date of issuance, and an exercise price of $0.93.

Pursuant to the Series A Transaction Documents (see Note 4), the Company agreed
to file a registration statement (the "Registration Statement") to register the
shares of common stock underlying the Series A Convertible Preferred Stock,
Class A Warrants, Class B Warrants and Class C Warrants no later than 45 days
after the Closing Date (the "Required Filing Date"). For various reasons, the
Company was not able to satisfy its requirement to file the Registration
Statement on or prior to the Required Filing Date. Subsequently, the holders of
the preferred stock waived their rights to any penalties related to the
company's failure to file the registration statement.

As a result of the sale of convertible debentures in April 2005, pursuant to
antidilution provisions in the Series A preferred stock and the Class A, B, and
C Warrants, the company: (i) reduced the conversion price of the Series A
Preferred Stock, so that each share of Series A Preferred Stock is convertible
into such number of shares of the Company's common stock as is determined by
dividing $5,000, by $0.25; (ii) reduced the exercise price of the Class A
Warrants to $0.19 per share, and extend the term to two years from the effective
date of the Registration Statement; (iii) reduced the exercise price of the
Class B Warrants to $0.34 per share, and extend the term to five years from the
effective date of the Registration Statement; and (iv) reduced the exercise
price of the Class C Warrants to $0.47 per share.

                                       16


                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Contemporaneously with its acquisition of 1stAlerts, Inc., the Company converted
the accrued interest on the convertible loans of $177,066 into 708,263 shares of
its common stock, as full and complete payment thereof.

NOTE 8  PROMISSORY NOTES

As of April 14, 2005, the Company acquired 1stAlerts, Inc. and the Company
assumed promissory notes in the aggregate amount of $1,165,000.

The loans are evidenced by a promissory note (the "Promissory Note") issued by
1stAlerts to the lenders. Interest on the principal amount of the loan
outstanding accrues at the annual rate of 12% and is payable on the maturity of
the loan. Prior to the acquisition, 1stAlerts had defaulted on the notes. The
Company is currently negotiating a resolution with the holders of the 1stAlerts
Notes, however the loan remains in default.

Pursuant to the merger with 1stAlerts, the company exchanged warrants to
purchase 1,861,841 shares of 1stAlerts common stock for 1,861,841 of its Class
A Warrants.

Each of the 1,861,841 Class A Warrants the Company issued in connection with the
1stAlerts Merger have a term of two years from the effective date of a
registration statement that the Company is obligated to file to register the
shares of the Company's common stock underlying these warrants, among other of
the Company's securities and is exercisable at $.19 per share.

NOTE 9. CONVERTIBLE DEBENTURES

Former Shareholders of 1stAlerts, Inc.

Pursuant to the 1stAlerts Merger, First Info Network, Inc. assumed the
promissory notes in the aggregate principal amount of $3,400,000 which 1stAlerts
had issued to two of the pre-merger 1stAlerts stockholders (the "Notes"). The
Notes bear interest at the rate of one percentage point per annum above the
prime rate and is due December 31, 2009. Pursuant to the Notes, concurrently
with any public sale, spin-off or other similar disposition of the shares of
First Info Network, Inc., the Notes are convertible into shares of Common Stock
of First Info Network, Inc at 70% of the "Market Price" (as determined at the
time of such transaction). As security for the repayment of the Notes, the
Company pledged all of the Company's shares of First Info Network, Inc. No value
has been currently assigned to this contingent beneficial conversion feature.

Sale of 12% Convertible Debentures and Warrants


As of April 14, 2005, contemporaneously with the 1stAlerts Merger, the Company
sold an aggregate of: (i) $215,000 of its 12% Convertible Debentures (the
"Debentures"), (ii) 215,000 Class A Warrants, (iii) 215,000 Class B Warrants,
and (iv) 215,000 Class C Warrants to four lenders.

The Debentures, which have a maturity date of December 3, 2005, are convertible
into such number of shares of the Company's common stock as is determined by
dividing the amount of the Debentures, by $0.25. Each of the Class A Warrants
has a term of two years from the effective date of the Registration Statement,
and an exercise price of $0.19. Each of the Class B Warrants has a term of five
years from the effective date of the Registration Statement, and an exercise
price of $0.34. Each of the Class C Warrants has a term of five years from the
date of issuance, and an exercise price of $0.47.

The fair value of $215, 000 Debenture securities issued in April 2005 were
allocated 71% or $153,741 to the Debenture and 29% or $61,259 to the Debenture
warrants. The conversion price of the Debenture was below the market value of
the Company's Common Stock at April 14, 2005, which resulted in a beneficial
conversion feature relating to the $215,000 of $153,741. In accordance with EITF
00-27 the amount allocated to the beneficial conversion was limited to the
proceeds of the offering less the value allocated to the warrants issued to the
purchasers.


NOTE 10- SHAREHOLDERS' EQUITY

Stock Option Grants and Exercises

In March 2005, the Company granted to a consultant for professional services
stock options to purchase 80,000 shares of its common stock at an exercise price
of $.01 per share. The options vest on January 31, 2006. Since the Company's
stock has had a historically limited "public market", the fair value of the
stock options estimated on the date of grant was determined using the value of
the services of $60,000. The $60,000 and has been recorded as Deferred
Compensation and is being amortized over the period of service.

In March 2005, the Company granted to a consultant stock options for
professional services rendered to purchase 8,258 shares of its common stock at
an exercise price of $1.70 per share. The options vest on July 14, 2005. Since
the Company's stock has had a historically limited "public market", the fair
value of the stock options estimated on the date of grant was determined using
the value of the services rendered. The value of services was determined to be
$5,000 and has been recorded as a compensatory stock element expense in the
accompanying condensed consolidated statement of operations for the quarter
ended March 31, 2005.


                                       17


                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

In March 2005, a former director and officer of the Company exercised 610,750
stock options at an exercise price of $.001.

Effective as of January 6, 2005, a former officer, director and consultant of
the Company was removed as an officer and director of the Company. As a result
of such removal, 341,250 of his options to purchase shares of common stock of
the Company, which had not already vested, automatically expired on the date
thereof.

As of March 6, 2005, the exercise price of his 568,750 remaining stock options
was reduced to $0.001, in an administrative matter, which should have occurred
in connection with a stock split the Company effectuated in January 2004. As of
March 21, 2005, the former officer, director and consultant exercised all of
these stock options.

Simultaneously with the 1stAlerts Merger, the former officer, director and
consultant was reinstated as a director of the Company, and, the Company entered
into a new Consulting Agreement with him. In consideration for his services, the
Company reissued 341,250 stock options, which had automatically expired at the
time of his removal. The stock options: (i) are exercisable at a price of $.001
per share, (ii) vested 50% on the date of his reinstatement, and (iii) will vest
with respect to the remaining 50% on June 30, 2005. Also, in connection with the
agreement, the consultant was issued an additional 1,000,000 shares of the
Company's Common Stock, at an exercise price of $.001 per share. The options
vested 100% on the date of grant. Since the company's stock has had a
historically limited "public market", the fair value of $.37 per share or
$433,131. The $433,131 has been recorded as compensatory stock element expense
in the accompanying condensed consolidated statement of operations for the three
and six months ended June 30, 2005.

As of August 2005, the consultant exercised the 1,170,625 options which had
already vested as of that date.

Additional Issuances of Stock Options Pursuant to the Company's 2003 Stock
Option Plan

Contemporaneously with our acquisition of 1stAlerts, Inc., as of April 14, 2005,
the Company granted options to purchase an aggregate of 4,000,000 shares of our
Common Stock, at an exercise price of $0.001 per share, to two service providers
of ours. These options vested 100% upon their grant and have a term of five (5)
years from their date of grant. As of June 20, 2005, options to purchase
2,000,000 of these shares were rescinded by one of the grantees. Since the
Company's stock has had a historically limited "public market", the fair vale of
the stock options estimated on the date of grant was determined using the value
of $.37 per share or $740,000. The $740,000 has been recorded as compensatory
stock element expense in the accompanying condensed consolidated statement of
operations for the three and six months ended June 30, 2006.

In May 2005, the Company granted to a consultant stock options for professional
services rendered to purchase 50,000 shares of its common stock at an exercise
price of $0.01 per share. The options were exercised in June 2005. Since the
Company's stock has had a historically limited "public market", the fair vale of
the stock options estimated on the date of grant was determined using the value
of $.37 per share or $18,500. The $18,500 has been recorded as Deferred
Compensation and is being amortized over the period of service.

In May 2005, the Company granted to a consultant stock options for professional
services rendered to purchase 100,000 shares of its common stock at an exercise
price of $0.01 per share. The options were exercised in May 2005. Since the
Company's stock has had a historically limited "public market", the fair vale of
the stock options estimated on the date of grant was determined using the value
of the services rendered. Since the Company's stock has had a historically
limited "public market", the fair vale of the stock options estimated on the
date of grant was determined using the value of $.37 per share or $37,000. The
$37,000 has been recorded as Deferred Compensation and is being amortized over
the period of service.

In May 2005, the Company granted to a consultant stock options for professional
services rendered to purchase 500,000 shares of its common stock at an exercise
price of $0.01 per share. The options were exercised in May 2005. Since the
Company's stock has had a historically limited "public market", the fair vale of
the stock options estimated on the date of grant was determined using the value
of $.37 per share or $185,000. The $185,000 has been recorded as Deferred
Compensation and is being amortized over the period of service.

In May 2005, the Company granted to a consultant stock options for professional
services rendered to purchase 100,000 shares of its common stock at an exercise
price of $0.01 per share. The options were exercised in May 2005. Since the
Company's stock has had a historically limited "public market", the fair vale of
the stock options estimated on the date of grant was determined using the value
of $.37 per share or $37,000. The $37,000 has been recorded as Deferred
Compensation and is being amortized over the period of service.



                                       18



                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Issuance of Shares to a Former Stockholder

The Company and a former stockholder of Formula Footwear, Inc. ("Formula"), the
Company's former parent, and the predecessor filer, agreed to revise the terms
of a Promissory Note in the amount of $100,000 which was paid to the former
stockholder of Formula in consideration of its cancellation of shares of
Formula's common stock held by it. According to the revised terms, the maturity
date of the note is extended so that one-third of the amount is payable on April
14, 2005, one-third is payable thirty days thereafter, and the one-third is
payable sixty days thereafter. As of June 30, 2005, there remains an outstanding
balance of $33,333. In addition, in consideration for the stockholder's
agreement to extend the maturity date of the note, the Company issued it, and
certain of its affiliates, an aggregate of 124,750 shares of the Company's
Common. Since the Company's stock has had a historically limited "public
market", the fair vale of the stock issued estimated on the date of issuance was
determined using the value of $.25 per share or approximately $31,000. The
$25,000 has been recorded as interest expense in the accompanying condensed
consolidated statement of operations for the six months ended June 30, 2005.

Preferred Stock

As part of the 1stAlerts merger, the Company issued 1stAlerts, 200 shares of its
Series B Participating Preferred Stock. As set forth in the Certificate of
Designation of Series B Participating Preferred Stock that the Company filed,
the holders of the Company's Series B Participating Preferred Stock: (i) are
entitled to participate, on an "as if converted" basis, in any and all dividends
paid with respect to our Common Stock, (ii) have a liquidation preference, which
provides that, upon certain "liquidity events," they will be paid out of the
Company's assets prior to the holders of the Company's Common Stock, in parity
with the holders of the Company's other series of preferred stock, and (iii)
have no voting rights.

Shares of our Series B Participating Preferred Stock will be automatically
converted into shares of the Company's Common Stock upon the occurrence of: (i)
the liquidation, dissolution, or winding up of the Company, (ii) the
consolidation, merger or reorganization of the company, which results in a
change of control, or (iii) the sale of all or substantially all of the
Company's assets, or the Company's issued and outstanding shares of Common
Stock. In such event, our outstanding shares of Series B Participating Preferred
Stock will be converted into shares of the Company's Common Stock, so that after
such issuance, the holders of shares of the Company's Series B Participating
Preferred Stock will hold, in the aggregate, a number of shares of the Company's
Common Stock equal to the percentage of the total "Fair Market Value" of the
Company represented by the "Fair Market Value" of First Info Network, Inc., the
Company's wholly-owned subsidiary, determined by a mutually agreed upon
independent appraiser. In addition, any time on or after the third anniversary
of the effective date of the 1stAlerts Merger, any holder of shares of the
Company's Series B Participating Preferred Stock may convert such shares into
the number of shares of the Company's Common Stock as is determined by the
following formula:

         x = y ((A/B) x (C/D))

A = Number of shares of Series B Participating Preferred Stock owned by the
    holder.
B = Total number of issued and outstanding shares of Series B Participating
    Preferred Stock.
C = Fair Market Value of First Info Network, Inc. on the conversion date.
D = Fair Market Value of the Company on the conversion date.
y = Total number of shares of the Company's Common Stock issued and outstanding
    on the conversion date.
x = Number of shares of the Company's Common Stock into which the holder of
    shares of Series B Participating Preferred Stock is entitled to convert.



                                       19




                         VSUS TECHNOLOGIES INCORPORATED
                          (A DEVELOPMENT STAGE COMPANY)
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 11- COMMITMENTS AND CONTINGENCIES

NET LOSS PER SHARE

Securities that could potentially dilute basic earnings per share (EPS) in the
future, that were not included in the computation of diluted EPS because to do
so would have been anti-dilutive for the periods presented, consist of the
following:


         Options to purchase common stock                        4,948,375
         Warrants to purchase common stock                       7,756,841
         Convertible preferred stock (1)                         7,708,269
         Convertible Notes (1)                                     860,000
                                                                ----------
                     Total as of June 30, 2005                  21,273,485
                                                                ==========


     (1) Based on conversion rate of $.25.

     Substantial and potential issuances after June 30, 2005:

         Stock issued for services                                  50,000

 In addition, in connection with the 1stAlert Merger, the shares of Series B
Participating Preferred Stock Issued are potentially convertible into common
shares based on a formula described in Note 9.

Entry into Employment Agreement and Issuance of Shares

On April 28, 2005, the Company entered into an Employment Agreement with its
President and director (the "Employment Agreement"), in connection with his
services as its President and director. Pursuant to the Employment Agreement, in
consideration for his services, the Company issued its President and director
5,038,000 shares of its Common Stock (the "Shares"). The Company has the right
to repurchase certain amounts of the Shares under certain circumstances.
Concurrently with entering into the Employment Agreement, the Company's
President and director canceled 5,038,000 shares of Common Stock of the Company
he had purchased in January 2005, in connection with the Company's settlement
with a former officer and director.

NOTE 12-SUBSEQUENT EVENTS

On July 13, 2005, the Company entered into a Consulting Agreement. In
consideration for the consulting services to be provided to the Company by the
consultant, the Company agreed to, among other things (i) issue 50,000 shares of
our Common Stock to the consultant upon execution of the Consulting Agreement,
and (ii) issue an additional 15,000 shares of the Company's Common Stock to the
consultant per month thereafter, for each month in which consulting services are
to be provided.


                                       20



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

         The following discussion should be read in conjunction with the
unaudited financial statements and notes thereto set forth in Item 1 of this
Quarterly Report. In addition to historical information, this discussion and
analysis contains forward-looking statements that involve risks, uncertainties
and assumptions, which could cause actual results to differ materially from
management's expectations. Factors that could cause differences include, but are
not limited to, expected market demand for our products, as well as general
conditions of the information technology industry.

OVERVIEW

         We were incorporated in Delaware as Safe Mail Limited, on September 20,
2000. On May 15, 2001, we changed our name to VSUS Technologies Incorporated.
Since inception, we have been a developer and marketer of highly secure
communication systems for use over the Internet.

         Effective as of April 15, 2004, we became a wholly-owned subsidiary of
Formula Footwear, Inc., a Utah corporation, when we merged with Formula
Acquisition Corp., its wholly-owned Delaware subsidiary. Upon consummation of
the merger, our business became the primary business of Formula Footwear, Inc.,
which had no substantial business operations prior to acquiring our company.
Subsequently, effective as of June 9, 2004, Formula Footwear, Inc., merged with
and into our company. After the merger, we continued as the surviving company
and successor filer.

         Effective as of April 13, 2005, we reorganized our business by
transferring substantially all of our assets to VSUS Secured Services, Inc., a
Delaware corporation, and wholly-owned subsidiary of ours. In addition,
effective as of April 14, 2005, we acquired 1stAlerts, Inc. ("1stAlerts"), a
company that enables the provision of up-to-the-minute information over a
secure, private intranet, through a combination of push and pull technologies,
when it merged with and into our wholly-owned Delaware subsidiary, First Info
Network, Inc. As a result of these recent developments, we are now a holding
company providing information technology products and services to customers
through our two wholly-owned subsidiaries, VSUS Secured Services, Inc. and First
Info Network, Inc. In addition, following our acquisition of 1stAlerts, we
shifted the company's business operations to primarily focus on the 1stAlerts
business model and, as a result, have begun to wind down our operations in
Israel.

         We are a development stage enterprise. To date we have incurred
significant losses from operations and, at June 30, 2005, had an accumulated
deficit of $8,061,000. At June 30, 2005, we had $20,000 of cash and cash
equivalents. As a result of the consummation of our recent acquisition of
1stAlerts, and the anticipated cash flow from the combined company's operations,
we believe that we will have sufficient capital to fund our operations. However,
until such time as we generate sufficient revenues from operations, we will
continue to be dependent on raising substantial amounts of additional capital
through any one of a combination of debt offerings or equity offerings. There is
no assurance that we will be able to raise additional capital when necessary.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2004

         REVENUE: Revenue decreased $110,000, or 100%, to $ -0-in the
three-month period ended June 30, 2005, as compared to $110.000 in the
three-month period ended June 30, 2004. This decrease was primarily due to our
attention to the acquisition of 1stAlerts, Inc., the result of which was a shift
of our company's primary business operations to 1stAlerts' business.

                                       21


         RESEARCH AND DEVELOPMENT EXPENSES: Research and development expenses
consist primarily of personnel costs and consulting expenses directly associated
with the development of our software applications and other technology. During
the three-month period ended June 30, 2005, we incurred expenses of $400,000
developing our technology, an increase of $340,000, or 567%, over the $60,000 we
incurred during the three-month period ended June 30, 2004. The primary reason
for this increase in research and development expenses was the result in shift
of our company's primary business operations to 1stAlerts' business.

         SALES AND MARKETING EXPENSES: Sales and marketing expenses consist
primarily of personnel costs, professional fees, communications expenses and
other miscellaneous costs associated with supporting our sales and marketing
activities. During the three-month period ended June 30, 2005, we incurred
expenses of $-0- selling and marketing our products, as compared to $201,000
during the three-month period ended June 30, 2004. This decrease of $201,000, or
100%, is primarily a result of the resignation of our existing sales and
marketing personnel in connection with our acquisition of 1stAlerts, and the
resulting shift of our company's primary business operations to 1stAlerts'
business.

         GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative
expenses consist primarily of personnel costs, occupancy costs and other
miscellaneous costs associated with supporting our operations. During the
three-month period ended June 30, 2005, we incurred $2,222,000 in general and
administrative expenses, as compared to $178,000 during the three-month period
ended June 30, 2004. This increase of $2,044,000 is primarily a result of an
increase in legal and other professional fees we paid in connection with our
acquisition of 1stAlerts, Inc.

         FINANCING EXPENSES: Financing expenses consist primarily of interest
and other costs of our financing activities. During the three-month period ended
June 30, 2005, we incurred $907,000 in financing expenses, an increase of
$858,000 over the $49,000 incurred during the three-month period ended June 30,
2004.

         MERGER EXPENSES: During the three-month period ended June 30, 2004, we
incurred expenses of $113,000 in connection our merger with our former parent,
Formula Footwear, Inc., the predecessor filer.

         NET LOSS: We incurred a net loss of $3,905,000 ($0.16 per share) for
the three-month period ended June 30, 2005, compared to $515,000 ($0.04 per
share) for the three-month period ended June 30, 2004. Our revenues and future
profitability are substantially dependent on our ability to:

     o    successfully shift to 1stAlerts' business as our primary business
          operations;

     o    continue the development of products based on our technology;

     o    identify and obtain clients to purchase our products;

     o    modify our software applications, over time, to provide enhanced
          benefits to then-existing users;

     o    raise substantial amounts of additional capital through any one of a
          combination of debt offerings or equity offerings, if necessary; and

     o    continue to grow our business through additional acquisitions.

                                       22


SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2004

         REVENUE: Revenue decreased $118,000, or 100%, to $ -0-in the six-month
period ended June 30, 2005, as compared to $118.000 in the three-month period
ended June 30, 2004. This decrease was primarily due to our attention to the
acquisition of 1stAlerts, Inc., the result of which was a shift of our company's
primary business operations to 1stAlerts' business.

         RESEARCH AND DEVELOPMENT EXPENSES: Research and development expenses
consist primarily of personnel costs and consulting expenses directly associated
with the development of our software applications and other technology. During
the six-month period ended June 30, 2005, we incurred expenses of $400,000
developing our technology, an increase of $292,000, or 270%, over the $108.000
we incurred during the six-month period ended June 30, 2004. The primary reason
for this increase in research and development expenses was the result in shift
of our company's primary business operations to 1stAlerts' business.

         SALES AND MARKETING EXPENSES: Sales and marketing expenses consist
primarily of personnel costs, professional fees, communications expenses and
other miscellaneous costs associated with supporting our sales and marketing
activities. During the six-month period ended June 30, 2005, we incurred
expenses of $-0- selling and marketing our products, as compared to $258,000
during the six-month period ended June 30, 2004. This decrease of $258,000, or
100%, is primarily a result of the resignation of our existing sales and
marketing personnel in connection with our acquisition of 1stAlerts, and the
resulting shift of our company's primary business operations to 1stAlerts'
business.

         GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative
expenses consist primarily of personnel costs, occupancy costs and other
miscellaneous costs associated with supporting our operations. During the
six-month period ended June 30, 2005, we incurred $2,546,000 in general and
administrative expenses, as compared to $363,000 during the three-month period
ended June 30, 2004. This increase of $2,183,000 is primarily a result of an
increase in legal and other professional fees we paid in connection with our
acquisition of 1stAlerts, Inc.

         FINANCING EXPENSES: Financing expenses consist primarily of interest
and other costs of our financing activities. During the three-month period ended
June 30, 2005, we incurred $961,000 in financing expenses, an increase of
$853,000 over the $108,000 incurred during the six-month period ended June 30,
2004.

         MERGER EXPENSES: During the six-month period ended June 30, 2004, we
incurred expenses of $219,000 in connection our merger with our former parent,
Formula Footwear, Inc., the predecessor filer.

         NET LOSS: We incurred a net loss of $4,283,000 ($0.23 per share) for
the six-month period ended June 30, 2005, compared to $977,000 ($0.07 per share)
for the three-month period ended June 30, 2004. Our revenues and future
profitability are substantially dependent on our ability to:

     o    successfully shift to 1stAlerts' business as our primary business
          operations;

     o    continue the development of products based on our technology;

     o    identify and obtain clients to purchase our products;

     o    modify our software applications, over time, to provide enhanced
          benefits to then-existing users;

                                       23


     o    raise substantial amounts of additional capital through any one of a
          combination of debt offerings or equity offerings, if necessary; and

     o    continue to grow our business through additional acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

         GENERAL: We are a development stage enterprise. As such, our historical
results of operations are unlikely to provide a meaningful understanding of the
activities expected to take place over the next twelve months. Our major
initiatives through that period are:

     o    shifting to 1stAlerts' business as our primary business operations;

     o    furthering the development of our products;

     o    obtaining commercial sales of our products, and continuing our current
          marketing program; and

     o    seeking acquisitions of additional businesses and assets that will be
          beneficial to our company and its stockholders.

         Since inception, we have primarily funded our operations from private
placements of debt and equity. Until such time as we are able to generate
adequate revenues from the sale of our software applications and services, we
cannot assure that cash from the issuance of debt securities, the exercise of
existing warrants and the placements of additional equity securities will be
sufficient to fund our long-term research and development and general and
administrative expenses.

         At June 30, 2005, we had negative working capital of $2,805,000,
compared to negative working capital of $744,000 at December 31, 2004.

         We had $20,000 of cash and cash equivalents on hand at June 30, 2005,
compared to $20,000 at December 31, 2004. As a result of our acquisition of
1stAlerts, and the anticipated cash flow from the combined company's operations,
we believe that we will have sufficient capital to fund our operations. However,
until such time as we generate sufficient revenues from the sale of our
products, we will continue to be dependent on raising substantial amounts of
additional capital through any one of a combination of debt offerings or equity
offerings. We have no current arrangements with respect to any additional
financing. Consequently, there can be no assurance that any future financing
will be available to us when needed, and on commercially reasonable terms. Our
inability to derive sufficient revenues from the sale of our products, or obtain
additional financing when needed, would have a material adverse effect on our
company, requiring us to curtail or cease operations. In addition, any equity
financing may involve substantial dilution to our then current stockholders.

         USES OF CAPITAL: Since inception we have directed our efforts towards
the development and marketing of our software applications. Our objective is to
gain market recognition for our company and our products, in order to generate
future commercial sales of our products in the earliest time-frame possible.



                                       24




OFF-BALANCE SHEET ARRANGEMENTS

         None.


ITEM 3.  CONTROLS AND PROCEDURES.

         The term "disclosure controls and procedures" is defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. This term refers
to the controls and procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified by the Securities and Exchange
Commission. Our management, including our principal executive officer and
principal financial officer, has evaluated the effectiveness of disclosure
controls and procedures as of the end of the period covered by this quarterly
report. Based upon that evaluation, our principal executive officer and
principal financial officer have concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this annual
report.

         There were no changes to our internal controls over financial reporting
during our last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.





                                       25





                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

         We are not a party to any pending legal proceedings. To the knowledge
of management, no federal, state or local governmental agency is presently
contemplating any proceeding against us. No director, executive officer or
affiliate of ours, or owner of record of more than 5% of our common stock is a
party adverse to us, or has a material interest adverse to us in any legal
proceeding.


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

RECENT SALES OF UNREGISTERED SECURITIES

         In the three-month period ended June 30, 2005, and subsequent periods
through the date hereof, we issued unregistered securities, as follows:

         SECURITIES ISSUED UPON OUR ACQUISITION OF 1STALERTS, INC.

         As of April 14, 2005, we acquired 1stAlerts, Inc., a Delaware
corporation ("1stAlerts"), when it merged with and into our wholly-owned
Delaware subsidiary, First Info Network, Inc. (the "1stAlerts Merger"), pursuant
to an Agreement and Plan of Merger we entered into with those parties. At the
time of the 1stAlerts Merger, among other things, we exchanged: (i) 13,000,000
shares of our Common Stock, and 200 shares of our Series B Participating
Preferred Stock, for all of the issued and outstanding shares of capital stock
of 1stAlerts, Inc., and (ii) warrants to purchase 1,861,841 shares of our Common
Stock, for an equal number of warrants to purchase shares of capital stock of
1stAlerts.

         As set forth in the Certificate of Designation of Series B
Participating Preferred Stock we filed, the holders of our Series B
Participating Preferred Stock: (i) are entitled to participate, on an "as if
converted" basis, in any and all dividends paid with respect to our Common
Stock, (ii) have a liquidation preference, which provides that, upon certain
"liquidity events," they will be paid out of our assets prior to the holders of
our Common Stock, in parity with the holders of our other series of preferred
stock, and (iii) have no voting rights.

         Shares of our Series B Participating Preferred Stock will be
automatically converted into shares of our Common Stock upon the occurrence of:
(i) the liquidation, dissolution, or winding up of our company, (ii) the
consolidation, merger or reorganization of our company, which results in a
change of control, or (iii) the sale of all or substantially all of our assets,
or our issued and outstanding shares of Common Stock. In such event, our
outstanding shares of Series B Participating Preferred Stock will be converted
into shares of our Common Stock, so that after such issuance, the holders of
shares of our Series B Participating Preferred Stock will hold, in the
aggregate, a number of shares of our Common Stock equal to the percentage of the
total "Fair Market Value" of our company represented by the "Fair Market Value"
of First Info Network, Inc., our wholly-owned subsidiary, determined by a
mutually agreed upon independent appraiser. In addition, any time on or after
the third anniversary of the effective date of the 1stAlerts Merger, any holder
of shares of our series B participating preferred stock may convert such shares
into the number of shares of our Common Stock as is determined by the following
formula:


                                       26




         x = y ((A/B) x (C/D))

         A =      Number of shares of Series B Participating Preferred Stock
                  owned by the holder.
         B =      Total number of issued and outstanding shares of Series B
                  Participating Preferred Stock.
         C =      Fair Market Value of First Info Network, Inc. on the
                  conversion date.
         D =      Fair Market Value of our company on the conversion date.
         y =      Total number of shares of our Common Stock issued and
                  outstanding on the conversion date.
         x =      Number of shares of our Common Stock into which the holder
                  of shares of Series B Participating Preferred Stock is
                  entitled to convert.

         Each of the 1,861,841 Class A Warrants we issued in connection with the
1stAlerts Merger have a term of a term of two (2) years from the effective date
of a registration statement we're obligated to file to register the shares of
our Common Stock underlying these warrants, and an exercise price of $0.19.

         The pre-merger stockholders of 1stAlerts have been granted the option
to purchase up to 95% of the shares of First Info Network, Inc. from us under
certain circumstances, pursuant to a Call Option Agreement we entered into with
them.

         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         CONVERSION OF LOANS INTO SHARES OF PREFERRED STOCK AND WARRANTS

         As of November 10, 2003, we borrowed an aggregate of $1,750,000 from
certain lenders (the "Loans"). As of November 3, 2004, the Loans were converted
into units comprised of an aggregate of: (i) 350 shares of our Series A
Convertible Preferred Stock (the "Series A Preferred Stock"), (ii) 1,750,000
Class A Warrants (in this instance, the "Class A Warrants"), (iii) 1,750,000
Class B Warrants (in this instance, the "Class B Warrants"), and (iv) 1,750,000
Class C Warrants (in this instance, the "Class C Warrants"). The purchase price
of each unit was $5,000.

         As a result of certain adjustments we made to these securities, as of
April 14, 2005:

     o    Each share of Series A Preferred Stock outstanding after the
          conversion of the Loans is convertible into such number of shares of
          our Common Stock as is determined by dividing $5,000, by $0.25;

     o    Each Class A Warrant issued in connection with the conversion of the
          Loans has a term of two (2) years from the effective date of a
          registration statement we're obligated to file (in this instance, the
          "Registration Statement") to register the shares of our Common Stock
          underlying the shares of Series A Preferred Stock, Class A Warrants,
          Class B Warrants and Class C Warrants (the "Underlying Shares"), and
          an exercise price of $0.19;

     o    Each Class B Warrant issued in connection with the conversion of the
          Loans has a term of five (5) years from the effective date of the
          Registration Statement, and an exercise price of $0.34; and

                                       27


     o    Each Class C Warrant issued in connection with the conversion of the
          Loans has a term of five (5) years from the date of issuance, and an
          exercise price of $0.47.

         We have granted the holders of our Series A Preferred Stock, Class A
Warrants, Class B Warrants and Class C Warrants mandatory registration rights
with regard to the Underlying Shares.

         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         CONVERSION OF INTEREST INTO SHARES OF COMMON STOCK

         As stated above, effective as of November 3, 2004, we converted an
aggregate of $1,750,000 in Loans, and certain accrued interest, payable to
certain lenders of ours (each, a "Series A Holder," and collectively, the
"Series A Holders"), into a total of: (i) 350 shares of Series A Convertible
Preferred Stock, (ii) 1,750,000 Class A Warrants, (iii) 1,750,000 Class B
Warrants, and (iv) 1,750,000 Class C Warrants.

         At the time the Loans were converted into units of our securities, we
planned to pay accrued and unpaid interest of $177,066 (the "Interest") to the
Series A Holders in cash. However, subsequently, we found that making such
payments would have a material adverse effect on our operations.

         Therefore, contemporaneously with the merger of 1stAlerts, Inc., a
Delaware corporation, with and into First Info Network, Inc., a wholly-owned
subsidiary of ours, we converted the Interest into 708,263 shares of our Common
Stock, as full and complete payment thereof.

         We have given the Series A Holders mandatory registration rights with
regard to these shares of our Common Stock.

         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         ISSUANCES OF STOCK OPTIONS TO MATIS COHEN

         Matis Cohen served as our President, and as a director and consultant
of ours, since January 1, 2003. In consideration for such services, pursuant to
our 2003 Stock Option Plan: (i) as of January 1, 2003, we granted Mr. Cohen
stock options to purchase 910,000 shares of our Common Stock, at an exercise
price of $0.01 per share (the "2003 Cohen Options"); and (ii) as of February 1,
2004, we granted Mr. Cohen stock options to purchase 42,000 shares of our Common
Stock, at an exercise price of $0.001 per share (the "2004 Cohen Options").

         Effective as of January 6, 2005, Mr. Cohen was removed from our board
of directors, and, subsequently, as an officer of ours. As a result of such
removal, 341,250 of the 2003 Cohen Options, which had not already vested,
automatically expired on the date thereof.

         As of March 6, 2005, Mr. Cohen's 568,750 remaining 2003 Cohen Options
(as well as 1,584,000 options held by another optionholder) were repriced to
$0.001, to give effect to a stock split we completed in January 2004. As of
March 21, 2005, Mr. Cohen exercised his 568,750 2003 Cohen Options, and his
42,000 2004 Cohen Options.

                                       28


         Simultaneously with our acquisition of 1stAlerts, Inc., as of April 14,
2005, as described elsewhere in this report, Mr. Cohen was reinstated as a
director of ours, and was appointed as a director of our wholly-owned
subsidiary, VSUS Secured Services, Inc. In connection with his reinstatement, we
reissued his 341,250 stock options (the "Director Options"), which had
automatically expired at the time of his removal. The Director Options: (i) are
exercisable at a price of $0.001 per share, (ii) vested 50% on the date of Mr.
Cohen's reinstatement, and (iii) will vest with respect to the remaining 50% on
June 30, 2005.

         In addition, simultaneously with our acquisition of 1stAlerts, Inc., we
entered into a Consulting Agreement with Mr. Cohen, pursuant to which he shall
serve as a consultant in connection with our operations, and the operations of
VSUS Secured Services, Inc., our wholly-owned subsidiary, in Israel. In
consideration for his services as a consultant, we issued Mr. Cohen options to
purchase 1,000,000 shares of our Common Stock, at an exercise price of $0.001
per share (the "Consultant Options"). The Consultant Options vested 100% on the
date of grant.

         Effective as of May 26, 2005, Mr. Cohen exercised (i) the 170,625
Director Options that had already vested, and (ii) the 1,000,000 Consultant
Options. Effective as of July 22, 2005, Mr. Cohen exercised his remaining
170,625 Director Options, which had vested on June 30, 2005.

         We believe that the 2003 Stock Option Plan grants described in this
section are exempt from the registration requirements of the Securities Act of
1933, as amended, by reason of Rule 701 promulgated thereunder, because such
options were granted pursuant to a written compensatory benefit plan, copies of
which were provided to each participant, and the aggregate offering price did
not exceed the limit prescribed by Rule 701 in connection with any such grant.

         ADDITIONAL ISSUANCES OF STOCK OPTIONS PURSUANT TO OUR 2003 STOCK OPTION
PLAN

         In addition to the stock options we granted to Mr. Cohen, described
above, we issued the following additional options to purchase shares of our
Common Stock, pursuant to our 2003 Stock Option Plan:

          o    Contemporaneously with our acquisition of 1stAlerts, Inc., as of
               April 14, 2005, we granted options to purchase an aggregate of
               4,000,000 shares of our Common Stock, at an exercise price of
               $0.001 per share, to two service providers of ours. These options
               vested 100% upon their grant and have a term of five (5) years
               from their date of grant. As of June 20, 2005, options to
               purchase 2,000,000 of these shares were rescinded by one of the
               grantees.

          o    In addition, during May 2005, we granted options to purchase an
               aggregate of 750,000 shares of our Common Stock, at an exercise
               price of $0.01 per share, to four consultants of ours, pursuant
               to Consulting Agreements we entered into with such consultants.
               These options vested 100% upon their grant and have a term of
               five (5) years from their date of grant. As of the date hereof,
               100% of these options have been exercised.

         We believe that the 2003 Stock Option Plan grants described in this
paragraph are exempt from the registration requirements of the Securities Act of
1933, as amended, by reason of Rule 701 promulgated thereunder, because such
options were granted pursuant to a written compensatory benefit plan, copies of
which were provided to each participant, and the aggregate offering price did
not exceed the limit prescribed by Rule 701 in connection with any such grant.

                                       29


         SALE OF 12% CONVERTIBLE DEBENTURES AND WARRANTS

         As of April 14, 2005, contemporaneously with our acquisition of
1stAlerts, Inc., we sold an aggregate of: (i) $215,000 of our 12% Convertible
Debentures (the "Debentures"), (ii) 215,000 Class A Warrants (in this instance,
the "Class A Warrants"), (iii) 215,000 Class B Warrants (in this instance, the
"Class B Warrants"), and (iv) 215,000 Class C Warrants (in this instance, the
"Class C Warrants"), to four (4) lenders (the "Purchasers"), pursuant to a
Securities Purchase Agreement and related documents.

         The Debentures, which have a maturity date of December 3, 2005, are
convertible into such number of shares of our Common Stock as is determined by
dividing the amount of the Debentures, by $0.25. Each of the Class A Warrants
has a term of two (2) years from the effective date of a registration statement
we're obligated to file (in this instance, the "Registration Statement") to
register the shares of our Common Stock underlying the Debentures, among other
of our securities, and an exercise price of $0.19. Each of the Class B Warrants
has a term of five years from the effective date of the Registration Statement,
and an exercise price of $0.34. Each of the Class C Warrants has a term of five
years from the date of issuance, and an exercise price of $0.47.

         We have given the Purchasers mandatory registration rights with regard
to these shares of our Common Stock.

         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         ISSUANCE OF SHARES TO JENSON SERVICES AND ITS AFFILIATES

         On February 24, 2004, we entered into an Agreement and Plan of
Reorganization with Formula Footwear, Inc. (the "Merger Agreement"). At that
time, Jenson Services, Inc., Formula Footwear's majority shareholder, agreed to
cancel 1,768,785 shares of its Common Stock. In consideration for its
cancellation of such shares, and its entering into an Indemnity Agreement with
us, Jenson Services, Inc. was issued:

          o    a cash payment of $100,000;

          o    a promissory note in the principal amount of $100,000 (the
               "Promissory Note"), payable on the earlier of six months from the
               effective date of a registration statement we're required to file
               (in this instance, the "Registration Statement"), or nine months
               from the date of the Merger Agreement; and

          o    an option to purchase 500,000 shares of Common Stock, at an
               exercise price of $0.001 per share (the "Jenson Option"), with
               "piggy back" registration rights with respect to the shares of
               Common Stock underlying the option.

         Subsequently, the Jenson Option was exercised by Jenson Services, Inc.,
and certain of its affiliates (collectively, the "Jenson Group"), pursuant to a
cashless exercise provision in the option. As a result, we issued an aggregate
of 499,000 shares of our Common Stock to the Jenson Group.

         As a result of: (i) our failure to timely file the Registration
Statement; (ii) our failure to pay the principal amount of the Promissory Note,
and interest thereon, when due; (iii) the Jenson Group's agreement not to pursue
any claims against us in connection with our failure to file the Registration
Statement on a timely basis; and (iv) Jenson Service's agreement to amend the
Promissory Note to,

                                       30


among other things, extend the maturity date thereof, we agreed to issue to the
Jenson Group 124,750 shares of our Common Stock, as of April 14, 2005.

         We have agreed that any registration statement we file to register the
shares of Common Stock underlying our outstanding shares of Series A Convertible
Preferred Stock shall also include these shares of our Common Stock. In
addition, the Jenson Group has agreed to subject these shares to any lockup
agreement as to which the holders of our Series A Convertible Preferred Stock
agree to subject the shares of our Common Stock underlying such securities.

         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         ISSUANCE OF SHARES TO OUR PRESIDENT

         Pursuant to a Settlement Agreement we entered into with Amiram Ofir, a
former officer and director of ours, effective as of January 28, 2005, among
other things, (i) 4,389,000 shares of our Common Stock held by Ofir Holding
Limited, a company controlled by Mr. Ofir, and (ii) 649,000 shares of our Common
Stock, jointly owned by Mr. Ofir and his spouse, Hannah Ofir, our former
Secretary (collectively, the "Ofir Shares"), were sold to Mr. Eliyahu Kissos,
our newly appointed President and director, for an aggregate purchase price of
$170,000 (the "Purchase Price"). The Purchase Price was negotiated as part of
our settlement with Mr. Ofir, and, therefore, does not necessarily represent the
fair market value of our Common Stock on the date of the transaction.

         On April 28, 2005, we entered into an Employment Agreement with Mr.
Kissos (the "Employment Agreement"), in connection with his services as our
President and director. Pursuant to the Employment Agreement, in consideration
for his services, we issued Mr. Kissos 5,038,000 shares of our Common Stock (the
"Kissos Shares"). We have the right to repurchase certain amounts of the Kissos
Shares under certain circumstances. Concurrently with entering into the
Employment Agreement, Mr. Kissos cancelled the 5,038,000 Ofir Shares he had
purchased in connection with the Settlement Agreement.

         As of May 27, 2005, we waived certain "leak-out" and "repurchase"
provisions in the Employment Agreement to allow Mr. Kissos to transfer 4,500,000
of the Kissos Shares in repayment of a loan.

         We believe that these transaction are exempt from registration under
the Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation
D promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         ISSUANCE OF SHARES TO NEWPORT CAPITAL

         On July 13, 2005, we entered into a Consulting Agreement with Newport
Capital Consultants Inc. ("Newport"). In consideration for the consulting
services to be provided to us by Newport, we agreed to, among other things (i)
issue 50,000 shares of our Common Stock to Newport upon execution of the
Consulting Agreement, and (ii) issue an additional 15,000 shares of our Common
Stock to Newport per month thereafter, for each month in which consulting
services are to be provided.

                                       31


         We believe that this transaction is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2), or Regulation D
promulgated thereunder, as a transaction by an issuer not involving a public
offering.

         Except as set forth above, we did not sell any unregistered securities
during the second quarter of 2004, or subsequent period through the date hereof.
In addition, we did not repurchase any of our equity securities during the
second quarter of 2004, or subsequent period through the date hereof.

USE OF PROCEEDS

         As of May 3, 2005, we filed a registration statement on Form S-8
relating to 20,038,000 shares of our Common Stock held by certain selling
stockholders. We will not receive any of the proceeds from the sale of these
shares by the selling stockholders.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         PROMISSORY NOTE OF JENSON SERVICES

         On February 24, 2004, we entered into an Agreement and Plan of
Reorganization with Formula Footwear, Inc. (the "Merger Agreement"). At that
time, Jenson Services, Inc., Formula Footwear's majority shareholder, agreed to
cancel 1,768,785 shares of its Common Stock. In consideration for its
cancellation of such shares, and its entering into an Indemnity Agreement with
us, Jenson Services, Inc. was issued:

          o    a cash payment of $100,000;

          o    a promissory note in the principal amount of $100,000 (the
               "Promissory Note"), payable on the earlier of six months from the
               effective date of a registration statement we're required to file
               (in this instance, the "Registration Statement"), or nine months
               from the date of the Merger Agreement; and

          o    an option to purchase 500,000 shares of Common Stock, at an
               exercise price of $0.001 per share (the "Jenson Option"), with
               "piggy back" registration rights with respect to the shares of
               Common Stock underlying the option.

         Subsequently, the Jenson Option was exercised by Jenson Services, Inc.,
and certain of its affiliates (collectively, the "Jenson Group"), pursuant to a
cashless exercise provision in the option. As a result, we issued an aggregate
of 499,000 shares of our Common Stock to the Jenson Group.

         As a result of: (i) our failure to timely file the Registration
Statement; (ii) our failure to pay the principal amount of the Promissory Note,
and interest thereon, when due; (iii) the Jenson Group's agreement not to pursue
any claims against us in connection with our failure to file the Registration
Statement on a timely basis; and (iv) Jenson Service's agreement to amend the
Promissory Note (the "Amended Note") to, among other things, extend the maturity
date of the Promissory Note, we agreed to issue to the Jenson Group 124,750
shares of our Common Stock, as of April 14, 2005.

         As of the date hereof, $33,666 is still owed to Jenson Services under
the Amended Note.


                                       32



         NOTES ASSUMED UPON CONSUMMATION OF 1STALERTS MERGER

         As of April 14, 2005, we acquired 1stAlerts, Inc., a Delaware
corporation ("1stAlerts"), when it merged with and into our wholly-owned
Delaware subsidiary, First Info Network, Inc. ("First Info") (the "1stAlerts
Merger"). At the time of the 1stAlerts Merger, among other things, First Info
assumed promissory notes in the aggregate amount of $1,165,000 (the "1stAlerts
Notes"), on which 1stAlerts had defaulted. We are currently negotiating a
resolution with the holders of the 1stAlerts Notes.


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

         MATTERS RECENTLY APPROVED BY THE HOLDERS OF SHARES OF OUR SERIES A
         PREFERRED STOCK

         Effective as of November 3, 2004 (the "Closing Date"), we converted an
aggregate of $1,750,000 in loans (the "Loans"), and certain accrued interest,
payable to certain lenders of ours (each, a "Series A Holder," and collectively,
the "Series A Holders"), into a total of: (i) 350 shares of Series A Convertible
Preferred Stock (the "Series A Preferred Stock"), (ii) 1,750,000 Class A
Warrants (in this instance, the "Class A Warrants"), (iii) 1,750,000 Class B
Warrants (in this instance, the "Class Warrants"), and (iv) 1,750,000 Class C
Warrants (in this instance, the "Class C Warrants"), pursuant to the terms and
conditions of a Series A Unit Purchase Agreement, and other related documents
(collectively the "Series A Transaction Documents").

         Pursuant to the Series A Transaction Documents, among other things: (i)
each share of Series A Preferred Stock was convertible into such number of
shares of our Common Stock as is determined by dividing $5,000, by $0.51; (ii)
each of the Class A Warrants had a term of one (1) year from the effective date
of a registration statement we are obligated to file (in this instance, the
"Registration Statement") to register the shares of Common Stock underlying the
shares of Series A Preferred Stock, Class A warrants, Class B Warrants and Class
C Warrants (collectively, the "Underlying Shares"), and an exercise price of
$0.38; (iii) each of the Class B Warrants had a term of three (3) years from the
date of issuance, and an exercise price of $0.68; (iv) each of the Class C
Warrants had a term of five (5) years from the date of issuance, and an exercise
price of $0.93; (v) we agreed to file the Registration Statement no later than
45 days after the Closing Date (the "Required Filing Date"); and (vi) the
written consent of the holders of 70% of the shares of Series A Preferred Stock
must be obtained for any amendment, waiver or modification of the terms thereof.

         For various reasons, we were not able to satisfy our requirement to
file the Registration Statement on or prior to the Required Filing Date.

         In addition, at the time we converted the Loans into shares of Series A
Preferred Stock, Class A Warrants, Class B Warrants and Class C Warrants, we
planned to pay accrued and unpaid interest of $177,066 (the "Interest") to the
Series A Holders in cash. However, subsequently, we found that making such
payments would have a material adverse effect on our operations.

         As of April 14, 2005, our officers received the vote of holders of in
excess of 70% of shares of our Series A Preferred Stock, to:

               o    Merge 1stAlerts, Inc., a Delaware corporation, with and into
                    First Info Network, Inc., a wholly-owned subsidiary of ours
                    (the "1stAlerts Merger"), and take certain required actions
                    in connection with the 1stAlerts Merger;

                                       33


               o    Contemporaneously with the 1stAlerts Merger, make the
                    following adjustments to the Series A Preferred Stock, Class
                    A Warrants, Class B Warrants and Class C Warrants, in full
                    and complete settlement of any claims the Series A Holders
                    may have had against us in connection with our failure to
                    file the Registration Statement on or before the Required
                    Filing Date:

                           (i) The conversion price of the Series A Preferred
                           Stock was reduced, so that each share of Series A
                           Preferred Stock is now convertible into such number
                           of shares of our Common Stock as is determined by
                           dividing $5,000, by $0.25;

                           (ii) The exercise price of the Class A Warrants was
                           reduced to $0.19 per share, and the term was extended
                           to two (2) years from the effective date of the
                           Registration Statement;

                           (iii) The exercise price of the Class B Warrants was
                           reduced to $0.34 per share, and the term was extended
                           to five (5) years from the effective date of the
                           Registration Statement; and

                           (iv) The exercise price of the Class C Warrants was
                           reduced to $0.47 per share; and

         Contemporaneously with the 1stAlerts Merger, we converted the Interest
into 708,263 shares of our Common Stock, as full and complete payment thereof.


ITEM 5.  OTHER INFORMATION.

         On April 28, 2005, we entered into an Employment Agreement with Mr.
Eliyahu Kissos, in connection with his services as our President, and a director
of ours (the "Employment Agreement"). Pursuant to the Employment Agreement, in
consideration for his services, we issued Mr. Kissos 5,038,000 shares of our
Common Stock (the "Shares"). In addition, as set forth in the Employment
Agreement:

               o    Mr. Kissos may only sell up to 1/16th of the Shares in each
                    calendar quarter, commencing on July 1, 2005, on a
                    cumulative basis; and

               o    If Mr. Kissos' employment is terminated prior to the three
                    (3) year anniversary of the execution of the Employment
                    Agreement, we have the right to repurchase certain amounts
                    of the Shares, under certain circumstances.

         As reported in the Current Report on Form 8-K we filed on May 31, 2005,
as of May 26, 2005, our board of directors agreed to waive the aforementioned
provisions of the Employment Agreement, to permit Mr. Kissos to transfer
4,500,000 of the Shares to Mr. Matis Cohen, a director of ours, in payment of
the principal amount of a promissory note, and accrued interest thereon. Mr.
Kissos and Mr. Cohen, who were interested parties, abstained from voting on this
matter.



                                       34



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

EXHIBIT
NUMBER         DESCRIPTION OF EXHIBIT
---------      ----------------------

     2.1       Agreement and Plan of Merger by and among the Company, First Info
               Network, Inc. and 1stAlerts, Inc.(2)

     2.2       Certificate of Merger of 1stAlerts, Inc. with and into First Info
               Network, Inc.(2)

     4.1       Certificate of Designation of Series A Convertible Preferred
               Stock(3)

     4.2       Certificate of Designation of Series B Participating Preferred
               Stock(2)

     4.3       Form of 12% Convertible Debenture(4)

     4.4       Form of Class A Warrant(5)

     4.5       Form of Class B Warrant(5)

     4.6       Form of Class C Warrant(5)

     4.7       Form of 1stAlerts Convertible Promissory Note(2)

     4.8       Amended Promissory Note of Jenson Services, Inc.(2)

    10.1       Consulting Agreement, dated April 14, 2005, between the Company
               and Matis Cohen(4)

    10.2       Employment Agreement, dated April 28, 2005, between the Company
               and Eliyahu Kissos(4)

    10.3       Letter Agreement between the Company and Jenson Services, Inc.(2)

    10.4       Form of Pledge Agreement between the Company and Pre-Merger
               Stockholders of 1stAlerts, Inc.(2)

    10.5       Form of Securities Purchase Agreement between the Company and the
               Series A Holders(2)

    10.6       Form of 1stAlerts Loan Agreement(2)

    10.7       Call Option Agreement(2)

    31.1       Certification of Eliyahu Kissos pursuant to Section 13a-14(a)(1)

    31.2       Certification of Steven Goldberg pursuant to Section 13a-14(a)(1)

    32.1       Certification of Eliyahu Kissos and Steven Goldberg pursuant to
               Section 1350(1)

---------------------
(1)  Filed herewith

(2)  Incorporated by reference from the Company's Annual Report on Form 10-KSB,
     for the year ended December 31, 2004

(3)  Incorporated by reference from the Company's Quarterly Report on Form
     10-QSB, for the three-month period ended June 30, 2004

(4)  Incorporated by reference from the Company's Registration Statement on Form
     S-8, filed May 3, 2005 (5) Incorporated by reference from the Company's
     Current Report on Form 8-K, dated November 3, 2004


                                       35





                                   SIGNATURES


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

                                             VSUS TECHNOLOGIES INCORPORATED



Date:  August 22, 2005                       By: /s/ Eliyahu Kissos
     ----------------------                     --------------------------------
                                                      Eliyahu Kissos
                                                      President



Date:  August 22, 2005                       By: /s/ Steven Goldberg
     ----------------------                     --------------------------------
                                                      Steven Goldberg
                                                      Chief Financial Officer




                                       36




                                  EXHIBIT INDEX

EXHIBIT
NUMBER      DESCRIPTION OF EXHIBIT
-------     ----------------------

   2.1      Agreement and Plan of Merger by and among the Company, First Info
            Network, Inc. and 1stAlerts, Inc.(2)

   2.2      Certificate of Merger of 1stAlerts, Inc. with and into First Info
            Network, Inc.(2)

   4.1      Certificate of Designation of Series A Convertible Preferred
            Stock(3)

   4.2      Certificate of Designation of Series B Participating Preferred
            Stock(2)

   4.3      Form of 12% Convertible Debenture(4)

   4.4      Form of Class A Warrant(5)

   4.5      Form of Class B Warrant(5)

   4.6      Form of Class C Warrant(5)

   4.7      Form of 1stAlerts Convertible Promissory Note(2)

   4.8      Amended Promissory Note of Jenson Services, Inc.(2)

  10.1      Consulting Agreement, dated April 14, 2005, between the Company
            and Matis Cohen(4)

  10.2      Employment Agreement, dated April 28, 2005, between the Company
            and Eliyahu Kissos(4)

  10.3      Letter Agreement between the Company and Jenson Services, Inc.(2)

  10.4      Form of Pledge Agreement between the Company and Pre-Merger
            Stockholders of 1stAlerts, Inc.(2)

  10.5      Form of Securities Purchase Agreement between the Company and the
            Series A Holders(2)

  10.6      Form of 1stAlerts Loan Agreement(2)

  10.7      Call Option Agreement(2)

  31.1      Certification of Eliyahu Kissos pursuant to Section 13a-14(a)(1)

  31.2      Certification of Steven Goldberg pursuant to Section 13a-14(a)(1)

  32.1      Certification of Eliyahu Kissos and Steven Goldberg pursuant to
            Section 1350(1)

---------------------
(1)   Filed herewith

(2)   Incorporated by reference from the Company's Annual Report on Form 10-KSB,
      for the year ended December 31, 2004

(3)   Incorporated by reference from the Company's Quarterly Report on Form
      10-QSB, for the three-month period ended June 30, 2004

(4)   Incorporated by reference from the Company's Registration Statement on
      Form S-8, filed May 3, 2005

(5)   Incorporated by reference from the Company's Current Report on Form 8-K,
      dated November 3, 2004





                                       37`