UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



Amendment #1

FORM 10-QSB/A



ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended:      September 30, 2004OroTRANSITION REPORT PURSUANT TO SECTION 13 0R 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from                           toCommission File Number:        000-51008




TELESIS TECHNOLOGY CORPORATION

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



|Florida                                                         | 04-3684840                       
|--------------------------------------------------------------- | ---------------------------------
|(State or Other jurisdiction of
 incorporation or organization) | (IRS Employer
Identification No.)
|                                                                |                                  
|1611 12th Street East, Unit A
Palmetto, Florida                 | 34221                            
|(Address of principal executive offices)                        | (Zip Code)                       
|                                                                |                                  
|(941) 795-7441                                                 
|(Issuers telephone number including area code)                



Check whether the issuer (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 ý  No o



State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Common Stock Outstanding as of September 30, 2004:  13,367,500 shares



Transitional Small Business Disclosure Format: Yes o  No ý



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Telesis Technology Corporation



Index to Form 10QSB











PART  I

Financial Information



Item 1.

Financial Statements

Title Page

Report of Independent Registered Public Accounting Firm

Balance Sheet at September 30, 2004 & 2003

Stockholders Equity at September 30, 2004 & 2003

Statements of Operations at September 30, 2004 & 2003

Statements of Cash Flows at September 30, 2004 & 2003

Notes to Financial Statements



Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Critical Accounting Policies

Additional Factors That May Affect Future Results

Controls and Procedures



PART II

Other Information



Item 1.

Legal Proceedings

Item 2.

Changes in Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Submission of Matters to a Vote of Security Holders

Item 5.

Other Information

Item 6.

Exhibits and Reports on Form 8-K



SIGNATURES









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Telesis Technology Corporation



Balance sheets as of September 30, 2004 and 2003



Statements of Operations, and

Cash Flows for the nine month

periods ended September 30, 2004 and 2003.



Notes to the financial statements







---















E. Randall Gruber, CPA, PC

Certified Public Accountant                                           Telephone (314)238-1224

10805 Sunset Office Drive, Suite 300                                      Fax (314)238-1250

St. Louis, Missouri  63127





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors

Telesis Technology Corporation



I have reviewed the accompanying balance sheets of Telesis Technology Corporation as of September 30, 2004 and 2003 and the related statements of operations, and cash flows for the nine months ended September 30, 2004 and 2003. These financial statements are the responsibility of the Companys management.



I conducted my reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, I do not express such an opinion.



Based on my reviews, I am not aware of any material modifications that should be made to the accompanying interim financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.



/S/

E. Randall Gruber, CPA, PC

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

February 2, 2005











Member:  American Institute of Certified Public Accountants

Registered:  Public Company Accounting Oversight Board (PCAOB)











---

|Telesis Technology Corporation            |                           |                   |           |   |        |        
|----------------------------------------- | ------------------------- | ----------------- | --------- | - | ------ | -------
|Balance Sheets                            |                           |                   |           |   |        |        
|(Unaudited)                               |                           |                   |           |   |        |        
|                                          |                           |                   |           |   |        |        
|ASSETS                                    |                           | September
    30, |          
|                                          |                           |                   | 2004      |   |        | 2003   
|Current assets                            |                           |                   |           |   |        |        
|                                          |                           |                   |           |   |        |        
|Cash and cash equivalents                 | $                         | 165,278           |           | $ | 46,808 |        
|Accounts receivable                       |                           | 56,150            |           |   | 78,985 |        
|Inventories                               |                           | 584,003           |           |   | 1,287  |        
|                                          |                           |                   |           |   |        |        
|                                          | Total current assets      |                   | 805,431   |   |        | 127,080
|Property and equipment (at cost), net of  |                           |                   |           |   |        |        
|accumulated depreciation of $11.798 and   |                           |                   |           |   |        |        
|$                                         | 2,974 respectively        |                   |           |   |        |        
|                                          |                           |                   | 395,471   |   |        | 110,985
|                                          |                           |                   |           |   |        |        
|Other assets                              |                           |                   |           |   |        |        
|Loan to shareholder                       |                           | 5,247             |           |   | --     |        
|Software, net of accumulated amortization |                           |                   |           |   |        |        
|of $450                                   |                           | 3,632             |           |   | --     |        
|Deposits                                  |                           | 2,410             |           |   | 260    |        
|                                          |                           |                   |           |   |        |        
|                                          | Total other assets        |                   | 11,289    |   |        | 260    
|                                          |                           |                   |           |   |        |        
|                                          | Total assets              |                   | 1,212,191 |   |        | 238,325
|                                          |                           |                   |           |   |        |        
|LIABILITIES AND STOCKHOLDERS'             |                           |                   |           |   |        |        
|EQUITY                                    |                           |                   |           |   |        |        
|                                          |                           |                   |           |   |        |        
|Current liabilities                       |                           |                   |           |   |        |        
|Notes payable                             |                           | 32,029            |           |   | 1,570  |        
|Accounts payable                          |                           | 65,455            |           |   | 37,960 |        
|Accrued income taxes                      |                           | 10,600            |           |   | --     |        
|Current maturities of long-term debt      |                           | 7,200             |           |   | 1,700  |        
|                                          |                           |                   |           |   |        |        
|                                          | Total current liabilities |                   | 115,284   |   |        | 41,230 
|                                          |                           |                   |           |   |        |        
|Long-term debt                            |                           |                   |           |   |        |        
|Mortgages payable, net of current         |                           |                   |           |   |        |        
|maturities                                |                           | 241,494           |           |   | 67,776 |        
|                                          |                           |                   |           |   |        |        
|Deferred income taxes                     |                           | 13,800            |           |   | --     |        



---

|                                           |  |               |  |  |             | 
|------------------------------------------ |  | ------------- |  |  | ----------- | 
|                                           |  |               |  |  |             | 
|Total liabilities                          |  | 370,578       |  |  | 109,006     | 
|                                           |  |               |  |  |             | 
|                                           |  |               | 
|                                           |  |               |  |  |             | 
|                                           |  |               |  |  |             | 
|                                           |  |               |  |  |             | 
|Stockholders' equity                       |  |               |  |  |             | 
|                                           |  |               |  |  |             | 
|Preferred stock, $0.001 par value;         |  |               |  |  |             | 
|20,000,000 shares authorized; no shares    |  |               |  |  |             | 
|issued and outstanding                     |  | ------------- |  |  | ----------- | 
|                                           |  |               |  |  |             | 
|Common stock, $0.001 par value;            |  |               |  |  |             | 
|100,000,000 shares authorized (2004) and   |  |               |  |  |             | 
|$1.00 par value; 7,500 shares authorized   |  |               |  |  |             | 
|(2003) and 13,367.500 (2004)               |  |               |  |  |             | 
|and 100 (2003) issued and outstanding      |  | 13,368        |  |  | 100         | 
|Additional paid-in capital                 |  | 758,049       |  |  | 113,416     | 
|Retained earnings (accumulated deficit)    |  | 70,196        |  |  | 15,803      | 
|                                           |  |               |  |  |             | 
|Total stockholders' equity                 |  | 841,613       |  |  | 129,319     | 
|                                           |  |               |  |  |             | 
|Total liabilities and stockholders' equity |  | 1,212,191     |  |  | $238,325    | 





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|Telesis Technology Corporation      |   |                   |  |   |         | 
|----------------------------------- | - | ----------------- |  | - | ------- | 
|Statements of Operations            |   |                   |  |   |         | 
|(Unaudited)                         |   |                   |  |   |         | 
|                                    |   |                   |  |   |         | 
|                                    |   |                   |  |   |         | 
|                                    |   | For the           | 
|                                    |   | Nine months ended | 
|                                    |   | September30       | 
|                                    |   | 2004              |  |   | 2003    | 
|Revenues                            |   |                   |  |   |         | 
|Sales                               | $ | 938,327           |  | $ | 420,010 | 
|                                    |   |                   |  |   |         | 
|Cost of sales                       |   |                   |  |   |         | 
|Cost of goods sold                  |   | 569,802           |  |   | 307,536 | 
|Freight                             |   | 17,169            |  |   | 5,946   | 
|                                    |   |                   |  |   |         | 
|Total cost of sales                 |   | 586,971           |  |   | 313,482 | 
|                                    |   |                   |  |   |         | 
|Gross profit                        |   | 351,356           |  |   | 106,528 | 
|                                    |   |                   |  |   |         | 
|Operating expenses                  |   |                   |  |   |         | 
|Salaries and wages                  |   | 146,179           |  |   | 23,020  | 
|Professional fees                   |   | 12,662            |  |   | 2,508   | 
|Outside services                    |   | 16,770            |  |   | 1,056   | 
|Payroll taxes and employee benefits |   | 14,894            |  |   | 2,426   | 
|Operating supplies                  |   | 12,406            |  |   | 2,536   | 
|Utilities and telephone             |   | 8,699             |  |   | 5,217   | 
|Depreciation and amortization       |   | 8,150             |  |   | 2,726   | 
|Office supplies                     |   | 5,195             |  |   | 1,346   | 
|Repairs and maintenance             |   | 4,021             |  |   | 1,566   | 
|Advertising and promotion           |   | 2,340             |  |   | 2,015   | 
|Auto expense                        |   | 3,523             |  |   |         | 
|Insurance                           |   | 2,749             |  |   |         | 
|Travel                              |   | 2,308             |  |   | 168     | 
|Dues and subscriptions              |   | 1,570             |  |   | 261     | 
|Other operating expenses            |   | 3,924             |  |   | 835     | 
|Total operating expenses            |   | 245,390           |  |   | 45,680  | 
|                                    |   |                   |  |   |         | 
|Income (loss) from operations       |   | 105,966           |  |   | 60,848  | 
|Other income (expenses)             |   |                   |  |   |         | 
|Interest income.                    |   | 300               |  |   |         | 
|Interest expense                    |   | (11,670)          |  |   | 4,686   | 
|                                    |   |                   |  |   |         | 
|                                    |   |                   |  |   |         | 
|Net other expense                   | $ | (11,370)          |  | $ | 4,686   | 
|                                    |   |                   |  |   |         | 
|Income before income taxes          |   | 94,596            |  |   | 56,162  | 



---

|Telesis Technology Corporation               |   |                   |  |   |        | 
|-------------------------------------------- | - | ----------------- |  | - | ------ | 
|Statements of Operations                     |   |                   |  |   |        | 
|(Unaudited)                                  |   |                   |  |   |        | 
|                                             |   |                   |  |   |        | 
|                                             |   |                   |  |   |        | 
|                                             |   | For the           | 
|                                             |   | Nine months ended | 
|                                             |   | September
    30  | 
|                                             |   | 2004              |  |   | 2003   | 
|                                             |   |                   |  |   |        | 
|Income taxes                                 |   | 24,400            |  |   | --     | 
|                                             |   |                   |  |   |        | 
|                                             |   |                   |  |   |        | 
|Net income                                   | $ | 70,196            |  | $ | 58,165 | 
|                                             |   |                   |  |   |        | 
|Weighted average number of common            |   |                   |  |   |        | 
|shares outstanding - basic and fully diluted |   | 12,225,000        |  |   | 100    | 
|                                             |   |                   |  |   |        | 
|Net income per share - basic and fully       |   |                   |  |   |        | 
|diluted                                      | $ | 0.01              |  | $ | 581.65 | 
|                                             |   |                   |  |   |        | 
|Pro forma data:                              |   |                   |  |   |        | 
|                                             |   |                   |  |   |        | 
|Historical income before taxes               |   | 94,596            |  |   | 56,162 | 
|                                             |   |                   |  |   |        | 
|Pro forma provision for income taxes         |   | 24,400            |  |   | 16,528 | 
|                                             |   |                   |  |   |        | 
|Net income adjusted for pro forma            |   |                   |  |   |        | 
|provision for income taxes                   |   | 70,196            |  |   | 39,634 | 
|                                             |   |                   |  |   |        | 
|Pro forma weighted average number of         |   |                   |  |   |        | 
|common shares outstanding                    |   | 12,225,000        |  |   | 100    | 
|                                             |   |                   |  |   |        | 
|Net income adjusted for pro forma            |   |                   |  |   |        | 
|provision for income taxes per common        |   |                   |  |   |        | 
|share:                                       |   | 0.01              |  |   | 396.34 | 



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|Telesis Technology Corporation        |   |                   |  |   |          | 
|------------------------------------- | - | ----------------- |  | - | -------- | 
|Statements of Cash Flows              |   |                   |  |   |          | 
|(Unaudited)                           |   |                   |  |   |          | 
|                                      |   | For the           | 
|                                      |   | Nine months ended | 
|                                      |   | September
    30, | 
|                                      |   | 2004              |  |   | 2003     | 
|Operating activities                  |   |                   |  |   |          | 
|                                      |   |                   |  |   |          | 
|Net income (loss)                     | $ | 70,196            |  | $ | 16,110   | 
|Adjustments to reconcile net income   |   |                   |  |   |          | 
|to net cash provided by operating     |   |                   |  |   |          | 
|activities                            |   |                   |  |   |          | 
|Depreciation and amortization         |   | 8,150             |  |   | 400      | 
|Deferred income taxes                 |   | 13,800            |  |   | --       | 
|Changes in assets and liabilities     |   |                   |  |   |          | 
|Accounts receivable                   |   | 105,159           |  |   | (75,051) | 
|Prepaid expenses                      |   | 5,000             |  |   | --       | 
|Inventories                           |   | (92,715)          |  |   | (958)    | 
|Notes payable                         |   | 32,029            |  |   |          | 
|Current maturities of long-term debt  |   | 5,000             |  |   |          | 
|Accounts payable                      |   | (24,720)          |  |   | 37,696   | 
|Accrued income taxes                  |   | 10,600            |  |   | --       | 
|                                      |   |                   |  |   |          | 
|Net cash provided by operating        |   |                   |  |   |          | 
|activities                            |   | 132,499           |  |   | (21,803) | 
|                                      |   |                   |  |   |          | 
|Investing activities                  |   |                   |  |   |          | 
|Expenditures for property & Equipment |   | (272,093)         |  |   | (5,928)  | 
|Expenditures for software             |   | (4,082)           |  |   | --       | 
|Loans to shareholder                  |   | (3,477)           |  |   | --       | 
|Additional security deposits          |   | (2,150)           |  |   | --       | 
|Proceeds from issue of long-term debt |   |                   |  |   | 1,629    | 
|Principal payments on long-term debt  |   |                   |  |   | (1,952)  | 
|                                      |   |                   |  |   |          | 
|Net cash used in investing activities |   | (281,802)         |  |   | (6,251)  | 
|                                      |   |                   |  |   |          | 
|Financing activities                  |   |                   |  |   |          | 
|Proceeds from issue of long-term debt |   | 183,500           |  |   |          | 
|Principal payments on long-term debt  |   | (8,602)           |  |   |          | 
|Additional investment by shareholders |   | 72,176            |  |   | 4,908    | 
|                                      |   |                   |  |   |          | 
|Net cash provided by financing        |   |                   |  |   |          | 
|activities                            |   | 247,074           |  |   | 4,908    | 
|                                      |   |                   |  |   |          | 
|Net decrease in cash and cash         |   | 97,771            |  |   | (23,146) | 



---





equivalentsCash and cash equivalents, beginning
   
   67,507
   
   
   69,954Cash and cash equivalents, end
   $
   165,278
   
   $
   46,808Supplemental disclosures:Interest paid
   $
   11,670
   
   $
   --




Non-cash investing and financing transactions - During the nine months ended September 30, 2004, the Company's major shareholder transferred inventory items to the Company. The inventory was valued at replacement cost in the amount of $353,029. The stockholder was credited with additional paid-in capital in the amo unt of $353,029.





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Telesis Technology Corporation

Notes to Financial Statements



Note A - Company overview and summary of significant accounting policies



Company overview



Telesis Technology Corporation is a publicly traded multi-faceted high technology company that designs, develops, tests, manufacturers and markets a diverserange of aerospace and defense products.  The Company is focused on providingproduct, system and service solutions for commercial and governmental customers.The Company has five operating divisions - Government Products division (GPD);Commercial Products Division (CPD); Telesis Aerospace; Telesis Test Labsand Telesis RF.



Basis of preparation of financial statements



The accompanying financial statements are prepared in accordance with U.S.generally accepted accounting principles (GAAP).



Use of estimates



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities, the disclosure of contingent assets and liabilities on thedate of the financial statements and the reported amounts of revenues and expenses during the audit period.  An example of an estimate is the useful lives ofproperty, plant and equipment.  Actual results could differ from those estimates.



Revenue recognition



The Company derives its revenues primarily from product sales, testing services and from packaging and preservation services.  Revenues are recognized as theservices are performed.  The Company has no long-term sales contracts.



Cash and cash equivalents



The Company considers all highly liquid investments with a remaining maturity at the date of purchase / investment of three months or less to be cashequivalents.  Cash and cash equivalents comprise cash, and cash on depositswith banks.



Credit risk



The Company's major customer is the Defense Department of the United Statesgovernment.  Sales to the United States government represent approximately65%

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of Company sales for the nine months ended September 30, 2004.  No
provision for uncollectible accounts has been established at September 30, 2004.







Telesis Technology Corporation

Notes to Financial Statements



Property and equipment



Property and equipment are stated at cost, less accumulated depreciation.The Company depreciates
property and equipment over their estimated usefullives using the straight-line method.  The
estimated useful lives of assets areas follows:





Buildings

40 years

Furniture and fixtures

10 years

Computer and telecommunications equipment

5-7 years



Foreign currency translation



The Company prepares financial statements using the United States dollar as the
functional currency.  The financial statements required no translation of foreign
currencies, since none of the foreign operations had transactions during the financial statement periods.



Income taxes



Upon incorporation in June, 2002, the Company elected to be taxed as an "S"
Corporation in which all items of income and expense and other tax attributes "pass-through" to the shareholders' individual
income tax returns.



Effective January 1, 2004, the Company elected out of the "S" Corporation income
tax status, and elected to be taxed as a regular corporation.  Financial statements
for periods subsequent to December 31, 2003 include a provision for income taxes due by the Company.



Note BInventories



Inventories consist of the cost of parts, components, material, labor and manufacturing overhead used in the performance of services for customers, and are stated at the lower of cost or market on an FIFO (first-in, first-out) basis.  Inventory transferred to the Company by its major stockholderwas valued at replacement cost since historical cost was not available.



Note C - Property and equipment



Property and equipment consist of the following at September 30, 2004:





Building

$  351,501

Furniture and fixtures

4,700

Computer and telecommunications equipment

51,068

---

407,269

Less - Accumulated depreciation

(11,798)

$  395,471





Telesis Technology Corporation

Notes to Financial Statements



Depreciation expense totaled $7,700 for the nine months ended September 30, 2004.



Note D - Related party transactions



The Company's major stockholder transferred inventory items to the Company during the period.The inventory was valued at replacement cost (since historical cost was unavailable) in the amount of $353,029.The stockholder was credited with additional paid-in capital in the amount of $353,029 in exchange for the inventory.



The Company's major stockholder is the recipient of a non-interest bearing loan in the amountof $5,247.  The loan receivable is included in the other assets section of the balance sheet.



The Company's major stockholder has signed a personal guarantee for the mortgage debt and line of credit of the Company as described in Notes E and F.



Note E - Long-Term Debt



Long-term debt consists of the following at September 30, 2004:



|Real estate mortgage note issued in the original amount of $72,000 payable at 6.50% interest.  The note is amortized over thirty years with monthly payments in the amount of $631.  The note is subjectto an interest rate change based on 3% over the one year U.S. Treasuryrate effective November 15, 2005.  The balance of the note is due on November 15, 2007.  The note is secured by real estate.                             | $ 65,912
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|Real estate mortgage note issued in the original amount of $182,782payable at 6.25% interest.  The note is amortized over thirty yearswith monthly payments in the amount of $685.  The note is subjectto an interest rate change based on 3.00% over the three year U.S. Treasuryrate every thirty-six months effective September 1, 2007.  The balance of the note is due on September 1, 2014.  The note is secured by real estate. | 182,782 
|Total long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                   | 248,694 
|Less-Current maturities                                                                                                                                                                                                                                                                                                                                                                                                                | (7,200) 
|Long-term debt, net of current maturities                                                                                                                                                                                                                                                                                                                                                                                              | $241,494









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Telesis Technology Corporation

Notes to Financial Statements



The maturities of long-term debt are as follows:





2004

$   7,200

2005

9,120

2006

10,032

2007

69,116

2008

11,600

Later years

141,626

$
248,694



Note F - Line of Credit



The Company has available a line of credit in the amount of $50,000.  There have beenadvances totaling $32,029 against the line of credit at September 30, 2004.



Note G  Regulation D, Rule 504 Private Placement



On December 29, 2003, the Company conducted a private placement of common stock pursuant to Regulation D, Rule 504 of the Securities Act, as amended (the Securities Act). This offering was registered in the State of Nevada pursuant to N.R.S. 90.480  Registration by Qualification on December 29, 2003. Pursuant to this offering, the Company offered to sell a minimum of 350,000 shares with a maximum of 1,500,000 shares of its common stock at a price of $.08 per share.  On April 16, 2994, the Company completed this private offering of shares of common stock of the Company in accordance with Regulation D, Rule 504 of the Securities Act and the Registration by Qualification in the State of Nevada, whereby it sold 1,042,500 shares of common stock for an aggregate total of $83,400.00 USD.



Note H - Preferred and Common stock



The Company is authorized to issue 20,000,000 shares of preferred stock at $.001 par valueand 100,000,000 shares of common stock at $.001 par value.  As of September 30, 2004 the Company had issued 12,225,000 shares of common stock to the initial shareholders. The initial shareholders have entered into an agreement with the Company that the 12,225,000 shares will not be sold for two years from the issuance date.



Note ISales



Sales consists of the following for the nine months ended September 30, 2004



|Product sales to the Unites States government | $ 607,125
|--------------------------------------------- | ---------
|Product sales to commercial entities          | 322,204  
|Testing service                               | 8,998    
|                                              | $938,327 

---



Telesis Technology Corporation

Notes to Financial Statements



Note J - Income Tax Expense



Income tax expense consists of the following for the nine months ended September 30, 2004:





Federal income tax:





Current

$

10,600

Deferred

13,800

$  
24,400





Current income taxes are based on the annualized taxable income for the year.





Deferred income taxes, resulting from timing differences in the recognition of expenses for tax and financial reporting purposes are as follows:



Depreciation

$

40,153



Note K - Employee Retirement Plan



The Company has adopted an employee retirement plan under which employees may defera portion of their annual compensation pursuant to provisions of the Internal Revenue Code.The Company can elect to contribute to the plan.  Substantially all employees who have completed at least one year of service are eligible to participate in the plan.  The Companyhas not elected to make a contribution to the plan for the nine months ended September 30, 2004.



Note L - Pro forma information



Effective January 1, 2004, the Company changed its tax status from an S Corporation to a C Corporation.  The Company has reflected a pro forma basis the reporting of the Company's income tax for the nine months period ended September 30, 1993 as though it were a C Corporation.The net earnings per share have also been reflected on a pro-forma basis reflecting the effect of theincome taxes.



NOTE M  Subsequent Events



On January 4, 2005, the Company issued 6,000,000 shares of its common stock to Hasit
Vibhakar, an officer of the Company, in exchange for a transfer of inventory valued at $463,561.44
USD. This issuance of common stock was issued under an exemption from the registration provisions of Section 5 of the Securities Act of 1933, as amended (the Act), as provided under Section 4(2) of the Act and the Common Stock shall be restricted securities that cannot be resold by the Purchaser without





---

subsequent registration under the Act or the applicability of a secondary transactional exemption from the registration requirements of the Act (e.g. subject to the safe harbor guidelines and resale limitations as provided under Rule 144 of the Act).



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Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations.





This filing contains forward-looking statements, which involve risks and uncertainties.  Our actual future results may differ materially from the results discussed in the forward-looking statements.  When used in this report, the words expects anticipates and estimates and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us include, but are not limited to:

- our ability to finance our activities and maintain our financial liquidity;
- our ability to attract and retain qualified, knowledgeable employees;
- the impact of general economic conditions on our business;
- postponements, reductions, or cancellations in orders from customers;
- the limited number of potential customers for our products;
- the variability in gross margins on our products;
- our ability to design  and market new products successfully;
- our failure to acquire new customers in the future;
- deterioration of business and economic conditions in our markets;
- intensely competitive industry conditions with increasing price competition;
- the rate of growth in the aerospace and defense markets.





Overview





Telesis Technology Corporation designs, manufactures and markets semiconductor, electronic components and machined components and sub assemblies serving the aerospace and defense markets. Our defense industry products, which represent approximately 65% of our sales, are used in specifically for the repair and maintenance of weapons systems, ground support, and equipment spares programs radar and electronic warfare equipment integrated into electronic systems for tactical aircraft, ships, ground systems, and missile systems.  The demand for products manufactured by us and used in the aerospace and defense industry has been growing at a fast pace during the last 2 years and is expected to continue to grow. This growth is attributable to an increase in demand for our products by the government and all prime contractors dealing with the government, as well as to our strategy to acquire market share by offering leading edge products.



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Results of Operations



Telesis Technology Corporation results for the third quarter and nine months ended September 30, 2004.



Sales revenue for the nine months ended on September 30, 2004 was $ 938,327 compared with $ 420,010 for the same period ended a year earlier in 2003. This was an increase of 123%. Gross Profit for the nine months ended on September 30, 2004 was $ 351,356 compared with $ 106,528 for the same period in 2003. This was an increase of 230%. Telesis Technology Corporation reported a net income for the nine months ended September 30, 2004 of $ 105,966 or $ 0.01 basic earnings per share (EPS).

Total Assets for the nine months ended on September 30, 2004 were reported at $ 1,212,191 compared to $ 238,325 for the same period in 2003. This was an increase of 409%. Total Liabilities for the nine months ended September 30, 2004 were $ 370,578 compared to $ 109,006, which is an increase of 240%.

Liquidity and Capital Resources



Since inception, we have financed our operations primarily from the founder and his initial investments in the company and internally generated funds.  For the nine months ended September 30, 2004 shareholders equity was reported at $ 841,613.00.



The company has been able to pay its expenses and costs through profitable operations.  As of September 30, 2004 we had working capital of $ 841,613.00.  The company needs to raise additional funds through the sale of its common stock or borrowing in order to accelerate growth and maintain a competitive edge against our competitors by increasing R&D, Sales and New product introductions.  Our future liquidity will depend on numerous factors, including the extent to which our present and future products gain market acceptance, the costs of sales, marketing and manufacturing activities, the cost, timing and business management of current and potential acquisitions and contingent liabilities associated with such acquisitions, and the extent to which products under development are successfully developed.  If necessary, we may be required to raise additional capital in the future through one or more of the following: (1) sale of equity or debt securities; (2) obtaining new loans; or (3) sale of assets, products or marketing rights. There is no guarantee that additional capital will be available from these sources on acceptable terms, if at all, and certain of these sources may require approval by existing lenders.





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Critical Accounting Policies



Our discussion and analysis of our financial conditions and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe that the following critical accounting policies affect our more significant judgments and estimates in the preparation of our financial statements.



Revenue recognition.  We generate our revenue through the sale of products.  Our policy is to recognize revenue when the applicable revenue recognition criteria have been met, which generally include the following:

- Persuasive evidence of an arrangement exists;
- Delivery has occurred or services have been rendered;
- Price is fixed or determinable; and
- Collectibility and Fund Collections is reasonably assured



Revenue from the sale of products is generally recognized after both the goods are shipped to the customer and acceptance has been received, if required. Our products are specialized and made to order for our customers, who primarily consist of original equipment manufacturers (OEMs). Our products are shipped complete and ready to be incorporated into higher level assemblies by our customers. The terms of the customer arrangements generally pass title and risk of ownership to the customer at the time of shipment.



Recording revenue from the sale of products involves the use of estimates and management judgment. We must make a determination at the time of sale whether the customer has the ability to make payments in accordance with arrangements. While we do utilize past payment history, and, to the extent available for new customers, public credit information in making our assessment, the determination of whether collections is reasonably assured is ultimately a judgment decision that must be made by management.



Allowance for Doubtful Accounts.  We maintain specific allowance for doubtful accounts receivable based on customer-specific allowances. Specific allowances are maintained for customers which are determined to have a high degree of collection risk based on such factors, among others, as:
(i) the aging of the accounts receivable balance; (ii) the customers past payment experience; or (iii) a deterioration in the customers financial condition, evidenced by weak financial condition and/or continued poor operating results, reduced credit ratings, and/or a bankruptcy filing.  A considerable amount of judgment is required in assessing the



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collection of accounts receivables. Should any of the factors considered in determining the adequacy of the overall specific allowance change, an adjustment to the provision for doubtful accounts receivable may be necessary.





Inventory.  Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out method. We review the carrying cost of our inventories by product each quarter to determine the adequacy of our reserves for obsolescence. In accounting for inventories we must make estimates regarding the estimated net realizable value of our inventory. This estimate is based, in part, on our forecasts of future sales and age of the inventory.



Additional Factors That May Affect Future Results



Future operating results may be impacted by a number of factors that could cause actual results to differ materially from those stated herein, which reflect managements current expectations. These factors include:



- industry-specific factors (including the reliance upon growth of the aerospace and defense market sectors, significant competition characterized by rapid technological change, new product development, product obsolescence, and significant price erosion over the life of a product);
- our ability to timely develop and produce commercially viable products at competitive prices;
- our ability to produce products which meet the quality standards of both existing and potential new customers;
- our ability to accurately anticipate customer demand;
- the availability and cost of components and raw materials;
- the impact of worldwide economic and political conditions on our business; and
- the ability to integrate current and potential future acquisitions into our existing operations.



We believe that, to the extent that foreign sales are recognized, we may face increased risk associated with political and economic instability, compliance with foreign regulatory rules governing export requirements, tariffs and other trade barriers, differences in intellectual property protections, longer accounts receivable cycles, currency fluctuations and general trade restrictions. If any of these risks materialize, they could have a material adverse effect on our business, results of operations, and financial condition.



We have evaluated the credit exposure associated with conducting business with foreign customers and have concluded that such risk is acceptable with great due



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diligence. Nevertheless, any significant change in the economy or a deterioration in United States trade relations or the economic or political stability of foreign markets could have a material adverse effect on our business, results of operations, and financial condition.







Sales to foreign customers are invoiced in U.S. dollars. Accordingly, we currently do not engage in foreign currency hedging transactions.  In addition, should the relative value of the U.S. dollar in comparison to foreign currencies increase, the resulting increase in the price of our products to foreign customers could result in decreased sales which could have a material adverse impact on our business, results of operations, and financial condition.



We experience significant price competition and expect price competition in the sale of our products to remain intense. We cannot assure you that our competitors will not develop new technologies or enhancements to existing products or introduce new products that will offer superior price or performance features. We expect our competitors to offer new and existing products at prices necessary to gain or retain market share. Several of our competitors have substantial financial resources, which may enable them to withstand sustained price competition or a downturn in the pricing of their products in the future. Substantially all of our competitors have, and potential future competitors could have, substantially greater technical, marketing, distribution and other resources than we do and have, or could have, greater name recognition and market acceptance of their products and technologies.



The markets in which we compete are characterized by rapidly changing technology and continuous improvements in products and services.  Our future success depends on our ability to enhance our current products and to develop and introduce, in a timely manner, new products that keep pace with technological developments, that meet or exceed industry standards, that compete effectively on the basis of price, performance and quality, that adequately address OEM customer, distributor customer and end-user customer requirements, and that achieve market acceptance.  We believe that to remain competitive in the future we will need to continue to develop new technologies, plant, facilities and products, which will require the investment of significant financial resources.  In the event our newly developed products are not timely developed or do not gain market acceptance, our business, results of operations and financial condition could be materially adversely affected.





Item 3.

Controls and Procedures



(a)

Evaluation of disclosure controls and procedures.  Based on the evaluation of the companys disclosure controls and procedures (as defined in Rules 13a-14 (c) and 15d-14 (c) under the Securities Exchange Act of 1934) as of a date within 90 days of the filing date of this Quarterly Report on Form 10-qsb, our (CEO) Chief Executive Officer and (CFO) Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and are operating in an effective manner.





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(b)

Changes in internal controls.  There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation.









PART II OTHER INFORMATION





Item 1.

Legal Proceedings



To the knowledge of Telesis Technology Corporations executive management and directors, the company is not party to any legal proceeding or litigation and none of its property is the subject of a pending legal proceeding and the executive officers and directors know of no other threatened or contemplated legal proceedings or litigation.  To the companys knowledge, there are no lawsuits nor were any lawsuits commenced against the company during the quarter ended September 30, 2004, nor did the company commence any lawsuits during the same period.



Item 2.

Changes in Securities and Use of Proceeds



There were no changes in securities during the quarter ended September 30, 2004.



Item 3.

Defaults upon Senior Securities



Not Applicable.



Item 4.

Submission of Matters to a Vote of Security Holders



No matters were put forward to a vote of the security holders of the Company this quarter.



Item 5.

Other Information



Not Applicable.



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