`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  March 31, 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                         (IRS Employer
incorporation or organization)                        Identification No.)


             444 Madison Ave., 27th 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 June 8, 2005, the issuer had
28,007,284 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 MARCH 31, 2005


                                      INDEX
                                      -----

<TABLE>

                                                                                                            PAGE NO.
                                                                                                            --------

PART I.    FINANCIAL INFORMATION

Item.1     Financial Statements................................................................................ 3

           Condensed Consolidated Balance Sheet as of March 31, 2005 (unaudited)
              and December 31, 2004............................................................................ 4

           Condensed Consolidated Statement of Operations for the three months ended
              March 31, 2005 and 2004 (unaudited).............................................................. 5

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

           Condensed Consolidated Statement of Cash Flows for the three months ended
              March 31, 2005 and 2004 (unaudited).............................................................. 7

           Notes to the Condensed Consolidated Financial Statements............................................ 8

Item 2.    Management's Discussion and Analysis or Plan of Operation...........................................17

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.....................................................................................................37
</TABLE>



                                       2




                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.



                         VSUS TECHNOLOGIES INCORPORATED
                         ------------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                          -----------------------------

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   -------------------------------------------
                              AS OF MARCH 31, 2005
                              --------------------
                                    UNAUDITED
                                    ---------

            INDEX TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
            --------------------------------------------------------


                                                                          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...................8-16









                                       3



                         VSUS TECHNOLOGIES INCORPORATED
                         (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)


<TABLE>

                                                                             March 31,
                                                                               2005
                                                                          ---------------
                                                                           (Unaudited)

ASSETS:

CURRENT ASSETS
Cash and cash equivalents                                                 $            1
Other receivables                                                                      2
                                                                          ---------------
                                                                                       3
                                                                          ---------------

FIXED ASSETS, NET                                                                      -
                                                                          ---------------
                                                                          $            3
                                                                          ===============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
CURRENT LIABILITIES
Short-term bank credit                                                                15
Accrued expenses                                                                     533
Accrued interest                                                                     120
Other payables                                                                       131
Related parties                                                                      178
                                                                          ---------------
                                                                                     977
                                                                          ---------------

LONG-TERM LIABILITIES
Related Party                                                                        166
CONVERTIBLE PREFERRED STOCK (350 shares issued, 305 outstanding),
  stated at its liquidation preference                                             1,571
                                                                          ---------------
                                                                                   1,737
                                                                          ---------------

CONTINENCIES AND COMMITMENTS

STOCKHOLDERS' DEFICIENCY

Common Stock                                                                          13
Additional paid-in-capital                                                         4,102
Deferred stock based compensation                                                 (2,670)
Accumulated deficit                                                               (4,156)
                                                                          ---------------
                                                                                  (2,711)
                                                                          ---------------
                                                                          $            3
                                                                          ===============
</TABLE>


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

                                       4



                         VSUS TECHNOLOGIES INCORPORATED
                         (A DEVELOPMENT STAGE COMPANY)
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>


                                                                                            CUMULATIVE FROM
                                                                                              SEPTEMBER 20,
                                                                                                 2000
                                                                                               (INCEPTION)
                                                                                              TO MARCH 31,
                                                             For the Three Months Ended           2005
                                                                     March 31,
                                                           -------------- --------------
                                                                 2005           2004
                                                           -------------- --------------    ------------------


Revenue                                                      $         -    $         8        $        1,728

Cost of revenues                                                       -             15                   232
                                                           -------------- --------------    ------------------

     Gross profit                                                      -             (7)                1,496

Research and development expense                                       -             48                 1,420
Sales and marketing                                                    -             57                   944
General and administrative expense                                   324            185                 2,577
Merger expenses                                                        -            106                   409
                                                           -------------- --------------    ------------------

Operating loss                                                      (324)          (403)               (3,854)

Financing expenses, net                                               54             59                   302
                                                           -------------- --------------    ------------------

Net loss                                                     $      (378)   $      (462)       $       (4,156)
                                                           ============== ==============    ==================

Basic and diluted loss per share                             $     (0.03)   $     (0.04)
                                                           ============== ==============

Weighted average number of shares outstanding                 12,466,723     11,836,012
                                                           ============== ==============

</TABLE>


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


                                       5



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


<TABLE>

                                                   FOR THE
                                                THREE MONTHS
                                                    ENDED
                                               MARCH 31, 2005                                      ACCUMULATED
                                                                                                     DEFICIT
                                                COMMON STOCK        ADDITIONAL                        DURING
                                          -----------------------    PAID-IN      DEFERRED STOCK   DEVELOPMENT
                                             SHARES       AMOUNT     CAPITAL       COMPENSATION       STAGE          TOTAL
                                          ------------  ---------- -------------- -------------- --------------- --------------

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

Value assigned to stock options                     -           -           5                -              -               5
Value assigned to buy back of
  shares from former officer                        -           -       2,601           (2,601)             -               -
Excericise of stock options                   610,750           1                                                           1
Deferred compensation                               -           -          60              (60)             -               -
Amortization of deferred compensation               -           -           -               42              -              42
Net loss-Quarter ended March 31, 2005               -           -           -                -           (378)           (378)
                                          ------------  ---------- -------------- -------------- --------------- --------------
Balance at March 31, 2005                  13,003,646        $ 13     $ 4,102      $    (2,670)      $ (4,156)       $ (2,711)
                                          ============  ========== ============== ============== =============== ==============
</TABLE>


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


                                       6



<TABLE>


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

                                                                                                                 CUMULATIVE FROM
                                                                                                                SEPTEMBER 20, 2000
                                                                               FOR THE THREE MONTHS ENDED         (INCEPTION) TO
                                                                                           MARCH                     MARCH 31,
                                                                               ---------------------------         -----------
                                                                                  2005           2004                  2005
                                                                               ------------   ------------         -----------
                                                                                       (UNAUDITED)                 (UNAUDITED)

CASH FLOWS-OPERATING ACTIVITIES

Net loss for the period                                                              ($378)         ($462)          ($4,156)
Adjustments to reconcile net loss to net cash used in operating actvities:
         Depreciation and amortization                                                   -              2                33
         Amortization of deferred stock-based compensation                              42            102             1,318
         Compensatory elements of stock issuances                                        5              -                 5
         Accrued dividend-preferred stock                                               46              -                46
         Transfer of assets to former officer                                           49              -                49
         Interest to related party                                                       5              5                41
         Accrued interest on convertible loan                                            -             53               171
         Decrease (increase) in accounts receivable and other current assets             4              -                (2)
         Increase (decrease) in accrued expenses                                        68           (169)              654
         Increase in related party                                                     130             40               309
                                                                               ------------  -------------         ---------
              Net cash provided by (used in) operating activities                      (29)          (429)           (1,532)
                                                                               ------------  -------------         ---------

CASH FLOWS-INVESTING ACTIVITIES
        Reverse merger                                                                   -              -              (200)
        Purchase of fixed assets                                                         -             (7)              (82)
                                                                               ------------   ------------         ---------
                                                                                         -             (7)             (282)
                                                                               ------------   ------------         ---------
        Net cash provided by (used in) operating activities

CASH FLOWS-FINANCING ACTIVITIES
        Short term bank credit                                                           9              -                15
        Exercise of stock options                                                        1              -
        Receipt of convertible loan                                                      -            450             1,475
        Issuance of share capital                                                        -              -               325
                                                                               ------------   ------------         ---------
        Net cash provided by financing activities                                       10            450             1,815
                                                                               ------------   ------------         ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                       (19)            14                 1
CASH AND CASH EQUIVALENTS-
        BEGINNING OF PERIOD                                                             20            661
                                                                               ------------   ------------         ---------

CASH AND CASH EQUIVALENTS-
        END OF PERIOD                                                                   $1           $675                $1
                                                                               ============   ============         =========
</TABLE>

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


                                       7


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

NOTE 1 - BASIS OF PRESENTATION AND RECENT DEVELOPMENTS

BASIS OF PRESENTATION
---------------------

The accompanying unaudited condensed consolidated financial statements have been
prepared by VSUS Technologies Incorporated ("VSUS" or 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 March 31, 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 in the Annual Report on Form 10-KSB for the year ended December 31,
2004.

These results for the period ended March 31, 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.

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.

The Company and its subsidiaries (hereinafter - "the Group") are engaged in
development, marketing and sale of secure messaging systems and secure content
management solutions, which enable business to be conducted via the Internet in
a secure environment.

The Company is considered to be in the development stage and has earned limited
revenues to date. Business activities to date have focused on product and
marketing research, product development and raising capital.

RECENT DEVELOPMENTS
-------------------

Transfer of Assets to a Subsidiary

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.

Acquisition of 1stAlerts, Inc.

As of April 14, 2005, the Company acquired 1stAlerts, Inc., a Delaware
corporation, when it merged with and into the Company's wholly-owned Delaware
subsidiary, First Info Network, Inc. (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 1,697,367
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 $1,040,000 of promissory notes from 1stAlerts, Inc., and (iii)
certain officers and directors of 1stAlerts, Inc. became the Company's officers
and directors.

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.

                                       8


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


GOING CONCERN
-------------

As reflected in the accompanying financial statements, the Company's operations
for the three months ended March 31, 2005, resulted in a net loss of $378,000
and the Company's balance sheet reflects a net stockholders' deficit of
$2,711,000. These factors raise substantial doubt as to the ability of the
Company to continue as a going concern. The Company's ability to continue
operating as a "going concern" is dependent on its ability to raise sufficient
additional working capital. 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.

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. All significant inter-company transactions and
balances have been eliminated.

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 quarter ended March 31, 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.

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.


                                       9


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


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.

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 - 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

                                       10


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


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 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 will record 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.

The Company is party to a revenue collection service agreement with a related
party. According to the agreement, the Company should pay the related party a
commission of 15% of the collected revenues, but not less than $30,000 per
annum. In addition, this related party was entitled to $30,000 per annum for
consulting services to the Company. Effective as of February 2005, the related
party resigned from his duties with the Company.

During the year ended December 31, 2004, the Company paid $150,000 to a related
party for business development and marketing services in Japan. Effective as of
February 2005, the related party resigned from his duties with the Company.

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 4 - 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.


                                       11


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


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.

The amount of the Convertible Preferred Stock presented in the Financial
Statements is net of $225,000 of loans, which were not received by the Company
through March 31, 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;

          (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. 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 March 31, 2005, the
Company had recorded approximately $46,000.

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.
See Note 7, "Subsequent Event," for changes to conversion terms to the Series A
Preferred Stock and Warrants.

NOTE 5- SHAREHOLDERS' DEFICIENCY

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 $80,000. The $80,000 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.

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


                                       12


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


NOTE 6- 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                       3,172,625
              Warrants to purchase common stock                      5,250,000
              Convertible preferred stock (1)                        7,708,264
                                                                    ----------
                     Total as of March 31, 2005                     16,130,889
                                                                    ==========

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

     Substantial and potential issuances after March 31, 2005:

              Convertible Notes                                        860,000
              Options to purchase common stock                       5,341,250

              Common stock issued in connection with the
                  1stAlerts Merger                                  13,000,000
              Warrants to purchase stock issued in connection with
                  The 1stAlerts Merger                               1,697,367
                                                                    ----------
                        Total                                       20,898,617
                                                                    ==========

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 7.

NOTE 7-SUBSEQUENT EVENTS

Transfer of Assets to a Subsidiary

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.

Acquisition of 1stAlerts, Inc.

As of April 14, 2004, the Company acquired 1stAlerts, Inc., a Delaware
corporation, when it merged with and into the Company's wholly-owned Delaware
subsidiary, First Info Network, Inc. (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 1,697,367
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 $1,040,000 of promissory notes from 1stAlerts, Inc., and (iii)
certain officers and directors of 1stAlerts, Inc. became the Company's officers
and directors. Immediately after the merger, the Shareholders of 1stAlerts, Inc.
controlled a majority of the voting securities, controlled the board of
directors and the officers of 1stAlerts, Inc. became the executive officers of
the Company. Accordingly, the merger between 1st Alert's and the

                                       13


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


Company will be accounted for as a reverse merger. 1st Alerts, Inc. was
determined to be the "accounting acquirer" in the reverse acquisition.

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.

Each of the 1,697,367 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.

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.

Adjustment to Terms of Securities Issued upon Conversion of Loan

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.

As a result, as of April 14, 2005, the Company agreed to, contemporaneously with
the 1stAlerts Merger, and in full and complete settlement of any claims the
holders of the Company's Series A Preferred Stock may have had against the
Company in connection with its failure to file the Registration Statement on or
before the Required Filing Date: (i) reduce 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

                                       14


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


$0.25; (ii) reduce 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) reduce 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) reduce the exercise price of the Class C
Warrants to $0.47 per share.

Conversion of Interest into Shares of Common Stock

Contemporaneously with its acquisition of 1stAlerts, Inc., the Company converted
the accrued interest on the convertible loan (see Note 4) into 708,263 shares of
its common stock, as full and complete payment thereof.

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.

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 the date hereof, the first two payments
have been made. 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 Stock.

Reinstatement of Former Director and Consultant

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.

As of May 26, 2005, the consultant exercised the 1,170,625 options which had
already vested as of that date.

                                       15


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


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

Contemporaneously with the 1stAlerts Merger, the Company issued (i) options to
purchase 2,000,000 shares of its Common Stock, at an exercise price of $.001 per
share and (ii) options to purchase 2,000,000 shares of its Common Stock. The
options vested 100% upon their grant and have a term of five years from their
date of grant.

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.



                                       16


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 (see, "Off-Balance Sheet
Arrangements - Transfer of Assets to a Subsidiary of Ours"). In addition,
effective as of April 14, 2005, we acquired 1stAlerts, Inc., 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.
(see, "Off-Balance Sheet Arrangements - Acquisition of 1stAlerts, 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.

     We are a development stage enterprise. To date we have incurred significant
losses from operations and, at March 31, 2005, had an accumulated deficit of
$2,711,000. At March 31, 2005, we had $1,000 of cash and cash equivalents.
Subsequently, as of April 14, 2005, we raised an aggregate of $215,000 in a
private offering of our convertible debentures and warrants (see, "Off-Balance
Sheet Arrangements - Sale of 12% Convertible Debentures and Warrants"). As a
result of the consummation of this private offering, combined with the recent
merger of 1stAlerts, Inc. into First Info Networks, Inc., our wholly-owned
subsidiary, and the anticipated cash flow from the combined company's
operations, we believe that we will have sufficient capital to fund our
operations (see, "Off-Balance Sheet Arrangements - Acquisition of 1stAlerts,
Inc."). 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.


                                       17


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2004

     REVENUE: Revenue decreased $8,000, or 100%, to $-0- in the three-month
period ended March 31, 2005, as compared to $8,000 in the three-month period
ended March 31, 2004. This decrease was primarily due to our attention to the
negotiation of a settlement with a former officer and director of ours, pursuant
to which the majority of our former employees resigned, and our corresponding
acquisition of 1stAlerts, Inc., the collective result of which was a and shift
of our company's primary business operations to 1stAlerts' business (see, "Off-
Balance Sheet Arrangements - Settlement with Former Officer and Director of
Ours" and "- Acquisition of 1stAlerts, Inc.").

     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 March 31, 2005, we incurred expenses of $-0-
developing our technology, a decrease of $48,000, or 100%, over the $48,000 we
incurred during the three-month period ended March 31, 2004. The primary reason
for this decrease in research and development expenses, was our attention to the
negotiation of a settlement with a former officer and director of ours, pursuant
to which the majority of our research and development personnel resigned, and
our corresponding acquisition of 1stAlerts, Inc., the collective result of which
was a and shift of our company's primary business operations to 1stAlerts'
business (see, "Off-Balance Sheet Arrangements - Settlement with Former Officer
and Director of Ours" and "- Acquisition of 1stAlerts, Inc.").

     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 March 31, 2005, we incurred
expenses of $-0- selling and marketing our products, as compared to $57,000
during the three-month period ended March 31, 2004. This decrease of $57,000, or
100%, is primarily a result of our attention to the negotiation of a settlement
with a former officer and director of ours, pursuant to which the majority of
our sales and marketing personnel resigned, and our corresponding acquisition of
1stAlerts, Inc., the collective result of which was a and shift of our company's
primary business operations to 1stAlerts' business (see, "Off-Balance Sheet
Arrangements - Settlement with Former Officer and Director of Ours" and "-
Acquisition of 1stAlerts, Inc.").

     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 March 31, 2005, we incurred $324,000 in general and administrative
expenses, as compared to $185,000 during the three-month period ended March 31,
2004. This increase of $139,000, or 75.1%, is primarily a result of an increase
in legal and other professional fees we paid in connection with our attention to
the negotiation of a settlement with a former officer and director of ours and
our corresponding acquisition of 1stAlerts, Inc. (see, "Off-Balance Sheet
Arrangements - Settlement with Former Officer and Director of Ours" and "-
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
March 31, 2005, we incurred $54,000 in financing expenses, an decrease of
$5,000, or 9.2%, over the $59,000 incurred during the three-month period ended
March 31, 2004.

                                       18


     MERGER EXPENSES: Merger expenses consist primarily of legal, accounting and
other professional fees we incurred in connection with our merger with Formula
Footwear, Inc., our former parent company. During the three-month period ended
March 31, 2005, we incurred expenses of $-0- in connection with this merger, an
decrease of $106,000, or 100%, over the $106,000 incurred during the three-month
period ended March 31, 2004.

     NET LOSS: We incurred a net loss of $378,000 ($0.03 per share) for the
three-month period ended March 31, 2005, compared to $462,000 ($0.04 per share)
for the three-month period ended March 31, 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.

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, 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 March 31, 2005, we had negative working capital of $974,000, compared to
negative working capital of $744,000 at December 31, 2004.

                                       19


     We had $1,000 of cash and cash equivalents on hand at March 31, 2005,
compared to $20,000 at December 31, 2004. As of April 14, 2005, we raised an
aggregate of $215,000 in a private offering of our convertible debentures and
warrants (see, "Off Balance Sheet Arrangements - Sale of 12% Convertible
Debentures and Warrants"). As a result of the consummation of this private
offering, combined with the recent merger of 1stAlerts, Inc. into First Info
Networks, Inc., our wholly-owned subsidiary, and the anticipated cash flow from
the combined company's operations, we believe that we will have sufficient
capital to fund our operations (see, "Off Balance Sheet Arrangements -
Acquisition of 1stAlerts, Inc."). 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.

OFF-BALANCE SHEET ARRANGEMENTS

     SETTLEMENT WITH A FORMER OFFICER AND DIRECTOR OF OURS

     In resolution of certain differences of opinion over the future business
operations of our company, as of January 28, 2005, we entered into a settlement
agreement (the "Settlement Agreement") with Mr. Amiram Ofir, our former Chief
Executive Officer, and a director of ours. Pursuant to the Settlement Agreement,
we granted Mr. Ofir a worldwide, perpetual license, including the right to
sublicense, to use certain software of ours internally in the operations of
ViVaVu, Inc., a new company he organized, and incorporate our software in larger
programs and systems, which he may commercially market, license and sell copies
of. Notwithstanding the foregoing, Mr. Ofir has agreed not to compete with us in
certain business opportunities we intend to pursue.

     In addition, Mr. Ofir agreed that ViVaVu, Inc. will provide us with certain
customer service and support, development services, which may include, among
other things, software design, programming, maintenance and training; and
certain hosting services.

     Also, as a result of this settlement, Mr. Ofir waived certain amounts we
owed him, pursuant to a promissory note.

     We believe that this arrangement will be beneficial to us, as it will allow
us to pursue new business opportunities, while at the same time reducing our
research and development expenses relating to certain of our existing software.
In addition, it has allowed us to eliminate a significant liability of ours.
However, as a result of his agreement to provide certain services to us in
connection with the settlement, we are dependent on our relationship with Mr.
Ofir. This relationship may prove to be unsuccessful. Any disruption of our
relationship with Mr. Ofir and ViVaVu, Inc. might harm our business and
operating results.

                                       20


     TRANSFER OF ASSETS TO A SUBSIDIARY OF OURS

     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, which was incorporated for
that purpose. Consequently, two of our 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.

     As a result of this transaction, and our acquisition of 1stAlerts, Inc.,
described below, we are now a holding company providing information technology
products and services to customers through our subsidiaries.

     One of our strategies for growth is the acquisition of businesses, which
are synergistic with our current operations. We believe this strategy will be
beneficial to us and have a positive effect on our liquidity and capital
resources. However, we may not be able to find and consummate acquisitions on
terms and conditions acceptable to us. In addition, acquisitions we undertake
may end up having a material adverse affect on our business and operations.

     ACQUISITION OF 1STALERTS, INC.

     As of April 14, 2005, we acquired 1stAlerts, Inc., a Delaware corporation,
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, and related agreements, we entered into. At the time of the 1stAlerts
Merger, among other things, (i) we exchanged 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., (ii) we
agreed to issue warrants to purchase 1,697,367 shares of 1stAlerts' Common
Stock, in exchange for warrants to purchase shares of Common Stock of 1stAlerts,
Inc., (iii) we agreed to guarantee payment of $1,040,000 of promissory notes
assumed by First Info Network, Inc., (iv) we agreed to pledge all of our shares
of First Info Network, Inc. to secure repayment of an additional $3,200,000 of
promissory notes assumed by First Info Network, Inc., and (v) certain officers
of directors of 1stAlerts, Inc. became officers and directors of ours.

     The shares of Series B Participating Preferred Stock issued in connection
with the 1stAlerts Merger are convertible into shares of our Common Stock on
both a mandatory or voluntary basis, under certain circumstances.

     Also, 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. This option continues for three (3) years from the date
of the 1stAlerts Merger, however, it may not be exercised within the first year
following the 1stAlerts Merger. The number of shares that each of the grantees
can purchase is based upon the relative value of First Info Network, Inc. to the
overall value of our company.

     In addition, at the effective time of the 1stAlerts Merger, First Info
Network, Inc. assumed promissory notes in the aggregate principal amount of
$3,200,000, 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. 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

                                       21


such transaction). As security for the repayment of the Notes, we pledged all of
our shares of First Info Network, Inc.

     Each of the 1,697,367 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, among other of our securities, and
an exercise price of $0.19.

     We believe this acquisition will have a positive effect on our liquidity
and capital resources. However, our management may find it difficult to
integrate 1stAlerts, Inc.'s business with our current business, or the
acquisition of 1stAlerts fails to provide us with the benefits we had
anticipated. In addition, in connection with the 1stAlerts Merger, we have
assumed a substantial amount of debt. As a result, our acquisition of 1stAlerts,
Inc. may have a material adverse affect on our business and operations.

     ADJUSTMENT TO SECURITIES ISSUED IN CONNECTION WITH OUR CONVERSION OF LOANS

     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 B 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 (in this instance, the "Registration Statement")
we're obligated to file 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. As a result,
as of the April 14, 2005, we agreed to, 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:

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


                                       22


     o   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;

     o   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

     o   The exercise price of the Class C Warrants was reduced to $0.47 per
         share.

     We believe that these actions had a positive effect on our operations, by
removing any possibility of the commencement of an action against us by the
holders of our Series A Preferred Stock, in connection with our failure to file
the Registration Statement on a timely basis. However, these adjustments make it
more likely that our shares of Series A Preferred Stock will be converted, and
Class A Warrants, Class B Warrants and Class C Warrants will be exercised, which
could lead to subsequent sales of the shares in the public market, depressing
the market price of our stock by creating an excess in supply of shares for
sale.

     CONVERSION OF INTEREST INTO SHARES OF COMMON STOCK

     At the time the Loans, described above, were converted into units of our
securities, we planned to pay accrued and unpaid interest on $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 our acquisition of 1stAlerts, Inc., we
converted the Interest into 708,263 shares of our Common Stock, as full and
complete payment thereof.

     We believe this conversion of debt to shares of our Common Stock will have
a positive effect on our operations by removing our obligation to pay this debt.
However, the issuance of these additional shares of our Common Stock had a
dilutive effect on our stockholders.

     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 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 the registration
statement (in this instance, the "Registration Statement") we're obligated to
file to register the shares of our Common Stock underlying the Debentures, Class
A Warrants, Class B Warrants and Class C Warrants, 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 sale of these securities has allowed us to meet our short term cash
flow needs. However, the issuance of shares pursuant to the conversion of the
Debentures, or the exercise of Class A Warrants, Class B Warrants, and Class C
Warrants could lead to subsequent sales of the shares in the public market,

                                       23


which could depress the market price of our stock by creating an excess in
supply of shares for sale. Issuance of these shares and sale of these shares in
the public market could also impair our ability to raise capital by selling
equity securities.

     ISSUANCE OF SHARES TO JENSON SERVICES AND ITS AFFILIATES

     As of 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 (in this instance, the "Registration
         Statement") we're obligated to file, 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) the Jenson Group's agreement to revise the
terms of the Promissory Note, to extend the maturity date of the Promissory
Note, we agreed to issue to the Jenson Group 124,750 shares of our Common Stock.

     One third of the amount due pursuant to the revised Promissory Note was to
be paid on the effective date of our acquisition of 1stAlerts, Inc. The other
two thirds due under the revised terms of the Promissory Note must be paid
thirty (30) and sixty (60) days thereafter. As of the date hereof, the first two
payments have been made pursuant to the revised Promissory Note.

     We believe that these actions had a positive effect on our operations, by
removing any possibility of the commencement of an action against us by the
Jenson Group, in connection with our failure to file the Registration Statement
on a timely basis, and failure to make payments of principal and interest when
due pursuant to the Promissory Note. However, the issuance of these additional
shares of our Common Stock had a dilutive effect on our stockholders.

                                       24


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 March 31, 2005, and subsequent periods
through the date hereof, we issued unregistered securities, as follows:

     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

     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.

                                       26


     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.

     SECURITIES ISSUED IN SETTLEMENT WITH OUR FORMER OFFICER AND DIRECTOR

     In connection with Amiram Ofir's services as our Chief Executive Officer,
and as a director of ours, and as an officer and director of certain of our
subsidiaries, pursuant to our 2003 Stock Option Plan: (i) on January 1, 2003, we
granted Mr. Ofir non-qualified options to purchase 1,750,000 shares of our
Common Stock, at an exercise price of $0.01 per share, which had an expiration
date of December 31, 2007 (the "2003 Ofir Options"); and (b) on February 1,
2004, we granted Mr. Ofir additional non-qualified options to purchase 90,000
shares of our Common Stock, at an exercise price of $0.001 per share, which were
immediately exercisable, and had an expiration date of January 31, 2009 (the
"2004 Ofir Options").

     As of January 28, 2005, pursuant to a Settlement Agreement we entered into
with Mr. Ofir (the "Settlement Agreement"), among other things, all of the 2003
Ofir Options and 2004 Ofir Options were terminated, and were replaced with: (i)
non-plan, non-qualified options to purchase 1,093,750 shares of our Common
Stock, at an exercise price of $0.01 per share, which expire on December 31,
2007 (which amount is identical to the amount of 2003 Ofir Options that had
vested as of that date); and (ii) non-plan, non-qualified options to purchase
90,000 shares of our Common Stock, at an exercise price of $0.001 per share,
which expire on January 31, 2009 (collectively, the "New Options"). All of the
New Options vested immediately upon their grant.

     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 the shares of our Common Stock underlying the
New Options. In addition, Mr. Ofir has agreed to subject the shares underlying
the New Options to any lockup agreement that the holders of our Series A
Convertible Preferred Stock agree to subject their 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.

     SECURITIES ISSUED UPON OUR ACQUISITION OF 1STALERTS, INC.

     As of April 14, 2005, we acquired 1stAlerts, Inc., a Delaware corporation,
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 1,697,367 shares of 1stAlerts' Common Stock, for an equal number of our
Class A Warrants.

     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.

                                       27


     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:

          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 1,697,367 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 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.

                                       28


     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, the exercise price of Mr. Cohen's 568,750 remaining
2003 Cohen Options (as well as 1,584,000 options held by another optionholder)
was reduced 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.

     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 March 26, 2005, Mr. Cohen exercised (i) the 170,625
Director Options that had already vested, and (ii) the 1,000,000 Consultant
Options.

     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

                                       29


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 options to purchase shares of our Common Stock, pursuant
to our 2003 Stock Option Plan:

     o   As of March 14, 2005, we issued options to purchase 8,258 shares of our
         Common Stock, at an exercise price of $1.70 per share, to a service
         provider of ours. These options will vest 100% on July 14, 2005;

     o   As of March 18, 2005 we issued options to purchase 80,000 shares of our
         Common Stock, at an exercise price of $0.01 per share, to a service
         provider of ours. These options will vest 50% on September 18, 2005,
         and 50% on January 31, 2006; and

     o   Contemporaneously with our acquisition of 1stAlerts, Inc., as of April
         14, 2005, we issued options to purchase an aggregate of 4,000,000
         shares of our Common Stock, at an exercise price of $0.001 per share,
         to certain service providers of ours. These options vested 100% upon
         their grant.

     All of the options listed above have a term of five (5) years from their
date of grant.

     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.

     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.

                                       30


     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) the Jenson Group's agreement to extend the
maturity date of the Promissory Note, we agreed to issue to the Jenson Group
124,750 shares of our Common Stock.

     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 the Settlement Agreement we entered into with Mr. Amiram Ofir
(described above), 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

                                       31


"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.

     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 third quarter of 2004. In addition, we did not repurchase any of our
equity securities during the third quarter of 2004.

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.

     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.

                                       32


     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) the Jenson Group's agreement to extend the
maturity date of the Promissory Note, we agreed to issue to the Jenson Group
124,750 shares of our Common Stock.

     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.

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

REMOVAL AND SUBSEQUENT REINSTATEMENT OF MATIS COHEN AS A DIRECTOR OF OURS

     Effective as of January 6, 2005, following a vote of our common
stockholders at a special meeting, Mr. Matis Cohen was removed from our board of
directors, and, subsequently, as an officer of ours. Mr. Cohen did not hold any
positions on any committee of the board of directors at the time of his removal.

     Simultaneously with our acquisition of 1stAlerts, Inc., effective as of
April 14, 2005, as described elsewhere in this report, Mr. Cohen was reappointed
to our board of directors.

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 B 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.

                                       33


     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;

     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

                                       34


     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.

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

                                       35


(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















                                       36


                                   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:  June 10, 2005                      By:  /s/ Eliyahu Kissos
     ----------------------                 ------------------------------------
                                                  Eliyahu Kissos
                                                  President



Date:  June 10, 2005                      By:  /s/ Steven Goldberg
     ----------------------                 ------------------------------------
                                                  Steven Goldberg
                                                  Chief Financial Officer




                                       37


                                  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


                                       38`