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


                                  FORM 10-KSB/A
                                (AMENDMENT NO. 2)

(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, 2003

                                       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
incorporation or organization)                          number)


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


                 ----------------------------------------------
                 (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>
     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge,  in definitive proxy or information statement
incorporated  by  reference  in  Part  III  or this Form 10-KSB or any amendment
hereto.  [X]

     As  of  the  close  of trading on September 26, 2003, there were 66,023,969
shares  outstanding,  57,474,937  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 26, 2003, was approximately
$15,518,233.

     The  registrant's  revenue  for  the  fiscal  year  ended June 30, 2003 was
$37,017.

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


<PAGE>
                          Explanatory Note on Amendment


This  Amendment  has  been filed to make minor clarifying revisions to Item 1 of
Part  I,  and  Item  12  of  Part II of the Annual Report on Form 10-KSB for the
registrant  for  the  fiscal  year  ended  June 30, 2003 that was filed with the
Securities  and  Exchange Commission on September 29, 2003 (the "Original Filing
Date").  This  Amendment  continues to speak as of the Original Filing Date, and
the  registrant  has not updated the disclosures contained herein to reflect any
events  that  occurred  at  a  date  subsequent  to  such  date.

                                     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,  and  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.  As of June 30, 2003, Intercell held
6,376,764  common shares of the Company.  The Company acquired the PI Technology
in  order to pursue a more focused, strategic application and development of the
PI  Technology,  subsequently  referred  to  as the NanoPierce Connection System
("NCS(TM)")

     The  Company,  since  the  acquisition of NCS, has focused on providing the
electronics  industry  with  possible  solutions to their "connection" problems,
through not only know-how, but also products and services provided by either the
Company  or  its  subsidiaries.

     The Company has three wholly owned subsidiaries.

     NANOPIERCE  CARD  TECHNOLOGIES,  GMBH  ("NANOPIERCE  CARD"  OR  "NCT").
Established  in January 2000, NanoPierce Card is located in Hohenbrunn, Germany.
NanoPierce  Card  was responsible for the marketing of the Company's technology,
services  and  products  on an international basis.  On April 1, 2003, NCT filed
insolvency  with the Courts of Munich, Germany.  The insolvency was necessary in
order  to  comply with specific German legal requirements.  In conjunction, with
the  insolvency  filing  management made a decision in April 2003 to discontinue
operations  at NanoPierce Card and liquidate NanoPierce Card, through the German
courts  through  self-liquidation.  Subsequently,  the  Court  rejected  the
application for insolvency and the Company is, at this time, implementing a plan
of  self-liquidation  as  provided  by  German  law.


                                        1
<PAGE>
     NANOPIERCE  CONNECTION  SYSTEMS,  INC. ("NANOPIERCE CONNECTION" OR "NCOS").
NanoPierce  Connection  is  a  Nevada  corporation, located in Colorado Springs,
Colorado, USA.  Beginning business in January 2002, NanoPierce Connection is the
center of not only research and development activities, but also the development
of various applications of the NCS.  In addition, NanoPierce Connection provides
the  WaferPierce(TM)  service  to  potential  customers.  In September 2003, the
Company  entered  into a joint venture with Scimaxx, LLC in order to further the
marketing  of  the  services  offered  by  NanoPierce  Connection  (See - Item 6
"Management's  Discussion  and  Analysis").

     EXYPNOTECH,  GMBH  ("EXYPNOTECH"  OR  "EPT").  ExypnoTech  was organized in
February  2002.  ExypnoTech  produces inlay components used in the manufacturing
of,  among  other  things,  Smart  Labels.  ExypnoTech, in addition to the inlay
components,  plans  to manufacture and sell other types of RFID (Radio Frequency
Identification)  components.  In  September 2003, the Company signed a letter of
intent  with  Meshed  Systems, GmbH, in which Meshed Systems, GmbH is to make an
equity  investment  in  ExypnoTech  in  exchange  for  a  51% equity interest in
ExypnoTech.  (See  -  Item  6  "Management's  Discussion  and  Analysis")

THE TECHNOLOGY

     NCS(TM)  is  a  method  where  metallized,  hard, microscopic particles are
deposited onto one of two contact surfaces, through electrolytic or electro-less
plating  methods  or other methods.  When the two surfaces are pressed together,
the  conductive  particles  penetrate  the  second contact surface and create an
electrical  connection.  Bonding  of  the contact surfaces can be achieved using
nonconductive  adhesives  or  ultrasonic  welding.

     NCS  can  be used with 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.  In addition, NCS can be used to form
either  temporary  or  permanent  connections.

     NCS  provides  several advantages to potential users 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 RF (radio frequency) performance.

     The  Company  has  extended  NCS  to  permit  the  direct  attachment  of
semiconductor  chips  to  a  substrate,  a  process  called  WaferPierce(TM).
WaferPierce  is  comprised of two parts:  (1) the electroless application of NCS
to  the  contact  pads of chips while still in wafer form; and (2) a proprietary
chip attachment process in which chips are bonded to a substrate face down using
the  core  NCS  method.

     WaferPierce  offers  both  cost  and  performance benefits over the current
methods  of  chip  attachment.  These  benefits  include  the simplification and
acceleration  of  chip assembly, reduction of substrate costs and economic wafer
preparation.  In  addition,  WaferPierce has several functional advantages, such
as,  good  electrical and thermal conductivities, reliability, thinness and good
high  frequency  characteristics  and  the  absence  of  lead.

     The  Company  currently holds 12 Patents with the U.S. Patent and Trademark
Office.  Further,  the Company has filed several patent applications both in the
United  States  and  internationally  in  order  to  continue  to  protect  its
intellectual


                                        2
<PAGE>
property.  The  Company  has  also  filed  trademark  applications with the U.S.
Patent  and  Trademark  Office  to  protect its name, logo and other trademarks.

     During the fiscal year ended June 30, 2003, the Company incurred an expense
of  $200,000  in  connection  with  the  impairment of the original intellectual
property  owned  by  the  Company.  The  decision to record an impairment of the
intellectual  property  was based primarily on the overall age of the patents in
the  intellectual  property  combined  with  the  Company's  current operational
status.  This  impairment  is  not indicative of the value of the technology and
the  current  value  of  the  patent applications and trademark applications the
Company  has  filed both in the United States and internationally. (See - "Notes
to  the  Consolidated  Financial  Statements  -  Note  1")

BUSINESS STRATEGY

     The  Company  has  developed  a business strategy to penetrate all possible
markets  with  its  technology, with the ultimate plan to make NCS the preferred
technology in these markets.  The Company currently provides potential customers
with  three  possible  ways  to  gain  access  to  the  NCS  technology.

     1.   WAFERPIERCE  SERVICE.  Through  its subsidiary, NanoPierce Connection,
          the  Company  is  able  to  provide  a  WaferPiercing  service  to its
          customers.  NanoPierce  Connection is currently providing this service
          in  developing  samples  for  potential  customers.

     2.   LICENSING.  For those customers needing NCS or WaferPierce on a larger
          scale  than  the  Company  is  able  to  provide  at this time through
          NanoPierce  Connection, the Company is willing to provide a license to
          the  customer, to transfer know-how in connection with various aspects
          or  applications  of  NCS  and  WaferPierce.

     3.   RFID  COMPONENTS.  The  Company,  through ExypnoTech currently has the
          capability  to  provide  RFID  components,  using  NCS  to  potential
          customers.  In  addition,  ExypnoTech,  in  manufacturing  the  RFID
          components,  uses  chips  that have been treated using the WaferPierce
          process.  ExypnoTech  has  signed  contracts with several customers to
          provide  RFID components. In the future, the Company plans to continue
          to  utilize the strategy of providing the final product to the user in
          those  markets  where  it  is  economically  practical.

While  there  are  numerous  possible  applications for NCS and WaferPierce, the
Company  has decided to focus, at this time, on those specific applications that
are  low  cost  and  experience  high  volumes.

     1.   RFID  COMPONENTS.  RFID  components  are  used to identify objects, by
          short-range  radio  over  a few millimeters to distances as great as a
          meter.  RFID  inlays consist of a small transponder chip bonded onto a
          metal foil antenna on an exceptionally thin and small plastic or paper
          sheet.  NCS  can  be  used  to  provide  the  connection  between  the
          transponder  chip  and  the  antenna.  In addition, NCS can be used to
          connect the chip to the chip module in contact smart cards or the chip
          module  to  the  antenna in the case of contactless smart cards. There
          are  many  different  applications  for  RFID  components, but the two
          applications  being  focused  on  by  the Company are Smart Labels and
          Smart  Cards.  The  Company currently offers RFID Components using NCS
          through  its  subsidiary,  ExypnoTech.

     2.   WAFERPIERCE  SERVICE.  Wafers  are  2,  4, 6, 8 or 12 -inch silicon or
          other  substrate  material  used  in  the process of making chips with
          integrated  circuits in the semiconductor industry. NCS can be used as
          a  method  of  a  chip  attachment  to the actual substrate, replacing
          conventional  flip chip processes used to remove chips and attach them
          to  substrates.


                                        3
<PAGE>
     3.   OTHER  APPLICATIONS. The applications described above are not the only
          possible  applications  for  NCS;  other  viable  applications include
          connectors  and  sockets  in both printed and flexible circuit boards.
          Further  applications  include  temporary  applications,  such as test
          connectors,  sockets  and  switches.

     In  addition  to  the development and marketing of NCS, the Company through
NanoPierce Card, has generated revenues during the last two fiscal years through
software  development and project management for various customers in industries
with  potential  NCS  applications.

     For the fiscal year ended June 30, 2003, the Company recognized $128,947 in
revenue  from  its  software  development  activities,  which  were discontinued
effective  April  1,  2003.

RESEARCH AND DEVELOPMENT

     Research  and  development  activities  are  conducted  through  NanoPierce
Connection,  with  additional  activities  occurring  at  NanoPierce  Card  and
ExypnoTech.  For  the  fiscal  years  ended  June  30,  2003  and June 30, 2002,
NanoPierce Connections and ExypnoTech incurred $316,403 and $316,438 in research
and  development  expenses from continuing operations.  NanoPierce Card incurred
$251,354  and  $320,908 in 2003 and 2002, respectively, which is classified as a
component  of  loss  from  discontinued operations in the Company's consolidated
statements  of  operations.

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, anisotropic technology (technologies
using  materials  whose  behavior  differs  in  the  up/down  and  left/right
directions),  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  limitations  with  regard  to
electrical/mechanical performance, manufacturability or cost as compared to NCS.
However,  there  are  no assurances that the Company or the NCS can successfully
compete  with  current  or  future  technologies.


GOVERNMENT REGULATION

     The  Company  believes  that it is in compliance with all federal and state
laws  and  regulations  governing  its limited operations.  Further, the Company
believes that it is in compliance with all 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,  2003.


                                        4
<PAGE>
EMPLOYEES

     On  June  30,  2003,  the  Company  and  its subsidiaries had 10 employees.
Messrs.  Metzinger,  Neuhaus and Ms. Kampmann, key officers of the Company, have
signed  employment  agreements with the Company or its subsidiaries.  (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.

FACTORS AFFECTING FUTURE OPERATING RESULTS

     Our  future  results  may  be  affected  by various risks and uncertainties
including  the  following:

     WE HAVE A HISTORY OF LOSSES

     Developing  our  particle  technology  and its applications has been and we
expect  will continue to be expensive.  Our operating expenses have consistently
exceeded  our  revenues.  We  reported  a net loss of $4,017,785, $4,729,072 and
$3,598,543  for  the  fiscal  years  ended  June  30,  2003,  2002  and  2001,
respectively.

     WE MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN

     Our independent auditor's report of our financial statements as of June 30,
2003  includes  an  explanatory paragraph expressing substantial doubt about our
ability  to continue as a going concern.  If we are unable to secure significant
additional  financing,  we  may  be  obligated  to  seek  protection  under  the
bankruptcy  laws  and  our  shareholders  may  loose  their  investment.

     OUR  REVENUES  DEPEND  ON  OUR  ABILITY  TO  LICENSE COMPANIES TO APPLY OUR
PARTICLE TECHNOLOGY TO PRODUCTS THAT THEY BRING TO THE MARKETPLACE WHICH WE HAVE
BEEN  UNABLE  TO  ACCOMPLISH  TO  DATE

     We  do  not anticipate generating significant revenues until we are able to
license  companies to apply our particle technology to products that are brought
to  the  marketplace.  To  date,  we have not successfully licensed companies to
apply  our  particle technology to products that are brought to the marketplace.
Even  if  we  are  successful and products utilizing our particle technology are
brought  to  the marketplace, we may still not generate enough revenue to offset
our  operating  costs.

     We  do  not  have licensing relationships with manufacturers to develop and
market  products using our particle technology in place, and if we are unable to
secure  these  agreements,  we  believe that we may not become profitable in the
future

     We  believe that our long-term profitability and growth depends on entering
into  licensing  or  joint  venture  relationships with various manufacturers to
develop  and market products using the particle technology.  We have not entered
into  any  formal agreements to date, and even if we do enter into agreements in
the  future,  we  cannot  assure  you  that  the  agreements will be profitable.

     CONSUMERS  MAY  USE  ALTERNATIVE  TECHNOLOGIES UNLESS WE ESTABLISH A MARKET
PRESENCE  WITH  OUR  PARTICLE  TECHNOLOGY

     The  interconnect  market  is  subject  to  rapid  technology changes.  New
products  are  introduced, old products are enhanced and others become obsolete.
The  entire  interconnect  market may be replaced by a newer form of technology.
To be competitive, we believe that we must develop, market and sell our products
on  a


                                        5
<PAGE>
timely  and  cost-effective  basis and respond to the ever changing requirements
and demands of our customers, which in turn depends in part on our capability to
upgrade  our  products  and  quality  control  procedures  and  to  adapt  to
technological  changes  and  advances  in  the  electronics  industry.

     We  cannot  assure that we will be successful in selecting, developing, and
marketing  new  technologies  or  that  compatibility  issues  with  an evolving
generation  of  electronic  components and manufacturing equipment and errors or
flaws  in the new technologies will not prevent or delay market acceptance.  Any
further delay in bringing our particle technology to the marketplace could cause
prospective  customers  to  use alternative technologies and could result in our
inability  to  generate  sufficient  revenues  to  cover  our  operating  costs.

     WE MAY BE UNABLE TO SUCCESSFULLY COMPETE IN THE MARKETPLACE

     The  interconnect  market is highly competitive. Our success will depend in
part  on  how  quickly competitors can design and develop competing products and
technologies.  We will compete with suppliers of other interconnect technologies
including  Alien  Technologies,  Inc.,  Interconnect  Technologies  and  major
electronic technology manufacturing leaders including Philips, Siemens, Infineon
and  IBM.  We  are  disadvantaged competing against these competitors in several
different  areas,  including:

     -    financial  resources;

     -    technological  resources;

     -    manufacturing  capabilities;

     -    diversity  of  revenue  sources  and  business  opportunities;

     -    personnel  and  human  resources;  and

     -    research  and  development  capabilities.

     Our  larger  competitors  have long term advantages over us in research and
new  product  development  and  have  a  greater  ability  to withstand periodic
downturns  in  the  interconnect  market because they have diverse product lines
that  can  provide  revenue  even  when  there is a downturn in the interconnect
market.

     WE CANNOT GUARANTEE THE QUALITY, PERFORMANCE OR RELIABILITY OF OUR PRODUCTS

     We  have  no  prior experience in taking technology to the manufacturing or
production  stage.  We  plan to have licensees or co-joint venturers manufacture
products  using  the particle technology.  We expect that the customers of these
products will demand quality, performance and reliability.  We cannot assure you
that our future licensees or co-joint venturers will be able to meet the quality
control  standards  that may be established by equipment manufacturers and other
customers  of  products  utilizing  the  particle  technology.

     THERE MAY BE INSUFFICIENT DEMAND FOR OUR PARTICLE TECHNOLOGY

     We  must  convince  our potential customers that the particle technology is
technologically  sound  and can be manufactured efficiently and cost-effectively
before  connector  manufacturers  and electronic equipment manufacturers will be
willing  to  use  our  technology.  To  create  this consumer demand, we have to
successfully  market  and  sell  our  technology.  Even after these efforts, our


                                        6
<PAGE>
particle  technology  may  not  be  viewed  by  consumers as an improvement over
existing technologies and may not achieve commercial acceptance.

     WE MAY BE UNABLE TO MEET OUR ONGOING NEEDS FOR ADDITIONAL CAPITAL

     We cannot accurately predict how much funding we will need to implement our
strategic  business  plan  or  to  continue  operations.  Our  future  capital
requirements,  the  likelihood  that  we  can  obtain money and the terms of any
financing  will  be  influenced  by  many  different  factors,  including:

     -    our  revenues,

     -    the  status  of  competing  products  in  the  marketplace,

     -    our  performance  in  the  marketplace,

     -    our  overall  financial  condition,

     -    our  business  prospects,

     -    the  perception  of  our  growth  potential  by  the public, including
potential  lenders,

     -    our  ability to enter into joint venture or licensing relationships to
achieve  a  market  presence  and

     -    our  progress  in  developing,  marketing  and  selling  the  particle
technology.

     If we cannot obtain adequate financing or if the terms on which we are able
to acquire financing are unfavorable, our business and financial condition could
be  negatively  affected.  We may have to delay, scale back or eliminate some or
all  of  our development and marketing programs, if any.  We may also have to go
to  third  parties  to  seek  financing, and in exchange, we may have to give up
rights  to  some  of  our  technologies, patents, patent applications, potential
products  or  other  assets.

     WE MAY BE UNABLE TO HIRE AND RETAIN KEY PERSONNEL

     Our  future  success  depends on our ability to attract qualified technical
personnel  capable  of working with our technology.  We may be unable to attract
these  necessary  personnel.  If we fail to attract or retain skilled employees,
or  if a key employee fails to perform in his or her current position, we may be
unable  to  bring  our  particle  technology  to the marketplace and to generate
sufficient  revenues  to  offset  our  operating  costs.

     WE  MAY  BE  UNABLE  TO OBTAIN AND RETAIN APPROPRIATE PATENT, COPYRIGHT AND
TRADEMARK  PROTECTION  OF  OUR  PRODUCTS

     We  protect  our  intellectual property rights through patents, trademarks,
trade  names,  trade  secrets  and  a variety of other measures.  However, these
measures  may  be  inadequate  to  protect  our  intellectual  property or other
proprietary  information.

     -    TRADE SECRETS MAY BECOME KNOWN BY THIRD PARTIES.  Our trade secrets or
proprietary  technology  may  become  known  or  be  independently  developed by
competitors.


                                        7
<PAGE>
     -    RIGHTS  TO PATENTS AND TRADE SECRETS MAY BE INVALIDATED.  Disputes may
arise with third parties over the ownership of our intellectual property rights.
Our  patents  may  be  invalidated,  circumvented  or challenged, and the rights
granted  under those patents that provide us with a competitive advantage may be
nullified.

     -    PROBLEMS  WITH  FUTURE  PATENT  APPLICATIONS.  Our  pending  or future
patent  applications may not be approved, or the scope of the granted patent may
be  less  than  the  coverage  sought.

     -    INFRINGEMENT CLAIMS BY THIRD PARTIES.  Infringement, invalidity, right
to use or ownership claims by third parties or claims for indemnification may be
asserted  by third parties in the future.  If any claims or actions are asserted
against  us,  we  can  attempt  to  obtain  a  license  for  that  third party's
intellectual  property  rights.  However,  the  third  party  may  not provide a
license  under  reasonable  terms,  or may not provide us with a license at all.

     -    THIRD  PARTIES  MAY DEVELOP SIMILAR PRODUCTS.  Competitors may develop
similar  products,  duplicate our products or may design around the patents that
are  owned  by  us.

     -    LAWS  IN  OTHER  COUNTRIES  MAY  INSUFFICIENTLY  PROTECT  INTELLECTUAL
PROPERTY  RIGHTS  ABROAD.  Foreign intellectual property laws may not adequately
protect  our  intellectual property rights abroad.  Our failure to protect these
rights  could  adversely  affect  our  business  and  financial  condition.

     -    LITIGATION  MAY  BE  REQUIRED TO PROTECT INTELLECTUAL PROPERTY RIGHTS.
Litigation  may  be  necessary  to  protect our intellectual property rights and
trade  secrets,  to  determine  the validity of and scope of the rights of third
parties  or  to  defend  against  claims  of infringement or invalidity by third
parties.  This  litigation  could  be  expensive,  would  divert  resources  and
management's  time  from  our  sales  and  marketing  efforts,  and could have a
materially  adverse  effect  on our business, financial condition and results of
operations  and on our ability to enter into joint ventures or partnerships with
others.

     LICENSE RIGHTS TO PARTICLE TECHNOLOGY MAY LIMIT OUR ABILITY TO COMPETE

     Before  we  acquired the patents, patent applications and licenses from the
original  owners  of  the  particle  technology,  the  inventor  of the particle
technology  granted  five  companies exclusive and non-exclusive licenses to use
the  patents  and  patent  applications relating to the particle technology.  At
this  time, only two of the original five licensees are using our technology and
none of these licenses relate to either smart card or smart label technology.  A
non-exclusive, two year license was also granted to the inventor of the particle
technology  in  October  2002  in  connection  with  the  settlement  of certain
litigation  with  the  inventor.  These  licenses  restrict  us  as  follows:

     -    EXCLUSIVE  LICENSES  PREVENT  US  FROM COMPETING AGAINST THE EXCLUSIVE
LICENSES.  We cannot compete in the fields in which exclusive licenses have been
granted.  An  exclusive  license  was granted in the field of sockets for use in
the  automated  handling  and  testing  of  integrated  circuits,  a  type  of
semiconductor  in  which a number of transistors and other elements are combined
to  form  a  more  complicated  circuit.

     -    NON-EXCLUSIVE  LICENSES  ALLOW  LICENSEES  TO  COMPETE  AGAINST  US IN
CERTAIN  AREAS.  The  licensees with non-exclusive licenses can compete directly
with us or our other future licensees.  Non-exclusive licenses have been granted
to  use  the  particle  technology  for  electrically  conductive  components,
laminate-based  and  metal-based  products  and  semiconductor products.  If the
present  licensees  decide


                                        8
<PAGE>
to  compete  with  us  or our future licensees, this competition could adversely
affect  our  business.

     WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE

     We have never paid cash dividends on our common stock.  We do not expect to
pay  cash  dividends  on our common stock at any time in the foreseeable future.
The  future  payment  of  dividends  directly  depends upon our future earnings,
capital requirements, financial requirements and other factors that our board of
directors  will  consider.  Since  we do not anticipate paying cash dividends on
our  common  stock,  return on your investment, if any, will depend solely on an
increase,  if  any,  in  the  market  value  of  our  common  stock.

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 its current office space
on  June  27, 2001 and has a 5-year lease on the property, expiring in September
2006.  The  base  rent  is $4,850 per month for the remaining term of the lease,
plus  certain  occupancy costs.  Intercell maintains an administrative office on
the  premises.

     NanoPierce  Connection  is  located  at  4180  Center  Park Drive, Colorado
Springs,  Colorado  80916.  The  Company  currently  has  a  3-year lease on the
property, expiring in March 2006. The base rent is $2,600 per month for the year
ending  March  30,  2004,  with a $100 per month increase in base rent each year
thereafter  for  the remaining term of the lease, plus utilities and maintenance
expenses.  From  these  facilities  research  and  development  activities  in
connection  with  application  development  take  place.  The  facility  is
approximately  4,800  square  feet  consisting  of  office  space  and  a  small
laboratory.  The  facility  also  has  a  clean  room for use in the WaferPierce
process.

     NanoPierce Card, during the fiscal year ended June 30, 2003, leased offices
located  at  Lise-Meitner-Strasse  1,  D-85662  Hohenbrunn, Germany.  From these
offices  marketing, software development and additional research and development
activities  took  place through March 31, 2003.  As part of the self-liquidation
of  NanoPierce  Card,  the  landlord has first priority on any funds received by
NanoPierce  Card.

     ExypnoTech  leases  production  space  located  at
Professor-Hermann-Klare-Strasse 6, D-07407 Rudolstadt, Germany. ExypnoTech has a
5-year  lease  on  the facilities, expiring in March 2007. The base rent is $821
per  month  for  the  remaining  term  of  the  lease,  plus utilities, repairs,
maintenance and tax expenses. The lease can be cancelled with a notice period of
6  months.  ExypnoTech  also  used the facilities of NanoPierce Card for certain
administrative  tasks.

ITEM 3.   LEGAL PROCEEDINGS

DIFRANCESCO LITIGATION

     The  Company and Louis DiFrancesco, the inventor of the PI Technology, were
involved  in  litigation  relating to NanoPierce'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.  In October 2002, the Company
and  DiFrancesco  signed  a  settlement  agreement enforced by Court Order.  The
Court  Order declares that the Company owns the entire, exclusive, incontestable
ownership,  right,  title  and interest in the patents.  The Court Order further
declares  that Mr. DiFrancesco owns the sole, exclusive, and incontestable right
to  receive  and  collect  all  royalties  and  other payments from all licenses
outstanding  on  September  3,  1996.  Pursuant to the settlement agreement, Mr.
DiFrancesco  was  also  granted  a


                                        9
<PAGE>
limited,  two-year,  non-transferable,  royalty-bearing license with no right to
sublicense.

HARVEST COURT LITIGATION

     In  connection with a financing obtained in October 2000, the Company filed
various actions in the United States District Court for the District of Colorado
against,  among others, Harvest Court, LLC, Southridge Capital Investments, LLC,
Daniel  Pickett,  Patricia  Singer and Thomson Kernaghan, Ltd. for violations of
federal  and  state  securities laws, conspiracy, aiding and abetting and common
law  fraud  among  other claims.  The Company is seeking various forms of relief
including  actual,  exemplary  and  treble  damages.  As  a  result  of  various
procedural  rulings  in  January  2002, the United States District Court for the
District  of  Colorado  transferred the case to the United States District Court
for  the  Southern District of New York, New York City, New York.  In July 2003,
Harvest Court, LLC filed counterclaims, in this proceeding, against the Company,
Mr.  Metzinger,  Ms.  Kristi  Kampmann, Dr. Herbert Neuhaus, Dr. Robert Shaw and
unrelated  third  parties  in  the United States District Court for the Southern
District  of  New York, New York City, New York.  The suit alleges violations of
federal  securities laws and common law fraud among other claims.  Harvest Court
is  seeking various forms of relief including compensatory and punitive damages.
The  Company  is  preparing  appropriate  responsive  pleadings.

     In  May  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 breached an October 20, 2000 Stock 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 due in connection with the third
reset  date.  Harvest  Court,  LLC  is  seeking  the  delivery of such shares or
damages  in  the alternative.  In August 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.
The  Company  has  filed  counterclaims  seeking various forms of relief against
Harvest  Court,  LLC.

OTHER LITIGATION

     In  September  2001,  litigation was filed by Thomson Kernaghan & Co., Ltd.
against  the  Company  and  certain  officers/directors  of  the Company seeking
damages  for  defamation.  Thomson  Kernaghan  &  Co.,  subsequently  filed  for
protection  under  Canadian  bankruptcy  laws.  In December 2002 this action was
dismissed  by  the  Trustee.

     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.


                                       10
<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.

<TABLE>
<CAPTION>
     2002 FISCAL YEAR                   HIGH                   LOW
     ----------------                   -----                 -----
<S>                                     <C>                   <C>
     September 30, 2001                 $0.70                 $0.64
     December 31, 2001                   0.70                  0.67
     March 31, 2002                      1.54                  1.42
     June 30, 2002                       0.96                  0.91

     2003 FISCAL YEAR
     ----------------
     September 30, 2002                  0.60                  0.56
     December 31, 2002                   0.63                  0.61
     March 31, 2003                      0.30                  0.28
     June 30, 2003                       0.32                  0.28
</TABLE>

     As  of June 30, 2003, there were approximately 339 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.
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,  2003  through  June  30,  2003.

<TABLE>
<CAPTION>
                TITLE OF       NO. OF
                --------       ------
       DATE    SECURITIES      SHARES    CONSIDERATION      PURCHASER
       ----    ----------      ------    -------------      ---------
<C>           <S>            <C>        <C>               <C>
      4/3/03  Common Stock   1,333,334  $     20,000 (1)  Neptune
                                                          Investment
                                                          Group, Ltd.
      4/3/03  Warrant (2)    1,333,334  $     20,000 (1)  Neptune
                                                          Investment
                                                          Group, Ltd.
     6/20/03  Common Stock     240,842  $       31,307    John Provazek
<FN>
____________


                                       11
<PAGE>
(1) Total consideration received for the issuance by the Company of common stock
and  warrants.
(2)  Warrants to purchase shares of restricted common stock at an exercise price
of  $0.15  per  share.  Warrants expire April 3, 2008, unless exercised earlier.
</TABLE>

     EXEMPTION  FROM  REGISTRATION  CLAIMED.  The issuance by the Company of its
unregistered securities was made by the Company in reliance upon Section 4(2) of
the  Securities Act of 1933, as amended.  The individuals and/or entities listed
above that received the unregistered securities were all business associates and
previous investors of the Company.  Each such person were 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  issuance.  Each  person  who  received  such unregistered
securities  acquired  such  securities for investment and not with a view toward
distribution,  and acknowledged such intent to the Company.  All certificates or
agreements  representing  the  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.

     The  independent  auditors' report on the Company's financial statements as
of  June  30, 2003, and for each of the years in the two-year period then ended,
includes  a  "going  concern"  explanatory paragraph, that describes substantial
doubt  about the Company's ability to continue as a going concern.  Management's
plans in regard to the factors prompting the explanatory paragraph are discussed
below  and  also  in  Note  2 to Notes to the Consolidated Financial Statements.

RESULTS OF OPERATIONS

     On  April 1, 2003, NCT filed insolvency with the Courts of Munich, Germany.
The  insolvency  filing  was  necessary, in the view of the Company, in order to
comply  with  specific  German  legal  requirements.  NCT  is  presented  as
discontinued  operations  in  the  Company's  consolidated financial statements.
During  the  year  ended  June  30, 2003, NCT had losses of $882,718 compared to
losses  of $782,858 during the year ended June 30, 2002.  In September 2003, the
court  rejected  the  application  for  insolvency  and the Company is now under
self-liquidation  in  accordance  with  German  law.

     The  Company  recognized  $37,017  of  revenues  from continuing operations
during the fiscal year ended June 30, 2003 compared to $4,737 in the fiscal year
ended  June  30,  2002.  Revenues  recognized  by  discontinued  operations were
$128,947  during the fiscal year ended June 30, 2003 and $151,392 for the fiscal
year  ended  June  30, 2002.  The revenue generated from discontinued operations
was from various software development contracts generated by NanoPierce Card and
the  remaining $37,017 was from the preparation of samples using WaferPierce for
potential  customers by NanoPierce Connection ($3,900) and the sale of inlays by
ExypnoTech  ($33,117).  The


                                       12
<PAGE>
Company  expects  to  continue  to  generate  revenues through its subsidiaries,
NanoPierce  Connection  and  ExypnoTech.

     The  Company  recognized  $7,251  in interest income during the fiscal year
ended  June  30,  2003 compared to $98,574 during the fiscal year ended June 30,
2002.  The  decrease  of  $91,323  is  due  primarily to the need for capital to
support  operations  throughout  the  year.

     Total  operating expenses from continuing operations during the fiscal year
ended  June 30, 2003 were $3,179,297, compared to $4,049,525 for the fiscal year
ended  June 30, 2002.  The decrease of $870,228 is attributable to a decrease in
operational  activities  and  spending  over  the  year,  as  described  below.

     General  and  administrative expenses during the fiscal year ended June 30,
2003  were  $2,414,077 compared to $3,516,534 for the fiscal year ended June 30,
2002.  The  decrease  of $1,102,457 is mainly attributable to decreases in legal
expenses,  payroll  and  press  releases, website development and other investor
relations  matters.  In  April  2001, the Company issued 3,125,000 of its common
shares,  valued  at  $1,000,000  in  connection  with legal costs related to the
Harvest  Court  Litigation,  as  part  of  a Contingency Fee Agreement, to cover
expenses  to  be incurred on its behalf.  The Company amortized the value of the
shares  over  a one-year period.  Prior to July 1, 2001, $175,343 was amortized.
The remaining $824,657 was amortized during the fiscal year ended June 30, 2002.
Selling  and  marketing expenses during the fiscal year ended June 30, 2003 were
$238,817  compared  to $112,178 during the fiscal year ended June 30, 2002.  The
increase  of  $126,639 was due to an increase in marketing activities, including
appearances  at  various  trade shows.  Research and development expenses during
the  fiscal  year ended June 30, 2003 were $316,403 compared to $316,438 for the
fiscal  year  ended  June  30,  2002.

     During the fiscal year ended June 30, 2003, the Company incurred an expense
of  $200,000  in  connection  with  the  impairment of the original intellectual
property  owned  by  the  Company.  The  decision to record an impairment of the
intellectual  property  was  based  primarily  on the overall age of the patents
underlying  the  intellectual  property  combined  with  the  Company's  current
operational  status.  This  impairment  is  not  indicative  of the value of the
technology  and  the  current  value  of  the  separate  and  independent patent
applications and trademark applications the Company has filed both in the United
States  and  internationally.

     During the fiscal year ended June 30, 2003, the Company incurred an expense
of  $10,000  in  connection with the impairment of the WaferPierce System bought
and  modified  by Company for the application of NCS on wafers.  This impairment
is  not  indicative to the value of the technology, nor does the Company believe
that  it  limits  the  Company's  ability  to  market NCS.  The Company does not
believe that there has been any impairment to other long-lived assets as of June
30,  2003.

     During the fiscal year ended June 30, 2002, the Company incurred an expense
of  $104,375 in connection with the impairment of equipment built by the Company
to  develop  the  application  of  the NanoPierce Connection System (NCS(TM)) on
flexible substrates.  Given the Company's focus on the application of NCS at the
wafer-level and based on management's operational plans and developments for the
future,  it  was  decided  that because the equipment had no resale value to the
Company,  to  write  off the carrying value of the equipment.  This write off is
not indicative to the value of the technology, nor does the Company believe that
it  limits  the  Company's  ability  to  market  NCS  in  markets using flexible
substrates.

     During  the  fiscal  year ended June 30, 2003, the Company recognized a net
loss  of  $4,017,785 compared to a net loss of $4,729,072 during the fiscal year
ended


                                       13
<PAGE>
June  30,  2002.  The  decrease  of  $711,287  is  explained  by the decrease of
$870,228  in operating expenses, offset by a $91,323 decrease in interest income
and a $99,860 increase in the loss from discontinued operations between 2003 and
2002.

LIQUIDITY AND FINANCIAL CONDITION

     Net  cash  used  in operating activities from continuing operations in 2003
was  $1,754,247,  compared  to  net  cash  used  in  operating  activities  from
continuing  operations  in  2002  of  $2,777,705.  In  2003,  the  net cash used
represented  a  net  loss of $4,017,785, adjusted for the loss from discontinued
operations  of  $882,718,  amortization  and  depreciation  expense of $416,250,
impairment  charges of $210,000, and changes in operating assets and liabilities
and  other  adjustments  which  net  to  $754,570.

     In  2002,  the net cash used represented a net loss of $4,729,072, adjusted
for  the  loss  from  discontinued  operations  of  $782,858,  amortization  and
depreciation  expense of $1,142,334, impairment charges of $104,375, and changes
in  operating  assets  and  liabilities  and  other  adjustments  which  net  to
($78,200).

     During  the  year  ended June 30, 2003 the Company sold 7,340,348 shares of
common  stock  and granted warrants to purchase 6,024,525 shares of common stock
at  exercise  prices ranging from $0.15 to $0.60 for $1,826,766 (net of offering
costs  of  $75,500).  The  warrants  are  exercisable through 2008 and contain a
cashless  exercise  provision.  The  funds  were  raised  to support operations.

     During  the  fiscal  year  ended  June 30, 2003, the Company entered into a
12-month financial advisory and exclusive placement agent agreement with a third
party  (the "Placement Agent").  Under the terms of the agreement, the Placement
Agent  is  to  act  as the financial advisor to the Company and as its exclusive
placement  agent  for  a  private  placement  of  equity  securities  during the
twelve-month  term  of  the  agreement.  Compensation consists of a retainer fee
(deferred  consulting  costs  of  approximately  $230,400),  which consists of a
warrant  to  purchase  up  to  450,000  shares  of  the  Company's common stock.
Compensation  also  includes  a  $10,000  monthly advisory fee, payable in cash,
beginning  in  June  2003. In addition, the Company is exploring other financing
opportunities  to  support  continuing  operations.

     In  June  2003, Mr. Metzinger, the President, Chief Executive Officer and a
director  of  the  Company,  loaned  $10,000  to  the Company in exchange for an
unsecured  7%  note  payable  due  in  December 2003, the proceeds of which were
utilized  for  operational  purposes.

     In April 2002, the Company entered into a $2,000,000 equity financing.  The
Company  received  the first of two available tranches of $1,000,000 per tranche
($900,000  net  of $100,000 of offering costs) and in return issued 800,000 free
trading  common  shares  to  the  investor.  In  addition,  the  Company  issued
1,073,000  of  its free-trading common shares, which are being held by an escrow
agent  for  the  potential  issuance  upon  exercise  of  the warrants issued in
connection  with the financing. Such warrants have a term of five years, with an
exercise  price  of  $1.45 per share.  The second tranche of $1,000,000 was made
available  to  the  Company  sixty  days  after the take down of the first.  The
Company  declined  to  take  down  the  second  tranche, due to depressed market
conditions,  at  that  time,  and  possible  dilutive effects on its stock.  The
second  tranche  is no longer available to the Company, pursuant to the terms of
the  agreement  with  the  investor.

     During  the fiscal year ended June 30, 2001, the Company loaned $500,000 to
an  unrelated  third party, Global Capital Partners, Inc. ("Global") in exchange
for  a  12%  note  receivable  due  in  November  2001.  Through  June 30, 2002,
principal


                                       14
<PAGE>
payments  of $230,291 were received.  In October 2002 the remaining principal of
$144,709  was  received.

     In  April  2002,  the  Company  loaned  $50,000  to a representative of the
unrelated  third party, which had been assigned the Global note, in exchange for
a  unsecured,  8% note receivable due in October 2002.  In May 2002, the Company
received $23,930.  In September 2002, the remaining principal balance of $26,859
was  received.

     At  July  1,  2001, the Company also had a $300,000 loan receivable from an
unaffiliated third party.  In September 2001, the outstanding amount was paid in
full.

     At  July  1,  2001,  the  Company  had  an  unsecured  note receivable from
Intercell of $92,500.  During the year ended June 30, 2002, the Company advanced
an  additional $35,000 to Intercell.  The entire amount was paid in full by June
30,  2002.

     During the fiscal year ended June 30, 2003, the Company made investments in
machinery  and  equipment  of  approximately  $351,431  in continuing operations
($8,358 by NanoPierce Card, presented in discontinued operations) to support its
expanded  activities  at  ExypnoTech,  as  compared  to  $188,755  in continuing
operations  ($12,136  by  NanoPierce Card, presented in discontinued operations)
during the fiscal year ended June 30, 2002.  In August 2002, ExypnoTech accepted
delivery  on  machinery  to begin the production of RFID components for usage in
Smart  Labels.

     During  the fiscal year ended June 30, 2003, the Company expanded the scope
of its patent and trademark applications.  The patent and trademark applications
are  being amortized using the straight-line method over ten years.  On June 30,
2003,  the  Company  has  patent  and  trademark applications costs of $431,286,
compared to $242,646 on June 30, 2002.  The increase of $188,640 was due in part
to  the  filing  of  trademark  applications  at the international level and the
filing of new patent applications in connection with development and advancement
of  the  technology.

PLAN OF OPERATIONS

     The  Company  has  signed  various nondisclosure and cooperation agreements
with  companies  both  overseas  and  in  the United States.  The agreements are
applicable  to  the  application  of  the  Company's  NCS  technology and/or its
WaferPierce  method  for  various  products  in  the  smart  card/smart  label
industries,  the  LED industry and in the semiconductor industry.  Management is
pursuing  the  development  of  further  similar  agreements both nationally and
internationally  with  additional  companies  in  not  only  these  but  other
industries.  The  Company  is  also  involved in creating samples and testing in
connection  with  these  agreements.

     In  September  2003,  the Company formed a joint venture with Scimaxx, LLC.
The  joint  venture,  Scimaxx  Solutions,  LLC  is  to  handle  marketing of the
Company's  technology.  Scimaxx  LLC, is owned by an officer and director of the
Company and two former employees of the Company.  In return for 50% ownership of
the  Scimaxx  Solutions,  LLC,  the Company contributed a license to utilize its
technology  and  the  facilities  and  equipment of NanoPierce Connections.  The
Company  is  not  required  to make any cash contributions to the joint venture.
Operating  capital  will  be  provided  by  Scimaxx,  LLC.

     Effective  September  22,  2003, the Company signed a letter of intent with
Meshed  Systems,  GmbH  ("Meshed Systems"), in which Meshed Systems is to make a
100,000  Euro investment in ExypnoTech for a 51% equity interest.  The letter of
intent provides for Meshed Systems to manage the operations of ExypnoTech and to


                                       15
<PAGE>
provide  ExypnoTech  with working capital on an as needed basis.  The Company is
to  grant  ExypnoTech  a non-exclusive, non-royalty bearing worldwide license to
practice  its  ultrasonic  technology.  Profit sharing is to based on the equity
ownership.  The  license  will  also  allow  ExypnoTech  to  sublicense  the
intellectual  property.  Meshed  Systems  is  managed  by  a  former officer and
director  of  the  Company.

     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  May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  150,  Accounting  for Certain Financial Instruments with Characteristics of
Both  Liabilities  and Equity.  SFAS No. 150 establishes new standards on how an
issuer  classifies  and  measures  certain  financial  instruments  with
characteristics  of  both  liabilities  and  equity.  Under  previous  guidance,
issuers  could  account  for  many of those instruments as equity.  SFAS No. 150
requires  that  those  instruments be classified as liabilities in statements of
financial  position.  SFAS  No.  150  is effective for all financial instruments
entered  into  or modified after may 31, 2003, and otherwise is effective at the
beginning  of  the  first  interim  period  beginning  after June 15, 2003.  The
Company  believes  that  the  adoption  of SFAS No. 150 will not have a material
impact  on  its  results  of  operations  or  financial  condition.

     In  December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition  and  Disclosure.  This  statement  amends SFAS No. 123,
Accounting for Stock Based Compensation, and establishes two alternative methods
of  transition  for  the  intrinsic  value  method  to  the fair value method of
accounting  for  stock-based  employee  compensation.  In addition, SFAS No. 148
requires  prominent  disclosure  about the effects on reported net income (loss)
and requires disclosure for these effects in interim financial information.  The
Company adopted the disclosure only provisions of SFAS No. 148 in 2003 and plans
to  continue  accounting  for  stock-based  compensation  under  APB  25.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or  Disposal  of  Long-Lived  Assets,  which  addresses accounting and financial
reporting  for  the  impairment  or  disposal of long-lived assets.  The Company
adopted  SFAS  No. 144 effective July 1, 2002, and has applied the provisions of
SFAS  No. 144 in connection with its accounting for the impairment of long-lived
assets,  discussed  above.  Management  does not believe the application of SFAS
No.  144 resulted in a 2003 impairment charge different from that under previous
accounting  standards.  The  provisions  of  SFAS  No.  144 were also applied in
connection with the Company's accounting for discontinued operations.


                                       16
<PAGE>
CRITICAL ACCOUNTING POLICIES

     The  discussion  and  analysis  of  our  financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America.  The  preparation  of  these  financial  statements
requires  us to make estimates and judgments that affect the reported amounts of
assets  and  liabilities,  revenues  and  expenses  and  related  disclosures of
contingent  assets  and  liabilities.  On  an  on-going  basis,  we evaluate our
estimates,  including  those related to deferred revenues; depreciation or fixed
assets,  amortization  of  intangible  assets such as our intellectual property,
financing  operations, currency valuations and contingencies and litigation.  We
base  our  estimates  on  historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form  the  basis  for  making  judgments about the carrying values of assets and
liabilities  that  are  not readily apparent from other sources.  Actual results
may  differ  from  these  estimates  under  different assumptions or conditions.

     The  Company  believes  that the following are some of the more significant
accounting  policies  and  methods  used  by  the  Company:

          -    stock  based  compensation;
          -    valuation  of  intellectual  property,  patent  and  trademark
               applications  and  other  long-lived  assets;
          -    international  operations;
          -    revenue  recognition  and  deferred  revenue;
          -    litigation;  and
          -    contractual  obligations.

Stock-based  compensation

     SFAS  No.  123,  Accounting  for  Stock  Based  Compensation,  defines  a
fair-value-based  method  of  accounting  for  stock-based employee compensation
plans  and  transactions  in  which  an  entity issues its equity instruments to
acquire  goods  or  services  from  non-employees,  and  encourages but does not
require  companies  to  record  compensation  cost  for  stock-based  employee
compensation  plans  at  fair  value.

     The  Company  has  chosen  to account for employee stock-based compensation
using  the  intrinsic  value  method  prescribed  in Accounting Principles Board
Opinion  No.  25  (APB  No.  25),  Accounting for Stock Issued to Employees, and
related  interpretations.  Accordingly,  employee  compensation  cost  for stock
options  is  measured  as the excess, if any, of the estimated fair value of the
Company's stock at the date of the grant over the amount an employee must pay to
acquire  the  stock.

     In  December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition  and  Disclosure.  This  statement  amends SFAS No. 123,
Accounting for Stock Based Compensation, and establishes two alternative methods
of  transition  for  the  intrinsic  value  method  to  the fair value method of
accounting  for  stock-based  employee  compensation.  In addition, SFAS No. 148
requires  prominent  disclosure  about the effects on reported net income (loss)
and requires disclosure for these effects in interim financial information.  The
Company adopted the disclosure only provisions of SFAS No. 148 in 2003 and plans
to  continue  accounting  for  stock-based  compensation  under  APB  25.

Valuation  of intellectual property, patent and trademark applications and other
long-lived  assets


                                       17
<PAGE>
     The  Company  assesses  the  impairment of long-lived assets and intangible
assets  such  as  intellectual  property  and  patent and trademark applications
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable.  Factors the Company considers important which could trigger
an  impairment  review  include  negative projected operating performance by the
Company and significant negative industry or economic trends.  At June 30, 2003,
management  assessed  the  carrying  value  of intellectual and other long-lived
assets  for  impairment,  and based on this assessment the Company believed that
impairment  was necessary in the case of both the original intellectual property
and  the WaferPierce System located at NanoPierce Connections.  During 2003, the
Company recognized an impairment of $200,000 on the intellectual property and an
impairment  of  $10,000 on the WaferPierce System.  The Company does not believe
that  there  has  been  any other impairment to long-lived assets as of June 30,
2003.

International  operations

     The  Company's  two  foreign  subsidiaries (NanoPierce Card and ExypnoTech)
operations  are located in Germany.  NanoPierce Card and ExypnoTech transactions
are conducted in currencies other than the U.S. dollar, (the currency into which
the  subsidiaries'  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, foreign political and economic
environment, trade barriers, managing foreign operations and potentially adverse
tax  consequences.  Any of these factors could have a material adverse effect on
the  Company's  financial  condition  or  results  of  operations in the future.

Revenue  recognition  and  deferred  revenue

     The  Company's  revenue  recognition  policy  is significant because future
revenue  could be a key component of its results or operations.  Revenue results
are  difficult  to predict, and any shortfall in revenue or delay in recognizing
revenue  could  cause  operating  results  to  vary  significantly.

     The  Company derived most of its revenue through discontinued operations of
its  German  subsidiary,  NanoPierce  Card,  which  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  as  the  services are
preformed  and when no significant obligations remain related to implementation.
Revenues  are  deferred if significant future obligations are to be fulfilled or
if  connection  is  not  probable.

Litigation

     The  Company is involved in certain legal proceedings, as described in Note
8  and  9  to  the  consolidated  financial  statements included in this report.

     The  Company  intends  to  vigorously prosecute these legal proceedings and
does  not  believe the outcome of these proceedings 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.

Contractual  obligations

     For  more information on the Company's contractual obligations on operating
leases,  refer to Note 10 of the Consolidated Financial Statements.  At June 30,


                                       18
<PAGE>
2003,  the  Company's  commitments  under  these obligations were as follows (in
thousands):

<TABLE>
<CAPTION>
                                                          OPERATING LEASES
                                                          ----------------
<S>                                                       <C>
                      Year ending June 30,
                      2004                                $             125
                      2005                                               91
                      2006                                               67
                                                          -----------------
                                                          $             283
                                                          =================
</TABLE>

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  consolidated  financial  statements  and related financial information
required  to  be  filed  are  indexed  on  page F-1 and are incorporated herein.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                    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:


                                       19
<PAGE>
<TABLE>
<CAPTION>
        NAME AND AGE                  POSITION                     PERIOD
        ------------                  --------                     ------
<S>                          <C>                         <C>
Paul H. Metzinger (64)       Director, President, Chief  December 1998 to present
                             Executive Officer,
                             General Manager of          January 2000 to present
                             NanoPierce Card
Dr. Herbert J. Neuhaus (44)  Director, Executive Vice    January 1999 to present
                             President of Technology &
                             Marketing,
                             President & Chief           January 2002 to present
                             Executive Officer of
                             NanoPierce Connection
Dr. Michael E. Wernle (41)   Director, Executive Vice    November 1999 to
                             President of Strategic      September 2003
                             Business Development,
                             President & Chief
                             Executive Officer of        January 2000 to May 2003
                             NanoPierce Card,
                             President & Chief
                             Executive Officer of        February 2002 to  August
                             ExypnoTech                  2003
Kristi J. Kampmann (30)      Chief Financial Officer,    October 1999 to present
                             Secretary                   February 1998 to present
Dr. Robert Shaw (63)         Director                    October 2000 to present
Dr. Noel Eberhardt (65)                                  November 2001 to December
                             Director                    9, 2003
John Hoback (63)             Director                    April 2002 to present
Richard Lancaster (36)       Chief Financial Officer of
                             NanoPierce Card &           February 2002 to June 2003
                             ExypnoTech
</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 established
audit,  incentive  compensation  and  nominating  committees,  consisting of the
independent  directors.

    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  served  as  the
President,  Chief  Executive  Officer  and a Director of Intercell International
Corporation  from  June  1996 to October 2003.  Prior to becoming a director and
officer  of  the  Company and Intercell International Corporation, 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.  He  has  been  the  President and Chief Executive Officer of
NanoPierce  Connection  since January 2002. Dr. Neuhaus previously served as the
Managing  Director  of Particle Interconnect Corporation from August 18, 1997 to
November  1,  1997.  From  August


                                       20
<PAGE>
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 served as the Executive Vice President
for  Strategic Business Development and a Director of the Company, from November
1999  to  September  2003.  He  was the President and Chief Executive Officer of
NanoPierce  Card  from  January 2000 to May 2003. He was the President and Chief
Executive  Officer  of ExypnoTech from February 2002 to August 2003.  Dr. Wernle
was the Chief Operations Officer for Meinen, Ziegel & Co., GmbH, Munich, Germany
from  1997  to  1999.  He  also  served  as  the  Director  of  Production  for
Mikron/Philips-Graz,  Graz,  Austria from 1994 to 1996. 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 Chief Financial Officer of
Intercell  International  Corporation  since October 1, 2003 and as 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 received an MBA from the University of Colorado,
Denver  in  December  2001.  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.

     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  were  he  has served on the faculty since September 1988.
Dr. Shaw also performs professional research in his academic areas of specialty,
and  has  held,  among others, 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.

     NOEL  EBERHARDT.  Mr. Eberhardt was a director of the Company from November
28,  2001 until December 9, 2003.  Mr. Eberhardt's 35 year career has focused on
the  design,  development,  process  development and manufacturing of electronic
packages.


                                       21
<PAGE>
He has held positions with Motorola WSSD (Worldwide Smartcard Systems Division),
Indala  Corporation  and Hytek Microsystems, among a few, throughout his career.

      JOHN  HOBACK.  Mr.  Hoback  has been a director of the Company since April
2002. Mr. Hoback currently serves as the President of Z&H Enterprises Solutions,
Ltd.,  which  position he has held since 2000. Among other positions, Mr. Hoback
was  the  Director  of  Marketing and Sales of CTS from 1999 to 2000 and was the
Venture  Manager  of  Electronics  with  Amoco  Chemical  from  1998  to  1999.

     RICHARD  LANCASTER.  Mr. Lancaster served as the Chief Financial Officer of
NanoPierce  Card  from  February 1, 2002 to June 30, 2003 and of ExypnoTech from
February 2002 to June 30, 2003.  From 1995 to February 1, 2002 Mr. Lancaster was
with  Booz,  Allen  &  Hamilton Management consultants, focusing on managing key
financial  programs  for international technology companies.  Mr. Lancaster also
served  as  a  project  leader  with ICI Chemicals and Poymers, Plc and with EDS
(Electronic  Data  Systems)  Consulting.  Mr.  Lancaster received his masters in
electrical  and information engineering from the University of Cambridge, UK and
an  MBA  from  INSEAD,  France.


                                       22
<PAGE>
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 years ended June 30, 2003
and  2002  (the  "Named  Executive  Officers"):

<TABLE>
<CAPTION>
                              ANNUAL COMPENSATION                           LONG TERM COMPENSATION
                              -------------------                           ----------------------
                                                                      AWARDS                   PAYOUTS
                                                                      ------                   -------
                                                OTHER                   SECURITIES
                                                ANNUAL     RESTRICTED   UNDERLYING     LTIP     ALL OTHER
NAME & PRINCIPAL          SALARY     BONUS    COMPENSA-      STOCK       OPTIONS/     PAYOUTS   COMPENSA-
    POSITION       YEAR     ($)       ($)        TION      AWARDS ($)    SARS (#)       ($)        TION
<S>                <C>   <C>        <C>       <C>         <C>           <C>          <C>        <C>
Paul H.
Metzinger,         2003  $ 132,500  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
Director,          2002  $ 190,750  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
President &        2001  $ 181,500  $    -0-  $      -0-  $        -0-      500,000  $     -0-  $      -0-
CEO(1)

Dr. Herbert J.
Neuhaus,
Director, Ex.VP    2003  $ 148,333  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
of Technology &    2002  $ 190,750  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
Marketing, Pre &   2001  $ 181,500  $    -0-  $      -0-  $        -0-      100,000  $     -0-  $      -0-
CEO of
NanoPierce
Connection (2)

Dr. Michael E.
Wernle,
Director, Ex. VP   2003  $ 128,000  $    -0-  $      -0-  $        -0-      365,000  $     -0-  $      -0-
of Strategic       2002  $ 160,000  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
Business Dvlpmt,   2001  $ 160,000  $    -0-  $      -0-  $        -0-      485,000  $     -0-  $      -0-
Pres & CEO of
ExypnoTech (3)

Kristi J.
Kampmann, Chief
Financial          2003  $  58,125  $    -0-  $      -0-  $        -0-          -0-  $     -0-  $      -0-
Officer &          2002  $  67,500  $    -0-  $      -0-  $        -0-      100,000  $     -0-  $      -0-
Secretary(4)       2001  $  60,000  $    -0-  $      -0-  $        -0-       50,000  $     -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, 2003 at an annual salary of $200,000.  At July 15, 2002,
Mr. Metzinger agreed to take a 30% cut in the gross amount of his salary, resulting in an annual salary of
$140,000.  In  February  2003,  Mr.  Metzinger agreed to a further reduction in his salary, resulting in a
gross  amount  of  $80,000.
2  Dr.  Neuhaus has served as the Executive Vice President of Technology and Marketing since January 1999.
He  has  served  as  the President and CEO of NanoPierce Connection since January 2002.  He is compensated
pursuant to a written Employment Agreement, dated January 2002 at an annual salary of $200,000.  On August
1,  2002,  Dr.  Neuhaus agreed to take a cut of 20% of his annual salary, resulting in an annual salary of
$160,000.  In  March  2003,  Dr.  Neuhaus agreed to a further reduction in his salary resulting in a gross
amount  of  $80,000.
3  Dr.  Wernle  served  as  the Executive Vice President of Strategic Business Development until September
2003.  He  has  served as the President & CEO of NanoPierce Card since January 2000.  He has served as the
President  &  CEO  of ExypnoTech, since February 2002.  He is compensated pursuant to a written Employment
Agreement  with  NanoPierce Card, dated February 1, 2000, at an annual salary of $160,000 (181,000 Euros).
On  August 1, 2002, Dr. Wernle agreed to take a 20% cut in the gross amount of his salary, resulting in an
annual  salary  of  $128,000.  As  of  August 2003, Dr. Wernle no longer is a paid employee of the Company
and/or  its  subsidiaries.
4  Kristi  Kampmann  has  served  as  the  Chief Financial Officer since October 1999.  She is compensated
pursuant  to a written Employment Agreement, dated July 15, 2002, at an annual salary of $60,000.  On July
15,  2002, Ms. Kampmann agreed to take a 20% cut in the gross amount of her salary, resulting in an annual
salary  of  $60,000.  In  February 2003, she agreed to a further reduction in salary, resulting in a gross
amount  of  $52,500.
</TABLE>


                                       23
<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,  2003.

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

                      # OF         % OF TOTAL
                   SECURITIES     OPTIONS/SARS
                   UNDERLYING      GRANTED TO
                  OPTIONS/SARS    EMPLOYEES IN    EXERCISE OR BASE   EXPIRATION
NAME               GRANTED (#)   FISCAL YEAR(1)   PRICE ($/SHARE)       DATE
<S>               <C>            <C>             <C>                 <C>
Paul H.Metzinger       -0-              0%              -0-              -0-

Dr. Herbert J.
Neuhaus                -0-              0%              -0-              -0-

Dr. Michael E.
Wernle               365,000           81%           $  0.61            2012

Kristi J.
Kampmann               -0-              0%              -0-              -0-
<FN>
_______________
1  Based  on  a total of 450,000 options granted to employees in the fiscal year
ended  June  30,  2003.
</TABLE>

             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, 2003 by the Company's executive
officers  and  the  2003  fiscal  year-end  value  of  unexercised  options.

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

                                         EXERCISABLE/UNEXERCISABLE      EXERCISABLE/UNEXERCISABLE
                                         -------------------------      -------------------------
<S>          <C>           <C>        <C>                              <C>
Paul H.           0            0                2,500,000/0               $    750,000/0
Metzinger
Dr. Herbert       0            0                1,350,000/0               $    405,000/0
J. Neuhuas
Dr. Michael       0            0                1,350,000/0               $    405,000/0
E. Wernle
Kristi            0            0                  325,000/0               $     97,500/0
J.Kampmann


                                       24
<PAGE>
<FN>
1  The average of the closing bid and asked price of the Common Stock on June 30, 2003 ($0.30) was
used  to  calculate  the  option  value.
</TABLE>

EMPLOYMENT AGREEMENTS

     On  January  1, 2003, 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, 2005.
Pursuant to his employment agreement, the Company agreed to pay Mr. Metzinger an
annual  salary of $215,000 the first year, $231,000 the second year and $250,000
the  third  year.

     On  January  1,  2002,  NanoPierce  Connection  entered  into an employment
agreement  with  Dr.  Herbert J. Neuhaus to serve as the Chief Executive Officer
and  President  of  NanoPierce  Connection.  The  employment  agreement  expires
December  31, 2005.  Pursuant to his employment agreement, NanoPierce Connection
agreed  to  pay Mr. Neuhaus an annual salary of $200,000,     $215,000, $231,000
and $250,000 the first, second, third and fourth year, respectively.

     On  July  15,  2002,  the Company entered into an employment agreement with
Kristi J. Kampmann to serve as the Chief Financial Officer of the Company.  Such
employment  agreement  expired  on  July  15,  2003.  Pursuant to her employment
agreement Ms. Kampmann receives an annual salary of $60,000.

     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.  The  Company has two Stock Option Plans.  As of June
30,  2003,  7,047,524  options are outstanding under the 1998 Compensatory Stock
Option  Plan  and  1,740,000 options are outstanding under the 2000 Compensatory
Stock  Option  Plan,  for  a total of 8,787,542 options outstanding.  A total of
8,322,524  options  are exercisable at June 30, 2003, under these plans.  During
the fiscal year ended June 30, 2003, the Company granted options pursuant to its
registered  2000  Compensatory  Stock  Option Plan to purchase 450,000 shares of
common  stock  to  directors,  officers,  and  employees  of the Company and its
subsidiaries.  The  Company  has  reserved  7,500,000 shares of common stock for
issuance  under  the  1998 Compensatory Stock Option Plan.  In January 2002, the
Company's  Board  of Directors passed a resolution closing the 1998 Compensatory
Stock  Option  Plan  for  issuance  of


                                       25
<PAGE>
new  options.  The  Company  has  reserved  5,000,000 shares of common stock for
issuance  under  the  2000  Compensatory  Stock  Option  Plan.

     During  the  fiscal  year ended June 30, 2003, there was no action taken to
reprice  any  options  or warrants held by any officers, directors or employees.

COMPENSATION  OF  DIRECTORS

     The  Company  holds quarterly meetings of the board of directors.  Although
the  Company  does  not  have  any  standard  arrangements pursuant to which our
directors  are  compensated  for  any  services  provided  as  a director or for
attendance  at meetings of the board of directors, if the financial situation of
the  Company  is adequate, the Company compensates directors $1,000 per meeting,
plus  reasonable  travel  expenses.

     During the fiscal year ended June 30, 2003, the officers and directors were
not  compensated  for  attendance  at  board  meetings.

     During  the fiscal year ended June 30, 2003, we granted options to purchase
365,000  shares  of  our common stock at an exercise price of $0.61 per share to
Dr. Wernle, as set forth above under "Options/SAR Grant Table."

ITEM 11.  CURITY 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, 2003 on a fully
diluted basis, by (a) each person known by the Company to own 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.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
    NAME, ADDRESS & NATURE OF
    -------------------------
        BENEFICIAL OWNER                     TITLE OF CLASS              AMOUNT     PERCENT OF CLASS9
        ----------------                     --------------              ------     -----------------
<S>                                 <C>                               <C>           <C>
------------------------------------------------------------------------------------------------------

                                    Common Stock                      4,543,188(1)               5.53%
The Paul H. Metzinger Trust
Paul H. Metzinger, President &
CEO, Director  370 17th Street,
Suite 3640 Denver, CO 80202

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

The Cheri L. Metzinger Trust        Common Stock                      4,543,188(2)               5.53%
Cheri L. Metzinger, Wife of Paul
H. Metzinger
3236 Jellison Street Wheatridge,
CO 80033
------------------------------------------------------------------------------------------------------

Dr. Herbert J. Neuhaus, Ex. VP of   Common Stock                      1,460,000(3)               1.78%
Technology & Marketing, Director,
President & CEO NanoPierce
Connection
770 Maroonglen Court
Colorado Springs, CO 80906
------------------------------------------------------------------------------------------------------

Dr. Michael E. Wernle, Ex VP of     Options to                        1,350,000(4)               1.64%
Strategic Business Development,     purchase Common
Director, President & CEO of        Stock
------------------------------------------------------------------------------------------------------


                                       26
<PAGE>
------------------------------------------------------------------------------------------------------
ExypnoTech  Lise-Meitner-Strasse
1D-85662 Hohenbrunn Germany
------------------------------------------------------------------------------------------------------

Kristi J. Kampmann, Chief           Common Stock                        344,080(5)               0.42%
Financial Officer & Secretary
370 17th Street, Suite 3640
Denver, CO 80202
------------------------------------------------------------------------------------------------------

Dr. Robert E. Shaw, Director        Options to                          400,000(6)               0.49%
8 Nicklaus Court                    purchase Common
Florham Park, NJ 07932              Stock
------------------------------------------------------------------------------------------------------

Dr. Noel Eberhardt, Director        Options to                          400,000(7)               0.49%
21407 Krzich Place                  purchase Common
Cupertino, CA 95014                 Stock
------------------------------------------------------------------------------------------------------

John Hoback, Director  20 White     Options to                          400,000(8)               0.49%
Heron Lake                          purchase Common
East Stroudsburg, PA 18301          Stock
------------------------------------------------------------------------------------------------------

Intercell International             Common Stock                        6,376,764                7.76%
Corporation  370 17th Street,
Suite 3640 Denver, CO 80202
------------------------------------------------------------------------------------------------------

All Officers & Directors as a       Common Stock                        8,897,268               10.91%
Group (7 persons)
------------------------------------------------------------------------------------------------------
<FN>
___________________
1  Includes  1,072,937  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.
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 1,072,937 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,  300,000  shares  at  $0.45  per  share  and  365,000  shares
exercisable  at  $0.60  per  share.
5 Based on 19,080 common shares and options; 100,000 shares exercisable at $0.84
per  share,  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 options consisting of 250,000 shares exercisable at $0.97 per share,
50,000  shares exercisable at $0.67 per share, and 100,000 shares exercisable at
$2.00  per  share.
7  Based  on options consisting of 300,000 shares exercisable at $0.70 per share
and  100,000  shares  exercisable  at  $0.70  per  share.
8  Based on options consisting of 400,000 shares exercisable at $1.35 per share.
9  Based on 65,054,738 shares of common stock issued and outstanding on June 30,
2003  and  assuming  exercise of all 8,787,524 presently exercisable options and
exercise  of  8,380,186  outstanding  warrants, there would be 82,222,448 shares
outstanding.  Mr.  Metzinger's  and  Mrs.  Metzinger's  stock  ownership are not
duplicated  in  this  computation.
</TABLE>

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     The  following  table  provides  information  as of June 30, 2003 regarding
compensation  plans (including individual compensation arrangements) under which
shares  of  our  common  stock  are  authorized  for  issuance.  NO class of our
securities  other than our common stock or options to purchaser our common stock
is authorized for issuance under any of our equity compensation plans.


                                       27
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                                    Number of securities
                     Number of securities    Weighted-average     remaining available for
                       to be issued upon     exercise price of     future issuance under
                          exercise of           outstanding      equity compensation plans
                     outstanding options,    options, warrants     (excluding securities
Plan Category         warrants and rights       and rights        reflected in column (a)
                              (a)                   (b)                     (c)
-------------------------------------------------------------------------------------------
<S>                  <C>                     <C>                 <C>
Equity
compensation plans
approved by
security holders               0                     -                       0
-------------------------------------------------------------------------------------------
Equity
compensation plans
not approved by
security holders(1)        8,787,524               $1.00                 3,712,476
-------------------------------------------------------------------------------------------
Total                      8,787,524               $1.00                 3,712,476
-------------------------------------------------------------------------------------------
<FN>
(1) The material features of the plans not approved by the security holders are described
herein under "ITEM 10-EXECUTIVE COMPENSATION-Compensation Pursuant to Plans."
-------------------------------------------------------------------------------------------
</TABLE>

ITEM 12.  RTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     As  previously  disclosed  in  response to Item 11 under "Options/SAR Grant
Table," a stock option to purchase 365,000 shares of Common Stock was granted to
Dr. Michael E. Wernle, an officer and director of the Company, during the fiscal
year  ended  June  30,  2003.

     In  June 2003, Mr. Metzinger, the President and Chief Executive Officer and
a  director  of  the  Company  loaned  the  Company  $10,000, in exchange for an
unsecured  7%  note  payable  due  in December 2003.  At June 30, 2003, the note
balance  was  $10,000  and  related  accrued  interest  of  $38.

     In  September  2003,  Mr. Metzinger, the President, Chief Executive Officer
and  director  of  the  Company  loaned  the Company $30,000, in exchange for an
unsecured  7%  note  payable  due  in  September  2004.

     In  September  2003,  the Company formed a joint venture with Scimaxx, LLC.
The  joint  venture,  Scimaxx  Solutions,  LLC  is  to  handle  marketing of the
Company's  technology.  Scimaxx  LLC,  is  owned  by  Dr. Herbert J. Neuhaus, an
executive vice president and director of the Company and two former employees of
the  Company.  In  return  for  50%  ownership of the Scimaxx Solutions, LLC the
Company  contributed  a license to utilize its technology and the facilities and
equipment  of  NanoPierce  Connections.  The Company is not required to make any
cash  contributions to the joint venture.  Operating capital will be provided by
Scimaxx,  LLC.

     In  September  2003,  the  Company  signed  a  letter of intent with Meshed
Systems,  GmbH  to  make  an  equity  investment  in ExypnoTech for a 51% equity
interest  in  ExypnoTech.  The  letter  of intent provides for Meshed Systems to
take  over  the management of the operations of ET, make a cash contribution and
to  provide  ExpynoTech working capital on an as needed basis.  The Company will
grant  ET a non-exclusive, non-royalty bearing worldwide license to practice its
ultrasonic  technology.  Profit  sharing  will be based on the equity ownership.
The  license will also allow ExypnoTech to sublicense the intellectual property.
Meshed  Systems,  GmbH is managed by Dr. Michael E. Wernle, a former officer and
director  of  the  Company.


     On  July  1,  2001, the Company advanced $92,500 to Intercell International
Corporation  (Intercell),  a  corporation  that  owned approximately 9.8% of the
Company's  outstanding common stock as of June 30, 2003, for an unsecured, 5.75%
promissory  note due on demand.  During the fiscal year ended June 30, 2002, the
Company  increased  the  advance  amount  by  $35,000  and  the  note receivable
evidencing  the  advance  was  increase  to  reflect the increase in the advance
amount.  The  entire  advance  amount  was  collected  from Intercell during the
fiscal  year  ended  June  30,  2002.



                                       28
<PAGE>
                                     PART IV

ITEM 13.  HIBITS AND REPORTS ON FORM 8-K

     (a)  e  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 Company,
                  Particle Interconnect Corporation and Intercell Corporation 4

        2.02      Application and Development Agreement, dated April 15, 1999, by
                  and among the Company and Multitape & Co., Gmbh, KG. 2

        2.03      Technology Cooperation Agreement, dated May 17, 1999, by and
                  among the Company and Meinen, Zeigel & Co. 2

        2.04      Technology Development Agreement, dated June 11, 1999, by and
                  among the Company and ORGA Kartensysteme, GmbH. 2

        2.05      Agreement-In-Principle, dated May 18, 1999, by and among the
                  Company and Cirrex Corporation. 2

        4.01      The Articles of Incorporation of the Company 3

        4.02      Amendment to the Articles of Incorporation of the Company filed
                  with the Nevada Secretary of State on March 20, 2002 3

        4.03      Amendment to Articles of Incorporation filed with the Nevada
                  Secretary of State on March 20, 2002 *

        4.04      Certificate of Designation of Rights and Preferences of the
                  Series A Preferred Stock 4

        4.05      Certificate of Designation of Rights and Preferences of the
                  Series B Preferred Stock 5

        4.06      Certificate of Designation of Rights and Preferences of the
                  Series C Preferred Stock 5

        4.07      Form of Common Stock Certificate 3

        4.08      The Amended and Restated By-laws of the Company*

        10.01     Employment Agreement, dated January 1, 2003, between Paul H.
                  Metzinger and the Company*

        10.02     Employment Agreement, dated January 1, 2002 between Dr. Herbert
                  J. Neuhaus and the Company*

        10.03     Employment Agreement, dated July 15, 2002, between Kristi J.
                  Kampmann and the Company*

        11        Statement regarding Computation of Per Share Earnings 6

        21        Subsidiaries of the Company 6

        23        Consent of Independent Certified Public Accountants 6

        31        Certifications pursuant to Section 302 of the Sarbanes-Oxley Act 1

        32        Certifications pursuant to Section 906 of the Sarbanes-Oxley Act 1
<FN>
___________________
*    Incorporated by reference to Amendment No. 1 to the Company's Annual Report
     on Form 10-KSB for the fiscal year ended June 30, 2003.
1    Filed  herewith.
2    Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the  fiscal  year  ended  June  30,  1999.
3    Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the  fiscal  year  ended  June  30,  1998.
4    Incorporated  by  reference  to  the  Company's Current Report on Form 8-K,
     dated  February  26,  1998.
5    Incorporated  by  reference  to  the  Company's Current Report on Form 8-K,
     dated  July  23,  1998.
6    Previously  filed.
</TABLE>



                                       29
<PAGE>
     (b)  REPORTS  ON  FORM  8-K.
     The  Company  filed  the  following  reports  on Form 8-K during the fourth
     quarter  of  the  year  ended  June  30,  2003:

          (i)  Current Report on Form 8-K filed with the Securities and Exchange
               Commission  April  1,  2003

ITEM 14.  CONTROLS AND PROCEDURES

     Within  90  days prior to the date of this Form 10-KSB, the Company carried
out  an  evaluation,  under  the  supervision  and with the participation of the
Company's President and Chief Financial Officer, of the effectives of the design
and  operation of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934,  as  amended  (the  "Exchange  Act").  Based  upon  such  evaluation, such
officers  have  concluded  that the Company's disclosure controls and procedures
are  affective  in  alerting  them,  on  a timely basis, to material information
relating  the  Company  required  to  be  included  in  this  Form  10-KSB.

     There have been no significant change is the Company's internal controls or
in  other  factors,  which  could  significantly  affect  such  controls.

ITEM 15.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The  aggregate fees billed by Gelfond Hochstadt Pangburn, PC, the Company's
independent  auditors,  for professional services in the fiscal years ended June
30,  2003  and  2002  are  as  follows:

<TABLE>
<CAPTION>
     ------------------------------------------------------------
        Services Rendered           2003               2002
     ------------------------------------------------------------
<S>                                <C>                <C>
     Audit Fees                    $49,800            $41,328
     ------------------------------------------------------------
     Audit Related Fees                  0                  0
     ------------------------------------------------------------
     All Other Fees                      0                  0
     ------------------------------------------------------------
</TABLE>

     The  Company's corporate tax returns are prepared by the firm of Thompson &
Lowe,  P.C.  Fees  for the fiscal year ended June 30, 2003 and 2002 were $13,610
and  $11,577,  respectively.

     The  engagement  of  the  auditors  was  approved by the Company's Board of
Directors  prior  to  the  start of the audit for the fiscal year ended June 30,
2003.


                                       30
<PAGE>
                                   SIGNATURES

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

                                  NANOPIERCE  TECHNOLGIES,  INC.
                                  (a  Nevada  corporation)



     Date:  April 13, 2004         By:  /s/  Paul  H.  Metzinger
                                      --------------------------
                                     Paul  H.  Metzinger,  Director,  Chief
                                     Executive  Officer  &  President



     Date:  April 13, 2004         By:  /s/  Kristi  J.  Kampmann
                                      ---------------------------
                                     Kristi  J.  Kampmann,  Chief  Financial
                                     Officer  &  Chief  Accounting  Officer


     In  accordance  with  the  Securities Exchange Act of 1934, this report has
been  signed  below  by the following persons on behalf of the registrant and in
the  capacities  and  on  the  dates  indicated.

     Date:  April 13, 2004          By:  /s/  Paul  H.  Metzinger
                                       --------------------------
                                      Paul  H.  Metzinger,  Director,  Chief
                                      Executive  Officer  &  President


     Date:  April 13, 2004          By:  /s/  Herbert  J.  Neuhaus
                                       ---------------------------
                                      Herbert J. Neuhaus, Director &
                                      Executive Vice-President of
                                      Technology & Marketing


     Date:  April 13, 2004          By:  /s/  Robert  Shaw
                                       -------------------
                                      Robert  Shaw,  Director


     Date:  April 12, 2004          By:  /s/  John  Hoback
                                       -------------------
                                      John  Hoback,  Director



                                       31
<PAGE>
SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d)  OF  THE  EXCHANGE  ACT  BY  NON-REPORTING  ISSUERS

     No  annual  report  covering the Company's fiscal year ended June 30, 2003,
nor  any  proxy  material,  has  been  sent  to security holders of the Company.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                          NANOPIERCE TECHNOLOGIES, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                           Page
                                                                           ----
<S>     <C>                                                                <C>
Independent Auditors' Report                                                F-2

Financial Statements:

        Consolidated Balance Sheet - June 30, 2003                          F-3

        Consolidated Statements of Operations -
          Years ended June 30, 2003 and 2002                                F-5

        Consolidated Statements of Comprehensive Loss -
          Years ended June 30, 2003 and 2002                                F-6

        Consolidated Statements of Shareholders' Equity -
          Years ended June 30, 2003 and 2002                                F-7

        Consolidated Statements of Cash Flows -
          Years ended June 30, 2003 and 2002                                F-9

        Notes to Consolidated Financial Statements                         F-11
</TABLE>


                                      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  subsidiaries  as  of  June  30,  2003, and the related
consolidated  statements of operations, comprehensive loss, shareholders' equity
and cash flows for each of the years in the two-year period ended June 30, 2003.
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  subsidiaries  as  of June 30, 2003, and the results of
their  operations  and  their  cash  flows for each of the years in the two-year
period  ended  June 30, 2003, in conformity with accounting principles generally
accepted  in  the  United  States  of  America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern.  As discussed in Note 2 to
the  consolidated  financial  statements,  the  Company  reported  a net loss of
$4,017,785  for  the  year  ended  June  30, 2003, and an accumulated deficit of
$21,073,620  as  of  June 30, 2003.  These factors raise substantial doubt about
the  Company's  ability  to  continue as a going concern.  Management's plans in
regard  to  these  matters  are  also  described  in  Note  2.  The consolidated
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.

GELFOND HOCHSTADT PANGBURN, P.C.


Denver, Colorado
September 22, 2003


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                  June 30, 2003

<S>                                                       <C>
                           Assets
                           ------

Current assets:
  Cash and cash equivalents                                          $  200,741
  Accounts receivable                                                    21,235
  Inventory                                                              39,259
  Deferred consulting costs and other prepaid expenses                  168,687
  Assets of discontinued operations (Note 3)                             21,977
                                                                     -----------
    Total current assets                                                451,899
                                                                     -----------

Property and equipment:
  Machinery                                                             431,125
  Office equipment and furniture                                        328,386
  Leasehold improvements                                                138,776
                                                                     -----------
                                                                        898,287
  Less accumulated depreciation                                        (353,413)
                                                                     -----------
                                                                        544,874
                                                                     -----------

Other assets:
  Assets of discontinued operations (Note 3)                             20,287
  Deposits and other                                                     19,510
  Intellectual property rights, net of accumulated                      265,685
    amortization of $534,315
  Patent and trademark applications, net of accumulated
    amortization of $77,877                                             431,286
                                                                     -----------
                                                                        736,768
                                                                     -----------

    Total assets                                                     $1,733,541
                                                                     ===========
<FN>
                                   (continued)
</TABLE>


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                  June 30, 2003
                                   (Continued)

<S>                                                                <C>
                 Liabilities and Shareholders' Equity
                 ------------------------------------

Current liabilities:
  Accounts payable                                                 $    576,561
  Accrued liabilities                                                    53,230
  Note payable - related party (Note 6)                                  10,000
  Liabilities of discontinued operations (Note 3)                       402,968
                                                                   -------------

    Total liabilities - all current                                   1,042,759
                                                                   -------------

Commitments and contingencies (Notes 4, 8 and 10)

Shareholders' equity (Note 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; 200,000,000 shares authorized
    65,054,738 shares issued and outstanding                              6,505
  Additional paid-in capital                                         21,567,807
  Accumulated other comprehensive income                                190,090
  Accumulated deficit                                               (21,073,620)
                                                                   -------------
    Total shareholders' equity                                          690,782
                                                                   -------------

      Total liabilities and shareholders' equity                   $  1,733,541
                                                                   =============
<FN>
               See notes to the consolidated financial statements.
</TABLE>


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                       Years Ended June 30, 2003 and 2002


                                                           2003         2002
                                                       ------------  -----------
<S>                                                    <C>           <C>
Revenues                                               $    37,017        4,737
                                                       ------------  -----------

Operating expenses:
  Research and development                                 316,403      316,438
  General and administrative                             2,414,077    3,516,534
  Selling and marketing                                    238,817      112,178
  Impairment of intellectual property
    and equipment(Note 1)                                  210,000      104,375
                                                       ------------  -----------
                                                         3,179,297    4,049,525
                                                       ------------  -----------

Loss from operations                                    (3,142,280)  (4,044,788)
                                                       ------------

Other income (expense):
  Interest income                                            7,251       98,574
  Interest expense                                           (  38)           -
                                                       ------------  -----------
                                                             7,213       98,574
                                                       ------------  -----------

Loss from continuing operations                         (3,135,067)  (3,946,214)
                                                       ------------  -----------

Discontinued operations, loss from
  operations of subsidiary (Note 3)                     (  882,718)  (  782,858)
                                                       ------------  -----------

Net loss                                               $(4,017,785)  (4,729,072)
                                                       ============  ===========

Basic and diluted loss per share:
  Loss from continuing operations                      $(     0.05)  (     0.07)
  Loss from discontinued operations                     (     0.02)  (     0.01)
                                                       ------------  -----------

Net loss per share, basic and diluted                  $(     0.07)  (     0.08)
                                                       ============  ===========

Weighted average number of common
  shares outstanding                                    61,647,688   56,194,682
                                                       ============  ===========
<FN>
               See notes to the consolidated financial statements.
</TABLE>


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                  Consolidated Statements of Comprehensive Loss
                       Years Ended June 30, 2003 and 2002


                                                        2003            2002
                                                    ------------     -----------
<S>                                                 <C>              <C>
Net loss                                            $(4,017,785)     (4,729,072)

Change in unrealized gain on                         (      237)     (      261)
  securities

Change in foreign currency                               48,915         135,408
                                                    ------------     -----------
  translation adjustments

Comprehensive loss                                  $(3,969,107)     (4,593,925)
                                                    ============     ===========
<FN>
               See notes to the consolidated financial statements.
</TABLE>


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                                        NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                        Consolidated Statements of Shareholders' Equity
                                              Years Ended June 30, 2003 and 2002


                                        Common Stock                        Accumulated other                       Total
                                   -------------------     Additional         comprehensive      Accumulated    shareholders'
                                     Shares    Amount    paid-in capital      income(loss)         deficit         equity
                                   ----------  -------  -----------------  -------------------  -------------  ---------------
<S>                                <C>         <C>      <C>                <C>                  <C>            <C>
Balances, July 1, 2001             55,701,398  $ 5,570  $     18,451,781   $            6,265   $(12,326,763)  $    6,136,853

Common stock issued for cash in
  connection with financing
  agreement, net of $100,000
  of offering costs                 1,873,000      187           899,813                    -              -          900,000

Common stock issued for services       46,000        5            40,055                    -              -           40,060

Common stock issued upon exercise
  of stock options                     16,604        2                (2)                   -              -                -

Warrants issued for services                -        -           104,800                    -              -          104,800

Net loss                                    -        -                 -                    -     (4,729,072)      (4,729,072)

Other comprehensive income:
  Change in unrealized gain on
    securities                              -        -                 -                 (261)             -             (261)
  Foreign currency translation
    adjustments                             -        -                 -              135,408              -          135,408
                                   ----------  -------  -----------------  -------------------  -------------  ---------------

Balances, June 30, 2002            57,637,002  $ 5,764  $     19,496,447   $          141,412   $(17,055,835)  $    2,587,788
                                   ==========  =======  =================  ===================  =============  ===============
<FN>
                                                          (continued)
</TABLE>


                                      F-7
<PAGE>
<TABLE>
<CAPTION>
                                         NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                        Consolidated Statements of Shareholders' Equity
                                               Years Ended June 30, 2003 and 2002
                                                          (Continued)


                                          Common     Stock    Additional    Accumulated other                       Total
                                        ----------  -------    paid-in        comprehensive      Accumulated    shareholders'
                                          Shares    Amount     Capital           income            deficit         equity
                                        ----------  -------  ------------  -------------------  -------------  ---------------
<S>                                     <C>         <C>      <C>           <C>                  <C>            <C>
Balances, July 1, 2002                  57,637,002  $ 5,764  $19,496,447   $          141,412   $(17,055,835)  $    2,587,788

Common stock issued
  for services                              14,000        1        9,344                    -              -            9,345

Warrants issued for
    services                                     -        -        3,190                    -              -            3,190

Common stock and
  warrants issued for
  cash (net of offering
  costs of $75,500)                      7,340,348      734    1,826,032                    -              -        1,826,766

Common stock issued
  upon cashless exercise
  of warrants                               56,388        5           (5)                   -              -                -

Common stock issued upon
  cashless exercise of
  option                                     7,000        1           (1)                   -              -                -

Warrant issued in
  exchange for deferred
  consulting costs                               -        -      230,400                    -              -          230,400

Extension of term of
  warrant                                        -        -        2,400                    -              -            2,400

Net loss                                         -        -            -                    -     (4,017,785)      (4,017,785)

Other comprehensive
  income:
  Change in unrealized
  gain on securities                             -        -            -                 (237)             -             (237)
  Foreign currency
  translation
  adjustments                                    -        -            -               48,915              -           48,915
                                        ----------  -------  ------------  -------------------  -------------  ---------------
Balances,
  June 30, 2003                         65,054,738  $ 6,505  $21,567,807   $          190,090   $(21,073,620)  $      690,782
                                        ==========  =======  ============  ===================  =============  ===============
<FN>
                                      See notes to the consolidated financial statements.
</TABLE>


                                      F-8
<PAGE>
<TABLE>
<CAPTION>
                  NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                       Consolidated Statements of Cash Flows
                        Years Ended June 30, 2003 and 2002


                                                             2003         2002
                                                         ------------  -----------
<S>                                                      <C>           <C>
Cash flows from operating activities:
  Net loss                                               $(4,017,785)  (4,729,072)
                                                         ------------  -----------
  Adjustments to reconcile net loss to net cash used
    in operating activities from continuing operations:
    Loss from discontinued operations                        882,718      782,858
    Amortization expense                                     150,916      126,961
    Depreciation expense                                     157,393      190,716
    Amortization of deferred legal and consulting costs      107,941      824,657
    Impairment of intellectual property and equipment        210,000      104,375
    Expenses incurred in exchange for
      common stock, warrants and options                      14,935      144,860
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable              29,139     ( 37,570)
      Decrease (increase) in prepaid expenses                  4,001     ( 21,807)
      Decrease (increase) in deposits and other assets       240,013     (220,867)
      Increase in accounts payable and
        accrued liabilities                                  466,482       57,184
                                                         ------------  -----------

  Total adjustments                                        2,263,538    1,951,367
                                                         ------------  -----------

    Net cash used in operating activities
      from continuing operations                          (1,754,247)  (2,777,705)
                                                         ------------  -----------

Cash flows from investing activities:
  Increase in patent and trademark applications             (239,556)    (186,297)
  Purchases of property and equipment                       (351,431)    (188,755)
  Increase in notes receivable                                     -     ( 85,000)
  Payments received on notes receivable                      170,779      681,721
                                                         ------------  -----------
    Net cash (used in) provided by investing activities
      from continuing operations                            (420,208)     221,669
                                                         ------------  -----------

Cash flows from financing activities:
  Issuance of common stock and warrants for cash           1,826,766      900,000
  Issuance of note payable - related party                    10,000            -
                                                         ------------  -----------
    Net cash provided by financing activities
      from continuing operations                           1,836,766      900,000
                                                         ------------  -----------

Effect of exchange rate changes on cash
  and cash equivalents                                        44,098      117,625
                                                         ------------  -----------

Net cash used in discontinued operations                    (184,877)    (458,899)
                                                         ------------  -----------

Net decrease in cash and cash equivalents                   (478,468)  (1,997,310)

Cash and cash equivalents, beginning                         679,209    2,676,519
                                                         ------------  -----------

Cash and cash equivalents, ending                        $   200,741      679,209
                                                         ============  ===========
<FN>
                                    (continued)
</TABLE>


                                      F-9
<PAGE>
<TABLE>
<CAPTION>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                       Years Ended June 30, 2003 and 2002
                                   (Continued)


                                                              2003      2002
                                                            --------  --------
<S>                                                         <C>       <C>
Supplemental disclosure of cash flow information:
  Cash paid for interest                                    $      -       120
                                                            ========  ========

Supplemental disclosure of non-cash investing and
  financing activities:
  Warrant issued in exchange for deferred consulting costs  $230,400         -
                                                            ========  ========
<FN>
               See notes to the consolidated financial statements.
</TABLE>


                                      F-10
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


1.   BASIS  OF  PRESENTATION,  BUSINESS,  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), its wholly
owned  subsidiary,  NanoPierce  Connection  Systems,  Inc., a Nevada Corporation
(NCOS)  which  was  incorporated  in November 2001, and its wholly owned foreign
subsidiaries,  NanoPierce  Card  Technologies  GmbH,  Hohenbrunn  (NCT)  and
ExypnoTech,  GmbH  (EPT),  both  German subsidiaries, which were incorporated in
January  2000 and February 2002, respectively. During the quarter ended June 30,
2003,  NCT  effectively  discontinued  its  operations (Note 3). All significant
intercompany  accounts  and  transactions have been eliminated in consolidation.

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(TM))  and  markets  the  PI  Technology  to
companies  in  various  industries  for  a  wide  range  of  applications.

NCOS business activities are to include the licensing, sale and or manufacturing
of  certain electronic products using the NCS technology. Through June 30, 2003,
NCOS  activities have primarily consisted of research and development, marketing
and administrative functions.  Prior to discontinuing operations, NCT activities
consisted  primarily  of  providing  software  development  and  implementation
services,  and  performing administrative, research and development, and selling
and  marketing  activities. Through June 30, 2003, EPT activities have primarily
consisted  of  manufacturing  inlay components used in, among other things Smart
Labels,  which is a paper sheet holding a chip-containing module that is capable
of  memory  storage  and/or  processing.

USE  OF  ESTIMATES  IN  THE  FINANCIAL  STATEMENTS:

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America 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 and cash equivalents, accounts receivable
and  accounts  payable  approximate  their  carrying  amounts  due  to the short
maturities  of  these  instruments.  The  fair  value  of  the  Company's  note


                                      F-11
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002

payable-related  party  is not practicable to estimate, due to the related party
nature  of  the  underlying  transaction.

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.

INVENTORY:

Inventory  consists primarily of chips and antennas for use in the production of
inlays by EPT and is stated at the lower of cost (first-in, first-out) or market
value.

DEFERRED  CONSULTING  AND  LEGAL  COSTS:

In  January 2003, the Company entered into a twelve-month financial advisory and
exclusive placement agent agreement with a third party, in which this party acts
as  financial advisor to the Company and serves as its exclusive placement agent
for a private placement of equity securities during the twelve-month term of the
agreement.  Compensation  includes a non-refundable retainer fee, which consists
of  a  warrant  to  purchase  up to 450,000 shares of the Company's common stock
(Notes  7  and  8).  The  warrant was valued at approximately $230,000 using the
Black-Scholes  pricing  model.  The  deferred  cost  is  being  amortized  on  a
straight-line  basis over a twelve-month period from the date of issuance, which
represents  the  estimated  period  the  expenses  are  expected to be incurred.
Through  June  30,  2003,  $107,941 was expensed in connection with the warrant.

In  April  2001,  the  Company recorded deferred legal costs in exchange for the
issuance  of  3,125,000  shares  of common stock valued at $1,000,000 ($0.32 per
share).  The  shares were issued as a non-refundable retainer for legal services
to  be  performed.  The  Company  amortized  these deferred costs to general and
administrative expense on a straight-line basis over a one-year period ending in
April  2002,  which  represented  the estimated period the benefits of the legal
costs  were  expected  to be received.  The Company recorded amortized remaining
legal  costs  of  $824,657  during  the  year  ended  June  30,  2002.

INTELLECTUAL  PROPERTY  RIGHTS  AND  PATENT  AND  TRADEMARK  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 has been amortized using the straight-line method over 10
years, which was based on a average protection period of underlying patents.  In
conjunction  with  the  Company's assessment of its long-lived assets, discussed
below,  the  Company  reviewed  the  estimated  remaining  useful  life  of  the
intellectual  property and made a determination in the fourth quarter ended June
30, 2003 to prospectively utilize a remaining useful life of 2.5 years, which is
consistent  with the remaining average patent protection period of the remaining
intellectual  property.


                                      F-12
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


Costs incurred to establish patents and trademarks are capitalized and amortized
beginning  at  the  time  of  the  application over the shorter of the estimated
useful life of the technology or patent term.  Patent and trademark applications
are  amortized  over  a  period  of 10 years.  Unsuccessful patent and trademark
application  costs  are  expensed  as  incurred.

Estimated  amortization  expense for each of the five succeeding fiscal years is
as  follows:

<TABLE>
<CAPTION>
                              Year             Amount
                              ----            --------
<S>                                           <C>
                              2004            $178,000
                              2005             178,000
                              2006             144,000
                              2007              78,000
                              2008              78,000
</TABLE>

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
estimates of future cash flows and projected operating information.  The Company
recognizes  impairment  losses  when  undiscounted  cash  flows  estimated to be
generated  from  the  long-lived  assets are less than the amount of unamortized
assets.  Based on its evaluation, in the fourth quarter ended June 30, 2003, the
Company  determined  that  a  $200,000  impairment  charge  to  the intellectual
property  was  necessary.  The  decision  to  record  an  impairment  of  the
intellectual  property  was based primarily on the remaining life of the patents
underlying  the  intellectual  property  and the Company's assessment of current
operational  and  marketing  activities.

PROPERTY  AND  EQUIPMENT:

Property  and equipment are stated at cost.  Depreciation expense is provided by
use  of accelerated and straight-line methods over the estimated useful lives of
the  assets.  Leasehold  improvements  are  depreciated  over the shorter of the
useful  lives  of  the  assets or the length of the respective leases, whichever
period  is shorter.  The estimated useful lives of property and equipment are as
follows:

          Machinery                                             7  years
          Office  equipment  and  furniture                   5-7  years
          Leasehold  improvements                               3  years

In the fourth quarter ended June 30, 2003, the Company made a decision to record
an  impairment charge of $10,000 to the net carrying amount of certain equipment
of  NCOS in Colorado Springs, Colorado.  The decision to record an impairment of
the equipment was based primarily on current and projected NCOS operations data.

In  the  fiscal year ended June 30, 2002, the Company made a decision to abandon
certain  NCS  equipment  located in Colorado Springs, Colorado and wrote off the
$104,375  carrying  amount  of this equipment.  The decision to abandon this NCS
equipment was based primarily on NCOS's focus on WaferPierce applications of the
NCS  technology.


                                      F-13
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


REVENUE  RECOGNITION:

Revenues  from  the sales of product are recognized at time of shipment.  During
each  of  the  two  years  ended  June  30, 2003, 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 as the services are provided
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, 2003, there were no deferred revenues
related  to  contract  services  in  progress.

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.

Had  compensation  cost  for  the Company's stock plans been determined based on
fair  value  at  the  grant dates for awards under the plans 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:

<TABLE>
<CAPTION>
                                             2003            2002
                                         ------------     -----------
<S>                                      <C>              <C>
Net loss, as reported                    $(4,017,785)     (4,729,072)
Total stock-based employee compensation
expense determined under fair value
based method for all awards               (  233,000)     (  445,000)
                                         ------------     -----------
Net loss, pro forma                      $(4,250,785)     (5,174,072)
                                         ============     ===========
Net loss per share as reported            (     0.07)     (     0.08)
Net loss per share pro forma              (     0.07)     (     0.09)
</TABLE>

The  fair value of options granted during 2003 and 2002 is estimated on the date
of  grant  using  the  Black-Scholes  option-pricing  model  with  the following
weighted-average  assumptions:

<TABLE>
<CAPTION>
                                            2003             2002
                                         ----------       ----------
<S>                                      <C>              <C>
Expected dividend yield                          0%               0%
Expected stock price volatility                105%              53%
Risk-free interest rate                        2.9%             5.0%
Expected life of options                 6.5 years        6.5 years
</TABLE>


                                      F-14
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


FOREIGN  CURRENCY  TRANSLATION:

The  financial  statements  of  the  Company's foreign subsidiaries are measured
using  the  local  currency  (the  Euro) as the functional currency.  Assets and
liabilities  of  the  subsidiaries  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,  2003  and  2002.

COMPREHENSIVE  INCOME:

SFAS No. 130, Reporting Comprehensive Income, requires the reporting and display
of  comprehensive  income  and its components.  SFAS No. 130 requires unrealized
gains  and  losses  on  the  Company's available-for-sale securities and foreign
currency  translation adjustments to be included in comprehensive income (loss).

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  and  warrants  are  not
considered  in  the  calculation,  as  the impact of the potential common shares
(17,167,710  shares  at  June  30,  2003 and 10,822,661 shares at June 30, 2002)
would  be  to  decrease  loss  per  share.  Therefore, diluted loss per share is
equivalent  to  basic  loss  per  share.

RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS:

In  May  2003, the Financial Accounting Standards Board ("FASB") issued SFAS No.
150,  Accounting  for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity.  SFAS No. 150 establishes new standards on how an issuer
classifies  and  measures  certain financial instruments with characteristics of
both liabilities and equity.  Under previous guidance, issuers could account for
many  of  those  instruments  as  equity.  SFAS  No.  150  requires  that  those
instruments  be  classified  as liabilities in statements of financial position.
SFAS No. 150 is effective for all financial instruments entered into or modified
after  May  31,  2003,  and otherwise is effective at the beginning of the first
interim  period  beginning  after  June  15,  2003.  The


                                      F-15
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


Company  believes  that  the  adoption  of SFAS No. 150 will not have a material
impact  on  its  results  of  operations  or  financial  condition.

In  December  2002,  the  FASB  issued  SFAS No. 148, Accounting for Stock-Based
Compensation-Transition  and  Disclosure.  This  statement  amends SFAS No. 123,
Accounting for Stock Based Compensation, and establishes two alternative methods
of  transition  for  the  intrinsic  value  method  to  the fair value method of
accounting  for  stock-based  employee  compensation.  In addition, SFAS No. 148
requires  prominent  disclosure  about the effects on reported net income (loss)
and requires disclosure for these effects in interim financial information.  The
Company adopted the disclosure only provisions of SFAS No. 148 in 2003 and plans
to  continue  accounting  for  stock-based  compensation  under  APB  25.

In  August  2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,  which  addresses  accounting  and  financial
reporting  for  the  impairment  or  disposal of long-lived assets.  The Company
adopted  SFAS  No. 144 effective July 1, 2002, and has applied the provisions of
SFAS  No. 144 in connection with its accounting for the impairment of long-lived
assets,  discussed  above.  Management  does not believe the application of SFAS
No.  144 resulted in a 2003 impairment charge different from that under previous
accounting  standards.  The  provisions  of  SFAS  No.  144 were also applied in
connection  with  the Company's accounting for discontinued operations (Note 3).

RECLASSIFICATIONS:

     Certain  amounts  reported  in  the  2002  financial  statements  have been
reclassified  to  conform  to  the  2003  presentation.

2.   GOING  CONCERN,  RESULTS  OF  OPERATIONS,  AND  MANAGEMENT'S  PLANS:

The  Company's  financial  statements for the year ended June 30, 2003 have been
prepared  on a going concern basis, which contemplates the realization of assets
and  the  settlement  of  liabilities  and  commitments  in the normal course of
business.  The Company reported a net loss of $4,017,785 for the year ended June
30,  2003,  and  an accumulated deficit of $21,073,620 as of June 30, 2003.  The
Company  has not recognized any significant revenues from its PI technology, and
the  Company  expects  to  use  cash  in  operations  during  the next year.  In
addition,  during  the  quarter  ended  June  30,  2003,  NCT  discontinued  its
operations  (Note  3).

These factors raise substantial doubt about the Company's ability to continue as
a  going  concern.  The  financial  statements  do  not  include any adjustments
relating  to  the recoverability and classification of assets or the amounts and
classification  of  liabilities  that  might  be necessary should the Company be
unable  to  continue  as  a  going  concern.

To  address  its  current  cash flow concerns, the Company is performing certain
activities  and  considering  certain  strategies,  as  follows:

     (a)  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


                                      F-16
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


          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.

     (b)  Effective September 15, 2003, the Company entered into a joint venture
          with Scimaxx, LLC, a limited liability company owned by an officer and
          director  of the Company and two former employees of NCOS. The Company
          has  a  50%  interest in the joint venture company, Scimaxx Solutions,
          LLC.  In  exchange  for  a  50%  interest, the Company contributed the
          rights  to  utilize a license to use the technology of the Company and
          to  utilize  the  facility  and  equipment of NCOS. Scimaxx, LLC is to
          contribute  $50,000  in  cash  over  a  specified  period  of  time.

     (c)  Effective  September  22,  2003, the Company signed a letter of intent
          with  Meshed Systems, GmbH ("Meshed Systems"), in which Meshed Systems
          is  to  make  a  100,000  Euro investment in EPT in exchange for a 51%
          equity  interest  in  EPT.  The  letter  of intent provides for Meshed
          Systems  to  manage  the  operations  of  EPT  and to provide EPT with
          working  capital  on an as needed basis. The Company is to grant EPT a
          non-exclusive,  non-royalty  bearing  worldwide license to utilize its
          ultrasonic  technology.  Profit  sharing  is  to  be  based  on  the
          proportionate  equity  ownership.  The  license will also allow EPT to
          sublicense  the  intellectual property. Meshed Systems is managed by a
          former  officer  and  director  of  the  Company.

     (d)  The  Company  believes  sales  of  its products and technology license
          rights  may  provide  additional  funds  to meet the Company's capital
          requirements.

3.   DISCONTINUED  OPERATIONS:

On  April 1, 2003, NCT filed insolvency with the Courts of Munich, Germany.  The
insolvency  filing  was  necessary in order to comply with specific German legal
requirements.  In  conjunction  with  the  insolvency  filing, management made a
decision  in  April  2003,  to  discontinue operations at NCT and liquidate NCT,
either  though  the  German  courts, or through a self-liquidation. In September
2003,  the  German  court rejected the application for insolvency; therefore NCT
implemented  a  plan of self-liquidation as provided by German law.  The Company
anticipates  that  a  liquidation  will  be  completed  by  June  30,  2004.


                                      F-17
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


At  June  30,  2003, the carrying amounts of NCT's assets and liabilities are as
follows:

<TABLE>
<CAPTION>
<S>                                          <C>
          Cash                               $ 10,492
          Accounts receivable                   6,345
          Other assets                          5,140
                                             --------
            Total current assets               21,977
                                             --------

          Machinery, net                       14,957
          Office equipment, net                 5,330
                                             --------
                                               20,287
                                             --------

            Total assets                     $ 42,264
                                             ========

          Accounts payable                   $360,122
          Accrued liabilities                  42,846
                                             --------
            Total liabilities
              (all current)(1)               $402,968
                                             ========
<FN>
(1)  Liabilities  above  do not include payables to the Company of approximately
     $172,719  at  June  30,  2003.
</TABLE>

NCT's  revenues  for  the  years  ended  June  30,  2003  and  2002  reported in
discontinued  operations were $128,947 and $151,392, respectively.  NCT incurred
losses  in  2003  and 2002, of $882,718 and $782,858, respectively.  NCT did not
incur  any  income  taxes  in  2003  or  2002.

4.   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  foreign  subsidiaries'  (NCT  and EPT) operations are located in
Germany.  NCT  and  EPT  transactions are conducted in currencies other than the
U.S.  dollar  (the  currency  into  which  NCT's  and EPT'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-18
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


5.   NOTES  RECEIVABLE:

RELATED  PARTY:

At  July  1,  2001,  the  Company  had  an unsecured, 5.75% note receivable from
Intercell  International  Corporation  (Intercell)  of  $92,500,  due on demand.
Intercell  is a company that owns 9.8% of the Company's outstanding common stock
at  June 30, 2003.  During the year ended June 30, 2002, the Company advanced an
additional  $35,000  to Intercell under this note receivable.  The entire amount
was  collected  during  the  year  ended  June  30,  2002.

OTHER:

Prior to July 1, 2001, the Company loaned $500,000 to an unrelated third party -
Global  Capital  Partners, Inc. ("Global") in exchange for a 12% note receivable
due  in November 2001.  At July 1, 2001, the note balance was $375,000, of which
$100,000  was  received in August 2001.  The note was not paid in November 2001,
and therefore, in January 2002, the Company agreed to the assignment of the note
($275,000), and related accrued interest ($14,630), by Global, to a third party.
This  third party was an investment group involved in assisting the Company with
its  financing  efforts.  Through  June 30, 2002, principal payments of $130,291
along  with  accrued  interest  of  $19,300  were received. In October 2002, the
remaining  balance  of the note ($144,709) and related interest were received in
full.

In  April 2002, the Company loaned $50,000 to a representative of the investment
group  described  above  in exchange for an unsecured, 8% note receivable due in
October  2002.  A  payment  of  $23,930  was received in May 2002.  In September
2002,  the  remaining  balance  of  the  note ($26,070) and related interest was
received  in  full.

At  July  1,  2001, the Company also had a $300,000 loan receivable from a third
party,  which  was  unsecured  and non-interest bearing.  In September 2001, the
outstanding  amount  was  received  in  full.

6.   NOTE  PAYABLE  -  RELATED  PARTY

In  June  2003, an officer/director of the Company loaned $10,000 to the Company
in exchange for an unsecured 7% note payable due in December 2003.  In September
2003,  an  officer/director  loaned  the  Company  $30,000  in  exchange  for an
unsecured,  7%  promissory  note.

7.  SHAREHOLDERS'  EQUITY:

COMMON  STOCK:

During the quarter ended December 31, 2002, the Company sold 5,691,190 shares of
restricted  common  stock  along  with  warrants to purchase 4,616,191 shares of
common  stock  at exercise prices ranging from $0.30 to $0.60 per share for cash
of  $1,570,459  (net  of  offering  costs  of  $75,500).  In connection with the
issuance  of  1,119,999  shares  out  of  the  total 5,691,190 issued during the
quarter,  the  Company  extended  the  expiration  dates of existing warrants to
purchase  612,500 shares of common stock held by the purchasers.  These warrants
were  scheduled  to  expire  from  October  2002  through January 2003, and were
extended  for  a  one-year  period.


                                      F-19
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


During  the  quarter  ended  March  31,  2003, the Company sold 75,000 shares of
restricted  common stock along with warrants to purchase 75,000 shares of common
stock  at  exercise  prices  ranging  from  $0.30 to $0.36 per share for cash of
$25,000.

During  the  quarter  ended  June 30, 2003, the Company sold 1,574,158 shares of
restricted  common  stock  along  with  warrants to purchase 1,333,334 shares of
common  stock  at  an  exercise  price  of $0.15 per share for cash of $231,307.

The  warrants issued are exercisable immediately and include a cashless exercise
provision.  Warrants  to  purchase  1,251,191  shares  of  common  stock  have a
three-year  term, and warrants to purchase 4,773,334 shares of common stock have
a  five-year  term.

Subsequent  to  June 30, 2003, the company issued 969,231 shares of common stock
for  cash  of  $100,000  and  for  services  valued  at  $7,600.

In  March  2002,  the  Company  increased  its  authorized  common  shares  from
100,000,000  to  200,000,000.

On  March  29,  2002, the Company entered into a $2,000,000 financing agreement,
which  consisted of two tranches of $1,000,000 each.  In April 2002, the Company
issued  800,000  units  at  $1.25  per unit under the first tranche and received
$1,000,000.  The  closing bid price of the Company's common stock on the date of
issuance  was $1.31 per share.  Each unit consists of one share of the Company's
common  stock  and a warrant to purchase 1.1 shares of common stock at $1.45 per
share.  The  warrants have a term of five years and exercise of the warrants can
be  cashless  under  certain  circumstances.  The  Company  incurred transaction
costs, which were settled through a cash payment of $100,000 and the issuance of
warrants  to  purchase 113,000 shares of the Company's common stock at $1.45 per
share and warrants to purchase 80,000 shares of common stock at $1.25 per share.
These warrants have a term of five years and the exercise of the warrants can be
cashless  under  certain  circumstances.  The  Company  issued  1,073,000 common
shares,  which are being held by an escrow agent for the potential issuance upon
the  exercise of the warrants.  The second tranche is no longer available to the
Company,  pursuant  to  the  terms  of  expiration.

Prior  to  July 1, 2001, 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


                                      F-20
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


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, but
has  reserved  the  shares  pursuant  to a court order (Note 8).  As a result of
lawsuits  filed,  the  second  installment  of  the  equity financing has not be
completed.

During  the  years  ended  June  30, 2003 and 2002, 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:

<TABLE>
<CAPTION>
                                 2003              2002
                                ------            ------
                            Shares   Amount   Shares  Amount
                            ------  --------  ------  -------
<S>                         <C>     <C>       <C>     <C>
Third parties, investment-
related services            14,000  $  9,345  36,000  $27,360
Employees                        -         -  10,000   12,700
                            ------  --------  ------  -------
                            14,000  $  9,345  46,000  $40,060
                            ======  ========  ======  =======
</TABLE>

During  the  year ended June 30, 2003, the Company issued 7,000 shares of common
stock  in connection with an exercised stock option, and issued 56,388 shares of
common  stock  in  connection  with  exercised  warrants.

During  the year ended June 30, 2002, the Company issued 16,604 shares of common
stock  in  connection  with  exercised  stock  options.

STOCK  OPTIONS  AND  WARRANTS:

STOCK  OPTIONS:

The  Company  has  established  two  Compensatory Stock Option Plans (the Option
Plans) and has reserved 12,500,000 shares of common stock for issuance under the
Option Plans.  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  Plans  is  as  follows:


                                      F-21
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


<TABLE>
<CAPTION>
                                        2003                    2002
                                        ----                    ----
                                             Weighted                Weighted-
                                              average                 average
                                             exercise                 exercise
                                  Shares       price      Shares       price
                                -----------  ---------  -----------  ----------
<S>                             <C>          <C>        <C>          <C>
Outstanding, beginning of
  Year                           8,502,000   $    1.06   6,852,000   $     1.08
Granted                            450,000        0.62   1,675,000         0.98
Expired                         (  150,000)       2.06           -            -
Exercised                       (   14,476)       0.66  (   25,000)        0.45
                                -----------  ---------  -----------  ----------

Outstanding, end of year         8,787,524   $    1.00   8,502,000   $     1.06
                                ===========  =========  ===========  ==========

Options exercisable at
  end of year                    8,322,000   $    1.00   7,502,000   $     1.07
                                ===========  =========  ===========  ==========
Weighted-average fair value of
  options granted during the
  year at market                             $    0.52               $     0.27
                                             =========               ==========
</TABLE>

The following table summarizes information about stock options outstanding as of
June  30,  2003:

<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  3,255,000          5.37  $          0.32  3,255,000  $       0.32
0.51 - 1.00   2,495,524          9.48             0.67  2,240,524          0.64
1.01 - 2.00     860,000          7.23             1.53    650,000          1.58
2.01 - 3.00   2,167,000          5.28             2.28  2,167,000          2.28
5.01 - 6.00      10,000          6.67             6.00     10,000          6.00
              ---------  ------------  ---------------  ---------  ------------
              8,787,524          7.80  $          1.00  8,322,524  $       1.00
              =========  ============  ===============  =========  ============
</TABLE>

During 2003, options to purchase 450,000 shares of the Company's common stock at
exercise  prices  ranging  from  $0.61  to  $0.97 per share were granted to four
employees of the Company, one of whom is an officer and director of the Company.
The exercise prices were equal to the market value of the Company's common stock
at  the  date  of  grant  and  expire  through  2013.

During 2002, options to purchase 1,675,000 shares of the Company's common stock,
at  exercise  prices  ranging  from $0.65 to $1.47 per share, were granted to 21
employees  of  the Company, six of whom are or were officers and/or directors of
the  Company.  The  exercise  prices  were  equal  to  the  market  value of the
Company's  common  stock  at  the  date  of  grant  and  expire  through  2012.


                                      F-22
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


WARRANTS:

At  June  30,  2003,  the  following  warrants  to  purchase  common  stock were
outstanding:

<TABLE>
<CAPTION>
     Number of common         Exercise           Expiration
shares covered by warrants     Price                date
--------------------------  ------------  -----------------------
<C>                         <C>           <S>
          70,000            $       2.81         July 2003
         522,500             0.30 - 2.17  October - December 2003
         440,000             0.25 - 1.50  January - February 2004
          20,000                    1.25  August - September 2005
       1,629,352             0.30 - 2.58  October - December 2005
          75,000             0.30 - 0.36       January 2006
         200,000                    0.65         May 2006
         650,000             0.60 - 1.25       January 2007
       3,440,000             0.50 - 0.60  October - November 2007
       1,333,334                    0.15        April 2008
       ---------
       8,380,186
       =========
</TABLE>

During  the  year  ended  June 30, 2003, the Company issued warrants to purchase
20,000  shares  of  common stock at $1.25 per share for services received from a
third  party.  The  warrants expire in 2005.  The warrants were valued at $3,190
using  the  Black-Scholes  pricing  model,  which  was  charged  to  general and
administrative  expense.

In  January  2003,  the  Company  issued a warrant to purchase 450,000 shares of
common  stock  with  an  exercise  price of $0.60 per share in consideration for
deferred  consulting  services  to  be received from a third party.  The warrant
expires  in  January 2010, and is exercisable immediately.  The warrant provides
for  a  cashless  exercise  and  was  valued at approximately $230,400 using the
Black-Scholes  pricing  model  (Note  8).

During  the  year  ended  June  30,  2003,  the  Company extended the term of an
existing  warrant,  held by an unrelated third party, to purchase 300,000 shares
of  common  stock  at  an exercise price of $0.25 per share.  The warrant was to
expire  on  February  24,  2003.  The  Company  agreed to extend the term of the
warrant  by one year, through February 24, 2004.  All other terms of the warrant
remain  unchanged.  In connection with the extension of the term of the warrant,
the  Company  recorded  a  $2,400 expense, using the Black-Scholes pricing model
(Note  8).

During  the  year  ended  June  30, 2003, warrants to purchase 630,000 shares of
common  stock  at  an  exercise  price  of  $2.92  per  share  expired.

During  the  year  ended  June 30, 2002, the Company issued warrants to purchase
200,000  shares  of common stock at $1.25 per share for services received from a
third  party.  The warrants expire in January 2007.  The warrants were valued at
$104,800  using the Black-Scholes pricing model, and that expense was charged to
general  and  administrative  expense.

During  the  year  ended  June  30,  2002, warrants to purchase 50,000 shares of
common  stock  at  $3.52  per  share  expired.


                                      F-23
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


8.   COMMITMENTS  AND  CONTINGENCIES

LICENSE  AGREEMENTS:

The  Company  and  Louis  DiFrancesco,  the  inventor of the PI Technology, were
involved  in  litigation  relating to NanoPierce'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.  In October 2002, the Company
and  DiFrancesco  signed  a  settlement  agreement enforced by Court Order.  The
Court  Order declares that the Company owns the entire, exclusive, incontestable
ownership,  right,  title  and interest in the patents.  The Court Order further
declares  that Mr. DiFrancesco owns the sole, exclusive, and incontestable right
to  receive  and  collect  all  royalties  and  other payments from all licenses
outstanding  on  September  3,  1996.  Pursuant to the settlement agreement, Mr.
DiFrancesco  was  also  granted  a  limited,  two-year,  non-transferable,
royalty-bearing  license  with  no  right  to  sublicense.

FINANCIAL  ADVISORY  AND  PLACEMENT  AGENT  AGREEMENT:

Effective  January  10,  2003,  the  Company  entered  into a 12-month financial
advisory  and  exclusive  placement  agent  agreement  with  a  third party (the
"Placement Agent").  Under the terms of the agreement, the Placement Agent is to
act as financial advisor to the Company and as its exclusive placement agent for
a  private  placement  of  equity securities during the twelve-month term of the
agreement.  During  the  term  of  the agreement, the Company is prohibited from
directly  or  indirectly  offering  securities,  except  in  connection with (a)
stock-based  compensation  issued  to  employees  or  other  participants,  (b)
securities  sold  prior  to  February  15,  2003,  and  (c)  securities  sold in
connection  with  bridge  financing,  as  defined  in  the  agreement.

Compensation  to  the  Placement  Agent  consists  of  a  retainer fee (deferred
consulting  costs) valued at approximately $230,400, which consists of a warrant
to  purchase  up  to 450,000 shares of the Company's common stock.  Compensation
also includes a $10,000 monthly advisory fee, payable in cash, beginning in June
2003.  In  addition,  the  Placement  Agent  is to receive a 6% fee based on the
proceeds raised from a successful offering, payable in cash, along with warrants
to  purchase  shares  of the Company's common stock in an amount equal to 10% of
the  number  of  common  shares  issued  in  an  offering.

FINANCING  AGREEMENT  SUIT:

In  connection  with  a  financing  obtained  in October 2000, the Company filed
various actions in the United States District Court for the District of Colorado
against,  among others, Harvest Court, LLC, Southridge Capital Investments, LLC,
Daniel  Pickett,  Patricia  Singer and Thomson Kernaghan, Ltd. for violations of
federal  and  state  securities laws, conspiracy, aiding and abetting and common
law  fraud  among  other claims.  The Company is seeking various forms of relief
including  actual,  exemplary  and  treble  damages.  As  a  result  of  various
procedural  rulings  in  January  2002, the United States District Court for the
District  of  Colorado  transferred the case to the United States District Court
for  the  Southern District of New York, New York City, New York.  In July 2003,
Harvest  Court, LLC filed suit against the Company, Mr. Metzinger, Ms. Kampmann,
Dr.  Neuhaus, Dr. Shaw and unrelated third parties in the United States District
Court  for  the  Southern  District


                                      F-24
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


of  New  York,  New York City, New York.  The suit alleges violations of federal
securities  laws  and  common  law  fraud  among other claims.  Harvest Court is
seeking  various  forms  of  relief including compensatory and punitive damages.
The  Company  is  preparing  pleadings  responsive  to  the  complaint.

In  May  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  breached  an  October 20, 2000 Stock 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  due  in  connection with the third reset date.
Harvest  Court,  LLC  is  seeking  the delivery of such shares or damages in the
alternative.  In August 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.  The Company has filed
counterclaims  seeking  various  forms  of  relief  against  Harvest Court, LLC.

The Company intends to vigorously prosecute this litigation and does not believe
the  outcome  of  this  litigation  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.

In September 2001, litigation was filed by Thomson Kernaghan & Co., Ltd. against
the  Company  and  certain officers/directors of the Company seeking damages for
defamation.  Thomson  Kernaghan  &  Co., subsequently filed for protection under
Canadian bankruptcy laws. In December 2002, the Company received notice from the
bankruptcy  trustee of the Thomson Kernaghan & Co., that it would not pursue the
action  and  would  move  for  dismissal  of  the  litigation  with  the  court.

9.   INCOME  TAXES:

The  Company and its subsidiaries did not incur income tax expense for the years
ended  June 30, 2003 and 2002.  The reconciliation between taxes computed at the
statutory federal tax rate of 34% applied to the loss from continuing operations
and  the  effective  tax  rate  for the years ended June 30, 2003 and 2002 is as
follows:

<TABLE>
<CAPTION>
                                     2003         2002
                                 ------------  -----------
<S>                              <C>           <C>
Expected income tax benefit      $(1,066,000)  (1,342,000)
Increase in valuation allowance    1,066,000    1,342,000
                                 ------------  -----------
                                 $         -            -
                                 ============  ===========
</TABLE>



The  tax effects of temporary differences that give rise to substantially all of
deferred  tax  assets  at  June  30,  2003  are  as  follows:

<TABLE>
<CAPTION>
<S>                                     <C>
Deferred tax assets:
  Net operating loss                    $ 4,010,000
Less valuation allowance                 (4,010,000)
                                        ------------
Net deferred tax assets                 $         -
                                        ============
</TABLE>


                                      F-25
<PAGE>
                 NANOPIERCE TECHNOLOGIES, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                       Years Ended June 30, 2003 and 2002


As  of  June  30,  2003,  the  Company  has net operating loss carry forwards of
approximately  $11,800,000,  which  expire between 2012 and 2023.  The Company's
net  operating  loss  carry forwards 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.

10.  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:

<TABLE>
<CAPTION>
     Year ending
       June 30,                   Amount
       --------                  --------
<S>                              <C>
        2004                     $124,743
        2005                       90,901
        2006                       66,601
                                 --------
                                 $282,245
                                 ========
</TABLE>

Aggregate  rental  expense  in  continuing operations under operating leases was
$211,095  and $227,226 for the years ended June 30, 2003 and 2002, respectively.

11.  FOREIGN  AND  DOMESTIC  OPERATIONS:

Operating  results and long-lived assets of continuing operations as of June 30,
2003  and  for  the  years ended June 30, 2003 and 2002, by geographic area, are
presented  in  the  table below.  There were no significant amounts of transfers
between  geographic  areas.

<TABLE>
<CAPTION>
                            UNITED STATES        GERMANY         TOTAL
                            --------------       -------       ---------
<S>                         <C>                  <C>           <C>
Revenues for year
  ended June 30, 2003       $        3,900        33,117          37,017
                            ==============       =======       =========
Revenues for year
  ended June 30, 2002       $        4,737             -           4,737
                            ==============       =======       =========
Long-lived assets at
  June 30, 2003             $      870,831       371,014       1,241,845
                            ==============       =======       =========
</TABLE>


                                      F-26
<PAGE>