EXHIBIT 10.5
Aholt Promissory Note

                                                             Exhibit 10.5

THIS PROMISSORY  NOTE HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933,
AS  AMENDED.  THE  NOTE  HAS  BEEN  ACQUIRED  FOR  INVESTMENT  AND  MUST BE HELD
INDEFINITELY and MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT
IS SUBSEQUENTLY  REGISTERED  UNDER SAID ACT or, in the opinion of counsel to the
company, an exemption from registration under said act is available.

PROMISSORY NOTE

$100,000                                                        August 30, 2004

FOR VALUE RECEIVED,  Phase III Medical, Inc., a Delaware corporation,  ("Maker")
promises to pay to Robert Aholt ("Payee"),  in lawful money of the United States
of America,  the principal sum of One Hundred Thousand  Dollars  ($100,000.00 ),
together with interest  thereon  accruing at an annual rate equal to 20%, in the
manner  provided  below.  Interest shall be calculated on the basis of a year of
365 or 366 days,  as  applicable,  and  charged  for the  actual  number of days
elapsed.

1.    PAYMENTS

      1.1   Principal and interest.

            Interest on the unpaid  principal amount shall be payable monthly in
            arrears until the entire principal amount shall be paid in full. All
            principal and accrued interest shall be paid in full on February 30,
            2005 (6 months after the date of issuance of this Note).

      1.2   Manner of Payment

            All payments of principal and interest on this Note shall be made by
            check at Robert Aholt, 20128 Cavern Court,  Saugus, CA, 91390, or at
            such  other  place in the United  States of  America as Payee  shall
            designate  to Maker in  writing.  If any  payment  of  principal  or
            interest  on this Note is due on a day which is not a

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            Business  Day,  such  payment  shall be due on the  next  succeeding
            Business  Day.  "Business  Day" means any day other than a Saturday,
            Sunday or legal holiday in the State of New York.

      1.3   Prepayment

            Maker may, without premium or penalty,  at any time and from time to
            time, prepay all or any portion of the outstanding principal balance
            due  under  this  Note,   provided  that  each  such  prepayment  is
            accompanied by accrued  interest on the amount of principal  prepaid
            calculated to the date of such prepayment.

            Any partial  prepayments  shall be applied first to accrued interest
            and then to principal.

2.    DEFAULTS

      2.1   Events of Default

            The  occurrence  of any  one or more of the  following  events  with
            respect to Maker  shall  constitute  an event of  default  hereunder
            ("Event of Default"):

            (a)   If Maker shall fail to pay when due any  payment of  principal
                  or interest on this Note.

            (b)   If,  pursuant  to or within the  meaning of the United  States
                  Bankruptcy  Code or any other federal or state law relating to
                  insolvency or relief of debtors (a  "Bankruptcy  Law"),  Maker
                  shall  (i)  commence  a  voluntary  case or  proceeding;  (ii)
                  consent to the entry of an order for  relief  against it in an
                  involuntary  case;  (iii)  consent  to  the  appointment  of a
                  trustee, receiver,  assignee,  liquidator or similar official;
                  (iv) make an assignment for the benefit of its  creditors;  or
                  (v) admit in writing  its  inability  to pay its debts as they
                  become due.

            (c)   If a court of competent jurisdiction enters an order or decree
                  under any  Bankruptcy Law that (i) is for relief against Maker
                  in an involuntary case; (ii) appoints of a trustee,  receiver,
                  assignee,  liquidator  or  similar  official  for the Maker or
                  substantially all of the Maker's  properties;  or (iii) orders
                  the  liquidation  of the Maker,  and in each case the order is
                  not dismissed within 90 days.

      2.2   Remedies

            Upon the  occurrence  of an Event of Default  hereunder  (unless all
            Events of Default have been cured or waived by Payee), Payee may, at
            its  option,  (i) by  written  notice to Maker,  declare  the entire
            unpaid  principal  balance of this Note,  together  with all accrued
            interest thereon, immediately due and payable, and (ii) exercise all
            and any rights and remedies  available to it under  applicable  law,
            including,  without limitation,  the right to collect from maker all
            sums due under

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            this  Note.  Maker  shall  pay all  reasonable  costs  and  expenses
            incurred  by or on  behalf  of  Payee  in  connection  with  Payee's
            exercise of any or all of its rights and  remedies  under this Note,
            including,  without  limitation,   reasonable  attorneys'  fees  and
            expenses.

3.    REPRESENTATIONS BY PAYEE

      Payee represents and warrants to Maker as follows:

      (a)   Payee has received and examined all information, including financial
            statements,  of or concerning Maker which Payee considers  necessary
            to making an informed  decision  regarding  this Note.  In addition,
            Payee has had the  opportunity  to ask  questions  of,  and  receive
            answers from, the officers and agents of Maker  concerning Maker and
            to obtain such information, to the extent such persons possessed the
            same or could acquire it without  unreasonable effort or expense, as
            Payee deemed  necessary  to verify the  accuracy of the  information
            referred to herein.

      (b)   The Payee  acknowledges  and understands that (i) the Maker will use
            the proceeds of this Note in its the  establishment  of new business
            operations; (ii) the proceeds of this Note will not be sufficient to
            provide  Maker  with the  necessary  funds to  achieve  its  current
            business  plan;  (iii)  the  Maker  does  not have  sufficient  cash
            available to repay this Note;  (iv) this Note will not be guaranteed
            nor will it be  secured  by any  assets of Maker  nor  senior to any
            other  indebtedness of Maker;  and (v) Payee bears the economic risk
            of never being repaid on this Promissory Note.

      (c)   The Payee hereby  certifies that Payee is an  "Accredited  Investor"
            (as that term is defined by Regulation D under the Securities Act of
            1933, as amended)  because at least one of the following  statements
            is applicable to Payee:

                  (i)   Payee is an  Accredited  Investor  because the Payee had
                        individual  income of more than  $200,000 in each of the
                        two prior calendar years and reasonably  expects to have
                        individual  income  in  excess of  $200,000  during  the
                        current calendar year.

                  (ii)  The Payee is an  Accredited  Investor  because the Payee
                        and his spouse together had income of more than $300,000
                        in each of the two prior  calendar  years and reasonably
                        expect to have joint income in excess of $300,000 during
                        the current calendar year.

                  (iii) The Payee is an  Accredited  Investor  because the Payee
                        has an individual net worth, or the Payee and his spouse
                        have a joint net worth of more than $1,000,000.

      (d)   Payee is  acquiring  this Note for his own account,  for  investment
            purposes only, and not with a view to the resale or  distribution of
            all or any part thereof.

      (e)   Payee  acknowledges that this Note (i) has not been registered under
            applicable  securities laws, (ii) will be a "restricted security" as
            defined in  applicable  securities  laws,  (iii) has been  issued in
            reliance on the statutory exemptions from registration  contemplated
            by  applicable  securities  laws based (in part) on the  accuracy of
            Payee's  representations  contained  herein,  and  (iv)  will not be
            transferable without registration under applicable  securities laws,
            unless  an  exemption  from  such   registration   requirements   is
            available.

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      (f)   Payee has reviewed and understands Maker's (i) Annual Report on Form
            10-K for the fiscal year ended  December  31, 2003;  (ii)  Quarterly
            Reports  on  Form10-Q  for the  quarters  ended  March 31,  June 30,
            September  30,  2003,  and  March 31,  June 30,  2004;  (iii)  proxy
            statement for its 2003 annual meeting of  shareholders  and (iv) all
            Current  Report on Form 8-K filed  since the filing of its last Form
            10-K.

4.    MISCELLANEOUS

      4.1   Waiver

            The rights and remedies of Payee under this Note shall be cumulative
            and not alternative. No waiver by Payee of any right or remedy under
            this Note shall be  effective  unless it is in writing and signed by
            Payee.  Neither the failure nor any delay in  exercising  any right,
            power or privilege  under this Note will operate as a waiver of such
            right,  power or privilege and no single or partial  exercise of any
            such right,  power or privilege by Payee will  preclude any other or
            further  exercise of such right,  power or privilege or the exercise
            of any  other  right,  power or  privilege.  To the  maximum  amount
            permitted by applicable  law, (i) no claim or right of Payee arising
            out of this Note can be discharged by Payee, in whole or in part, by
            a waiver or  renunciation of the claim or right unless in a writing,
            signed by Payee;  (b) no waiver  that may be given by Payee  will be
            applicable  except in the  specific  instance for which it is given;
            and (c) no  notice  to or  demand  on Maker  will be  deemed to be a
            waiver of any  obligation  of Maker or of the right of Payee to take
            further action without notice or demand as provided in this Note.

            Maker acknowledges that this Note and Maker's obligations under this
            Note are,  and  shall at all  times  continue  to be,  absolute  and
            unconditional  in all respects,  and shall at all times be valid and
            enforceable. To the extent permitted by applicable law, Maker hereby
            absolutely,  unconditionally  and irrevocably forever waives any and
            all right to assert any  defense,  set-off,  off-set,  counterclaim,
            cross-claim,  or claim of any nature whatsoever with respect to this
            Note or Maker's obligations hereunder.

      4.2   Notices

            Any notice or  communication  to be given hereunder by any party, to
            the other party shall be in writing and shall be deemed to have been
            given when personally  delivered,  or one day after the date sent by
            recognized  overnight  courier or  transmitted  by facsimile,  which
            transmission by facsimile has been confirmed or 3 (three) days after
            the date sent by registered or certified mail,  postage prepaid,  as
            follows:

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                  If to Maker, addressed to it at:

                  Phase III Medical, Inc.
                  330 South Service Road
                  Suite 120
                  Melville, NY 11747
                  Attn: Mark Weinreb
                  Facsimile Number: (631) 574 4956

                  If to Payee, addressed to:

                  Name: Robert Aholt
                  Address: 20128 Cavern Court
                           Saugus, CA  91390

            Or persons or addresses as may be designated in writing by the party
            to receive such notice.

      4.3   Severability

            If any  provision of this Note is held invalid or  unenforceable  by
            any court of competent  jurisdiction,  the other  provisions of this
            Note will remain in full force and  effect.  Any  provision  of this
            Note held  invalid  or  unenforceable  only in part or  degree  will
            remain in full force and  effect to the  extent not held  invalid or
            unenforceable.

      4.4   Governing Law.

            This  Promissory  Note will be  governed by the laws of the State of
            New York without regard to conflicts of laws principles.

      4.5   Assignment; Parties in Interest

            This Note shall bind Maker and its successors and assigns. This Note
            shall not be assigned or transferred  by Maker,  without the express
            prior  written  consent  of Payee,  and this Note will  inure to the
            benefit   of  Payee  and  his   heirs,   estates,   representatives,
            administrators, successors and assigns.

      4.6   Section Headings, Construction

            The headings of Sections in this Note are  provided for  convenience
            only and will not affect its  construction  or  interpretation.  All
            references  to "Section" or  "Sections"  refer to the  corresponding
            Section or Sections of this Note unless otherwise specified.

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            All words used in this Note will be  construed  to be of such gender
            or number as the circumstances  require.  Unless otherwise expressly
            provided,  the words "hereof" and "hereunder" and similar references
            refer to this Note in its entirety  and not to any specific  section
            or subsection hereof.

      4.7   Savings Clause

            If, at any  time,  the rate of  interest  under  this Note  shall be
            deemed  by any  competent  court  of  law,  governmental  agency  or
            tribunal to exceed the maximum  rate of  interest  permitted  by the
            laws of any applicable  jurisdiction  or the rules or regulations of
            any  regulatory  authority or agency,  then during such time as such
            rate of interest  would be deemed  excessive,  that  portion of each
            interest payment  attributable to that portion of such interest rate
            that  exceeds the maximum  rate of  interest so  permitted  shall be
            deemed a voluntary  prepayment of principal or, if all principal has
            been paid,  that portion of each interest  payment  attributable  to
            that portion of such  interest rate that exceeds the maximum rate of
            interest so permitted shall be promptly refunded to Maker.

      4.8   Waiver of Jury Trial

            MAKER AND PAYEE EACH HEREBY WAIVE,  TO THE FULLEST EXTENT  PERMITTED
            BY  APPLICABLE  LAW,  ANY  RIGHT  IT MAY  HAVE TO A TRAIL BY JURY IN
            RESPECT OF ANY  LITIGATION  DIRECTLY OR  INDIRECTLY  ARISING OUT OF,
            UNDER,  OR IN CONNECTION  WITH,  THIS NOTE, IT BEING AGREED THAT ALL
            SUCH TRAILS  SHALL BE CONDUCTED  SOLELY BY A JUDGE.  MAKER AND PAYEE
            EACH CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF EITHER HAS
            REPRESENTED,  EXPRESSLY OR  OTHERWISE,  THAT THE OTHER WOULD NOT, IN
            THE EVENT OF  LITIGATION,  SEEK TO ENFORCE  THE  FOREGOING  WAIVERS.
            MAKER  AND  PAYEE  EACH  AGREE  AND  ACKNOWLEDGE  THAT  IT HAS  BEEN
            REPRESENTED BY INDEPENDENT  COUNSEL IN CONNECTION  WITH THIS NOTE OR
            BEEN ADVISED THAT IT SHOULD BE REPRESENTED BY INDEPENDENT COUNSEL IN
            CONNECTION  WITH THIS NOTE.  IF MAKER OR PAYEE HAS DECIDED NOT TO BE
            REPRESENTED BY INDEPENDENT  COUNSEL IN CONNECTION WITH THIS NOTE, IT
            IRREVOCABLY  AND  FOREVER  WAIVES  ANY AND ALL  DEFENSES  OR  RIGHTS
            ARISING OUT OF OR RELATED TO SAID DECISION.

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IN WITNESS  WHEREOF,  Maker has executed and delivered  this Note as of the date
first stated above.

PHASE III MEDICAL, INC.


                                    Bye :
                                         --------------------------------
                                    Name: Mark Weinreb
                                    Title: President and Chief Executive Officer

Accepted and agreed to:


-----------------------------------
Payee: Robert Aholt