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

                                   FORM 10-QSB

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

                    For the quarter ended March 31, 2004

                                       or

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

         For the transition period from ____________ to ____________

                        Commission file number 000-28661

                               AUGRID CORPORATION
             (Exact name of registrant as specified in its charter)

                             AUGRID OF NEVADA, INC.
                           (Former name of registrant)

            Nevada                                      34-1878390
------------------------------                     --------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                        10777 Westheimer Rd - Suite 1040
                              Houston, Texas 77042
                    (Address of principal executive offices)

                                 (713)532-2000
              (Registrant's telephone number, including area code)

     Check 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, and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

     As of May 11, 2004, there were 634,510,898 shares of the Registrant's
Common Stock, par value $0.001 issued and outstanding.

<PAGE>



                               AuGRID CORPORATION
               MARCH 31, 2004 QUARTERLY REPORT ON FORM 10-QSB
                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements..............................Page 5
Item 2.      Management's Plan of Operation....................Page 20
Item 3.      Controls and Procedures...........................Page 23


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings................................................Page 23
Item 2. Risk Factors/Other Information...................................Page 23
Item 3. Changes in Securities and Use of Proceeds........................Page 31
Item 4. Defaults Upon Senior Securities..................................Page 31
Item 5. Submission of Matters to a Vote of Security Holders..............Page 32
Item 6. Exhibits and Reports on Form 8-K.................................Page 32

References in this report to the "Company", "we", "us", "our" and similar terms
means Augrid Corporation, and its wholly owned subsidiaries.


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     The following cautionary statements identify important factors that could
cause our actual results to differ materially from those projected in the
forward-looking statements made in this Quarterly Report on Form 10-QSB. Any
statements about our beliefs, plans, objectives, expectations, assumptions or
future events or performance are not historical facts and may be
forward-looking. These statements are often, but not always, made through the
use of words or phrases such as "will likely", "are expected to", "should", "is
anticipated", "estimated", "intends", "plans", "projection" and "outlook". Any
forward-looking statements are qualified in their entirety by reference to
various factors discussed throughout this Quarterly Report and discussed from

<PAGE>

time to time in our filings with the Securities and Exchange Commission. Among
the significant factors that could cause our actual results to differ materially
from those expressed in the forward-looking statements are:

-    the need for additional financing
-    the potential risk of delay in implementing our business plan; and
-    the market for products.

     Because the factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements, persons should not place undue reliance on any of these
forward-looking statements. In addition, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to
update any forward-looking statement or statements to reflect events or
circumstances after the date on which the statement is made, to reflect the
occurrence of unanticipated events or otherwise. New factors emerge from time to
time, and it is not possible for us to predict which will arise or to assess
with any precision the impact of each factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.


<PAGE>

                                      PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



<PAGE>

                               AUGRID CORPORATION
                                AND SUBSIDIARIES

                              Financial Statements


                                TABLE OF CONTENTS




                                                                   PAGE NO.

Review Report

Consolidated Balance Sheets as of March 31, 2004                    2 - 3

Consolidated Statements of Operations for the
          three month period ended  March 31, 2004                    4

Consolidated Statement of Retained Earnings
         for the three month period ended March 31, 2004              5

Consolidated Statement of Stockholders' Deficit for the
         three month period ended March 31, 2004                      6

Notes to the Financial Statements -
         As of March 31, 2004                                       7 -11


<PAGE>

                            HENRY L. CREEL CO., INC.
                           Certified Public Accountant
                         (216)491-0800 FAX (216)491-0803


To the Board of Directors and Stockholders of
AUGRID CORPORATION



                           ACCOUNTANT'S REVIEW REPORT


We have reviewed the accompanying balance sheet of AuGRID CORPORATION as of
March 31, 2004, and the related statement of income, retained earnings and cash
flows for the three months ended March 31, 2004, in accordance with Statements
on Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants. All information included in this financial
statement is the representation of the management of the AuGRID CORPORATION.

A review consists principally of inquiries to Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

As discussed in note 1, the Company has a going concern problem. Without
realization of additional capital and source of revenue, it would be unlikely
for the Company to continue as a going concern.

Based on my reviews, with the exception of the matter described in the above
paragraph, we are not aware of any material modifications that should be made to
the accompanying financial statements in order for them to be in conformity with
generally accepted accounting principles.





Henry L Creel Co., Inc
Cleveland, Ohio

May 5, 2004




                    3587 LEE ROAD SHAKER HEIGHTS, OHIO 44120
<PAGE>

                               AUGRID CORPORATION
                                AND SUBSIDIARIES

                           Consolidated Balance Sheets
                   As of March 31, 2004 and December 31, 2003


                                     ASSETS
<TABLE>
<CAPTION>

CURRENT ASSETS                                March 31            December 31
--------------                                -------            -----------
                                               2004                 2003
                                               ----                 ----
<S>                                           <C>                    <C>
    Cash                                      $   10,839         $   214,758
    Accounts Receivables                         104,445               8,195
    Inventory                                    135,307               5,414
                                              ----------         -----------
Total Current Assets                             250,591             228,367

PROPERTY AND EQUIPMENT (Note 1)

    Machinery And Equipment                      204,832             204,832
    Furniture And Fixtures                        42,139              42,139
    Office Equipment                              66,488              66,488
                                              ----------         -----------

         Total Property At Cost                  313,459             313,459

    Less:  Accumulated Depreciation             ( 88,569)           ( 88,569)
                                              -----------        ------------

    Net Property and Equipment                   224,890             224,890
                                              ----------         -----------

OTHER ASSETS

    Deposits Building Construction                24,141              24,141
                                              ----------         -----------

         Total Other Assets                       24,141              24,141
                                              ----------         -----------


TOTAL ASSETS                                  $  499,622         $   477,398
                                              ==========         ===========
</TABLE>


              See review report and notes to financial statements.


                                       2
<PAGE>

                               AUGRID CORPORATION
                                AND SUBSIDIARIES

                       Interim Consolidated Balance Sheets
                   As of March 31, 2004 and December 31, 2003

                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES                                   March 31,     December 31
-------------------                                     2004           2003
                                                        ----           ----

    Accounts Payable                               $   305,780      $    86,844
    Accounts Payable to Related Parties(Note 3)        227,680          227,680
                                                   -----------      -----------
       Total Current Liabilities                       533,460          314,524

LONG-TERM DEBT

    Notes Payable to Stockholders (Note 7)           1,394,483        1,176,403
                                                   -----------      -----------
    Long-Term Debt                                   1,394,483        1,176,403
                                                   -----------      -----------
    Total Liabilities                                1,927,943        1,490,927
                                                   -----------      -----------

STOCKHOLDERS' EQUITY

     Preferred Stock $ 0.001 par value
     10,000,000 shares authorized and
      8,317,500 shares issued and outstanding            8,318            8,318

     Common stock- with $0.001 par value
     700,000,000 shares
      Authorized; Shares outstanding:

    March 31, 2004 - 659,510,898 shares                659,510          554,510
    Additional paid in capital                       7,150,695        7,100,695
    Deficit accumulated during
    the development stage                           (9,256,254)      (8,677,053)
                                                   ------------     ------------

       Total Stockholders' Equity (Deficit)         (1,437,731)      (1,013,529)
                                                   ------------     ------------

TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY                           $   499,622      $   477,398
                                                   ===========      ===========


              See review report and notes to financial statements.


                             -3-
<PAGE>

                               AUGRID CORPORATION
                                AND SUBSIDIARIES

                  Interim Consolidated Statements of Operations
             For the Period Ended March 31, 2004 and March 31, 2003


<TABLE>
<CAPTION>
                                                                                      Cumulative
                                                                                        From the
                                                                                      Inception to
                                                 March 31,          March 31,           March 31,
Revenue                                            2004               2003                2004
                                                   ----               ----                ----
<S>                                            <C>                <C>                  <C>
    Net Sales (Note 1)                             154,144                -0-              265,897

Cost and Expenses

    Write -Off License
     Agreement (Note 1H)                               -0-                -0-            1,262,908
     Cost Of Goods Sold                             86,994                -0-              137,298
General and Administrative                         596,532            170,944            7,038,848
Income (Loss) Before Depreciation                 (529,202)          (170,944)          (8,193,977)

    Amortization                                       -0-                -0-             (527,306)

    Depreciation                                       -0-                -0-              (88,569)
                                               ------------       ------------         ------------

Income (Loss) Before Income Taxes                 (529,202)          (170,944)          (8,789,852)

Provision for Income Taxes (Note 2)                    -0-                 -0-                 -0-
                                               ------------       ------------         ------------

       Net Income (Loss)                       $  (529,202)       $  (170,944)         $(8,789,852)
                                               ============       ============         ============

    Basic and Diluted                                 (.01)              (.01)                (.01)
     Loss Per Share
</TABLE>


              See review report and notes to financial statements.


                                      -4-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES

             Interim Consolidated Statement of Stockholders' Deficit
                              As of March 31, 2004


<TABLE>
<CAPTION>
                           Shares of       Addit.           Accum            Accum                          After
                                           Common           Common           Paid in        Prior to        March 18
                                           Stock            Stock            Capital        March 18        Total
                                           -----            -----            -------        --------        -----------
<S>                       <C>             <C>             <C>               <C>           <C>              <C>
Balance at
March 8, 1998                                                               (429,352)                        (429,352)

Balance at
December 31, 1998         46,629,414       46,629         1,473,469                         (429,352)       1,520,098
Net Loss                                                                                    (590,366)         500,380

Balance at
December 31, 1999         49,889,348       50,207         1,945,304                       (1,019,718)         975,475
Net Loss                                                                                    (675,719)         300,074

Balance at
December 31, 2000         58,268,469       58,586         3,653,639                       (1,695,437)       2,016,470
Net Loss                                                                                  (1,171,377)         845,411

Balance at
December 31, 2001         64,364,720       64,683         3,861,286                       (2,866,814)       1,058,837
Net Loss                                                                                  (1,889,445)        (840,280)

Reverse Split
50 to 1  (51,147,907)

Balance at
December 31, 2002         13,216,813       13,535         4,517,459                       (4,756,259)        (225,265)
Net Loss                                                                                    (678,212)        (903,477)

Balance at
December 31, 2003        554,510,898      554,828         7,276,377                       (5,434,471 )     (2,416,734)
Net Loss                                                                                  (3,252,582)      (1,013,529)

Balance at
March 31, 2004           659,510,898      667,828         7,150,695                       (8,687,053)        (877,940)
Net Loss                                                                                    (579,202)      (1,437,731)
</TABLE>


      See auditors report and notes to financial statements.


                                      -5-
<PAGE>

                               AUGRID CORPORATION
                                AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows
                              As of March 31, 2004


<TABLE>
<CAPTION>
                                                                                                 Inception Thru
                                                              March 31           March 31           March 31
                                                                2004               2003               2003
                                                                ----               ----               ----
<S>                                                        <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES

      Net Income (Loss)                                    $ (579,202)        $  (170,944)        $(8,839,852)
  Adjustments to reconcile Net Income to
  Net Cash provided by Operating Activities:

      Depreciation and Amortization                               -0-                 -0-             619,875

Changes in Operating Assets and Liabilities Net:

      Loss on Write off Other Assets                              -0-                 -0-           1,127,959
      Increase(Decrease) in Accounts
      Payable Related Parties                                     -0-             139,250             227,680
(Increase)Decrease in  Acct. Receivables                      (96,250)                -0-            (104,445)
      Increase in Accounts Payables                           228,348                 750             306,096
                                                           -----------        ------------        ------------
      Net Cash (Used) by Operating Activities                (447,104)            (90,944)         (6,662,687)

CASH FLOWS FROM INVESTING ACTIVITIES

        Increase in Deposits-Building Construction                -0-                 -0-             (24,141)
      Increase in Inventories                                (129,893)                -0-            (135,307)
      Increase in Licensing Agreement                             -0-                 -0-          (1,423,542)
      Purchase of Property and Equipment                          -0-                 -0-            (277,327)
                                                           ------------       ------------        ------------
      Net Cash Used in Investing Activities                  (129,893)                -0-          (1,860,317)

CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from Common Stock Issuance                     154,998              22,000           6,742,217
      Proceeds from Notes Payable- to Stockholders            218,080                 -0-           1,394,483
                                                           -----------        ------------        ------------
      Net Cash Provided by Financing Activities               373,078              22,000           8,136,700
                                                           -----------        ------------        ------------

Increase ( Decrease) in Cash and Cash Equivalents            (203,919)               (205)             21,534

Cash and Cash Equivalents at Beginning of Year                214,758               2,179              32,373
                                                           -----------        ------------        ------------

Cash and Cash Equivalents at End of Year                   $   10,839         $     1,974         $    10,839
                                                           ===========        ============        ============
</TABLE>



              See review report and notes to financial statements.


                                      -6-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES

                          Notes to Financial Statements
                              As of March 31, 2004

Note 1     Organization and Summary of Significant Accounting Policies

           A.  Organization

           AuGRID CORPORATION, whose name was changed from Augrid of Nevada, Inc
           on August 17, 2002 formed under the laws of the State of Nevada. It
           is a development stage company whose primary business is a technology
           development firm specializing in Thin Cathode Ray Tube (TCRT)
           technology. The Company currently has limited operating income and,
           in accordance with SFAS #7 is considered a development company.

           B.  Basis of Presentation

           The financial records of the company are maintained on the accrual
           basis of accounting. The accompanying financial statements have been
           prepared on the going concern basis which contemplates the
           realization of assets and the satisfaction of liabilities in the
           normal course of business in accordance with generally accepted
           accounting principles.

           C.  Property and Equipment

           All property and equipment is stated at cost. The Company provides
           for depreciation, using the straight line method, over the estimated
           useful lives of the respective assets, as follows:

                                                                         Years
                                                                         -----
                  Machinery and Equipment                  $    69,119     10
                  Furniture and Fixtures                        15,562     10
                  Office Equipment                              66,488     10
                                                           -----------
                  Total Property & Equipment               $   151,169
                                                           ===========

           Major renewals and improvements of property and equipment are
           capitalized, while replacements, maintenance and repairs which do not
           improve or extend the lives of the assets are charged against current
           operations.

           When property and equipment is disposed of, any gain or loss is
           included in current operations.

           D.  Use of Estimates

           The preparation of financial statements in conformity with general
           accepted accounting principles require management to make estimate
           and assumptions that affect the reported amounts of assets and
           liabilities at the date of the financial statement and the reported
           amounts of revenue and expenses during the reported period. Actual
           results could differ from those estimates.


                                      -7-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES

                          Notes to Financial Statements
                              As of March 31, 2004

Note 1     Organization and Summary of Significant Accounting Policies
           (Continued)

           E.  Going Concern

           The Company's financial statements are prepared using the generally
           accepted accounting principles applicable to a going concern, which
           contemplates the realization of assets and liquidation of liabilities
           in the normal course of business. However, The Company has just began
           to produce sales. Without realization of profits or additional
           capital, it would be unlikely for the Company to continue as a going
           concern. The financial statements do not include any adjustments
           relating to the recoverability and classification of recorded assets
           or the amount and classification of liabilities which might be
           necessary should the Company be unable continue as a concern. The
           Company's continuation as a going concern is dependent upon its
           ability to generate sufficient cash flows to meet its obligations on
           a timely basis, to obtain additional financing as may be required,
           and ultimately to attain successful operations.

           F.  Research and Development Expense

           The Company's policy relating to research and development and patent
           development cost are expensed when incurred except R&D machinery,
           equipment, and facilities which have alternative future uses either
           in R&D activities or otherwise. Machinery, equipment and facilities,
           which have alternate future uses should be capitalized. All
           expenditures in conjunction with an R&D project, including personnel
           cost, materials, equipment, facilities, and intangibles, for which
           the company has no alternative future use beyond the specific project
           for which the items were purchased, are expensed.

           G.  Revenue Recognition

           The Company has a limited amount of revenue.

           H.  Impairment of Long-Lived Assets & Long -Lived Assets to Be
               Disposed Of

           Statement of Financial Accounting Standards No. 121, "Impairment of
           Long-Lived Assets" (SFAS 121), requires the Company to review for
           possible impairment, assets to be held for use and assets held for
           disposal, whenever events or changes in circumstances indicate that
           the carrying amount may not be recoverable, and in such event, to
           record an impairment loss. The Company adopted SFAS 121 in 1998 and
           evaluated the recoverability of long lived assets at its properties.
           Initial adoption of SFAS 121 in 1998 did not have a material impact
           on the Company's financial condition or results of operations.


                                      -8-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES

                          Notes to Financial Statements
                              As of March 31, 2004

Note 1     Organization and Summary of Significant Accounting Policies
           (Continued)

           H. Impairment of Long-Lived Assets & Long - Lived Assets to Be
              Disposed Of (Cont)

           Up to 2000, the Company recorded a charges of $1,822,907 from
           continuing operations relating to an impairment loss on other assets.
           Approximately $1,450,000 was due to a current licensing agreement
           while $373,383 was due to a prior licensing agreement. The Company's
           revenue, which was anticipated from future agreements of this type,
           had not been realized as anticipated, therefore resulting in and
           impairment loss on intangible assets.

           I. Principals of Consolidation

           Summit Media LLC
           Effective October 31, 2002, the Company acquired 51% of Summit Media,
           LLC. We intended it would be used as a distribution chain for it
           products. The acquisition was accounted under the purchase method of
           accounting. As part of the agreement, AuGrid Corporation will not be
           obligated to pay any additional amounts in 2003 or 2004. As a result
           of our management discussions, Summit Media LLc is no longer in
           existence.

           Alysium Corporation
           Effective August 15, 2003 the Company acquired 100% ownership of
           Alysium Corporation. The acquisition was aquired under the purchase
           method of accounting. All significant intercompany accounts and
           transactions have been eliminated. Subsidiary losses in excess of the
           unrelated investors' interest are charged against the Company's
           interest. Changes in the company's proportionate share of the
           subsidiary equity resulting from the additional equity transaction in
           the consolidation with no gain recognition due to the development
           stage of the subsidiaries and uncertainty regarding the Companys
           ability to continue as a going concern.

           J. Net Income Per Common Share

           Basic net income per share includes no dilution and is computed by
           dividing income available to common stockholders by the weighted
           average number of common shares outstanding for the period. Diluted
           net income per share reflects the potential dilution of securities
           that could share in the earnings of an entity.


                                      -9-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES
                          Notes to Financial Statements
                              As of March 31, 2004

Note 2     Licensing Agreement

           The Company entered into agreement with Ceravision Limited.
           Ceravision has developed and is developing certain technology
           relating to ceramic-based field emission flat screen displays and
           hold certain patent applications and other intellectual property
           rights in relations to such technology and in relation to
           manufacturing processes and equipment to produce and sell such
           displays and components for incorporation into such displays. The
           cost incurred in relation to this licensing agreement is capitalized.
           The cost is amortized over a period of 5 years.

                                      -10-
<PAGE>

Note 3     Accounts Payable to Related Parties

           The Company entered into consulting agreements with certain
           Stockholders. The Company has violated its agreements by being
           delinquent in its payment to these stockholders. At December 31, 2003
           the Company owed these related parties $107,680, and $120,000
           totaling $227,680.These amounts relates to unpaid consulting fees and
           cash advances to the Company made by stockholders. All amounts due on
           demand with no interest.

Note 4     Income Taxes

           There was no provision for Federal Income tax during the first
           quarter of 2004 or year of 2003 because of an unexpired net operating
           loss carry forward.

                                                         Carryforward
           Year Ended                     Amount       Available to Year
           ----------                     ------       -----------------
           December 31, 1998           1,019,718              2013
           December 31, 1999             675,719              2014
           December 31, 2000           1,171,377              2015
           December 31, 2001           1,889,445              2016
           December 31, 2002             678,212              2017
           December 31, 2003           3,252,581              2018
           March 31, 2004                579,202              2019

           The Company has a net operating loss carry forward of $9,256,254
           which expires, if unused, in the years 2013 to 2019. The following is
           a reconciliation of the income tax benefit computed at the federal
           statutory rate with the provision for income taxes for the period
           ended 2003 and 2004.


                                                     2003            2004
                                                     ----            ----

Income tax benefit at the statutory rate (34%)    3,252,581        579,202
Change in valuation allowance State tax,
net of federal benefit Non included items
Provision for income taxes                                0              0
                                                 ==========        =======


                                      -11-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES

                          Notes to Financial Statements
                             As of December 31, 2003

Note 5     Capitalization

           On March 1, 1998, Augrid Corporation`s current controlling
           stockholders purchased controlling interest in Ironwood Ventures via
           the purchase of approximately 4,616,111 shares of Common Stock of
           Ironwood Ventures' in private transactions; this represented
           approximately 62.2 percent (62.2%) of Ironwood Ventures' issued and
           outstanding common stock.

           On March 2, 1998, Ironwood Ventures' executed a forward stock split
           of its stock, 6.06571228 to 1. In addition, Ironwood Ventures'
           increased its authorized shares to 90,000,000 common shares, par
           value $0.001, 10,000,000 preferred shares, par value $0.001, and
           changed its name to AuGRID of Nevada, Inc.

           On March 12, 1998, Ironwood Ventures' - now called AuGRID of Nevada,
           Inc - executed an asset purchase agreement purchasing substantially
           all of the assets of Augrid Corporation, a Delaware corporation
           hereinafter referred to as "Augrid of Delaware", a company under
           common control by the control stockholders of the Ironwood Ventures',
           for 1,000,000 newly issued shares of the Ironwood Ventures'. This was
           not a third party, arms length transaction, and due to the
           development stage and specialized nature of the assets\technology
           that Ironwood Ventures' purchased, The Company's management is unable
           to determine how this transaction would compare to a similar arms
           length transaction. The shares of common stock were spun off to
           Augrid of Delaware shareholders on a pro-rata basis on March 13,
           1998.

           On August 17, 2002 at the company's annual shareholders meeting the
           Company changed its name to AuGRID Corporation and approved a 50 to 1
           reverse split.


                                      -12-
<PAGE>

                               AuGRID CORPORATION
                                AND SUBSIDIARIES


                          Notes to Financial Statements
                             As of December 31, 2003



Note 6     Net Loss Per Share

           The Company follows the provisions of Statement of Financial
           Accounting Standards No. 128, earnings per share (SFAS 128)
           The following table presents the calculation.

              Net Loss                                        $     579,201
           Basic:
              Weighted average share of
              Common stock outstanding                          659,510,898
                                                              -------------
              Basic net loss per share                                     (.01)
           Pro forma :
              Shares used above                                 659,510,898
              Pro forma adjusted to reflect
              Weighted affect of assumed
              Conversion of preferred stock                       8,317,500
                                                              -------------
              Shares used in computing pro forma
                 Basic net loss per share                       667,828,398
                                                              -------------
              Pro forma basic net loss per share                           (.01)


Note 7     Notes Payable to Stockholders

           Notes payable to stockholders represents demand notes that
           matured on 01/28/01 with interest at 12%. The matured notes
           were converted into 18 Month Demand notes at 10% interest
           totaling $ 1,176,403 and additional notes in total of $
           218,080. The company is currently is in default of these
           notes.

           Notes Payable to Stockholders- Long Term           $   1,394,483

Note 8     Reclassification

           Certain balances have been reclassified in the 2001 and from
           inception to March 31, 2003 consolidated financial statements
           to conform to the 2003 presentation.

Note 9     Commitments

           Employment Agreements - The Company has entered into
           employment agreements on December 31, 2003 that extend to
           December 31, 2008 with three officers. The employment
           agreements set forth annual compensation to its officers of
           between $225,000 and $175,000 each. Compensation is adjusted
           annually based on the cost of living index plus seven percent
           per annum base increase.


                                      -13-
<PAGE>


  ITEM 2. MANAGEMENT'S PLAN OF OPERATION

       The following discussion and analysis should be read in conjunction with
  the Financial Statements and Notes thereto appearing elsewhere in this
  Quarterly Report. Certain statements in this Quarterly Report, which are not
  statements of historical fact, are forward-looking statements. See "Special
  Note Regarding Forward-Looking Information" on Page 2.


Overview

         AuGRID Corporation operates within three business segments:

o designing, marketing and distributing consumer electronics, principally in
plasma televisions; o development and marketing of nanotechnology-based
products, including thermocouples and armor plating; o development and marketing
of security-based systems utilizing Radio Frequency Identification
(RFID)-technology

         Through our wholly-owned subsidiary, OptiPure LLC, a Nevada limited
liability corporation, we design, market and distribute high-end consumer
electronics. We formed OptiPure in July 2003 to establish distribution channels
for innovative electronic devices as well as our future Field Emission Display
(FED) technology. Our goal is to become a provider in the high-end consumer
electronics arena by fulfilling a need in the marketplace. We believe that
through an array of highly original and technologically advanced product lines,
OptiPure's electronic devices address the niche market often ignored or
over-looked by other manufacturers and distribution companies, high-end consumer
electronics, specialty motor-coach and the marine industry. OptiPure is a
limited distributed product line manufactured by third party suppliers in
Taiwan, Hong Kong and Korea according to AuGRID's strict specifications, and is
intended that it will be sold only through selected authorized dealers and
distributors.

         Alysium Corporation, also a wholly-owned subsidiary of AuGRID, is a
manufacturing concern specializing in the fields of thermalcouple advancement,
nanotechnology and armor plating. Alysium is a diversified manufacturer and
distributor. Currently, Alysium is manufacturing and delivering next generation
thermocouples, distributing specialty sensors, drives and motors while
continuing the advancement and testing of its armor plating.

         Our executive offices are located at 10777 Westheimer Rd. - Suite 1040,
Houston, Texas 77042, and our telephone number is (713) 532.2000. We also lease
and maintain an 8,000-square foot manufacturing facility with a state of the art
ISO Clean Room at 3636 Dime Circle, Austin, Texas 78744 for our wholly owned
subsidiary, Alysium Corporation.


 Liquidity and Capital Resources.

 We have experienced cash flow shortages due to operating losses primarily
attributable to research, development, marketing and other costs associated with
our strategic plan as an international developer and supplier of Plasma


                                      -14-
<PAGE>

Televisions and Thermocouples. Cash flows from operations have not been
sufficient to meet our obligations. Therefore, we have had to raise funds
through several financing transactions. At least until we reach breakeven volume
in sales and develop and/or acquire the capability to manufacture and sell our
products profitably, we will need to continue to rely on cash from external
financing sources. Augrid is seeking new investment capital to fund research and
development and create new market opportunities. In order to fund our growth in
the market, we will need additional capital to further these development
programs and augment our intellectual properties.

In late December 2003, we entered into a Standby Equity Distribution Agreement
with Cornell Capital Partners, LP. Pursuant to the Standby Equity Distribution
Agreement, we may, at our discretion, periodically issue and sell shares of our
common stock for a total purchase price of $10 million. If we request advances
under the Standby Equity Distribution Agreement, Cornell Capital Partners will
purchase shares of common stock of AuGRID for 97% of the lowest closing bid
price on the Over-the-Counter Bulletin Board or other principal market on which
our common stock is traded for the 5 days immediately following the advance
notice date. Cornell Capital Partners will retain 5% of each advance under the
Standby Equity Distribution Agreement. We may not request advances in excess of
a total of $10 million. The aggregate dollar amount of all Puts in any
thirty-day calendar period is Three Hundred Thousand Dollars ($300,000) and
specifically a maximum of Seventy Five Thousand ($75,000) per Put.
In January, 2004, we issued a Secured Convertible Debenture to Cornell Capital
Partners in the principal amount of $150,000. The convertible debenture is
convertible into shares of our common stock as a price per share that is equal
to the lesser of: (i) an amount equal to 100% of the closing bid price of our
common stock as of the date of the convertible debenture or (ii) an amount equal
to 80% of the average of the lowest daily-volume-weighted average price of our
common stock for the five trading days immediately preceding the conversion
date. The convertible debenture accrues interest at a rate of 5% per year and is
convertible at the holder's option. The convertible debenture may be paid in
cash or converted into shares of our common stock unless converted earlier by
the holder. Except after an event of default, as set forth in the Secured
Convertible Debenture the holder cannot convert such debenture for a number of
shares of common stock of AuGrid in excess of that number of shares which,
upon giving effect to such conversion, would cause the aggregate number of
shares of common stock beneficially held by such holder and its affiliated to
exceed 9.997% of the outstanding shares of common stock of AuGRID.
In the absence of outside financing, we believe that we have sufficient cash to
operate for approximately one (1) month. The Company should benefit in fiscal
2004 from expense reductions through the reduction in the number of employees
and other expenses undertaken in fiscal 2003. However, the Company's current
sources of funds are not sufficient to provide the working capital for material
growth, and it would be required to obtain additional debt or equity financing
to support such growth.

During first quarter 2004, management reassessed its current resource
allocations and overhead costs. Management implemented several cost reduction
programs including personnel reductions, work-week modifications and other cost
restraint endeavors


                                       15
<PAGE>


to achieve these goals. Personnel levels have been reduced. In early December
2003, management discontinued its modified compensation plan for full-time
salaried employees as well as work-week reductions for other employees. Because
of the workforce reductions and other cost containment policies, the Company
continues to realize a reduction in monthly cash outlays via these cost
reductions without impact to our current operations.

Our operations during the period ended March 31, 2004 were financed by
development contracts and product sales, as well as from working capital
reserves. During the period ended March 31, 2004, our operations required
$529,202 more in cash than was generated. We have minimized research and
development spending and increased sales, marketing and administrative expenses
necessary for expansion to meet customer demand. Accounts receivable increased
by $96,250 from $8,195 from the balance at December 31, 2003. Augrid Corporation
began several new development contacts in the fourth quarter, as noted
throughout this Form 10-QSB, which we anticipate will increase receivables in
future quarters. Fixed assets increased by $0 from $222,478 on December 31, 2003
balances.

       Other assets remained constant at $24,141 during 1st Quarter 2004.

Current Liabilities increased by $218,936 to $553,460 during the period ending
March 31, 2004. Long term notes were increased by $218,080 to $1,1394,483 during
1st Quarter 2004

       We have no material commitments for capital expenditures. We do not
believe that we have sufficient liquidity to meet all of our cash requirements
for the next twelve months however, through cost reductions and increased
marketing efforts together with additional proceeds from debentures and note
agreements we believe we will offset a portion of our cash flow shortfall. A key
element of our strategy is to evaluate opportunities to expand through
acquisition of companies engaged in similar and related complementary
businesses. Any additional acquisitions may require additional capital, although
there can be no assurances that any acquisitions will be completed. Also, we
believe that additional funding will be necessary to expand our market share.

       The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make the appropriate application of certain accounting policies,
many of which require estimates and assumptions about future events and their
effect on amounts reported in the financial statements and related notes. Since
future events and their effect cannot be determined with certainty, the actual
results will inevitably differ from the estimates. Such differences could be
material to the financial statements.


  ITEM 3.  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our Company conducted an
evaluation, under the supervision and with the participation of our Chief


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<PAGE>

Executive Officer and Chief Financial Officer, of our disclosure controls and
procedures (as defined in Rules 13a-15(e) of the Exchange Act). Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our company's disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.

         There was no change in our internal controls which are included within
disclosure controls and procedures during our most recently completed fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal controls.



                                     PART II
                                OTHER INFORMATION

  ITEM 1.  LEGAL PROCEEDINGS

       In November 2003, Francis Iaconis, through legal proceedings, attempted
to acquire service of certified documentation to both AuGRID Corporation and its
CEO and President, M.J. Shaheed. Inadvertently, knowledge of the service was
acquired by an officer of the Company realizing Mr. Iaconis initiated legal
proceedings against a non-existent Company (AuGRID Corporation of Nevada). The
Company's legal counsel, Blakemore, Meeker and Bowler, LLP, has since accepted
service on behalf of the Company, as well as Mr. Shaheed. The firm has filed
against the allegations of defamation of character and non-payment of wages.

       In October 2003, the Company engaged the services of Baker & Hostetler,
LLP to initiate legal proceedings and investigate the viability of the Company's
Global Exclusive Licensing Agreement with Ceravision Limited, UK. To date, the
process continues to be in the discovery phase.

       During the first quarter of 2004, AuGRID responded by affidavit to the
complaint that was filed by Francis J. Iaconis in November 2003 against AuGrid
Corporation of Nevada and Muhammad J. Shaheed. The complaint is pending before
the United States District Court, Northern District of Ohio, Eastern Division,
Case No. 1:03CV2372. The merits of Mr. Iaconis' complaint will be contested by
the company's legal counsel, Blakemore, Meeker & Bowler Co., L.P.A. It has
recently come to the company's attention that service of process upon the
company and Mr. Shaheed was insufficient and is presently in dispute. Further,
Mr. Iaconis' complaint failed to sue the real party. The company and Mr. Shaheed
take the position that they were not properly served. Therefore, as it stands,
the company and Mr. Shaheed have been advised that the proceedings are
procedurally defective.

       There are no other material pending legal proceedings to which AuGRID
Corporation or its subsidiaries are a party to or of which any of their property
is the subject.


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<PAGE>


ITEM 2.  RISK FACTORS AND OTHER INFORMATION

Factors that May Affect Future Results and Market Price of Our Stock

       We face a number of substantial risks. Our business, financial condition
or results of operations could be harmed by any of these risks. The trading
price of our common stock could decline due to any of these risks, and they
should be considered in connection with the other information contained in this
Quarterly Report on Form 10-QSB. Factors Concerning Our Business

       We have incurred losses since our inception. We incurred net losses of
$592,202 and $170,944 for the 1st quarters ended March 31, 2004 and 2003. As of
March 31, 2004, we had an accumulated deficit of approximately $9,256,254
million. We expect to incur significant operating expenses over the next several
years in connection with the continued development and expansion of our
business. Our expenses include product development and marketing expenses
relating to products that will not be introduced and will not generate revenue
until later periods, if at all. We expect we will continue to experience losses
and negative cash flow, some of which could be significant. Results of
operations will depend upon numerous factors, some of which are beyond our
control, including market acceptance of our products, new product introductions
and competition.

       Our limited operating history and the rapidly evolving nature of our
industry make it difficult to forecast our future results.

       Prior to 2003, our operations consisted primarily of research and
development efforts. As a result of our limited operating history, our
historical financial and operating information is of limited value in predicting
our future operating results. In addition, any evaluation of our business and
prospects must be made in light of the risks and difficulties encountered by
companies offering products or services in new and rapidly evolving markets. The
markets for digital display devices, thermocouples, armor plating and security
oriented software are rapidly evolving, and it is difficult to forecast the
future growth rate, if any, or size of the market for our products. We may not
accurately forecast customer behavior and recognize or respond to emerging
trends, changing preferences or competitive factors facing us, and, therefore,
we may fail to make accurate financial forecasts. Our current and future expense
levels are based largely on our investment plans and estimates of future
revenue. As a result, we may be unable to adjust our spending in a timely manner
to compensate for any unexpected revenue shortfall, which would harm our
operating results.

       Our business may be substantially hurt if we are unable to meet our
future capital requirements. Our business strategy requires substantial capital
to market and promote our product lines. We plan to implement our aggressive
sales and marketing plan, provide for adequate working capital to meet the
projected demand for our products and repay debt over the next twelve months. To
do this, we will require approximately $15 million to meet our goals and advance


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<PAGE>


our technologies, all of which we anticipate will come from offerings of our
securities through several instruments.

       Any inability or delay in raising capital is likely to leave us with
insufficient cash to meet the requirements of our aggressive budget and impede
our ability to pursue our business plan. In addition, development opportunities
and other contingencies may arise, which could require additional capital. Any
inability to obtain required future financing would likely have a materially
adverse effect on our business and could require that we significantly reduce or
suspend our operations, seek a merger partner or sell some or substantially all
of our assets. We presently have no arrangements or understandings with any
prospective merger partner or prospective purchaser of our assets.

       If we issue additional stock to raise capital, your percentage ownership
in us would be reduced. Additional financing may not be available when needed on
terms acceptable to us or at all. If we raise funds through debt financing, we
will have to pay interest and may be subject to restrictive covenants. If we
cannot raise necessary additional capital on acceptable terms, we may not be
able to develop or enhance our products, take advantage of future opportunities
or respond to competitive pressures or unanticipated industry changes.

       We depend substantially on our relationships with a small number of OEMs,
and our failure to maintain or expand these relationships would reduce our
revenue and gross profit or otherwise harm our business.

       Specific to Alysium Corporation, we anticipate that we will derive a
substantial portion of our revenue from the sale of our products to the small
number of OEM customers we currently serve. While in the long term a substantial
portion of our revenue is projected to be from the thermocouple and defense
market, we expect that our current OEM customers will continue to account for a
consistent flow of revenue and a small portion of our gross profit for the
foreseeable future. The loss of any of these customers, or a material decrease
in revenue from these customers, would reduce our gross profit or otherwise harm
our business.

As a result of our dependency on a small number of OEMs, any
problems those customers experience could harm our operating results. Some of
the factors that affect the business of our OEM customers, all of which are
beyond our control, include:

       o  the competition these customers face and the market acceptance of
          their products;

       o  the engineering, marketing and management capabilities of these
          customers and the technical challenges that they face in developing
          their products;

       o  the financial and other resources of these customers; and

       o  new governmental regulations or changes in taxes or tariffs applicable
          to these customers.

The inability of our OEM customers to successfully address any of these risks
could harm our business.


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<PAGE>


       We are dependent on our suppliers, and the inability of these suppliers
to continue to deliver, or the refusal to deliver our products could
significantly harm our business.

       We do not have agreements with any of our third party Asian suppliers
requiring them to continue to manufacture our Optipure Products. In this
competitive market alternative sources are available but may require up to 30
days-to-initiate delivery of our product lines. This delay would adversely
affect our ability to meet promised demand for our products and harm our
business.

       Competition in our industry is intense and is likely to continue to
increase, which could result in price reductions, decreased customer orders,
reduced product margins and loss of market share, any of which could harm our
business.

       Our industry is competitive and we expect competition to intensify in the
future. We have many primary competitors located in the United States and
globally in the display and thermocouple industries. Additional competitors are
likely to enter our industry in the future.

       Many of our current competitors and potential competitors have longer
operating histories and significantly greater financial, technical, sales and
marketing resources and in some cases greater name recognition than we do. As a
result, these competitors are able to devote greater resources to the
development, promotion, sale and support of their products. In addition, our
competitors that have large market capitalizations or cash reserves are in a
better position to acquire other companies in order to gain new technologies or
products that may displace our products. Any of these potential acquisitions
could give our competitors a strategic advantage. In addition, some of our
current competitors and potential competitors have greater brand name
recognition, a more extensive customer base, more developed distribution
channels and broader product offerings than we do. These companies can use their
broader customer base and product offerings, or adopt aggressive pricing
policies, to gain market share. Increased competition in the market may result
in price reductions, decreased customer orders, reduced profit margins and loss
of market share, any of which could harm our business.

       The market for our thermocouples and consumer electronics is constantly
changing. If we do not respond to changes in a timely manner, the market for our
products could decrease.

       The market for our products is characterized by rapidly changing trends
and technological advancements, new and improved product introductions, changes
in customer requirements and evolving industry standards. Our future success
will depend to a substantial extent on our ability to develop, introduce and
support cost-effective new products and technologies on a timely basis, hence
our continued focus on research and development. If we fail to develop and
deploy new cost-effective products and technologies or enhancements of existing
products on a timely basis, or if we experience delays in the development,
introduction or enhancement of our products and technologies, the market for our
products could decrease and our business will suffer.


                                       20
<PAGE>


       The development of new, technologically advanced products is a complex
and uncertain process requiring high levels of innovation and highly skilled
engineering and development personnel, as well as the accurate anticipation of
technological and market trends. We may not be able to identify, develop,
manufacture, market or support new or enhanced products on a timely basis, if at
all. Furthermore, our new products may never gain market acceptance, and we may
not be able to respond effectively to product announcements by competitors,
technological changes or emerging industry standards. Our failure to respond to
product announcements, technological changes or changes in industry standards
would likely prevent our products from gaining market acceptance and harm our
business.

       If we do not successfully establish strong brand identity in the markets
we are currently serving, we may be unable to achieve widespread acceptance of
our products.

       We believe that establishing and strengthening both of our subsidiaries'
products is critical to achieving widespread acceptance of our future products
and to establishing key strategic relationships. The importance of brand
recognition will increase as current and potential competitors enter the market
with competing products. Our ability to promote and position our brand depends
largely on the success of our marketing efforts and our ability to provide high
quality products and customer support. These activities are expensive and we may
not generate a corresponding increase in customers or revenue to justify these
costs. If we fail to establish and maintain our brand, or if our brand value is
damaged or diluted, we may be unable to attract new customers and compete
effectively.

       We rely on patents, trademarks, trade secrets and confidentiality
agreements to protect our proprietary rights, which afford only limited
protection.

       Our success depends upon our ability to protect our proprietary rights.
We rely on a combination of patent, trademark and trade secret laws, as well as
confidentiality and non-disclosure agreements with our employees, customers,
suppliers and others to establish and protect our proprietary rights. The
protection of patentable inventions is important to our future opportunities. It
is possible that:

       o  our pending patent applications may not result in the issuance of
          patents;

       o  we may not apply for or obtain effective patent protection in every
          country in which we do business;

       o  our patents may not be broad enough to protect our proprietary rights;

       o  any issued patent could be successfully challenged by one or more
          third parties, which could result in our loss of the right to prevent
          others from using the inventions claimed in those patents; and

       o  current and future competitors may independently develop similar
          technology, duplicate our products or design new products in a way
          that circumvents our patents.



                                       21
<PAGE>


       Existing trademark and trade secret laws and confidentiality agreements
afford only limited protection. In addition, the laws of some foreign countries
do not protect our proprietary rights to the same extent as do the laws of the
United States, and policing the unauthorized use of our products is difficult.
Any failure to adequately protect our proprietary rights could result in our
competitors offering similar products, potentially resulting in the loss of some
of our competitive advantage and a decrease in our revenue. Infringement claims
and lawsuits would likely be expensive to resolve and would require management's
time and resources and, therefore, could harm our business.

       Our success depends on retaining our key personnel, including M.J.
Shaheed, our President and Chief Executive Officer, the loss of whom could
disrupt our operations or otherwise harm our business.

       Our success depends on the continued contributions of our senior
management, particularly M.J. Shaheed, our President and Chief Executive
Officer, and other key engineering, sales and marketing and operations
personnel. Competition for employees in our industry can be intense. We have
employment agreements with three executives, but do not have key man life
insurance policies covering any of our executives. In addition, all of the
capital stock and options held by the members of our management are vested.
There can be no assurance that we will retain our key employees or be able to
hire replacements. Our loss of any key employee or an inability to replace lost
key employees and add new key employees as we grow could disrupt our operations
or otherwise harm our business.

       Our international sales will likely account for a significant amount of
our revenue in the future, which may expose us to political, regulatory,
economic, foreign exchange and operational risks.

       Because we intend to sell our products worldwide, our business is subject
to risks associated with doing business internationally. Significant management
attention and financial resources are needed to develop our international sales,
support and distribution channels and manufacturing. Our future results could be
harmed by a variety of factors related to international operations, including:

       o  foreign currency exchange rate fluctuations;

       o  seasonal fluctuations in sales;

       o  changes in a specific country's or region's political or economic
          condition, particularly in emerging markets;

       o  unusual or burdensome foreign laws or regulatory requirements or
          unexpected changes to those laws or requirements;

       o  trade protection measures and import or export licensing requirements,

       o  potentially adverse tax consequences;

       o  longer accounts receivable collection cycles and difficulties in
          collecting accounts receivables;

       o  difficulty in managing widespread sales, development and manufacturing
          operations; and

       o  less effective protection of intellectual property.



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<PAGE>


       In the future, some or all of our international revenue and expenses may
be denominated in foreign currencies. Accordingly, we could experience the risks
of fluctuating currencies and may choose to engage in currency hedging
activities. In addition, if we conduct sales in local currencies, we may engage
in hedging activities, which may not be successful and could expose us to
additional risks.

       Our business may continue to be affected by our substantial debt and
restrictions under debt covenants.

       We have a significant amount of debt. Our debt service obligations could
have material adverse consequences to our security holders. As of March 31,
2004, we are in default of several outstanding loans and services and have
approximately $1.9 million of debt, including various accounts receivables and
approximately $ 1.3 million of secured debt owed to various parties including
but not limited to; Blakemore, Meeker and Bowler, Brouse McDowell, LLP, James
Coco, Just the Two of US, GATO Corp, Tom Paige and William Scala.

       The level of our indebtedness could have important consequences to us and
our stockholders including, but not limited to, the following:

       o our ability to obtain additional financing in the future may be
         impaired;

       o a significant portion of our cash flow from operations must be
         dedicated to the payment of principal and interest on our indebtedness,
         thereby reducing the funds available to us for our operations;

       o we may be substantially more leveraged than certain of our competitors,
         which may place us at a competitive disadvantage; and

       o our substantial debt may limit our flexibility to adjust to changing
         market conditions, reduce our ability to withstand competitive
         pressures and make us more vulnerable to a downturn in general economic
         conditions or our business.

       Our ability to make scheduled payments and comply with our debt covenants
or to refinance our debt obligations will depend upon our future financial and
operating performance, which will be affected by prevailing economic conditions
and financial, business and other factors which are beyond our control. Cash
flow from operations and other capital resources may not be sufficient for
payment of our debt in the future. In the absence of such operating results and
resources, we could face substantial liquidity problems and might be required to
dispose of material assets or operations to meet our debt service and other
obligations.

       If we are unable to pay our debt, we may be required to take actions such
as reducing or delaying planned expansion and capital expenditures, selling
assets, restructuring or refinancing our indebtedness or seeking additional
equity capital. We cannot predict whether any of these actions could be affected
on satisfactory terms, if at all.

       We have implemented anti-takeover provisions that could discourage a
third party from acquiring us and consequently decrease the market value of your
investment.


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<PAGE>


       Our Certificate of Incorporation and bylaws contain provisions that may
have the effect of delaying or preventing a change of control or changes in
management that a stockholder might consider favorable. Our Certificate of
Inception and bylaws, provide for a classified board of directors, allow our
board to designate "blank check" preferred stock, and limit who may call special
meetings of stockholders. These provisions may delay or impede a merger, tender
offer or proxy contest involving us. Any delay or prevention of a change of
control transaction or changes in management could cause the market price of our
common stock to decline.

       Future sales of common stock or senior securities could adversely affect
our common stock price and dilute your interest.

       We may issue additional capital stock in future financing. If a trading
market for our common stock were to develop, sales of substantial amounts of
such shares of common stock or the availability of substantial amounts of such
shares for sale could adversely affect prevailing market prices for our common
stock.

       In addition, we could issue other series or classes of preferred stock
having rights, preferences and powers senior to those of our common stock,
including the right to receive dividends and preferences upon liquidation,
dissolution or winding-up in excess of, or prior to, the rights of the holders
of our common stock. This could reduce or eliminate the amounts that would
otherwise have been available to pay dividends on the common stock.

       Because our executive officers' and directors' liabilities are limited,
your rights against them in a civil lawsuit may be limited.

       We will indemnify any executive officer, director or former executive
officer or director, and may indemnify any other officer or employee, to the
full extent permitted by Nevada law. This could include indemnification for
liabilities under securities laws enacted for stockholder protection, though the
SEC thinks this indemnification is against public policy.

       M.J. Shaheed, our President and Chief Executive Officer, owns a
significant portion of our outstanding common stock and his interests may be
different from, and conflict with, your own.

       The interests of our management could conflict with the interests of our
other stockholders. M.J. Shaheed, our President and Chief Executive Officer,
beneficially owns approximately 5.9% of our outstanding common stock and 60% of
our preferred stock convertible at a rate of 25 to 1 to common shares.
Accordingly, Mr. Shaheed has the power to influence the election of our
directors and the approval of actions for which the approval of our stockholders
is required.

       We do not expect to pay dividends.

       We do not anticipate paying cash dividends in the foreseeable future. We
presently intend to reinvest our cash back into the company rather than paying
dividends to our common stockholders. As a result, your ability to

                                       24
<PAGE>

realize any return on your investment in our common stock will likely result
only from your sale of some or all of your shares.

       The issuance of additional shares of common stock, including shares
issuable upon conversion of the outstanding notes and preferred stock and the
exercise of outstanding options and warrants, will dilute the interests of our
stockholders.

       As of May 15, 2004, we had 634,510,898 shares of our common stock
outstanding. Our board has the ability, without further stockholder approval, to
issue up to approximately 55,489,102 million additional shares of common stock.
Such issuance may result in a reduction of the book value or market price of our
outstanding common shares. Issuance of additional common stock will reduce the
proportionate ownership and voting power of the then existing stockholders.
Thus, the percentage of shares owned by all existing stockholders will be
reduced proportionately as options and warrants are exercised and convertible
notes are converted.

       Our board of directors, without seeking stockholder approval, may
designate and issue up to 1,682,500 shares of preferred stock, and the sale of
such shares may adversely impact the market price of shares of common stock.

       Our Certificate of Incorporation allows our board of directors to issue
at any time without further stockholder approval up to 10,000,000 shares of
preferred stock. Such shares may be issued and sold upon such terms and
conditions as our board of directors may determine, including the amount of
consideration for which the shares may be issued and sold in one or more series,
and such voting rights, designations, preferences and other rights,
qualifications, limitations and restrictions as our board of directors may
determine.

       We have designated 10,000,000 shares of Series A Preferred Stock, the
rights, privileges and preferences of which are described under "Description of
Securities - Preferred Stock - Series A Preferred Stock". There are currently
issued and outstanding 8,317,500 shares of Series A Preferred Stock, convertible
at a rate of 25:1 into the Company's common stock. We may issue up to an
additional 1,682,500 shares of Series A Preferred Stock in the future. No other
shares of our preferred stock are designated outstanding as of the date of this
document.

       Sales of a substantial number of shares of preferred stock, or the fact
that our board of directors may determine the rights, privileges and preferences
of one or more classes or series of preferred stock, may discourage a future
acquisition of our company, including an acquisition in which you might
otherwise receive a premium for your shares. As a result, stockholders who might
desire to participate in such a transaction may not have the opportunity to do
so.

ITEM 3. CHANGES IN SECURITIES AND USE OF PROCEEDS

       During the first quarter of 2004 there were no changes in the corporate
securities. The Company prepared and on April 29, 2004, filed with the

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<PAGE>


SEC, an information statement with no requirement of vote to the shareholders,
making notification of an authorization by majority shareholders of an increase
in the number of shares of common stock to 690,000,000 shares. The paperwork was
filed and accepted by the State of Nevada in August 2003.


ITEM 4. DEFAULTS UPON SENIOR SECURITIES

       Currently there are several convertible debentures that have matured.
There is currently approximately $ 1.3 million of secured debt owed to various
parties including but not limited to; Blakemore, Meeker and Bowler, Brouse
McDowell, LLP, James Coco, Just the Two of US, GATO Corp, Tom Paige and William
Scala.

ITEM 5. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

       No matters were submitted to a vote of shareholders during the fourth
quarter of our fiscal year ended March 31, 2004, however, a 14C Information
Statement with no requirement of vote to the shareholders, making notification
of an authorization by majority shareholders of an increase in the number of
shares of common stock to 690,000,000 shares was filed prepared and filed on
April 29, 2004. The paperwork was filed and accepted by the State of Nevada in
August 2003.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

       31.1 Certification of Chief Executive Officer Pursuant to Section 302

       31.2 Certification of Chief Financial Officer Pursuant to Section 302

       32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
              Section 1350 as Adopted Pursuant to Section 906 of Sarbanes-Oxley
              Act of 2002

       32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.
              Section 1350 as Adopted Pursuant to Section 906 of Sarbanes-Oxley
              Act of 2002

                                       26
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                                   SIGNATURES

       In accordance with Section 13 or 15(d) of the Securities and Exchange Act
of 1934, as amended, AuGRID Corporation has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                AuGRID Corporation


                 /s/ M.J. Shaheed
                 By: M.J. Shaheed
                                        -------------------------------------
                                             President,  Chief Executive
                                             Officer and Chairman of the
                                             Board (principal executive
                                             officer)


Date: May 21, 2004

       In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE                 TITLE                                  DATE

/s/ M.J. Shaheed          President, CEO and Chairman of         May 21, 2004
-----------------         the Board
M.J. Shaheed              (principal executive officer)

/s/ Stan Chapman          Chief Financial Officer and            May 21, 2004
-----------------         Director
Stan Chapman              (principal financial and
                          accounting officer)

/s/Mary F. Sloat-         Secretary and Director                 May 21, 2004
Horoszko
-----------------
Mary F. Sloat-Horoszko

/s/ Essa Mashni           Director                               May 21, 2004
-----------------
Essa Mashni

                                 27
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