UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-Q/A
                                   -----------



(Mark One)

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934
     For the quarterly period ended March 31, 2004
     ---------------------------------------------

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
     For the transition period from                  to
                                   ----------------    ----------------

33-23617
--------
(Commission file number)

Material Technologies, Inc.
---------------------------
(Exact name of small business issuer as specified in its charter)

Delaware
--------
(State or other jurisdiction of incorporation or organization)

95-4622822
----------
(IRS Employer Identification No.)

11661 San Vicente Boulevard
Suite 707
Los Angeles, California 90049
-----------------------------
(Address of principal executive offices)

(310) 208-5589
--------------
(Issuer's telephone number)


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

[X]  Check  whether  the issuer (1) filed all  reports  required  to be filed by
     Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for
     such shorter period that the registrant was required to file such reports),
     and (2) has been subject to such filing requirements for the past 90 days.

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity;
as of March 31, 2003
Class A Common Stock - 67,588,975 shares outstanding, 842 shares held in reserve
Class B Common Stock - 600,000 shares outstanding
Class A Preferred - 337 shares outstanding
Class B Preferred - 167 shares outstanding
Class C Preferred - 4,050 shares outstanding
Class D Preferred - 4,990,000 shares outstanding





                                        1
<PAGE>








                                      INDEX
                                      -----




                                                                        Page
                                                                      --------

Part 1. Financial Information


     Item 1. Financial Statements

          Consolidated Balance Sheets                                  3 - 4

          Consolidated Statements of Operations -
          First Quarter Ended March 31, 2003 and 2004
          and from the Company's inception (October 21,
          1983) through March 31, 2004                                   5

          Consolidated Statements of Cash Flows
          First Quarter Ended March 31, 2003 and 2004
          and from the Company's inception (October 21,
          1983) through March 31, 2004                                 6 - 7

          Notes to Consolidated Financial Statements                     8


     Item 2. Management's Discussion and Analysis                       11


     Item 3. Quantitative and Qualitative Disclosures
             about Market Risk                                          12


Part 2. Other Information                                               12









                                        2
<PAGE>



Part 1.   Financial Information
-------------------------------


Item 1.   Financial Statements
------------------------------


The following  financial  statements  have not been  reviewed by an  independent
accountant.


<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
==========================================================================================================================

                                                                                        December 31,          March 31,
                                                                                            2003                2004
                                                                                      ----------------    ----------------
                                                                                                             (Unaudited)

<S>                                                                                   <C>                 <C>
ASSETS

     CURRENT ASSETS
       Cash                                                                           $        47,664     $        28,133
       Receivable due in research contracts                                                    28,004              34,307
       Receivable from officer                                                                 83,940              86,033
       Employee receivable                                                                      1,350               1,350
       Receivable from tax authorities                                                            161                 152
       Prepaid expenses                                                                         4,179               3,000
                                                                                      ----------------    ----------------

         TOTAL CURRENT ASSETS                                                                 165,298             152,975
                                                                                      ----------------    ----------------

     FIXED ASSETS
       Property and equipment, net
         of accumulated depreciation                                                           20,626              19,048
                                                                                      ----------------    ----------------

     OTHER ASSETS
       Intangible assets, net of
         accumulated amortization                                                              10,004               9,475
       Refundable deposit                                                                       2,348               2,348
                                                                                      ----------------    ----------------

         TOTAL OTHER ASSETS                                                                    12,352              11,823
                                                                                      ----------------    ----------------

         TOTAL ASSETS                                                                 $       198,276     $       183,846
                                                                                      ================    ================



















                             See accompanying notes
                                        3
<PAGE>



<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
==========================================================================================================================

                                                                                        December 31,          March 31,
                                                                                            2003                2004
                                                                                      ----------------    ----------------
                                                                                                             (Unaudited)

<S>                                                                                   <C>                 <C>
LIABILITIES AND STOCKHOLDERS' (DEFICIT)

     CURRENT LIABILITIES
       Legal fees payable                                                             $       219,154     $       204,270
       Fees payable to R&D subcontractors                                                      25,000                   -
       Accounting fees payable                                                                 37,984              23,336
       Other accounts payable                                                                  78,671              26,525
       Accrued expenses                                                                        17,920              17,095
       Accrued officer wages                                                                  142,446             160,446
       Notes payable - current portion                                                         25,688              25,688
       Payable on research and
         development sponsorship                                                              638,003             666,713
       Loans payable - others                                                                  60,438              60,844
                                                                                      ----------------    ----------------

         TOTAL CURRENT LIABILITIES                                                          1,245,304           1,184,917

     LONG-TERM DEBT                                                                           345,333             736,183
                                                                                      ----------------    ----------------

         TOTAL LIABILITIES                                                                  1,590,637           1,921,100
                                                                                      ----------------    ----------------

     MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY                                              38,422              38,422
                                                                                      ----------------    ----------------


     STOCKHOLDERS' (DEFICIT)
       Class A preferred stock, $.001 par value, authorized 350,000 Shares,
         issued and outstanding 337 shares at December 31, 2003 and
         March 31, 2004                                                                             -                   -
       Class B preferred stock, $.001 par value, authorized 200,000 Shares,
         issued and outstanding 167 shares at December 31, 2003 and
         March 31, 2004                                                                             -                   -
       Class C preferred stock, $.001 par value, authorized
         25,000,000 shares, issued and outstanding 4,050 at December 31, 2003
         and March 31, 2004                                                                         4                   4
       Class D preferred stock, $.001 par value, authorized 20,000,000 Shares,
         issued and outstanding 5,440,000 shares at December 31, 2003 and
         4,990,000 shares at March 31, 2004                                                     5,440               4,990
       Class A Common Stock, $.001 par value, authorized 549,400,000
         shares, issued and outstanding 66,488,975 at December 31, 2003 and
         67,588,975 shares at March 31, 2004, Shares held
         in reserve 843 shares at December 31, 2003 and March 31, 2004                         66,488              67,588
       Class B Common Stock, $.001 par value, authorized 600,000
         Shares, issued and outstanding 600,000 shares at
         December 31, 2003, and  March 31, 2004                                                   600                 600
       Additional paid in capital                                                          13,086,976          13,664,528
       Less notes receivable - common stock                                                   (51,096)            (52,093)
       Deficit accumulated during the development stage                                   (14,539,195)        (15,461,293)
                                                                                      ----------------    ----------------

         TOTAL STOCKHOLDERS' (DEFICIT)                                                     (1,430,783)         (1,775,676)
                                                                                      ================    ================

         TOTAL LIABILITIES AND STOCKHOLDERS'
           (DEFICIT)                                                                  $       198,276     $       183,846
                                                                                      ================    ================
</TABLE>


                             See accompanying notes
                                       4
<PAGE>



<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
============================================================================================================

                                                                                             From Inception
                                                         For the Three Months Ended        (October 21, 1983)
                                                                 March 31,                      Through
                                                          2003                2004           March 31, 2004
                                                    ----------------    ----------------    ----------------
                                                      (Unaudited)         (Unaudited)         (Unaudited)

<S>                                                 <C>                 <C>                 <C>
REVENUES
  Sale of fatigue fuses                             $             -     $             -     $        64,505
  Sale of royalty interests                                       -                   -             198,750
  Research and development revenue                                -              67,270           5,133,631
  Test services                                                   -                   -              10,870
                                                    ----------------    ----------------    ----------------
    TOTAL REVENUES                                                -              67,270           5,407,756
                                                    ----------------    ----------------    ----------------

COSTS AND EXPENSES
  Research and development                                   31,236             161,586           5,421,666
  General and administrative                                338,438             784,419          14,770,298
                                                    ----------------    ----------------    ----------------
    TOTAL COSTS AND EXPENSES                                369,674             946,005          20,191,964
                                                    ----------------    ----------------    ----------------
    (LOSS) FROM OPERATIONS                                 (369,674)           (878,735)        (14,784,208)
                                                    ----------------    ----------------    ----------------

OTHER INCOME (EXPENSE)
  Interest income                                            13,186               3,090             345,331
  Interest expense                                          (46,261)            (45,653)           (686,876)
  Forgiveness of indebtedness                                                                      (289,940)
  Loss on abandonment of joint venture                            -                   -             (33,000)
                                                    ----------------    ----------------    ----------------
    TOTAL OTHER INCOME (EXPENSE)                            (33,075)            (42,563)           (664,485)
                                                    ----------------    ----------------    ----------------

NET (LOSS) BEFORE EXTRAORDINARY ITEMS
  AND PROVISION FOR INCOME TAXES                           (402,749)           (921,298)        (15,448,693)
PROVISION FOR INCOME TAXES                                     (800)               (800)            (12,600)
                                                    ----------------    ----------------    ----------------

    NET (LOSS)                                      $      (403,549)    $      (922,098)    $   (15,461,293)
                                                    ================    ================    ================

PER SHARE DATA
  Basic income (loss) before extraordinary item
    BASIC NET (LOSS) PER SHARE                      $         (3.49)    $         (0.01)
                                                    ================    ================
  WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                115,637          67,006,008
                                                    ================    ================
</TABLE>



















                             See accompanying notes
                                        5
<PAGE>



<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
====================================================================================================================

                                                                                                     From Inception
                                                                 For the Three Months Ended        (October 21, 1983)
                                                                         March 31,                      Through
                                                                  2003                2004           March 31, 2004
                                                            ----------------    ----------------    ----------------
                                                              (Unaudited)         (Unaudited)         (Unaudited)

<S>                                                         <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss)                                                $      (403,549)    $      (922,098)    $   (15,461,293)
                                                            ----------------    ----------------    ----------------
  Adjustments to reconcile net income
    (loss) to net cash provided
    (used) in operating activities
  Depreciation and amortization                                       2,285               2,107             196,858
  Accrued interest income                                           (12,007)             (3,090)           (290,259)
  Gain on sale of securities                                              -                   -            (196,596)
  Charge off of investment in joint venture                               -                   -              33,000
  Officers' and directors compensation on stock
    subscription modification                                             -                   -           1,500,000
  Issuance of common stock to officer for past services                   -                   -           1,727,617
  Charge off of deferred offering costs                                   -                   -              36,480
  Charge off of long-lived assets due to impairment                       -                   -              92,919
  Modification of royalty agreement                                       -                   -               7,332
  Gain on foreclosure                                                     -                   -             (18,697)
  (Increase) decrease in accounts receivable                              -              (6,303)            (84,635)
  (Increase) decrease in employee advances                            1,433                   -              (1,511)
  (Increase) decrease in prepaid expense                                  -               1,188              (3,150)
  Loss on sale of equipment                                               -                   -              12,780
  Issuance of common  stock for services                            132,250             553,200           4,526,192
  Issuance of stock for agreement modification                            -                   -                 152
  Forgiveness of Indebtedness                                             -                   -             215,000
  Increase (decrease) in accounts                                                                                 -
    payable and accrued expenses                                     10,098             (64,501)          1,005,336
  Increase in legal fees secured by note payable                     22,725                   -           1,481,895
  Interest accrued on note payables                                  22,849              44,966             632,669
  Increase in research and development
    sponsorship payable                                                   -                   -             218,000
  (Increase) in note for litigation settlement                            -                   -             (25,753)
  (Increase) in Deposits                                                  -                   -              (2,189)
                                                            ----------------    ----------------    ----------------
    TOTAL ADJUSTMENTS                                               179,633             527,567          11,063,440
                                                            ----------------    ----------------    ----------------
  NET CASH PROVIDED (USED) BY
    OPERATING ACTIVITIES                                           (223,916)           (394,531)         (4,397,853)
                                                            ----------------    ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds From sale of equipment                                         -                   -              10,250
  Purchase of property and equipment                                      -                   -            (266,472)
  Proceeds from sale of securities                                        -                   -             283,596
  Purchase of securities                                                  -                   -             (90,000)
  Proceeds from foreclosure                                               -                   -              44,450
  Investment in joint ventures                                            -                   -            (102,069)
  Payment for license agreement                                           -                   -              (6,250)
                                                            ----------------    ----------------    ----------------

  NET CASH PROVIDED (USED) BY
   INVESTING ACTIVITIES                                                   -                   -            (126,495)
                                                            ----------------    ----------------    ----------------












                             See accompanying notes
                                        6
<PAGE>



<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
====================================================================================================================

                                                                                                     From Inception
                                                                 For the Three Months Ended        (October 21, 1983)
                                                                         March 31,                      Through
                                                                  2003                2004           March 31, 2004
                                                            ----------------    ----------------    ----------------
                                                              (Unaudited)         (Unaudited)         (Unaudited)

<S>                                                         <C>                 <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock                                  $       112,853     $             -     $     3,110,583
  Costs incurred in offerings                                       (19,045)                  -            (454,488)
  Purchase of Company's common stock for cancellation               (15,720)                  -             (24,432)
  Sale of common stock warrants                                           -                   -              18,250
  Sale of preferred stock                                            24,100                   -             323,005
  Sale of redeemable preferred stock                                      -                   -             150,000
  Capital contributions                                                   -                   -             301,068
  Payment on proposed reorganization                                      -                   -              (5,000)
  Loans From officer                                                      -                   -             778,805
  Repayments to officer                                                   -                   -            (542,379)
  Increase in loan payable-others                                         -             375,000             897,069
                                                            ----------------    ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:                               102,188             375,000           4,552,481
                                                            ----------------    ----------------    ----------------

NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                                           (121,728)            (19,531)             28,133
BEGINNING BALANCE CASH AND
    CASH EQUIVALENTS                                                251,782              47,664                   -
                                                            ----------------    ----------------    ----------------
ENDING BALANCE CASH AND CASH
    EQUIVALENTS                                             $       130,054     $        28,133     $        28,133
                                                            ================    ================    ================
</TABLE>


































                              See acompanying notes
                                        7
<PAGE>





                           MATERIAL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          -----------------------------


Note 1.   In  the  opinion  of  the  Company's  management,   the   accompanying
          unaudited  consolidated  financial  statements contain all adjustments
          (consisting of normal recurring  accruals) necessary to present fairly
          the  financial  position of the Company as of March 31, 2004,  and the
          results of its operations and cash flows for the  three-month  periods
          ended March 31, 2004 and 2003. The operating results of the Company on
          a quarterly  basis may not be indicative of operating  results for the
          full year.

          On September  23, 2003,  the Company's  Board of Directors  affected a
          1,000 for 1 reverse  stock  split of its Class A Common  Stock and all
          classes of its Preferred  Stock.  The financial  statements  presented
          herein have been  restated as if the reverse  stock split  occurred at
          the beginning of each period presented.


Note 2.   Summary of Significant Accounting Policies

     a.   Principles of consolidation

          The  accompanying   financial  statements  include  the  accounts  and
          transactions  of  Material  Technologies,  Inc.and  its  wholly  owned
          subsidiaries,  Matech  International,  Inc and Matech Aerospace,  Inc.
          Intercompany   transactions  and  balances  have  been  eliminated  in
          consolidation.

     b.   Accounts Receivable

          Accounts  receivable  are  reported  at  the  customers'   outstanding
          balances  less any allowance  for doubtful  accounts.  Interest is not
          accrued on overdue accounts receivable.

     c.   Allowance for Doubtful Accounts

          The allowance for doubtful accounts on accounts  receivable is charged
          to  income  in  amounts  sufficient  to  maintain  the  allowance  for
          uncollectible  accounts at a level management  believes is adequate to
          cover any probable losses.  Management  determines the adequacy of the
          allowance  based on historical  write-off  percentages and information
          collected from individual customers.

     d.   Property and Equipment

          Property  and  equipment  are  stated  at  cost.  Major  renewals  and
          improvements  are charged to the asset  accounts  while  replacements,
          maintenance  and repairs,  which do not improve or extend the lives of
          the  respective  assets,  are  expensed.  At  the  time  property  and
          equipment are retired or otherwise  disposed of, the asset and related
          accumulated  depreciation  accounts  are  relieved  of the  applicable


                                        8
<PAGE>






          amounts.  Gains or losses from  retirements  or sales are  credited or
          charged to income.

          Material Technologies,  Inc. depreciates its property and equipment as
          follows:

               Financial statement reporting - straight line method as follows:

                  Machinery                               5 years
                  Computer equipment                    3-5 years
                  Office equipment                        5 years

          Long-Lived Assets

          As of January 1, 2002,  the Company  adopted  Statement  of  Financial
          Accounting  Standards  No.  144,  "Accounting  for the  Impairment  or
          Disposal of Long-Lived  Assets," which requires that long-lived assets
          be reviewed for impairment whenever events or changes in circumstances
          indicate that the  historical  cost-carrying  value of an asset may no
          longer be  appropriate.  The Company  assesses  recoverability  of the
          carrying  value of an asset by  estimating  the  future net cash flows
          expected to result from the asset, including eventual disposition.  If
          the  future  net cash  flows are less than the  carrying  value of the
          asset, an impairment loss is recorded equal to the difference  between
          the asset's carrying value and fair value or disposable value.

     e.   Net Loss Per Share

          The  Company   adopted  the   provisions  of  Statement  of  Financial
          Accounting  Standards  ("SFAS") No. 128,  "Earnings Per Share" ("EPS")
          that  established  standards  for the  computation,  presentation  and
          disclosure  of  earnings  per share,  replacing  the  presentation  of
          Primary EPS with a  presentation  of Basic and diluted EPS.  Basic and
          diluted EPS is calculated by dividing net loss by the weighted average
          shares number of shares outstanding during the year.

     f.   Accounting Estimates

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and assumptions  that affect certain reported amounts and disclosures.
          Accordingly, actual results could differ from those estimates.

     g.   Fair Value of Financial Instruments

          The Company  estimates the fair value of its financial  instruments at
          their  current  carrying  amounts  since the  assets  and  liabilities
          approximate their respective fair values.

     h.   Stock Based Compensation

          For 1998 and subsequent  years, the Company has adopted FASB Statement
          123  which  establishes  a fair  value  method of  accounting  for its
          stock-based  compensation  plans.  Prior to 1998, the Company used APB
          Opinion 25.


                                        9
<PAGE>






     i.   Revenue Recognition

          Significantly  all  of the  Company's  revenue  is  derived  from  the
          Company's  contracts  relating  to  the  further  development  of  the
          Electrochemical  Fatigue  Sensor  (EFS).  Revenue on the  contracts is
          recognized at the time services are rendered.

          All other  revenue  is  reported  in the  period  that the  income was
          earned.

     j.   Cash and Cash Equivalents

          For  purposes of the  statement of cash flows,  the Company  considers
          cash and  cash  equivalents  to  include  all  stable,  highly  liquid
          investments with maturities of three months or less.

     k.   Income Taxes

          The Company  accounts  for its income  taxes under the  provisions  of
          Statement of Financial  Accounting  Standards  109 ("SFAS  109").  The
          method of  accounting  for income taxes under SFAS 109 is an asset and
          liability  method.   The  asset  and  liability  method  requires  the
          recognition  of deferred tax  liabilities  and assets for the expected
          future tax consequences of temporary differences between tax bases and
          financial reporting bases of other assets and liabilities.


Note 4.   Stock Activity

          During the quarter ended March 31, 2004,.the  Company issued 1,100,000
          shares of its common of which 450,000  shares were issued  through the
          conversion  of  450,000  shares of the  Company's  Class D  Preferred,
          25,000 shares were issued to the Company's  accountant for $25,000 for
          past  amounts  due,  and 625,000  shares  were  issued for  consulting
          services valued at $553,200. The 25,000 shares issued to the Company's
          accountant and the 625,000 issued to the five  consultants are subject
          to  three-year  lockup  agreements  whereby  these  shares  cannot  be
          transferred or sold for three years.

          During the quarter ended March 31, 2003, the Company  received $93,808
          net of offering costs in exchange for the issuance of 10,799 shares of
          its  Class A common  stock.  The  Company  also  received  $24,100  in
          exchange for the  issuance of 24 shares of its  preferred  stock.  The
          preferred  stock is convertible  into 48 shares of Class A common.  In
          addition,  during the quarter the Company  issued  6,000 shares of its
          Class A common  stock for legal  services  valued at  $105,000,  1,362
          shares of Class A common were issued for consulting services valued at
          $27,250,  and 2,550 shares of Class A common were issued in connection
          with its  Regulation S offering  valued at $25,496.  The shares issued
          for  non-cash  consideration  were valued at their  respective  quoted
          market price at date of issuance.

          Also during the quarter  ended March 31, 2003,  the Company  purchased
          812 shares of its common stock from various  shareholders  on the open
          market for $15,720.  These shares are held in the  Company's  treasury
          waiting for cancellation.


                                       10
<PAGE>






Item 2.   Management's  discussion  and  analysis  of  financial  conditions and
--------------------------------------------------------------------------------
results of operations
---------------------


Results of Operations for the Three Months Ended March 31, 2004 and 2003
------------------------------------------------------------------------

Revenue  generated by the Company  during the quarter  ended March 31, 2004 came
from its research  contracts with Northrop  Gruman  amounting to $25,715 and URS
Corporation  amounting to $41,555.  In addition,  the Company  accrued  interest
income  during  the same  quarter on amounts  due it from its  President  in the
amount of $3,090.

During the three-month period ended March 31, 2003, the Company did not generate
any revenue from its research and  development  contracts and earned  $13,186 in
interest  income,  the majority of which was accrued on officer  loans and notes
due the Company.

During the  three-month  periods  ended  March 31,  2004 and 2003,  the  Company
incurred development costs of approximately $161,586 and $31,236,  respectively.
Of the $31,236  incurred in 2003,  $5,000 was paid  through the  issuance of 250
shares of the Company's common stock.

General and administration costs were $784,419 and $338,438,  respectively,  for
the three-month periods ended March 31, 2004 and 2003.

The major expenses incurred during 2004 consisted of consulting in the amount of
$591,419,   officer's  salary  of  $48,000,   secretarial   salary  of  $11,658,
professional fees of $81,863,  travel expenses of $9,913,  and telephone expense
of $3,736.  Of the $591,419 incurred for consulting  expense,  $553,200 was paid
through the issuance of 675,000 shares of the Company's  common stock.  Included
in the 675,000 shares is 550,000 shares issued to two  consultants  for services
rendered in connection with Matech  Aerospace and for the overseeing the design,
utilization,  and marketing of the Company's Videoscope.  The shares are subject
to a three-year lock up agreement and were valued at $486,750, which is based on
30% of the quoted market value of the shares on the date of issuance.

The major expenses incurred during 2003 consisted of consulting in the amount of
$67,155,   officer's   salary  of  $31,000,   secretarial   salary  of  $13,015,
professional fees of $161,772,  travel expenses of $6,575, and telephone expense
of $4,317. Of the $67,155 incurred for consulting  expense,  $22,250 was through
the  issuance of 1,112 shares of the  Company's  common  stock.  Of the $161,155
incurred  for  professional  fees,  $105,000  was through the  issuance of 6,000
shares of the Company's common stock.

Interest  charged to operations  for the quarters ended March 31, 2004 and 2003,
primarily relate to accrued interest due on the Company's various obligations.


                                       11
<PAGE>






Liquidity and Capital Resources
-------------------------------

Cash and cash  equivalents  as of March  31,  2004  and 2003  were  $28,133  and
$130,054, respectively.

During  the  quarter  ended  March 31,  2004,  the  Company  received a total of
$435,967,  $60,967  was  received  on  services  rendered  on its  two  research
contracts and $375,000 was advanced on its Class A Senior Convertible Debenture.
During the quarter, the Company spent $455,498 in its operations.

During the first  quarter of 2003,  the  Company  received a total of  $138,133,
which  consisted  of $112,853  through  the sale of 10,799  shares of its common
stock,  $24,100 through the sale of 24 of its convertible  preferred shares, and
$1,180 in interest income.  During the quarter, the Company used $225,096 in its
operations,  $19,045 was incurred in the offering of the shares of common stock,
and  $15,720 was used to purchase  812 shares of its common  stock from  various
shareholders.

For the quarter  ended March 31, 2004,  operating  expenses  exceeded  operating
revenue by $394,531  ($60,967 less $455,498) leaving a cash balance at March 31,
2004 of only $28,133. The Company is currently financing its operations from its
two  research  contracts,  and its Senior  Class A  Debenture.  The two research
contracts  do not  generate  enough  revenues  to cover the  costs of  Company's
current  research  projects and the remaining  expected funds from its debenture
agreement is only $785,000.  Based upon the Company's current level of spending,
the remaining  amounts  expected  from the  debenture and the remaining  amounts
expected  from the  research  contracts  should  allow the  Company  to fund its
operations  through May 2004.  Although  Management  has  continued to lower the
Company's  overhead,  there  is no  assurance  that  the  Company  can  continue
operating without  additional  funding.  Management  continues in its attempt to
raise capital,  but there is no assurance that additional capital will be found,
and if found, the amounts raised will be sufficient to fund continued operations
until such time as the  Company's  products  are brought to market.  Even if the
necessary funds are obtained, there is no assurance that Company's products will
be fully  developed  and go to market,  or that that the Company  will  generate
enough sales to ever be profitable.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------

n/a.


Part II.  Other Information
---------------------------


Item 2.   Changes in Securities
-------------------------------

During the quarter ended March 31, 2004, the Company issued  1,100,000 shares of
its common of which 450,000 shares were issued through the conversion of 450,000
shares of the  Company's  Class D  Preferred,  25,000  shares were issued to the
Company's accountant for $25,000 for past amounts


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<PAGE>






due, and 625,000 shares were issued for consulting  services valued at $553,200.
The 25,000 shares issued to the Company's  accountant  and the 625,000 issued to
the five consultants are subject to three-year lockup  agreements  whereby these
shares cannot be transferred or sold three years.


Pursuant to the requirements of Securities  Exchange Act of 1934, the registrant
has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
thereunto duly authorized.


                           Material Technologies, Inc.
                           ---------------------------
                                   Registrant



                             /s/ Robert M. Bernstein
                  --------------------------------------------
                    Robert M. Bernstein, President and Chief
                                Financial Officer





















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