================================================================================

                     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, 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
     (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  67,845,485  shares  of Common  Stock,  par  value  $.01 per  share,
outstanding at May 5, 2003.

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

================================================================================

<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION

                                   FORM 10-QSB

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                PAGE
<S>                                                                                             <C>
Part I - Financial Information

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

         Unaudited Condensed Balance Sheets - March 31, 2003 and September 30, 2002.............  3

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

         Unaudited Condensed Statements of Cash Flows - Six Months ended March 31, 2003, 2002
            and Cumulative from October 1, 1997 (Inception) through March 31, 2003..............  5

         Unaudited Condensed Statement of Changes in Shareholders' Equity (Deficit) - Six
            Months Ended March 31, 2003.........................................................  7

         Notes to Financial Statements..........................................................  8

Item 2 - Management's Discussion and Analysis of Financial or Plan of Operation................. 10

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.............................................. 15

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

Certification................................................................................... 17

Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section 1350
</TABLE>


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)
                        Unaudited Condensed Balance Sheet
                      March 31, 2003 and September 30, 2002
<TABLE>
<CAPTION>
                                                                   MARCH 31,      SEPTEMBER 30,
                                                                      2003             2002
                                                                  ------------    -------------
                                     ASSETS
<S>                                                               <C>             <C>
Current Assets:
   Cash and cash equivalents                                      $     19,141    $       1,405
   Inventory                                                             8,822           14,916
   Other assets                                                         17,856            7,462
                                                                  ------------    -------------
      Total current assets                                              45,819           23,783

Property and equipment, net                                             38,545           45,007
                                                                  ------------    -------------
                                                                  $     84,364    $      68,790
                                                                  ============    =============

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable and accrued expenses                          $    462,893    $     765,457
   Private placement deposits                                           10,000               --
   Notes payable                                                        90,079           75,079
                                                                  ------------    -------------
      Total current liabilities                                        562,972          840,536
                                                                  ------------    -------------

Shareholders' equity (deficit):
   Common stock, par value $.01; 120,000,000
     shares authorized, and shares issued
     63,845,485 and 51,587,062 outstanding at
     March 31,2003 and September 30, 2002
     respectively                                                      638,380          515,871
   Additional paid-in capital                                       20,047,018       19,517,719
   Accumulated deficit                                             (21,164,006)     (20,805,336)
                                                                  ------------    -------------
      Total shareholders' equity                                      (478,608)        (771,746)
                                                                  ------------    -------------
                                                                  $     84,364    $      68,790
                                                                  ============    =============
</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 Three and Six Months Ended March 31, 2003, 2002, and Development Stage
<TABLE>
<CAPTION>
                                       Three Months      Three Months       Six Months        Six Months       Cumulative
                                          Ended             Ended             Ended             Ended          Development
                                      March 31, 2003    March 31, 2002    March 31, 2003    March 31, 2002        Stage
                                      --------------    --------------    --------------    --------------    ------------
<S>                                   <C>               <C>               <C>               <C>               <C>
Revenues                              $       13,093    $           --    $       18,548    $           --    $    904,177
Cost of Sales                                  1,477                --             4,790                --         876,429
                                      --------------    --------------    --------------    --------------    ------------
Gross profit                                  11,616                --            13,758                --          27,748

Costs and expenses
   Salaries and benefits                     113,243           176,822           179,376           384,231       1,917,928
   Research and development                   12,087            44,298            21,777           118,834       3,650,611
   Consulting fees, related party              7,500                --            15,000                --       8,173,323
   Other                                      45,580           244,216           154,152           566,249       5,201,246
                                      --------------    --------------    --------------    --------------    ------------

     Total costs and expenses                178,410           465,336           370,305         1,069,314      18,943,108
                                      --------------    --------------    --------------    --------------    ------------
Net loss from operations                    (166,794)         (465,336)         (356,547)       (1,069,314)    (18,915,360)
                                      --------------    --------------    --------------    --------------    ------------

Other income (expense)
   Interest and other income                      --            30,391                --            90,898         173,228
   Interest expense                             (979)               --            (2,123)             (641)        (27,194)
                                      --------------    --------------    --------------    --------------    ------------
                                                (979)           30,391            (2,123)           90,257         146,034
                                      --------------    --------------    --------------    --------------    ------------

Net loss before income taxes benefit        (167,773)         (434,945)         (358,670)         (979,057)    (18,769,326)
Provision for income taxes (benefit)              --                --                --                --              --
                                      --------------    --------------    --------------    --------------    ------------

Net loss                              $     (167,773)   $     (434,945)   $     (358,670)   $     (979,057)   $(18,769,326)
                                      ==============    ==============    ==============    ==============    ============
Net loss per common share,
basic and diluted                     $        (0.00)   $        (0.01)   $        (0.01)   $        (0.02)
                                      ==============    ==============    ==============    ==============
</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, 2003, 2002, and Development Stage
<TABLE>
<CAPTION>
                                                                                          DEVELOPMENT
                                                              2003            2002           STAGE
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>
Cash flows from operating activities:
   Net loss                                               $   (358,670)   $   (979,057)   $(18,769,326)
   Adjustments to reconcile net loss to net cash used
     in operating activities:
   Noncash transactions:
      Depreciation                                               6,462          15,803          58,733
      Loss on disposal of assets                                    --              --          30,960
      Impairment loss on equipment                                  --              --          64,187
      Stock and options issued for services, net               142,750         193,277      11,381,154
      Warrants issued below market                                  --              --              --
      Decrease (increase) in inventory                           6,094          20,000          (8,822)
      Deferred offering costs                                       --              --         (85,171)
      Decrease in receivables                                       --              --         130,000
      Decrease in other assets                                 (10,394)          5,877          (7,285)
      Increase in accounts payable and accrued expenses       (122,564)        134,166         620,313
                                                          ------------    ------------    ------------
         Net cash used in operating activities                (336,322)       (609,934)     (6,585,257)
                                                          ------------    ------------    ------------
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                                    15,000              --          15,000
   Draws on the line of credit                                      --        (430,000)        430,000
   Loan from (to) officer                                           --              --          65,079
   Repayment of notes payable                                       --              --        (110,000)
   Repayment of line of credit                                      --              --        (430,000)
   Repayment of capital lease obligations                           --              --          (1,819)
   Deferred offering costs                                          --         193,015              --
   Proceeds from the exercise of options                        29,058          31,890         198,590
   Proceeds from the exercise of warrants                           --          92,460          92,460
   Proceeds from equity line of credit                              --         159,198         414,824
   Proceeds from the issuance of preferred stock                    --              --         482,500
   Deposits for private placement                               10,000              --          10,000
   Proceeds from private placement                             300,000              --         300,000
   Proceeds from issuance of common stock                           --              --       5,481,788
                                                          ------------    ------------    ------------
         Net cash provided by financing activities             354,058          46,563       6,948,422
                                                          ------------    ------------    ------------

                                                                                           (Continued)
</TABLE>
                                       5
<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)
            Unaudited Condensed Statements of Cash Flows (Continued)
      For the Six Months Ended March 31, 2003, 2002, and Development Stage
<TABLE>
<CAPTION>
                                                                                          DEVELOPMENT
                                                              2003            2002           STAGE
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>
Net (decrease) increase in cash and cash equivalents            17,736        (563,371)         15,523
Cash and cash equivalents, beginning of year                     1,405         604,761           3,618
                                                          ------------    ------------    ------------
Cash and cash equivalents, end of  the period             $     19,141    $     41,390    $     19,141
                                                          ============    ============    ============

Supplementary Disclosure of Cash Flow Information:

Cash paid during the period for interest                  $         --    $         --          23,618
                                                          ============    ============    ============
Cash paid during the period for income taxes              $         50    $         50             100
                                                          ============    ============    ============
</TABLE>


    The accompanying notes are an integral part of these financial statements



                                       6

<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION
                          (A Development Stage Company)
   Unaudited Condensed Statement of Changes in Shareholders' Equity (Deficit)
                     For the Six Months Ended March 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, 2002      51,587,062   $  515,871           --   $       --   $ 19,517,719    $(20,805,336)   $  (771,746)

Exercise of options                 637,153        6,297           --           --         22,761              --         29,058

Stock issued for services           271,270        2,713           --           --         33,887              --         36,600

Common stock options granted             --           --           --           --         39,070              --         39,070

Debt equity swap                    500,000        5,000           --           --         25,000              --         30,000

Private placement                 7,500,000       75,000           --           --        225,000              --        300,000

Stock retainage program           3,350,000       33,500           --           --        183,580              --        217,080

Net loss                                 --           --           --           --             --        (358,670)      (358,670)

Rounding adjustment                      --           --           --           --              1              --             --
                                 ----------   ----------   ----------   ----------   ------------    ------------    -----------
Balance, March 31, 2003          63,845,485   $  638,380           --   $       --   $ 20,047,018    $ (21,164,006)  $  (478,608)
                                 ==========   ==========   ==========   ==========   ============    =============   ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       7

<PAGE>

                         NATIONAL SCIENTIFIC CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The accompanying  financial statements have been prepared by National Scientific
Corporation, 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 and
six months ended March 31, 2003 and 2002 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, 2002, and the Company's quarterly
report on Form 10-QSB for the fiscal period ended December 31, 2002.

2.   ISSUANCE OF COMMON STOCK

During the three months ended March 31, 2003, the Company  raised  approximately
$5,660 in consideration for the issuance of 108,500 shares of common stock under
common stock option  agreements,  primarily to consultants  for services.  These
shares were issued at an average market price per share of $0.05.

In November 2002, the Company  commenced a private offering of restricted common
stock and common stock purchase warrants. During the five months ended March 31,
2003, the Company  raised  approximately  $330,000 in cash and debt  forgiveness
from the private offering in consideration  for the issuance of 8,000,000 shares
of common stock.  These shares were issued at an average  market price per share
of $0.04.

In January,  2003, the Company,  under the restricted  stock  retainage  program
initiated in September  2002, and described in the Company 10-KSB filing for the
year ending September 30, 2002, and also in the Company Proxy Statement for 2003
filed January 27, 2003,  issued  3,350,333  shares of common stock at an average
price of $0.06 or 90% of the price on the grant date of September 30, 2002.

Also during the three  months  ended March 31,  2003,  204,464  shares of common
stock were  issued for  services at an average  market  price per share price of
$0.14.


                                       8
<PAGE>

During the quarter ended March 31, 2003, Mr. Lou Ross, currently a Director, was
paid for his services as an active  member of the board in shares of  restricted
common stock,  in lieu of cash. The former Chairman  received 54,464  restricted
common  shares  at an  average  market  price on the date of grant of $0.14  per
share.

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,  2003,  non-qualified  stock  options
totaling  196,000 were granted  under the 2000 Stock Option Plan,  at an average
exercise  price of $0.08 per share.  Also  during the same  period,  options for
108,500 shares were exercised at $0.05 per share.

The Company adopted APB Opinion 25 and related interpretations in accounting for
the plan.  Accordingly,  compensation expense is equal to the difference between
the exercise price of the options granted and the fair value of the common stock
at the date of grant.  Compensation  of  $104,580  has been  recognized  for the
fiscal  quarter  ended March 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 March 31,  2003,  3,501,676
outstanding stock options were vested,  and fully  exercisable,  and 10,000 were
not vested.

In accordance  with APB Opinion 25, 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, 2002       3,582,829         $ 1.97
        Granted                                      556,000           0.05
        Exercised                                    627,153           0.05
                                                --------------------------------
     Options Outstanding, March 31, 2003           3,511,676          $2.01
                                                ================================

Had the Company fully adopted SFAS 123, the second quarter loss from  operations
would have been $(175,009) down from $(513,067) for the comparable  period ended
March 31,  2002 and basic loss per share  would have been  $(0.00)  compared  to
$(0.01) for the six months to March 31, 2002.


                                       9
<PAGE>

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 thousands except shares and per share amounts):

                                            Three months ended
                                                 March 31
                                       ----------------------------
                                           2003            2002
                                       ----------------------------
     Basic net income (loss) per
     common share:

     Net income (loss)                 $   (167,773)   $   (434,945)
                                       ============================
     Weighted average common
     shares                              57,141,650      49,211,280
                                       ============================

     Basic per share amount            $      (0.00)   $      (0.01)
                                       ============================

6.   SUBSEQUENT EVENTS

In November 2002, the Company  commenced a private offering of restricted common
stock and common stock  purchase  warrants.  As of May 5, 2003,  the Company had
raised  approximately  $490,000 in cash and debt  forgiveness  from this effort.
Subsequent to the end of March 31, 2003, the Company issued  4,000,000 shares of
restricted  common  stock  and  granted  16 "A"  warrants  to  purchase  100,000
additional common stock shares. The warrants are exercisable at a price of $0.30
until  December 31, 2004.  As part of this  transaction,  the $10,000  liability
entry  shown on the  balance  sheet for the  period  ending  March 31,  2003 for
private placement deposits was converted to equity. No underwriters are 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.


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


                                       10
<PAGE>

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 MARCH 31, 2003 COMPARED TO THREE AND SIX MONTHS ENDED
MARCH 31, 2002

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  roughly  doubled to $5,455 in the first  quarter of the current
fiscal year,  and then has more than doubled again in this most  recently  ended
quarter to $13,093.  This  compares  with no revenue  generated  during the same
quarters of the  previous  fiscal  year,  prior to the  adoption of the location
services  business model. This growth in revenue over the last three quarters is
attributed  to product  introductions  from its Followit,  DarkStar,  and Gotcha
lines,  only some of which were  available  for sale during the  quarter  ending
March 31, 2003, as well as revenues related to design services that quarter. The
Company  expects all these product lines can contribute  some revenue during the
fiscal quarter ending June 30, 2003.

As  of  March  31,  2003,  the  Company's  cash  and  cash  equivalents  totaled
approximately  $19,141 and total current assets were approximately  $45,819.  In
conjunction  with the Company's annual Form 10-KSB for the year ending September
30, 2002, and the Company's quarterly Form 10-QSB for the period ending December
31,  2002,   accounts   payable   liabilities   were   presented  that  included
approximately  $150,000 to its largest creditor,  a services firm. In late March
of 2003,  the  Company  came to a  definitive  settlement  agreement  with  this
creditor  regarding this debt. The result of this agreement was the  elimination
of approximately $150,000 of short-term liability previously owed by the Company
to this creditor.  The Company was able to eliminate these  liabilities  without
the use of cash or stock.  This settlement  resulted in a positive impact to the
Company's net income of approximately  $150,000 for the quarter ending March 31,
2003.  As of March 31,  2003,  the Company has a $10,000  liability  for private
placement  deposits.  Subsequent to March 31, 2003,  the liability was converted
entirely into equity,  in connection with the issuance of shares under the April
2003 private placement (See Liquidity and Capital Resources).

On April 29,  2002 Mr.  Lou Ross,  sold  240,000  shares of common  stock in the
Company.  The proceeds (net of sales  commission)  of $41,125 were loaned to the
Company.  The loan,  which  bears 6%  interest  per annum,  is payable in twelve
monthly  installments  of $3,649  beginning  October 29, 2002. In July 2002, Mr.
Ross,  sold 260,000 shares of common stock in the Company.  The proceeds (net of
sales  commission) of $34,000 were loaned to the Company.  The loan, which bears
6% interest per annum,  is payable in twelve  installments  of $3,022  beginning
February  28,  2003.  The Company is not current on its  payments  for either of
these Notes.

In March 2003, the Company  settled a lawsuit with a landlord of leased property
in California that was vacated as part of its corporate consolidation. A balance
of $15,000  remains to be paid to the landlord in six quarterly  installments of
$2,500 commencing on or before June 15, 2003.


                                       11
<PAGE>

We believe that our current cash position, including cash funds arising from the
exercise  of   outstanding   options,   and  secured  plant  assets  from  legal
settlements,  equity private placement,  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.

Operating  expenses  for the six months  ended March 31,  2003 of  approximately
$370,305 are down from the  comparable  period ended March 31, 2002,  which were
approximately  $1,069,314.  This decrease was primarily due to staff  reductions
and the shift away from investments in semiconductor technology development.

Salary and benefits  have  decreased  for the six months ended March 31, 2003 by
approximately  $204,855 from the six months ended March 31, 2002.  This decrease
is  attributable  to the staff  reductions and the movement of some staff from a
full time to part time basis.

Research and development  costs have decreased from  approximately  $118,834 for
the six months ended March 31, 2002 to approximately  $21,177 for the six months
ended March 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
distributor and 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 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  research  and  implement  innovative  ways to take its  technology
expertise and products to market,  across its entire  portfolio of semiconductor
and electronics related devices.



                                       12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2003, our liquidity  included cash and cash  equivalents of $19,141
compared  to $1,405 at  September  30,  2002.  Our total cash used in  operating
activities from developmental stage inception in 1998 through March 31, 2003 was
$6,585,257.  We have an accumulated  deficit of  $21,164,006  million 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.  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  only just  recently,  through  the sale of our  products.  We expect our
ability to finance operations through sales to improve during the course of this
fiscal year.

In November 2002, the Company  commenced a private offering of restricted common
stock and common stock  purchase  warrants.  As of May 5, 2003,  the Company had
raised approximately $490,000 in cash and debt forgiveness from this effort.  No
underwriters are 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.

We believe that our current cash position, including cash funds arising from the
exercise  of   outstanding   options,   and  secured  plant  assets  from  legal
settlements,  equity private placement,  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  $336,322  for the six months ended
March 31, 2003  compared  with  approximately  $609,934 for the six months ended
March 31, 2002.  The  decrease in cash used in  operations  resulted  from staff
reductions,  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 reductions.

SUBSEQUENT EVENTS

In April and May of 2003,  the Company also began making its sales and shipments
of its IBus  technology to Verify  Systems.  These initial  orders are for pilot
projects  planned at a variety of schools during the summer of 2003. The Company
was providing  early factory samples of its Gotcha units to field sales staff in
March and April of 2003, and as of May 13, 2003, was targeting very late May for
first production quality shipments of its Gotcha line.


                                       13
<PAGE>

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, 2002.  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.

The Company was awarded a default judgment of  approximately  $179,000 in May of
2003 against  E4World  Corporation.  However,  there is no assurance that any of
this amount will be collected  by NSC. The Company  continues to press its claim
to  secured  assets  held by PSI in a  separate  matter,  although  there  is no
assurance that this claim will be collected by NSC.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

During the six months ended March 31, 2003,  121,270  restricted  common  shares
were issued for  consulting  services at a total value of $15,000.  In addition,
637,153  common  shares were issued in  connection  with the exercise of options
granted under the 2000 Stock Option Plan. These options had an exercise price of
$0.05 per share, resulting in $29,058 of cash proceeds to the Company.

As of April 30,  2003,  there are 412,201  outstanding  warrants to purchase the
Company common stock at $1.67 per share held by Coriander  Enterprises  Limited,
4,700,000 warrants outstanding to purchase the Company common stock at $0.30 per
share,  expiring December 30, 2004, and 200,000 warrants outstanding to purchase
the Company  common stock at $0.50 per share,  expiring  also December 30, 2004.
Coriander  Enterprises  Limited  has  recently  assigned  all  warrants  held by
Coriander Enterprises Limited to Omega Financial International, Inc.



                                       14
<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

         99.1       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, 2003.


                                       15
<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



May 14, 2003                             /s/ Michael A. Grollman
                                         ---------------------------------------
                                         Michael A. Grollman
                                         Chief Executive Officer, Chairman


                                         /s/ Graham Clark
                                         ---------------------------------------
                                         Graham L. Clark
                                         Secretary


                                         /s/ Lou L. Ross
                                         ---------------------------------------
                                         Lou L. Ross
                                         Director and Chairman-Emeritus


                                       16
<PAGE>

                                 CERTIFICATION


I, Michael A. Grollman, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of National Scientific
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal


                                       17
<PAGE>

     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   May 14, 2003


/s/ Michael A. Grollman
------------------------------------------------
Michael A. Grollman
President, Chief Executive Officer, and Chairman



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