U.S. 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 quarterly period ended December 31, 2004

                                    000 28745
                              (Commission File No.)

                                 --------------

                         NATIONAL SCIENTIFIC CORPORATION
                 (Name of Small Business Issuer in its Charter)

                                 --------------


                Texas                                    86-0837077
       (State of Incorporation)             (I.R.S. Employer Identification No.)

   14505 North Hayden Road, Suite 305
            Scottsdale, AZ                               85260-6951
(Address of Principal Executive Offices)                 (Zip Code)

                                 (480) 948-8324
                 (Issuers Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                        PREFERRED STOCK, $0.10 PAR VALUE
         Securities registered under Section 12(g) of the Exchange Act:
                          COMMON STOCK, $0.01 PAR VALUE

     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 [X] No [ ]

     There were  91,500,657  shares of Common  Stock,  par value $.01 per share,
outstanding at February 10, 2005.

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


<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                                   FORM 10-QSB

                                      INDEX

                                                                            PAGE

Part I - Financial Information

Item 1 - Financial Statements (unaudited)...................................  3

Unaudited Condensed Balance Sheets - December 31, 2004 and
September 30, 2004..........................................................  3

Unaudited Condensed Statements of Operations - Quarters
ended December 31, 2004, 2003, and Cumulative from
October 1, 1997 (Inception) through December 31, 2004.......................  4

Unaudited Condensed Statements of Cash Flows - Quarters
ended December 31, 2004, 2003, and Cumulative from
October 1, 1997 (Inception) through December 31, 2004.......................  5

Unaudited Condensed Statement of Changes in Shareholders'
Equity (Deficit) - Three Months Ended December 31, 2004
and Development Stage.......................................................  6

Notes to Financial Statements...............................................  7

Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................  12

Item 3 - Controls and Procedures...........................................  16


Part II - Other Information

Item 1 - Legal Proceedings.................................................  17

Item 2 - Changes in Securities and Use of Proceeds.........................  17

Item 3 - Defaults Upon Senior Securities...................................  17

Item 4 - Submission of Matters to a Vote of Security Holders...............  17

Item 5 - Other Information.................................................  17

Item 6 - Exhibits and Reports on Form 8-K..................................  17

Signatures.................................................................  18


Exhibit 31   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32   Certification Pursuant to Section 906 of the Sarbanes-Oxley Act


                                       2
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)

                       UNAUDITED CONDENSED BALANCE SHEETS
                    DECEMBER 31, 2004 AND SEPTEMBER 30, 2004

                                                   December 31,    September 30,
                                                       2004            2004
                                                   ------------    ------------
                      ASSETS

Current Assets:
  Cash and cash equivalents                        $      9,627    $    160,214
  Trade receivables, net                                 25,259          25,797
  Inventory (includes goods on consignment, in
    Canada, on December 31, 2004 of $27,444)             67,381          66,150
  Other assets                                           23,337          15,489
                                                   ------------    ------------
           Total current assets                         125,604         267,650

  Property and equipment, net                            17,686          21,021
  Deposits                                                2,000           5,031
                                                   ------------    ------------
                                                   $    145,290    $    293,702
                                                   ============    ============

   LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Accounts payable                                 $    142,529    $    148,187
  Accrued expenses                                      369,469         340,984
  Notes payable, related party                           65,000              --
                                                   ------------    ------------
           Total current liabilities                    576,998         489,171

Notes payable, net of current portion                    43,250          43,250
                                                   ------------    ------------
           Total liabilities                            620,248         532,421

Commitments and contingencies                                --              --
                                                   ------------    ------------
Shareholders' equity (deficit):
  Preferred stock, par value $0.10; 4,000,000
    shares authorized, and no shares issued
    and outstanding                                          --              --
  Common stock, par value $0.01; 120,000,000
    shares authorized, and shares issued and
    outstanding 84,350,657 and 84,330,669 at
    December 31, 2004 and September 30, 2004,
    respectively                                        843,507         843,307
  Additional paid-in capital                         21,631,891      21,627,654
  Accumulated deficit                               (22,950,356)    (22,709,680)
                                                   ------------    ------------
           Total shareholders' equity (deficit)        (474,958)       (238,719)
                                                   ------------    ------------
                                                   $    145,290    $    293,702
                                                   ============    ============

          SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS, WHICH ARE AN
                   INTEGRAL PART OF THE FINANCIAL STATEMENTS.

                                       3
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
      FOR THE QUARTERS ENDED DECEMBER 31, 2004, 2003, AND DEVELOPMENT STAGE

<TABLE>
<CAPTION>
                                                Three Months    Three Months
                                                   Ended           Ended
                                                December 31,    December 31,     Development
                                                    2004            2003            Stage
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
Revenues                                        $      1,863    $     38,230    $  1,029,065

Cost of Sales                                          1,113          31,142         954,197
                                                ------------    ------------    ------------
Gross profit                                             750           7,088          74,868

Costs and expenses
  Salaries and benefits                              103,801         145,049       2,673,905
  Research and development                            73,483           4,958       4,039,875
  Stock compensation                                   4,437           6,003       3,130,552
  Consulting fees, related party                          --              --       8,175,973
  Other                                               55,988          58,724       2,723,940
                                                ------------    ------------    ------------
           Total costs and expenses                  237,709         214,734      20,744,245
                                                ------------    ------------    ------------
Loss from operations                                (236,959)       (207,646)    (20,669,377)

Other income (expense)
  Interest and other income                               --              --         178,972
  Gain on settlement                                      --              --          89,403
  Interest expense                                    (3,717)         (3,132)        (59,527)
  Loss on disposal of assets                              --              --         (30,960)
  Loss on impairment of equipment                         --              --         (64,187)
                                                ------------    ------------    ------------
                                                      (3,717)         (3,132)        113,701
                                                ------------    ------------    ------------
Loss before income taxes                            (240,676)       (210,778)    (20,555,676)
Income tax expense                                        --              --              --
                                                ------------    ------------    ------------

Net loss                                        $   (240,676)   $   (210,778)   $(20,555,676)
                                                ============    ============    ============

Net loss per common share, basic and diluted    $      (0.00)   $      (0.00)
                                                ============    ============

Weighted average number of shares outstanding     84,345,443      70,975,072
                                                ============    ============
</TABLE>

          SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS, WHICH ARE AN
                   INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       4
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)

                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
      FOR THE QUARTERS ENDED DECEMBER 31, 2004, 2003, AND DEVELOPMENT STAGE
<TABLE>
<CAPTION>
                                                               Three Months    Three Months
                                                                  Ended           Ended
                                                               December 31,    December 31,     Development
                                                                   2004            2003            Stage
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
Cash flows from operating activities:
  Net loss                                                     $   (240,676)   $   (210,778)   $(20,555,676)
  Adjustments to reconcile net loss to net cash used
    in operating activities:
    Non cash transactions
      Depreciation                                                    3,335           3,232          81,665
      Loss on disposal of assets                                         --              --          30,960
      Impairment loss on equipment                                       --              --          64,187
      Stock and options issued for services, net                      4,437           6,003      11,632,570
    Decrease (increase) in inventory                                 (1,231)        (34,163)        (67,381)
    (Increase) decrease in deferred offering costs                       --              --         (85,171)
    Decrease (increase) in receivables                                  538         (16,300)        106,372
    Decrease (increase) in other assets                              (4,817)          5,199         (16,397)
    Increase (decrease) in accounts payable and
      accrued expenses                                               22,827         172,153         761,454
                                                               ------------    ------------    ------------
         Net cash (used in) operating activities                   (215,587)        (74,654)     (8,047,417)
                                                               ------------    ------------    ------------
Cash flows from investing activities:
   Acquisition of property and equipment                                 --              --        (155,766)
   Repayment of loans                                                    --              --         200,000
   Proceeds from the sale of furniture and equipment                     --              --           6,050
   Loans issued                                                          --              --        (400,000)
                                                               ------------    ------------    ------------
         Net cash (used in) provided by investing activities             --              --        (349,716)
                                                               ------------    ------------    ------------
Cash flows from financing activities:
   Draws on the line of credit                                           --              --         430,000
   Loan from (to) officer , related party                            65,000              --         130,079
   Repayment of notes payable                                            --          (2,500)       (120,000)
   Repayment of line of credit                                           --              --        (430,000)
   Repayment of capital lease obligations                                --              --          (1,819)
   Proceeds from the exercise of options                                 --              --         208,265
   Proceeds from the exercise of warrants                                --              --          92,460
   Proceeds from equity line of credit                                   --              --         414,824
   Proceeds from the issuance of preferred stock                         --              --         482,500
   Deposits from private placement                                       --         (20,000)             --
   Proceeds from issuance of common stock                                --          80,000       7,196,833
                                                               ------------    ------------    ------------
         Net cash provided by financing activities                   65,000          57,500       8,403,142
                                                               ------------    ------------    ------------
Net (decrease) increase in cash and cash equivalents               (150,587)        (17,154)          6,009
Cash and cash equivalents, beginning of period                      160,214          17,903           3,618
                                                               ------------    ------------    ------------
Cash and cash equivalents, end of period                       $      9,627)   $        749    $      9,627
                                                               ============    ============    ============
Supplementary Disclosure of Cash Flow Information
Cash paid for interest                                         $         --    $         --    $     35,967
                                                               ============    ============    ============
Cash paid for income taxes                                     $         --    $         --    $         50
                                                               ============    ============    ============
</TABLE>
          SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS, WHICH ARE AN
                   INTEGRAL PART OF THE FINANCIAL STATEMENTS.

                                       5
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)

   UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
       FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND DEVELOPMENT STAGE

<TABLE>
<CAPTION>
                                         Common Stock         Preferred Stock
                                     ----------------------   ---------------
                                       Number                 Number             Additional
                                         of          Par        of       Par      Paid-in      Accumulated
                                       Shares       Value     Shares    Value     Capital        Deficit         Total
                                     ----------   ---------   ------    -----   ------------   ------------   ----------
<S>                                  <C>          <C>         <C>       <C>     <C>            <C>            <C>
Balance, September 30, 2004          84,330,669   $ 843,307       --    $  --   $ 21,627,654   $(22,709,680)  $ (238,719)

Stock Issued for services
  Price per share ranged
  $0.1608                                 6,218          62       --       --            838             --          900
  $0.145                                 13,770         138       --       --          1,659             --        1,797
Common stock options granted, net            --          --       --       --          1,740             --        1,740
Net loss                                     --          --       --       --             --       (240,676)    (240,676)
                                     ----------   ---------   ------    -----   ------------   ------------   ----------
Balance, December 31, 2004           84,350,657   $ 843,507       --    $  --   $ 21,631,891   $(22,950,356)  $ (474,958)
                                     ==========   =========   ======    =====   ============   ============   ==========
</TABLE>


          SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS, WHICH ARE AN
                   INTEGRAL PART OF THE FINANCIAL STATEMENTS.

                                       6
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

     The  accompanying  financial  statements  have been  prepared  by  National
Scientific  Corporation  ("NSC" or the "Company" or "We"),  without  audit,  and
reflect all adjustments that are, in the opinion of management,  necessary for a
fair statement of the results for the interim periods.  The statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and Securities and Exchange Commission regulations.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted pursuant to such rules and  regulations.  In the opinion of
management,  the financial  statements  reflect all adjustments (of a normal and
recurring  nature) that are necessary for a fair  presentation  of the financial
position,  results of  operations  and cash flows for the interim  periods.  The
results of  operations  for the three  months  ended  December  31, 2004 are not
necessarily indicative of the results to be expected for the entire fiscal year.

     These financial statements should be read in conjunction with the financial
statements  and notes thereto  included in the  Company's  annual report on Form
10-KSB for the fiscal year ended September 30, 2004.

2.   ISSUANCE OF COMMON STOCK

     During the three months ended  December 31, 2004,  19,988  shares of common
stock were  issued for board  services at average  market  prices  ranging  from
$0.145 to $0.1608 per share.

3.   DEVELOPMENT STAGE OPERATIONS

     Although we have been in operation since 1996,  management considers NSC to
be in the  development  stage.  From  September  30, 1997 through the year ended
September  30, 2001, we engaged our efforts in the research and  development  of
semiconductor  proprietary  technology  and processes and in raising  capital to
fund its  operations  and  research.  Beginning  calendar  2002,  we focused our
efforts  toward the  development,  acquisition,  enhancement,  and  marketing of
location  device  technologies.  Since its  initiation of operations in 1996, we
have  not  realized  significant  revenue,  except  for  approximately  $882,000
generated through the export of electronic  equipment,  an isolated event, which
occurred in fiscal 2001.

     We experienced significant operating losses during fiscal 2004 and 2003, of
$951,708 and $952,564,  respectively,  which raise  substantial  doubt about the
Company's  ability to continue as a going  concern.  Of the total net  operating
losses,  approximately  $45,000 and  $292,000  are  related to stock  issued for
services  and  compensation  in fiscal 2004 and 2003,  respectively.  Management
believes  that our current cash position  including  cash funds arising from the
exercise of outstanding options, equity private placement,  loans from officers,
product sales, and continued  aggressive  expense management to be sufficient to
continue  operations for the next twelve months.  We also believe that we may be
able to reduce outstanding  liabilities through negotiations with our creditors,
or possibly  negotiate to extend the payment  schedule  for these debts.  In the

                                       7
<PAGE>

event these approaches do not provide us with adequate  working capital,  we may
be  required  to  further  curtail or reduce our  development  activities,  seek
alternative funding sources, or seek protection under reorganization laws.

     The  accompanying  financial  statements  do not  include  any  adjustments
relating to the  recoverability and classification of the recorded asset amounts
or the amounts and  classification of liabilities that might be necessary should
the Company be unable to continue in existence.

4.   STOCK OPTIONS AND WARRANTS

     STOCK OPTIONS

     As of December 31, 2004, we have a stock-based  compensation plan initially
adopted in 2000 wherein  officers and employees were granted stock  options.  We
apply  APB  25  and  related   interpretations   in  accounting  for  the  plan.
Accordingly,  compensation  expense  is  equal  to the  difference  between  the
exercise price of the options  granted and the fair value of the common stock at
the date of the grant.

     Under the  above-mentioned  2000 Stock Option Plan, the purchase price must
be at least 100% of the fair market  value of our common stock (if the option is
an  incentive  stock  option),  or at least 25% of the fair market  value of our
common stock at the time the option is granted (if the option is a  nonqualified
grant),  or such higher price as may be  determined by the Board of Directors at
the time of grant.  If  however,  an  incentive  stock  option is  granted to an
individual who would,  immediately before the grant,  directly or indirectly own
more than 10% of the total  combined  voting  power of all our classes of stock,
the purchase price of the shares of common stock covered by such incentive stock
option may not be less than 110% of the fair market  value of such shares on the
day the incentive stock option is granted.  As the price of the Company's common
stock is currently  quoted on the OTC Bulletin  Board,  the fair market value of
the common stock  underlying  options  granted  under the 2000 Stock Option Plan
shall be the last  closing sale price of the common stock on the day the options
are granted. If there is no market price for the common stock, then our Board of
Directors may, after taking all relevant facts into consideration, determine the
fair market value of our common stock.

                                                           Weighted   Weighted
                                                 Number    Average    Average
                                                   of      Exercise    Fair
                                                 Shares     Price      Value
                                               ---------   --------   --------

     Options Outstanding, September 30, 2004   3,709,257   $   0.82   $   0.02

       Granted                                    40,000       0.12       0.03
       Exercised                                      --         --         --
       Canceled                                       --         --         --
                                               ---------
     Options Outstanding, December 31, 2004    3,749,257   $   0.82   $   0.01
                                               =========

     During the quarter  ended  December  31, 2004,  40,000  stock  options were
granted to a director for board services.  Also during the same period, no stock
options were exercised or canceled.

                                       8
<PAGE>

     Our board of directors adopted the 2000 Stock Option Plan effective January
1, 2001.  Our  stockholders  formally  approved  the 2000 Stock  Option  Plan on
February  14,  2001.  We have  reserved  the right to issue a total of 7,000,000
shares of our  common  stock for  issuance  under the 2000  Stock  Option  Plan,
although our Board  currently  plans to limit  issuances of options to 4,000,000
for the immediate future.

     STOCK BASED COMPENSATION

     The Company has elected to follow  Accounting  Principles Board Opinion No.
25,  "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES" and related  interpretations  as
permitted by SFAS 123 "ACCOUNTING FOR  STOCK-BASED  COMPENSATION"  as amended in
accounting for its employee stock options. Under APB 25, compensation expense is
measured as the  excess,  if any, of the quoted  market  price of the  Company's
stock at the date of grant over the exercise price.

     During the three months ended  December 31, 2004, the Company did not grant
any  options  under the 2000  Stock  Option  Plan to any of its  employees.  The
Company did grant an option under the 2000 Stock Option Plan to a director.

     The following  table  illustrates the effect on net loss and loss per share
for the three  months  ended  December  31,  2004 and  December  31, 2003 if the
Company applied the fair value recognition provisions of SFAS 123 to stock-based
compensation:

                                          2004           2003
                                       ----------     ----------

     Net loss as reported              $ (240,676)    $ (210,778)

     Add: total stock based
       compensation expense as
       determined under the fair
       value method                         1,200             --
                                       ----------     ----------
     Pro forma net loss                $ (241,876)    $ (210,778)
                                       ==========     ==========
     Loss per share as reported             (0.00)         (0.00)

     Loss per share, pro forma              (0.00)         (0.00)

     As  required  by SFAS 123,  as  amended,  the fair  value of each  grant is
estimated on the date of grant using the Black-Scholes option pricing method for
pro forma footnote  disclosure  with the following  assumptions for all periods;
dividend yield of 0%, risk free interest rate of 5%, and expected option life of
10 years. Expected volatility was assumed to be 50% as of the date of issue.

     WARRANTS

     The warrants outstanding as of December 31, 2004 are as follows:

                                       9
<PAGE>

                                            Number of      Exercise
                                             Shares         Price     Expires
                                           -----------     --------   -------

Outstanding at September 30, 2002              412,201     $   1.67     5/04

   New issues                                4,800,000         0.30    12/04
                                               200,000         0.50    12/04
                                             1,000,000         0.35     6/06
                                             1,000,000         0.50     6/06
                                           -----------
Outstanding at September 30, 2003            7,412,201

   Expired                                    (412,201)
   New issues                                  275,000         0.50     6/06
                                               275,000         0.75     6/06
                                               640,000         0.13     1/07
                                               500,000         0.10     3/11
                                             4,414,739         0.11     4/09
                                             3,335,961         0.11     4/09
                                             1,808,497         0.10     4/11
                                            ----------
Outstanding at September 30, 2004 and
     December 31, 2004                      18,249,197
                                            ==========

5.   NET LOSS PER SHARE

     The following  table  reconciles  weighted  average  shares  outstanding to
amounts  used to  calculate  basic and diluted  earnings per share for the three
months ended December 31, 2004 and December 31, 2003.

                                            2004            2003
                                        -----------     -----------

     Net (loss)                         $  (240,676)    $  (210,778)
     Weighted average shares:
     Average shares outstanding          84,345,443      70,975,072
     Effect of diluted shares                    --              --
                                        -----------     -----------
     Average Shares outstanding,
       adjusted for dilutive effect      84,345,443      70,975,072
                                        -----------     -----------
     (Loss) per share - basic           $     (0.00)    $     (0.00)
                                        ===========     ===========
     (Loss) per share - diluted         $     (0.00)    $     (0.00)
                                        ===========     ===========

     Incremental  common shares (not included in denominator of diluted earnings
per share because of their anti-dilutive nature):

                                            2004            2003
                                        -----------     -----------

     Employee options                     3,749,257       3,329,757
     Warrants                            18,249,197       7,812,201
                                        -----------     -----------
     Potential common equivalents        21,998,454      11,141,958
                                        ===========     ===========

                                       10
<PAGE>

     If all currently  outstanding  potential common  equivalents are exercised,
the Company would receive proceeds of approximately $7,000,000.

6.   BORROWINGS

     On June 11, 2003, the Company issued a three-year interest free convertible
note of $43,250,  with no payments  required of the Company until the end of the
three-year  period, to its then-Director Mr. Lou Ross for past services rendered
(See 10-KSB report for the year ended  September 30, 2003).  The Company can pay
this note at any time before the  three-year  period elapses with either cash or
its common  restricted  stock or a  combination  of cash and stock,  at its sole
discretion.  Currently  this  note  represents  the only  long-term  debt of the
Company. Mr. Ross retired from the Company's board on September 30, 2003.

     In December 2004, our Chairman  Michael  Grollman made personal loans to us
in the amount of $65,000 to assist NSC with  short-term cash  requirements.  The
loan is evidenced by an unsecured  promissory  note that  provides for repayment
within 90 days or less, at no interest.  The promissory  note also provides that
if repayment  takes longer than 90 days,  then  interest  accrues at a rate of 6
percent  per year until paid in full.  We paid this Note in full in  February of
2005.

7.   SUBSEQUENT EVENTS

     On January 28, 2005, we entered into a Securities  Exchange  Agreement (the
"Agreement")  with  TurboWorx,  Inc.,  a  Delaware  corporation  ("Turbo")  that
provides  for the  exchange of 360,000  shares of the common stock of Turbo plus
$240,000  in cash in  exchange  for  7,150,000  shares of NSC Common  Stock (the
"Exchange").  NSC and Turbo consummated the Exchange on February 1, 2005, and we
filed an 8-K report with the Commission  regarding this Agreement on February 2,
2005, which included the full text of the Agreement.

     NSC has agreed to  distribute at least 180,000 of the shares of Turbo stock
it received in the Exchange to NSC shareholders of record on a pro rata basis as
soon as practicable after the effective date of a registration statement on Form
SB-2 registering the Turbo shares to be distributed to NSC  shareholders.  Turbo
has agreed to file such registration  statement within the next 30 days, and has
agreed  to use its  best  efforts  to have  such  filed  registration  statement
declared effective no later than 90 days following the filing date.

     The Exchange is a further  development  resulting  from the  Memorandum  of
Understanding  entered into between NSC and Turbo on October 29, 2004  regarding
the joint development of technology and joint marketing.

     In January 2005, our Chairman Michael Grollman made personal loans to us in
the amount of $30,000 to assist NSC with short-term cash requirements.  The loan
is evidenced by an unsecured  promissory note that provides for repayment within
90 days or less,  at no interest.  The  promissory  note also  provides  that if
repayment  takes  longer  than 90 days,  then  interest  accrues  at a rate of 6
percent  per year until paid in full.  We paid this Note in full in  February of
2005.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

SAFE HARBOR STATEMENT

     Statements   contained   herein  that  are  not  historical   fact  may  be
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We use words and phrases such as "should be," "will be," "believes,"
"expects,"  "anticipates,"  "plans," "intends," "may" and similar expressions to
identify forward-looking  statements.  Forward-looking statements are made based
upon  our  belief  as  of  the  date  that  such  statements  are  made.   These
forward-looking statements are based largely on our current expectations and are
subject  to a number of risks and  uncertainties,  many of which are  beyond our
control.   You  should  not  place  undue  reliance  on  these   forward-looking
statements,  which  apply  only as of the  date of such  documents.  Our  actual
results could differ materially from those anticipated in these  forward-looking
statements for many reasons, including the risks faced by us described above and
elsewhere in this report.

THREE MONTHS ENDED DECEMBER 31, 2004 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2003

     National Scientific  Corporation is focused on the research and development
of devices and designs that are intended to enhance the  performance  of various
products  commonly  used in the  semiconductor  and  electronics  industries  in
general,  and in location  services  devices in particular.  We primarily design
products  that we believe will have a broad  application  and  acceptance in the
commercial electronic component  marketplace.  We currently hold U.S. Patents on
eight devices and designs.  We plan to continue to develop our existing patented
technologies as well as new performance-enhancing devices and designs for use in
the  semiconductor  and  electronics  industries  when  appropriate  funding  is
available.

     We remained  focused on primarily  semiconductor  development  from 1996 to
approximately  February  of  2002.  In  February  of  2002,  we  began  to focus
specifically  on  applications  of electronic  devices in the location  services
market.  We also  began to  decrease  our  focus on  semiconductor  intellectual
property,  due primarily to difficult  market  conditions  in the  semiconductor
area.  We plan to  continue  our  focus on  wireless  location  devices  for the
foreseeable future. Much of our efforts since February 2002 have been devoted to
licensing and developing technologies related to location services. We expect to
continue product  development in 2005, and to develop new sales channels and new
customers for our location services products.

     The Company's  embedded systems Location  Tools(TM) strategy began to yield
small amounts of revenue late in the fiscal year ended  September 30, 2002. This
small revenue  stream  increased to $77,994 for the fiscal year ended  September
30, 2004 from $63,579  during the prior fiscal year.  Revenue was $1,863 for the
three months ended  December 31, 2004  compared to $38,230 in the quarter  ended
December  31,  2003.  This  decrease  in revenue  was partly  attributable  to a
consignment  shipment of our Gotcha!(R) product sent in November to Canada, with
a planned  selling  price of $34,200,  that had been  expected to invoice out of
consignment before the end of December 2005, but did not. This inventory remains
on  consignment  in Canada as of the date of this report,  and is available  for
immediate sale by the distributor as needed.  An additional  factor has been the

                                       12
<PAGE>

increase in the Company's focus on its newer business-oriented  products,  which
are just  entering  the market in 2005,  such as Travado  IBUS(TM),  and a small
decrease in its focus on its consumer products, such as Gotcha!(R).

     NSC has recently initiated product-marketing efforts after several years of
research and  development and has negative  operational  cash flow and has never
been  profitable.  The Company has long-term  debt of $43,250 as of December 31,
2004.  Total  liabilities  at December 31, 2004 were  $620,248,  which  includes
unpaid back wages to employees.

     Total operating  expenses for the three months ended December 31, 2004 were
approximately  $237,709  compared to $214,734 in the same period ended  December
31, 2003.

     Salaries  and  benefits  were  approximately  $103,801 for the three months
ended December 31, 2004 compared to approximately  $145,049 for the three months
ended December 31, 2003.

     Stock compensation decreased to approximately $4,437 during the first three
months of fiscal year 2005  compared to $6,003  during the first three months of
fiscal year 2004.

     Research and  development  expenditures  increased to $73,483 for the three
months ended December 31, 2004,  compared to approximately  $4,958 for the three
months  ended  December  31, 2003,  primarily  because the company  continued to
engineer and develop new location tools. The Company has also spent and plans to
spend  resources  on  the  development  of  strategic  partnerships  with  other
technology  firms to assist in taking its  products to market.  The Company will
continue  to  explore  innovative  ways to take  its  technology  expertise  and
products to market,  across its entire portfolio of  semiconductor  and location
electronics related devices.

     Other costs and expenses were approximately  $55,988 during the first three
months of fiscal year 2005 compared to $58,724  during the first three months of
fiscal year 2004.

     The  Company  expects  to  continue  to  increase  its  focus on sales  and
marketing of its Location  Tools(TM) products for the foreseeable  future.  This
includes  significantly  increased  attendance  at trade shows and other product
marketing events during the most recent quarters,  as well as recent  additional
investment  in product  promotion  through new outreach  programs with the trade
press, using new outside public relations resources. Partly as a result of these
efforts and others,  revenues have begun to be generated from operations.  It is
thus possible that the Company may emerge from its  development  stage status at
sometime during the coming year.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2004, we had cash and cash  equivalents of $9,627  compared
to $160,214 at September 30, 2004.  Our total cash used in operating  activities
from  developmental  stage  inception  in 1997  through  December  31,  2004 was
$8,047,417.  We have an accumulated  deficit of $22,950,356 and expect operating
losses in the  foreseeable  future as we  continue  our  efforts to develop  and
market  commercial  products.  We expect to generate future revenues by entering
into strategic joint venture licensing relationships,  manufacturing agreements,
development agreements,  and other relationships with manufacturing firms and/or
entities that will incorporate our technologies  into their products and overall

                                       13
<PAGE>

solutions.  We have financed our operations primarily through the sale of common
stock and  warrants  in the public and  private  market,  and to a very  limited
extent and only just recently, though the sale of our products.

     In December 2004, our Chairman  Michael Grollman made a personal loan to us
in the  amount of  $65,000  to  assist  the  Company  with  short-term  key cash
requirements.  The  loan  was  evidenced  by an  unsecured  Note  from us to Mr.
Grollman.  The material  terms of the Note are  repayment  due within 90 days or
less, at no interest. If payment were to take longer than 90 days, then interest
would  accrue at a rate of 6 percent  per year until paid in full.  We paid this
Note in full in February of 2005.

     We  believe  that our  current  cash  position  as of  December  31,  2004,
including  cash funds  arising from the  exercise of  outstanding  options,  and
secured plant assets from legal  settlements,  from equity  placement  sales and
other capital raising efforts, loans from officers, product sales, and continued
aggressive  expense  management to be sufficient to continue  operations for the
next twelve  months.  We also believe that we may be able to reduce  outstanding
liabilities  through  negotiations with our creditors,  or possibly negotiate to
extend the payment  schedule for these debts.  In the event these  approaches do
not  provide us with  adequate  working  capital,  we may be required to further
curtail or reduce our development activities,  seek alternative funding sources,
or seek protection under reorganization laws.

     Cash used in  operations  was  approximately  $215,587 for the three months
ended December 31, 2004 compared with approximately $74,654 for the three months
ended December 31, 2003.  The increase in cash used in operations  resulted from
fewer salary deferrals,  the addition of new permanent employees and contractors
to  support  the  Company's  drive,  in the area of  sales,  marketing,  product
engineering,  and development,  to take its technology expertise and products to
market.

OTHER RESULTS OF OPERATIONS

     On October 1, 2004,  we changed  our stock  transfer  agent from  Corporate
Stock  Transfer  (CST)  of  Colorado,  to  Computershare  Investor  Services  of
Illinois.   The  new  contact  information  for  our  stock  transfer  agent  is
Computershare Investor Services, 2 North LaSalle Street, Chicago, IL, 60602, and
their telephone number is 312-588-4753.  The principle reason for the change was
to improve  shareholder  services,  particularly  online services,  which in our
opinion are much more developed at Computershare than they are today at CST.

     In October 2004,  David  Mandala also rejoined us as a full time  employee,
after a period when his work was limited to our technical  advisory  board.  Mr.
Mandala is focused on development of some of our embedded systems technology, in
particular, our Travado IBUS(TM) technology.

     On October 8, 2004, we announced a new marketing program for our Gotcha!(R)
child safety monitor.  We plan to market  Gotcha!(R) to organizations  arranging
field trips,  focusing on the product's  ability to monitor  several child units
simultaneously  with only one parent unit.  The company  will target  public and
private schools, school districts,  parent-teacher  associations,  and child and
youth  organizations  nationwide.  We entered into a contract in support of this
effort  with  KidMapper,  Inc.,  a privately  owned  Illinois  corporation.  The
material  terms of that  agreement  call for KidMapper to  aggressively  use its
existing extensive network of sales representatives in the U.S. K-12 marketplace

                                       14
<PAGE>

to sell Gotcha!(R) as an adjunct for field trips. In exchange for these efforts,
NSC will provide a period of exclusivity in the U.S. K-12 territory to KidMapper
for a one-year  period of time,  and extended  payment  terms and  discounts for
products purchased by KidMapper for this market.

     On October 29, 2004, we commenced a new strategic working relationship with
TurboWorx Inc. ("Turbo") regarding joint technology  development and cooperative
marketing.   The  relationship  was  first   memorialized  in  a  Memorandum  of
Understanding  (MOU) in early  November  2004.  The two companies see benefit in
connecting NSC's location sensor  technology to the computing  engines developed
by TurboWorx.

     In November  2004, the Company  presented its WiFi tag technology  combined
with its  software  partner  Ekahau's  technology  at a  symposium  on  location
technology  at  East  Carolina  University.  The  objective  of the  competitive
presentation,  which included  presentations from Bosch,  Nextel,  CISCOR,  Code
Blue,  and others,  was to provide novel  solutions for campus  student  safety.
Trials from this are expected to continue in 2005.

     In November 2004, we entered into a distributor agreement with Ingram Micro
of Canada.  The material terms of this agreement call for us to pay regular fees
to Ingram Micro based on the number of products we stock with them in Canada, in
exchange  for their  promotion  and  distribution  of our  products  with  their
Canadian  resellers,  which  include  firms such as Radio Shack and  Wal-Mart of
Canada.  Either party with 30 days notice can cancel the  agreement.  We plan to
distribute Gotcha!(R) as well as potentially other products,  including some new
video-related  products  we  may  acquire  as  part  of a  developing  strategic
relationship with Aethra of Italy, a leader in video technology.

     On November 22, 2004,  we received  radio  frequency  use approval from the
government of Canada for our Gotcha!(R)  product,  known as "CA"  approval,  IC:
5521A-P and IC: 5522A-C for the parent unit and child unit,  respectively.  This
step was  required  to fulfill a sales  order from Ingram  Micro  ("Ingram")  of
Canada, for subsequent resale to a Canadian retail outlet.

     On November  24,  2004 we shipped an initial  quantity of Gotchas to Ingram
Micro in  Canada.  Sale  terms  required  product  with a cost of  $27,444 to be
consigned  to  Ingram.  Currently  product,  with a  selling  price of  $34,200,
continues under consignment with revenue not yet recognized for this transaction
as of the date of this report.

     In  December  2004 we  signed an  agreement  with LDL  Enterprises  in Palm
Springs,  California.  Under this  agreement,  Marcile  Wright,  EDD, CEO of LDL
Enterprises,  is to provide  marketing  services in  California  for various NSC
products,  especially IBUS(TM) technology.  This is a commission-only agreement,
with a one-year term, and is nonexclusive.

OTHER SUBSEQUENT EVENTS

     In  January  2005,  after  announcing  our new  Travado(TM)  line of  video
tracking units, we received a purchase order from Auto Safety House (ASH) for 25
units of our Travado  IBUS(TM)  Digital Video Recording (DVR) and location aware
systems in response to an order ASH received for 25 school buses  equipped  with
NSC's IBUS(TM) system.  ASH is a leading  distributor of Thomas Built Buses. The
order is scheduled to be delivered to ASH in May of 2005.

                                       15
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

     Our management has responsibility for establishing and maintaining adequate
internal  control  over  financial  reporting  for  us.  Our  management  uses a
framework for  establishing  these internal  controls.  This framework  includes
review of accounting  detailed records on at least a quarterly basis by multiple
senior officers of National Scientific, at least one of whom operates outside of
the corporate  finance and accounting  area, and one of whom operates within the
area of corporate finance and accounting. This review process includes review of
significant  accounting  records and source  documents,  such as general journal
entry   records,   accounts   payable   records,   and  monthly  bank  statement
reconciliations. Documentary records are kept of this review process.

     The Company  carried out an evaluation,  under the supervision and with the
participation of the Company's management, including its Chief Executive Officer
and Acting Chief Financial Officer and its President,  of the effectiveness,  as
of December 31, 2004, of the design and  operation of the  Company's  disclosure
controls and  procedures  pursuant to Exchange Act Rule 13a-15.  Based upon that
evaluation,  the Chief Executive  Officer and Acting Chief Financial Officer and
its President  concluded that the Company's  disclosure  controls and procedures
are  effective  as of December  31, 2004 for a Company its size to timely  alert
them to material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Company's Exchange Act filings.

     There have been no  significant  negative  changes in our internal  control
over  financial  reporting  during the quarter ended December 31, 2004 that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control over financial reporting.

     These  controls  and  procedures  are  processes  designed by, or under the
supervision of, the principal executive and principal  financial  officers,  and
effected by the board of directors,  management and other personnel,  to provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of financial  statements for external  purposes in accordance  with
generally  accepted  accounting  principles  and  includes  those  policies  and
procedures that:

     1.   Pertain  to the  maintenance  of  records  that in  reasonable  detail
          accurately and fairly reflect the transactions and dispositions of the
          assets;

     2.   Provide  reasonable   assurance  that  transactions  are  recorded  as
          necessary to permit preparation of financial  statements in accordance
          with generally accepted accounting  principles,  and that receipts and
          expenditures  are  made  only in  accordance  with  authorizations  of
          management and directors; and

     3.   Provide reasonable  assurance regarding prevention or timely detection
          of unauthorized acquisition,  use, or disposition of assets that could
          have a material effect on the financial statements.

     Our external auditors,  Hurley and Company,  have not issued an attestation
report  on  management's  assessment  of the  Company's  internal  control  over
financial reporting.

     We believe that a control system, no matter how well designed and operated,
cannot provide absolute  assurance that the objectives of the control system are
met, and no  evaluation  of controls  can provide  absolute  assurance  that all

                                       16
<PAGE>

control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.  Our management  believes that upon  significant  future growth in the
number of  accounting  transactions  we process,  perhaps  within the next year,
additional  review and  enhancement of internal  controls will be required.  Our
management  is  planning to assign  additional  staff  resources  to assist with
support  for  growth  in  the  internal  controls  area  when  the  increase  in
transaction  velocity  dictates  this as a prudent step in order to maintain our
effective level of internal controls.


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The  Company is  involved in legal  actions in the  ordinary  course of its
business, including those outlined in the Company's annual report on Form 10-KSB
for the fiscal year ended  September 30, 2004.  Although the outcome of any such
legal actions cannot be predicted,  in the opinion of  management,  there are no
legal  proceedings  pending or asserted against or involving the Company the net
outcome of which are likely to have a material adverse effect upon the financial
position or results of operations of the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     During the three months ended December 31, 2004,  19,988  restricted common
shares were issued for board  services at average  market  prices  ranging  from
$0.145 to $0.1608 per share.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     Not applicable.

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

     Not applicable.

ITEM 5. OTHER INFORMATION.

     Not applicable.

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

     (a) Exhibits

     Exhibit
     Number                          Description
     -------    ---------------------------------------------------------------

       31       Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
       32       Certification Pursuant to Section 906 of the Sarbanes-Oxley Act


     (b) Reports on Form 8-K

     The Company  filed one Report on Form 8-K on  February 2, 2004  relating to
TurboWorx.

                                       17
<PAGE>

SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934,  the  Registrant  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                   NATIONAL SCIENTIFIC CORPORATION



Date:  February 14, 2005           By: /s/ Michael A. Grollman
                                       -----------------------------------------
                                       Director, Chief Executive Officer, Acting
                                       Chief Financial Officer, and Chairman


                                   By: /s/ Graham L. Clark
                                       -----------------------------------------
                                       Director, President, and Secretary


                                   By: /s/ Gregory Szabo
                                       -----------------------------------------
                                       Director




                                       18