SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]  Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

                  For the quarterly period ended June 30, 2004

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from __________________ to ______________________.

                         Commission file number 0-14266

                         UNIVERSAL DETECTION TECHNOLOGY
        (Exact Name of Small Business Issuer as Specified in its Charter)

                CALIFORNIA                                  95-2746949
      (State or Other Jurisdiction of                    (I.R.S. Employer
      Incorporation or Organization)                    Identification No.)

                       9595 WILSHIRE BOULEVARD, SUITE 700
                         BEVERLY HILLS, CALIFORNIA 90212
                    (Address of Principal Executive Offices)

                                 (310) 248-3655
                (Issuer's 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 past 90 days.

                                   Yes X No ___

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock, no par value,
46,983,084 shares issued and outstanding as of August 16, 2004.

     Transitional Small Business Disclosure Format (check one): Yes ___ No X


<PAGE>

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<CAPTION>

                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS

                                                                                     PAGE

<S>                                                                                    <C>
Unaudited Consolidated Balance Sheet                                                   2

Unaudited Consolidated Statements of Operations                                        3-4

Unaudited Consolidated Statements of Changes in Stockholders' Equity (Deficit)         5

Unaudited Consolidated Statements of Cash Flows                                        6

Notes to Unaudited Consolidated Financial Statements                                   7

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                                       1
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<TABLE>
<CAPTION>
                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004

                                     ASSETS

<S>                                                                     <C>
CURRENT ASSETS:
    Cash and cash equivalents                                           $     955,914
      Certificate of deposit                                                  900,990
    Restricted cash                                                           100,978
    Accounts receivable                                                        10,000
    Due from related parties                                                   47,770
    Inventories                                                                20,000
    Prepaid expenses and other current assets                                 293,187
                                                                          --------------

        Total Current Assets                                                2,328,839

FURNITURE AND EQUIPMENT, NET                                                   76,628
                                                                          --------------

            Total Assets                                                $   2,405,467
                                                                          ==============

            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
    Accounts payable, trade                                             $      69,132
    Accrued liabilities                                                       904,444
    Notes payable, related party                                               40,000
    Notes payable                                                           1,257,526
    Accrued interest expense                                                  523,534
                                                                          --------------

        Total current liabilities                                           2,794,636
                                                                          --------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
    Preferred stock, $.01 par value, 20,000,000 shares                            ---
      Authorized, -0- issued and outstanding
    Common stock, no par value, 480,000,000 shares
      Authorized, 44,969,865 issued and outstanding                        19,999,642
    Additional paid-in-capital                                              3,606,891
    Accumulated (deficit)                                                 (23,995,702)
                                                                          --------------

        Total stockholders' equity (deficit)                                 (389,169)
                                                                          --------------

        Total liabilities and stockholders' equity (deficit)            $   2,405,467
                                                                          ==============

     See accompanying notes to unaudited consolidated financial statements.

</TABLE>

                                       2
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<TABLE>
<CAPTION>

                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                          FOR THE THREE MONTHS ENDED JUNE 30,
                                                                2004                2003
                                                           ---------------    --------------

<S>                                                        <C>             <C>
REVENUE                                                    $   25,000      $          ---
                                                           ---------------    --------------

OPERATING EXPENSES:
    Selling, general and administrative                        805,765            184,544
    Research and development                                       ---            169,000
     Marketing                                                 594,173            394,928
                                                           ---------------    --------------

     Total expenses                                          1,399,938            748,472
                                                           ---------------    --------------

(LOSS) FROM OPERATIONS                                      (1,374,938)          (748,472)

OTHER INCOME (EXPENSE):
     Interest income                                             1,364                ---
     Interest expense                                          (39,064)           (52,844)
     Beneficial conversion feature of convertible debt             ---               (651)
     Amortization of loan fees                                     ---            (28,500)
                                                           ---------------    --------------
             Total other income (expense)                      (37,700)           (81,995)
                                                           ---------------    --------------

(LOSS) FROM OPERATIONS BEFORE INCOME TAXES                  (1,412,638)          (830,467)

INCOME TAX EXPENSE                                                 ---                ---
                                                           ---------------    --------------

  NET (LOSS)                                             $  (1,412,638)    $     (830,467)
                                                           ===============    ==============

NET (LOSS) PER SHARE - BASIC AND DILUTED:                $       (0.03)    $        (0.05)
                                                           ===============    ==============

WEIGHTED AVERAGE SHARES - BASIC AND DILUTED                 41,249,231         15,525,398
                                                           ===============    ==============
 </TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                       3
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<TABLE>
<CAPTION>
                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                          FOR THE SIX MONTHS ENDED JUNE 30,
                                                                2004              2003
                                                           ---------------    --------------
<S>                                                        <C>             <C>
REVENUE                                                  $      25,000     $          ---
                                                           ---------------    --------------

OPERATING EXPENSES:
     Selling, general and administrative                     1,460,018            249,077
     Research and development                                      ---            169,000
     Marketing                                               1,400,384            430,309
                                                           ---------------    --------------

     Total expenses                                          2,860,402            848,386
                                                           ---------------    --------------

(LOSS) FROM OPERATIONS                                      (2,835,402)          (848,386)

OTHER INCOME (EXPENSE):
     Interest income                                             2,461                 48
     Interest expense                                          (81,427)          (102,627)
     Beneficial conversion feature of convertible debt             ---               (651)
     Amortization of loan fees                                 (43,260)           (58,500)
                                                           ---------------    --------------
             Total other income (expense)                     (122,226)          (161,730)
                                                           ---------------    --------------

(LOSS) FROM OPERATIONS BEFORE INCOME TAXES                  (2,957,628)        (1,010,116)

INCOME TAX EXPENSE                                                 ---                ---
                                                           ---------------    --------------


  NET (LOSS)                                             $  (2,957,628)    $   (1,010,116)
                                                           ===============    ==============

NET (LOSS) PER SHARE - BASIC AND DILUTED:                $       (0.07)    $        (0.07)
                                                           ===============    ==============

WEIGHTED AVERAGE SHARES - BASIC AND DILUTED                 39,489,581         14,100,585
                                                           ===============    ==============

</TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                       4
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<TABLE>
<CAPTION>

                                UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                    FOR THE SIX MONTHS ENDED JUNE 30, 2004

                                                                                                                        Total
                                                 Common Stock                 Additional          Accumulated       Stockholders'
                                                                                                                       Equity
                                           Shares            Amount        Paid-in-Capital         (Deficit)          (Deficit)
                                        -------------     -------------    -----------------     --------------    ----------------

<S>                                     <C>            <C>                  <C>                 <C>                <C>
BALANCE, DECEMBER 31, 2003              35,002,197     $  15,705,055          $   3,606,891     $  (21,038,074)    $ (1,726,128)

Stock issued in private
   placements net of offering
   costs of $585,514                     9,857,668         4,245,587                    ---                ---        4,245,587

Stock issued for services                  110,000            49,000                    ---                ---           49,000

Net (loss) for the period                      ---               ---                    ---         (2,957,628)      (2,957,628)
                                        -------------     -------------    -----------------     --------------    ----------------

BALANCE, JUNE 30, 2004                  44,969,865     $  19,999,642          $   3,606,891      $ (23,995,702)    $   (389,169)
                                        =============     =============    =================     ==============    ================




                           See accompanying notes to unaudited consolidated financial statements.

</TABLE>
                                                         5
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<TABLE>
<CAPTION>

                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                            FOR THE SIX MONTHS ENDED JUNE 30,
                                                                2004                 2003
                                                           ----------------     ---------------

CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
<S>                                                          <C>                  <C>
Net (loss)                                                  $(2,957,628)         $(1,010,116)
Adjustments to reconcile net (loss) to net cash (used in)
 operations:
   Stock issued for services                                     49,000               11,280
   Stock issued for loan fees                                       ---               16,500
   Fair market value of repriced warrants                           ---               56,019
   Depreciation                                                   3,646                  ---
   Changes in operating assets and liabilities:
          Accounts receivable                                   (10,000)                 ---
          Prepaid expenses                                      751,968               (3,727)
          Accounts payable and accrued expenses                  65,615               42,803
                                                           ----------------     ---------------

                Net cash (used in) operating activities      (2,097,399)            (887,241)
                                                           ----------------     ---------------

CASH FLOWS FROM (TO) INVESTING ACTIVITIES:

  Purchase of equipment                                         (76,767)                 ---
  Advances to related party                                     (18,671)                 ---
  Payments received on bridge note to related party              50,000                  ---
  Investment in certificate of deposit                         (900,990)                 ---
  (Increase) in restricted cash                                    (745)                 ---
                                                           ----------------     ---------------

             Net cash (used in) investing activities           (947,173)                 ---
                                                           ----------------     ---------------

CASH FLOWS FROM (TO) FINANCING ACTIVITIES:

  Proceeds from issuance of common stock                      4,831,101              839,947
  Payment of offering costs                                    (585,514)            (115,613)
  Proceeds from exercise of warrants                                ---               62,018
  Advances on notes payable                                         ---              145,000
  Payments on notes payable                                    (260,000)             (25,000)
                                                           ----------------     ---------------

              Net cash provided by financing activities       3,985,587              906,352
                                                           ----------------     ---------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                       941,015               19,111

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                   14,899                9,318
                                                           ----------------     ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                     $  955,914             $ 28,429
                                                           ================     ===============
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.


                                       6
<PAGE>


                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to Form
10-QSB and Item 310 of Regulation S-B. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The accompanying unaudited
consolidated financial statements reflect all adjustments that, in the opinion
of management, are considered necessary for a fair presentation of the financial
position, results of operations, and cash flows for the periods presented. The
results of operations for such periods are not necessarily indicative of the
results expected for the full fiscal year or for any future period. The
accompanying financial statements should be read in conjunction with the audited
consolidated financial statements of Universal Detection Technology, formerly
Pollution Research and Control Corp., included in Form 10-KSB for the fiscal
year ended December 31, 2003.

On August 8, 2003, the shareholders approved the change of the name of Pollution
Research and Control Corp. to Universal Detection Technology.

REVENUE RECOGNITION

The Company recognized $25,000 of revenue in accordance with its agreement with
Rutgers University. The Company completed all obligations under the agreement.

NOTE 2. EARNINGS PER SHARE

The Company computes earnings per common share in accordance with Statement of
Financial Accounting Standards No. 128, Earnings per Share (SFAS No. 128). This
Statement simplifies the standards for computing earnings per share (EPS)
previously found in Accounting Principles Board Opinion No. 15, Earnings Per
Share, and makes them more comparable to international EPS standards. SFAS No.
128 replaces the presentation of primary EPS with a presentation of basic EPS.
In addition, the Statement requires dual presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted EPS
computation. However, such presentation is not required if the effect is
antidilutive. Accordingly, no such presentation has been made.

NOTE 3. STOCKHOLDERS' EQUITY

During the three months ended June 30, 2004, the Company sold 5,344,200 shares
of common stock for a total of $2,712,459. Certain investors received warrants
to purchase 5,205,000 shares of the Company's common stock at $0.50 and $0.70
per share in connection with the sale of stock, which expire in June 2009.. The
Company paid placement fees totaling $362,319 which includes $5,012 in placement
fees to a company in which its President and CEO has an equity interest and
$357,307 in placement fees to unrelated entities. The Company also issued
warrants to purchase 3,123,000 shares of its common stock as placement fees. The
warrants are exercisable at $0.50 per share and expire in July 2009.



                                       7
<PAGE>


                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)
                                  JUNE 30, 2004

NOTE 3. STOCKHOLDERS' EQUITY (CONTINUED)

During the three months ended March 31, 2004, the Company sold 4,513,468 shares
of common stock for a total of $2,118,642. The Company paid placement fees
totaling $223,195 which includes $96,184 in placement fees to a company in which
its President and CEO has an equity interest and $127,011 in placement fees to
an unrelated entity. Certain investors received warrants to purchase 166,668
shares of the Company's common stock at $0.90 per share in connection with the
sale of stock, which expire in February 2007.

In June 2004, the Company issued 10,000 shares of its common stock for
consulting services. The shares were valued at $9,000, the fair market value of
the stock on the date issued.

Pursuant to a binding Letter of Intent dated March 18, 2002, in connection with
the sale of its wholly owned subsidiary, Dasibi Environmental Corp., the Company
was obligated to issue 100,000 shares of its common stock to the purchaser of
Dasibi. During the six months ended June 30, 2004, the Company issued these
100,000 shares of common stock. The shares were valued at $40,000, the fair
market value of the stock on the date issuable.

PRIOR PERIOD ADJUSTMENT

During the quarter ended June 30, 2004, a change was made to the retained
earnings and accrued expenses of the Company to correct the legal judgment
recorded during the year ended December 31, 2002. The Company originally
recorded the amount of damages sought by the plaintiff, rather than the amount
of the final judgment. The Company has retroactively restated net loss for the
year ended December 31, 2002, increasing the net loss from $1,980,718 to
$2,143,218 due to an adjustment of $162,500.

NOTE 4. RELATED PARTY TRANSACTIONS

Effective June 1, 2003, the Company entered into an agreement with a company in
which its President and CEO has an equity interest. The agreement requires the
Company to pay $25,000 per month for investment banking and strategic advisory
services as well as a 10% fee for all debt and equity financing raised by the
Company.

The Company amended the terms of its agreement for investment banking and
strategic advisory services, reducing the monthly payment to a sum no greater
than $5,000 per month commencing April 29, 2004 and for the nine months
thereafter. For the six months ended June 30, 2004, the Company paid a total of
$211,196 under this agreement.

The Company's President and Chief Executive Officer agreed to defer payment of
all accrued wages and future compensation due to him in excess of $150,000 per
year for nine months from April 29, 2004.

Restricted cash consists of a certificate of deposit, which guarantees an
irrevocable letter of credit. The letter of credit has been provided for the
benefit of a related party company in which the Company's president and CEO has
an equity interest.



                                        8
<PAGE>


                 UNIVERSAL DETECTION TECHNOLOGY AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)
                                  JUNE 30, 2004

NOTE 4. RELATED PARTY TRANSACTIONS (CONTINUED)

The Company and the related entity intend to enter into a sub-lease agreement
during 2004. The Company's restricted cash currently guaranteeing its letter of
credit for the benefit of the related party will be incorporated as a condition
of the sub-lease agreement when executed.

NOTE 5. SUBSEQUENT EVENTS

The Company entered into a Settlement Agreement on July 26, 2004 related to
$440,765 of notes payable and related accrued interest. In July 2003, the
Company paid a total of $73,333 towards the debt and agreed to pay a total of
$298,667, including interest through January 2006 in full payment. The
Settlement Agreement provides for an accelerated payment schedule, which would
reduce the total payment made by the Company by approximately $12,000.

In July 2004, the Company issued 795,000 shares of its common stock for proceeds
of $397,500 in a private placement transaction. Certain investors received
warrants to purchase 795,000 shares of the Company's common stock at $0.50 and
$0.70 per share in connection with the sale of stock. The Company paid placement
fees totaling $67,627 to an unrelated entity. The Company also issued warrants
to purchase 477,000 shares of its common stock as placement fees. The warrants
are exercisable at $0.50 per share and have been valued at the fair market value
of $344,871 using the Black-Scholes model. Significant assumptions used in
calculating the fair market value are a 5-year life, 89.31% volatility, and
3.81% risk free interest rates.

During July and August 2004, the Company issued an additional 333,334 shares of
its common stock for proceeds of $150,000 in private placements.

During August 2004, the Company issued 210,000 shares of its common stock per
the terms of an agreement for consulting services. The shares have been valued
at $75,000, the value of the services, and will be recorded as a prepaid expense
to be amortized over the term of the agreement.



                                       9
<PAGE>


ITEM 2. PLAN OF OPERATION.

     The following discussion should be read in conjunction with our
consolidated financial statements, and the related notes included elsewhere in
this Quarterly Report on Form 10-QSB and the Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2003. Certain statements contained herein may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve a number of
risks, uncertainties and other factors that could cause actual results to differ
materially, as discussed more fully herein.

     The forward-looking information set forth in this Quarterly Report on Form
10-QSB is as of August 20, 2004, and we undertake no duty to update this
information. If events occur subsequent to August 20, 2004, that make it
necessary to update the forward-looking information contained in this Form
10-QSB, the updated forward-looking information will be filed with the
Securities and Exchange Commission in a Quarterly Report on Form 10-QSB or a
Current Report on Form 8-K. More information about potential factors that could
affect our business and financial results is included in the section entitled
"Cautionary Statements and Risk Factors."

OVERVIEW

     We primarily are engaged in the research and development of bio-terrorism
detection devices. In August 2002, we entered into a technology affiliates
agreement with JPL, to develop technology for our bio-terrorism detection
equipment. The agreement provides that JPL will develop its proprietary
bacterial spore detection technology for integration into our existing aerosol
monitoring system, resulting in a product which we refer to as the Anthrax Smoke
Detector. Our goal with JPL is to develop a product which provides continuous
unattended monitoring of airborne bacterial spores in large public places, with
real-time automated alert functionality.

PLAN OF OPERATION

     In May 2004, we unveiled the first commercial prototype of our Anthrax
Smoke Detector. We recently completed the software component of our Anthrax
Smoke Detector and expect in the third quarter of 2004 to engage in simulated
tests with particles having anthrax-like properties in order to fine tune our
product. Based on the results we obtain, we intend to order several units with
the modified specifications from a third-party manufacturer that assembled our
first commercial prototype. During the remainder of 2004 and first quarter of
2005, we plan to engage in field testing of these units in different
environments and conditions and to use the empirical data gained from the
testing to further improve the design and functionality of our product. Our
field testing, other than the testing performed by JPL, will be performed
through our collaboration with Rutgers University. Rutgers University plans to
select a site operated by the New York and New Jersey Port Authority in order to
test our product under a real-time environment. Rutgers University will manage
all details relating to the implementation of the program as well as effective
integration of our Anthrax Smoke Detector into the emergency management response
protocol of the test-site facilities.

     After completing our field testing, we plan to initiate orders of our
Anthrax Smoke Detector with a third-party manufacturer based on sales orders we
receive during the following 12 month period. In connection with our sales and
marketing efforts, we hope to sell units to customers in specific sectors in the
market including, sports stadiums, conventions centers, and casinos. We believe
that



                                       10
<PAGE>


these sales will provide us a well-defined customer base to use as a reference
in connection with our marketing campaign in 2005. In August 2004, we retained
KAL Consultants, Inc., to assist us with our marketing and sales efforts. At
this time, we have not entered into any agreements with any third parties
regarding the manufacturing of our product, but one third party has indicated to
us that it will be capable of producing between 50 to 100 units per month.

     During the next 12 month period, we also plan on securing and leasing a
testing facility close to the JPL laboratories where we would be able to
implement a quality assurance program and test our products against the required
specifications before shipping them to customers. We believe that the proximity
to JPL and in particular to California Institute of Technology, which we refer
to as Caltech throughout this report, will help us by utilizing the knowledge of
graduate and PhD students familiar with the project in a consultant or
employment capacity.

     During the first half of 2004, we hired four additional employees and
increased our use of consultants for corporate development purposes, including
further development of our strategic business plan to sell our Anthrax Smoke
Detector. We anticipate hiring up to three additional employees in the next
twelve months, one of whom would concentrate on marketing our Anthrax Smoke
Detector to both the public and private sector. Upon establishment of the
testing facility, we intend to hire up to two employees to assist with the
testing of the products.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by (used in) our operating activities during the six
months ended June 30, 2004, was $2,097,399, and during the six months ended
June, 2003, was ($887,241). Net cash provided by (used in) our investing
activities was ($947,173) during the six months ended June 30, 2004 and $0
during the six months ended June 30, 2003. Net cash provided by financing
activities during the six months ended June 30, 2004, was $3,985,587, and during
the six months ended June 30, 2003 was $906,352. Our total cash and cash
equivalent balance at June 30, 2004, was $955,914, as compared to June 30, 2003,
which was $28,429.

     On April 29, 2004, we commenced a private offering of our securities. In
this private placement, we sold $3.0 million of Units. The offering was made
solely to accredited investors through Meyers Associates, L.P., a registered
broker dealer firm. Each Unit consists of one share of common stock and a Class
A Warrant and a Class B Warrant. The offering price per Unit was $0.50. Both
the Class A and Class B Warrants are exercisable by the holder at any time up to
the expiration date of the warrant, which is five years from the date of
issuance. In the aggregate, the investors purchased 6,000,000 shares of common
stock, Class A Warrants to purchase 3,000,000 shares of common stock at $0.50
per share and Class B Warrants to purchase 3,000,000 shares of common stock at
$0.70 per share. Meyers received a sales commission equal to 10% of the gross
proceeds and payment of 3% of the gross proceeds for a non-accountable expense
allowance for an aggregate payment of $390,000. Meyers and their agents also
received Class A Warrants to purchase an aggregate of 2.4 million shares of
common stock as consideration for their work as placement agent. In connection
with the private placement, we also entered into a consulting agreement with
Meyers for an 18 month term, whereby Meyers will provide us consulting services
related to corporate finance and other financial service matters for $7,500 per
month, as well as Class A Warrants to purchase 1.2 million shares of our common
stock.

     The net proceeds to us from the sale of the Units were approximately $2.5
million. We intend to use the proceeds of the offering for working capital and
general corporate purposes. We agreed to not use any of the proceeds to repay
debt outstanding at the time of the closing of the offering, any accrued but
unpaid salary to our officer, or our monthly consulting fee under our Agreement
for Investment Banking and Advisory Services with Astor Capital, Inc.


                                       11
<PAGE>


     Our working capital deficit at June 30, 2004, was $465,797. Our independent
auditors' report, dated February 4, 2004 (except for note 14, as to which the
date is July 27, 2004, includes an explanatory paragraph relating to substantial
doubt as to our ability to continue as a going concern, due to our working
capital deficit at December 31, 2003, and the sale of our operating subsidiary.
We require approximately $1.8 million to repay indebtedness in the next twelve
months and approximately $1.0 million in the next twelve months to complete our
existing prototype, engage in testing of the device, and revise the technology
or reengineer the device as may be necessary or desirable and otherwise execute
our business plan.

     As a result of the private placement completed in July 2004, we believe
we have sufficient capital to fund our operating expenses for the next 12
months. Our uses of capital during the past two fiscal years have been, and we
anticipate during the next 12 months will be, for:

     o    administrative expenses, including salaries of officers and other
          employees we plan to hire;

     o    research and development of our Anthrax Smoke Detector;

     o    sales and marketing; and

     o    expenses of professionals, including accountants and attorneys.

     We may need to raise additional capital to repay our debt. We currently are
in discussions with several note holders to make scheduled payment arrangements
with respect to those notes. We may need to obtain extensions on some of our
notes as they become due. Historically, we have financed operations through
private debt and equity financings. In recent years, financial institutions have
been unwilling to lend to us and the cost of obtaining working capital from
investors has been expensive. We actively continue to pursue additional equity
or debt financings. If we are unable to pay our debt as it becomes due and are
unable to obtain financing on terms acceptable to us, or at all, we will not be
able to accomplish any or all of our initiatives and will be forced to consider
steps that would protect our assets against our creditors.

RELATED PARTY TRANSACTIONS

     In connection with our recently completed private placement offering, our
Chief Executive Officer agreed that he will defer payment of all accrued but
unpaid bonus and salary, as well as any compensation payable to him in excess of
$150,000 per year, for nine months from April 29, 2004.


                                       12
<PAGE>


     Effective June 1, 2003, we entered into an agreement with Astor Capital,
Inc., pursuant to which we have agreed to pay $25,000 per month for investment
banking and strategic advisory services as well as a 10% fee for all debt and
equity financing raised for us. In connection with our recently completed
private placement offering , we amended this agreement so that the compensation
payable to Astor Capital under the agreement is reduced during the period from
April 29, 2004, and for nine months thereafter, to an amount not to exceed the
sum of $5,000 per month, excluding any fees for placement of securities. The
parties also have agreed to extend the term of the agreement until June 30,
2005.

     We have provided an irrevocable letter of credit for the benefit of Astor
Capital, Inc. in connection with obtaining its office space lease. We currently
are subleasing a portion of this office space and intend to enter into a written
agreement to reflect the sublease in 2004.

     During the three months ended June 30, 2004, we sold 5,344,200 shares of
our common stock for $2,712,459, less offering costs of $362,319, including
$5,012 in placement fees paid to Astor Capital, Inc., a company in which Jacques
Tizabi, our President and CEO, has an equity interest.

CAUTIONARY STATEMENTS AND RISK FACTORS

     The risks and uncertainties described below are not the only risks and
uncertainties we face. Additional risks and uncertainties not presently known to
us or that we currently deem immaterial also may impair our business operations.
If any of the following risks actually occur, our business, results of
operations and financial condition could suffer. In that event the trading price
of our common stock could decline, and our shareholders may lose all or part of
their investment in our common stock. The risks discussed below also include
forward-looking statements and our actual results may differ substantially from
those discussed in these forward-looking statements.

OUR INDEPENDENT AUDITORS' REPORT EXPRESSES DOUBT ABOUT OUR ABILITY TO CONTINUE
AS A GOING CONCERN.

     Our independent auditors' report, dated February 4, 2004 (except for Note
14, as to which the date is July 27, 2004), includes an explanatory paragraph
expressing substantial doubt as to our ability to continue as a going concern,
due to our working capital deficit at December 31, 2003, and the sale of our
operating subsidiary in March 2002. We have experienced operating losses since
the date of the auditors' report and in prior years. We have been unable to pay
all of our creditors and certain other obligations in accordance with their
terms, and as a result, we are in default on certain debt obligations equaling
approximately $250,000, excluding accumulated interest, as of June 30, 2004.
These defaults currently restrict our ability to file registration statements,
including those relating to capital-raising transactions, on Form S-3, which may
make it more difficult for us to raise additional capital. We have limited cash
on hand and short-term investments and we do not expect to generate material
cash from operations this year. We have attempted to raise additional capital
through debt or equity financing and to date have had limited success. In July
2004, we completed a private placement resulting in net proceeds to us of
approximately $2.5 million. The net proceeds from this financing may not be
used, however, to repay any of our outstanding indebtedness as of the closing
date of the financing. If we are unable to obtain financing on terms acceptable
to us, or at all, we will not be able to accomplish any or all of our
initiatives and will be forced to consider steps that would protect our assets
against our creditors.

WE HAVE A HISTORY OF LOSSES AND WE DO NOT ANTICIPATE THAT WE WILL BE PROFITABLE
IN FISCAL 2004.

We do not anticipate having a product for sale until our Anthrax Smoke Detector
is commercialized, which we expect may not occur until the second quarter of
2005. We have not been profitable in the past years and had an accumulated
deficit of approximately $24 million as of June 30, 2004. During the six months
ended


                                       13
<PAGE>


June 30, 2004, we incurred a net loss of approximately $2.96 million. Achieving
profitability depends upon numerous factors, including our ability to develop,
market and sell commercially accepted products timely and cost-efficiently. We
do not anticipate that we will be profitable in fiscal 2004.

WE MAY NEED ADDITIONAL CAPITAL TO FUND OUR RESEARCH AND DEVELOPMENT ACTIVITIES
AND REPAY OUR DEBT.

     If we cannot raise additional capital, we will not be able to pursue our
business strategies as scheduled, or at all, and we may cease operations. The
down-trend in the financial markets has made it extremely difficult for us to
raise additional capital for our research and development activities and other
capital needs or repay our debt. In addition, it is more difficult to raise
additional debt or equity financing while trading on The Over the Counter
Bulletin Board. We recently raised approximately $2.5 million in a private
placement. We believe that this amount should be sufficient to cover our
operating expenses, including research and development activities, for the next
12 months. However, if we are unable to achieve our research and development
goals as scheduled, we may need to raise additional capital. In addition, we
have approximately $1.8 million in debt obligations and we may not use any of
the $2.5 million in proceeds to repay this debt. We currently are in discussions
with several note holders to make scheduled payment arrangements with respect to
those notes. We may seek extensions on some of our notes as they become due. We
cannot assure you that the noteholders will agree to extend the payment dates of
our debt.

IF WE OBTAIN FINANCING, EXISTING SHAREHOLDER INTERESTS MAY BE DILUTED.

If we raise additional funds by issuing equity or convertible debt securities,
the percentage ownership of our shareholders will be diluted. In addition, any
convertible securities issued may not contain a minimum conversion price, which
may make it more difficult for us to raise financing and may cause the market
price of our common stock to decline because of the indeterminable overhang that
is created by the discount to market conversion feature. In addition, any new
securities could have rights, preferences and privileges senior to those of our
common stock. Furthermore, we cannot assure you that additional financing will
be available when and to the extent we require or that, if available, it will be
on acceptable terms.

WE CANNOT GUARANTEE THAT OUR BIO-TERRORISM DETECTION DEVICE WILL WORK OR BE
COMMERCIALLY VIABLE.

If our product development efforts are unsuccessful or if we are unable to
develop a commercially viable product, we would need to consider steps to
protect our assets against our creditors. Our product in development requires
further research, development, laboratory testing and demonstration of
commercial scale manufacturing before it can be proven to be commercially
viable. Potential products that appear to be promising at early stages of
development may not reach the market for a number of reasons. These reasons
include the possibilities that the product may be ineffective, unsafe, difficult
or uneconomical to manufacture on a large scale, or precluded from


                                       14
<PAGE>


commercialization by proprietary rights of third parties. We cannot predict with
any degree of certainty when, or if, we will complete our research, development,
and testing of our Anthrax Smoke Detector.

OUR RELIANCE ON THIRD PARTIES FOR RESEARCH AND DEVELOPMENT MAY AFFECT OUR FUTURE
PROSPECTS.

Our inability to conduct our own research and development may delay or impair
our ability to commercialize our technology. We do not maintain our own
laboratory and we do not employ our own researchers. We contract with third
parties to conduct research and development activities and we expect to continue
to do so in the future. Because we rely on third parties for our research and
development activities, we have less direct control over those activities and
cannot assure you that the research will be done properly or in a timely manner.
The cost and time to establish or locate an alternative research and development
facility to develop our technology could have a materially adverse affect on our
future prospects.

OUR PRODUCTS MAY NOT BE COMMERCIALLY ACCEPTED WHICH WILL ADVERSELY AFFECT OUR
REVENUES AND PROFITABILITY.

If our products are not commercially accepted, we will not recognize meaningful
revenue and may not continue to operate. Our ability to enter into the
bio-terrorism detection device market, establish brand recognition and compete
effectively depends upon many factors, including broad commercial acceptance of
our products. The success of our products will depend in large part on the
breadth of information these products capture and the timeliness of delivery of
that information. The commercial success of our products also depends upon the
quality and acceptance of other competing products, general economic and
political conditions and other factors, all of which can change and cannot be
predicted with certainty. We cannot assure you that our new products will
achieve market acceptance or will generate significant revenue.

WE HAVE NO EXPERIENCE IN PRODUCT MANUFACTURING. WE MAY NOT BE ABLE TO
MANUFACTURE OUR ANTHRAX SMOKE DETECTOR IN SUFFICIENT QUANTITIES AT AN
ACCEPTABLE COST, OR IN A TIMELY FASHION, WHICH COULD HARM OUR FUTURE PROSPECTS.

If we are unable to establish an efficient manufacturing process for the Anthrax
Smoke Detector, our costs of production will increase, our budgeted margins may
decrease, and we may not be able to timely deliver our product to customers. We
remain in the research and development phase of product commercialization. When
and if our Anthrax Smoke Detector becomes available for commercial sale, we will
need to establish the capability to manufacture it. We have no experience in
establishing, supervising, or conducting commercial manufacturing. We plan to
rely on third party contractors to manufacture our product, although we have not
made any formal arrangements yet. Relying on third parties may expose us to the
risk of not being able to directly oversee the manufacturing process, which may
adversely affect the production and quality of our Anthrax Smoke Detector. In
addition, these third party contractors may experience regulatory compliance
difficulty, mechanical shutdowns, employee strikes, or other unforeseeable acts
that may increase the cost of production or delay or prevent production.


                                       15
<PAGE>


WE HAVE NO EXPERIENCE IN PRODUCT MARKETING, SALES, OR DISTRIBUTION. WE MAY NOT
BE ABLE TO MARKET AND DISTRIBUTE OUR PLANNED PRODUCT EFFECTIVELY, WHICH COULD
HARM OUR FUTURE PROSPECTS.

If we are unable to establish a successful sales, marketing, and distribution
operation, we will not be able to generate sufficient revenue in order to
maintain operations. We have no experience in marketing or distributing new
products. We have not yet established marketing, sales, or distribution
capabilities for our Anthrax Smoke Detector. At this time, we have retained KAL
Consultants, Inc. to assist us with our marketing and sales efforts. We also
plan on entering into agreements with third parties to distribute a portion of
our Anthrax Smoke Detectors. If we unable to enter into relationships with third
parties to market, sell, and distribute our products, we will need to develop
our own capabilities. We have no experience in developing, training, or managing
a sales force. If we choose to establish a direct sales force, we will incur
substantial additional expense. We may not be able to build a sales force on a
cost effective basis or at all. Any direct marketing and sales efforts may prove
to be unsuccessful. In addition, our marketing and sales efforts may be unable
to compete with the extensive and well-funded marketing and sales operations of
some of our competitors. We also may be unable to engage qualified distributors.
Even if engaged, they may fail to satisfy financial or contractual obligations
to us, or adequately market our products.

THE MARKET FOR OUR ANTHRAX SMOKE DETECTOR IS RAPIDLY CHANGING AND COMPETITIVE.
NEW PRODUCTS MAY BE DEVELOPED BY OTHERS, WHICH COULD IMPAIR OUR ABILITY TO
DEVELOP, GROW OR MAINTAIN OUR BUSINESS AND BE COMPETITIVE.

Developments by others may render our technology and our Anthrax Smoke Detector
noncompetitive or obsolete, or we may be unable to keep pace with technological
developments or other market factors. Our industry is subject to rapid and
substantial technological change. Competition from other biotechnology
companies, universities, government research organizations and others
diversifying into our field is intense and is expected to increase. Many of
these entities have significantly greater research and development capabilities
and budgets than we do, as well as substantially greater marketing,
manufacturing, financial and managerial resources. These entities could
represent significant competition for us. Our resources are limited and we may
experience technical challenges inherent in developing our technology. Our
competitors have developed or are in the process of developing technologies that
are, or in the future may be, the basis for competition. Our competitors may use
different methods to detect biological pathogens in a manner that is more
effective and less costly than our planned product and, therefore, represent a
serious competitive threat to us.

SHARES ISSUED UPON THE EXERCISE OF OUR OUTSTANDING OPTIONS AND WARRANTS MAY
DILUTE YOUR STOCK HOLDINGS AND ADVERSELY AFFECT OUR STOCK PRICE.

If exercised, our outstanding options and warrants will cause immediate and
possibly substantial dilution to our stockholders. We have issued options and
warrants to acquire our common stock to our employees, consultants, and
investors at various prices, some of which are or may in the future be below the
market price of our stock. As of June 30, 2004, we had outstanding options and
warrants to purchase a total of 20,000,657 shares of common stock. Of these
options and warrants, 16,249,643 have exercise prices above the recent market
price of $0.65 per share (as of August 18, 2004), and 3,751,014 have exercise
prices at or below this recent market price.

THE LOSS OF OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER WOULD DISRUPT OUR
BUSINESS.

Our success depends in substantial part upon the services of Jacques Tizabi, our
President, Chief Executive Officer and Chairman of the Board of Directors. The
loss of or the failure to retain the services of Mr. Tizabi would adversely
affect the development of our business and our ability to realize or sustain
profitable operations. We do not maintain key-man life insurance on Mr. Tizabi
and have no present plans to obtain this insurance.


                                       16
<PAGE>


IF A U.S. PATENT FOR THE BACTERIAL SPORE DETECTION TECHNOLOGY IS NOT ISSUED,
COMPETITORS MAY BE ABLE TO COPY AND SELL PRODUCTS SIMILAR TO OURS WITHOUT PAYING
A ROYALTY, WHICH WOULD HAVE A MATERIALLY NEGATIVE IMPACT ON OUR ABILITY TO
COMPETE.

If our Anthrax Smoke Detector is commercialized, the lack of U.S. or foreign
patent protection could allow competitors to copy and sell products similar to
ours without paying a royalty. The bacterial spore detection technology that is
integrated into our Anthrax Smoke Detector is owned by. On January 31, 2003,
Caltech filed a U.S. patent application covering the technology, which currently
is being reviewed by the U.S. Patent and Trademark Office. Caltech also has a
filed patent application with the European Patent Office. We paid and filed on
behalf of Caltech a patent application in Japan as well. No patents have been
issued and we cannot assure you that any patents will be issued. If a U.S.
patent is not issued, or not issued timely, we may face substantially increased
competition in our primary geographic market.

THE BACTERIAL SPORE DETECTION TECHNOLOGY IS LICENSED TO US BY A THIRD PARTY. IF
WE ARE UNABLE TO CONTINUE TO LICENSE THIS TECHNOLOGY, OUR FUTURE PROSPECTS WOULD
BE HARMED.

The loss of our technology license would require us to cease operations until we
identify, license and integrate into our product another technology, if
available. We license the bacterial spore detection technology from Caltech; if
we fail to fulfill any payment due under the terms of the license agreement or
materially breach the agreement, Caltech may terminate the license. To maintain
our license with them, a minimum annual royalty of $10,000 is due to Caltech on
August 1, 2005, and each anniversary thereof, regardless of any product sales.
Any royalties paid from product sales for the 12-month period preceding the date
of payment of the minimum annual royalty will be credited against the annual
minimum.

WE MAY BE SUED BY THIRD PARTIES WHO CLAIM OUR PRODUCT INFRINGES ON THEIR
INTELLECTUAL PROPERTY RIGHTS. DEFENDING AN INFRINGEMENT LAWSUIT IS COSTLY AND WE
MAY NOT HAVE ADEQUATE RESOURCES TO DEFEND OURSELVES.

Any litigation or claims against us, whether or not valid, could result in
substantial costs, could place a significant strain on our financial and
managerial resources, and could harm our reputation. We may be exposed to future
litigation by third parties based on claims that our technology, product, or
activity infringes on the intellectual property rights of others or that we have
misappropriated the trade secrets of others. This risk is compounded by the fact
that the validity and breadth of claims covered in technology patents in general
and the breadth and scope of trade secret protection involves complex legal and
factual questions for which important legal principles are unresolved. Our
license agreement with Caltech requires that we pay the costs associated with
initiating an infringement claim and defending claims by third parties for
infringement, subject to certain offsets that may be allowed against amounts we
may owe to Caltech under the licensing agreement. In addition, intellectual
property litigation or claims could force us to do one or more of the following:


                                       17
<PAGE>


     o    cease selling, incorporating, or using any of our technology and/or
          products that incorporate the challenged intellectual property, which
          could adversely affect our potential revenue;

     o    obtain a license from the holder of the infringed intellectual
          property right, which license may be costly or may not be available on
          reasonable terms, if at all; or

     o    redesign our products, which would be costly and time consuming.

OUR STOCK PRICE IS VOLATILE.

The trading price of our common stock fluctuates widely and in the future may be
subject to similar fluctuations in response to quarter-to-quarter variations in
our operating results, announcements of technological innovations or new
products by us or our competitors, general conditions in the bio-terrorism
detection device industry in which we compete and other events or factors. In
addition, in recent years, broad stock market indices, in general, and the
securities of technology companies, in particular, have experienced substantial
price fluctuations. These broad market fluctuations also may adversely affect
the future trading price of our common stock.

OUR STOCK HISTORICALLY HAS BEEN THINLY TRADED. THEREFORE, SHAREHOLDERS MAY NOT
BE ABLE TO SELL THEIR SHARES FREELY.

The volume of trading in our common stock historically has been low and a
limited market presently exists for the shares. We have no analyst coverage of
our securities. The lack of analyst reports about our stock may make it
difficult for potential investors to make decisions about whether to purchase
our stock and may make it less likely that investors will purchase our stock. We
cannot assure you that our trading volume will increase, or that our
historically light trading volume or any trading volume whatsoever will be
sustained in the future. Therefore, we cannot assure you that our shareholders
will be able to sell their shares of our common stock at the time or at the
price that they desire, or at all.

POTENTIAL ANTI-TAKEOVER TACTICS THROUGH ISSUANCE OF PREFERRED STOCK RIGHTS MAY
BE DETRIMENTAL TO COMMON SHAREHOLDERS.

     If we issue shares of our preferred stock as an anti-takeover tactic, our
common stock shareholders will be detrimentally impacted. We are authorized to
issue up to 20,000,000 shares of preferred stock, of which none currently are
issued and outstanding. The issuance of preferred stock does not require
approval by the shareholders of our common stock. Our Board of Directors, in its
sole discretion, has the power to issue preferred stock in one or more series
and establish the dividend rates and preferences, liquidation preferences,
voting rights, redemption and conversion terms and conditions and any other
relative rights and preferences with respect to any series of preferred stock.
Holders of preferred stock may have the right to receive dividends, certain
preferences in liquidation and conversion and other rights, any of which rights
and preferences may operate to the detriment of the shareholders of our common
stock. Further, the issuance of any preferred stock having rights superior to
those of our common stock may result in a decrease in the market price of the
common stock and, additionally, could be used by our Board of Directors as an
anti-takeover measure or device to prevent a change in our control.


                                       18
<PAGE>


ITEM 3. CONTROLS AND PROCEDURES.

     We carried out an evaluation, under the supervision and with the
participation of our chief executive officer and acting chief financial officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. Based on this
evaluation, our executive officer and acting financial officer concluded that
our disclosure controls and procedures are effective in timely alerting him to
material information required to be included in our periodic reports filed with
the SEC. Notwithstanding, management has taken certain actions designed to
enhance our disclosure controls and procedures and internal control structure.
In particular, we retained a third-party consultant in August 2004 to assist,
among other things, in improving our disclosure controls and procedures and
internal control structure.

     In accordance with SEC requirements, our chief executive officer and acting
chief financial officer notes that, since the date of the most recent evaluation
of our disclosure controls and procedures to the filing date of our Quarterly
Report on Form 10-QSB, there have been no significant changes in our internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

     Our management, including our chief executive officer and acting chief
financial officer, does not expect that our disclosure controls or our internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple errors or mistakes. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the control.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.


                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     None.

ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
        SECURITIES.

     During the second quarter of fiscal 2004, we issued the following
securities which were not registered under the Securities Act of 1933, as
amended. We did not employ any form of general solicitation or advertising in
connection with the offer and sale of the securities described below. In


                                       19
<PAGE>


addition, we believe the purchasers of the securities are "accredited investors"
for the purpose of Rule 501 of the Securities Act. For these reasons, among
others, the offer and sale of the following securities were made in reliance on
the exemption from registration provided by Section 4(2) of the Securities Act
or Regulation D promulgated by the SEC under the Securities Act:

     o    In June 2004, we issued an aggregate of 10,000 shares of common stock
          to a consultant for consulting services rendered to us valued at
          $9,000.

     o    In June and July 2004, we engaged in a private placement of $3 million
          of Units. The offering was made solely to accredited investors through
          Meyers Associates, L.P., a registered broker dealer firm. Each Unit
          consists of one share of common stock and a Class A Warrant and a
          Class B Warrant. We incurred $414,640 in placement fees, and our net
          proceeds were $2,585,360.

     During the second quarter of fiscal 2004, we issued the following
securities which were not registered under the Securities Act of 1933, as
amended. No offer or sale of the securities was made to a person in the United
States. We believe that each purchaser of securities was not a U.S. person as
defined in Rule 902(k) of Regulation S and did not acquire the securities for
the account or benefit of any U.S. person. We did not engage in any directed
selling efforts in the United States. For these reasons, among others, the offer
and sale of the following securities were not subject to Section 5 of the
Securities Act by virtue of Regulation S promulgated by the SEC under the
Securities Act:

     o    We issued 139,200 shares of common stock to non-U.S. persons, as such
          term is defined in Regulation S, for an aggregate offering price of
          $15,306.51. We incurred $14,306.51 in placement fees, and our net
          proceeds were $94,652.49.

     In addition to the sales of unregistered stock disclosed in our Quarterly
Report on Form 10-QSB for the quarter ended March 31, 2004, during the first
quarter of fiscal 2004, we issued the following securities which were not
registered under the Securities Act of 1933, as amended. No offer or sale of the
securities was made to a person in the United States. We believe that each
purchaser of securities was not a U.S. person as defined in Rule 902(k) of
Regulation S and did not acquire the securities for the account or benefit of
any U.S. person. We did not engage in any directed selling efforts in the United
States. For these reasons, among others, the offer and sale of the following
securities were not subject to Section 5 of the Securities Act by virtue of
Regulation S promulgated by the SEC under the Securities Act:

     o    We issued 700,743 shares of common stock to non-U.S. persons, as such
          term is defined in Regulation S, for an aggregate offering price of
          $420,967. We incurred $42,096.70 in placement fees, and our net
          proceeds were $378,870.30.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     We executed a demand note for $250,000 with Ex-Im Bank accruing interest at
Wall Street Journal Prime plus 3% per annum, which matured on an extended due
date of June 30, 2002, and currently is in default. The aggregate amount due
under this note as of June 30, 2004, is approximately $300,625, consisting of
$250,000 of principal and $50,625 of interest.


                                       20
<PAGE>


     On July 26, 2004, we entered into a settlement agreement in connection with
three one-year loans from unaffiliated individuals evidenced by promissory notes
that were in default. The aggregate amount due on the notes, including interest,
was $440,765, as of the date of settlement. We agreed to pay a total of $298,667
as full payment. The settlement agreement allows us to pay a total of $286,667
under an accelerated payment schedule.

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

     None.

ITEM 5. OTHER INFORMATION.

     None.

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

     (a) Exhibits.

          10.1 Amendment to Agreement for Investment Banking and Advisory
               Services with Astor Capital, Inc. dated April 29, 2004.

          31.1 Certification of Chief Executive Officer and Acting Chief
               Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
               Act of 2002 Dated August 20, 2004.

          32.1 Certification of Chief Executive Officer and Acting Chief
               Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Dated
               August 20, 2004.

     (b) Reports on Form 8-K.

          Current Report on Form 8-K filed May 5, 2004, Items 5 and 7.




                                       21
<PAGE>


                                   SIGNATURES

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

                                    UNIVERSAL DETECTION TECHNOLOGY



Date: August 20, 2004                /s/ Jacques Tizabi
                                    -------------------------------------------
                                    By:  Jacques Tizabi
                                    Its: President, Chief Executive Officer,
                                         Acting Chief Financial Officer
                                         and Chairman of the Board



                                       22