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

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(D) OF

                       THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended: September 30, 2001       Commission file number: 33-23617

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



          Delaware                                               95-4622822
 ------------------------------                              -------------------
(State or other jurisdiction of                                (IRS  Employer
(incorporation or organization)                              identification No.)


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




                                 (310) 208-5589
               ---------------------------------------------------
               (Registrant's telephone number including area code)

           Securities Registered pursuant to Section 12(g) of the Act:

                                     Common
                                     ------

     Indicate  by  check  mark  whether the registrant (1) has 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
                                                       ---    ---

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

     The  aggregate  market  value of the voting stock held by Non-affiliates of
the  registrant  at  October  18,  2001  was  approximately  $4,293,377.

Documents incorporated by reference-None.


                                        1
<PAGE>
                                      INDEX



                                                                            PAGE
                                                                            ----
Part  1.  Financial  Statements

     Balance  Sheets                                                         3-4

     Statements  of  Operations  -
        Third Quarter Ended September 30, 2000 and 2001 and from
        the Company's inception (October  21,  1983) through
        September  30, 2001                                                   5


     Statements  of  Cash  Flows  -
        Third Quarter Ended September 30, 2000 and 2001 and from
        the Company's inception (October  21,  1983) through
        September  30,  2001                                                 6-7


     Notes to Financial Statements                                            8


     Management's  Discussion  and  Analysis                                9-10



Part  2.  Other Information                                                  11


                                        2
<PAGE>
<TABLE>
<CAPTION>
MATERIAL  TECHNOLOGIES,  INC.
(A  Development  Stage  Company)
BALANCE  SHEETS
==================================================================================




                                              December 31,         September 30,
                                                 2000                  2001
                                           -----------------  --------------------
                                                                   (Unaudited)
<S>                                        <C>                <C>
ASSETS

  CURRENT ASSETS
    Cash and Cash Equivalents              $           1,954  $            101,610
    Receivable Due on Research Contract               33,932               186,183
    Receivable from Officer                           22,052                38,328
                                           -----------------  --------------------

      TOTAL CURRENT ASSETS                            57,938               326,121
                                           -----------------  --------------------

  FIXED ASSETS
    Property and Equipment, Net
        of Accumulated Depreciation                    2,990                 2,272
                                           -----------------  --------------------

  OTHER ASSETS
     Intangible Assets, Net of
        Accumulated Amortization                      12,712                16,821
    Investments                                       33,000                33,000
    Refundable Deposit                                 2,136                 2,136
    Deferred Offering Costs                                -                 4,000
                                           -----------------  --------------------

      TOTAL OTHER ASSETS                              47,848                55,957
                                           -----------------  --------------------

      TOTAL ASSETS                         $         108,776  $            384,350
                                           =================  ====================
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
MATERIAL  TECHNOLOGIES,  INC.
(A  Development  Stage  Company)
BALANCE  SHEETS
=====================================================================================================

                                                                        December 31,    September 30,
                                                                            2000            2001
                                                                       --------------  ---------------
                                                                                         (Unaudited)
<S>                                                                    <C>             <C>
LIABILITIES AND STOCKHOLDERS' (DEFICIT)

     CURRENT LIABILITIES
       Legal Fees Payable                                              $     209,306   $      214,865
       Fees Payable to R&D Subcontractor                                      20,474          133,572
       Consulting Fees Payable                                                50,000                -
       Accounting Fees Payable                                                26,288           29,416
       Other Accounts Payable                                                 10,157            2,480
       Accrued Expenses                                                       24,982           42,121
       Accrued Officer Wages                                                  40,000           80,000
       Notes Payable - Current Portion                                        25,688           25,688
       Loans Payable - Others                                                 54,160           56,594
                                                                       --------------  ---------------

         TOTAL CURRENT LIABILITIES                                           461,055          584,736

      Payable on Research and
        Development Sponsorship                                              358,181          406,535
                                                                       --------------  ---------------

    TOTAL LIABILITIES                                                        819,236          991,271
                                                                       --------------  ---------------


STOCKHOLDERS' (DEFICIT)
  Class A Common Stock, $.001 Par Value, Authorized 199,000,000
     Shares, Outstanding 24,618,167 at December 31, 2000, and
     37,239,214 shares at September 30, 2001                                  24,618           37,239
  Class B Common Stock, $.001 Par Value, Authorized 100,000
     Shares, Outstanding 100,000 Shares at December 31, 2000, and
     September 30, 2001                                                          100              100
   Class A Preferred, $.001 Par Value, Authorized  50,000,000 Shares
     Outstanding 337,471 Shares at December 31, 2000 and
     September 30, 2001                                                          337              337
  Additional Paid in Capital                                               5,909,782        6,744,372
  Less Notes Receivable - Common Stock                                    (2,133,251)        (720,907)
  Deficit Accumulated During the Development Stage                        (4,512,046)      (6,668,062)
                                                                       --------------  ---------------

  TOTAL STOCKHOLDERS' (DEFICIT)                                             (710,460)        (606,921)
                                                                       --------------  ---------------

    TOTAL LIABILITIES AND STOCKHOLDERS'
       (DEFICIT)                                                             108,776          384,350
                                                                       ==============  ===============
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
MATERIAL  TECHNOLOGIES,  INC.
(A  Development  Stage  Company)
Statement of Operations

                                                                                                                 From Inception
                                                                                                                   (October 21,
                                                              For the Three Months         For the Nine Months         1983)
                                                                      Ended                       Ended               Through
                                                                   September 30,              September 30,          September
                                                                2000          2001          2000          2001         2001
                                                            ------------  ------------  ------------  ------------  ------------
                                                            (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
<S>                                                         <C>           <C>           <C>           <C>           <C>
REVENUES
  Sale of Fatigue Fuses                                     $         -   $         -   $         -   $         -   $    64,505
  Sale of Royalty Interests                                           -             -             -             -       198,750
  Research and Development Revenue                              143,781       427,004       601,936     1,038,060     4,021,726
  Test Services                                                       -             -             -             -        10,870
                                                            ------------  ------------  ------------  ------------  ------------
    TOTAL REVENUES                                              143,781       427,004       601,936     1,038,060     4,295,851
                                                            ------------  ------------  ------------  ------------  ------------

COSTS AND EXPENSES
  Research and Development                                      100,051       356,706       433,445       828,326     3,700,026
  General and Administrative                                    117,477       258,597       443,777     2,402,032     7,211,677
                                                            ------------  ------------  ------------  ------------  ------------
    TOTAL COSTS AND EXPENSES                                    217,528       615,303       877,222     3,230,358    10,911,703
                                                            ------------  ------------  ------------  ------------  ------------
    (LOSS) FROM OPERATIONS                                      (73,747)     (188,299)     (275,286)   (2,192,298)   (6,615,852)
                                                            ------------  ------------  ------------  ------------  ------------

OTHER INCOME (EXPENSE)
  Expense Reimbursed                                                  -             -             -             -         4,510
  Interest Income                                                39,128        11,487        61,606        89,933       235,468
  Gain on Sale of Stock                                               -             -       251,798             -       207,497
  Gain on Foreclosure                                                 -             -             -             -        18,697
  Miscellaneous Income                                                -             -             -             -        25,145
  Modification of Royalty Agreement                                   -             -             -             -        (7,332)
  Loss on Sale of Equipment                                           -             -             -             -       (12,780)
  Interest Expense                                              (15,158)      (17,617)      (45,537)      (52,851)     (298,370)
  Settlement of Teaming Agreement                                     -             -             -             -        50,000
  Litigation Settlement                                               -             -             -             -        18,095
                                                            ------------  ------------  ------------  ------------  ------------
    TOTAL OTHER INCOME (EXPENSE)                                 23,970        (6,130)      267,867        37,082       240,930
                                                            ------------  ------------  ------------  ------------  ------------

NET INCOME (LOSS) BEFORE EXTRAORDINARY
  ITEMS AND PROVISION FOR INCOME TAXES                          (49,777)     (194,429)       (7,419)   (2,155,216)   (6,374,922)
PROVISION FOR INCOME TAXES                                            -             -        (2,575)         (800)      (10,200)
                                                            ------------  ------------  ------------  ------------  ------------
    NET INCOME (LOSS) BEFORE
      EXTRAORDINARY ITEMS                                       (49,777)     (194,429)       (9,994)   (2,156,016)   (6,385,122)
 EXTRAORDINARY ITEMS
  Forgiveness of Debt                                                 -             -             -             -      (289,940)
  Utilization of Operating  Loss Carry forward                        -             -             -             -         7,000
                                                            ------------  ------------  ------------  ------------  ------------
    NET INCOME (LOSS)                                       $   (49,777)  $  (194,429)  $    (9,994)  $(2,156,016)  $(6,668,062)
                                                            ============  ============  ============  ============  ============

PER SHARE DATA
  Basic Income (Loss) Per Share Before Extraordinary Item         (0.00)  $     (0.01)        (0.00)        (0.07)
  Extraordinary Items                                                 -             -             -             -
                                                            ------------  ------------  ------------  ------------
    NET INCOME (LOSS)                                             (0.00)  $     (0.01)        (0.00)        (0.07)
                                                            ============  ============  ============  ============
    WEIGHTED AVERAGE
         COMMON SHARES OUTSTANDING                           20,324,413    35,127,551    17,483,367    31,272,062
                                                            ============  ============  ============  ============
</TABLE>

                                               See accompanying Notes


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                                    MATERIAL TECHNOLOGIES, INC.
                                                   (A Development Stage Company)
                                                     STATEMENTS OF CASH FLOWS

                                                                                                                     From Inception
                                                                                                                      (October 21,
                                                              For the Three Months Ended   For the Nine Months Ended  1983) Through
                                                                     September 30,               September 30,        September 30,
                                                                  2000          2001          2000          2001          2001
                                                              ------------  ------------  ------------  ------------  ------------
                                                              (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
<S>                                                           <C>           <C>           <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss)                                                  $   (49,777)  $  (194,429)  $    (9,994)  $(2,156,016)  $(6,668,062)
                                                              ------------  ------------  ------------  ------------  ------------
  Adjustments to Reconcile Net
    (Loss) to Net Cash Provided
    (Used) by Operating Activities
  Depreciation and Amortization                                       737           738         2,211         2,211       176,784
  Interest Income on Stock Subscriptions Receivable               (39,790)      (11,488)      (57,459)      (89,932)     (189,921)
  Officer's Compensation on Stock Subscription Modification             -             -             -     1,500,000     1,500,000
  Bad Debt                                                              -             -             -             -        50,000
  Gain on Sale of Marketable Securities                                 -             -             -             -      (196,596)
  Gain on Real Estate Foreclosure                                       -             -             -             -       (18,697)
  Charge off of Deferred Offering Costs                                 -             -             -             -        36,480
  Charge off of Long-lived Assets Due Impairment                                      -             -             -        92,919
  Charge off of Deferred Offering Costs                                 -             -             -             -        12,780
  Loss on Sale of Equipment                                             -             -             -             -         7,332
  Issuance of Common  Stock for Services                           16,000       120,250        61,950       596,500     1,217,897
  Issuance of Stock for Agreement Modification                          -             -             -             -           152
  Forgiveness of Indebtedness                                           -             -             -             -       165,000
  (Increase) Decrease in Accounts Receivable                      136,791        81,108       141,168      (152,251)     (233,183)
  (Increase) Decrease in Prepaid Expenses                         (50,000)            -       (50,000)            -            53
  Increase (Decrease) in Accounts                                                     -                           -             -
    Payable and Accrued Expenses                                 (123,788)      (85,145)     (109,863)      184,928     1,104,800
  Interest Accrued on Note Payable                                    703           811         2,388         2,434       207,471
  Increase in Research and Development
     Sponsorship Payable                                           13,659        16,118        40,978        48,354       266,354
  (Increase) in Note for Litigation Settlement                          -             -             -             -       (25,753)
  (Increase) in Deposits                                                -             -             -             -        (2,189)
                                                               ------------  ------------  ------------  ------------  -----------
   TOTAL ADJUSTMENTS                                             (45,688)      122,392        31,373     2,092,244      4,171,683
                                                              ------------  ------------  ------------  ------------  ------------
  NET CASH PROVIDED (USED) BY
   OPERATING ACTIVITIES                                           (95,465)      (72,037)       21,379       (63,772)   (2,496,379)
                                                              ------------  ------------  ------------  ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds From Sale of Equipment                                       -             -             -             -        10,250
  Proceeds from Sale of Marketable Securities                           -             -             -             -       283,596
  Purchase of Marketable Securities                                     -             -             -             -       (90,000)
  Investment in Joint Venture                                           -             -       (15,000)            -      (102,069)
  Purchase of Property and Equipment                                    -        (5,600)            -        (5,600)     (236,503)
  Net Proceeds from Sale of Real Estate                                 -             -             -             -        44,450
  Payment for License Agreement                                         -             -             -             -        (6,250)
                                                              ------------  ------------  ------------  ------------  ------------
  NET CASH PROVIDED (USED) BY
   INVESTING ACTIVITIES                                                 -        (5,600)      (15,000)       (5,600)      (96,526)
                                                              ------------  ------------  ------------  ------------  ------------
</TABLE>

                                               See accompanying Notes


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                             MATERIAL TECHNOLOGIES, INC.
                                            (A Development Stage Company)
                                              STATEMENTS OF CASH FLOWS

                                                                                                   From Inception
                                       For the Three Months Ended   For the Nine Months Ended    (October 21, 1983)
                                              September 30,               September 30,               Through
                                            2000          2001          2000          2001       September 30, 2001
                                        ------------  ------------  ------------  ------------  --------------------
                                        (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)        (Unaudited)
<S>                                     <C>           <C>           <C>           <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES

  Issuance of Common Stock              $         -   $   230,309   $     5,000   $   230,309   $         1,611,916
  Costs incurred in Offering                      -       (47,281)            -       (47,281)              (78,761)
  Sale of Common Stock Warrants                   -             -             -             -                18,250
  Payment on Proposed Reorganization              -             -             -             -                (5,000)
  Sale of Preferred Stock                         -             -             -             -               258,500
  Sale of Redeemable Preferred Stock              -             -             -             -               150,000
  Capital Contributions                           -             -             -             -               301,068
  Loans  From  Officers                           -           500         3,000        14,800               750,805
  Repayments to Officer                     (11,000)      (10,000)      (22,500)      (28,800)             (484,332)
  Increase in Loans - Other                       -             -             -             -               172,069
                                        ------------  ------------  ------------  ------------  --------------------

CASH FLOWS FROM FINANCING ACTIVITIES:       (11,000)      173,528       (14,500)      169,028             2,694,515
                                        ------------  ------------  ------------  ------------  --------------------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                  (106,465)       95,891        (8,121)       99,656               101,610
BEGINNING BALANCE CASH AND
     CASH EQUIVALENTS                       161,248         5,719        62,904         1,954                     -
                                        ------------  ------------  ------------  ------------  --------------------
ENDING BALANCE CASH AND CASH
    EQUIVALENTS                         $    54,783   $   101,610   $    54,783   $   101,610   $           101,610
                                        ============  ============  ============  ============  ====================
</TABLE>

                                               See accompanying 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
          financial  statements  contain  all  adjustments (consisting of normal
          recurring accruals) necessary to present fairly the financial position
          of  the  Company  as of September 30, 2000 and 2001 and the results of
          operations  and  cash flows for the three-month and nine-month periods
          then  ended. The operating results of the Company on a quarterly basis
          may  not  be  indicative  of  operating  results  for  the  full year.


                                        8
<PAGE>
                           MATERIAL TECHNOLOGIES, INC.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
                                   OPERATIONS


RESULTS  OF  OPERATIONS
-----------------------


     FOR  THE  NINE  MONTHS  ENDED  SEPTEMBER  30,  2000  AND  2001

     During  the  nine  month  period  ended  September  30,  2000,  the Company
     generated  approximately  $915,340  in revenue, which consisted of $601,936
     under  its  research  and  development contracts, $251,798 from the sale of
     marketable  securities, and $61,606 in interest. Of the $61,606 in interest
     earned,  $55,572  relates  to  interest  accrued  on  non-recourse  stock
     subscription  receivables  due from the Company's President and a Director.

     During  the  nine  month  period  ended  September  30,  2001,  the Company
     generated  approximately  $1,127,993  in  revenue,  which  consisted  of
     $1,038,060  under  its  research, and development contracts, and $89,933 in
     interest. Of the total interest earned, $85,536 relates to interest accrued
     on  non-recourse  stock  subscription  receivables  due  from the Company's
     President  and  a  Director.

     During  the  nine  month  periods  ended  September  30, 2000 and 2001, the
     Company  incurred  approximately  $433,445,  and $828,326, respectively, in
     development  costs  all  of which related to the above indicated contracts.

     General   and   administration   costs   were   $443,777,  and  $2,402,032,
     respectively,  for  the  nine-month  periods  ended September 30, 2000, and
     2001.  The  major  expenses  incurred  during  the  nine-month period ended
     September  30,  2000,  consisted  of $84,101 in consulting fees, $90,000 in
     officer's  salary,  $109,315 in professional fees, $18,855 in rent, $14,577
     in  telephone  expense, $28,187 in salaries, office expense of $21,761, and
     $22,491  in  travel  costs.

     The  major  expenses  incurred during the nine-month period ended September
     30,  2001,  consisted  of  $1,500,000  relating  to the modification of the
     amount  owed to the Company by its President and a Director on non-recourse
     stock  subscriptions,  $420,000  of  prior  years'  compensation  due  its
     President  that  was  paid  in  stock in 2001, $147,569 in consulting fees,
     $90,000 in officer's salary, $97,695 in professional fees, $16,454 in rent,
     $11,706 in telephone expense, $26,200 in office salaries, office expense of
     $16,454,  and  $25,643  in  travel  costs


     FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 2001

     During  the  three-month  period  ended  September  30,  2000,  the Company
     generated  approximately  $182,909  in revenue, which consisted of $143,781
     under  its  research  and  development  contracts,  and  interest earned of
     $39,128  the  majority of which relates to interest accrued on non-recourse
     stock  subscription  receivables  due  from  the  Company's President and a
     Director.


                                        9
<PAGE>
     During  the  three-month  period  ended  September  30,  2001,  the Company
     generated  approximately  $438,491  in revenue, which consisted of $427,004
     under  its  research  and  development  contracts,  and  interest earned of
     $11,487,  the majority of which relates to interest accrued on non-recourse
     stock  subscription  receivables  due  from  the  Company's President and a
     Director.

     During  the  three-month  periods  ended  September  30, 2000 and 2001, the
     Company  incurred  approximately  $100,051,  and $356,706, respectively, in
     development  costs  all  of which related to the above-indicated contracts.

     General  and administration costs were $117,477 and $258,597, respectively,
     for  the  three-month  periods ended September 30, 2000 and 2001. The major
     expenses  incurred  in  2000,  consisted  of officer's salaries of $30,000,
     office salaries of $8,928, consulting fees of $8,591, professional services
     of  $34,498, rent of $6,411, office expense of $6,246, telephone expense of
     $5,236,  and  travel  expense  of  $3,672.

     The  major  expenses  incurred  in 2001, consisted of officer's salaries of
     $30,000,  office  salaries  of  $10,617,  consulting  fees  of  $113,066,
     professional  services  of  $46,486,  rent  of  $6,833,  office  expense of
     $13,129,  telephone  expense  of  $6,875,  and  travel  expense of $16,674.


     LIQUIDITY  AND  CAPITAL  RESOURCES
     ----------------------------------

     Cash  and  cash equivalents as of September 30, 2000 and 2001 were $54,783,
     and  $101,610,  respectively.  During  2000,  the Company received $841,647
     through its research contracts, $3,000 through advances from its President,
     $5,000 through the issuance of Company's common stock, $251,798 through the
     sale  of stock held for investment, $3,990 from interest earned on savings,
     and  other receipts totaling $3,053. Of the $1,108,488 received, $1,070,988
     was  used  in  operations,  $15,000  was  invested  in a joint Venture, and
     $22,500  was  repaid  to  its  President.

     During  2001, the Company received $885,808 through its research contracts,
     $14,800  through  advances  from  its  President,  and $230,309 through the
     issuance  of  Company's  common stock. Of the $1,130,917 received, $949,580
     was used in operations, $5,600 was used in the development of the Company's
     website,  $47,281  was  used  in  the  selling of the stock and $28,800 was
     advanced  to  its  President.


                                       10
<PAGE>
PART  2.  OTHER  INFORMATION

ITEM  2.  CHANGES  IN  SECURITIES

     On  October 12, 2001, the Company's Board of Directors approved an increase
     in  the number of the Company's authorized common shares to 200,000,000 and
     approved  an  increase  in  the  Company's  authorized  preferred shares to
     50,000,000.  The  financial  statements have been retroactively restated to
     reflect  the  increased  number  of  authorized  shares.

     In  the  third quarter 2001, the Company issued a total of 4,396,047 shares
     of  its  common  stock  of  which,  3,193,547  shares  were issued for cash
     totaling  $187,028 (net of offering costs of $43,281), and 1,202,500 shares
     were  issued to various individual for legal and consulting services valued
     at  $120,250.

     In  October  2001,  the  Company  issued a total of 5,829,307 shares of its
     common  stock  of which, 1,461,307 shares were issued for $102,105, 300,000
     shares were issued to a Director, 20,000 shares were issued to an employee,
     350,000  shares  were  issued  to consultants, 3,000,000 shares were issued
     pursuant  to  the  terms  of  the  Commitment  Letter  in connection with a
     $12,500,000  Straight  Documentary  Credit  from  Allied  Boston Group, and
     698,000  shares were issued for the assistance in raising the funds through
     the  Company's  Regulation  S  offering.


     Under  the  terms of the agreement with the University of Pennsylvania, the
     University  was  issued 5% of the Company's outstanding stock. According to
     the  agreement, the shares issued are anti-dilutive. Currently, the Company
     is  required  to  issue  864,089 additional shares to the University. These
     additional  shares  have  not  been  issued.


ITEM  5.  OTHER  INFORMATION

     On October 10, 2001, the Company entered into an arrangement whereby Allied
     Boston  Group  will  provide the Company with a Straight Documentary Credit
     for $12,500,000. Under the terms of the commitment, the Company will pledge
     sufficient  shares  of  its  common  stock  to  equal  125% of the Straight
     Documentary  Credit. Under the initial terms, the shares are valued at $.27
     per  share,  therefore  the  Company  will  pledge approximately 58 million
     shares  of its common stock against this instrument. If the Company's stock
     price  goes  lower,  then  additional  shares will be pledged. If the stock
     price  goes  to  a  $1.00  per  share,  then  Allied  Boston is required to
     liquidate  a  sufficient  number  of  shares  to  pay off the amount funded
     through  this  Straight  Documentary  Credit. After the amount is paid off,
     Allied  Boston will retain 25 million shares of the Company's common stock.
     Any  remaining  shares  will  be  returned  to  the  Company;

     On  October  18,  2001,  the  Company issued 3,000,000 shares of its common
     stock  to Allied Boston as an issuance fee valued at $812,500. Upon funding
     through  the  Straight Documentary Credit, the Company is required to pay a
     Success  Fee  to  Allied Boston in the amount of 8% of the amount funded of


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     which  50%  will  be paid in cash and the remainder of the fee will be paid
     through  the  issuance of the Company's common stock to be valued currently
     at  $.27  per  share. As long as the Documentary Credit is in force, Allied
     Boston  will  have 2 voting seats on the Company's Board. All out-of-pocket
     expenses  pertaining to the issuance of the instrument will be borne by the
     Company.



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



                             DATE:  OCTOBER 19, 2001


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