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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 MARCH 31, 2004

                                    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  84,228,168  shares  of Common  Stock,  par  value  $.01 per  share,
outstanding at May 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

                  Unaudited Condensed Balance Sheets - March 31, 2004
                  and September 30, 2003....................................  3

                  Unaudited Condensed Statements of Operations -
                  Three and Six Months ended March 31, 2004, 2003
                  and Cumulative from October 1, 1997 (Inception)
                  through March 31, 2004....................................  4

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

                  Unaudited Condensed Statement of Changes in
                  Shareholders' Equity (Deficit) - Six Months Ended
                  March 31, 2004............................................  6

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

         Item 2 - Management's Discussion and Analysis of Financial
                  Condition and Results of Operations....................... 13

         Item 3 - Controls and Procedures................................... 17

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........................... 18

         Item 4 - Submission of Matters to a Vote of Security Holders....... 18

         Item 5 - Other Information......................................... 18

         Item 6 - Exhibits and reports on Form 8-K.......................... 18

Signatures.................................................................. 19

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
                      MARCH 31, 2004 AND SEPTEMBER 30, 2003

                                                     MARCH 31,    SEPTEMBER 30,
                                                       2004           2003
                                                   ------------   -------------
                          ASSETS

Current Assets:
   Cash and cash equivalents                       $     14,748    $     17,903
   Cash in esrow  account                               534,691              --
   Trade receivables, net of reserve
     of $18,169 at March 31, 2004 and
     $8,169 at September 30, 2003                        30,000          28,200
   Inventory                                             60,374           9,700
   Other assets                                          37,425          16,926
                                                   ------------    ------------
       Total current assets                             677,238          72,729

   Property and equipment, net                           25,618          32,081
   Deposits                                               5,031           5,031
                                                   ------------    ------------
                                                   $    707,887    $    109,841
                                                   ============    ============

  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                $    266,879    $    185,725
   Accrued expenses                                     333,238         457,695
   Deposits                                                  --          20,000
   Notes payable                                        201,000          10,000
                                                   ------------    ------------
       Total current liabilities                        801,117         673,420

   Notes payable, net of current portion                 43,250          43,250
                                                   ------------    ------------
       Total Liabilities                                844,367         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
     79,700,783 and 70,633,819 outstanding
     at March 31, 2004 and September 30, 2003
     respectively                                       797,007         706,338
   Additional paid-in capital                        21,242,603      20,444,733
   Accumulated deficit                              (22,176,090)    (21,757,900)
                                                   ------------    ------------
       Total shareholders' equity (defecit)            (136,480)       (606,829)
                                                   ------------    ------------
                                                   $    707,887    $    109,841
                                                   ============    ============

    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 THREE AND SIX MONTHS ENDED MARCH 31, 2004, 2003 AND DEVELOPMENT STAGE

<TABLE>
<CAPTION>
                                    Three Months      Three Months       Six Months       Six Months
                                       Ended             Ended             Ended             Ended          Development
                                   March 31, 2004    March 31, 2003    March 31, 2004    March 31, 2003        Stage
                                   --------------    --------------    --------------    --------------    -------------
<S>                                <C>               <C>               <C>               <C>               <C>
Revenues                           $       36,308    $       13,093    $       74,538    $       18,548    $   1,061,976
Cost of Sales                              24,856             1,477            55,998             4,790          984,627
                                   --------------    --------------    --------------    --------------    -------------
Gross profit                               11,452            11,616            18,540            13,758           77,349

Costs and expenses
  Salaries and benefits                   112,346           113,243           257,395           179,376        2,579,240
  Research and development                  4,440            12,087             9,398            21,777        3,727,491
  Stock compensation                       22,290            97,080            28,293           109,980        3,114,990
  Consulting fees, related party               --             7,500                --            15,000        8,175,973
  Other                                    72,446           (51,500)          131,170            44,172        2,597,197
                                   --------------    --------------    --------------    --------------    -------------
      Total costs and expenses            211,522           178,410           426,256           370,305       20,194,891
                                   --------------    --------------    --------------    --------------    -------------
Loss from operations                     (200,070)         (166,794)         (407,716)         (356,547)     (20,117,542)
                                   --------------    --------------    --------------    --------------    -------------
Other income (expense)
  Interest and other income                    --                --                --                --          173,228
  Interest expense                         (7,342)             (979)          (10,474)           (2,123)         (47,874)
  Loss on disposal of assets                   --                --                --                --               --
                                   --------------    --------------    --------------    --------------    -------------
                                           (7,342)             (979)          (10,474)           (2,123)         125,354
                                   --------------    --------------    --------------    --------------    -------------

Loss before income taxes                 (207,412)         (167,773)         (418,190)         (358,670)     (19,992,188)
Income tax expense                             --                --                --                --               --
                                   --------------    --------------    --------------    --------------    -------------
Net loss                           $     (207,412)   $     (167,773)   $     (418,190)   $     (358,670)   $ (19,992,188)
                                   ==============    ==============    ==============    ==============    =============
Net loss per common share,
basic and diluted                  $        (0.00)   $        (0.00)   $        (0.01)   $        (0.01)
                                   ==============    ==============    ==============    ==============
</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 SIX MONTHS ENDED MARCH 31, 2004, 2003 AND DEVELOPMENT STAGE

<TABLE>
<CAPTION>
                                                              2004            2003         DEVELOPMENT
                                                                                              STAGE
                                                          ------------    ------------    -------------
<S>                                                       <C>             <C>             <C>
Cash flows from operating activities:
   Net loss                                               $   (418,190)   $   (358,670)   $(19,781,410)
   Adjustments to reconcile net loss to net
   cash used in operating activities:
      Non cash transactions
         Depreciation                                            6,463           6,462          71,658
         Loss on disposal of assets                                 --              --          30,960
         Impairment loss on equipment                               --              --          64,187
         Stock and options issued for services, net             28,293         142,750      11,611,005
      Decrease (increase) in inventory                         (50,674)          6,094         (60,374)
      Deferred offering costs                                       --              --         (85,171)
      Decrease (increase) in receivables                        (1,800)             --         101,631
      Decrease (increase) in other assets                      (20,499)        (10,394)        (33,516)
      Increase in accounts payable and accrued expenses        172,252        (122,564)        845,378
                                                          ------------    ------------    ------------
           Net cash (used in) operating activities            (284,155)       (336,322)     (7,235,652)
                                                          ------------    ------------    ------------
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:
   Increase in notes payable                                   196,000          15,000         196,000
   Draws on the line of credit                                      --              --         430,000
   Loan from (to) officer                                           --              --          65,079
   Repayment of notes payable                                   (5,000)             --        (115,000)
   Repayment of line of credit                                      --              --        (430,000)
   Repayment of capital lease obligations                           --              --          (1,819)
   Proceeds from the exercise of options                            --          29,058         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)         10,000              --
   Proceeds from issuance of common stock                      644,691         300,000       6,796,480
                                                          ------------    ------------    ------------
           Net cash provided by financing activities           815,691         354,058       8,129,114
                                                          ------------    ------------    ------------

Net (decrease) increase in cash and cash equivalents           531,536          17,736         545,820
Cash and cash equivalents, beginning of period                  17,903           1,405           3,619
                                                          ------------    ------------    ------------
Cash and cash equivalents, end of period                  $    549,439    $     19,141    $    549,439
                                                          ============    ============    ============
Supplementary Disclosure of Cash Flow Information:

Cash paid for interest                                    $      5,211    $         --          30,685
                                                          ============    ============    ============
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 SIX MONTHS ENDED MARCH 31, 2004

<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
Price per share ranged
   $0.14                                  47,646          476       --             --          5,527             --           6,003
   $0.155                                 33,000          330       --             --          4,274             --           4,604

Common stock options granted                  --           --       --             --         13,491             --          13,491

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

Private placement of common stock
Shares issued for:
   $0.10                               1,100,000       11,000       --             --         99,000             --         110,000
   $0.11                               5,886,318       58,863       --             --        475,828             --         534,691

Stock retainage program                  500,000        5,000       --             --         64,750             --          69,750

Net loss                                      --           --       --             --             --       (418,190)       (418,190)

                                      ----------   ----------   ---------    --------   ------------   ------------    ------------
Balance, March 31, 2004               79,700,783   $  797,007       --       $     --   $ 21,242,603   $(22,176,090)   $   (136,480)
                                      ==========   ==========   =========    ========   ============   ============    ============
</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  six  months  ended  March  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, 2003, and the Company's quarterly
report on Form 10-QSB for the fiscal period ended December 31, 2003.

2.   ISSUANCE OF COMMON STOCK

     During the three  months ended March 31, 2004,  the Company  continued  the
private offering of restricted common stock,  commenced in June 2003. During the
six months ended March 31, 2004,  the Company raised  approximately  $110,000 in
cash and issued 1,100,000 shares of restricted  common stock and granted 550,000
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.

     During the three months ended March 31, 2004, 33,000 shares of common stock
were  issued for board  services at an average  market  price per share price of
$0.155

     In January, 2004, the Company, under the restricted stock retainage program
initiated  in September  2002,  and more fully  described in the Company  10-KSB
filing for the fiscal year ended  September 30, 2002, and September 30, 2003 and
also in the Company Proxy Statements for 2003 and 2004, issued 500,000 shares of
common  stock  at an  average  price  of  $0.155.  The  shares  were  issued  as


                                       7
<PAGE>

compensation  to retain  key staff that had to forgo some  salary  payments  for
significant  portions of this period as well as  previous  periods.  These share
grants are subject to risk of forfeiture  should the Company not achieve certain
objectives during calendar year 2004.

     On March 15, 2004, the Company  commenced a private  offering of restricted
common stock units through a placement agent. During the quarter ended March 31,
2004, the Company raised approximately $534,691 net of costs, in cash and issued
5,886,318  shares of restricted  common stock at a price of $0.11 per share, and
granted  4,414,739  warrants to purchase  common  stock at an exercise  price of
$0.11 per share  (For  additional  detail of the total  proceeds  raised in this
offering  as of the  date of this  report,  see  Subsequent  Events  below).  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. The
cash in escrow as of March 31, 2004  represents  investor  funds  collected from
this  private  placement  as of the  end  of  this  quarter.  These  funds  were
transferred  from escrow to the Company main cash account upon the first closing
of this private placement on April 8, 2004 (see Subsequent Events below).

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 March 31, 2004, 170,000  non-qualified  stock
options  were  granted  under  the 2000  Stock  Option  Plan at  $0.15,  250,000
non-qualified  stock  options were  cancelled at $0.15 and 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 March 31, 2004.  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
March 31, 2004,  3,244,757  outstanding  stock  options  were vested,  and fully
exercisable, and 5,000 were not vested.


                                       8
<PAGE>

     In accordance with The Statement of Financial  Accounting  Standards (SFAS)
148, 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
   Add: Granted                                    170,000             0.15
   Deduct:Forfeited                               (250,000)           (0.15)
                                                 -------------------------------
Options Outstanding, March 31, 2004              3,249,757           $ 0.92
                                                 ===============================

     Had the  Company  fully  adopted  SFAS 148,  the  Company's  net income and
earnings per share would approximate the following pro forma amounts:

                                         Three Months             Three Months
                                            Ended                     Ended
                                        March 31, 2004           March 31, 2003
                                        ---------------------------------------

Net ( loss) income:
   As reported                          $     (207,412)          $     (167,773)
   Pro forma                                  (207,412)                (175,009)

Basic (loss) earnings per share:

   As reported                          $        (0.00)          $        (0.00)
   Pro forma                                     (0.00)                   (0.00)


     During the three months ended March 31, 2004, the Company  issued  warrants
in conjunction  with its June 2003 private  placement  offering (see Issuance of
Common Stock above),  its January 2004 debt offering (see  Borrowing  below) and
its March 15, 2004  private  placement  offering  (see  Issuance of Common Stock
above). The table below summarizes all outstanding  warrants  obligations of the
Company as of March 31, 2004:


                                        9
<PAGE>

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

                                         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        5/04
                                       ----------
Outstanding at September 30, 2002         412,201

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                                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
                                       ----------

Outstanding at March 31, 2004          13,516,940
                                       ----------


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):


                                       10
<PAGE>

                                                      Six months ended
                                                          March 31
                                               ----------------------------
                                                   2004             2003
                                               -----------      -----------
Basic net income (loss) per common share:

Net income (loss)                              $ (418,190)      $  (358,670)
                                               ==========       ===========
Basic per share amount                         $    (0.01)      $     (0.01)
                                               ==========       ===========


5.   BORROWINGS

     On June 11, 2003, the Company issued a three-year interest free convertible
note to its then-Director Mr. Lou Ross of $43,250,  with no payments required of
the Company until the end of the three-year  period,  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 in September 30, 2003.

     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's  restricted
stock, at $0.13 during the first and second year of the warrant's lifetime,  and
$0.15 during the third and final year of the warrant's lifetime.  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's 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  within 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.  This $160,000 Note was paid in full in May of 2004
(See Subsequent Events below).

     During March 2004, an Officer of the Company raised  approximately  $36,000
using his  personal  credit from a group of  shareholders  in  consideration  of
short-term  personal promissory notes to assist the Company with very short-term
cash  requirements.  The notes carried  effective  annual interest rates of less


                                       11
<PAGE>

than 10%, plus minor processing fees.  These notes were  subsequently  repaid in
full in April 2004 (See Subsequent Events below).

6.   SUBSEQUENT EVENTS

     On April 8, 2004,  the  Company  executed  an initial  closing of a private
placement  equity  offering  ("Offering")  of units that  commenced on March 15,
2004, with aggregate gross proceeds of approximately  $1.1 million.  As of April
8, 2004, this offering raised a gross amount of approximately $1,136,769 in cash
in  consideration  for the issuance of 10,334,265  shares of  restricted  common
stock and 7,750,700  warrants to purchase  common stock at an exercise  price of
$0.11  per  share.  Each  Unit in the  Offering  consists  of one  share  of the
Company's  common stock and a warrant to purchase  0.75 shares of the  Company's
common stock.  These warrants  carried a strike price of $0.11 per share,  and a
term of five years,  and contain certain  registration  rights in the event that
the Company files a registration  statement to register  shares of its stock. As
of April 8, 2004 the cash  proceeds  to the  Company,  net of  expenses to date,
totaled  $972,864.  No  underwriters  were  involved  in  connection  with  this
offering, but a placement agent was used. The Company intends to use part of the
proceeds  of the private  placement  to finance the  continued  development  and
marketing of its WiFi and RFID related Location Tools(TM) products. In addition,
the Company  plans to use part of the proceeds for expanded  marketing and sales
efforts, for further commercialization of the Company's other Location Tools(TM)
product  line,  and  for  other  corporate  purposes.  The  Units  were  sold to
accredited investors pursuant to an exemption from the registration requirements
of the Securities Act of 1933 (the "Act") and applicable  state  exemptions from
registration.  The securities offered have not been registered under the Act and
they may not be offered or sold in the United States or any state in the absence
of  an  effective   registration  statement  or  an  applicable  exemption  from
registration requirements.

     On April 13, 2004, the Company paid $36,000 to retire promissory notes plus
interest  associated  with  short-term  bridge  financing from an Officer of the
Company  and  several  shareholders,  originally  issued in March of 2004.  (See
Liquidity and Capital Resources below).

     In May 2004, the Company paid off the six-month  note for $160,000  entered
into in January 2004 (See Liquidity and Capital Resources below).



                                       12
<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 AND SIX MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE AND SIX MONTHS ENDED
MARCH 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
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(TM) strategy began to yield small amounts of revenue late in the
fiscal year ended  September 30, 2002.  This small revenue  stream  increased to
$63,579 for the fiscal year ended September 30, 2003. Revenues increased roughly
seven fold to $38,230 in the quarter ended December 31, 2003, compared to $5,455
for the quarter ending December 31, 2002, and were $36,308 for the quarter ended
March 31,  2004,  compared  to $13,093 for the  quarter  ended  March 31,  2003.
Revenues  for the six months  ended  March 31,  2004 were  $74,538  compared  to
$18,548 for the six months ended March 31, 2003.

     As of March 31,  2004,  the  Company's  cash and cash  equivalents  totaled
approximately  $549,439 and total current  assets were  approximately  $677,238.


                                       13
<PAGE>

During  the  first  week in  January  2004,  the  Company  secured a net loan of
approximately   $130,000  to  assist  with  short-term  cash  requirements  (See
Liquidity and Capital Resources below). On March 15, 2004, the Company commenced
a private  offering  of  restricted  common  stock of units  through a placement
agent. During the quarter ended March 31, 2004, the Company raised approximately
$534,691 after costs. 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
March 31, 2004. Total liabilities at March 31, 2004 were $844,367. This increase
is  attributable in part, to the increase of  approximately  $81,000 in accounts
payable due partially to the build up of  inventory,  an increase of $191,000 in
notes payable (For an explanation  see Liquidity and Capital  Resources  below),
and a decrease of $124,000 in accrued expenses due in part from the reduction of
$70,000 in the stock  retainage  program (See  Issuance and Common Stock above),
the  reversal  of  $30,000  of an  accrual  made in early  2001  which  has been
unclaimed and a reduction of approximately  $19,000 of accrued vacation pay. The
adjustment  to the  vacation  pay  accrual  was made  following  a review of the
Company policy on vacation pay.

     Total operating  expenses for the six months ended March 31, 2004 increased
by  approximately  $55,951  to  approximately  $426,256  from  $370,305  in  the
comparable  period  ended  March  31,  2003.  Salaries  and  benefits  increased
primarily  due to the hiring of two full time  engineers  just before the end of
the last fiscal year. Stock  compensation  decreased by $81,687 during the first
six months of fiscal year 2004 almost  offsetting the increase of $89,149 in all
other costs and expenses during the same period.

     Research and development costs decreased from approximately $21,177 for the
six months ended March 31, 2003 to approximately $9,398 for the six months ended
March 31,  2004.  This trend is  expected  to reverse  during the second half of
fiscal year 2004,  as research  funding is planned to increase in the near term.
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,
Internet  advertising and promotion through website  listings,  on-site customer
product  demonstrations,  and other  marketing  related  activities  intended to
foster  customer  acquisition.  The  Company  marketed  some of its  products in
December 2003 on cable  television's  Home Shopping Network and in March 2004 on
the QVC cable television shopping channel.  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 (TM) 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.


                                       14
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 2004,  our  liquidity  included cash and cash  equivalents  of
$549,349  compared  to $17,903 at  September  30,  2003.  Our total cash used in
operating  activities from  developmental  stage inception in 1998 through March
31, 2004 was  $7,235,652.  We have an  accumulated  deficit of  $22,176,090  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  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.  In the quarter ended March 31, 2004
the Company raised  approximately  $30,000 from this offering in cash and issued
300,000  shares of  restricted  common  stock and  granted  150,000  warrants to
purchase  common stock at exercise prices ranging from $0.50 to $0.75 per share.
This  private  offering  was  closed on March 12,  2004.  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's  restricted
stock, at $0.13 during the first and second year of the warrant's lifetime,  and
$0.15 during the third and final year of the warrant's lifetime.  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's 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. This $160,000 Note was repaid in full in May of 2004
(See Subsequent Events above).

     During March 2004, an Officer of the Company raised  approximately  $36,000
using his  personal  credit from a group of  shareholders  in  consideration  of
short-term  personal promissory notes to assist the Company with very short-term


                                       15
<PAGE>

cash  requirements.  The notes carried  effective  annual interest rates of less
than 10%, plus minor processing fees.  These notes were  subsequently  repaid in
full in April 2004 (See Subsequent Events above).

     On March 15, 2004, the Company  commenced a private  offering of restricted
common stock units through a placement agent. During the quarter ended March 31,
2004, the Company raised approximately  $534,691 after costs (gross $647,495) in
cash and  issued  5,886,318  shares  of  restricted  common  stock  and  granted
4,414,739  warrants to purchase  common stock at an exercise  price of $0.11 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.
Additional  funds have been raised as part of this private  offering in April of
2004,  for a gross  amount  as of the date of this  report  of  $1,136,769  (See
Subsequent Events above).

     We believe that our current cash  position as of March 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 (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.

     Cash used in operations was approximately $284,155 for the six months ended
March 31, 2004  compared  with  approximately  $336,322 for the six months ended
March 31, 2003.  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.

     OTHER SUBSEQUENT EVENTS

     In order to advance the company's  product  development time line and sales
requirements, in April 2004 the Company added several new personnel as permanent
employees and also as contractors in the area of sales and marketing, as well as
in product engineering and development.

     In March 2004,  the Company  learned that it was listed on the Berlin Stock
Exchange, even though the Company's officers or directors never applied for such
a listing. The Company's board does not believe this un-solicited listing on the
Berlin Stock Exchange is in the current best interest of its  shareholders,  and
directed its corporate  counsel in May 2004 to request a removal of this listing
until such a time as it can be demonstrated to the Company Board's  satisfaction
that  such a  listing  is in the best  interest  of the  Company's  current  and
prospective  shareholders.  The Company  advises  investors  looking to purchase
shares of National  Scientific  Corporation  to consider only  purchasing  their
shares for the  foreseeable  future from the NASDAQ  Over The  Counter  Bulletin
Board under the trading  symbol NSCT.  The Company has further  indicated it may


                                       16
<PAGE>

take action to evaluate steps that would require all brokers to request physical
delivery of  certificates  to  legitimize  the  exchange of shares on all future
trades.

     In May 2004, the Company  announced plans to ship a new version of its WiFi
tracker tag device,  version 1.2, before the end of the 2nd calendar  quarter of
2004.  This tag is  intended to provide  enhanced  compatibility  with  upcoming
future planned  releases of Ekahau  software,  as well as to offer early NSC tag
customers  substantial  benefits in size and battery life over the 1.1 level NSC
WiFi tag. The Company also announced in May 2004 that it had reached  agreements
with its marketing partners KMH Products and Verify Systems,  to the effect that
the  Company  would take a much more  active and direct  leadership  role in the
sales and marketing of the Company's products with those partners.

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  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 six months ended March 31, 2004, 47,646 restricted common shares
were issued for services at an average  market  price of $0.14.  During the same
period 33,000 shares were issued for board  services at an average  market price
of $0.155.

     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.

                                       17
<PAGE>

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

               31.1      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
              March 31, 2004.


                                       18
<PAGE>

                                   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:  May 13, 2004              By: /s/ Michael A. Grollman
                                     -------------------------------------------
                                     Director, Chairman, Chief Executive
                                     Officer, and Acting Chief Financial Officer


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


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


                                       19