UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   FORM 10-QSB

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the quarterly period ended March 31, 2003

                   Transition Report under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

             For the transition period from __________ to __________

                          COMMISSION FILE NO. 000-30191

                       KRONOS ADVANCED TECHNOLOGIES, INC.
                       ----------------------------------

             (Exact name of registrant as specified in its charter)

           NEVADA                                        87-0440410
        -------------                                    ----------
(State of other jurisdiction                     (I.R.S. Employer Identification
of incorporation or organization)                          Number)

 464 Common Street, Suite 301, Belmont, MA                       02478
-------------------------------------------                    ----------
 (Address of principal executive offices)                      (Zip Code)


 Registrant's telephone number, including area code:         (617) 993-9965
-----------------------------------------------------      -------------------

(1) Registrant 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

As of May 5, 2003, there were 54,527,565 shares outstanding of the issuer's
common stock.

<PAGE>

                                     PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The following comprise our condensed (unaudited) consolidated financial
statements for the three months and nine months ended March 31, 2003.

<PAGE>

            KRONOS ADVANCED TECHNOLOGIES, INC. (FORMERLY TSET, INC.)
                           CONSOLIDATED BALANCE SHEETS

                                                     MARCH 31,        JUNE 30,
                                                      2003             2002
                                                   (Unaudited)
                                                  --------------   -------------

ASSETS
CURRENT ASSETS
   Cash                                           $      13,555    $     21,510
   Accounts receivable, net                                 500             700
   Prepaids                                              36,453         101,029
                                                  --------------   -------------
             TOTAL CURRENT ASSETS                        50,508         123,239


PROPERTY AND EQUIPMENT                                   64,023          62,723
   Less: Accumulated Depreciation                       (43,571)        (33,348)
                                                  --------------   -------------
             NET PROPERTY AND EQUIPMENT                  20,452          29,375

OTHER ASSETS
   Intangibles                                        2,011,894       2,213,917

TOTAL ASSETS                                      $   2,082,854    $  2,366,531
                                                  ==============   =============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES

   Accrued expenses and payables to directors
     and officers                                 $   1,078,112    $    886,447
   Accounts payable                                     904,815         254,201
   Accrued expenses                                     175,924         100,797
   Deferred revenue                                     148,876               -
   Notes payable, current portion                       428,466         535,700
                                                  --------------   -------------
             TOTAL CURRENT LIABILITIES                2,736,193       1,777,145

LONG TERM LIABILITIES
   Notes payable                                        105,299         225,466
                                                  --------------   -------------

             TOTAL LIABILITIES                        2,841,492       2,002,610

REDEEMABLE WARRANTS                                     805,300         748,500

SHAREHOLDERS' EQUITY
   Common stock, authorized 500,000,000
     shares of $.001 par value                           50,292          43,938
   Capital in excess of par value                    14,897,686      14,371,113
   Deferred equity compensation                               -         (41,668)
   Retained earnings (Accumulated deficit)          (16,511,916)    (14,757,963)
                                                  --------------   -------------
             TOTAL SHAREHOLDERS' EQUITY              (1,563,937)       (384,579)
                                                  --------------   -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $   2,082,854    $  2,366,531
                                                  ==============   =============

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>

            KRONOS ADVANCED TECHNOLOGIES, INC. (FORMERLY TSET, INC.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                     FOR THE THREE MONTHS ENDED     FOR THE NINE MONTHS ENDED
                                                              MARCH 31,                    MARCH 31,
                                                              ---------                    ---------
                                                         2003          2002          2003             2002
                                                     (UNAUDITED)    (UNAUDITED)    (UNAUDITED)    (UNAUDITED)
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>
Sales                                                   $139,737    $        --       $457,899        $65,070

Cost of sales                                            100,719             --        226,022         50,070
                                                     -----------    -----------    -----------    -----------

Gross Profit                                              39,018             --        231,876         15,000

Selling, General and Administrative expenses
   Compensation and benefits                             143,642        141,261        409,376        401,115
   Research and development                               23,655         58,682        102,337        197,516
   Professional services                                 351,511        225,078      1,038,439      1,750,454
   Depreciation and amortization                          70,318         71,674        213,746        215,021
   Facilities                                             25,065         26,680         70,278         95,920
   Other selling general & administrative expenses        68,657         99,576        145,716        225,481
                                                     -----------    -----------    -----------    -----------

Total Selling, General and Administrative expenses       682,848        622,952      1,979,891      2,885,508
                                                     -----------    -----------    -----------    -----------

Net Operating Income (Loss)                             (643,830)      (622,952)    (1,748,015)    (2,870,508)

Other Income / (expense)                                       4             50        108,380          1,537

Interest Expense                                         (46,183)       (34,349)      (114,317)       (69,513)
                                                     -----------    -----------    -----------    -----------

Net Income (Loss) Before Taxes                          (690,008)      (657,250)    (1,753,952)    (2,938,484)

Provision for Taxes                                           --             --             --             --
                                                     -----------    -----------    -----------    -----------

Net Income (Loss) from continuing operations            (690,008)      (657,250)    (1,753,952)    (2,938,484)

Income (Loss) from discontinued operations, net of            --             --             --             --
  income tax of $0
Loss on disposal of discontinued operations, net
  of income tax of $0                                         --             --             --             --
                                                     -----------    -----------    -----------    -----------

Net Income (Loss)                                      $(690,008)     $(657,250)   $(1,753,952)   $(2,938,484)
                                                     ===========    ===========    ===========    ===========

Basic Earnings (Loss) Per Share

   Income (loss) from continuing operations                (0.01)         (0.03)         (0.04)         (0.08)
   Loss from discontinued operations                          --             --             --             --
                                                     -----------    -----------    -----------    -----------
        Net Income (loss)                                 $(0.01)        $(0.03)        $(0.04)        $(0.08)
                                                     ===========    ===========    ===========    ===========
Diluted Earnings (Loss) Per Share

   Income (loss) from continuing operations                (0.01)         (0.03)         (0.04)         (0.08)
   Loss from discontinued operations                          --             --             --             --
                                                     -----------    -----------    -----------    -----------
   Net Income (loss)                                      $(0.01)        $(0.03)        $(0.04)        $(0.08)
                                                     ===========    ===========    ===========    ===========
</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>

            KRONOS ADVANCED TECHNOLOGIES, INC. (FORMERLY TSET, INC.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                     FOR THE NINE MONTHS ENDED
                                                             MARCH 31,
                                                     --------------------------
                                                         2003         2002
CASH FLOWS FROM OPERATING ACTIVITIES                  (UNAUDITED)   (UNAUDITED)
                                                     --------------------------
  NET LOSS FROM CONTINUING OPERATIONS                $(1,753,952)  $(2,938,484)
  ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
    (USED IN) PROVIDED BY OPERATIONS
    Depreciation and amortization                        213,746       215,021
    Common stock issued for compensation/services        112,281       814,532

  CHANGE IN
    Inventory Assets                                           -             -
    Accounts receivable                                      200             -
    Prepaid expenses and other assets                     64,576      (176,502)
    Deferred revenue                                     148,876             -
    Accounts Payable                                     583,376       952,772
    Accrued Expenses and other liabilities               184,643       (56,626)
                                                     --------------------------
          NET CASH USED IN CONTINUING OPERATIONS        (446,254)   (1,189,286)

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of property and equipment                   (1,300)            -
    Investment in patent protection                       (1,500)       15,795
    Investment in discontinued operations                      -       (84,014)
                                                     --------------------------
          NET CASH USED IN INVESTING ACTIVITIES           (2,800)      (68,219)
                                                     --------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Issuance of common stock                             668,500     1,234,607
    Proceeds from short-term borrowings                  218,889             -
    Repayments of short-term borrowings                 (446,290)            -
                                                     --------------------------

          NET CASH PROVIDED BY FINANCING ACTIVITIES      441,099     1,234,607
                                                     --------------------------

NET (DECREASE) INCREASE IN CASH                           (7,955)      (22,898)

CASH

  BEGINNING OF PERIOD                                     21,510        32,619
                                                     --------------------------

  END OF PERIOD                                      $    13,555   $     9,721
                                                     ==========================


Supplemental schedule of non-cash investing and
  financing activities:
  Debt satisfied with stock                          $   206,000   $   100,000
                                                     ==========================

  Note payable issued in satisfaction of accrued
    liability                                        $             $   350,000
                                                     ==========================

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.

<PAGE>

            KRONOS ADVANCED TECHNOLOGIES, INC. (FORMERLY TSET, INC.)
                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                        COMMON STOCK
                                                    ---------------------
                                                                                                                          TOTAL
                                                                                              RETAINED                    SHARE-
                                                                             CAPITAL IN       EARNINGS      DEFERRED      HOLDERS'
                                                                             EXCESS OF      (ACCUMULATED    EQUITY        EQUITY
                                                      SHARES      AMOUNT     PAR VALUE         DEFICIT)   COMPENSATION   (DEFICIT)
                                                    --------------------------------------------------------------------------------
<S>                                                 <C>           <C>        <C>            <C>             <C>         <C>
BALANCE at June 30, 2002                            43,937,907    $43,938    $14,371,113    $(14,757,963)   $(41,668)     $(384,580)

  Shares issued in July 2002 for cash                  150,000        150         26,100                                     26,250

  Shares issued in August 2002 for cash                790,248        790        116,928                                    117,718

  Shares issued in September 2002 for cash             263,141        263         38,769                                     39,032

  Stock options granted at Sept 30, 2002 for
    consulting services                                                            5,674                                      5,674

  Costs associated with equity financing                                        (114,655)                                  (114,655)

  Amortization of deferred equity compensation                                                                15,624         15,624

  Net loss for the quarter ended September 30,
    2002                                                                                        (591,130)                  (591,130)
                                                    --------------------------------------------------------------------------------
BALANCE at September 30, 2002 (Unaudited)           45,141,296    $45,141    $14,443,929    $(15,349,093)   $(26,044)     $(886,067)

  Shares issued in October 2002 for cash             1,750,000      1,750        173,250                                    175,000

  Shares issued in November 2002 for cash              189,884        190         24,810                                     25,000

  Shares issued in December 2002 for cash              350,000        350         34,650                                     35,000

  Shares issued in December 2002 for debt
    reduction                                          306,000        306         33,854                                     34,160

  Stock options granted at December 31, 2002 for
    consulting services                                                            5,225                                      5,225

  Costs associated with equity financing                                         (75,000)                                   (75,000)

  Amortization of deferred equity compensation                                                                15,624         15,624

  Net loss for the quarter ended December 31,
    2002                                                                                        (472,814)                  (472,814)
                                                    --------------------------------------------------------------------------------
BALANCE at December 31, 2002 (Unaudited)            47,737,180    $47,737    $14,640,718    $(15,821,907)   $(10,420)   $(1,143,872)

  Shares issued in January 2003 for cash             1,000,000      1,000         99,000                                    100,000

  Shares issued in February 2003 for cash              850,000        850         84,150                                     85,000

  Shares issued in March 2003 for cash                 704,811        705         73,263                                     73,968

  Costs associated with equity financing                                          (1,400)                                    (1,400)

  Stock options granted at March 31, 2003 for
    consulting services                                                            1,955                                      1,955

  Amortization of deferred equity compensation                                                                10,420         10,420

  Net loss for the quarter ended March 31, 2003                                                 (690,008)                  (690,008)
                                                    --------------------------------------------------------------------------------
BALANCE at March 31, 2003 (Unaudited)               50,291,991    $50,292    $14,897,686    $(16,511,915)   $      -    $(1,563,937)
                                                    ================================================================================
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.

<PAGE>

               KRONOS ADVANCED TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - ACCOUNTING MATTERS

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly,  they do not  include  all the  information  and notes  required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of  management,  all  adjustments  necessary  to present  fairly the
information  set forth  therein have been  included.  Operating  results for the
three-month  and  nine-month  periods  ended March 31, 2003 are not  necessarily
indicative  of the results  that may be  experienced  for the fiscal year ending
June 30, 2003.

These  financial  statements  are  those  of the  Company  and its  wholly-owned
subsidiaries.  All significant inter-company accounts and transactions have been
eliminated in the preparation of the consolidated financial statements.  Aperion
Audio, Inc. is disclosed as discontinued operations from July 1, 2001 to June 7,
2002 (the date of disposal) in these financial statements.

The  accompanying  financial  statements  should be read in conjunction with the
Kronos  Advanced  Technologies,  Inc. Form 10-KSB for the fiscal year ended June
30, 2002 filed on  September  28,  2002,  the Form 10-QSB for the quarter  ended
September  30, 2002 filed on  November  14,  2002,  and the Form  10-QSB for the
quarter  ended  December  31,  2002 filed on February  14,  2003.  This  filing,
including  the  accompanying  financial  statements,  have not been  reviewed by
independent certified public accountants.

RECENT  ACCOUNTING  PRONOUNCEMENTS.  In August 2002,  the  Financial  Accounting
Standards Board issued SFAS No. 146, "Accounting for Costs Associated with Exit,
or  Disposal  Activities"  ("SFAS  146").  This  Statement  addresses  financial
accounting and reporting for costs associated with exit or disposal  activities.
The Company believes the adoption of SFAS 146 will have no significant impact on
its  financial  statements.  This  statement is  effective  for exit or disposal
activities initiated after December 31, 2002.

In December 2002, the Financial  Accounting Standards Board issued SFAS No. 148,
"Accounting  for   Stock-Based   Compensation--Transition   and   Disclosure--An
Amendment of SFAS No. 123" ("SFAS  148").  This  Statement  amends SFAS No. 123,
"Accounting for Stock-Based  Compensation"  ("SFAS 123"), to provide alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based employee  compensation.  In addition,  this Statement
amends the disclosure  requirements of SFAS 123 to require prominent disclosures
in both annual and interim  financial  statements about the method of accounting
for  stock-based  employee  compensation  and the effect of the  method  used on
reported  results.  The Company  believes  the adoption of SFAS 148 will have no
significant impact on its financial statements.  This statement is effective for
interim  periods  beginning  after December 15, 2002 and for fiscal years ending
after December 15, 2002.


NOTE 2 -- INCOME TAXES

The  composition of deferred tax assets and the related tax effects at March 31,
2003 and June 30, 2002 are as follows:

                                              March 31, 2003
                                                (Unaudited)        June 30, 2002
                                              --------------       -------------

Benefit from carryforward of capital and       $3,773,288           $3,115,886
  net operating losses

Other temporary differences                       221,381              220,332
Less:
  Valuation allowance                          (3,994,669)          (3,376,218)

Net deferred tax asset                         $        -          $         -
                                               ===========         ============

The other temporary differences shown above relate primarily to gain and loss on
discontinued  operations,  impairment  reserves for intangible  assets,  accrued
expenses,  and accrued and deferred  compensation.  The  difference  between the
income tax benefit in the  accompanying  statements of operations and the amount
that would  result if the U.S.  Federal  statutory  rate of 34% were  applied to
pre-tax loss is as follows:

<PAGE>

<TABLE>
<CAPTION>
                                                            MARCH 31, 2003
                                                              (UNAUDITED)            JUNE 30, 2002
                                                          ---------------------  ----------------------
                                                                          % OF                   % OF
                                                                         PRE-TAX                PRE-TAX
                                                            AMOUNT        LOSS     AMOUNT        LOSS
                                                          ------------   ------- -----------    --------
<S>                                                       <C>           <C>     <C>       <C>   <C>
Benefit for income tax at federal statutory rate          $ 596,344      34.0%   $1,377,158      34.0%
Benefit for income tax at state statutory rate               34,960       2.0%       94,927       2.0%
Non-deductible expenses                                     (12,853)     (0.7)%    (111,274)     (4.0)%
Acquired NOL and other                                            -       0.0%      248,489       8.9%
Increase in valuation allowance                            (618,451)    (35.3)%  (1,609,296)    (40.9)%
                                                          ----------    ------- ------------    -------
                                                          $       -       0.0%  $         -       0.0%
                                                          ==========    ======= ============    =======
</TABLE>


The non-deductible expenses shown above related primarily to the amortization of
intangible  assets and to the accrual of stock  options for  compensation  using
different valuation methods for financial and tax reporting purposes.

The Company  has filed all of its  federal and state  income tax returns for all
years  through June 30, 2002.  The Company is current on all income tax filings.
At March 31, 2003, for federal income tax and alternative  minimum tax reporting
purposes,  the  Company has  approximately  $7.0  million of unused  Federal net
operating  losses,  $2.3  million of capital  losses and $4.8  million of unused
State net operating  losses  available  for  carryforward  to future years.  The
benefit from  carryforward  of such losses will expire in various  years between
2006 and 2022 and could be  subject  to  limitations  if  significant  ownership
changes occur in the Company.


NOTE 3 - SEGMENTS OF BUSINESS

The  Company  operates  principally  in one  segment of  business:  The  Company
licenses,  manufactures  and distributes air movement and  purification  devices
utilizing the KronosTM  technology.  All other segments have been disposed of or
discontinued.  For the nine months  ended March 31, 2003,  the Company  operated
only in the U.S.


NOTE 4 - EARNINGS PER SHARE

Weighted average shares  outstanding used in the earnings per share  calculation
were  49,132,902  and  37,563,025  for the three months ended March 31, 2003 and
2002, respectively and 46,877,432 and 35,836,735 for the nine months ended March
31, 2003 and 2002, respectively.

As of March 31,  2003,  there were  outstanding  options to purchase  10,187,775
shares of the  Company's  common  stock and  outstanding  warrants  to  purchase
2,300,000 shares of the Company's common stock.  These options and warrants have
been  excluded  from the  earnings  per  share  calculation  as their  effect is
anti-dilutive. As of March 31, 2002, there were outstanding options and warrants
to purchase  6,563,575  and  1,900,000  shares,  respectively,  of the Company's
common  stock.  These  options  have been  excluded  from the earnings per share
calculation as their effect is anti-dilutive.


NOTE 5 - DISCONTINUED OPERATIONS

The  Company's  consolidated  financial  statements  for all  periods  have been
reclassified to report separately results of operations and operating cash flows
from continuing operations and the discontinued operations. The net revenues are
included in the financial  statements under Net Income (Loss) from  Discontinued
Operations.  Operating  results of  discontinued  operations for the nine-months
ended March 31, 2002 are as follows:

                  OPERATING RESULTS OF DISCONTINUED OPERATIONS:

                              OPERATING RESULTS OF
                            DISCONTINUED OPERATIONS:
                        ---------------------------------
                            FOR THE NINE MONTHS ENDED
                                   MARCH 31,
                        ---------------------------------
                                      2002
                        ---------------------------------

                                  APERION AUDIO
                        ---------------------------------
<PAGE>

Sales                                                  $733,183
Cost of sales                                          (273,282)
Depreciation and amortization                            (9,927)
General and administrative                             (545,964)
                                                    ------------
Operating income (loss)                                 (95,990)


Other income                                             22,217
Interest expense                                        (25,584)
Provision for future operating losses                    79,485
Minority interest                                        19,871
                                                    ------------
Income (Loss) pre-tax                                         0

Income taxes (benefits)                                       -
                                                    ------------

Loss from discontinued operations                            $0
                                                    ============


NOTE 6 - NOTES PAYABLE

The Company had the following notes payable  obligations at December 31 and June
30, 2002:

                                           MARCH 31, 2003    JUNE 30, 2002
                                           --------------    -------------
   (1) Obligations to Fusion Capital          $      --       $  123,000
   (2) Obligation to Aperion Audio               95,466          200,466
   (3) Obligation to Jeff Wilson                212,890          360,000
   (4) Obligation to the Eagle Rock Group       123,000           70,000
   (5) Obligations to others                     45,000            7,700
   (6) Obligations under capital leases          57,409               --
                                              ---------       ----------
       Total Notes Payable                      533,765          761,166
Current portions:
       Obligations to Fusion Capital                 --          123,000
       Obligation to Aperion Audio               95,466          205,000
       Obligation to Jeff Wilson                165,000          130,000
       Obligation to the Eagle Rock Group       123,000           70,000
       Obligations to others                     45,000            7,700
                                              ---------       ----------
       Total current portion                    428,466          535,700
                                              ---------       ----------
Total long term obligations net of
       current portion                          105,299          225,466
                                              =========       ==========

(1)  This is a non-interest  bearing demand  obligation and is only  outstanding
     until  Fusion  Capital  purchases  enough  common stock from the Company to
     eliminate the advance position.

(2)  This is a non-interest bearing note with monthly payments of $15,000.

(3)  This note is to a former  officer and director  and bears  interest at 12%.
     The note  calls  for  quarterly  payments  of at least  $10,000  until  the
     principal and interest are paid in full.

(4)  This note bears  interest at a rate of 12%. The payment  terms are interest
     only and the principal was due on March 1, 2003. The Note was  subsequently
     paid off in full in May 2003.

(5)  This is a non-interest bearing obligation with monthly payments of $5,000.

(6)  See Note 7 - Capital Leases

<PAGE>

NOTE 7 - CAPITAL LEASES


The Company entered into a capital lease for the purpose of purchasing equipment
used  in  the  research  center.  Certain  Officers  of the  Company  personally
guaranteed  the capital lease if the Company does not full fill its terms of the
lease  obligations.  The following are the details of the assets leased at March
31,  2003 and June 30,  2002 and the  future  minimum  lease  payments  for such
leases.

                                 CAPITAL LEASES
                    GROSS ASSETS AND ACCUMULATED AMORTIZATION
--------------------------------------------------------------------------------

                                           March 31,            June 30,
                                             2003                2002
                                          -----------           --------
Type of property

     Electronic equipment                 $  32,121              $   -
     Software                                25,288                  -
     Other                                    5,167                  -
                                          ---------              -----
         Total                               62,576                  -
Less:  Accumulated amortization                   -                  -
                                          ---------              -----
     Capital leases, net                  $  62,576              $   -
                                          =========              =====


                        MINIMUM FUTURE LEASE PAYMENTS AND
                PRESENT VALUES OF THE NET MINIMUM LEASE PAYMENTS

 Year ended
 June 30,
--------------------------- -------------------------------------------------

           2003                                                  $  9,302
           2004                                                    23,256
           2005                                                    23,256
           2006                                                    18,604

                                                                 --------
        Total minimum lease payments                               74,418

 Less:  Executory costs                                               674
                                                                 --------

        Net minimum lease payments                                 73,744

 Less:  Imputed interest                                           11,168

                                                                 --------
        Present value of net minimum lease payments              $ 62,576
                                                                 =========


NOTE 8 - CONSULTING AGREEMENTS

In July 2001, the Company signed a six-month  agreement to utilize the strategic
planning and business plan execution  services of The Eagle Rock Group, LLC. The
Eagle Rock Group was  retained  by Kronos  Advanced  Technologies  team to fully
develop and capitalize the Kronos(TM) technology. Pursuant to the agreement that
the Company  entered into with The Eagle Rock Group,  the Company  issued to The
Eagle  Rock  Group a  ten-year  warrant  granting  them the  right  to  purchase
1,400,000 shares of the Company's common stock at an exercise price of $0.68 per
share. The warrants immediately vested and are non-forfeitable.  The warrant was
valued  at  $686,000  using the  Black-Scholes  option  valuation  model and was
initially  recorded as deferred equity  compensation  and amortized into current

<PAGE>

period  professional  services  expense at a rate of $137,200 per month over the
term of the  agreement.  Amortization  for the  year  ended  June  30,  2002 was
$686,000.   The  shares  underlying  the  warrant  have  piggy-back  and  demand
registration  rights,  as well as  subscription  rights  in the  event  that the
Company issues any rights to all of its  stockholders to subscribe for shares of
the Company's common stock. In addition,  the warrant contains redemption rights
in the event that the Company enters into a transaction that results in a change
of control of the Company.

In October 2001, the Company entered into a 15-month  consulting  agreement with
Joshua B.  Scheinfeld and Steven G. Martin,  principals of Fusion  Capital,  for
consulting  services with respect to operations,  executive  employment  issues,
employee  staffing,  strategy,  capital structure and other matters as specified
from time to time.  As  consideration  for their  services,  the Company  issued
360,000  shares  of its  common  stock.  In  accordance  with  EITF  96-18,  the
measurement  date was established as the contract date of October 1, 2001 as the
share grant was  non-forfeitable  and fully  vested on that date.  The stock was
valued on that date at $0.28 a share (the closing price for the Company's common
stock on the  measurement  date).  The stock  issuance  has been  recorded  as a
prepaid  consulting  fee and was being  amortized  to  Professional  Fee Expense
ratably over the 15-month term of the contract.  During the three and nine month
periods  ending March 31, 2003,  the Company  recognized  professional  services
expenses of $0 and $40,000,  respectively  under this  agreement  compared  with
$20,000 and $40,000 for the three and nine month periods ended March 31, 2002.

In March 2002, the Company entered into a 12-month consulting agreement with The
Eagle Rock Group.  Pursuant to the agreement,  the Company issued a note for the
outstanding balance of $120,000 due to The Eagle Rock Group. The note was due on
March 1, 2003 and beared  interest  at the rate of 12% per  annum.  The Note was
subsequently  paid off in full in May 2003.  The Company  also granted The Eagle
Rock Group a 10 year warrant for up to 2,000,000  shares.  The warrant  contains
redemption  rights in the event that the Company enters into a transaction  that
results in a change of control of the  Company.  Of this,  500,000  shares  were
earned over a period of 12 months.  The  exercise  price of the initial  500,000
warrants is $0.42 for 250,000  warrants  and $0.205  (the  closing  price of the
Company's  common stock on March 1, 2002) for 250,000  warrants.  These warrants
are irrevocable and are fully vested.  The measurement  date is March 1, 2002 as
the  warrants  are fully  vested and  non-forfeitable  on that  date.  The value
assigned to these warrants is $62,500 and was determined using the Black-Scholes
option valuation model. The 500,000 warrants are for general consulting services
for a 12-month  period.  The $62,500 was  expensed  ratably over the term of the
consulting  contract.  The  remainder  of the  shares  could  have  been  earned
contingent  upon the occurrence of various  events that did not occurred  before
the contract expired, with one exception. In October 2002, 400,000 warrants were
earned when the Company secured a contract with  consumer-oriented  distribution
organization  HoMedics.  The  exercise  price for these  warrants is $0.145 (the
closing price of the Company's  common stock on October 22, 2003. These warrants
are irrevocable and are fully vested.  The measurement  date is October 22, 2002
as the  warrants are fully vested and  non-forfeitable  on that date.  The value
assigned to these warrants is $56,800 and was determined using the Black-Scholes
option valuation model. The Company recognized this amount as consulting expense
in the quarter ended December 31, 2002.  During the three and nine month periods
ending March 31, 2003, the Company recognized  professional services expenses of
$10,000 and $98,000,  respectively,  under these agreements compared with $5,000
and $691,000 for the comparable periods in the prior year.


NOTE 9 - SUBSEQUENT EVENTS

In May  2003,  Kronos  entered  into an  agreement  with a  strategic  customer,
HoMedics,  Inc.,  for $3.5 million in secured debt  financing.  $2.5 million was
advanced to Kronos upon  execution  of the  agreement  and $1.0  million will be
advanced  upon the start of production  for the  Kronos-based  air  purification
product line to be marketed and distributed by HoMedics. These loans are secured
by a  lien  on  substantially  all  of  the  Kronos  assets,  including  Kronos'
intellectual property. As previously announced, Kronos Air Technologies, Inc., a
wholly owned  subsidiary of Kronos  Advanced  Technologies,  Inc.,  and HoMedics
executed  a  multiyear,   multi-million-dollar   licensing  agreement  to  bring
Kronos(TM)  proprietary  technology to the consumer under an exclusive agreement
for North American,  Australian and New Zealand retail  distribution  rights for
next  generation  consumer  air  movement  and  purification  products  based on
patented Kronos(TM) technology.

This funding  should assist  Kronos to rapidly  complete its  transition  from a
development  company to an operating entity generating revenue from sale of mass
produced  Kronos-based  products.  The terms of the debt  include an annual cash
interest rate of six percent and a five year term with no payments  required for
the first twelve  months.  Proceeds  will be used by Kronos to meets its current
commitments,  including  customer  commitments  in the  consumer,  military  and
transportation  marketplaces,  as  well as  expansion  into  additional  revenue
generating  applications  for the Kronos  technology.  In  connection  with this
transaction, Kronos issued a warrant for 6,746,171 shares of Kronos common stock
at an exercise price of $0.10 per share. Such warrant vested immediately. Kronos
also issued an additional warrant for 6,746,171 shares of Kronos common stock at
an  exercise  price of $0.10 per  share.  The second  warrant  is not  presently
exercisable and becomes  exercisable only if (1) the Company does not prepay the
entire  amount of principal  and interest due under the Notes by November  2005;
(2) the Company goes in default under any of the  investment  documents,  or (3)
Kronos  does not earn  prior to  November  2005,  revenues  (as  defined  in the
agreement)  in an  aggregate  amount equal to or greater  than  $3,500,000.  The
warrants  are  subject  to certain  anti-dilution  provisions.  A more  detailed
description  of the  transaction is available in a Report on Form 8-K filed with
the Securities and Exchange Commission.

<PAGE>

Kronos and  HoMedics  plan to expand  their  relationship  into  other  consumer
products on a global basis. Kronos and HoMedics will seek to market and sell the
Kronos-based  HoMedics  air  purification  product  line  globally.  Kronos  and
HoMedics will also seek to develop,  market and sell globally other Kronos-based
products.

In May 2003, the Company  executed a Acquisition  and  Settlement  Agreement and
Mutual  Release  to  acquire  intellectual  property  rights  from High  Voltage
Integrated,  LLC and settled outstanding  disputes with Ingrid Fuhriman;  Robert
Fuhriman II; Alan  Thomson,  High  Voltage  Integrated,  LLC and  Emprise,  LLC.
Intellectual  Property  rights acquired  include all technology  rights owned by
High  Voltage  Integrated,   LLC  as  related  to  "Electron  Wind  Technology",
specifically  including rights to "micro technology,  computers and fuel cells".
Kronos Air Technologies,  Inc., Kronos Advanced Technologies,  Inc. and Dr. Igor
Krichtafovitch  settled all disputes  known and unknown  with former  Kronos Air
Technologies Inc.  management Ingrid Fuhriman;  Robert Fuhriman II; Alan Thomson
and with High Voltage Integrated, LLC and Emprise, LLC.

In May  2003,  the  Company's  Chief  Technology  Officer  and  inventor  of the
Kronos(TM)  technology,  Dr.  Igor  Krichtafovitch,  agreed  with the Company to
release all his ownership and intellectual  property rights held by High Voltage
Integrated,  LLC. In exchange for this release, the Company executed a two year,
renewable  Employment  Agreement  with  Dr.   Krichtafovitch  and  a  settlement
agreement that included 500,000 restricted shares of common stock.

In May 2003 at the  request of the U.S.  Army,  Kronos  re-submitted  a Phase II
Small Business  Innovation  Research proposal for review in 2003. Phase I of the
contract  was  worth  $120,000  in  funding  to  investigate   and  analyze  the
feasibility  of  the  Kronos(TM)  technology  to  reduce  humidity  in  heating,
ventilation and air conditioning  (HVAC) systems.  Dehumidification is essential
to making HVAC systems more energy efficient.  Phase II of the contract is worth
up to $730,000 in additional  funding for product  development and testing.  The
Phase II proposal was  submitted  after Kronos  completed  additional  prototype
testing requested by the U.S. Army.


NOTE 10 - REALIZATION OF ASSETS

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplate  continuation  of the  Company as a going  concern.  The Company has
sustained losses from operations in recent years, and such losses have continued
through the current year ended June 30, 2002. In addition, the Company has used,
rather than provided cash in its operations.  The Company is currently using its
resources to raise capital  necessary to complete research and development work,
and to provide for its working capital needs.

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the asset amounts  shown in the  accompanying  balance sheet is
dependent upon continued  operations of the Company,  which in turn is dependent
upon the Company's  ability to meet its financing  requirements  on a continuing
basis, to maintain  present  financing and to succeed in its future  operations.
The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of  recorded  asset  amounts or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue in existence.

Management  has taken the  following  steps with  respect to its  operating  and
financial requirements,  which it believes are sufficient to provide the Company
with the ability to continue in existence:

1. In  December  2001,  Kronos Air  Technologies  was  awarded an SBIR  contract
sponsored by the U.S. Army. This contract is potentially worth up to $850,000 in
product development and testing support for Kronos Air Technologies.  Phase I of
the  contract  was worth  $120,000  in funding to  investigate  and  analyze the
feasibility  of  the  Kronos(TM)  technology  to  reduce  humidity  in  heating,
ventilation and air conditioning  (HVAC) systems.  Dehumidification is essential
to making HVAC systems more energy efficient.  Phase II of the contract is worth
up to $730,000 in additional funding for product development and testing. In May
2003 at the request of the U.S. Army,  the Company  resubmitted a detailed Phase
II proposal for review in 2003.

2. In November 2002,  Kronos Air  Technologies,  Inc. and the United States Navy
executed a Small Business  Innovation  Research Phase II contract to develop and
demonstrate an advanced distributive air management system based on the patented
Kronos(TM)  technology.  The 24-month  contract is worth $581,000 with an option
for an additional $144,000 in funding.

3. In August 2002, we entered into a new Common Stock  Purchase  Agreement  with
Fusion.  Pursuant to the common stock  purchase  agreement,  Fusion  Capital has
agreed to purchase on each trading day during the term of the agreement, $10,000
of our common  stock or an aggregate  of $6.0  million.  The $6.0 million of our
common stock is to be purchased over a 30-month  period,  subject to a six-month
extension or earlier  termination at our sole  discretion and subject to certain
events.  The  purchase  price of the shares of common stock will be equal to the
lesser of (i) the lowest price of our common stock on the purchase date; or (ii)
the  average of the three (3) lowest  closing  sale  prices of our common  stock
during the twelve (12) consecutive  trading days prior to the date of a purchase
by Fusion Capital.  However,  there can be no assurance of how much cash we will
receive, if any, under the common stock purchase agreement with Fusion Capital.

4. In October  2002,  Kronos Air  Technologies,  Inc.,  and HoMedics  USA,  Inc.
executed  a  multiyear,   multi-million-dollar   Licensing  Agreement  to  bring

<PAGE>

Kronos(TM)  proprietary  technology to the consumer.  The agreement provides for
exclusive North American,  Australian and New Zealand retail distribution rights
for next  generation  consumer air movement and  purification  products based on
patented Kronos(TM)  technology.  The initial term of the agreement is three and
one half years with the option to extend the agreement for six additional years.
Kronos  will be  compensated  through an initial  royalty  payment  and  ongoing
quarterly  royalty  payments  based on a percentage of sales.  HoMedics will pay
minimum  royalty  payments of at least $2 million  during the  initial  term and
on-going  royalty  payments  to extend the  agreement.  Kronos  will retain full
rights to all of its intellectual property.

5. In November 2002, Kronos Air Technologies and HoMedics executed a Development
Agreement to provide Kronos with the financial  resources  necessary to complete
commercialization  of the  Kronos(TM)-based  consumer  product  line.  Kronos is
working with  HoMedics and  HoMedics'  engineers  and  designers to complete the
product line for sales and distribution.

6. In January 2003, Kronos extended its work into the transportation industry by
signing a Development  and  Acquisition  Agreement  with a premier  business jet
manufacturer.  The Kronos(TM)  devices will be designed and manufactured to meet
all  FAA   safety   standards,   including   environmental,   flammability   and
electromagnetic interference (EMI).

7. In May 2003,  Kronos  entered  into an agreement  with a strategic  customer,
HoMedics USA, Inc., for $3.5 million in secured debt financing. $2.5 million was
advanced to Kronos upon  execution  of the  agreement  and $1.0  million will be
advanced  upon the start of production  for the  Kronos-based  air  purification
product line to be marketed and distributed by HoMedics. These loans are secured
by a lien on substantially all of Kronos' assets, including Kronos' intellectual
property. As previously announced, Kronos Air Technologies, Inc., a wholly owned
subsidiary  of Kronos  Advanced  Technologies,  Inc.,  and  HoMedics  executed a
multiyear,   multi-million-dollar   licensing   agreement  to  bring  Kronos(TM)
proprietary  technology to the consumer  under an exclusive  agreement for North
American,  Australian  and New  Zealand  retail  distribution  rights  for  next
generation  consumer air movement and  purification  products  based on patented
Kronos(TM) technology.


NOTE 11 - COMMITMENTS AND CONTINGENCIES

None.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

INTRODUCTORY STATEMENTS

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

This filing contains forward-looking statements, including statements regarding,
among other things:  (a) the growth  strategies of Kronos Advanced  Technologies
(the "Company" or "Kronos");  (b) anticipated trends in our Company's  industry;
(c) our Company's  future  financing  plans;  and (d) our  Company's  ability to
obtain financing and continue operations. In addition, when used in this filing,
the  words  "believes,"  "anticipates,"  "intends,"  "in  anticipation  of," and
similar words are intended to identify certain forward-looking statements. These
forward-looking  statements are based largely on our Company's  expectations and
are subject to a number of risks and uncertainties, many of which are beyond our
Company's   control.   Actual  results  could  differ   materially   from  these
forward-looking  statements  as a result of changes in trends in the economy and
our Company's  industry,  reductions in the  availability of financing and other
factors.  In light of these risks and  uncertainties,  there can be no assurance
that the forward-looking statements contained in this filing will in fact occur.
Our Company does not undertake any obligation to publicly release the results of
any revision to these forward-looking statements that may be made to reflect any
future events or circumstances.

GENERAL

Kronos  Advanced  Technologies,  Inc. is a high  technology  industrial  company
focused on  developing,  marketing and selling  products  based on the Company's
proprietary  air  movement  and  purification  technology.  Kronos  is  actively
commercializing its technology across multiple markets.

Kronos(TM) device can be either used as a standalone product or can be embedded.
Standalone products are  self-contained;  the user would simple need to plug the
Kronos(TM)  device into a wall outlet to obtain air  filtration  for their home,
office or hotel room. Embedded applications of the Kronos(TM) technology require
the  technology  be added into  another  system  such as a building  ventilation
system for more efficient air movement and filtration or into a piece of medical
equipment to replace the cooling fan.

In December  2002,  the  shareholders  approved an  amendment to our Articles of
Incorporation for a name change of our Company to Kronos Advanced  Technologies,
Inc. (f/k/a TSET, Inc.). Kronos trades under the ticker symbol KNOS.

TECHNOLOGY   DESCRIPTION  AND  BENEFITS.   The  Kronos(TM)  technology  combines
state-of-the-art  high voltage  electronics and electrodes into an efficient but
simple  electrical  device.  As  a  result  of  this  combined   technology,   a
Kronos(TM)-based  device can both move and clean air without  any moving  parts.
Kronos(TM)  devices are  versatile,  energy- and  cost-efficient  and capable of
multiple  design  forms.  Kronos(TM)  devices can be made into any shape or size
and,  therefore,  have immediate potential to be used as a standalone product or
to replace a range of HVAC products  from low end  mini-splits  for  residential
usage to high end HEPA filtration systems for operating and manufacturing  clean
rooms.

The proprietary  Kronos(TM)  technology involves the application of high voltage
management  across paired  electrical grids to create an ion exchange that moves
and purifies air. Kronos(TM) technology has numerous,  valuable characteristics.
It moves  air and  gases at high  velocities  while  removing  odors,  smoke and
particulates and killing pathogens,  including bacteria and mold. The technology
is cost-effective and is more energy efficient than current  alternative fan and
filter (including HEPA filter and ultraviolet light based) technologies.

Many of the scientific  claims of the Kronos(TM)  technology have been validated
by  the  U.S.  government  and  multi-national  companies,  including  the  U.S.
Department  of  Energy,  the  U.S.  Department  of  Defense,  General  Dynamics,
Underwriters Laboratory, and Intel.

Independent  laboratory  testing has verified  the  purification  capability  of
Kronos(TM) technology.  Tests conducted at MicroTest Laboratories and at the New
Hampshire Materials  Laboratory  demonstrated HEPA Clean Room Class 1000 quality
particulate  reduction  and up to 95%  reduction of hazardous  gases (in one air
pass through the Kronos(TM)  system),  including numerous  contaminants found in
cigarette smoke.

PATENT AND  INTELLECTUAL  PROPERTY.  In January  2003,  Kronos  received  formal
notification  from the United States Patent and Trademark Office indicating that
its application  entitled  Electrostatic Fluid Accelerator has been examined and
allowed for  issuance as a U.S.  patent  (#6,504,308).  The patent will  provide
protection  for key  aspects of  Kronos'(TM)  technology  until late in 2019.  A
number of corresponding  applications have been filed and are pending outside of
the United States. Kronos' Chief Technology Officer, Dr. Igor Krichtafovitch, is
the lead inventor of this proprietary technology.

This patent is for the first in a series of patent and patent  applications  now
pending with the U.S. Patent and Trademark Office addressing  various aspects of
the Kronos' platform. In addition to the Electrostatic Fluid Accelerator patent,
five additional patent applications have been filed for, among other things, the

<PAGE>

control and management of  Electrostatic  Fluid  Acceleration.  These additional
patent applications are awaiting examination by the Patent Office. Each of these
patent  applications is directed towards Kronos'  innovative  technology used to
move, control and filter air  electronically,  without the use of fans or moving
parts.

STANDALONE PLATFORM.

HOMEDICS CONTRACT. In October 2002, Kronos Air Technologies,  Inc., and HoMedics
USA,  Inc.  executed a multiyear,  multi-million-dollar  Licensing  Agreement to
bring Kronos(TM)  proprietary technology to the consumer. The agreement provides
for exclusive  North  American,  Australian and New Zealand retail  distribution
rights for next generation consumer air movement and purification products based
on patented  Kronos(TM)  technology.  In May 2003, Kronos and HoMedics agreed to
negotiate  the  expansion  of  our  relationship  into  additional  Kronos-based
stand-alone  consumer  products,   including  fans,  heaters,   humidifiers  and
dehumidifiers.

The initial term of the agreement is three and one half years with the option to
extend the  agreement  for six  additional  years.  Kronos  will be  compensated
through an initial royalty payment and ongoing  quarterly royalty payments based
on a percentage of sales. HoMedics will pay minimum royalty payments of at least
$2 million during the initial term and on-going  royalty  payments to extend the
agreement   indefinitely.   Kronos  will  retain  full  rights  to  all  of  its
intellectual property.

HoMedics  commitment includes a  multi-million-dollar  marketing and advertising
campaign to promote the  Kronos(TM)-based  product  line.  The products  will be
manufactured and distributed by HoMedics.  HoMedics currently  distributes their
products  through major  domestic  retailers,  including  Wal-Mart,  Home Depot,
Sears,  Bed Bath & Beyond,  and Linens 'N Things.  Kronos will  manufacture  and
provide HoMedics with Kronos'(TM) proprietary electronics.

In November 2002,  Kronos Air Technologies  and HoMedics  executed a Development
Agreement to provide Kronos with the financial  resources  necessary to complete
commercialization  of the  Kronos(TM)-based  consumer  product  line.  Kronos is
working with HoMedics and HoMedics'  engineers,  designers and  manufacturers to
complete the product line for sales and distribution in 2003.

EMBEDDED PLATFORM

U.S.  NAVY SBIR  CONTRACTS.  The U.S.  Department  of Defense and  Department of
Energy have provided Kronos Air  Technologies  with various grants and contracts
to  develop,   test  and  evaluate  the   Kronos(TM)   technology  for  embedded
applications.   Kronos  has  developed   several   commercial   and   industrial
applications,  including  the  retrofit of berthing fan systems and embedded air
movement systems for U.S. Navy Aegis Class destroyers.  In November 2002, Kronos
executed an agreement with the U.S. Navy to develop a new ventilation system for
naval ships.  Working under a Small Business Innovation  Research contract,  the
Company  is in  Phase  II  (commercialization  phase)  of this  contract,  which
provides Kronos with up to an additional $725,000 of developmental  funding over
the next 24 months.

During Phase II, Kronos shall develop and demonstrate a set of fully  controlled
devices  that  represent a "cell" of an  advanced  distributive  air  management
system with medium  capacity  airflow in a U.S.  Navy  unique  environment.  The
"cell"  will be designed to be easily  adjustable  to a variety of  applications
such as duct  size,  airflow  requirements,  and air  quality.  The goal of this
development  work is to significantly  reduce or replace  altogether the current
HVAC air handling systems on naval ships.

As part of its air management system,  Kronos intends to develop and test an air
filtration mechanism capable of performing to HEPA quality standards. We believe
that  Kronos(TM)  devices could  replace  current HEPA filters with a permanent,
easily cleaned,  low-cost solution.  The U.S. Navy unique  environment  includes
shock exposure, vibration, Electromagnetic Interference/Compatibility (EMI/EMC),
and salt spray.  Kronos(TM)  devices  will be tested and built to meet  specific
Navy  standards.  Testing  shall  include  assessments  for system  performance,
including control techniques, noise levels, acquisition and lifecycle costs.

We  believe  that  during  the  option  portion  of  the  contract,   Kronos(TM)
technology's  ability to kill bacteria and other pathogens will be confirmed and
expanded to a wide range of pathogens for space  disinfection and  bio-terrorist
attacks. A unique ability of the Kronos(TM)  technology is to kill all or almost
all  airborne   pathogens   regardless  of  their  nature,   genetic  structure,
robustness, or method of delivery.

U.S. ARMY SBIR CONTRACT.  In December 2001,  Kronos Air Technologies was awarded
an SBIR contract  sponsored by the U.S. Army. This contract is potentially worth
up to  $850,000  in  product  development  and  testing  support  for Kronos Air
Technologies.  Phase  I of  the  contract  was  worth  $120,000  in  funding  to
investigate and analyze the  feasibility of the Kronos(TM)  technology to reduce
humidity  in  heating,   ventilation  and  air   conditioning   (HVAC)  systems.
Dehumidification  is essential  to making HVAC  systems  more energy  efficient.
Phase II of the  contract  is worth up to  $730,000  in  additional  funding for
product  development  and testing.  In May 2003 at the request of the U.S. Army,
the Company resubmit a detailed Phase II proposal for review.

PREMIER  BUSINESS JET CONTRACT.  In January 2003,  Kronos extended its work into
the transportation  industry by signing a Development and Acquisition  Agreement
with a premier business jet manufacturer. The Agreement was the direct result of
initial  prototype  development  work performed by the Kronos Research Team with

<PAGE>

input from the  customer in 2002.  The  Kronos(TM)  devices will be designed and
manufactured  to  meet  all  FAA  safety  standards,   including  environmental,
flammability and  electromagnetic  interference (EMI). The Company has initiated
the next  phase of  design  and  development  based on the  customer's  specific
product application requirements.

CRITICAL ACCOUNTING POLICIES

USE OF ESTIMATES.  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and disclosures of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

ALLOWANCE FOR DOUBTFUL  ACCOUNTS.  We provide a reserve  against our receivables
for estimated losses that may result from our customers' inability to pay. These
reserves  are  based on  potential  uncollectible  accounts,  aged  receivables,
historical  losses and our  customers'  credit-worthiness.  Should a  customer's
account  become  past due,  we  generally  will place a hold on the  account and
discontinue  further  shipments  and/or  services  provided  to  that  customer,
minimizing further risk of loss.

VALUATION  OF  GOODWILL,   INTANGIBLE  AND  OTHER  LONG-LIVED   ASSETS.  We  use
assumptions in establishing  the carrying value,  fair value and estimated lives
of our long-lived  assets and goodwill.  The criteria used for these evaluations
include management's estimate of the asset's ability to generate positive income
from  operations  and  positive  cash flow in  future  periods  compared  to the
carrying  value of the asset,  the strategic  significance  of any  identifiable
intangible   asset  in  our   business   objectives,   as  well  as  the  market
capitalization  of Kronos.  We have used certain key assumptions in building the
cash  flow  projections  required  for  evaluating  the  recoverablility  of our
intangible  assets. We have assumed revenues from the following  applications of
the Kronos(TM) technology:  consumer stand-alone devices,  assisted care/skilled
nursing stand-alone devices, embedded devices in the hospitality industry and in
specialized  military  applications.  Expenses/cash out flows in our projections
include   sales   and   marketing,   production,   distribution,   general   and
administrative   expenses,   research  and  development   expenses  and  capital
expenditures.  These  expenses are based on  management  estimates and have been
compared  with   industry   norms   (relative  to  sales)  to  determine   their
reasonableness.  We use the same key assumptions for our cash flow evaluation as
we do for internal budgeting,  lenders and other third parties;  therefore, they
are  internally  and externally  consistent  with financial  statement and other
public and private  disclosures.  We are not aware of any negative  implications
resulting   from  the   projections   used  for  purposes  of   evaluating   the
appropriateness  of the carrying value of these assets. If assets are considered
to be impaired,  the  impairment  recognized is the amount by which the carrying
value of the assets  exceeds  the fair  value of the  assets.  Useful  lives and
related  amortization or  depreciation  expense are based on our estimate of the
period that the assets will  generate  revenues or  otherwise be used by Kronos.
Factors that would influence the likelihood of a material change in our reported
results include  significant changes in the asset's ability to generate positive
cash flow, loss of legal ownership or title to the asset, a significant  decline
in the  economic  and  competitive  environment  on  which  the  asset  depends,
significant changes in our strategic business objectives, and utilization of the
asset.

VALUATION OF DEFERRED INCOME TAXES.  Valuation allowances are established,  when
necessary,  to reduce deferred tax assets to the amount expected to be realized.
The likelihood of a material change in our expected  realization of these assets
is  dependent  on  future  taxable  income,  our  ability  to  deduct  tax  loss
carryforwards  against  future  taxable  income,  the  effectiveness  of our tax
planning and strategies among the various tax jurisdictions  that we operate in,
and any  significant  changes  in the tax  treatment  received  on our  business
combinations.

REVENUE  RECOGNITION.  We recognize revenue in accordance with SAB 101. Further,
Kronos  Air  Technologies  recognizes  revenue  on the  sale of  custom-designed
contract  sales under the  percentage-of-completion  method of accounting in the
ratio that costs incurred to date bear to estimated total costs. For uncompleted
contracts where costs and estimated  profits exceed billings,  the net amount is
included as an asset in the  balance  sheet.  For  uncompleted  contracts  where
billings  exceed costs and  estimated  profits,  the net amount is included as a
liability in the balance sheet.  Revenue from government grants for research and
development purposes is recognized as revenue when received.  Sales are reported
net of applicable cash discounts and allowances for returns.

RESULTS OF OPERATIONS

The Company's  net loss from  continuing  operations  for the three months ended
March 31, 2003 increased by 5% to $690,000, compared with a net loss of $657,000
for the  corresponding  period for the prior year.  The increase in the net loss
was  primarily  the  result of a  $126,000  increase  in  professional  fees and
consulting  services  offset by $35,000 and $30,000  reductions  in research and
development and other selling general and administrative expenses, respectively.
The  Company's  net loss from  continuing  operations  for the nine months ended
March 31, 2003 was reduced 40% to $1.8 million, compared with a net loss of $2.9
million for the corresponding period for the prior year. The decrease in the net
loss was primarily the result of a $712,000  reduction in professional  fees and
consulting services.

REVENUE.  Revenues are generated  through sales of Kronos(TM)  devices at Kronos
Air Technologies,  Inc. Revenue for the three months and nine months ended March
31, 2003 was $140,000 and $458,000, respectively.  Revenue of $0 and $65,000 was
recorded during the corresponding periods of the prior year. These revenues were

<PAGE>

primarily  from our  HoMedics  contracts,  our U.S.  Navy  and U.S.  Army  Small
Business Innovative Research contracts, our contract with a leading business jet
manufacturer and our contract with Access Business Group.

COST OF SALES.  Cost of sales for the three  months and nine months  ended March
31,  2003  was  $101,000  and  $226,000,  compared  to $0 and  $50,000  for  the
corresponding periods in the prior year. Cost of sales is primarily research and
development costs associated with our HoMedics contracts, our U.S. Navy and U.S.
Army Small Business Innovative  Research contracts,  our contract with a leading
business jet manufacturer and our contract with Access Business Group.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   General   and
Administrative  expenses  for the three months ended March 31, 2003 was $683,000
compared  to  $623,000  for the  corresponding  period  in the prior  year.  The
increase is  attributable  to an increase in  professional  fees and  consulting
services of $126,000  offset by $35,000 and $30,000  reductions  in research and
development and other selling general and administrative expenses, respectively.
Selling, General and Administrative expenses for the nine months ended March 31,
2003 was $2.0 million compared to $2.9 million for the  corresponding  period in
the prior year. The decrease is attributable  to decreases in professional  fees
and  consulting  services of  $712,000,  research  and  development  expenses of
$95,000 and other selling general and administrative expenses of $80,000.

CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2003

Our total assets at March 31, 2003 were $2.1 million, compared with $2.4 million
at June 30,  2002.  Total assets at March 31, 2003 were  comprised  primarily of
$2.0  million of  patents/intellectual  property.  Total assets at June 30, 2002
were comprised primarily of $2.2 million of patents/intellectual property. Total
current  assets at March 31, 2003 and June 30, 2002 were  $51,000 and  $123,000,
respectively,  while total current  liabilities for those same periods were $2.7
million and $1.8 million,  respectively,  creating a working  capital deficit of
$2.7  million  and $1.7  million at each  respective  period end.  This  working
capital  deficit  is  primarily  due  to  accrued  expenses  for   compensation,
management consulting and other professional  services.  Subsequent to the March
31, 2003, the Company addressed this deficit by securing $3.5 million in secured
debt financing from a strategic customer, HoMedics, Inc. Shareholders' equity as
of March 31,  2003 and June 30, 2002 were  $(1.6)  million  and $(0.4)  million,
respectively,   representing  a  decrease  of  $1.2  million.  The  decrease  in
shareholders'  equity is  primarily  the result of incurring a $1.8 million loss
from continuing  operations for the nine months ended March 31, 2003,  partially
offset through the sale and issuance of $0.5 million of common stock.

LIQUIDITY AND CAPITAL RESOURCES

Historically  we have relied  principally on the sale of common stock to finance
our  operations.  We have  recently  signed a $3.5 million loan  agreement and a
multi-million dollar, multi-year licensing agreement with HoMedics, as well as a
Small  Business  Innovative  Research Phase II contract with the U.S. Navy and a
development and acquisition  agreement with a premier business jet manufacturer.
Going forward,  in addition to continued  sales of common stock, we plan to rely
on the proceeds from our HoMedics Licensing Development and Loan Agreements, our
Small Business  Innovation  Research  (SBIR) contract with the U.S. Navy and our
agreement with a premier business jet manufacturer,  as well as other government
contracts and grants,  cash flow generated  from the sale of Kronos(TM)  devices
and the execution of licensing  agreements and other  contracts with  commercial
customers.  We have also  entered into a common stock  purchase  agreement  with
Fusion Capital under which we have the right, subject to certain conditions, but
not the requirement to draw down approximately  $10,000 per day from the sale of
common stock to Fusion Capital.

Net cash flow used on  operating  activities  was  $446,000 for the current year
nine  months.  We were able to satisfy  our cash  requirements  for this  period
through the issuance and sale of our common stock as well as from revenue on our
HoMedics and U.S.  Navy and Army SBIR  contracts,  our  contract  with a leading
business jet manufacturer and our contract with Access Business Group.

In July 2002, we entered into a Memorandum of understanding with Access Business
Group  under  the terms of which we were to  provide  them  with  three  working
prototype Kronos(TM) devices for testing and evaluation for $45,000.

In August 2002, we entered into a common stock  purchase  agreement  with Fusion
Capital.  Pursuant to the common stock  purchase  agreement,  Fusion Capital has
agreed to purchase on each trading day during the term of the agreement, $10,000
of our common  stock or an aggregate  of $6.0  million.  The $6.0 million of our
common stock is to be purchased over a 30-month period,  subject to a nine-month
extension or earlier  termination at our sole  discretion and subject to certain
events.  The  purchase  price of the shares of common stock will be equal to the
lesser of (i) the lowest price of our common stock on the purchase date; or (ii)
the  average of the three (3) lowest  closing  sale  prices of our common  stock
during the twelve (12) consecutive  trading days prior to the date of a purchase
by Fusion Capital.  However,  there can be no assurance of how much cash we will
receive, if any, under the common stock purchase agreement with Fusion Capital.

In October 2002, Kronos Air Technologies,  Inc., and HoMedics USA, Inc. executed
a  multiyear,  multi-million-dollar  Licensing  Agreement  to  bring  Kronos(TM)
proprietary  technology  to the  consumer.  The initial term of the agreement is
three  and one half  years  with the  option  to extend  the  agreement  for six
additional years. Kronos has been compensated through an initial royalty payment
and will receive  ongoing  quarterly  royalty  payments based on a percentage of
sales.  HoMedics will pay minimum royalty payments of at least $2 million during
the initial term and on-going royalty payments to extend the agreement.

<PAGE>

In November 2002,  Kronos Air Technologies  and HoMedics  executed a Development
Agreement to provide Kronos with the financial  resources  necessary to complete
commercialization  of the  Kronos(TM)-based  consumer  product  line.  Kronos is
working with HoMedics and HoMedics'  engineers,  designers and  manufacturers to
complete the product line for sales and distribution.

In November  2002,  Kronos Air  Technologies,  Inc.  and the United  States Navy
executed a Small Business  Innovation  Research Phase II contract to develop and
demonstrate an advanced distributive air management system based on the patented
Kronos(TM)  technology.  The 24-month  contract is worth $581,000 with an option
for an additional $144,000 in funding. Funding on Phase II commenced in December
2002.

In January 2003,  Kronos extended its work into the  transportation  industry by
signing  a  prototype  Development  and  Acquisition  Agreement  with a  premier
business  jet  manufacturer.  The  Agreement  was the  direct  result of initial
prototype development work performed by the Kronos Research Team with input from
the customer in 2002. The Kronos(TM)  devices will be designed and  manufactured
to meet all FAA safety  standards,  including  environmental,  flammability  and
electromagnetic interference (EMI).

In May  2003,  Kronos  entered  into an  agreement  with a  strategic  customer,
HoMedics,  Inc.,  for $3.5 million in secured debt  financing.  $2.5 million was
advanced to Kronos upon  execution  of the  agreement  and $1.0  million will be
advanced  upon the start of production  for the  Kronos-based  air  purification
product line to be marketed and distributed by HoMedics. These loans are secured
by a lien on substantially all of Kronos' assets, including Kronos' intellectual
property.  In  connection  with this  transaction,  Kronos  issued a warrant for
6,746,171 shares of Kronos common stock at an exercise price of $0.10 per share.
Such warrant vested  immediately.  Kronos also issued an additional  warrant for
6,746,171 shares of Kronos common stock at an exercise price of $0.10 per share.
The second warrant is not presently  exercisable and becomes exercisable only if
(1) the Company does not prepay the entire  amount of principal and interest due
under the notes by November  2005;  (2) the Company goes in default under any of
the  investment  documents,  or (3) Kronos does not earn prior to November 2005,
revenues  (as  defined in the  agreement)  in an  aggregate  amount  equal to or
greater  than  $3,500,000.  The  warrants  are subject to certain  anti-dilution
provisions.  A more detailed  description  of the  transaction is available in a
Report  on Form 8-K  filed  with the  Securities  and  Exchange  Commission.  As
previously announced,  Kronos Air Technologies,  Inc., a wholly owned subsidiary
of Kronos  Advanced  Technologies,  Inc.,  and  HoMedics  executed a  multiyear,
multi-million-dollar   licensing  agreement  to  bring  Kronos(TM)   proprietary
technology  to the consumer  under an exclusive  agreement  for North  American,
Australian  and New  Zealand  retail  distribution  rights  for next  generation
consumer air movement and  purification  products  based on patented  Kronos(TM)
technology.

GOING CONCERN OPINION

Our  independent  auditors  have added an  explanatory  paragraph to their audit
opinion issued in connection with the 2002,  2001 and 2000 financial  statements
that states that we do not have  significant  cash or other  material  assets to
cover our operating costs. Our ability to obtain additional funding will largely
determine our ability to continue in business. Accordingly, there is substantial
doubt about our ability to continue as a going concern. Our financial statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

We can make no assurance that we will be able to  successfully  transition  from
research and development to manufacturing and selling  commercial  products on a
broad basis. While attempting to make this transition, we will be subject to all
the risks inherent in a growing venture, including, but not limited to, the need
to develop and manufacture  reliable and effective  products,  develop marketing
expertise and expand our sales force.

CERTAIN RISK FACTORS

Our Company is subject to various risks which may materially  harm our business,
financial  condition  and results of  operations.  Certain  risks are  discussed
below.

WE HAVE A LIMITED OPERATING HISTORY WITH SIGNIFICANT LOSSES AND EXPECT LOSSES TO
 CONTINUE FOR THE FORESEEABLE FUTURE

We have begun implementing our plan to prioritize and concentrate our management
and  financial  resources to fully  capitalize  on our  investment in Kronos Air
Technologies and have yet to establish any history of profitable operations.  We
incurred a net operating  loss of $690,000 and $1.8 million for the three months
and nine months ended March 31, 2003, respectively.  We have incurred net losses
from continuing operations of $3.5 million and $3.6 million for the fiscal years
ended June 30, 2002 and 2001. We have incurred annual  operating  losses of $2.8
million,  $9.9  million and $2.0  million,  respectively,  during the past three
fiscal years of operation.  As a result, at March 31, 2003 and June 30, 2002, we
had an accumulated deficit of $16.5 million and $14.8 million, respectively. Our
revenues have not been sufficient to sustain our operations.  Our  profitability
will require the successful  commercialization of our Kronos(TM) technology.  No
assurances can be given when this will occur or that we will ever be profitable.

<PAGE>

WE HAVE BEEN SUBJECT TO A GOING CONCERN OPINION FROM OUR INDEPENDENT AUDITORS

Our  independent  auditors  have added an  explanatory  paragraph to their audit
opinion issued in connection  with the financial  statements for the years ended
June 30, 2002 and June 30,  2001  relative to our ability to continue as a going
concern.  Our ability to obtain additional funding will determine our ability to
continue as a going concern.  Accordingly,  there is substantial doubt about our
ability to continue as a going concern.  Our financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

WE WILL REQUIRE ADDITIONAL FINANCING TO SUSTAIN OUR OPERATIONS AND WITHOUT IT WE
 WILL NOT BE ABLE TO CONTINUE OPERATIONS

At March 31, 2003, we had a working capital deficit of $2.7 million. At June 30,
2002,  we had a  working  capital  deficit  of  $1.7  million.  The  independent
auditor's  report for the years ended June 30, 2002 and June 30, 2001,  includes
an  explanatory  paragraph to their audit  opinion  stating  that our  recurring
losses from operations and working capital  deficiency raise  substantial  doubt
about our ability to continue as a going concern. For the years ended 2002, 2001
and 2000, we had an operating  cash flow deficit of $1.5  million,  $1.6 million
and $0.3 million,  respectively.  We do not currently have sufficient  financial
resources to fund our operations or pay certain existing obligations or those of
our subsidiary. Therefore, we need additional funds to continue these operations
and pay certain existing obligations.

THE SALE OF OUR COMMON STOCK TO FUSION  CAPITAL MAY CAUSE  DILUTION AND THE SALE
OF THE SHARES OF COMMON STOCK ACQUIRED BY FUSION CAPITAL COULD CASE THE PRICE OF
OUR COMMON STOCK TO DECLINE

The purchase price for the common stock to be issued to Fusion Capital  pursuant
to the common stock purchase  agreement will fluctuate based on the price of our
common  stock.  All shares  issued to Fusion  Capital  will be freely  tradable.
Fusion  Capital  may  sell  none,  some or all of the  shares  of  common  stock
purchased  from us at any time. We expect that the shares sold to Fusion Capital
will be sold over a period of up to 30 months from the date of the common  stock
purchase  agreement.  Depending  upon market  liquidity  at the time,  a sale of
shares by Fusion  Capital at any given time could cause the trading price of our
common  stock to  decline.  The sale of a  substantial  number  of shares of our
common stock by Fusion Capital,  or  anticipation  of such sales,  could make it
more difficult for us to sell equity or equity-related  securities in the future
at a time and at a price that we might otherwise wish to effect sales.

COMPETITION IN THE MARKET FOR AIR MOVEMENT AND  PURIFICATION  DEVICES MAY RESULT
IN THE FAILURE OF THE KRONOS(TM) PRODUCTS TO ACHIEVE MARKET ACCEPTANCE

Kronos Air  Technologies  presently faces  competition from other companies that
are  developing or that currently  sell air movement and  purification  devices.
Many of these competitors have  substantially  greater  financial,  research and
development,  manufacturing,  and sales and marketing resources than we do. Many
of the products sold by Kronos Air Technologies'  competitors already have brand
recognition and  established  positions in the markets that we have targeted for
penetration.  In the event that the Kronos(TM) products do not favorably compete
with the  products  sold by our  competitors,  we would be forced to curtail our
business operations.

OUR FAILURE TO OBTAIN INTELLECTUAL  PROPERTY AND ENFORCE PROTECTION WOULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS

Our success depends in part on our ability to obtain and defend our intellectual
property,  including patent protection for our products and processes,  preserve
our trade  secrets,  defend and  enforce  our rights  against  infringement  and
operate without infringing the proprietary rights of third parties,  both in the
United States and in other countries.

We have received one patent from the U.S. Patent and Trademark  Office.  We have
five additional U.S. and six foreign patent applications  pending.  The validity
and  breadth of our  intellectual  property  claims in ion wind  generation  and
electrostatic  fluid  acceleration and control  technology involve complex legal
and factual  questions  and,  therefore,  may be highly  uncertain.  Despite our
efforts to protect our  intellectual  proprietary  rights,  existing  copyright,
trademark and trade secret laws afford only limited protection.

POSSIBLE FUTURE  IMPAIRMENT OF INTANGIBLE  ASSETS WOULD HAVE A MATERIAL  ADVERSE
EFFECT ON OUR FINANCIAL CONDITION

Our net intangible  assets of approximately  $2.0 million and $2.2 million as of
March 31, 2003 and June 30, 2002  relate only to the  acquisition  of Kronos Air
Technologies,  Inc. and consists  principally of purchased patent technology and
marketing intangibles. They comprise 97% and 94% of our total assets as of March
31,  2003 and June 30,  2002,  respectively.  Intangible  assets are  subject to
periodic review and consideration for potential  impairment of value.  Among the
factors that could give rise to impairment include a significant  adverse change
in legal factors or in the business climate,  an adverse action or assessment by
a regulator, unanticipated competition, a loss of key personnel, and projections
or forecasts that demonstrate continuing losses associated with these assets. In
the case of our  tangible  assets,  specific  factors  that  could  give rise to
impairment would be, but are not limited to, an inability to obtain patents, the

<PAGE>

untimely  death or other loss of Dr. Igor  Krichtafovitch,  the  inventor of the
Kronos(TM) technology,  or the ability to create a customer base for the sale or
licensing of the Kronos(TM) technology.

Although no events have  occurred that would  indicate  that an  impairment  may
exist with respect to these intangible  assets,  should an impairment  occur, we
would be  required  to  recognize  it in our  financial  statements.  Since  the
intangible  assets comprise 97% and 94% of out total assets as of March 31, 2003
and June 30, 2002,  respectively,  a write-down of these intangible assets could
have a material  adverse  impact on our total  assets,  net worth and results of
operations.

WE RELY ON MANAGEMENT AND KRONOS AIR TECHNOLOGIES  RESEARCH PERSONNEL,  THE LOSS
OF WHOSE SERVICES COULD HAVE A MATERIAL ADVERSE EFFECT UPON OUR BUSINESS

We rely  principally  upon  the  services  of our  Board  of  Directors,  senior
executive  management,  and  certain  key  employees,  including  the Kronos Air
Technologies  research  team,  the loss of whose  services could have a material
adverse effect upon our business and prospects.  Competition  for  appropriately
qualified  personnel  is  intense.  Our  ability  to attract  and retain  highly
qualified senior management and technical research and development personnel are
believed  to be an  important  element of our  future  success.  Our  failure to
attract and retain such  personnel  may,  among other things,  limit the rate at
which we can  expand  operations  and  achieve  profitability.  There  can be no
assurance  that we will be able to attract and retain senior  management and key
employees having  competency in those  substantive areas deemed important to the
successful  implementation of our plans to fully capitalize on our investment in
Kronos Air Technologies and the Kronos(TM)  technology,  and the inability to do
so or any  difficulties  encountered  by  management in  establishing  effective
working   relationships  among  them  may  adversely  affect  our  business  and
prospects.  Currently,  we do not carry key person life insurance for any of our
directors, executive management, or key employees.


ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE  CONTROLS AND  PROCEDURES.  Within 90 days prior to the
filing  date of this  report,  the  Company  carried  out an  evaluation  of the
effectiveness  of the  design  and  operation  of its  disclosure  controls  and
procedures  pursuant to Exchange Act Rule 13a-14. This evaluation was done under
the supervision and with the participation of the Company's  President and Chief
Financial Officer. Based upon that evaluation, they concluded that the Company's
disclosure  controls and  procedures  are effective in gathering,  analyzing and
disclosing  information needed to satisfy the Company's  disclosure  obligations
under the Exchange Act.

CHANGES IN INTERNAL CONTROLS. There were no significant changes in the Company's
internal  controls or in other  factors  that could  significantly  affect those
controls since the most recent evaluation of such controls.

<PAGE>

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

Acquisition and Settlement Agreement and Mutual Release,  executed and effective
May 9, 2003 between:  Ingrid  Fuhriman;  Robert Fuhriman II; Alan Thomson;  High
Voltage Integrated,  LLC ("HVI"); Emprise, LLC; Dr. Igor Krichtafovitch;  Kronos
Air  Technologies,  Inc.; and Kronos  Advanced  Technologies,  Inc,  settled all
disputes known and unknown between Fuhriman,  Fuhriman, Thomson, HVI and Emprise
with  Kronos  Air  Technologies,  Kronos  Advanced  Technologies  and  Dr.  Igor
Krichtafovitch.  In  connection  with the  acquisition  of certain  intellectual
property the Company will pay HVI $270,000 in $30,000 quarterly installments and
issued 2,790,000  restricted shares of Kronos common stock. In settlement of all
the disputes known and unknown among the parties Kronos paid HVI $30,000.

On May 9, 2003,  the  Company's  Chief  Technology  Officer and  inventor of the
Kronos(TM)  technology,  Dr.  Igor  Krichtafovitch,  agreed  with the Company to
release all his ownership and intellectual  property rights held by High Voltage
Integrated,  LLC. In exchange for this release, the Company executed a two year,
renewable  employment  agreement  with  Dr.   Krichtafovitch  and  a  settlement
agreement that included 500,000 restricted shares of common stock.

There are no known legal proceedings  against Kronos Air  Technologies,  Inc. or
Kronos Advanced technologies, Inc.

Kronos Air Technologies  and Kronos Advanced  Technologies do not have any filed
legal claims against any other party.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5. EXHIBITS


EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------

2.1     Articles of Merger for Technology       Incorporated by reference to
        Selection, Inc. with the Nevada         Exhibit 2.1 to the Registrant's
        Secretary of State                      Registration Statement on Form
                                                S-1 filed on August 7, 2001
                                                (the "Registration Statement")

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------

3.1     Articles of Incorporation               Incorporated by reference to
                                                Exhibit 3.1 to the Registration
                                                Statement on Form S-1 filed on
                                                August 7, 2001

3.2     Bylaws                                  Incorporated by reference to
                                                Exhibit 3.2 to the Registration
                                                Statement on Form S-1 filed on
                                                August 7, 2001

4.1     2001 Stock Option Plan                  Incorporated by reference to
                                                Exhibit 4.1 to
                                                Registrant's Form
                                                10-Q for the
                                                quarterly period
                                                ended March 31,
                                                2002 filed on May
                                                15, 2002

5.1     Opinion re: Legality                    Incorporated by reference to
                                                Exhibit 5.1 to Amendment No. 1
                                                to Form S-1 filed on October
                                                19, 2001

10.1    Employment Agreement, dated April 16,   Incorporated by reference to
        1999, by and between TSET, Inc. and     Exhibit 10.1 to the Registration
        Jeffrey D. Wilson                       Statement on Form S-1 filed on
                                                August 7, 2001

10.2    Deal Outline, dated December 9, 1999,   Incorporated by reference to
        by and between TSET, Inc. and Atomic    Exhibit 10.2 to the Registration
        Soccer, USA, Ltd.                       Statement on Form S-1 filed on
                                                August 7, 2001

10.3    Letter of Intent, dated December 27,    Incorporated by reference to
        1999, by and between TSET, Inc. and     Exhibit 10.3 to the Registration
        Electron Wind Technologies, Inc.        Statement on Form S-1 filed on
                                                August 7, 2001

10.4    Agreement, dated February 5, 2000, by   Incorporated by reference to
        and between DiAural,                    LLC and Exhibit 10.4 to the
        EdgeAudio, LLC                          Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.5    Stock Purchase Agreement, dated March   Incorporated by reference to
        6, 2000, by and among TSET, Inc.,       Exhibit 10.5 to the Registration
        Atomic Soccer USA, Ltd., Todd P.        Statement on Form S-1 filed on
        Ragsdale, James Eric Anderson, Jewel    August 7, 2001
        Anderson, Timothy Beglinger and Atomic
        Millennium Partners, LLC

10.6    Acquisition Agreement, dated March 13,  Incorporated by reference to
        2000, by and among TSET, Inc., High     Exhibit 10.6 to the Registration
        Voltage Integrated, LLC, Ingrid         Statement on Form S-1 filed on
        Fuhriman, Igor Krichtafovitch, Robert   August 7, 2001

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------
        L. Fuhriman and Alan Thompson

10.7    Letter of Intent, dated April 18,       Incorporated by reference to
        2000, by and between TSET, Inc. and     Exhibit 10.7 to the Registration
        EdgeAudio.com, Inc.                     Statement on Form S-1 filed on
                                                August 7, 2001

10.8    Lease Agreement, dated May 3, 2000,     Incorporated by reference to
        by and between Kronos Air               Exhibit 10.8 to the Registration
        Technologies, Inc. and TIAA Realty,     Statement on Form S-1 filed on
        Inc.                                    August 7, 2001

10.9    Agreement and Plan of Reorganization,   Incorporated by reference to
        dated May 4, 2000, by and among TSET,   Exhibit 10.9 to the Registration
        Inc., EdgeAudio.com, Inc., LYNK         Statement on Form S-1 filed on
        Enterprises, Inc., Robert Lightman, J.  August 7, 2001
        David Hogan, Eric Alexander and Eterna
        Internacional, S.A. de C.V.

10.10   Letter Agreement, dated May 4, 2000,    Incorporated by reference to
        by and between TSET, Inc. and Cancer    Exhibit 10.10 to the
        Detection International, LLC            Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.11   Employment Agreement, dated May 19,     Incorporated by reference to
        2000, by and between TSET, Inc. and     Exhibit 10.11 to the
        Richard A. Papworth                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.12   Finders Agreement, dated August 21,     Incorporated by reference to
        2000, by and among TSET, Inc.,          Exhibit 10.12 to the
        Richard F. Tusing and                   Registration Statement on Form
        Daniel R. Dwight                        S-1 filed on August 7, 2001

10.13   Contract Services Agreement, dated      Incorporated by reference to
        June 27, 2000, by and between Chinook   Exhibit 10.13 to the
        Technologies, Inc. and Kronos Air       Registration Statement on Form
        Technologies, Inc.                      S-1 filed on August 7, 2001

10.14   Letter of Intent, dated July 17, 2000,  Incorporated by reference to
        by and between Kronos Air               Exhibit 10.14 to the
        Technologies, Inc. and Polus            Registration Statement on Form
        Technologies, Inc.                      S-1 filed on August 7, 2001

10.15   Consulting Agreement, dated August 1,   Incorporated by reference to
        2000, by and among TSET, Inc., Richard  Exhibit 10.15 to the
        F. Tusing and Daniel R. Dwight          Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.16   Preferred Stock Purchase Agreement,     Incorporated by reference to
        dated September 12, 2000, by and        Exhibit 10.16 to the
        between EdgeAudio.com, Inc. and Bryan   Registration Statement on Form
        Holbrook                                S-1 filed on August 7, 2001

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------
10.17   Shareholders Agreement, dated           Incorporated by reference to
        September 12, 2000, by and among        Exhibit 10.17 to the
        TSET, Inc., Bryan Holbrook and          Registration Statement on Form
        EdgeAudio.com, Inc.                     S-1 filed on August 7, 2001

10.18   Amendment to Agreement and Plan of      Incorporated by reference to
        Reorganization dated September 12,      Exhibit 10.18 to the
        2000, by and among TSET, Inc.,          Registration Statement on Form
        EdgeAudio.com, Inc., LYNK Enterprises,  S-1 filed on August 7, 2001
        Inc., Robert Lightman, J. David Hogan,
        Eric Alexander and Eterna
        Internacional, S.A. de C.V.

10.19   Agreement Regarding Sale of Preferred   Incorporated by reference to
        Stock, dated November 1, 2000, by and   Exhibit 10.19 to the
        between EdgeAudio.com, Inc. and Bryan   Registration Statement on Form
        Holbrook                                S-1 filed on August 7, 2001

10.20   Amendment to Subcontract, dated         Incorporated by reference to
        December 14, 2000, by and between Bath  Exhibit 10.20 to the
        Iron Works and High Voltage             Registration Statement on
        Integrated                              Form S-1 filed on August 7, 2001

10.21   Consulting Agreement, dated January 1,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.21 to the
        Dwight, Tusing & Associates             Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.22   Employment Agreement, dated March 18,   Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.22 to the
        Alex Chriss                             Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.23   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.23 to the
        Jeffrey D. Wilson                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.24   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.24 to the
        Jeffrey D. Wilson                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.25   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.25 to the
        Daniel R. Dwight                        Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.26   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.26 to the
        Richard F. Tusing                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.27   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.27 to the
        Charles D. Strang                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------
10.28   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.28 to the
        Richard A. Papworth                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.29   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.29 to the
        Richard A. Papworth                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.30   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.30 to the
        Erik W. Black                           Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.31   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and J.  Exhibit 10.31 to the
        Alexander Chriss                        Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.32   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.32 to the
        Charles H. Wellington                   Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.33   Stock Option Agreement, dated April 9,  Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.33 to the
        Igor Krichtafovitch                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.34   Letter Agreement, dated April 10,       Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.34 to the
        Richard A. Papworth                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.35   Letter Agreement, dated April 12,       Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.35 to the
        Daniel R. Dwight and Richard F.         Registration Statement on Form
        Tusing                                  S-1 filed on August 7, 2001

10.36   Finders Agreement, dated April 20,      Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.36 to the
        Bernard Aronson, d/b/a Bolivar          Registration Statement on Form
        International Inc.                      S-1 filed on August 7, 2001

10.37   Indemnification Agreement, dated        Incorporated by reference to
        May 1, 2001, by and between TSET, Inc.  Exhibit 10.37 to the
        and Jeffrey D. Wilson                   Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.38   Indemnification Agreement, dated        Incorporated by reference to
        May 1, 2001, by and between TSET, Inc.  Exhibit 10.38 to the
        and Daniel R. Dwight                    Registration Statement on Form
                                                S-1 filed on August 7, 2001

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------
10.39   Indemnification Agreement, dated May    Incorporated by reference to
        1, 2001, by and between TSET, Inc. and  Exhibit 10.39 to the
        Richard F. Tusing                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.40   Indemnification Agreement, dated May    Incorporated by reference to
        1, 2001, by and between TSET, Inc. and  Exhibit 10.40 to the
        Charles D. Strang                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.41   Indemnification Agreement, dated May    Incorporated by reference to
        1, 2001, by and between TSET, Inc. and  Exhibit 10.41 to the
        Richard A. Papworth                     Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.42   Indemnification Agreement, dated May    Incorporated by reference to
        1, 2001, by and between TSET, Inc. and  Exhibit 10.42 to the
        Erik W. Black                           Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.43   Stock Option Agreement, dated May 3,    Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.43 to the
        Jeffrey D. Wilson                       Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.44   Common Stock Purchase Agreement, dated  Incorporated by reference to
        June 19, 2001, by and between TSET,     Exhibit 10.44 to the
        Inc. and Fusion Capital Fund II, LLC    Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.45   Registration Rights Agreement, dated    Incorporated by reference to
        June 19, 2001, by and between TSET,     Exhibit 10.45 to the
        Inc. and Fusion Capital Fund II, LLC    Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.46   Mutual Release and Settlement           Incorporated by reference to
        Agreement, dated July 7, 2001, by and   Exhibit 10.46 to the
        between TSET, Inc. and Foster & Price   Registration Statement on Form
        Ltd.                                    S-1 filed on August 7, 2001

10.47   Letter Agreement, dated July 9, 2001,   Incorporated by reference to
        by and between TSET, Inc. and The       Exhibit 10.47 to the
        Eagle Rock Group, LLC                   Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.48   Finders Agreement, dated July 17,       Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.48 to the
        John S. Bowles                          Registration Statement on Form
                                                S-1 filed on August 7, 2001

10.49   Warrant Agreement, dated July 16,       Incorporated by reference to
        2001, by and between TSET, Inc. and     Exhibit 10.49 to the
        The Eagle Rock Group, LLC               Registration Statement on Form
                                                S-1 filed on August 7, 2001

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------
10.50   Agreement and Release, dated October    Incorporated by reference to
        10, 2001, by and between TSET, Inc.     Exhibit 10.50 to the
        and Jeffrey D. Wilson                   Registrant's Form 10-K for the
                                                year ended June 30, 2001 filed
                                                on October 15, 2001

10.51   Promissory Note dated October 10, 2001  Incorporated by reference to
        payable to Mr. Jeffrey D. Wilson        Exhibit 10.51 to the
                                                Registrant's Form
                                                10-K for the year
                                                ended June 30, 2001
                                                filed on October
                                                15, 2001

10.52   Consulting Agreement, dated October     Incorporated by reference to
        10, 2001, by and between TSET, Inc.     Exhibit 10.52 to the
        and Jeffrey D. Wilson                   Registrant's Form 10-K for the
                                                year ended June 30, 2001 filed
                                                on October 15, 2001

10.53   Consulting Agreement effective          Incorporated by reference to
        October 1, 2001, by and among TSET,     Exhibit 10.53 to the
        Inc., Steven G. Martin and Joshua       Registrant's Form 10-Q for the
        B. Scheinfeld                           quarterly period ended December
                                                31, 2001 filed on November 19,
                                                2001

10.54   Letter Agreement dated November 13,     Incorporated by reference to
        2001 by and between TSET, Inc. and      Exhibit 10.54 to the
        Fusion Capital Fund II, LLC             Registrant's Form 10-Q for the
                                                quarterly period ended December
                                                31, 2001 filed on November 19,
                                                2001

10.55   Employment Agreement, effective         Incorporated by reference to
        November 15, 2001 by and between        Exhibit 10.55 to the
        TSET, Inc. and Daniel R. Dwight         Registrant's Form 10-Q for the
                                                quarterly period ended March 31,
                                                2002 filed on May 15, 2002

10.56   Agreement, dated November 13, 2001      Incorporated by reference to
        by and between TSET, Inc. and Fusion    Exhibit 10.56 to the
        Capital Fund II, LLC                    Registrant's Amendment No. 1 to
                                                Form S-1 filed on August 2, 2002

10.57   Common Stock Purchase Agreement,        Incorporate by reference to
        dated August 12, 2002 by and between    Exhibit 10.57 to the
        between TSET, Inc. and Fusion           Registrant's Form S-1
        Capital Fund II, LLC                    filed on August 13, 2002

10.58   Registration Rights Agreement, dated    Incorporated by reference to
        August 12, 2002 by and between TSET,    Exhibit 10.58 to the
        Inc. and Fusion Capital Fund II, LLC    Registrant's Form S-1
                                                filed on August 13, 2002

10.59   Termination Agreement, dated            Incorporated by reference to
        August 12, 2002 by and between TSET,    Exhibit 10.59 to the
        Inc. and Fusion Capital Fund II, LLC    Registrant's Amendment
                                                No. 1 to Form S-1 filed on
                                                September 16, 2002

<PAGE>

EXHIBIT
NO.     DESCRIPTION                             LOCATION
--------------------------------------------------------------------------------

10.60   Master Loan and Investment              Incorporated by reference to
        Agreement, dated May 9, 2003,           the Registrant's 8-K filed on
        by and among Kronos Advanced            May 15, 2003
        Technologies, Inc., Kronos Air
        Technologies, Inc. and FKA
        Distributing Co. d/b/a HoMedics,
        Inc., a Michigan corporation
        ("HoMedics")

10.61   Secured Promissory Note, dated          Incorporated by reference to
        May 9, 2003, in the principal           Exhibit 99.2 to the Registrant's
        amount of $2,400,000 payable to         8-K filed on May 15, 2003
        HoMedics

10.62   Secured Promissory Note, dated          Incorporated by reference to
        May 9, 2003, in the principal           Exhibit 99.4 to the Registrant's
        amount of $1,000,000 payable to         8-K filed on May 15, 2003
        HoMedics

10.63   Security Agreement dated May 9,         Incorporated by reference to
        2003, by and among Kronos Air           Exhibit 99.4 to the Registrant's
        Technologies, Inc. and HoMedics         8-K filed on May 15, 2003

10.64   Registration Rights Agreement,          Incorporated by reference to
        dated May 9, 2003, by and between       Exhibit 99.5 to the Registrant's
        Kronos and HoMedics                     8-K filed on May 15, 2003

10.65   Warrant No. 1 dated May 9, 2003,        Incorporated by reference to
        issued to HoMedics                      Exhibit 99.7 to the Registrant's
                                                8-K filed on May 15, 2003

10.65   Warrant No. 2 dated May 9, 2003,        Incorporated by reference to
        issued to HoMedics                      Exhibit 99.7 to the Registrant's
                                                8-K filed on May 15, 2003

<PAGE>

EXHIBIT
NO.     DESCRIPTION                                 LOCATION
--------------------------------------------------------------------------------
1.1     Statement re:  Computation of Earnings      Not applicable

12.1    Statement re:  Computation of Ratios        Not applicable

15.1    Letter re:  Unaudited Interim Financial     Not applicable
        Information

18.1    Letter re: Change in Accounting             Not applicable
        Principals

24.1    Power of Attorney                           Not applicable

27.1    Financial Data Schedule                     Not applicable




                                   SIGNATURES

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



DATED:   May 15, 2003               KRONOS ADVANCED TECHNOLOGEIS, INC.

                                       By: /S/ DANIEL R. DWIGHT
                                           --------------------------
                                           Daniel R. Dwight
                                           President and Chief Executive Officer


                                       By: /S/ RICHARD A. PAPWORTH
                                           --------------------------
                                           Richard A. Papworth
                                           Chief Financial Officer

<PAGE>

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO


SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly  Report of Kronos Advanced  Technologies,  Inc.
(the  "Company")  on Form 10-QSB for the  quarter  ended March 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
each of the  undersigned,  in the capacities and on the dates  indicated  below,
hereby  certifies  pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the  requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2. The  information  contained in the Report  fairly  presents,  in all material
respects, the financial condition and results of operation of the Company.


                              /S/ DANIEL R. DWIGHT
                              ---------------------
                              Daniel R. Dwight
                              President and Chief Executive Officer



                              /S/ RICHARD A. PAPWORTH
                              -----------------------
                              Richard A. Papworth
                              Chief Financial Officer

<PAGE>

                                  CERTIFICATION
                             PURSUANT TO SECTION 302

                       I, Daniel R. Dwight, certify that:

1. I have  reviewed  this  quarterly  report on Form  10-QSB of Kronos  Advanced
Technologies, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:

a.  designed  such  disclosure  controls and  procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b.  evaluated the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c. presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a. all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b. any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date:    May 15, 2003                  By: /S/ DANIEL R. DWIGHT
                                           ----------------------
                                           Daniel R. Dwight
                                           Chief  Executive Officer

<PAGE>

                                  CERTIFICATION
                             PURSUANT TO SECTION 302

                      I, Richard A. Papworth, certify that:

1. I have  reviewed  this  quarterly  report on Form  10-QSB of Kronos  Advanced
Technologies, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.  designed  such  disclosure  controls and  procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b.  evaluated the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c. presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a. all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b. any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date:    May 15, 2003               By: /S/ RICHARD A. PAPWORTH
                                        -----------------------------
                                        Richard A. Papworth
                                        Chief Financial Officer and
                                        Principal Accounting Officer



                                  END OF FILING