U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB



(Mark One)



[ x ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended:

March 31, 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 0-17232



NETMEASURE TECHNOLOGY INC.

(Exact name of small business issuer as specified in its charter)



|NEVADA                                                         | 86-0914695                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of
incorporation or organization) | (IRS Employer
Identification No.)



1715 Government Street

Victoria, B.C.  V8W 1Z4

(Address of principal executive offices)



(250) 386-5501

(Issuers telephone number)



N/A

(Former name, former address and former fiscal year, if changed since last report)



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





State the number of shares outstanding of each of the issuers classes of common equity, as of the last practicable date:



545,196 shares of common stock, $0.001 par value, as of  May 21, 2004



Transitional Small Business Disclosure Format (check one):

Yes

No  X













PART I FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS



The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-QSB and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the three month periods ended March 31, 2004 and 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004.  For further information refer to the financial statements and footnotes thereto included in  the Companys Annual Financial Statements filed on Form 10-KSB filed with the Securities and Exchange Commission on April 20, 2004.



2



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

March 31, 2004 and December 31, 2003

(Stated in US Dollars)

(Unaudited)



|                                                 | March 31,    | December 31,
|------------------------------------------------ | ------------ | ------------
|ASSETS                                           | 2004         | 2003        
|Current                                          |              |             
|Cash                                             | $
1,436      | $
2,163     
|                                                 |              |             
|LIABILITIES                                     
|Current                                          |              |             
|Accounts payable and accrued liabilities         | $
346,891    | $
313,143   
|Due to related party                             | 17,077       | 12,077      
|Promissory notes payable  Note 3                | 117,023      | 117,023     
|Convertible promissory notes  Note 4            | 127,964      | 127,964     
|                                                 |              |             
|                                                 | 608,955      | 570,207     
|                                                 |              |             
|STOCKHOLDERS' DEFICIENCY                        
|Capital stock  Note 5                           |              |             
|Authorized:                                      |              |             
|100,000,000 common shares at $0.001 par value    |              |             
|Issued:                                          |              |             
|545,196 shares (2003:  407,696)                  | 546          | 408         
|Additional paid-in capital                       | 2,374,490    | 1,760,378   
|Share subscriptions                              | -            | 614,250     
|Deficit accumulated during the development stage | (
2,982,555) | (
2,943,080)
|                                                 |              |             
|                                                 | (
607,519)   | (
568,044)  
|                                                 |              |             
|                                                 | $
1,436      | $
2,163     
|                                                 |              |             



Continuance of Operations  Note 2









SEE ACCOMPANYING NOTES

F-1



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

for the three month period ended March 31, 2004 and 2003

and for the period from May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)



|                                              |                              |             | For the period
|--------------------------------------------- | ---------------------------- | ----------- | --------------
|                                              |                              |             | from May 4,   
|                                              |                              |             | 1998 (Date of 
|                                              |                              |             | Inception) to 
|                                              | Three months ended March 31, | March 31,  
|                                              | 2004                         | 2003        | 2004          
|                                              |                              |             |               
|General and administrative                    |                              |             |               
|Advertising                                   | $
71                         | $
-         | $
472         
|Computer and office supplies                  | 44                           | -           | 31,475        
|Consulting fees                               | 22,500                       | 14,960      | 331,843       
|Interest and bank charges                     | 7,076                        | 3,072       | 48,590        
|Professional fees                             | 3,640                        | 10,172      | 92,612        
|Rent                                          | 2,104                        | -           | 6,126         
|Transfer agent fees                           | 2,339                        | -           | 10,306        
|Travel                                        | 1,701                        | 605         | 5,581         
|                                              |                              |             |               
|Loss before other items                       | (
39,475)                    | (
28,809)   | (
527,005)    
|Other items:                                  |                              |             |               
|Foreign exchange gain                         | -                            | -           | (
8,167)      
|Forgiveness of debt                           | -                            | -           | 69,700        
|Interest income                               | -                            | -           | 49            
|Write-off of deferred acquisition costs       | -                            | -           | (
66,500)     
|                                              |                              |             |               
|Loss from continuing operations               | (
39,745)                    | (
28,809)   | (
531,923)    
|                                              |                              |             |               
|Loss from discontinued operations             | -                            | -           | (
2,450,632)  
|                                              |                              |             |               
|Net loss for the period                       | $
(
39,745)                  | $
(
28,809) | $
(
2,982,555)
|                                              |                              |             |               
|Basic and diluted loss per share              |                              |             |               
|Loss from continuing operations               | $
(
0.08)                    | $
(
0.06)   |               
|                                              |                              |             |               
|Loss from discontinued continuing operations  | $
-                          | $
-         |               
|                                              |                              |             |               
|Loss for the period                           | $
(
0.08)                    | $
(
0.06)   |               
|                                              |                              |             |               
|Weighted average number of shares outstanding | 522,531                      | 407,696     |               
|                                              |                              |             |               





SEE ACCOMPANYING NOTES

F-2



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS CASH FLOWS

for the three month period ended March 31, 2004 and 2003

and for the period from May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)



|                                                               |                              |             | For the period
|-------------------------------------------------------------- | ---------------------------- | ----------- | --------------
|                                                               |                              |             | from May 4,   
|                                                               |                              |             | 1998 (Date of 
|                                                               |                              |             | Inception) to 
|                                                               | Three months ended March 31, | March 31,  
|                                                               | 2004                         | 2003        | 2004          
|Operating activities                                           |                              |             |               
|Net loss for the year                                          | $
(
39,475)                  | $
(
25,809) | $
(
531,923)  
|Foreign exchange                                               | -                            | -           | 8,281         
|Write off of deferred acquisition costs                        | -                            | -           | 66,500        
|Forgiveness of debt                                            | -                            | -           | (
66,500)     
|Interest on promissory note, payable in shares                 | -                            | -           | 1,250         
|Changes in non-cash operating working capital                  |                              |             |               
|Accounts payable and accrued liabilities                       | 33,748                       | 15,677      | (
221,830)    
|                                                               |                              |             |               
|Cash used in operating activities                              | (
5,727)                     | (
10,132)   | (
744,222)    
|                                                               |                              |             |               
|Investing Activities                                           |                              |             |               
|Deferred acquisition costs                                     | -                            | -           | (
66,500)     
|Advances to company controlled by a
shareholder of the Company | -                            | -           | (
17,208)     
|Advances to discontinued operations of disposed subsidiaries   | -                            | -           | (
1,235,235)  
|                                                               |                              |             |               
|Cash used in investing activities                              | -                            | -           | (
1,318,943)  
|                                                               |                              |             |               
|Financing Activities                                           |                              |             |               
|Due to related party                                           | 5,000                        | -           | 17,077        
|Promissory notes                                               | -                            | 10,000      | 303,206       
|Shares issued for cash                                         | -                            | -           | 1,258,691     
|Share subscriptions                                            | -                            | -           | 613,000       
|Payment of promissory notes payable by
subsidiary company      | -                            | -           | (
127,373)    
|                                                               |                              |             |               
|Cash provided by financing activities                          | 5,000                        | 10,000      | 2,064,601     
|                                                               |                              |             |               





SEE ACCOMPANYING NOTES



/Contd.



F-3



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

for the three month period ended March 31, 2004 and 2003

and for the period from May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)





|                                                       |           |         | For the period
|------------------------------------------------------ | --------- | ------- | --------------
|                                                       |           |         | from May 4,   
|                                                       |           |         | 1998 (Date of 
|                                                       |           |         | Inception) to 
|                                                       |           |         | March 31,     
|                                                       | 2004      | 2003    | 2004          
|                                                       |           |         |               
|Increase (decrease) in cash from continuing
operations | (
727)    | (
132)  | 1,436         
|                                                       |           |         |               
|Increase (decrease) in cash during the period          | (
727)    | (
132)  | 1,436         
|                                                       |           |         |               
|Cash, beginning of period                              | 2,163     | 5,481   | -             
|                                                       |           |         |               
|Cash, end of period                                    | $
1,436   | $
5,349 | $
1,436       
|                                                       |           |         |               
|Supplementary disclosure of cash flow
information:     |           |         |               
|Cash paid for:                                         |           |         |               
|Interest                                               | $
-       | $
-     | $
-           
|                                                       |           |         |               
|Income taxes                                           | $
-       | $
-     | $
-           
|                                                       |           |         |               
|                                                       |           |         |               
|Non-cash items not included in cash flows:             |           |         |               
|Stock award compensation expense                       | $
-       | $
-     | $
237,501     
|Shares issued under stock awards plan                  | $
-       | $
-     | $
237,501     
|Shares issued for services                             | $
-       | $
-     | $
111,938     
|Shares issued to acquire subsidiary                    | $
-       | $
-     | $
152,656     
|Shares issued under share subscriptions                | $
614,250 | $
-     | $
614,250     











SEE ACCOMPANYING NOTES

F-4



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

for the period from the May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)





|                                                                                             |               |           |            |               |             | Deficit     |            
|-------------------------------------------------------------------------------------------- | ------------- | --------- | ---------- | ------------- | ----------- | ----------- | -----------
|                                                                                             |               |           |            |               | Accrued     | Accumulated |            
|                                                                                             |               |           | Additional |               | Employee    | During the  |            
|                                                                                             | Common Shares | Paid-in   | Share      | Stock         | Development |            
|                                                                                             | Number        | Par Value | Capital    | Subscriptions | Award       | Stage       | Total      
|Common stock issued to officers for
services rendered                                        | 20,000        | $
20      | $
980      | $
-           | $
-         | $
-         | $
1,000    
|Common stock issued by offering at
$1.56 per share                                           | 99,000        | 99        | 154,589    | -             | -           | -           | 154,688    
|Common stock issued by offering at
$1.56  per share for services rendered                    | 71,000        | 71        | 110,867    | -             | -           | -           | 110,938    
|Net loss for the period from inception to
December 31, 1998                                  | -             | -         | -          | -             | -           | (226,390)   | (226,390)  
|                                                                                             |               |           |            |               |             |             |            
|Balance, December 31, 1998                                                                   | 190,000       | 190       | 266,436    | -             | -           | (226,390)   | 40,236     
|Common stock issued for cash, net of
issue costs of $33,247                                  | 16,196        | 16        | 978,987    | -             | -           | -           | 979,003    
|Common stock issued at $1.56 per
share on acquisition of NetMeasure
Technology (Canada) Inc. | 97,700        | 98        | 152,558    | -             | -           | -           | 152,656    
|Accrued employee stock awards                                                                | -             | -         | -          | -             | 387,665     | -           | 387,665    
|Net loss for the year ended
December 31, 1999                                                | -             | -         | -          | -             | -           | (1,132,851) | (1,132,851)
|                                                                                             |               |           |            |               |             |             |            
|Balance, December 31, 1999                                                                   | 303,896       | 304       | 1,397,981  | -             | 387,665     | (1,359,241) | 426,709    





SEE ACCOMPANYING NOTES



/Contd.

F-5



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

for the period from the May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)



|                                                            |               |           |            |               |             | Deficit     |            
|----------------------------------------------------------- | ------------- | --------- | ---------- | ------------- | ----------- | ----------- | -----------
|                                                            |               |           |            |               | Accrued     | Accumulated |            
|                                                            |               |           | Additional |               | Employee    | During the  |            
|                                                            | Common Shares | Paid-in   | Share      | Stock         | Development |            
|                                                            | Number        | Par Value | Capital    | Subscriptions | Award       | Stage       | Total      
|                                                            |               |           |            |               |             |             |            
|Share subscriptions received                                | -             | -         | -          | 600,000       | -           | -           | 600,000    
|Bonus shares to be issued under
convertible promissory note | -             | -         | -          | 1,250         | -           | -           | 1,250      
|Accrued employee stock awards                               | -             | -         | -          | -             | 411,962     | -           | 411,962    
|Shares issued under employee stock
award plan               | 3,800         | 4         | 237,497    | -             | (237,501)   | -           | -          
|Net loss for the year ended
December 31, 2000               | -             | -         | -          | -             | -           | (1,503,517) | (1,503,517)
|                                                            |               |           |            |               |             |             |            
|Balance, December 31, 2000                                  | 307,696       | 308       | 1,635,478  | 601,250       | 562,126     | (2,862,758) | (63,596)   
|Common stock issued for cash at $1.25
per share             | 100,000       | 100       | 124,900    | -             | -           | -           | 125,000    
|Accrued employee stock awards                               | -             | -         | -          | -             | (562,126)   | -           | (562,126)  
|Net loss for the year ended
December 31, 2001               | -             | -         | -          | -             | -           | (19,060)    | (19,060)   
|                                                            |               |           |            |               |             |             |            
|Balance, December 31, 2001                                  | 407,696       | 408       | 1,760,378  | 601,250       | -           | (2,881,818) | (519,782)  
|Share subscriptions received                                | -             | -         | -          | 13,000        | -           | -           | 13,000     
|Net loss for the year ended
December 31, 2002               | -             | -         | -          | -             | -           | (92,316)    | (92,316)   
|                                                            |               |           |            |               |             |             |            
|Balance, December 31, 2002                                  | 407,696       | 408       | 1,760,378  | 614,250       | -           | (2,974,134) | (599,098)  



SEE ACCOMPANYING NOTES                                             /Contd.



F-6



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

for the period from the May 4, 1998 (Date of Inception) to March 31, 2004

(Stated in US Dollars)

(Unaudited)





|                                                |               |           |             |               |             | Deficit       |            
|----------------------------------------------- | ------------- | --------- | ----------- | ------------- | ----------- | ------------- | -----------
|                                                |               |           |             |               | Accrued     | Accumulated   |            
|                                                |               |           | Additional  |               | Employee    | During the    |            
|                                                | Common Shares | Paid-in   | Share       | Stock         | Development |              
|                                                | Number        | Par Value | Capital     | Subscriptions | Award       | Stage         | Total      
|                                                |               |           |             |               |             |               |            
|Net income for the year ended
December 31, 2003 | -             | -         | -           | -             | -           | 31,054        | 31,054     
|                                                |               |           |             |               |             |               |            
|Balance, December 31, 2003                      | 407,696       | 408       | 1,760,378   | 614,250       | -           | (2,943,080)   | (568,044)  
|Common stock issued                             | 137,500       | 138       | 614,112     | (614,250)     | -           | -             | -          
|Net loss for the period ended
March 31, 2004    | -             | -         | -           | -             | -           | (39,475)      | (39,475)   
|                                                |               |           |             |               |             |               |            
|Balance, March 31, 2004                         | 545,196       | $
546     | $
2,374,490 | $
-           | $
-         | $
(2,982,555) | $
(607,519)
|                                                |               |           |             |               |             |               |            







SEE ACCOMPANYING NOTES

F-7



NETMEASURE TECHNOLOGY INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2004

(Stated in US Dollars)

(Unaudited)





Note 1

Interim Reporting



While the information presented in the accompanying interim three month financial statement is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented.  All adjustments are of a normal recurring nature.  It is suggested that these financial statements be read in conjunction with the Companys December 31, 2003 annual financial statements.



Note 2

Continuance of Operations



The financial statements have been prepared using generally accepted accounting principles in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business.  As at March 31, 2004, the Company has a working capital deficiency of $607,519, which is not sufficient to meet its planned business objective or ongoing operations for the next fiscal year.  The Company has accumulated losses of $2,982,555 since its commencement.  Its ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due.

F-8





Note 3

Promissory Notes Payable



|                                                                                                                                                                                                                                                                                                                             | 2004      | 2003     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------
|Due on December 1, 2000. This note bears interest at 10% per annum plus a bonus of 1,000 shares of capital stock. This loan entitled the lender to receive options to acquire 40,960 additional common shares. These options expired on December 14, 2002.                                                                   | $
75,000  | $
75,000 
|                                                                                                                                                                                                                                                                                                                             |           |          
|Due on demand to the Companys former president: principal CDN. $20,000; interest at 15% per annum; secured by a fixed and floating charge over the Company assets.  During the year ended December 31, 2003, the Companys former president assigned this debt to various non-related parties.                              | 15,426    | 15,426   
|                                                                                                                                                                                                                                                                                                                             |           |          
|Due on demand: Interest at 15% per annum; principal CDN. $20,000; secured by a first charge on the Companys assets.  In addition to the interest on this note, at the noteholder's option, the Company has committed to pay a bonus of 200 shares of the Company or CDN. $5,000 upon presentation of this note for payment. | 15,426    | 15,426   
|                                                                                                                                                                                                                                                                                                                             |           |          
|Due on demand to the Companys former president: Principal CDN. $8,000;  interest at 15% per annum; secured by a first charge on the Company's assets.  During the year ended December 31, 2003, the Companys former president assigned this debt to various non-related parties.                                           | 6,171     | 6,171    
|                                                                                                                                                                                                                                                                                                                             |           |          
|Due on demand: Interest at 15% per annum; secured by a fixed and floating charge over the Companys assets. In addition to the interest on this note, at the noteholder's option, the Company has committed to pay a bonus of 200 shares of the Company or $1,000 upon presentation of this note for payment.                | 5,000     | 5,000    
|                                                                                                                                                                                                                                                                                                                             |           |          
|                                                                                                                                                                                                                                                                                                                             | $
117,023 | $
117,023
|                                                                                                                                                                                                                                                                                                                             |           |          



F-9





Note 4

Convertible Promissory Notes Payable



|                                                                                                                                                                                                       | 2004      | 2003     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------- | ---------
|Promissory note payable September 7, 2002 bearing interest at 10% per annum, unsecured, convertible into shares at $100 per share solely at the company's discretion at any time before maturity.      | $
49,255  | $
49,255 
|                                                                                                                                                                                                       |           |          
|Promissory notes payable October 4, 2002 bearing interest at 10% per annum, unsecured, convertible into shares at $75 per share solely at the company's discretion at any time before maturity.        | 24,461    | 24,461   
|                                                                                                                                                                                                       |           |          
|Promissory notes payable May 31, 2003 bearing interest at 10% per annum, unsecured, convertible into shares at $0.25 per share solely at the company's discretion at any time before maturity.         | 30,548    | 28,654   
|                                                                                                                                                                                                       |           |          
|Promissory notes payable March 18, 2004 bearing interest at 10% per annum, unsecured and convertible into shares at $0.10 per share solely at the Companys discretion at any time before maturity.    | 10,000    | 10,000   
|                                                                                                                                                                                                       |           |          
|Promissory notes payable March 31, 2004 bearing interest at 10% per annum, unsecured and convertible into shares at $0.10 per share solely at the Companys discretion at any time before maturity.    | 7,500     | 7,500    
|                                                                                                                                                                                                       |           |          
|Promissory notes payable June 18, 2004 bearing interest at 10% per annum, unsecured and convertible into shares at $0.10 per share solely at the Company's discretion at any time before maturity.     | 3,200     | 3,200    
|                                                                                                                                                                                                       |           |          
|Promissory notes payable November 21, 2004 bearing interest at 10% per annum, unsecured and convertible into shares at $0.10 per share solely at the company's discretion at any time before maturity. | 3,000     | 3,000    
|                                                                                                                                                                                                       |           |          
|                                                                                                                                                                                                       | $
127,964 | $
127,964
|                                                                                                                                                                                                       |           |          



F-10





Note 5

Capital Stock -Notes 3 and 4



Authorized Capital Stock:

On January 22, 2004, the Company approved an increase in the authorized capital stock to 100,000,000 common shares effective February 24, 2004.



Commitment:

The Company has agreed to issue 360,000 common shares to settle $18,000 included in accounts payable at March 31, 2004.



F-11





ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS





CHANGES IN FINANCIAL CONDITION



As of March 31, 2004, the Company had not undergone a significant change in its financial condition since December 31, 2003.  As of December 31, 2003, the Company had total assets, which consisted of cash only, in the amount of $2,163 and as of March 31, 2004, it had total assets, which consisted of cash only, in the amount of $1,436.



The Company will need to raise approximately $50,000 USD to finance its operations for the next twelve month period.  The Company currently does not have any particular prospects or plans to raise such capital.  There are no guarantees that such financing can be achieved at this time.  The Company has not entered into discussions with any particular funding source regarding such fundraising.



Balance Sheet Data:

|                             |   | March 31, 2004 |  | December 31, 2003
|---------------------------- | - | -------------- |  | -----------------
|Cash                         | $ | 1,436          |  | 2,163            
|Total assets                 | $ | 1,436          |  | 2,163            
|Accounts payable             | $ | 346,891        |  | 313,143          
|Due to Related Party         | $ | 17,077         |  | 12,077           
|Promissory notes             | $ | 117,023        |  | 117,023          
|Convertible promissory notes | $ | 127,964        |  | 127,964          
|Total stockholders equity   | $ | (607,519)      |  | (568,044)        
|                             |   |                |  |                  



RESULTS OF OPERATIONS



Revenues



The Company earned no revenues for the three months ended March 31, 2004, and earned no revenues during the same period from the previous year.  The Company has no revenue producing operations since August 2001.



Expenses

Statement of Operations Data:

|                                           | THREE MONTH PERIOD ENDED MARCH 31, 2004 | THREE MONTH PERIOD
ENDED MARCH 31, 2003
|------------------------------------------ | --------------------------------------- | ---------------------------------------
|Net Sales                                  | $-0-                                    | $-0-                                   
|Loss from operations                       | ($39,745)                               | ($28,809)                              
|Net Income (loss)                          | ($39,745)                               | ($28,809)                              
|Net Income (loss) per common share         | ($0.08)                                 | ($0.06)                                
|Weighted average common shares outstanding | 522,531                                 | 407,696                                



3





During the three months ended March 31, 2004 and 2003, we incurred operating expenses of $39,745 and $28,809, respectively.  The following table provides a breakdown of operating expenses by category.



General Operating Expenses

|                             | THREE MONTH PERIOD ENDED MARCH 31, 2004 | THREE MONTH PERIOD ENDED MARCH 31, 2003
|---------------------------- | --------------------------------------- | ---------------------------------------
|Bank charges and interest    | $               7,076                   | $            3,072                     
|Consulting fees              | $            22,500                     | $          14,960                      
|Computer & office supplies   | 44                                      | -                                      
|Rent and Transfer Agent Fees | 4,443                                   | -                                      
|Travel and Advertising       | $               1,772                   | $               605                    
|Professional fees            | $               3,640                   | $          10,172                      
|TOTAL                        | $             39,475                    | $          28,809                      



Other administrative expenses have not substantially changed during the first three months of 2004, compared to the same period in 2003.  This is primarily due to the fact that the Company has not had sustained operations since August 2001 and has been undertaking only those activities that are necessary to keep the Company in good standing while management seeks acquisition opportunities.  As we continue seeking acquisition opportunities, we anticipate our general operating expenses will increase due to additional travel and possible consulting fees and professional fees.



LIQUIDITY AND CAPITAL RESOURCES



As of March 31, 2004 we had cash of $1,436 and a working capital deficit of ($607,519), compared to cash of $2,163 and a working capital deficit of ($568,044) at December 31, 2003.



Funds used in operations for the first three months of 2004 were $5,727, compared to funds used in operations of  $10,132 for the first three months of 2003.



Since inception, we have financed operations primarily through sales of equity securities, promissory notes and shareholder loans and have raised a total of $2,064,601, with $5,000 raised for the three month period ended March 31, 2004.



Our current operating cash expenditures are expected to be approximately $6,000.00 per month.



We will be required to raise additional funds to finance our current overhead requirements through the next twelve months.  Our principal source of capital has been equity financing from investors and our founders. Meeting our future financing requirements is dependent on access to equity and debt capital markets. We may not be able to raise additional equity when required or on favorable terms that are not dilutive to existing shareholders or obtain loans that have terms and conditions that the Company can perform under.



REPORT OF MANAGEMENTS RESPONSIBILITY



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.



Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to

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Exchange Act Rule 13a-14.  Based upon the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-QSB for the quarter ended March 31, 2004.



There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.



Prior to the filing date of this quarterly report, the Company had not adopted a complete set of written policies, controls and procedures.  The Company is now developing such written document and expects that in the process of such undertaking it will discover internal control policies and practices that the Company should implement and follow that are not part of its current practice.





PART II  OTHER INFORMATION



ITEM 1.

LEGAL PROCEEDINGS



Not Applicable.



ITEM 2.

CHANGES IN SECURITIES



Not Applicable.



ITEM 3.

DEFAULT 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)

Exhibit Index.  The following exhibits are filed with or incorporated by reference into this quarterly report:



Exhibit



No.

Description





2(a)

Corporate Charter of Powertech, Inc.

*

2(a)(1)

Articles of Amendment of Articles of Incorporation

*

2(b)

By-Laws of Powertech, Inc.

*

6(b)

Non- Competition Agreement dated February 12, 1999 between Randy

*

Voldeng and NETSentry Technology Inc.

*

6(e)

Assignment Agreement dated December 23, 1998 between Dragos Ruiu

*

and Dragostech.com Inc. and NETSentry Technology Inc.

6(g)

Asset Purchase and Sale Agreement made August 1998 between

*

Dragostech.com Inc. and NETSentry Technology Inc.



*

Incorporated by reference to the same exhibit number in the Registrant's Form 10-SB, as amended, File Number 0-27675.

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(b)

Reports on Form 8-K.  None.



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Date: May 21, 2004

By:   /s/ Peter Laipnieks

Name:

Peter Laipnieks

Title:

President



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