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                     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, 2003

                                    000-28745
                              (Commission File No.)

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

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

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

           TEXAS                                                 86-0837077
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

      14455 N. HAYDEN, SUITE 202
            SCOTTSDALE, AZ                                       85260-6947
(Address of Principal Executive Offices)                         (Zip Code)

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


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

There  were  73,614,465  shares  of Common  Stock,  par  value  $.01 per  share,
outstanding at February 10, 2004.

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

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<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION

                                   FORM 10-QSB

                                      INDEX

                                                                            PAGE
Part I - Financial Information

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

         Balance Sheets - December 31, 2003 and September 30, 2003..........  3

         Statements of Operations - Three Months ended December 31,
            2003, 2002 and Cumulative from October 1, 1997 (Inception)
            through December 31, 2003.......................................  4

         Statements of Cash Flows - Three Months ended December 31,
            2003, 2002 and Cumulative from October 1, 1997 (Inception)
            through December 31, 2003.......................................  5

         Statement of Changes in Shareholders' Equity (Deficit) - Three
            Months Ended December 31, 2003..................................  6

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

Item 2 - Management's Discussion and Analysis of Financial or
         Plan of Operation.................................................. 11

Item 3 - Controls and Procedures............................................ 14


Part II - Other Information

         Item 1 - Legal Proceedings......................................... 14

         Item 2 - Changes in Securities and Use of Proceeds................. 14

         Item 3 - Defaults upon Senior Securities........................... 15

         Item 4 - Submission of Matters to a Vote of Security Holders....... 15

         Item 5 - Other Information......................................... 15

         Item 6 - Exhibits and Reports on Form 8-K.......................... 16

Signatures.................................................................. 16


Exhibit 31.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act

Exhibit 32.1   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, 2003 AND SEPTEMBER 30, 2003
<TABLE>
<CAPTION>
                                                          DECEMBER 31,    SEPTEMBER  30,
                                                              2003             2003
                                                          ------------    --------------
                        ASSETS
<S>                                                       <C>             <C>
Current Assets:
   Cash and cash equivalents                              $        749    $       17,903
   Trade receivables, net of reserve of $8,169 at
     December 31, 2003 and September 30, 2003                   44,500            28,200
   Inventory                                                    43,863             9,700
   Other assets                                                 11,727            16,926
                                                          ------------      ------------
          Total current assets                                 100,839            72,729

   Property and equipment, net                                  28,849            32,081
   Deposits                                                      5,031             5,031
                                                          ------------      ------------
                                                          $    134,719      $    109,841
                                                          ============      ============
     LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                       $    245,752      $    185,725
   Accrued expenses                                            419,821           457,695
   Deposits                                                         --            20,000
   Notes payable                                                 7,500            10,000
                                                          ------------      ------------
          Total current liabilities                            673,073           673,420

   Notes payable,  net of current portion                       43,250            43,250
                                                          ------------      ------------
          Total Liabilities                                    716,323           716,670
                                                          ------------      ------------
   Commitments and contingencies                                    --                --
                                                          ------------      ------------
Shareholders' equity (deficit):
   Preferred stock, par value $.10; 4,000,000 shares
     authorized, and no shares issued or outstanding                --                --
   Common stock, par value $.01; 120,000,000 shares
     authorized, and shares issued 72,981,465 and
     70,633,819 outstanding at December 31, 2003 and
     September 30, 2003, respectively                          729,814           706,338
   Additional paid-in capital                               20,657,260        20,444,733
   Accumulated deficit                                     (21,968,678)      (21,757,900)
                                                          ------------      ------------
          Total shareholders' equity (defecit)                (581,604)         (606,829)
                                                          ------------      ------------
                                                          $    134,719      $    109,841
                                                          ============      ============
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
      FOR THE QUARTERS ENDED DECEMBER 31, 2003, 2002, AND DEVELOPMENT STAGE
<TABLE>
<CAPTION>
                                                                                            Development
                                                                2003            2002           Stage
                                                           ------------   -------------    ------------
<S>                                                        <C>             <C>             <C>
Revenues                                                   $     38,230    $      5,455    $    987,438
Cost of Sales                                                    31,142           3,313         928,629
                                                           ------------    ------------    ------------
Gross profit                                                      7,088           2,142          58,809

Costs and expenses
   Salaries and benefits                                        145,049          66,133       2,321,845
   Research and development                                       4,958           9,690       3,718,093
   Stock compensation                                             6,003          12,900       3,086,697
   Consulting fees, related party                                    --           7,500       8,175,973
   Other                                                         58,724          95,672       2,466,027
                                                           ------------    ------------    ------------
            Total costs and expenses                            214,734         191,895      19,768,635
                                                           ------------    ------------    ------------
Loss from operations                                           (207,646)       (189,753)    (19,709,826)
                                                           ------------    ------------    ------------
Other income (expense)
   Interest and other income                                         --              --         173,228
   Interest expense                                              (3,132)         (1,144)        (37,400)
   Loss on disposal of assets                                        --              --              --
                                                           ------------    ------------    ------------
                                                                 (3,132)         (1,144)        135,828
                                                           ------------    ------------    ------------
Loss before income taxes                                       (210,778)       (190,897)    (19,573,998)
Income tax expense                                                   --              --              --
                                                           ------------    ------------    ------------
Net loss                                                   $   (210,778)   $   (190,897)   $(19,573,998)
                                                           ============    ============    ============
Net loss per common share, basic and diluted               $      (0.00)   $      (0.00)
                                                           ============    ============

Weighted average number of shares outstanding                70,975,072      51,965,954
                                                           ============    ============
</TABLE>


    The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>
                         NATIONAL SCIENTIFIC CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
      FOR THE QUARTERS ENDED DECEMBER 31, 2003, 2002, AND DEVELOPMENT STAGE
<TABLE>
<CAPTION>
                                                                                            Development
                                                                2003            2002           Stage
                                                           ------------    -------------   ------------
<S>                                                        <C>             <C>             <C>
Cash flows from operating activities:
   Net loss                                                $   (210,778)   $   (190,897)   $(19,573,998)
   Adjustments to reconcile net loss to net cash used in
     operating activities:
     Non-cash transactions
       Depreciation                                               3,232           3,231          68,427
       Loss on disposal of assets                                    --              --          30,960
       Impairment loss on equipment                                  --              --          64,187
       Stock and options issued for services, net                 6,003          33,170      11,588,715
     Decrease (increase) in inventory                           (34,163)          3,426         (43,863)
     Deferred offering costs                                         --              --         (85,171)
     Decrease (increase) in receivables                         (16,300)             --          87,131
     Decrease (increase) in other assets                          5,199            (522)         (7,818)
     Increase in accounts payable and accrued expenses          172,153          19,855         845,279
                                                           ------------    ------------    ------------
       Net cash (used  in) operating activities                 (74,654)       (131,737)     (7,026,151)
                                                           ------------    ------------    ------------
Cash flows from investing activities:
   Acquisition of property and equipment                             --              --        (153,692)
   Repayment of loans                                                --              --         200,000
   Proceeds from the sale of furniture and equipment                 --              --           6,050
   Loans issued                                                      --              --        (400,000)
                                                           ------------    ------------    ------------
       Net cash (used in) investing activities                       --              --        (347,642)
                                                           ------------    ------------    ------------
Cash flows from financing activities:
   Draws on the line of credit                                       --              --         430,000
   Loan from (to) officer                                            --              --          65,079
   Repayment of notes payable                                    (2,500)             --        (112,500)
   Repayment of line of credit                                       --              --        (430,000)
   Repayment of capital lease obligations                            --              --          (1,819)
   Proceeds from the exercise of options                             --          23,897         198,590
   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 for private placement                               (20,000)        300,000              --
   Proceeds from issuance of common stock                        80,000              --       6,231,789
                                                           ------------    ------------    ------------
       Net cash provided by financing activities                 57,500         323,897       7,370,923
                                                           ------------    ------------    ------------

Net (decrease) increase in cash and cash equivalents            (17,154)        192,160          (2,870)
Cash and cash equivalents, beginning of  period                  17,903           1,405           3,619
                                                           ------------    ------------    ------------
Cash and cash equivalents, end of  period                  $        749    $    193,565    $        749
                                                           ============    ============    ============
Supplementary Disclosure of Cash Flow Information:

Cash paid for interest                                     $         --    $      1,144          25,474
                                                           ============    ============    ============
Cash paid for income taxes                                 $         --    $         --    $         50
                                                           ============    ============    ============
</TABLE>
    The accompanying notes are an integral part of these 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, 2003
<TABLE>
<CAPTION>
                                             COMMON STOCK           PREFERRED STOCK
                                       -----------------------   ---------------------   ADDITIONAL
                                        NUMBER OF      PAR        NUMBER OF     PAR       PAID-IN       ACCUMULATED
                                         SHARES       VALUE        SHARES      VALUE      CAPITAL         DEFICIT       TOTAL
                                       ----------   ----------   ----------   --------   -----------   ------------   ---------
<S>                                    <C>          <C>          <C>          <C>        <C>           <C>           <C>
Balance, September 30, 2003            70,633,819   $  706,338           --   $     --   $20,444,733   $(21,757,900)  $(606,829)

Stock issued for services @ $0.14          47,646          476           --         --         5,527             --       6,003

Debt equity swap                        1,500,000       15,000           --         --       135,000             --     150,000

Private placement "T" units @ $0.10       800,000        8,000           --         --        72,000             --      80,000

Net loss                                       --           --           --         --            --       (210,778)   (210,778)
                                       ----------   ----------   ----------   --------   -----------   ------------   ---------
Balance, December 31, 2003             72,981,465   $  729,814           --   $     --   $20,657,260   $(21,968,678)  $(581,604)
                                       ==========   ==========   ==========   ========   ===========   ============   =========
</TABLE>



    The accompanying notes are an integral part of these 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, 2003 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,  2003,  and the  Company  Proxy
Statement for 2004,  filed January 30, 2004,  which is incorporated by reference
in the Company's 10-KSB annual report.

2.   ISSUANCE OF COMMON STOCK

     During the three months ended December 31, 2003, the Company  continued the
private offering of restricted  common stock,  commenced in June 2003. From this
offering the Company  raised  approximately  $80,000 in cash and issued  800,000
shares of  restricted  common  stock and  granted  400,000  warrants to purchase
common  stock at an  exercise  price of between  $0.50 and $0.75 per  share.  No
underwriters were involved in connection with this private placement.  The sales
and  issuances  of the  securities  issued  pursuant  to the  foregoing  private
placement  are exempt from  registration  under the  Securities  Act of 1933, as
amended, pursuant to Section 4(2) thereof, and Rule 506 of Regulation D.

     Also during the three months ended  December  31,  2003,  47,646  shares of
common stock were issued for services at an average per share price of $0.14.

     Also during the three months ended  December 31, 2003,  the Company  issued
1,500,000 shares of restricted  common stock at an average market price of $0.10
to convert  accumulated back pay to stock as part of a buy back plan to conserve
cash resources.


                                        7
<PAGE>

3.   STOCK OPTIONS AND WARRANTS

     The Company  from time to time  issues  stock  options for the  purchase of
common stock to  directors,  officers,  employees and  consultants.  The Company
adopted a qualified  stock  option  plan for its  executives,  consultants,  and
employees in December 2000.

     During the three months ended  December 31, 2003, the Company did not grant
any options  under the 2000 Stock Option Plan.  Also during the same period,  no
stock options were exercised.

     The Company adopted  Financial  Accounting  Standards Board APB Opinion No.
25,  ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES,  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 grant. As no options were granted,  there was
no compensation recognized for the fiscal quarter ended December 31, 2003. Under
the terms of the Company's stock options granted to certain directors, officers,
employees and consultants,  the Board of Directors, at its sole discretion, will
determine when certain options granted shall be fully vested and exercisable. On
December 31, 2003,  3,324,757  outstanding stock options were vested,  and fully
exercisable, and 5,000 were not vested.

     In accordance with The Statement of Financial  Accounting  Standards (SFAS)
123, ACCOUNTING FOR STOCK-BASED COMPENSATION, the fair value of option grants is
estimated on the date of grant using the Black-Scholes  option-pricing model for
proforma footnote purposes with the following assumptions used for grants in all
years;  dividend yield of 0%, risk-free interest rate of 5%, and expected option
life of 10 years.  Expected  volatility was assumed to be 100% as of the date of
issue.

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

Options Outstanding, September 30, 2003          3,329,757           $ 0.90
   Granted                                              --               --
   Forfeited                                            --               --
   Exercised                                            --               --
                                                 -------------------------------
Options Outstanding, December 31, 2003           3,329,757           $ 0.90
                                                 ===============================


                                       8
<PAGE>

     Had the  Company  fully  adopted  SFAS 123,  the  Company's  net income and
earnings per share would approximate the following pro forma amounts:

                                           Three Months           Three Months
                                              Ended                  Ended
                                        December 31, 2003      December 31, 2002
                                        ----------------------------------------

Net (loss) income:
   As reported                             $   (210,778)         $   (190,897)
   Pro forma                                   (210,778)             (194,197)

Basic (loss) earnings per share:
   As reported                             $      (0.00)         $      (0.01)
   Pro forma                                      (0.00)                (0.01)


4.   NET LOSS PER SHARE

     Net  loss per  common  share is based  upon  the  weighted  average  shares
outstanding.  Outstanding stock options and warrants are treated as common stock
equivalents,  but are anti-dilutive,  for purposes of computing diluted net loss
per common share.  The following is a summary of the computation of net loss per
common share (amounts in dollars except shares):

                                                      Three months ended
                                                         December 31
                                               ------------------------------
                                                    2003             2002
                                               ------------------------------

Basic net income (loss) per common share:

Net income (loss)                              $   (210,778)     $   (190,897)
                                               ============      ============
Weighted average common shares                   70,975,072        51,965,954
                                               ============      ============
Basic per share amount                         $      (0.00)     $      (0.00)
                                               ============      ============


5.   SUBSEQUENT EVENTS

     In June 2003, the Company commenced a private offering of restricted common
stock and common  stock  purchase  warrants.  Subsequent  to the end of December
2003, the Company raised approximately $10,000 in cash and issued 100,000 shares


                                       9
<PAGE>

of restricted common stock and granted 100,000 warrants to purchase common stock
at an exercise price of between $0.50 and $0.75 per share. No underwriters  were
involved in connection with this private  placement.  The sales and issuances of
the securities  issued  pursuant to the foregoing  private  placement are exempt
from  registration  under the  Securities  Act of 1933, as amended,  pursuant to
Section 4(2) thereof, and Rule 506 of Regulation D.

     In January of 2004,  the Company  entered  into a financing  program with a
U.S. investment fund entity that wants to remain confidential. The terms of this
program  include a six-month Note payable at maturity in July 2004 for $160,000,
at an effective  annual  interest  rate of 13%. The  transaction  also  included
620,000 warrants good for three years to purchase the Company  restricted stock,
at $0.13 during the first and second year of the warrants,  and $0.15 during the
third and final  year of the  warrants.  These  warrants  include  anti-dilution
provisions,  as well as registration rights in the event that the Company was to
file an  appropriate  registration  statement with the SEC during the next three
years.  The  principle  of the Note is  optionally  convertible  to the  Company
restricted  stock at any time  during the first six months of the Note at 90% of
the  then-current  market value of the Company's  common stock.  In the event of
failure to repay the Note in July 2004,  the Note would be extended  another six
months,  and the effective interest rate would be increased to 15%, and a second
group of  approximately  620,000  warrants  priced at 50% of the average trading
price of the Company's stock would be made  effective,  and the Company would be
required to file a registration  statement for the securities  underlying  these
warrants with 90 days. An officer of the Company provided personal collateral to
support this Note,  which would be forfeited in the event of  non-payment of the
Note.

     In February of 2004,  the Company  entered into a binding  letter of intent
regarding a financing program with a different U.S. investment entity that wants
to  remain  confidential.  The  final  terms of this  transaction  remain  under
negotiation, but the Company intends to use this letter of intent as a new stage
in securing financing for accelerated  research,  development,  and marketing of
its  technology  products over the next one to two years.  The minimum  expected
cost to the Company for this transaction is expected to include 500,000 warrants
at a strike  price of $0.10.  There is no  assurance  that this letter of intent
will result in any additional capital for the Company.


                                       10
<PAGE>

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

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, 2003 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 2002

     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
seven devices and designs.  We plan to continue to develop our existing patented
technologies  as well as develop new  performance-enhancing  devices and designs
for use in the semiconductor and electronics industries when appropriate funding
is available.

     The Company  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 2004, and to develop new sales channels and new
customers for our location  services  products.  The Company's  embedded systems
location  tools  strategy  began to yield small  amounts of revenue  late in the
fiscal year ending  September  30, 2002.  This small  revenue  stream  increased
$63,579  for the fiscal year  ending  September  30,  2003.  Revenues  increased
roughly seven fold to $38,230 in the quarter ended  December 31, 2003,  compared
to $5,455 in for the quarter ending December 31, 2002.

     As of December 31, 2003,  the Company's cash and cash  equivalents  totaled
approximately $749 and total current assets were approximately $100,839.  During
the first week in January 2004, the Company secured a net loan for approximately

                                       11
<PAGE>

$130,000 to assist with short-term cash  requirements (See Liquidity and Capital
Resources  below,  and  Subsequent  Events  above).  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, 2003.  Total  liabilities  at
December 31, 2003 were $716,323.

     Operating  expenses for the three months ended  December 31, 2003 increased
by  approximately  $22,839  to  approximately  $214,734  from  $191,895  in  the
comparable  period  ended  December 31,  2002.  Salaries and benefits  increased
primarily  due to having four full time and three  part-time  employees on staff
for all of the first  quarter of fiscal  2004  compared to two full time and one
part-time  employee for most of the time in the comparable  quarter of 2003. All
other costs and expenses  decreased  significantly in the quarter ended December
31, 2003 compared to the first three months of fiscal year 2003.

     Research and development costs decreased from approximately  $9,690 for the
three  months  ended  December  31, 2002 to  approximately  $4,958 for the three
months ended  December 31, 2003,  primarily  due to the shift of resources  from
capital  intensive  semiconductor  related  development  projects  to more labor
intensive location service technology related projects.

     The Company has focused an increasingly  significant amount of its time and
energy on  development  of new sources of revenue  through  the  building of new
customer  relationships.  This has included increased attendance at trade shows,
increased  expenditures on direct mailings of promotional  literature,  internet
advertising and promotion  through website  listings,  on-site  customer product
demonstrations,  and  other  marketing  related  activities  intended  to foster
customer  acquisition.  The  Company  began  marketing  some of its  products in
December  2003 on cable  television's  Home  Shopping  Network,  and  expects to
continue  this  marketing  activity  in the future with this  organization.  The
Company  has  also  spent  and  plans to  continue  to  spend  resources  on the
development of strategic  partnerships  with other technology firms to assist it
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.

     The  Company  expects  to  continue  to  increase  its  focus on sales  and
marketing of its location tools products for the foreseeable future. As a result
of this effort,  and the revenues that have begun to be generated by this effort
already,  it is possible that the Company may emerge from its development  stage
status at sometime during the current fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2003, our liquidity  included cash and cash  equivalents of
$749 compared to $17,903 at September 30, 2003. Our total cash used in operating
activities from developmental  stage inception in 1998 through December 31, 2003
was  $7,026,151.  We have an  accumulated  deficit  of  $21,968,678  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

                                       12
<PAGE>

firms and/or entities that will incorporate our technologies into their products
and overall  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. We
expect our ability to finance  operations  through  sales to improve  during the
course of this fiscal year.

     In June 2003, the Company commenced a private offering of restricted common
stock and common stock purchase warrants.  The Company raised from this offering
in the quarter  ending  December  31,  2003,  approximately  $80,000 in cash and
issued 800,000 shares of restricted common stock and granted 400,000 warrants to
purchase  common stock at exercise prices ranging from $0.50 to $0.75 per share.
Subsequent to December 31, 2003,  the Company  raised  approximately  $10,000 in
cash and issued  100,000  shares of restricted  common stock and granted  50,000
warrants to purchase  common  stock at an  exercise  price of between  $0.50 and
$0.75 per share. No  underwriters  were involved in connection with this private
placement.  The sales and  issuances of the  securities  issued  pursuant to the
foregoing private  placement are exempt from  registration  under the Securities
Act of 1933,  as amended,  pursuant  to Section  4(2)  thereof,  and Rule 506 of
Regulation D.

     In January of 2004,  the Company  entered  into a financing  program with a
U.S. investment fund entity that wants to remain confidential. The terms of this
program  include a six-month Note payable at maturity in July 2004 for $160,000,
at an effective  annual  interest  rate of 13%. The  transaction  also  included
620,000 warrants good for three years to purchase the Company  restricted stock,
at $0.13 during the first and second year of the warrants,  and $0.15 during the
third and final  year of the  warrants.  These  warrants  include  anti-dilution
provisions,  as well as registration rights in the event that the Company was to
file an  appropriate  registration  statement with the SEC during the next three
years.  The  principle  of the Note is  optionally  convertible  to the  Company
restricted  stock at any time  during the first six months of the Note at 90% of
the  then-current  market value of the Company's  common stock.  In the event of
failure to repay the Note in July 2004,  the Note would be extended  another six
months,  and the effective interest rate would be increased to 15%, and a second
group of  approximately  620,000  warrants  priced at 50% of the average trading
price of the Company's stock would be made  effective,  and the Company would be
required to file a registration  statement for the securities  underlying  these
warrants with 90 days. An officer of the Company provided personal collateral to
support this Note,  which would be forfeited in the event of  non-payment of the
Note.

     We  believe  that our  current  cash  position  as of  December  31,  2003,
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 (See Subsequent Events above),  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.

                                       13
<PAGE>

     Cash used in  operations  was  approximately  $74,654 for the three  months
ended  December  31, 2003  compared  with  approximately  $131,737 for the three
months ended December 31, 2002. The decrease in cash used in operations resulted
from salary deferrals,  and reductions in other operating expense related areas.
Additionally,  management has sought to reduce cash uses wherever  possible.  We
are  continuing  efforts  to  lower  our  consumption  of cash  through  expense
reduction and through increases in product sales.

ITEM 3. CONTROLS AND PROCEDURES

     The Company's Chief Executive  Officer and Acting Chief Financial  Officer,
Michael A. Grollman,  after  reviewing and  evaluating the Company's  disclosure
controls  and  procedures  within 90 days prior to the filing of this  quarterly
report has  concluded  that the  Company's  disclosure  controls and  procedures
contained no significant  deficiencies or material weakness.  There have been no
significant  changes in the Company's internal controls that could significantly
affect these  controls  subsequent  to the date of their  evaluation,  including
corrective actions.


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, 2003.  Although the outcomes of any such
legal actions cannot be predicted,  in the opinion of  management,  there are no
legal  proceeding  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, 2003,  47,646  restricted common
shares were issued for services at an average market price of $0.14.

     On December 31, 2003,  the Company  issued  1,500,000  shares of restricted
common stock at an average market price of $0.10 to convert accumulated back pay
to stock as part of a buy back plan to conserve cash resources.

     The warrants outstanding as of December 31, 2003 are as follows:


                                       14
<PAGE>

                                            NUMBER
                                              OF       EXERCISE
                                            SHARES      PRICE      EXPIRES
                                          ---------    --------    -------

Outstanding at September 30, 2001         1,500,000    $   0.12      1/02
Exercised                                   770,500
Expired                                     729,500
New Issues                                  412,201    $   1.67     11/04
                                          ---------
Outstanding at September 30, 2002           412,201
Expired                                          --
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
New Issues                                  400,000    $   0.75      6/06
                                          ---------
Outstanding at December 31, 2003          7,812,201
                                          ---------

     On December 1, 2000, the Board of Directors  instituted a Stock Option Plan
(2000 Plan).  The Board is of the opinion that it is in the best interest of NSC
to reserve not less than  7,000,000  Common  Shares to provide  adequate  Common
Shares  for the  issuance  to  qualified  individuals  under  the  2000  Plan to
encourage  them to remain in the service of NSC and to promote its  business and
growth strategy.

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.


                                       15
<PAGE>

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

        (a)  Exhibits.

             EXHIBIT
             NUMBER     DESCRIPTION

              31.1      Certification  Pursuant to  Section 302 of the Sarbanes-
                        Oxley Act of 2002

              32.1      Certification  Pursuant to  18 U.S.C.  Section 1350,  as
                        adopted  pursuant to  Section 906 of the  Sarbanes-Oxley
                        Act of 2002

         (b)  Reports on Form 8-K.

              No reports on Form 8-K were filed  during the fiscal quarter ended
              December 31, 2003.


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                   NATIONAL SCIENTIFIC CORPORATION


Date:  February 13, 2004           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


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