UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                   FORM 10-KSB

(Mark one)

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934

For the fiscal year ended: June 30, 2001

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934

Commission file number: 33-19598-D

                          NANOPIERCE TECHNOLOGIES, INC.
                          -----------------------------
             (Exact name of registrant as specified in its charter)
         --------------------------------------------------------------


          Nevada                                       84-0992908
-------------------------------          ---------------------------------------
(State of other jurisdiction of          (I.R.S. employer identification number)
 incorporation or organization)

                       370 Seventeenth Street, Suite 3640
                             Denver, Colorado 80202
              ----------------------------------------------------
              (Address and zip code of principal executive office)
                       370 Seventeenth Street, Suite 3580
                             Denver, Colorado 80202
              ----------------------------------------------------
                 (Former address of principal executive office)


Registrant's telephone number, including area code: (303) 592-1010
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

                        (Title of Class)        Name of Each
                                              Exchange On Which
                                                  Registered
                    -------------------------------------------
                          Common Stock,           NASDAQ:BB
                        $0.0001 Par Value      Frankfurt Exchange
                                                Hamburg Exchange


     Indicate  by  check  mark  whether  the  registrant:  (1) filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934,  during  the  preceding  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
    ---            ---


<PAGE>
As  of  the close of trading on September 24, 2001, there were 55,701,798 shares
outstanding,  44,496,610  of  which  were held by non-affiliates.  The aggregate
market  value  of the common shares held by non-affiliates, based on the average
closing  bid  and  asked  prices  on  September  24,  2001,  was  approximately
$29,367,763.

Transitional  Small  Business  Disclosure     Yes         No  X
                                                  ---        ---


                                        2
<PAGE>
                                     PART I



ITEM  1.     DESCRIPTION  OF  BUSINESS

COMPANY  OVERVIEW

     NanoPierce  Technologies, Inc. (the "Company") is a Nevada corporation that
was incorporated on June 22, 1996, as Sunlight Systems, Ltd.  From June 22, 1996
through  November 1996 the Company engaged in limited activities as a dealer and
distributor  of  sun  tunnels.  This  business,  however,  was  discontinued and
substantially  all  assets  were sold in November of 1996.  From that time until
February  1998,  the  Company was generally inactive and reported no significant
operating  revenues.

     On February 26, 1998, the Company acquired the intellectual property rights
related  to  the  Company's  patented  Particle Interconnect Technology (the "PI
Technology")  from  Particle  Interconnect  Corporation  ("PI Corp"), a Colorado
Corporation,  a  wholly  owned subsidiary of Intercell Corporation (now known as
Intercell  International  Corporation,  hereinafter  "Intercell"),  a  Nevada
Corporation.  In  exchange  for  the  assets  of  PI  Corp,  the  Company issued
7,250,000  shares  of  its common stock and 100 shares of the Company's Series A
Preferred  Stock  (convertible  into  7,250,000  common  shares)  to  Intercell.
Intercell, subsequently converted the 100 shares of the Series A Preferred Stock
in  June  1999 for 7,250,000 common shares.  Intercell currently holds 8,808,050
common  shares of the Company as of June 30, 2001 (8,558,050 common shares as of
September  15, 2001).  The Company acquired the PI Technology in order to pursue
a  more  focused,  strategic  application  and development of the PI Technology.

     On  January  19,  2000,  the  Company  created  a  wholly owned subsidiary,
Nanopierce  Card Technologies, GmbH, in Hohenbrunn, Germany ("NanoPierce Card or
NCT").  The  Company  owns 100% of the equity of NanoPierce Card. The subsidiary
was  created  to  market  the  Company's  technology  initially  within  the
Smartcard/Smartlabel  industry  and  eventually  for  other  applications  on an
international  basis.

     The  Company's  Technology  Group is located in Colorado Springs, Colorado.
The  Technology  Group  is  responsible  for  research and development of the PI
Technology,  the  development  of  new  intellectual  properties and the limited
production  of  devices  using  the  PI  Technology.

     It is the mission of the Company to make electrical connections through the
commercial  exploitation of its patented technology, subsequently referred to as
the  NanoPierce  Connection  System  ("NCS").

NANOPIERCE  CONNECTION  SYSTEM

     NCS  is  an  electrical  or  electroless  process  using  metallized, hard,
microscopic  particles  that  are  readily  available  and  inexpensive, such as


                                        3
<PAGE>
industrial  diamond  dust, which can be deposited onto a contact surface.  Under
slight pressure, the conductive particles penetrate the contact of an electrical
component,  providing  an  electrical  connection.  NCS  can  be applied to many
different  substrates (flexible, rigid, metallic and non-metallic), allowing NCS
to  replace  more  conventional  methods  of making electrical contacts, such as
soldering,  spring-loading, pin-in-hole connections and conventional "flip chip"
attachment.

      NCS  provides  several  advantages  to  the electrical connection industry
among  which are; lower costs through the usage of less expensive materials; the
elimination  of manufacturing steps; improved thermal and electrical properties;
elimination  of special environments for application; decreased production time;
easy  integration  into  existing  production  lines;  increased  design
miniaturization;  adaptability for specific applications and excellent RF (radio
frequency)  performance.

     The  Company  currently holds 12 Patents with the U.S. Patent and Trademark
Office  in  relation  to  NCS.  Further,  the  Company  has filed several patent
applications  both in the United States and internationally in order to continue
to protect the intellectual property underlying NCS.  The Company has also filed
Trademark  Applications with the U.S. Patent and Trademark Office to protect its
name,  logo  and  other  trademarks.

BUSINESS  PLAN

     Management of the Company has developed a business strategy that focuses on
the  development of NCS for applications in four major markets at this time.  In
connection  with  this  strategy  the Company has signed co-operation agreements
with  several  potential  customers  within  the industry to further develop the
applications.  The  applications  are  as  follows:

          1.   SMART  CARDS.  Smart Cards are similar to a magnetic strip credit
               card,  except that a smart card has a memory chip embedded in it,
               that  when  coupled  with  a  reader, has the processing power to
               serve  many  different  applications.  Smart  cards  are  either
               "contact"  cards,  "contactless" cards, e.g. radio frequency (RF)
               activated cards or "dual interface" cards, which can be activated
               by  a  contact source or an RF source. NCS will primarily be used
               in  one of three ways: (1) to connect the chip to the chip module
               in  contact  cards,  (2)  to  connect  the chip to the antenna in
               contactless  cards,  and  (3) for both connections in the case of
               dual  interface  cards.

          2.   SMART LABELS. Smart Labels are paper-thin devices equipped with a
               chip  and  an  antenna.  Smart  Labels  are able to both send and
               receive  data,  when  activated  by  an  RF  signal.

          3.   LED  ARRAYS.  LED  (Light  Emitting  Diodes)  Arrays  are  either
               standardized  subassemblies  or  customer-specific  components
               equipped  with  light  emitting  diodes.

          4.   WAFERPIERCE.  Wafers  are  6,  8  or  12-inch  silicon  or  other
               substrate  material  used  in  the  process  of making chips with
               integrated  circuits.  NCS  can  be  applied  in  an  electroless
               chemical  deposition  process  to  the contact pads on the chips.


                                        4
<PAGE>
               This  application  broadens  the  use  of  the  chips,  since the
               connection  capability  is already present on the contact pads of
               the  chips,  which  allows  for  an improved flip chip attachment
               method.

     In  addition  to  the development and marketing of NCS, the Company through
NanoPierce  Card,  has  generated  revenues  during the last fiscal year through
software  development and project management for various customers in industries
with  potential  NCS  applications.  It  is the belief of the Company that these
initial software development contracts will lead to additional contracts.  While
additional  human  resources  will  be  needed  to  fulfill these agreements, no
significant  capital commitments should be required by the Company in connection
with  the  contracts.

     For the fiscal year ended June 30, 2001, the Company recognized $132,325 in
revenue  from  its  software  development  activities.

RESEARCH AND DEVELOPMENT

     Research  and  Development activities are conducted by the Technology Group
in  Colorado  Springs,  Colorado.  For  the Fiscal Years Ended June 30, 2001 and
2000,  the  Company  incurred  $441,459 and $133,088 in research and development
expenses.  The  Company,  in  order to expand its research activities during the
last  year, has built the first high volume, reel to reel, continuous deposition
system  designed  to apply the NCS technology to flexible substrates. Currently,
the  Colorado  Springs  facility  is in the process of finishing work on a clean
room  to  be  used  in the application of the NCS technology at the wafer level.

COMPETITION

     Competition  in  the  electronic connector market is fierce.  The principal
competitive  factors  are  product quality, performance, price and service.  The
Company  and  its  licensees  face  competition from well-established firms with
other  interconnect  technologies.

     The  Company  will  face  competition  from the development of existing and
future competing technologies. There currently exists approximately 28 different
technologies  that  can  be  used  to  create  interconnect solutions, including
dendrite  crystals,  gold  dot technology, an isotropic technology (technologies
using materials whose behavior differs in the up/down and left/right diversion),
elastomerics  (rubber-like synthetic materials) and Z-axis conductive adhesives.
These  technologies  currently are produced by materials and chemical suppliers,
flexible  and  rigid printed circuit board manufacturers, as well as electronics
manufacturers  who produce their own materials and interconnect systems. Many of
these  competitors have substantially greater financial and other resources than
the  Company.  The  Company believes that each existing technology currently has
unacceptable  limitations  with  regard  to  electrical/mechanical  performance,
manufacturability  or cost as compared to the NCS Technology. However, there are
no  assurances  that  the Company or the NCS Technology can successfully compete
with  current  or  future  technologies.


                                        5
<PAGE>
GOVERNMENT  REGULATION

     The Company believes that it is in substantial compliance with all material
federal  and  state  laws  and  regulations  governing  its  limited operations.
Further,  the Company believes that it is in compliance with all material German
laws  and  regulations  governing  its limited operations in Germany. Compliance
with  federal  and  state  environmental  laws  and  regulations  did not have a
material  effect  on the Company's capital expenditures, earnings or competitive
position  during  the  fiscal  year  ended  June  30,  2001.

EMPLOYEES

     As  of  June  30,  2001,  the  Company and its subsidiary had 19 employees.
Messrs. Metzinger, Neuhaus, Wernle and Ms. Kampmann, key officers of the Company
have  signed  Employment  Agreements with the Company or NanoPierce Card.  (See-
Item  9-  "Directors  and  Officers  of  the  Company")  None  of  the Company's
employees  are  represented  by  a  labor  union  or are subject to a collective
bargaining  agreement.  The  Company  believes  that  its  relations  with  its
employees  are  excellent.

ITEM  2.  DESCRIPTION  OF  PROPERTIES

     The  Company's corporate headquarters are located at 370 17th Street, Suite
3640,  Denver,  Colorado 80202.  The Company moved into offices on June 27, 2001
and  has  a  5-year  lease  on the property. Intercell International Corporation
maintains  an  administrative  office  on  the  premises.

     The  Company's  Technology  Group  is  located  at  4180 Center Park Drive,
Colorado  Springs,  Colorado  80916.  In  the  last  fiscal year the Company was
required  to  lease additional facility space for the expanded operations of the
Technology  Group.  The  Company  currently  has a 3-year lease on the property.

     NanoPierce  Card  leases offices located at Lise-Meitner-Strasse 1, D-85662
Hohenbrunn, Germany.  From  these  offices  marketing,  software development and
additional  research  and development activities take place.  NanoPierce Card in
the  last  year,  in  connection  with  the software development activities, has
leased  additional  storage  space.

ITEM  3.  LEGAL  PROCEEDINGS

DIFRANCESCO  LITIGATION

     The  Company and Louis DiFrancesco, the inventor of the PI Technology, were
involved  in  litigation relating to the Company's ownership of its intellectual
property and the rights as to who should receive royalty payments from licenses,
which  were  outstanding  as  of  September  3, 1996.  On November 30, 1999, the
Company obtained a Court Order of Declaratory Judgment that it has incontestable
and  exclusive  ownership  of  all patents, patent applications, licenses, trade
names,  trademarks,  trade secrets and other intellectual properties relating to
the  PI  Technology.  Mr. DiFrancesco filed an Appeal on March 28, 2000 with the
Colorado  Court  of  Appeals  regarding  the Declaratory Judgment.  The Colorado
Court  of  Appeals  remanded the case to the District Court to determine whether


                                        6
<PAGE>
Mr. DiFrancesco had waived his right to appeal.  On April 23, 2001, the District
Court,  City  and County of Denver issued a Court Order that Mr. DiFrancesco had
lost his right to Appeal.  Mr. DiFrancesco has filed an amended Appeal to review
that  Order.  No  ruling  has  yet been issued by the Colorado Court of Appeals.

HARVEST  COURT  LITIGATION

     On  April  27,  2001,  the  Company  filed  an  action in the United States
District  Court in and for the District of Colorado, against Harvest Court, LLC,
Southridge  Capital  Investments,  LLC,  Daniel  Pickett,  Patricia  Singer  and
Thompson  Kernaghan,  of  Toronto (Canada) (collectively, the "Defendants"). The
Company subsequently dismissed this suit, without prejudice and on July 27, 2001
re-filed  the  action in the District Court, City and County of Denver. The suit
alleges among other things, that the Defendants have violated the anti-fraud and
controlling persons sections of the Colorado Securities Act, aiding and abetting
violations of the Colorado Securities Act, common law fraud and civil conspiracy
and Declaratory Judgment against the Defendants.  The Company is seeking various
forms  of  relief  from  the  Defendants, including an accounting, a declaratory
judgment,  actual  damages  of  at  least  $190,000,000 and exemplary and treble
damages.

     On  May  7,  2001, Harvest Court, LLC filed suit against the Company in the
Supreme  Court  of  the State of New York, County of New York.  The suit alleges
that  the  Company  has breached the October 20, 2001 Purchase Agreement, by not
issuing  7,418,895  free  trading  shares  of  the  Company's  common  stock  in
connection with the reset provisions of the Purchase Agreement due on the second
"reset"  date and approximately 4,545,303 shares dues on the third "reset" date.
Harvest  Court is seeking delivery of such shares or damages in the alternative.
On  August  1,  2001,  the Supreme Court of the State of New York, County of New
York  issued  a  preliminary  injunction ordering the Company to reserve and not
transfer  the  shares  allegedly  due  to  Harvest  Court.

     On  September  13,  2001, Thomson, Kernaghan & Co., Ltd. filed suit against
the Company, Paul H. Metzinger and Dr. Michael E. Wernle in the Ontario Superior
Court  of  Justice. The suit alleges that the Company, Paul H. Metzinger and Dr.
Michael  E.  Wernle  have  defamed  Thomson,  Kernaghan & Co., Ltd. in two press
releases  made  in  connection  with  the  Harvest Court litigation in April and
August  2001.  Thomson,  Kernaghan  &  Co.,  Ltd. is seeking general damages for
defamation  and  punitive,  aggravated  and  exemplary  damages.

     Other than the above mentioned lawsuits, to the knowledge of the management
of  the  Company  there  are no material legal proceedings pending or threatened
(other  than routine litigation incidental to business) to which the Company (or
any  officer,  director,  affiliate  of  beneficial owner of more than 5% of the
Company's  voting  securities)  is  party or to which property of the Company is
subject.

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

     There  were  no  meetings  of security holders during the period covered by
this  report.


                                        7
<PAGE>
                                     PART II

ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
MATTERS

PRICE  RANGE  OF  COMMON  STOCK

     The  Common Stock is presently traded on the over-the-counter market on the
OTC Bulletin Board maintained by the National Association of Securities Dealers,
Inc.  (the "NASD") The NASDAQ symbol for the Common Stock is "NPCT".  The common
stock  of  the  Company is also traded on the Frankfurt Exchange and the Hamburg
Exchange  under  the  symbol  "NPI".

     The following table sets forth the range of high and low quotations for the
Common  Stock of each full quarterly period during the fiscal year or equivalent
period for the fiscal periods indicated below. The quotations were obtained from
information published by the NASD and reflect interdealer prices, without retail
mark-up,  markdown  or  commission  and  may  not  necessarily  represent actual
transactions.


            2000 FISCAL YEAR        HIGH        LOW
            ------------------     -----       -----
          September 30, 1999       $0.34       $0.31

          December 31, 1999         0.27        0.20

          March 31, 2000            5.75        5.13

          June 30, 2000             2.00        1.88

            2001 FISCAL YEAR
            ------------------

          September 30, 2000        1.94        1.84

          December 31, 2000         0.94        0.78

          March 31, 2001            0.35        0.35

          June 30, 2001             0.64        0.62


     As  of June 30, 2001, there were approximately 253 holders of record of the
Company's  Common  Stock.

DIVIDEND  POLICY

     The Company has not paid any cash dividends on its common stock in the past
and  does  not  anticipate  paying  any  dividends  in  the  foreseeable future.


                                        8
<PAGE>
Earnings,  if  any, are expected to be retained to fund future operations of the
Company.  There  can  be no assurance that the Company will pay dividends at any
time  in  the  future.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

The  Company  made the following unregistered sales of its securities from March
31,  2001  through  June  30,  2001.


             TITLE OF        NO. OF
         -----------------  ---------
 DATE       SECURITIES       SHARES      CONSIDERATION        PURCHASER
-------  -----------------  ---------  -----------------  ------------------

5/31/01    Common Stock       24,000   Investor Relation  Investor Relations
                                       Services           Worldwide
                                                          Corporation


     EXEMPTION  FROM  REGISTRATION  CLAIMED.  The  sale  by  the  Company of its
unregistered  securities was made by Registrant in reliance upon Section 4(2) of
the  Securities  Act  of 1933, as amended.  The corporation, which purchased the
unregistered  securities,  was  known to the Company and its management, through
pre-existing  business  relationships.  The purchaser was provided access to all
material  information,  which  it  requested,  and  all information necessary to
verify such information and were afforded access to management of the Company in
connection  with  the  purchase.  The  purchaser  of the unregistered securities
acquired  such securities for investment and not with a view toward distribution
acknowledging  such  intent  to  the  Company.  All  certificates  or agreements
representing  such  securities  that  were issued contained restrictive legends,
prohibiting further transfer of the certificates or agreements representing such
securities,  without  such securities either being first registered or otherwise
exempt  from  registration  in  any  further  resale  or  disposition.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS

     Certain  statements  contained in this Form 10-KSB contain "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995  and involve risks and uncertainties that could cause actual results to
differ  materially  from  the  results,  financial  or  otherwise,  or  other
expectations  described in such forward-looking statements.  Any forward-looking
statement  or statements speak only as of the date on which such statements were
made,  and  the  Company  undertakes no obligation to update any forward-looking
statement  to  reflect  events  or  circumstances  after  the date on which such
statements  are  made  or  reflect  the  occurrence  of  unanticipated  events.
Therefore, forward-looking statements should not be relied upon as prediction of
actual  future  results.

RESULTS  OF  OPERATIONS

     The  Company  recognized  $132,325 in revenues during the fiscal year ended
June  30,  2001 and no revenues during the fiscal year ended June 30, 2000.  The
$132,325 in revenues during the fiscal year ended June 30, 2001 was from various


                                        9
<PAGE>
software  development  contracts  generated  by  NanoPierce  Card.  The  Company
expects  to  continue  to  recognize revenue from software development contracts
currently  in  place  and  being  developed  at  this  time.

     The Company recognized $216,440 in interest income in the fiscal year ended
June  30,  2001, compared to $41,431 during the fiscal year ended June 30, 2001.
The  increase  of $175,000 is attributable to the Company's increased investment
activities  in  various  interest  bearing  investments.

     Total  operating  expenses  during the fiscal year ended June 30, 2001 were
$3,362,976  compared  to  $2,654,803 during the fiscal year ended June 30, 2000.
The increase of $708,173 is attributable to increases in salaries, depreciation,
marketing  and  research  and  development  activities  all  attributable to the
increased activities and expansions of NanoPierce Card and the Technology Group.
Further, legal expenses were significantly higher for the fiscal year ended June
30,  2001  due  to a quarterly expense of $175,343 in connection with litigation
research  for  the  Harvest  Court  Litigation,  as  part  of  a Contingency Fee
Agreement,  the  Company  issued  3,125,000  of  its  common  shares,  valued at
$1,000,000 to cover expenses to be incurred on its behalf, of which the $175,343
represents  the  amortized  portion  of  those  deferred  costs.   Research  and
development  expense  for  the  fiscal  year  ended  June 30, 2001 were $441,459
compared  to  $133,088 for the fiscal year ended June 30, 2000.  The increase of
$308,371  is  attributable  to  additional  salaries  incurred  in  research and
development  and  the  expansion  of  research  activities  for  the  Company's
WaferPierce  product.

     Interest  expense  for  the fiscal year ended June 30, 2001 was $32,521 and
$1,129,933  for  the  fiscal year ended June 30, 2000.  The decrease of $902,001
was  due to the payment of all of the Company's long-term debt during the fiscal
year ended June 30, 2001, and the non-recurring beneficial conversion feature of
the  $995,000,  which  was recorded as interest expense in the fiscal year ended
June  30,  2000.  The Company paid in full the remainder of its outstanding debt
in  connection  with  $4,000,000  in  Convertible  Debentures and paid in full a
promissory  note  to  a  related  party.

     The  Company  during  the  fiscal  year  ended June 30, 2001 recognized net
losses  of  $3,598,543  compared to a net loss of $3,743,305 for the fiscal year
ended  June  30,  2000.  The decrease of $144,762 is explained by the $1,097,412
decrease  in  interest  expense,  which was offset by an increase of $704,668 in
operating  expenses  and the recognition of an extraordinary loss of $551,811 in
connection  with  the  payment  of  the  $4,000,000  in  convertible  debt.

LIQUIDITY  AND  FINANCIAL  CONDITION

     The  Company's  current  operations are not generating positive cash flows.
The  Company  in  October 2000 entered into a $15,000,000 Equity Financing.  The
Company  received  the  first  installment  of  $7,500,000  and in return issued
4,531,613  of  its  common shares to the investor and granted certain options to
the  investor.  As  a  result  of  suit  filed  by  the  Company  in April 2001,
management does not believe that the second installment of this equity financing
will  be  completed.


                                       10
<PAGE>
     During October 2000, the Company redeemed for cash the remaining $1,850,000
outstanding  convertible  debentures  of  the  $4,000,000 financing completed in
January  2000.  In  addition to the outstanding principal, the Company also paid
$59,878  in  interest, a premium of $462,500 and issued a warrant to purchase up
to 50,000 shares of the Company's common stock at an exercise price of $2.17 per
share.  In  addition,  the Company paid in full the outstanding note payable and
accrued  interest  of  $77,292  payable  to  a  related  party.

     During  the fiscal year ended June 30, 2001, the Company loaned $500,000 to
an  unrelated  third  party, Global Capital Partners, Inc. ("Global").  The note
bears interest at 12%, is secured by 750,000 shares of Global and was due on May
14,  2001. As additional consideration, Global also agreed to issue 6,250 shares
of Global's restricted common stock to the Company. On May 29, 2001, the Company
agreed  to  extend  the  due  date of the note to August 30, 2001. At such time,
Global  made  a payment of $125,000 on the principal of the note, $12,493 on the
accrued interest to date and a prepayment on the interest of $7,500. In addition
Global  agreed to issue an additional 6,250 shares of Global's restricted common
stock  to  the Company. On August 30, 2001, Global made a payment of $100,000 on
the outstanding amount and arrangements were made to extend the final payment to
September  30,  2001.

     During  the  fiscal year ended June 30, 2001, the Company loaned $92,500 to
Intercell  International  Corporation, an affiliate of the Company.  The loan is
unsecured,  bears  interest  at  5.75%  per  annum  and  is  due  on  demand.

     During the fiscal year ended June 30, 2001, the Company made investments in
Machinery and Equipment to support its expanded activities at all three offices.
The Company during the fiscal year ended June 30, 2001, made improvements to the
Colorado  Springs facility totaling $70,838 in connection with the building of a
clean room for the WaferPierce Process.  Such improvements are being depreciated
over  the  life  of  the  3-year  lease.

     During  the  fiscal  year  ended  June  30,  2001,  the  Company  paid  all
outstanding  long-term  debt  and  at  this  time  has  no  long-term  debt.

     In  January 2000, the Company created a wholly owned subsidiary, NanoPierce
Card.  The  Company  is the sole holder of all of the equity of NanoPierce Card;
the  Company has invested $1,676,000 in the equity of NanoPierce Card as of June
30,  2001.  During the fiscal year ended June 30, 2001, both NanoPierce Card and
the  Technology  Group  expanded  their  facilities  to  provide  more space for
increased  activities.  During  the  same  period the Company move its corporate
headquarters  to  a  larger  space.

PLAN  OF  OPERATIONS

     The  Company has signed various agreements with companies both overseas and
in  the  states.  The  agreements  are  to apply the Company's NCS technology to
various  products  mainly in the smart card/smart label industry.  Management is
pursuing  the  development  of  further  similar  agreements both nationally and
internationally  with companies not only in the smart card/smart label industry,
the  wafer  manufacturing  industry,  but  also  other  industries, as well. The
Company  is  continuing  to  advance  those  agreements  already  in  place.

     The  Company  in  September  2001  will  provide  funding  for  a  sales
representative  in  Taipei,  Taiwan.  Such  office  would be responsible for the
marketing  and  sales  of  NCS  in  Taiwan.


                                       11
<PAGE>
     The  Company  is  continuing  to  look  for  additional  financing  through
marketing  of  its  NCS  though  the  pursuit  of  licensing,  joint  ventures,
co-manufacturing  or  other  similar  arrangements  with industry partners.  The
failure  to  secure  such  a  relationship  will result in the Company requiring
substantial additional capital and resources to bring its NCS to market.  To the
extent the Company's operations are not sufficient to fund the Company's capital
requirements,  the  Company  may  enter  into  a  revolving  loan agreement with
financial  institutions  or  attempt  to  raise  capital  through  the  sale  of
additional  capital  stock or through the issuance of debt.  At the present time
the  Company  does  not  have  a  revolving  loan  agreement  with any financial
institution  nor  can  the Company provide any assurance that it will be able to
enter  into  any  such agreement in the future or be able to raise funds through
the further issuance of debt or equity in the Company.  The Company continues to
evaluate  additional  merger  and  acquisition  opportunities.

RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets.  SFAS  No.  141  requires that the purchase method of accounting be used
for  all  business  combinations  initiated  after  June  30,  2001.  Use of the
pooling-of-interests  method  will  be  prohibited  on a prospective basis only.
SFAS  No. 142 addresses financial accounting and reporting for acquired goodwill
and  other  intangible assets.  It changes the accounting for goodwill and other
intangible  assets  with  indefinite  lives  from  an  amortization method to an
impairment-only  approach  and  requires  intangible assets with finite lives to
amortized  over  their useful lives.  SFAS No. 142 is effective for fiscal years
beginning  after  December  15,  2001.  The  Company  does  not  expect that the
adoption  of  SFAS  No.  141  will  have  a  significant immediate impact on the
financial  condition  or results of operations of the Company as the Company has
no  current  planned  business combinations.  The Company is currently assessing
the  impact,  if  any,  that SFAS No. 142 may have on its financial condition or
results  of  operations.

     In  December  1999,  the  staff  of  the Securities and Exchange Commission
issued  Staff  Accounting  Bulletin  ("SAB")  No.  101,  Revenue  Recognition in
Financial statements.  SAB No. 101, as amended by SAB No. 101A and SAB No. 101B,
was  effective no later than the fourth fiscal quarter of fiscal years beginning
after  December  15,  1999.  SAB  No. 101 provides the Staff's views in applying
generally accepted accounting principles to selected revenue recognition issues.
Currently,  the  Company  believes  that  it  complies  with  the accounting and
disclosure  described  in  SAB  No.  101.

     In  June  1998,  the Financial Accounting Standard Board (FASB) issued SFAS
No.  133,  Accounting  for  Derivative  Instruments and Hedging Activities. This
statement,  as  amended,  is effective for fiscal years beginning after June 15,
2000.  Currently, the Company does not have any derivative financial instruments
and  does not participate in hedging activities; therefore, SFAS No. 133 did not
impact  the  Company's  financial  statements.

ITEM  7.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The  Financial  Statements and related financial information required to be
filed  are  indexed  on  page  F-2  and  are  incorporated  herein.


                                       12
<PAGE>
                                    PART III

ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  COMPANY

EXECUTIVE  OFFICERS  AND  DIRECTORS

     The  executive officers, directors and significant employees of the Company
are  as  follows:

<TABLE>
<CAPTION>

       NAME AND AGE                 POSITION                     PERIOD
<S>                          <C>                          <C>
Paul H. Metzinger (62)       Director, President, Chief   December 1998 to present
                             Executive Officer, General   January 2000 to present
                             Manager of NanoPierce Card

Dr. Herbert J. Neuhaus (42)  Director, Executive Vice     January 1999 to present
                             President of Technology &
                             Marketing

Dr. Michael E. Wernle (39)   Director, Executive Vice     November 1999 to present
                             President of Strategic
                             Business Development,
                             President & Chief Executive
                             Officer of NanoPierce Card   January 2000 to present

Kristi J. Kampmann (28)      Chief Financial Officer,     October 1999 to present
                             Secretary                    February 1998 to present

Dr. Robert Shaw (62)         Director                     October 2000 to present

Albert M. Capote (45)        Director                     October 2000 to June 1, 2001
</TABLE>


     The directors hold office until the next annual meeting of shareholders and
until  their  successors  have  been  duly  elected and qualified.  The Board of
Directors  elects  the  officers at its annual meeting immediately following the
shareholders  annual  meeting  and  hold office until they resign or are removed
from office.  There are no family relationships that exist between any director,
executive  officer,  significant  employee  or person nominated or chosen by the
Company  to  become  a  director  of  executive  officer.  The  Company  has not
established  an  Executive  Committee of the Board of Directors or any committee
that  would  serve similar functions such as an audit, incentive compensation or
nominating  committee.


                                       13
<PAGE>
BIOGRAPHICAL INFORMATION ON OFFICERS, DIRECTORS AND SIGNIFICANT EMPLOYEES

     PAUL H. METZINGER.  Mr. Metzinger was President and Chief Executive Officer
of the Company from February 26, 1998 to May 6, 1998 and has served in that same
capacity  from  December  1,  1998  to  present.  He  has been a director of the
Company  since  February  26,  1998.  He  has  served  as the General Manager of
NanoPierce  Card  since  January  19,  2000.  In  addition,  he  serves  as  the
President,  Chief  Executive  Officer, Chief Financial Officer and a Director of
Intercell  International  Corporation.  Prior to becoming a director and officer
of  the  Company,  Mr.  Metzinger  served  as  Intercell's  General  Counsel and
practiced  securities  law in Denver, Colorado for over 32 years.  Mr. Metzinger
received  his  J.D.  degree in 1967 from Creighton University Law School and his
L.L.M.  from  Georgetown  University  in  1969.

     HERBERT J. NEUHAUS, PH.D. Dr. Neuhaus has been the Executive Vice President
of Marketing and Technology and a Director of the Company since January 1, 1999.
Dr.  Neuhaus previously served as the Managing Director of Particle Interconnect
Corporation from August 18, 1997 to November 1, 1997. From August 1989 to August
1997,  he  was  associated with the Electronic Material Venture Group in the New
Business Development Department of Amoco Chemical Company, Naperville, Illinois.
While  associated  with  Amoco  chemical  Company he held among other positions:
Business  Development  Manger/Team  Leader;  Project  Manager  --High  Density
Interconnect;  Product  Manager  MCM  Products  and  as  a  research  scientist.

     Dr.  Neuhaus  received  his  Ph.D. degree in Physics form the Massachusetts
Institute  of Technology, Cambridge, Massachusetts in 1989 and his BS in Physics
from  Clemson  University,  Clemson,  South  Carolina  in  1980.

     DR.  MICHAEL  E.  WERNLE.  Dr.  Wernle  has  served  as  the Executive Vice
President  for  Strategic  Business  Development  and a Director of the Company,
since  November  1999.  He has been the President and Chief Executive Officer of
NanoPierce Card since January 19, 2000. Dr. Wernle was formerly Chief Operations
Officer  for  Meinen, Ziegel & Co., GmbH, Munich, Germany. He also served as the
Director  of  Production  for  Mikron/Philips-Graz,  Graz, Austria. Where he was
responsible  for  the  development  and production of RFID and Contactless Smart
Card  Systems.

     Dr.  Wernle  received  his  Ph.D.  in  Applied  Physics  from the Technical
University of Vienna in 1990 and his Masters Degree in Industrial Electronics in
1988.

     KRISTI  J. KAMPMANN. Ms. Kampmann was appointed the Chief Financial Officer
of  the  Company  on  October  15,  1999. Ms. Kampmann has been Secretary of the
Company  since  February  1998.  She  has  served  as the Secretary of Intercell
International  Corporation,  since  July 28, 1999. Since June 1997, she has been
the  administrative assistant to the Chief Executive Officer and Chief Financial
Officer,  in addition, during the same period she served in the same capacity to
the  Chief  Executive  Officer  of  Intercell. From April 1996 to June 1997, she
served  as  a paralegal and administrative assistant for Paul H. Metzinger, P.C.
Ms.  Kampmann graduated from the Denver Paralegal Institute in 1996 and received
a B.A. from the University of Minnesota in Morris in 1995, majoring in Political
Science  with  a  minor  in  Business Management. She currently is attending the
University  of Colorado at Denver, where she will receive her M.B.A. in December
2001.


                                       14
<PAGE>
     DR.  ROBERT SHAW. Dr. Shaw has been a Director of the Company since October
31,  2000.  Dr.  Shaw currently is an Assistant Professor of Physics at Farleigh
Dickinson  University.  Among  others,  he  has  held  the positions of Research
chemist  at  the  American  Cyanamid  Research  Laboratories,  Stamford;  Senior
Research  Physicist  at  Exxon  Research and Engineering Company; Manager of New
Business  Development at Exxon Enterprises, Exxon Corporation, New York, NY; and
President  of  Robert  Shaw  Associates, Inc., Chatham, NJ.

     Dr.  Shaw  received  his  Ph.D.  in  Solid  State  Physics  form  Cambridge
University,  Cambridge,  England.  He  was  among  the first to conduct academic
research  on  electronic  conduction mechanisms in amorphous semiconductors.  He
received  a  B.S.  in  Inorganic  Chemistry with a minor in Nuclear Physics from
North  Carolina  State  University,  Raleigh,  NC.

     ALBERT CAPOTE.  Mr. Capote served as a Director of the Company from October
31, 2000 to May 2001, when he resigned for personal reasons.   Mr. Capote is the
founder  and  President  of  Aguila  Technologies, Inc. He also founded Toranaga
Technologies,  Inc.,  now  named  Ormet  Corporation,  in  1988.


ITEM  10.     EXECUTIVE  COMPENSATION

     The  following table sets forth certain information concerning compensation
paid  by the Company to the Chief Executive Officer and the Company's three most
highly  compensated  executive  officers for the fiscal year ended June 30, 2001
and  2000  (the  "Named  Executive  Officers"):


                                       15
<PAGE>
<TABLE>
<CAPTION>
                              ANNUAL COMPENSATION                                   LONG TERM COMPENSATION
                              -------------------                                   ----------------------
                                                                                 AWARDS                   PAYOUTS
                                                                                 ------                   -------
 NAME &                                                                  RESTRICTED   SECURITIES      LTIP
PRINCIPAL                      SALARY       BONUS         OTHER ANNUAL      STOCK     UNDERLYING     PAYOUTS     ALL OTHER
POSITION           YEAR         ($)          ($)          COMPENSATION    AWARDS ($)  OPTIONS (#)      ($)       COMPENSATION
<S>             <C>         <C>           <C>             <C>            <C>          <C>         <C>            <C>
Paul H.
Metzinger,
Director,             2001  $    181,500  $          -0-  $         -0-  $       -0-     500,000  $         -0-  $      -0-
President &
CEO(1)                2000  $    165,000  $          -0-  $         -0-  $       -0-         -0-  $         -0-  $      -0-

Dr. Herbert
J. Neuhaus,
Director, Ex.
VP of                 2001  $    181,500  $          -0-  $         -0-  $       -0-     100,000  $         -0-  $      -0-
Technology
& Marketing           2000  $    165,000  $          -0-  $         -0-  $       -0-     500,000  $         -0-  $      -0-

Dr. Michael
E. Wernle,
Director, Ex.
VP of
Strategic
Business              2001  $    175,000  $          -0-  $         -0-  $       -0-     485,000  $         -0-  $      -0-
Dvlpmt, Pres
& CEO of
NanoPierce
Card                  2000  $    165,000  $          -0-  $         -0-  $       -0-     500,000  $         -0-  $      -0-

Kristi J.
Kampmann,
Chief
Financial             2001  $     60,000  $          -0-  $         -0-  $       -0-      50,000  $         -0-  $      -0-
Officer &
Secretary             2000  $     42,000  $          -0-  $         -0-  $       -0-      75,000  $         -0-  $      -0-
--------------
<FN>
1  Paul  Metzinger  has  served as President & CEO since December 1998.  He is compensated pursuant to a written Employment
Agreement,  dated  January  1,  1999  at  an  annual  salary  of  $181,500.
2 Dr. Neuhaus has served as the Executive Vice President of Technology and Marketing since January 1999.  He is compensated
pursuant  to  a  written  Employment  Agreement,  dated  January  2000  at  an  annual  salary  of  $181,500.
3  Dr.  Wernle  has  served  as the Executive Vice President of Strategic Business Development since November 1999.  He has
served  as  the  President & CEO of NanoPierce Card since January 2000.  He is compensated pursuant to a written Employment
Agreement  with  NanoPierce  Card,  dated  February  1,  2000,  at  an  annual  salary  of  $175,000  (350,000  DM).
4  Kristi  Kampmann has served as the Chief Financial Officer since October 1999.  She is compensated pursuant to a written
Employment  Agreement,  dated  July  2000,  at  an  annual  salary  of  $60,000.
</TABLE>


                                       16
<PAGE>
     The  foregoing  compensation table does not include certain fringe benefits
made  available  on  a  nondiscriminatory basis to all Company employees such as
group  health  insurance,  dental  insurance,  long-term  disability  insurance,
vacation  and  sick  leave.  In  addition,  the  Company makes available certain
non-monetary  benefits  to  its  executive officers with a view to acquiring and
retaining  qualified  personnel  and  facilitating job performance.  The Company
considers  such  benefits  to  be  ordinary  and  incidental  business costs and
expenses.  The  aggregate  value  of such benefits in the case of each executive
officer  listed  in  the  above table, which cannot be precisely ascertained but
which  is  less  than  10%  of the cash compensation paid to each such executive
officer,  is  not  included  in  such  table.

                             OPTION/SAR GRANTS TABLE

     The  following  table  provides  information relating to the grant of stock
options  to  the  Company's executive officers during the fiscal year ended June
30,  2001

<TABLE>
<CAPTION>
                                INDIVIDUAL GRANTS
                                -----------------

                     % OF TOTAL
                        # OF        OPTIONS/SARS
                     UNDERLYING      GRANTED TO
                    OPTIONS/SARS    EMPLOYEES IN    EXERCISE OF BASE   EXPIRATION
NAME                 GRANTED (#)   FISCAL YEAR(1)   PRICE ($/SHARE)       DATE
<S>                 <C>            <C>             <C>                 <C>
Paul H. Metzinger         500,000          26.64%  $            2.125     10/6/10

Dr. Herbert J.            500,000          26.64%  $            2.125     10/6/10
Neuhaus

Dr. Michael E.            500,000          26.64%  $            2.125     10/6/10
Wernle

Kristi J. Kampmann         75,000           3.50%  $            2.125     10/6/10

--------------
<FN>
1  Based  on a total of 2,115,000 options granted to employees in the fiscal year
ended  June  30,  2001.
</TABLE>


                                       17
<PAGE>
             AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                        FISCAL YEAR END OPTION/SAR VALUES

     The  following table provides information relating to the exercise of stock
options  during  the  fiscal year ended June 30, 2001 by the Company's executive
officers  and  the  2001  fiscal  year-end  value  of  unexercised  options.

<TABLE>
<CAPTION>
                                                       # OF SECURITIES     VALUE OF
                                                         UNDERLYING       UNEXERCISED
                         SHARES                          UNEXERCISED      IN-THE-MONEY
                      ACQUIRED ON     VALUE REALIZED   OPTIONS/SARS AT   OPTIONS/SAR AT
       NAME           EXERCISE (#)          ($)          FISCAL YEAR       FY-END ($)
<S>                 <C>               <C>              <C>              <C>
                                                        EXERCISABLE/      EXERCISABLE/
                                                        UNEXERCISABLE     UNEXERCISABLE

Paul H. Metzinger                  0                0      2,500,000/0  $    1,550,000/0

Dr. Herbert J.                     0                0      1,350,000/0  $      850,550/0
Neuhuas

Dr. Michael E.                     0                0        985,000/0  $      620,550/0
Wernle

Kristi J. Kampmann                 0                0        250,000/0  $      157,500/0
<FN>
--------------
1  The  average  of the closing bid and asked price of the Common Stock on June 30, 2001
($0.63)  was  used  to  calculate  the  option  value.
</TABLE>

EMPLOYMENT  AGREEMENTS

     On  January  1, 1999, the Company entered into an employment agreement with
Paul  H.  Metzinger  to  serve  as  President and Chief Executive Officer of the
Company.  The employment agreement with Mr. Metzinger expires December 31, 2002.
On  January  6,  1999  the Company entered into an employment agreement with Dr.
Herbert  J.  Neuhaus  to serve as the Executive Vice President of Technology and
Marketing.  The  employment agreement with Dr. Neuhaus was renewed on January 1,
2000  and  expires  December 31, 2003.  On November 1, 1999, the Company entered
into  an  employment  agreement  with  Dr.  Michael  E.  Wernle  to serve as the
Executive  Vice  President  Strategic  Business  Development.  This  employment
agreement  has been superceded by his employment agreement with NanoPierce Card.
On  February  1, 2000, NanoPierce Card entered into an employment agreement with
Dr.  Michael  E.  Wernle  to  serve  as  the  President of NanoPierce Card.  The
employment  agreement between Dr. Wernle and NanoPierce Card expires as provided
by  German  law.


                                       18
<PAGE>
     On  July  15,  2000,  the Company entered into an employment agreement with
Kristi  J.  Kampmann  to  serve  as the Chief Financial Officer. Such employment
agreement  expires  on  July  15, 2002. Pursuant to her employment agreement Ms.
Kampmann  receives  an  annual  salary  of  $60,000  to  be increased to $75,000
annually  upon  the  completion  of  her  MBA.

     In connection with the Employment Agreements, generally, the Company or the
Employee  may  terminate  the  Employment  Agreement at any time with or without
cause.  In the event the Company terminates an Employment Agreement for cause or
the  Employee  terminates  his  Employee  Agreement  without  cause, all of such
Employee's  rights to compensation would cease upon the date of his termination.
If  the  Company  terminates an Employment Agreement without cause, the Employee
terminates  his  Employment  Agreement for cause, or in the event of a change in
control,  the  Company  will  pay  to  the  Employee  all compensation and other
benefits  that would have accrued and/or been payable to the Employee during the
full  term  of  the  Employment  Agreement.

     A change of control is considered to have occurred when, as a result of any
type of corporate reorganization, execution of proxies, voting trusts or similar
arrangements,  a  person  or  group  of  persons (other than incumbent officers,
directors and principal shareholders of the Company) acquires sufficient control
to  elect more than a majority of the Company's Board of Directors, acquires 50%
or  more  of  the  voting shares of the Company, or the Company adopts a plan of
dissolution  of  liquidation. The Employment Agreement also include a noncompete
and  nondisclosure  provisions in which each Employee agrees not to compete with
or  disclose  confidential  information  regarding  the Company and its business
during  the  term  of  the  Employment  Agreement  and  for a period of one year
thereafter.

COMPENSATION  PURSUANT  TO  PLANS

     STOCK  OPTION  PLANS.  During  the  fiscal  year  ended  June 30, 2001, the
Company  granted registered options pursuant to its registered 1998 Compensatory
Stock  Option  Plan  to  purchase 2,115,000 shares of common stock to directors,
officers,  employees and consultants of the Company and its subsidiaries.  As of
June  30,  2001,  6,852,000  options  are  exercisable.

     The Company has one Stock Option Plan entitled the NanoPierce Technologies,
Inc.  1998  Compensatory  Stock  Option Plan. The Company has reserved 7,500,000
shares  of  common  stock  for  issuance  under  the  Plan.

ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

                              BENEFICIAL OWNERSHIP

     The following table sets forth certain information regarding the beneficial
ownership  of  outstanding shares of common Stock as of June 30, 2001 on a fully
diluted basis, by (a) each person known by the Company to won beneficially 5% or
more  of  the  outstanding  shares of Common Stock, (b) the Company's directors,
Chief Executive Officer and executive officers whose total compensation exceeded
$100,000  for the last fiscal year, and (c) all directors and executive officers
of  the  Company  as  a  group.


                                       19
<PAGE>
<TABLE>
<CAPTION>
------------------------------  --------------  ------------  -------------------
NAME, ADDRESS & NATURE OF
BENEFICIAL OWNER                TITLE OF CLASS     AMOUNT     PERCENT OF CLASS(7)
------------------------------  --------------  ------------  -------------------
<S>                             <C>             <C>           <C>

The Paul H. Metzinger Trust
Paul H. Metzinger, President
& CEO, Director                 Common Stock    4,618,058(1)                7.14%
370 17th Street, Suite 3640
Denver, CO 80202
------------------------------  --------------  ------------  -------------------
The Cheri L. Metzinger Trust
Cheri L. Metzinger, Wife of
Paul H. Metzinger               Common Stock    4,618,058(2)                7.14%
3236 Jellison Street
Wheatridge, CO 80033
------------------------------  --------------  ------------  -------------------
Dr. Herbert J. Neuhaus, Ex.
VP of Technology &
Marketing, Director             Common Stock    1,460,000(3)                2.26%
770 Maroonglen Court
Colorado Springs, CO 80906
------------------------------  --------------  ------------  -------------------
Dr. Michael E. Wernle, Ex
VP of Strategic Business
Development, Director,          Options           985,000(4)                1.52%
President & CEO of
NanoPierce Card
Lise-Meitner-Strasse
1D-85662 Hohenbrunn
Germany
------------------------------  --------------  ------------  -------------------
Kristi J. Kampmann, Chief
Financial Officer
370 17th Street, Suite 3640     Common Stock      269,080(5)                0.38%
Denver, CO 80202
------------------------------  --------------  ------------  -------------------
Dr. Robert E. Shaw, Director
8 Nicklaus Court                Options           100,000(6)                0.16%
Florham Park, NJ 07932
------------------------------  --------------  ------------  -------------------
Intercell International
Corporation
370 17th Street, Suite 3640     Common Stock      8,808,050                13.61%
Denver, CO 80202
------------------------------  --------------  ------------  -------------------
All Officers & Directors as a
Group (5 persons)               Common Stock      7,332,138                13.16%
------------------------------  --------------  ------------  -------------------
<FN>
1  Includes  1,147,807  common  shares  held  directly and beneficially; 970,251
common  shares  that Mr. Metzinger owns beneficially though his wife and options
held  by  Mr.  Metzinger  consisting of 500,000 shares exercisable at $2.125 per
share,  500,000  shares  exercisable  at  $0.52  per  share and 1,500,000 shares
exercisable  at  $0.3250  per  share.


                                       20
<PAGE>
2  Cheri  L. Metzinger is the wife of Mr. Paul H. Metzinger, the Chief Executive
Officer and President of the Company. This includes 970,251 shares held directly
and beneficially and 1,147,807 common shares and 2,000,000 common shares subject
to  option  owned  beneficially  by  her  husband.
3  Based  on  110,000  common  shares  and  options consisting of 500,000 shares
exercisable  at $2.125 per share, 100,000 shares exercisable at $2.75 per share,
250,000  shares exercisable at $0.52 per share and 500,000 shares exercisable at
$0.20  per  share.
4 Based on options consisting of 500,000 shares exercisable at $2.125 per share,
160,000  shares  exercisable  at  $2.75  per share, 25,000 shares exercisable at
$0.52  per  share  and  300,000  shares  at  $0.45  per  share.
5  Based on 19,080 common shares and options 75,000 shares exercisable at $2.125
per  share,  50,000  shares  exercisable  at  $2.75  per  share,  50,000  shares
exercisable  at  $0.52  per  share  and 50,000 shares exercisable at $0.3250 per
share.
6  Based  on  an  option  consisting  of 100,000 shares exercisable at $2.00 per
share.
7  Based on 55,701,398 shares of common stock issued and outstanding on June 30,
2001  and  assuming  exercise of all 6,852,000 presently exercisable options and
exercise  of  2,170,661  outstanding  warrants, there would be 64,724,059 shares
outstanding.  Mr.  Metzinger's  and  Mrs.  Metzinger's  stock  ownership are not
duplicated  in  this  computation.
</TABLE>


ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     During  the fiscal year ended June 30, 1999, Paul H. Metzinger, President &
Chief  Executive  Officer,  a  Director  and  a major shareholder of the Company
loaned the Company $117,777.  This amount was represented by a demand, unsecured
Corporate  Promissory  Note  in the amount of $117,777, dated April 1, 1999.  On
May  31,  2000,  the  Company paid the Corporate Promissory Note in full using a
combination  of  stock  and  cash.

     A  former  affiliate and a shareholder of the Company made certain loans to
the  Company  amounting  to  $66,837.  Cheri  L.  Metzinger,  wife  of  Paul  H.
Metzinger,  acquired  such Notes from such shareholder by paying the face amount
of  the  Notes.  The Company issued a demand unsecured Corporate Promissory Note
in  the amount of $66,837, dated March 31, 1999, bearing interest at the rate of
10%  per  annum  to Cheri L. Metzinger.  The Company paid the Promissory Note in
full  on  October  23,  2000.

     As previously stated options were granted to each of Paul H. Metzinger, Dr.
Herbert  J.  Neuhaus, Dr. Michael E. Wernle and Kristi J. Kampmann, officers and
directors  of  the  Company,  during  the  fiscal  year  ended  June  30,  2001.


                                       21
<PAGE>
                                     PART IV

ITEM  13.     EXHIBITS

     (a)  The  following  documents  are  filed  as  a  part  of  this  Report.

               (i)  Financial  Statements. See Index to Financial Statements and
          Schedule  on  page  F-2  of  this  Report.
               (ii) Exhibits. The following is a complete list of exhibits filed
          as part of this Form 10-KSB. Exhibit numbers correspond to the numbers
          in  the  Exhibit  Table  of  Item  601  of  Regulation  S-B.

<TABLE>
<CAPTION>
EXHIBIT NO.  DESCRIPTION
<C>          <S>
   2           Agreement  dated  February 26, 1998, by and among the registrant,
               Particle  Interconnect  Corporation and Intercell Corporation (5)
   2.02        Application  and  Development Agreement, dated April 15, 1999, by
               and  among  the  registrant  and  Multitape  & Co., Gmbh, KG. (3)
   2.03        Technology  Cooperation  Agreement,  dated  May  17, 1999, by and
               among  the  registrant  and  Meinen,  Zeigel  &  Co.  (3)
   2.04        Technology  Development  Agreement,  dated  June 11, 1999, by and
               among  the  registrant  and  ORGA  Kartensysteme,  GmbH.  (3)
   2.05        Agreement-In-Principle,  dated  May  18,  1999,  by and among the
               registrant  and  Cirrex  Corporation.  (3)
   4.01        The  Articles  of  Incorporation  of  the  Company  (4)
   4.02        Amendment  to  the  Articles  of Incorporation of the Company (4)
   4.03        Certificate  of  Designation  of  Rights  and  Preferences of the
               Series  A  Preferred  Stock  (5)
   4.04        Certificate  of  Designation  of  Rights  and  Preferences of the
               Series  B  Preferred  Stock  (6)
   4.05        Certificate  of  Designation  of  Rights  and  Preferences of the
               Series  C  Preferred  Stock  (6)
   4.06        Form  of  Common  Stock  Certificate  (4)
   4.07        The By-laws of the Company  (4)
   10.01       Employment and Non-Disclosure, Non-Competition Agreement, dated
               January 1, 1999, between Paul H. Metzinger and the registrant (3)
   10.02       Employment and Non-Disclosure, Non-Competition Agreement, dated
               January  6,  1999,  between  Dr.  Herbert  J.  Neuhaus  and  the
               registrant  (3)
   10.03       Employment and Non-Disclosure, Non-Competition Agreement, dated
               July  15, 2000, between Kristi J. Kampmann and the registrant (2)
   11          Statement regarding Computation of Per Share Earnings  1
___________________
<FN>
1    Filed  herewith
2    Incorporated  by reference to the Registrant's Annual Report on Form 10-KSB
     for  the  year  ended  June  30,  2001.
3    Incorporated  by reference to the Registrant's Annual Report on Form 10-KSB
     for  the  year  ended  June  30,  1999.
4    Incorporated  by reference to the Registrant's Annual Report on Form 10-KSB
     for  the  year  ended  June  30,  1998.
5    Incorporated  by  reference  to  the  Company's Current Report on Form 8-K,
     dated  February  26,  1998.
6    Incorporated  by  reference  to  the  Company's Current Report on Form 8-K,
     dated  July  23,  1998.
</TABLE>


                                       22
<PAGE>
                                   SIGNATURES

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

                                         NANOPIERCE  TECHNOLGIES,  INC.
                                         (a  Nevada  corporation)


Date:  September 27,  2001          By:  /s/  Paul  H.  Metzinger
                                         --------------------------------------
                                         Paul  H.  Metzinger,  Director,  Chief
                                         Executive  Officer  &  President



Date:  September 27,  2001          By:  /s/  Kristi  J.  Kampmann
                                         --------------------------------------
                                         Kristi  J.  Kampmann,  Chief  Financial
                                         Officer  &  Chief  Accounting  Officer

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  the  capacities  and  on  the  dates  indicated.


Date:  September 27,  2001          By:  /s/  Paul  H.  Metzinger
                                         --------------------------------------
                                         Paul  H.  Metzinger,  Director,  Chief
                                         Executive  Officer  &  President


Date:  September 27,  2001          By:  /s/  Herbert  J.  Neuhaus
                                         --------------------------------------
                                         Herbert  J.  Neuhaus,  Director  &
                                         Executive  Vice-President  of
                                         Technology  &  Marketing


Date:  September 27,  2001          By:  /s/  Michael  E.  Wernle
                                         --------------------------------------
                                         Michael  E.  Wernle,  Director  &
                                         Executive Vice-President of Strategic
                                         Business Development


Date:  September 27,  2001          By:  /s/  Robert  Shaw
                                         --------------------------------------
                                         Robert  Shaw,  Director


                                       23
<PAGE>
                          NANOPIERCE TECHNOLOGIES, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                     Page
                                                                     ----
Independent Auditors' Report                                         F-2

Financial Statements:

  Consolidated Balance Sheet - June 30, 2001                         F-3

  Consolidated Statements of Operations -
        Years ended June 30, 2001 and 2000                           F-4

  Consolidated Statements of Comprehensive Loss -
        Years ended June 30, 2001 and 2000                           F-5

  Consolidated Statements of Shareholders' Equity (Deficit) -
        Years ended June 30, 2001 and 2000                           F-6

  Consolidated Statements of Cash Flows -
        Years ended June 30, 2001 and 2000                           F-8

  Notes to Consolidated Financial Statements                         F-10


                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------



Board  of  Directors
Nanopierce  Technologies,  Inc.
Denver,  Colorado

We  have  audited  the  accompanying  consolidated  balance  sheet of Nanopierce
Technologies,  Inc.  and  subsidiary  as  of  June  30,  2001,  and  the related
consolidated  statements of operations, comprehensive loss, shareholders' equity
(deficit) and cash flows for each of the years in the two-year period ended June
30,  2001.  These  financial  statements are the responsibility of the Company's
management.  Our  responsibility  is  to  express  an opinion on these financial
statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Nanopierce
Technologies,  Inc. and subsidiary as of June 30, 2001, and the results of their
operations  and  their  cash  flows for each of the years in the two-year period
ended June 30, 2001, in conformity with accounting principles generally accepted
in  the  United  States  of  America.


GELFOND  HOCHSTADT  PANGBURN,  P.C.




Denver,  Colorado
September  14,  2001


                                       F-2
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2001

                                     ASSETS
Current  assets:
  Cash  and  cash  equivalents                               $ 3,384,536
  Accounts  receivable                                            48,225
  Notes  receivable                                              675,000
  Deferred  legal  costs  and  other  prepaid  expenses          865,235
                                                             ------------
     Total  current  assets                                    4,972,996
                                                             ------------

Property  and  equipment:
  Machinery                                                      324,226
  Office  equipment  and  furniture                              166,765
  Leasehold  improvements                                         70,838
                                                             ------------
                                                                 561,829
  Less  accumulated  depreciation                               (115,338)
                                                             ------------
                                                                 446,491
                                                             ------------

Other  assets:
  Notes  receivable,  related  party                              92,500
  Marketable  securities                                             474
  Deposits  and  other                                            46,136
  Intellectual  property  rights,  net  of  accumulated
     amortization  of  $334,315                                  665,685
  Patent  applications                                            83,310
                                                             ------------
                                                                 888,105
                                                             ------------

                                                             $ 6,307,592
                                                             ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current  liabilities:
  Accounts  payable                                          $   139,253
  Accrued  liabilities                                            31,486
                                                             ------------
      Total  liabilities  -  all  current                        170,739
                                                             ------------

Commitments  and  contingencies  (Notes  8  and  9)

Shareholders'  equity  (Notes  6  and  7):
     Preferred  stock,  $0.0001  par  value;  5,000,000
       shares  authorized:
        Series  A;  no  shares  issued  and  outstanding
        Series B; maximum of 75,000 shares issuable; no
          shares issued and outstanding
        Series C; maximum of 700,000 shares issuable; no
          shares  issued  and  outstanding
     Common stock, $0.0001 par value; 100,000,000 shares
       authorized; 55,701,398 shares issued and outstanding        5,570
     Additional paid-in capital                               18,451,781
     Accumulated  other  comprehensive  income                     6,265
     Accumulated  deficit                                    (12,326,763)
                                                             ------------
               Total  shareholders'  equity                    6,136,853
                                                             ------------

                                                             $ 6,307,592
                                                             ============


               See notes to the consolidated financial statements.


                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED JUNE 30, 2001 AND 2000



                                                  2001          2000
                                              ------------  ------------
<S>                                           <C>           <C>
Revenues                                      $   132,325             -
                                              ------------  ------------

Operating expenses:
  Research and development                        441,459       133,088
  General and administrative                    2,741,250     2,511,715
  Selling and marketing                           180,267        10,000
                                              ------------  ------------

                                                3,362,976     2,654,803
                                              ------------  ------------

Loss from operations                           (3,230,651)   (2,654,803)
                                              ------------  ------------

Other income (expense):
     Interest income:                                            41,431
        Related party                               1,597
        Other                                     214,843
     Interest expense:
        Related party                          (    2,087)   (   10,548)
        Other                                  (   30,434)   (1,119,385)
                                              ------------  ------------
                                                  183,919    (1,088,502)
                                              ------------  ------------

Loss before extraordinary item                 (3,046,732)   (3,743,305)

Extraordinary loss on extinguishment of debt   (  551,811)            -
                                              ------------  ------------

Net loss                                      $(3,598,543)   (3,743,305)
                                              ============  ============

Net loss per share, basic and diluted:
  Loss from continuing operations             $(     0.06)  (      0.11)
  Extraordinary loss                           (     0.01)            -
                                              ------------  ------------
    Net loss                                  $(     0.07)   (     0.11)
                                              ============  ============

Weighted average number of common shares
outstanding                                    51,147,026    32,709,638
                                              ============  ============

</TABLE>


               See notes to the consolidated financial statements.


                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                       YEARS ENDED JUNE 30, 2001 AND 2000



                                2001         2000
                            ------------  -----------
<S>                         <C>           <C>
Net loss                    $(3,598,543)  (3,743,305)

Change in unrealized gain
  on securities              (    1,467)         993

Change in foreign currency
  translation adjustments         8,265   (    2,474)
                            ------------  -----------

Comprehensive loss          $(3,591,745)  (3,744,786)
                            ============  ===========
</TABLE>


               See notes to the consolidated financial statements.


                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                                          NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                               YEARS ENDED JUNE 30, 2001 AND 2000


                                               Common stock                        Accumulated other               Receivable
                                     ------------------------------    Additional    comprehensive   Accumulated      from
                                          Shares          Amount     paid-in capital  income(loss)    deficit      Intercell
                                     -----------------  -----------  ---------------  ------------  -----------  --------------
<S>                                  <C>                <C>          <C>              <C>           <C>          <C>
Balances, July 1, 1999                      29,734,614  $     2,973        5,452,255          948   (4,984,915)      (  69,182)

Common stock issued for services               985,125           99          276,851            -            -               -

Common stock issued for cash                 1,369,911          137          332,613            -            -               -

Common stock issued for note
 payable, accrued interest and
 accounts payable to officers                  565,934           57          152,745            -            -               -

Common stock issued upon exercise
 of stock options and warrants               1,434,229          143           49,777            -            -               -

Common stock issued for notes
 payable                                       624,000           62          298,005            -            -               -

Common stock issued for convertible
 debentures and accrued interest               399,861           40          703,953            -            -               -

Warrants issued in connection
 with notes payable and
 convertible debentures                              -            -          122,305            -            -               -

Warrants issued for services                         -            -          290,000            -            -               -

Beneficial conversion feature
 related to convertible debentures                   -            -          995,000            -            -               -

Payments received from
 Intercell Corporation                               -            -                -            -            -          69,182

Net loss                                             -            -                -            -   (3,743,305)              -

Change in unrealized gain on
 securities                                          -            -                -          993            -               -
Foreign currency translation
 adjustments                                         -            -                -     (  2,474)           -               -
                                     -----------------  -----------  ---------------  ------------  -----------  --------------



                                        Total
                                    shareholders'
                                       equity
                                     -----------
<S>                                  <C>
Balances, July 1, 1999                  402,079

Common stock issued for services        276,950

Common stock issued for cash            332,750

Common stock issued for note
 payable, accrued interest and
 accounts payable to officers           152,802

Common stock issued upon exercise
 of stock options and warrants           49,920

Common stock issued for notes
 payable                                298,067

Common stock issued for convertible
 debentures and accrued interest        703,993

Warrants issued in connection
 with notes payable and
 convertible debentures                 122,305

Warrants issued for services            290,000

Beneficial conversion feature
 related to convertible debentures      995,000

Payments received from
 Intercell Corporation                   69,182

Net loss                             (3,743,305)

Change in unrealized gain on
 securities                                 993
Foreign currency translation
 adjustments                         (    2,474)
                                     -----------
</TABLE>


                                   (Continued)


                                       F-6
<PAGE>
<TABLE>
<CAPTION>
                                         NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                              YEARS ENDED JUNE 30, 2001 AND 2000
                                                          (CONTINUED)



                                               Common stock                        Accumulated other               Receivable
                                     ------------------------------    Additional    comprehensive  Accumulated      from
                                          Shares          Amount     paid-in capital  income(loss)    deficit      Intercell
                                    -----------------  -----------  ---------------  ------------  ------------  --------------
<S>                                 <C>                <C>          <C>              <C>           <C>           <C>
Balances, June 30, 2000                    35,113,674        3,511        8,673,504         (533)   (8,728,220)              -

Common stock issued for services               60,000            5           96,991            -             -               -

Common stock and warrant issued
 for convertible debt and
 accrued interest                           1,194,616          120        1,548,359            -             -               -

Common stock issued in connection
 with financing agreement:
 6,675,588 shares for $7,500,000
 cash, 9,532,520 shares upon
 cashless exercise of warrants,
 net of $507,989 of offering costs         16,208,108        1,621        6,990,390            -             -               -

Common stock issued for
 litigation expenses                        3,125,000          313          999,687            -             -               -

Options and warrants
 issued for services                                -            -          142,850            -             -               -

Net loss                                            -            -                -            -    (3,598,543)              -

Other comprehensive income (loss):
  Change in unrealized gain on
   securities                                       -            -                -       (1,467)            -               -
  Change in foreign currency
   translation adjustments                          -            -                -        8,265             -               -
                                    -----------------  -----------  ---------------  ------------  ------------  -------------

Balances, June 30, 2001                    55,701,398  $     5,570       18,451,781        6,265   (12,326,763)              -
                                    =================  ===========  ===============  ============  ============  =============



                                       Total
                                    shareholders'
                                       equity
                                    -----------
<S>                                 <C>
Balances, June 30, 2000             (   51,738)

Common stock issued for services        96,996

Common stock and warrant issued
 for convertible debt and
 accrued interest                    1,548,479

Common stock issued in connection
 with financing agreement:
 6,675,588 shares for $7,500,000
 cash, 9,532,520 shares upon
 cashless exercise of warrants,
 net of $507,989 of offering costs   6,992,011

Common stock issued for
 litigation expenses                 1,000,000

Options and warrants
 issued for services                   142,850

Net loss                            (3,598,543)

Other comprehensive income (loss):
  Change in unrealized gain on
   securities                           (1,467)
  Change in foreign currency
   translation adjustments               8,265
                                    -----------

Balances, June 30, 2001              6,136,853
                                    ===========
</TABLE>


               See notes to the consolidated financial statements.


                                       F-7
<PAGE>
<TABLE>
<CAPTION>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED JUNE 30, 2001 AND 2000



                                                                  2001           2000
                                                            -------------  -------------
<S>                                                         <C>            <C>
Cash flows from operating activities:
  Net loss                                                  $ (3,598,543)    (3,743,305)
                                                            -------------  -------------
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Amortization expense                                       100,000        100,000
      Depreciation expense                                       105,143         10,195
      Amortization of deferred legal costs                       175,343            -
      Amortization of discount on note receivable and
       amortization of beneficial conversion feature
       on convertible debentures                                   5,257      1,016,615
      Expenses incurred in exchange for common stock
       warrants and options                                      239,846        566,950
      Extraordinary loss on extinguishment of debt               551,811            -
    Changes in operating assets and liabilities:
      Increase in accounts receivable                         (   40,341)    (    4,370)
      Decrease (increase) in prepaid expenses                      3,871     (   44,449)
      Increase in deposits and other assets                   (   20,713)    (   13,732)
      Increase in accounts payable and
        accrued liabilities                                       47,083         26,564
      Increase (decrease) in deferred revenue                 (   16,822)        16,822
                                                            -------------  -------------

  Total adjustments                                            1,150,478      1,674,595
                                                            -------------  -------------

Net cash used in operating activities                         (2,448,065)    (2,068,710)
                                                            -------------  -------------

Cash flows from investing activities:
  Increase in patent applications                             (   83,310)           -
  Purchase of property and equipment                          (  398,107)    (  163,722)
  Advances to Intercell International Corporation                    -              -
  Payments received on Intercell International
  Corporation advance                                                -           69,182
  Payments received on note receivable                           125,000         54,100
  Increase in notes receivable                                (  892,500)    (   44,100)
                                                            -------------  -------------

Net cash used in investing activities                         (1,248,917)    (   84,540)
                                                            -------------  -------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                       6,992,011        332,750
  Proceeds from issuance of convertible debentures
    and warrants                                                     -        4,000,000
  Proceeds from notes payable                                        -          302,500
  Proceeds from exercise of options and warrants                     -           49,920
  Redemption of convertible debentures                        (2,312,500)           -
  Payments on note payable                                    (   66,837)    (   62,582)
                                                            -------------  -------------

Net cash provided by financing activities                      4,612,674      4,622,588
                                                            -------------  -------------

Effect of exchange rate changes on cash and cash equivalents       2,551     (    3,686)
                                                            -------------  -------------

Net increase in cash and cash equivalents                        918,243      2,465,652

Cash and cash equivalents, beginning                           2,466,293            641
                                                            -------------  -------------

Cash and cash equivalents, ending                             $3,384,536      2,466,293
                                                            =============  =============
</TABLE>


                                   (continued)


                                       F-8
<PAGE>
<TABLE>
<CAPTION>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED JUNE 30, 2001 AND 2000

                                   (CONTINUED)


                                                                     2001           2000
                                                               ----------  --------------
<S>                                                            <C>         <C>

Supplemental disclosure of cash flow information:
     Cash paid for interest                                    $    67,362          6,329
                                                               ==========  ==============

Supplemental schedule of non-cash investing and financing activities:

     Issuance of 3,125,000 shares of common stock
       in exchange for deferred legal costs                    $ 1,000,000              -
                                                               ==========  ==============

     Conversion of debentures and accrued
       interest to common stock and warrant                    $ 1,548,479        703,993
                                                               ==========  ==============


     Conversion of note payable, accrued interest and
       accounts payable to officers, to common stock           $       -          152,802
                                                               ==========  ==============

     Conversion of notes payable, and
       accrued interest to common stock                        $       -          298,067
                                                               ==========  ==============


     Warrants issued in connection with notes
       payable and convertible debentures                      $       -          122,305
                                                               ==========  ==============
</TABLE>


               See notes to the consolidated financial statements.


                                       F-9
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

1.   BASIS  OF  PRESENTATION, BUSINESS, ORGANIZATION, AND SUMMARY OF SIGNIFICANT
     ACCOUNTING  POLICIES:

     BASIS  OF  PRESENTATION:

     The  accompanying consolidated financial statements include the accounts of
     Nanopierce  Technologies, Inc., a Nevada corporation (the Company), and its
     wholly  owned  foreign  subsidiary,  Nanopierce  Card  Technologies  GmbH,
     Hohenbrunn  (NCT),  a  German subsidiary, which was incorporated on January
     19,  2000. All significant intercompany accounts and transactions have been
     eliminated  in  consolidation. NCT activities through June 30, 2001 consist
     primarily of providing software development and implementation service, and
     performing  administrative, research and development, selling and marketing
     activities.

     BUSINESS:

     The Company is engaged in the design, development and licensing of products
     using  its  intellectual  property,  the  PI  Technology. The PI Technology
     consists  of  patents,  pending patent applications, patent applications in
     preparation,  trade secrets, trade names, and trademarks. The PI Technology
     improves  electrical,  thermal and mechanical characteristics of electronic
     products.  The  Company  has  designated  and  is  commercializing  its  PI
     Technology  as  the  Nanopierce  Connection  System  (NCS) and has begun to
     market  the  PI  Technology  to  companies in various industries for a wide
     range  of  applications.

     USE  OF  ESTIMATES  IN  THE  FINANCIAL  STATEMENTS:

     The  preparation  of  financial  statements  in  conformity  with generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and  the  reported  amounts of revenues and expenses
     during  the  reporting  periods.  Actual  results  could  differ from those
     estimates.

     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS:

     The  fair  values  of  the  Company's  cash equivalents, accounts and notes
     receivable,  accounts  payable  and  accrued  expenses  approximate  their
     carrying amounts due to the short maturities of these instruments. The fair
     value  of  the  Company's  note  receivable  from  a  related  party is not
     practicable  to  estimate due to the related party nature of the underlying
     transactions.

     CASH  AND  CASH  EQUIVALENTS:

     The  Company  considers  all  highly  liquid  investments  with an original
     maturity  of  three  months or less and money market instruments to be cash
     equivalents.

     DEFERRED  LEGAL  COSTS:

     Included  in  deferred  legal  costs and other prepaid expenses at June 30,
     2001,  is  $824,657  of  deferred  legal fees. The deferred legal fees were
     recorded  in connection with the Company's April 2001 issuance of 3,125,000
     shares  of common stock valued at $1,000,000 ($0.32 per share), issued as a
     non-refundable  retainer for legal services to be performed. The Company is
     amortizing  these  deferred  costs on a straight-line basis over a one-year
     period,  which  represents  the  estimated period the benefits of the legal
     costs  are  expected  to  be  incurred.  Through June 30, 2001, the Company
     recorded  amortized  legal  costs  of  $175,343.


                                      F-10
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

1.   BASIS  OF  PRESENTATION, BUSINESS, ORGANIZATION, AND SUMMARY OF SIGNIFICANT
     ACCOUNTING  POLICIES  (CONTINUED):

     INTELLECTUAL  PROPERTY  AND  PATENT  APPLICATIONS:

     The  PI  Technology  was  acquired upon the issuance of 7,250,000 shares of
     common  stock and 100 shares of Series A preferred stock of the Company and
     was  valued at the estimated fair value of the PI Technology at the date of
     acquisition based on a written cash offer from an outside third party. This
     third  party  is  a  manufacturer  in  a field, which uses the intellectual
     property.  The  intellectual  property  is  being  amortized  using  the
     straight-line  method  over  10  years.  The 10-year period is based on the
     estimated  useful  life, limited by the remaining average patent protection
     period.  Costs  incurred to establish patents are capitalized and amortized
     beginning  at the time of the application over the shorter of the estimated
     useful  life  of  the  technology  or  the patent term. Unsuccessful patent
     application  costs  are  expensed  as  incurred.  Management  assesses  the
     carrying  values  of  long-lived  assets  for impairment when circumstances
     warrant  such a review. In performing this assessment, management considers
     current  market  analysis  and  appraisal  of the PI Technology, along with
     projected  operating  information. Based on its evaluation, management does
     not  believe  that  there  has  been  any impairment through June 30, 2001.

     MARKETABLE  SECURITIES:

     Marketable securities consist of approximately 1,180 shares of common stock
     of  Intercell  International  Corporation (Intercell). These securities are
     classified  as  available-for-sale and are carried at fair value based upon
     quoted market prices. Unrealized gains and losses are computed on the basis
     of  specific  identification  and  are  reported as a separate component of
     comprehensive  income  (loss), included as a separate item in shareholders'
     equity.  Realized  gains, realized losses, and declines in value, judged to
     be  other-than-temporary,  are  included in other income (expense). At June
     30,  2001, Intercell owns approximately 16% of the outstanding common stock
     of  the  Company.

     PROPERTY  AND  EQUIPMENT:

     Property and equipment are stated at cost. Depreciation expense is provided
     by  use  of  the  accelerated  and straight-line methods over the estimated
     useful  lives  of the assets, generally 3 to 10 years for machinery, office
     equipment and furniture. Leasehold improvements are amortized over a period
     of  three years, which represents the shorter of the estimated useful lives
     of  the  leasehold  improvements  or  the  lease  term.

     REVENUE  RECOGNITION:

     During  the  year  ended  June  30,  2001,  NCT  performed various software
     development  and  implementation services for third parties. These services
     are  substantially  unrelated  to  the  development and marketing of the PI
     Technology. Revenues from these services are generally recorded at the time
     of  delivery  to  the  customer  and when no significant obligations remain
     related  to  implementation.  Revenues  are  deferred if significant future
     obligations  are  to be fulfilled or if collection is not probable. At June
     30,  2001,  there  was no deferred revenues related to contract services in
     progress.


                                      F-11
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

1.   BASIS  OF  PRESENTATION, BUSINESS, ORGANIZATION, AND SUMMARY OF SIGNIFICANT
     ACCOUNTING  POLICIES  (CONTINUED):

     RESEARCH  AND  DEVELOPMENT:

     Research  and  development  costs  are  expensed  as  incurred.

     STOCK-BASED  COMPENSATION:

     Statement  of Financial Accounting Standards (SFAS) No. 123, Accounting for
     Stock-  Based  Compensation,  allows companies to choose whether to account
     for  employee  stock-based  compensation  on  a  fair  value  method, or to
     continue  accounting for such compensation under the intrinsic value method
     prescribed  in  Accounting  Principles Board opinion No. 25, Accounting for
     Stock  Issued  to Employees (APB 25). The Company has chosen to continue to
     account  for  employee  stock-based  compensation  using  APB  25.

     FOREIGN  CURRENCY  TRANSLATION:

     The  financial  statements of the Company's foreign subsidiary are measured
     using  the local currency (the Euro) as the functional currency. Assets and
     liabilities  of  the  subsidiary are translated at exchange rates as of the
     balance  sheet  date. Revenues and expenses are translated at average rates
     of  exchange  in  effect  during  the  period.  The  resulting  cumulative
     translation  adjustments have been recorded as a component of comprehensive
     income  (loss),  included  as  a  separate  item  in  shareholders' equity.

     FOREIGN  CURRENCY  TRANSACTIONS:

     Gains  and  losses  from  foreign currency transactions are included in net
     income  (loss).  Foreign  currency  transaction  gains  and losses were not
     significant  during  the  years  ended  June  30,  2001  and  2000.

     INCOME  TAXES:

     Deferred  tax  assets  and  liabilities  are  recognized  for  the  future
     consequences  attributable  to  differences between the financial statement
     carrying  amounts  of  existing assets and liabilities and their respective
     tax  basis.  Deferred tax assets and liabilities are measured using enacted
     tax  rates  expected to apply to taxable income in the years in which those
     temporary  differences  are expected to reverse. The effect on deferred tax
     assets  and  liabilities  of  a  change  in  tax rates is recognized in the
     statement  of  operations  in  the period that includes the enactment date.

     COMPREHENSIVE  INCOME:

     SFAS  No.  130,  Reporting Comprehensive Income, requires the reporting and
     display  of  comprehensive income and its components. SFAS No. 130 requires
     that  unrealized  gains  and  losses  on  the  Company's available-for-sale
     securities  and  foreign  currency  translation adjustments are included in
     comprehensive  income  (loss).  Accumulated  other  comprehensive income of
     $6,265  at  June  30,  2001,  consists  of an unrealized gain on marketable
     securities  of $474 and foreign currency translation adjustments of $5,791.


                                     F-12
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


1.   BASIS  OF  PRESENTATION, BUSINESS, ORGANIZATION, AND SUMMARY OF SIGNIFICANT
     ACCOUNTING  POLICIES  (CONTINUED):

     LOSS  PER  SHARE:

     SFAS  No.  128, Earnings per Share, requires dual presentation of basic and
     diluted  earnings  or  loss  per  share  (EPS) with a reconciliation of the
     numerator and denominator of the basic EPS computation to the numerator and
     denominator  of  the  diluted EPS computation. Basic EPS excludes dilution.
     Diluted  EPS reflects the potential dilution that could occur if securities
     or  other  contracts to issue common stock were exercised or converted into
     common  stock  or resulted in the issuance of common stock that then shared
     in  the  earnings  of  the  entity.

     Loss  per  share of common stock is computed based on the average number of
     common  shares  outstanding  during  the year. Stock options, warrants, and
     convertible  preferred  stock  and  debentures  are  not  considered in the
     calculation, as the impact of the potential common shares (9,022,661 shares
     at  June  30,  2001  and  16,204,500  shares  at June 30, 2000) would be to
     decrease loss per share. Therefore, diluted loss per share is equivalent to
     basic  loss  per  share.

     RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS:

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
     No.  141,  Business  Combinations,  and  SFAS  No.  142, Goodwill and Other
     Intangible  Assets.  SFAS  No.  141  requires  that  the purchase method of
     accounting  be  used for all business combinations initiated after June 30,
     2001.  Use  of  the  pooling-of-interests  method  will  be prohibited on a
     prospective  basis  only.  SFAS  No. 142 addresses financial accounting and
     reporting for acquired goodwill and other intangible assets. It changes the
     accounting  for  goodwill and other intangible assets with indefinite lives
     from  an  amortization  method  to an impairment-only approach and requires
     intangible  assets  with  finite  lives  to  be amortized over their useful
     lives.  SFAS No. 142 is effective for fiscal years beginning after December
     15,  2001.  The  Company  does not expect that the adoption of SFAS No. 141
     will  have  a  significant  immediate  impact on the financial condition or
     results  of operations of the Company as the Company has no current planned
     business  combinations.  The  Company is currently assessing the impact, if
     any,  that  SFAS  No. 142 may have on its financial condition or results of
     operations.

     In  December  1999,  the  staff  of  the Securities and Exchange Commission
     issued  Staff  Accounting  Bulletin ("SAB") No. 101, Revenue Recognition in
     Financial  Statements.  SAB No. 101, as amended by SAB No. 101A and SAB No.
     101B, was effective no later than the fourth fiscal quarter of fiscal years
     beginning  after  December 15, 1999. SAB No. 101 provides the Staff's views
     in  applying  generally  accepted accounting principles to selected revenue
     recognition  issues.  The  Company  believes  that  it  complies  with  the
     accounting  and  disclosure  described  in  SAB  No.  101.

     In  June  1998,  the  FASB  issued  SFAS No. 133, Accounting for Derivative
     Instruments  and  Hedging  Activities.  This  statement,  as  amended,  is
     effective  for  fiscal  years beginning after June 15, 2000. Currently, the
     Company  does  not  have  any derivative financial instruments and does not
     participate  in  hedging activities; therefore, SFAS No. 133 did not impact
     the  Company's  financial  statements.


                                      F-13
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000



1.   BASIS  OF  PRESENTATION, BUSINESS, ORGANIZATION, AND SUMMARY OF SIGNIFICANT
     ACCOUNTING  POLICIES  (CONTINUED):

     RECLASSIFICATIONS:

     Certain  amounts  reported  in  the  2000  financial  statements  have been
     reclassified  to  conform  with  the  2001  presentation.

2.   RESULTS  OF  OPERATIONS  AND  MANAGEMENT'S  PLANS:

     The  Company  reported a net loss of $3,598,543 for the year ended June 30,
     2001,  and  an  accumulated deficit of $12,326,763 as of June 30, 2001. The
     Company  has not recognized any significant revenues from its PI technology
     and  expects  to  incur  continued  cash  outflows.  The  Company  has also
     experienced  difficulty  and  uncertainty in meeting its liquidity needs in
     prior  years.

     During  the  year  ended  June 30, 2001, the Company entered into an equity
     financing  agreement in which the Company received $7,500,000 in cash (Note
     7). As a result, the Company believes that it has adequate funds to support
     operations  for  the  next  twelve  months.

     To  address  its  on-going  and  long-term  cash  needs,  the Company is in
     discussions  with  investment bankers and financial institutions attempting
     to  raise  funds  to  support  current and future operations. This includes
     attempting  to  raise  additional  working  capital  through  the  sale  of
     additional  capital  stock  or through the issuance of debt. Currently, the
     Company  does  not  have  a  revolving  loan  agreement  with any financial
     institution,  nor  can the Company provide any assurance it will be able to
     enter  into  any  such  agreement  in the future, or be able to raise funds
     through  a  further  issuance of debt or equity in the Company. The Company
     also  believes  sales  of  its  products  and technology license rights may
     provide  additional  funds  to  meet  the  Company's  capital requirements.

3.   RISK  CONSIDERATIONS:

     BUSINESS  RISK:

     The  Company  is  subject  to  risks  and  uncertainties  common  to
     technology-based  companies,  including  rapid  technological  change,
     dependence  on  principal  products and third party technology, new product
     introductions  and  other  activities  of  competitors,  dependence  on key
     personnel,  and  limited  operating  history.

     INTERNATIONAL  OPERATIONS:

     The  Company's  subsidiary  (NCT)  operations  are  located in Germany. NCT
     transactions  are  conducted  in currencies other than the U.S. dollar (the
     currency  into  which  NCT's  historical  financial  statements  have  been
     translated)  primarily  the  Euro.  As  a result, the Company is exposed to
     adverse  movements  in  foreign  currency  exchange rates. In addition, the
     Company  is  subject to risks including adverse developments in the foreign
     political  and  economic  environment,  trade  barriers,  managing  foreign
     operations  and  potentially  adverse  tax  consequences.  There  can be no
     assurance that any of these factors will not have a material adverse effect
     on  the  Company's  financial  condition  or  results  of operations in the
     future.


                                      F-14
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


4.   NOTES  RECEIVABLE:

     RELATED  PARTY:

     At  July  1, 1999, the Company had a $69,182 receivable from Intercell that
     was  repaid  to  the  Company  in  2001.

     During  the  year  ended  June  30,  2001,  the  Company  loaned $92,500 to
     Intercell.  The  loan  is unsecured, bears interest at 5.75%, and is due on
     demand.  This  amount  is  classified as long-term, as the Company does not
     anticipate  demanding  payment  during  the  next  year.

     OTHER:

     During  the  year  ended  June  30,  2001 the Company loaned $500,000 to an
     unrelated  third party - Global Capital Partners, Inc. ("Global"). The note
     bears  interest  at  12%, and is collateralized by 750,000 shares of Global
     common  stock.  In  June  2001,  the Company received $125,000 plus accrued
     interest  of  $12,493.  In  August 2001, the Company received an additional
     $100,000.  The  remaining  $275,000 is due in September 2001. As additional
     consideration  for the loan, the Company received 12,500 shares of Global's
     restricted  common  stock  and  10,000  shares of IKON Ventures' restricted
     common  stock.  Due  to  lack  of marketability, no value was placed on the
     shares  of  Global  or  IKON  common  stock.

     In  April  2001  the Company loaned an additional $300,000 to another third
     party.  This  loan is unsecured, non-interest bearing and was repaid to the
     Company  in  September  2001.

5.   NOTES  AND  OTHER  PAYABLES  -  RELATED  PARTIES:

     At  July  1,  1999,  the Company had a note payable of $66,837 plus accrued
     interest  of  $10,455  due to a party related to an officer of the Company.
     These  amounts  were  paid  in  2001.

     During  the  year ended June 30, 2000, the Company issued 565,934 shares of
     common  stock  and  paid $47,582 in cash to officers of the Company in full
     settlement of a note payable, accrued interest, and other payables totaling
     $200,384.

6.   CONVERTIBLE  DEBENTURES  AND  NOTES  PAYABLE:

     CONVERTIBLE  DEBENTURES:

     During  the  year  ended June 30, 2000, the Company issued $4,000,000 of 6%
     convertible  debentures  and  warrants  to  purchase  400,000 shares of the
     Company's  common  stock for an aggregate purchase price of $4,000,000. The
     portion  of  the  proceeds  applicable to the warrants was determined to be
     $66,000  utilizing the Black-Scholes pricing model. The debentures were due
     in  January  2002.  The  warrants  expire  in  January  2003  (Note 7). The
     convertible  debentures included redemption provisions at a 25% premium and
     a beneficial conversion feature in which the debentures were convertible at
     the  lesser  of  $2.915  or  80%  of  the average of the three lowest daily
     closing bid prices of the Company's common stock during the 30 trading days
     immediately  preceding  the date on which the holder elected to convert the
     debentures.  The  intrinsic  value  of  the  beneficial  conversion feature


                                      F-15
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000

     CONVERTIBLE  DEBENTURES  AND  NOTES  PAYABLE  (CONTINUED):

     CONVERTIBLE  DEBENTURES  (CONTINUED):

     was  $995,000  and  was charged to interest expense in 2000. In addition to
     the  400,000  warrants described above, warrants to purchase 230,000 shares
     of the Company's common stock were issued for services performed by a third
     party  in  connection  with the issuance of the debentures. The warrants to
     purchase  common  stock are at an exercise price of $2.915 per share, which
     was  80%  of  the  quoted market price of the Company's common stock at the
     date  of  issue  and are exercisable over a ten-year period (Note 7). These
     warrants  were  valued at $37,905 using the Black-Scholes pricing model and
     that  amount  has  been included in general and administrative expense. The
     convertible  debentures  placed  certain  restrictions  on  the  Company,
     including the Company's ability to issue additional shares of common stock.

     In  the  quarter  ended  June  30, 2000, $700,000 of debentures and accrued
     interest  of  $3,993  were  converted  into 399,861 shares of common stock.
     During the year ended June 30, 2001, the Company issued 1,194,616 shares of
     common  stock  in  exchange  for  $1,431,633  of convertible debentures and
     $48,296  of  related  accrued  interest (approximately $1.24 per share. The
     remaining  $1,850,000 of convertible debentures (having a carrying value of
     $1,829,239,  net  of  unamortized discount) and accrued interest of $59,878
     were  redeemed,  at  a 25% premium, for cash of $2,372,378, and in exchange
     for  an additional warrant to purchase up to 50,000 shares of the Company's
     common  stock  at an exercise price of $2.17 per share (the market value of
     the Company's common stock at the date of grant). The warrant was valued at
     $68,550 using the Black-Scholes pricing model. The value of the warrant and
     premium  on  redemption of the convertible debentures resulted in a loss on
     extinguishment  of  debt  of  $551,811  (accounted  for as an extraordinary
     loss).

     NOTES  PAYABLE:

     During  the  year  ended  June  30,  2000,  the  Company  issued  unsecured
     promissory  notes in the amount of $122,500. The notes were due in one year
     with  interest  at  10%.  The  Company issued detached warrants to purchase
     857,500 shares of common stock in connection with the promissory notes. The
     detached  warrants  were  valued at $18,400 using the Black-Scholes pricing
     model,  and  the  resulting  discount  on  the  notes  of $18,400 was being
     amortized  to  interest  expense  over  one year through March 16, 2000, at
     which  time  all  of  the  notes  were  converted into 49,000 shares of the
     Company's  common  stock.

     During  the  year  ended June 30, 2000, the Company also issued $180,000 of
     promissory notes, convertible at $0.20 to $0.40 per share into common stock
     of  the  Company.  The conversion price represented the market price of the
     Company's common stock on the date of issuance of the notes. The notes were
     converted  in  January  2000  into  575,000  shares  of  common  stock.


                                      F-16
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


7.   SHAREHOLDERS'  EQUITY:

     COMMON  STOCK:

     In  October  2000,  the Company entered into a $15,000,000 equity financing
     agreement with a third party. Under the first installment of the agreement,
     the Company received $7,500,000 cash, net of $507,989 in offering costs, in
     exchange  for 4,531,613 shares of the Company's common stock (approximately
     $1.66  per share, before offering costs), a warrant ("the Initial Warrant")
     to purchase an additional 453,161 shares of the Company's common stock, and
     a  separate  warrant to purchase shares of the Company's common stock ("the
     Vesting  Warrant").  The  $1.66  per share amount was based upon 80% of the
     average market price of the Company's common stock prior to the closing, as
     defined  in  the  agreement. The Initial Warrant is exercisable immediately
     through  October  2005  at an exercise price of $2.586 per share. Under the
     Vesting Warrant, on defined dates, the warrant shall vest with respect to a
     defined  number  of  shares  that  are  exercisable  at  $0.001  per  share
     immediately  and  through  October  2005.  The  defined dates are the 65th,
     130th,  and  195th  trading  days  following  the closing of the $7,500,000
     transaction.  The  defined  number  of  shares is equal to one-third of the
     initial  shares  (4,531,613)  multiplied  by an amount equal to the initial
     purchase  price multiplied by an initial percentage (the initial percentage
     is  equal  to  115%,  125%  and  140% from the 65th, 130th, and 190th days,
     respectively,  from  the initial closing date), less the reset price, which
     is equal to the average market value of the Company's common stock at those
     dates. This amount is then divided by the reset price and equals the number
     of  shares  issuable  under  the Vesting Warrant. For the 65th trading day,
     2,143,975  shares  were  issued  in  March,  2001  for  the first one-third
     installment  under  the vesting warrant. The companies and individuals that
     provided the equity financing have stated that 7,418,895 shares are due for
     the  second  one-third  installment under the vesting warrant and 4,545,303
     shares  are  due  for  the  third  one-third  installment under the vesting
     warrant.  The  Company  does  not intend to issue the shares (Note 9). As a
     result  of  lawsuits  filed, the second installment of the equity financing
     will  not  be  completed.

     In  order  to close the first installment of the financing, the third party
     investor required the Company to cause the holders of an existing option to
     purchase  up  to  10,000,000  shares  of  the  Company's  common  stock, to
     immediately exercise the options and also required the Company to cause the
     option  holders  to  agree  to  restrictions  on  the  sale  and use of the
     10,000,000  shares  for a defined time period. The option holders agreed to
     these  terms  in exchange for a reduction in the exercise price to purchase
     10,000,000 shares of common stock from $.51 to $.25 per share. The warrants
     were  exercised  by  applying  a  $1,350,000  commission  due to the option
     holders  on  the  $15,000,000  financing  and  in  part through a cash-less
     exercise.  A  net  9,532,520  shares  of  common  stock were issued for the
     warrants  in  October  2000.


                                      F-17
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


7.   SHAREHOLDERS'  EQUITY  (CONTINUED):

     COMMON  STOCK  (CONTINUED):

     During the years ended June 30, 2001 and 2000, the Company issued shares of
     common  stock  in  exchange  for  services.  The shares were issued for the
     following  services  and  were  valued  at  the  quoted market price of the
     Company's  common  stock  at  the  date  the  services  were  performed:

                                         2001                2000
                                 ---------------------  -----------------
                                  Shares      Amount    Shares    Amount
                                 ---------  ----------  -------  --------
     Third parties, investment-
       related services             60,000  $   96,996  985,125  $276,950
     Deferred legal Costs        3,125,000   1,000,000        -         -
                                 ---------  ----------  -------  --------
                                 3,185,000  $1,096,996  985,125  $276,950
                                 =========  ==========  =======  ========

     During  the year ended June 30, 2001 the Company issued 1,194,616 shares of
     common  stock  (808,701  shares  for  the  year  ended  June  30,  2000) in
     connection  with the conversion of convertible debentures including accrued
     interest.

     STOCK  OPTIONS  AND  WARRANTS:

     STOCK  OPTIONS:

     The  Company  has  established a Compensatory Stock Option Plan (the Option
     Plan)  and has reserved 7,500,000 shares of common stock for issuance under
     the  Option  Plan.  Vesting  provisions  are  determined  by  the  Board of
     Directors.  All  stock  options  expire  10  years  from the date of grant.

     A  summary  of  the  Option  Plan  is  as  follows:

<TABLE>
<CAPTION>
                                        2001                    2000
                                --------------------  -----------------------
                                           Weighted                Weighted-
                                            average                 average
                                           exercise                 exercise
                                 Shares      price      Shares       price
                                ---------  ---------  -----------  ----------
<S>                             <C>        <C>        <C>          <C>
Outstanding, beginning of
  Year                          4,737,000  $     .37   4,875,000   $      .37
Granted                         2,115,000       2.02     912,000         1.82
Forfeited                               -          -           -            -
Exercised                               -          -  (1,050,000)         .33
                                ---------  ---------  -----------  ----------

Outstanding, end of year        6,852,000  $    1.08   4,737,000   $      .66
                                =========  =========  ===========  ==========

Options exercisable at
  end of year                   6,607,000  $    1.11   4,267,000   $      .70
Weighted-average fair value of
  options granted during the
  year at market                           $    1.64               $     1.36
</TABLE>


                                      F-18
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


7.   SHAREHOLDERS'  EQUITY  (CONTINUED):

     STOCK  OPTIONS  AND  WARRANTS  (CONTINUED):

     During  the year ended June 30, 2001, no options were exercised. During the
     year  ended  June  30,  2000,  1,050,000  options were exercised (including
     cashless  exercises)  in  exchange  for 973,207 shares of common stock. The
     following  table  summarizes information about stock options outstanding as
     of  June  30,  2001:

<TABLE>
<CAPTION>
                        Options Outstanding              Options Exercisable
              ----------------------------------------  ---------------------
                          Weighted-
                           average                                 Weighted-
Range of                  remaining       Weighted-                 average
exercise      Number of  contractual       average      Number of   exercise
prices         options   life (years)  exercise price    options     price
------------  ---------  ------------  ---------------  ---------  ----------
<S>           <C>        <C>           <C>              <C>        <C>
0.20- 0.50    3,280,000          7.43  $          0.32  3,035,000  $     0.32
0.51 - 1.00     985,000          8.84             0.55    985,000        0.55
1.01 - 2.00     360,000          7.08             1.88    360,000        1.88
2.01 - 3.00   2,217,000          7.16             2.29  2,217,000        2.29
5.01 - 6.00      10,000          8.67             6.00     10,000        6.00
              ---------  ------------  ---------------  ---------  ----------
              6,852,000          7.81  $          1.08  6,607,000  $     1.11
              =========  ============  ===============  =========  ==========
</TABLE>

     During  2001,  options to purchase 2,115,000 shares of the Company's common
     stock,  at  exercise  prices  ranging  from  $.60  to $3.00 per share, were
     granted  to  fifteen  employees  of  the  Company,  six of whom are or were
     officers and/or directors of the Company. The exercise prices were based on
     the  market  value  of  the Company's common stock at the date of grant and
     expire  through 2011. In addition, during the year ended June 30, 2001, the
     Company  granted  options  and  warrants to third parties to purchase up to
     250,000 shares of the Company's common stock at exercise prices of $0.65 to
     $3.00  per  share.  The  options  and  warrants were exchanged for services
     valued  at  $142,850  using  the  Black-Scholes  option-pricing  model. The
     options  expire  in  December  2002,  and  the warrants expire in May 2006.

     During  2000,  options  to  purchase 912,000 shares of the Company's common
     stock  at exercise prices ranging from $.40 to $6.00 per share were granted
     to  twelve  employees  of  the  Company,  three of whom are officers and/or
     directors  of  the  Company.  The  exercise prices were based on the market
     value of the Company's common stock at the date of grant and expire through
     2010.

     ACCOUNTING  FOR  STOCK-BASED  COMPENSATION  UNDER  SFAS  NO.  123:

     The Company applies APB 25 for its employee-based stock-compensation plans.
     Had compensation cost for the Company's stock plan been determined based on
     fair value at the grant dates for awards under the plan consistent with the
     method  prescribed  under SFAS No. 123, the Company's net loss and net loss
     per  share  would  have  changed  to the pro forma amounts indicated below:

                                                   2001                2000
                                              -------------       ------------

     Net loss, as  reported                   $ (3,598,543)        (3,743,305)
     Net loss, pro  forma                       (7,400,000)        (4,988,000)
     Net loss, per  share, as reported          (     0.07)        (     0.13)
     Net loss, per  share, pro forma            (     0.14)        (     0.15)


                                      F-19
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


7.   SHAREHOLDERS'  EQUITY  (CONTINUED):

     STOCK  OPTIONS  AND  WARRANTS  (CONTINUED):

     The  fair value of options granted during 2001 and 2000 is estimated on the
     date  of  grant  using  the  Black-Scholes  option-pricing  model  with the
     following  weighted-average  assumptions:

                                                 2001              2000
                                              -----------        -----------

     Expected  dividend  yield                       0%                0%
     Expected  stock  price  volatility            122%               96%
     Risk-free  interest  rate                     5.2%              6.5%
     Expected  life  of  options               6.5  years         6.5  years

     WARRANTS:

     At  June  30,  2001  the  following  warrants to purchase common stock were
     outstanding:

     Number  of  common                Exercise                 Expiration
shares  covered  by  warrants            price                 date
-----------------------------         ---------             --------------------

       70,000                            2.81                    July  22, 2003
       50,000                            3.52                    July  22, 2001
      140,000                            1.50                  January  4, 2003
      630,000                            2.92                 January  10, 2003
      105,000                             .30                 October  26, 2002
      192,500                             .30                 October  27, 2002
      140,000                             .30                 November  8, 2002
       70,000                             .30                 November 22, 2002
       70,000                             .30                 December 17, 2002
       50,000                            2.17                 January  20, 2003
      453,161                            2.58                 October  20, 2005
      200,000                             .65                    May  16,  2006
    ---------
    2,170,661
    =========

     During the year ended June 30, 2001, warrants to purchase 200,000 shares of
     the  Company's  common  stock were issued for public relation services. The
     warrants  were valued at $86,200 using the Black-Scholes pricing model, and
     that expense was charged to general and administrative expense for the year
     ended  June  30,  2001.

     During the year ended June 30, 2000, warrants to purchase 10,000,000 shares
     of  the  Company's  common  stock  were issued to two entities for services
     performed  in  connection  with arranging proposed debt financing which the
     Company  elected  not to pursue. The warrants were valued at $290,000 using
     the  Black-Scholes  pricing  model, and that expense was charged to general
     and  administrative  expense  for  the year ended June 30, 2000. During the
     year  ended  June  30,  2001  the warrants to purchase 10,000,000 shares of
     common  stock  were  exercised  as  described  above.

     During  the  year  ended  June  30,  2000,  warrants were exercised for the
     purchase  of  461,022  shares of the Company's common stock for proceeds of
     $25,000.


                                      F-20
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


8.   LICENSE  AGREEMENTS:

     The  Company  has  license  agreements  with third parties, which allow the
     third  parties  to  utilize  defined  aspects  of the intellectual property
     rights in return for royalty fees. All but two license agreements are idle.
     Royalties  and  maintenance  payments  from the two license agreements have
     been  held  in an escrow account, outside of the Company's control, pending
     the  resolution  of certain legal issues. On November 30, 1999, the Company
     obtained  a  Court  Order of Declaratory Judgment that it has incontestable
     and  exclusive  ownership  of  all  patents, patent applications, licenses,
     trade  names,  trademarks,  trade secrets and other intellectual properties
     relating  to  the  PI  Technology. As part of the Court Order, the original
     inventor  of  the  technology  is to receive all accrued and future royalty
     payments from the licenses, which were outstanding as of September 3, 1996.
     The  Company  also  granted  to  the  original inventor of the technology a
     two-year,  royalty  bearing, non-exclusive license to use the PI Technology
     for  certain  specified  applications.  The  Company  has  not recorded any
     receivables  or  revenues  associated  with the accrued royalty payments on
     licenses  which  were  outstanding  as  of  September 3, 1996. The original
     inventor  filed  a  Motion  of  Appeal  on  March  29,  2000  regarding the
     Declaratory  Judgment. On April 23, 2001 the District Court Judge signed an
     order  that  the  original  inventor  has  waived  his right to appeal. The
     inventor  has  filed  an  amended  appeal to review that order, on which no
     ruling  has  yet  been  issued. The Company believes that the resolution of
     this  litigation  will not have a material adverse impact on either results
     of  operations,  financial  position,  or  cash  flows.

9.   FINANCING  AGREEMENT  SUIT:

     On April 27, 2001 the Company filed an action in the United States District
     Court  in  and  for  the  District of Colorado, against Harvest Court, LLC,
     Southridge  Capital  Investments,  LLC, Daniel Pickett, Patricia Singer and
     Thomson  Kernaghan  &  Co.  Ltd.,  of  Toronto  (Canada)(collectively,  the
     "Defendants").  The  Company  subsequently  dismissed  this  suit,  without
     prejudice  and  on July 27, 2001 re-filed the action in the District Court,
     City  and  County  of Denver. The suit alleges among other things, that the
     Defendants have violated the anti-fraud and controlling persons Sections of
     the Colorado Securities Act, aiding and abetting violations of the Colorado
     Securities  Act,  common  law  fraud  and  civil conspiracy. The Company is
     seeking  various  forms  of  relief  from  the  Defendants,  including  an
     accounting, a declaratory judgment, actual damages of at least $190,000,000
     and  exemplary  and  treble  damages.

     On  May  7,  2001, Harvest Court, LLC filed suit against the Company in the
     Supreme  Court  of  the  State  of  New  York, County of New York. The suit
     alleges  that  the  Company  has  breached  the  October  20, 2000 Purchase
     Agreement,  by  not  issuing 7,418,895 free trading shares of the Company's
     common  stock  in  connection with the second reset provision and 4,545,303
     shares  due  in  connection  with the third reset provision of the Purchase
     Agreement.  Harvest  Court  is  seeking  the  delivery  of  such  shares or
     damages  in  the  alternative.  On August 1, 2001, the Supreme Court of the
     State of  New York,  County  of  New  York  issued a preliminary injunction
     ordering the Company to reserve  and  not  transfer  the  shares  allegedly
     due  to Harvest Court.  In  September  2001,  a  suit  was filed by Thomson
     Kernaghan & Co. Ltd. Against the  Company and certain officers/Directors of
     the Company seeking general damages for defamation and punitive, aggravated
     and exemplary damages that aggregated in excess of $3,000,000.  The Company
     intends  to  vigorously defend against these claims  and  does  not believe
     the outcome of these claims  will  have  a  material  adverse effect on the
     financial condition, results of operations or  liquidity  of  the  Company.
     However,  it is too early at this time to determine the ultimate outcome of
     these  matters.


                                      F-21
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


10.  INCOME  TAXES:

     The  Company  and  its  subsidiary did not incur income tax expense for the
     years  ended  June  30,  2001  and  2000.  The reconciliation between taxes
     computed  at  the  statutory  federal tax rate of 34% and the effective tax
     rate  for  the  years  ended  June  30,  2001  and  2000  is  as  follows:

                                                          2001         2000
                                                    --------------  -----------
     Expected  income  tax  benefit                 $  (1,227,000)  (1,272,000)
     Increase  in  valuation  allowance                 1,227,000    1,272,000
                                                    --------------  -----------
                                                    $           -            -
                                                    ==============  ===========

     The  tax  effects  of temporary differences that give rise to substantially
     all  of  deferred  tax  assets  at  June  30,  2001  are  as  follows:

     Deferred  tax  assets:
        Net  operating  loss                        $  2,720,000
     Less  valuation  allowance                       (2,720,000)
                                                    -------------
     Net  deferred  tax  assets                     $          -
                                                    =============

     As  of  June  30, 2001, the Company has net operating loss carryforwards of
     approximately $8,000,000, which expire between 2010 and 2021. The Company's
     net  operating  loss  carryforwards  may  be subject to annual limitations,
     which could reduce or defer the utilization of the losses as a result of an
     ownership  change  as  defined in Section 382 of the Internal Revenue Code.

11.  LEASES:

     The  Company  has entered into certain facilities and equipment leases. The
     leases  are  non-cancelable  operating leases that expire through September
     30, 2006. Future minimum lease payments under these operating leases are as
     follows:

             Year  ending
               June  30,
             -----------

                 2002                         $  156,018
                 2003                            147,691
                 2004                             84,253
                 2005                             86,032
                 2006                             21,508
                                              ----------
                                              $  495,502
                                              ==========

     Aggregate rental expense under operating leases was $84,744 and $21,650 for
     the  years  ended  June  30,  2001  and  2000,  respectively.


                                      F-22
<PAGE>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2001 AND 2000


12.  FOREIGN  AND  DOMESTIC  OPERATIONS:

     Operating  results  and long-lived assets as of and for the year ended June
     30,  2001, by geographic area, are presented in the table below. There were
     no  significant  amounts  of  transfers  between  geographic  areas.


                           United  States    Germany       Total
                           --------------  -----------  -----------

Revenues  for  year
  ended  June  30,  2001   $   (      - )  (  132,325)  (  132,325)
                           ==============  ===========  ===========

Long-lived  assets  at
  June  30,  2001          $     773,908       21,223      795,131
                           ==============  ===========  ===========


                                      F-23
<PAGE>
<PAGE>