UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

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

For the transition period from to

Commission file number 0-51148

TRI-S SECURITY CORPORATION

(Exact Name of Registrant as Specified in its Charter)

GEORGIA		30-0016962
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3700 Mansell Road, Suite 220, Alpharetta, Georgia 30022

(Address of Principal Executive Offices)

(770) 625-4945

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o.

Indicated by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes o No ý.

Shares of the registrant’s common stock, par value $0.001 per share, outstanding as of May 11, 2005: 3,323,700.

Tri-S Security Corporation and Subsidiary

Condensed Consolidated Balance Sheets

Unaudited

(In thousands, except per share data)

	March 31, 2005			December 31, 2004
Assets
Current assets:
Cash and cash equivalents	$	1,853		$	313
Trade accounts receivable, net	4,782			5,312
Deferred initial public offering costs	—			633
Deferred income taxes	200			200
Prepaid expenses and other assets	974			178

Total current assets	7,809			6,636

Property and equipment, less accumulated depreciation	262			325
Note receivable - officer	102			100
Investment in joint venture	6,265			6,665
Investment in government contracts, net	1,073			1,172
Non compete agreements, net	304			318
Deferred loan cost, net	—			18
Goodwill	7,747			7,747

Total assets	$	23,562		$	22,981

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Trade accounts payable	$	139		$	351
Accrued salaries	1,022			774
Payroll and payroll withholding taxes	295			347
Accrued vacation	682			612
Accrued interest expense	—			316
Accrued interest on preferred stock subject to mandatory redemption	25			250
Other accrued expenses	1,275			689
Income taxes payable	572			212
Short-term notes payable	1,736			10,798
Current portion of capital lease obligations	92			91

Total current liabilities	5,838			14,440

Other liabilities:
Capital lease obligations, less current portion	78			103
Income taxes payable	704			1,056
Deferred income taxes	2,381			2,663
Series C preferred stock subject to mandatory redemption	6,000			6,000

Total liabilities	15,001			24,262

Stockholders’ equity (deficit):
Preferred stock, $1.00 par value, 10,000,000 shares authorized
Series A convertible preferred stock 100,000 shares issued and outstanding	—			460
Series B convertible preferred stock, 40,000 shares issued and outstanding	—			196
Common stock, $0.001 par value, 25,000,000 shares authorized, 3,285,000 and 827,832 shares issued and outstanding at March 31, 2004 and December 31, 2005, respectively	3			1
Additional paid-in capital	11,050			115
Retained earnings (deficit)	(2,492		)	(2,053		)

Total stockholders’ equity (deficit)	8,561			(1,281		)

Total liabilities and stockholders’ equity (deficit)	$	23,562		$	22,981

See accompanying notes to financial statements.

Tri-S Security Corporation and Subsidiary

Condensed Consolidated Statements of Operations