UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





[X]
            QUARTERLY
      REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009.OR[   ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





Commission
file number 000-27094





FIRST
AMERICAN SCIENTIFIC CORP.


(Exact
name of registrant as specified in its charter)





NEVADA


(State
or other jurisdiction of incorporation or organization)





#201
– 30758 South Fraser Way


Abbotsford,
Columbia


Canada
V2T 6L4


(Address
of principal executive offices, including zip code.)





(604)
850-8959


(telephone
number, including area code)





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the last 90 days. YES
[X]     NO [  ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,
“accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.





Large
      Accelerated Filer
            [   ]
            Accelerated
      Filer
            [   ]Non-accelerated
      Filer
            [   ]
            Smaller
      Reporting Company
            [X]





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


YES
[   ]     NO [X]





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date: 199,952,195 as of September 30,
2009.








PART
I – FINANCIAL INFORMATION





ITEM
      1.
            FINANCIAL
      STATEMENTS





Consolidated
      Balance Sheets
            F-1Consolidated
      Statements of Operations
            F-2Consolidated
      Statements of Cash Flows
            F-3Notes
      to Financial Statements
            F-4


























































-2-








FIRST AMERICAN SCIENTIFIC CORP.CONSOLIDATED
      BALANCE SHEETSSeptember
      30,
            
            June
      30,2009
            
            2009ASSETS
            
            (unaudited)CURRENT
      ASSETSCash
            $
            122,153
            $
            33,891Accounts
      receivable, net of allowance
            
            30,271
            
            69,759Sales
      tax refunds
            
            -
            
            8,115Prepaid
      expenses
            
            1,142
            
            4,457Inventory
            
            198,039
            
            156,502TOTAL
      CURRENT ASSETS
            
            351,605
            
            272,724PROPERTY
      AND EQUIPMENTProperty
      and equipment
            
            158,400
            
            218,798Less:
      accumulated depreciation
            
            (136,105)
            
            (159,010)TOTAL
      PROPERTY AND EQUIPMENT
            
            22,295
            
            59,788OTHER
      ASSETSTechnology
      rights and patents,  net of amortization
            
            423,962
            
            460,256Investments
      in joint ventures ( net )
            
            -
            
            -TOTAL
      OTHER ASSETS
            
            423,962
            
            460,256TOTAL
      ASSETS
            $
            797,862
            $
            792,768LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
            $
            236,495
            $
            209,804Salaries
      payable - related parties
            
            1,037,000
            
            1,027,000Advances
      payable to related parties
            
            85,253
            
            82,053Deposits
      on Future Sales
            
            189,500
            
            156,697TOTAL
      CURRENT LIABILITIES
            
            1,548,248
            
            1,475,554LONG-TERM
      LIABILITIES
            
            -
            
            -COMMITMENTS
      AND CONTINGENCIES
            
            -
            
            -STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock - $.001 par value,200,000,000
      shares authorized; 199,952,195 and199,952,195
      shares issued and outstanding, respectively
            
            199,952
            
            199,952Stock
      Options
            
            253,600
            
            126,800Additional
      paid-in capital
            
            13,255,636
            
            13,255,636Accumulated
      deficit
            
            (14,459,574)
            
            (14,265,175)TOTAL
      STOCKHOLDERS' EQUITY(DEFICIT)
            
            (750,386)
            
            (682,786)TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
            $
            797,862
            $
            792,768





The
accompanying notes are an integral part of these consolidated financial
statements.


F-1











-3-








FIRST
      AMERICAN SCIENTIFIC CORP.CONSOLIDATED
      STATEMENTS OF OPERATIONSAND
      COMPREHENSIVE INCOME (LOSS)Three
      months endedSeptember
      30,2009
            
            2008(unaudited)
            
            (unaudited)REVENUESRevenues
      from equipment and machine sales
            $
            382,368
            $
            -Expenses
      recovered
            
            -
            
            -Total
      Revenue
            
            382,368COST
      OF SALES
            
            222,608
            
            -GROSS
      PROFIT
            
            159,760
            
            -OPERATING
      EXPENSESAdvertising
            
            -
            
            3,067Amortization
      and depreciation
            
            47,609
            
            50,643Bad
      debt expense
            
            -
            
            1,144Marketing
            
            312
            
            1,984Professional
      services
            
            22,653
            
            14,467Management
      Compensation
            
            201,800
            
            75,000Salaries
      and Wages
            
            24,515
            
            18,151Research
      and development
            
            25,610
            
            -General
      and administration
            
            18,118
            
            23,160Rent
            
            1,898
            
            4,034Total
      Operating Expenses
            
            342,515
            
            191,650LOSS
      FROM OPERATIONS
            
            (182,755)
            
            (191,650)OTHER
      INCOME (EXPENSE)Settlement
      of trade payable
            
            -
            
            5,500Foreign
      Exchange Gains (losses)
            
            (11,646)
            
            -Total
      Other Income (Expense)
            
            (11,646)
            
            5,500LOSS
      BEFORE INCOME TAXES
            
            (194,401)
            
            (186,150)INCOME
      TAXESNET
      LOSS
            
            (194,401)
            
            (186,150)OTHER
      COMPREHENSIVE INCOME (LOSS)
            
            -
            
            3,101COMPREHENSIVE
      NET LOSS
            $
            (194,401)
            
            (183,049)NET
      LOSS PER COMMON SHARE,BASIC
      AND DILUTED
            $
            nil
            $
            nilWEIGHTED
      AVERAGE NUMBER OFCOMMON
      SHARES OUTSTANDING,BASIC
      AND DILUTED
            
            199,952,195
            
            199,943,499





The
accompanying notes are an integral part of these consolidated financial
statements.


F-2








-4-








FIRST
      AMERICAN SCIENTIFIC CORP.CONSOLIDATED
      STATEMENTS OF CASH FLOWSThree
      months endedSeptember
      30,2009
            
            2008(unaudited)
            
            (unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            $
            (194,401)
            $
            (186,150)Adjustments
      to reconcile net loss to net cashused
      by operations:Depreciation
      and amortization
            
            47,609
            
            50,643Stock
      and options issued for services and compensation
            
            126,800
            
            3,000Gain
      (loss) on foreign currency translations
            
            (11,646)
            
            3,101Decrease
      (increase ) in:Accounts
      receivable
            
            39,488
            
            1,144Sales
      tax receivable
            
            8,115
            
            (3,484)Prepaid
      expenses
            
            3,315
            
            (14,172)Inventory
            
            (3,712)
            
            (59,475)Increase
      (decrease) in:Salaries
      payable - related parties
            
            10,000
            
            75,000Accounts
      payable & accrued expenses
            
            26,691
            
            52,224Customer
      deposits held
            
            32,803
            
            10,000Payables
      to related parties
            
            3,200
            
            -Net
      cash provided (used) by operating activities
            $
            88,262
            $
            (68,169)CASH
      FLOWS FROM INVESTING ACTIVITIESDisposal
      (purchase) of equipment - net
            
            -
            
            -Net
      cash provided (used) in investing activities
            $
            -
            $
            -CASH
      FLOWS FROM FINANCING ACTIVITIESLoans
      from related parties
            
            -
            
            63,975Net
      cash used by financing activities
            $
            -
            $
            63,975NET
      INCREASE (DECREASE) IN CASH
            
            88,262
            
            (4,194)CASH
      - Beginning of period
            
            33,891
            
            6,901CASH
      - End of period
            $
            122,153
            $
            2,707Supplemental
      Disclosure:Non-cash
      investing and financing activities:Transfer
      of Equipment to Inventory (net)
            
            37,825
            
            -





The
accompanying notes are an integral part of these consolidated financial
statements.


F-3


-5-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS





First
American Scientific Corp. (hereinafter “the Company” or “FASC”) was incorporated
in April 1995 under the laws of the State of Nevada primarily for the purpose of
manufacturing and operating equipment referred to as the KDS Micronex System.
This patented process has the capability of reducing industrial material such as
limestone, gypsum, zeolite, wood chips, bio-waste, rubber and ore containing
precious metals to a fine talcum-like powder. The process can significantly
increase the end value of the host material. The Company maintains an office in
Delta, British Columbia, Canada and a demonstration and sales site in
Abbotsford, British Columbia, Canada. The Company’s year-end is June
30th.





The
foregoing unaudited interim financial statements of First American Scientific
Corp. (hereinafter “FASC” or “the Company”) have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Regulation S-K as promulgated by the
Securities and Exchange Commission (“SEC”).  Accordingly, these
financial statements do not include all of the disclosures required by generally
accepted accounting principles in the United States of America for complete
financial statements.  These unaudited interim financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company’s annual report on Form 10K for the year ended June 30,
2009.  In the opinion of management, the unaudited interim financial
statements furnished herein include all adjustments, all of which are of a
normal recurring nature, necessary for a fair statement of the results for the
interim period presented.





The
preparation of financial statements in accordance with generally accepted
accounting principles in the United States of America requires the use of
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities known to exist as
of the date the financial statements are published, and the reported amounts of
revenues and expenses during the reporting period.  Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of the
Company’s financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions and could have a
material effect on the reported amounts of the Company’s financial position and
results of operations.





Operating
results for the three month period ended September 30, 2009 are not necessarily
indicative of the results that may be expected for the year ending June 30,
2010.





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





This
summary of significant accounting policies of FASC is presented to assist in
understanding the Company’s financial statements.  The financial
statements and notes are representations of the Company’s management, which is
responsible for their integrity and objectivity.  These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
financial statements.





F-4


-6-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





Use of
Estimates


The
process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts.





Going
Concern


The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. This basis of accounting
contemplates the recovery of the Company’s assets and the satisfaction of its
liabilities in the normal course of operations.





As shown
in the accompanying financial statements, the Company has incurred an
accumulated deficit of approximately $14,460,000 through September 30, 2009, has
limited cash resources and generated a net loss for the quarter of
$194,401.  These factors raise substantial doubt about the Company’s
ability to continue as a going concern.  Management plans to
substantially increase sales through current channels and develop new sales
opportunities.  Management has also established plans designed to
increase the sales of the Company’s products by continued research and
development and combining technology and sales resources with its joint venture
partners and with its Licensees.Additionally, management
plans include seeking new capital from new equity securities offerings which
may, if successful, provide funds needed to increase liquidity, fund internal
growth and fully implement its business plan.  However, there is no
assurance that the Company will raise the required capital.  If the
Company is unable to raise the required capital, then it will assess its future
business viability.





The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.





Impairment of Long-Lived
Assets


The
carrying value of our long-lived assets, such as property and equipment and
amortized intangible assets, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable, in accordance with guidance on the accounting for impairment or
disposal of long-lived assets (Topic 360). We look to current and future
profitability, as well as current and future undiscounted cash flows, excluding
financing costs, as primary indicators of recoverability. An impairment loss
would be recognized when the sum of the undiscounted future net cash flows
expected to result from the use of the asset and its eventual disposal is less
than the carrying amount. If impairment is determined to exist, any related
impairment loss is calculated based on fair value.





In
complying with this standard, the Company reviews its long-lived assets
annually. As of September 30, 2009, no impairments were deemed
necessary.


F-5


-7-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





Principles of
Consolidation


The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiary First American Scientific (Canada) Ltd.  All
significant inter-company transactions and balances have been eliminated in
consolidation.





Revenue and Cost
Recognition


Revenues
from the sale of KDS machines are recognized when there is a sales contract, all
terms of the contract have been completed, collectibility is reasonably assured
and the products are shipped.  During the three months ended September
30, 2009, the Company recorded revenue of $382,368.





Revenue
from license fees and royalties are recorded when they are
received.





KDS
machine costs include applicable direct material and labor costs and related
indirect costs.  Changes in job performance, job conditions and
estimated profitability may result in revisions to product costs, which are
recognized in the period in which the revisions are determined.





Reclassifications


Certain
prior year amounts in the accompanying financial statements have been
reclassified to conform to the current presentation.





Recent Accounting
Pronouncements


In
September 2009, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update 2009-12, Fair Value Measurements and
Disclosures (Topic 820): Investments in Certain Entities That Calculate Net
Asset Value per Share (or Its Equivalent).This Update
provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures
– Overall, for the fair value measurement of investments in certain entities
that calculate net asset value per share (or its equivalent).  The
amendments in this Update are effective for interim and annual periods ending
after December 15, 2009.  Early application is permitted in financial
statements for earlier interim and annual periods that have not been issued. The
adoption of this Update will have no material effect on the Company’s financial
condition or results of operations.





In August
2009, the FASB issued Accounting Standards Update 2009-05, Fair Value Measurements and
Disclosures (Topic 820): Measuring Liabilities at Fair Value. This update
provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures
– Overall, for the fair value measurement of liabilities.  The
guidance provided in this Update is effective for the first reporting period
beginning after issuance. The adoption of this statement will have no material
effect on the Company’s financial condition or results of
operations





In June
2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
CodificationTMand the Hierarchy of Generally
Accepted Accounting Principles—a replacement of FASB Statement
No. 162, which is codified in FASB ASC 105, Generally Accepted Accounting
Principles (“ASC 105”). ASC 105 establishes the Codification as the
source of authoritative GAAP in the United States (the “GAAP hierarchy”)
recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive


F-6


-8-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





releases
of the Securities and Exchange Commission (“SEC”) under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. Once
the Codification is in effect, all of its content will carry the same level of
authority and the GAAP hierarchy will be modified to include only two levels of
GAAP, authoritative and non-authoritative. ASC 105 is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. We adopted the requirements of ASC 105 in the third quarter of 2009; the
adoption had no material effect on the Company’s financial condition or results
of operation.





In June
2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation
No. 46(R) (“SFAS No. 167”), which amends the consolidation
guidance applicable to variable interest entities. The amendments will
significantly affect the overall consolidation analysis under FASB ASC 810,
Consolidation and
requires an enterprise to perform an analysis to determine whether the
enterprise’s variable interest or interests give it a controlling financial
interest in a variable interest entity.





SFAS
No. 167 has not yet been codified and in accordance with ASC 105, remains
authoritative guidance until such time that it is integrated in the FASB ASC.
SFAS No. 167 is effective as of the beginning of the first fiscal year that
begins after November 15, 2009, early adoption is prohibited. The adoption
of this Update will have no material effect on the Company’s financial condition
or results of operations.


In June,
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No 166, Accounting for Transfers of
Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”).
This Statement removes the concept of a qualifying special-purpose entity
Statement 140 and removes the exception from applying Interpretation No. 46
(revised December 2003), Consolidation of Variable Interest
Entities,to qualifying special-purpose entities.
 
 SFAS
No. 166 has not yet been codified and in accordance with ASC 105, remains
authoritative guidance until such time that it is integrated in the FASB ASC.
SFAS No. 166 is effective for financial asset transfers occurring after the
beginning of an entity’s first fiscal year that begins after November 15,
2009 and early adoption is prohibited. The adoption of this statement will have
no material affect on the financial statements or results of
operations.





In May,
2009, FASB issued ASC 855 Subsequent Eventswhich
establishes principles and requirements for subsequent events. In accordance
with the provisions of ASC 855, the Company currently evaluates subsequent
events through the date the financial statements are available to be
issued.





NOTE
3 – PROPERTY AND EQUIPMENT





The
Company refurbished and sold its demonstration machine to a customer during the
quarter. At the time of sale, the equipment sold was transferred to inventory at
cost of $ 60,398 less the accumulated depreciation taken to date in the amount
of $22,573.  The resultant net cost was expensed as cost of goods
sold.


F-7


-9-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





Depreciation
expense for the three month period ended September 30, 2009 and 2008 were $8,500
and $11,917 respectively.





NOTE
4 – COMMON STOCK





During
the three months ended September 30, 2009, the Company did not issue any shares
of common stock of the Company.





NOTE
5 – STOCK OPTIONS





The
Company’s board of directors approved the First American Scientific Corp. 2006
Non-qualified Stock Option Plan.  This plan allows the Company to
distribute up to 5,000,000 shares of common stock options at a maximum share
price of $0.04 to persons employed or associated with the
Company.  This plan was not approved by the Company’s security
holders. There is no express termination date for the options, authorized by the
Company’s plans, although the Company’s board may vote to terminate any existing
plan.  The exercise price of the options will be determined at the
date of grant.





On July
1, 2008, pursuant to the Employment Agreements with two senior officers, the
Company was obligated to grant options to purchase 4,000,000 at an exercise
price of $ 0.02.





On July
1, 2009, pursuant to the Employment Agreements with two senior officers, the
Company was obligated to grant options to purchase 4,000,000 at an exercise
price of $ 0.02.





As of
September 30, 2009, the Company was obligated to grant a total of 8,000,000
options to its senior officers.





In
determining the fair value of options vested, the Company applied the
Black-Scholes model using a market value of $0.037, a strike price of $0.02, a
ten year term and a 1 % annual interest rate and a volatility factor of
79%.  As a result, an amount of $ 126,800 was recorded as an expense
in the current quarter, and an amount of $ 253,600 is recorded as the total
value of outstanding obligations to grant stock options.





As of
September 30, 2009 the Company did not have sufficient authorized capital to
meet the obligation to issue the shares granted under the above
options.





NOTE
6 – RELATED PARTIES





On June
30, 2009 the Board of Directors committed to pay outstanding amounts due to two
of its senior officers by way of the grant of stock options to purchase shares
at the fair market value on June 30, 2009.  The options will be issued
upon the registration of a new Stock Option Plan.





F-8


-10-








FIRST
      AMERICAN SCIENTIFIC CORP.Notes
      to Condensed Consolidated Financial StatementsSeptember
      30, 2009





At
September 30, 2009, the Company owed its senior executives and its directors a
total of $ 1,037,000 for unpaid accrued salary and $ 85,253 for short term loans
made to the Company.





NOTE
7 – SUBSEQUENT EVENTS





On
October 1, 2009, the Company signed a forty eight month leasing agreement to
finance the acquisition of a new diesel generator. The total lease commitment is
$ 46,704 Cdn. After the final payment, the Company has the option to purchase
the equipment for $ 10 Cdn. The lease commitment is guaranteed by two of the
Company’s directors.





The
Company has evaluated subsequent events through to November 12, 2009, the date
the financial statements were available for issue.





































F-9


-11-





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





Liquidity and Capital
Resources





We were incorporated April 12, 1995 as
a development stage company. We are the owner of the KDS disintegration
technology which is patented in the USA, Canada, UK, Europe, Mexico, Australia,
and New Zealand. Patents applications are pending in Malaysia, Korea and
Japan.





We have now reached commercial
viability for several of our applications and have entered our marketing phase.
To date, we have sold systems in Canada, the United States, Poland, Latvia,
Brazil, Malaysia, South Korea, Japan, Mexico, Norway and the UK.





On September 30, 2009 we had current
assets of $351,605 and current liabilities of $1,548,248 compared to June 30,
2008 when we had $272,724 in current assets and $1,475,554 in current
liabilities. The Company has no long term debt other than amounts due to its
Officers in the amount of $1,122,253.  Notwithstanding these amounts,
our working capital ratio on September 30, 2009 was negative, and the decline in
working capital over time has been straining the Company’s ability to
progress.  The Company has no secured outside sources of liquidity and
has been relying upon the loans and salary deferments to maintain
operations.





Accounting
issues





Management believes that the carrying
value of its technology licenses, patents and manufacturing rights are fairly
stated at cost less amortization based upon the estimated present value of cash
flows and the Company’s projections to sell at least two machines each year
through 2009.  The Company exceeded this target in fiscal years 2008
and 2009, and based on orders on hand, has already exceeded that target for
fiscal year 2010.  Revenue is recognized when the equipment is
delivered.





The Company requests its customers to
pay a 50 % deposit on all orders prior to the commencement of fabrication. These
monies are reported as a current liability until the equipment is delivered at
which time it is recognized as revenue. Generally, deposits received are
non-refundable. As of September 30, 2009, the Company held deposits on one
machine in the amount of $189,500.





Method of Accounting for our
Interest in Joint Ventures





In the year ended June 30, 2008 the
Company changed its method of accounting for its investment in the Malaysian
joint venture to the equity method. Consequently, the carrying value of the
asset was reduced by its share of the accumulated losses incurred to
date.  As of June 30, 2009, due to the lack of availability of audited
financial reports, we concluded that there is doubt regarding the ability of the
joint venture to continue as a going concern, and consequently, we reduced the
carrying value of our interest in the Malaysian joint venture to one
dollar.





During the year ended June 30, 2009, we
entered into an agreement to form a joint venture in Korea. As of September 30,
2009, due to the lack of availability of audited financial reports, we concluded
that there is doubt regarding the ability of the joint venture to operate as
going concern, and consequently, we have reduced the carrying value of our
interest in the Korean joint venture to zero.








-12-





Going
Concern





As shown in the accompanying financial
statements, we have incurred significant losses since inception.  The
future of our Company is dependent upon our ability to obtain sufficient
financing and upon achieving future profitable operations.  These
factors, among others, raise substantial doubt about our Company’s ability to
continue as a going concern.  Our auditors have issued a going concern
report because we do not have sufficient cash flow to maintain our operation for
the next year.  Management will have to seek additional capital from
new equity securities offerings, loans, revenues or other sources to maintain
operations.  The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.





As of September 30, 2009, there were
199,952,195 shares of our common stock issued and outstanding.





Results of Operations –
Quarter ending September 30, 2009





Revenue from equipment sales for the
quarter was $382,368 compared to the zero for the same quarter last year. Sales
this quarter were for the sale of two KDS machines. Net losses for the quarter
were $194,401 compared to a loss of $183,049 for the same quarter last
year.





Generally, sales have been increasing
as are marketing efforts system wide are gaining momentum, with seven sales
recorded last fiscal year, two sales recorded in the first  quarter,
one sale completed in the second quarter and a royalty received for another from
one of our joint ventures.





The Company’s auditors have issued a
going concern report meaning we will need to increase sales or raise outside
capital in order to continue in existence.





The company anticipates future revenue
to come from equipment sales, as well as its share in future profits from joint
ventures, and from royalties and license fees. With the current orders in
process, we anticipate recognizing one sale next quarter.Sales are recorded when
the equipment is shipped as per our revenue recognition policy.





Project
Updates





First American Scientific
Corp ( Malaysia ) Bhd. Sdn, 50/50 joint venture





The joint venture sold two KDS machines
during the current fiscal year.





JP FASKorea Co Ltd, 50/50 -
joint venture – South Korea





The joint venture sold one KDS machine
last year and has a second sale pending this year.





JP Steelplantech Company -
License for Japan





On September 26, 2005, the Company
signed an exclusive license agreement for manufacturing and marketing the KDS
System in Japan with JP Steelplantech Company of Yokohama, Japan. As part of the
agreement JP Steel has paid an up front licensing fee and purchased and
installed a fully operational KDS at its facility in Yokohama to be used for
sales demonstrations and research purposes. JP Steel must also pay a royalty to
FASC for each machine manufactured and sold in Japan. Two machines have been
sold so far under this agreement.








-13-





Sodif S..A. de C.V. –
License for Mexico





In June 2007 we signed an exclusive
marketing agreement with a group in Mexico.  One condition of
exclusivity was that they purchase a demonstration machine and adapt it to the
local market conditions.  The machine has been delivered and is
operational. The customer is now developing a unique food product which it
advises it will launch early next year. No KDS machines have been sold so far
under this agreement.





Cover Technologies Inc –
License for eastern USA





In October 2008, we signed an exclusive
marketing license with this group for eastern USA.  One condition of
exclusivity was that they purchase a demonstration machine and adapt it to the
local market conditions.  The machine has now been set up and is
operational. The customer is now developing applications for the paper and
biomass industries on the eastern seaboard of the USA. No KDS machines have been
sold so far under this agreement.





Other  contracts
and agreements:





Agreement in
Principle  - Brazil





On November 11, 2008, the Company
signed an agreement to form a joint venture to be named First American
Scientific Brazil Ltda. for the manufacture, marketing, and operation of KDS
equipment in Brazil. This agreement, which is expected to be formalized next
quarter, will result in our ownership of 50 % of a newly formed Brazilian joint
venture corporation named FAS Brazil Ltda.





Marketing
Agreements





We offer our products for sale
worldwide using non-exclusive marketing agreements with local companies who
promote and sell our equipment to their customers in their regions.





Employment
Agreements





On July 1, 2008 the Company signed an
Employment Agreements with two of its senior officers providing an option for
the issue of stock in lieu of payment for unpaid salaries and loans, grant of
annual stock options, and provisions for compensation on termination due to
change of control or otherwise, and to provide for collateral for unpaid debts.
These agreements also provide for an acceleration of the total contracted
amounts due until the end of term of the contract in case of early termination
or due to change of control.





Research and
Development





We continue to focus on improving the
KDS equipment’s processing capacity and improve efficiencies for several
different applications. We have determined that processing of softer materials
such as biomass and pulp sludge currently represent the highest and best use for
our technology and the most probable to generate sales. A fully equipped
demonstration facility is set up in Abbotsford, Canada, to perfect the sludge
application and improve the KDS machine drying capabilities. Progress will be
announced as it materializes, but, presently, due to cash flow limitations, new
research is moving ahead only as funds become available.





-14-





Inflation





Inflation has not been a factor
affecting current operations, and is not expected to have any material effect on
operations in the near future.





Foreign
Operations





We rent office space in Abbotsford,
British Columbia, Canada, and our demonstration facility is located on the
adjacent property.





Foreign exchange
exposure:





The Company uses the US dollar as its
functional currency and records all international contacts in US dollars, except
for sales to Canadian customers which are recorded in Canadian dollars and then
translated to US dollars. These translations are reported as exchange gains and
losses and included in Net Income.





The majority of our operational
expenses, including fabrication costs, are incurred in Canadian
dollars.  Recent fluctuations of the US dollar vs. the Canadian has
given us a foreign exchange losses on our Canadian dollar liabilities. The
reverse would be true if the US dollar was to strengthen against the Canadian
dollar as was the case in recent history.  These changes are reported
as exchange gains and losses and are included in Net Income. Relative to our
total financial position, are not considered material at this time.





We attempt to, whenever practical, meet
our Canadian obligations with our Canadian dollars, and meet our US obligations
with our US dollars which we hold in separate accounts. This minimizes our
exposure to currency fluctuations as much as possible.





Trends





Sales efforts are beginning to bring
results with two sales booked in this quarter   and a third
completing in the next quarter ending December 31, 2009. Based upon recent sales
and current prospects, we anticipate revenue for the fiscal year ending June 30,
2010 to be in a range of $ $ 750,000 to $ 1,500,000.





With seven sales system-wide last
fiscal year, and two so far this year, the Company’s technology is beginning to
take hold in the waste to green energy sector, a sector where international
government support and funding is growing. To meet the expected growth in
demand, we continue to expand our marketing network throughout the USA, Canada
and Mexico, and are working with several prospects in Asia and Europe, as well
as South America.





Recent Accounting
Pronouncements





This information is disclosed in the
Notes to the Consolidated Financial Statements.





ITEM 3.
            QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET
RISK.





We are a smaller reporting company as
defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not
required to provide the information under this item.


-15-





ITEM
4.        CONTROLS AND
PROCEDURES.





Evaluation of Disclosure
Controls and Internal Controls





a)           Evaluation of Disclosure
Controls and Procedures





In connection with the preparation of
this report on Form 10-Q, an evaluation was carried out by the Company’s
management, with the participation of the chief executive officer and the chief
financial officer, of the effectiveness of the Company’s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (“Exchange Act”)). Disclosure controls and procedures are
designed to ensure that information required to be disclosed in reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Commission’s rules and forms
and that such information is accumulated and communicated to management,
including the chief executive officer and the chief financial officer, to allow
timely decisions regarding required disclosures.





Based on that evaluation, the Company’s
management concluded, as of the end of the period covered by this report, that
the Company’s disclosure controls and procedures were not effective in
recording, processing, summarizing, and reporting information required to be
disclosed, within the time periods specified in the Commission’s rules and
forms, and that such information was accumulated and communicated to management,
including the chief executive officer and the chief financial officer, to allow
timely decisions regarding required disclosures.





b)           Changes in Internal Control
over Financial Reporting





There have been no changes in internal
control over financial reporting (as defined in Rule 13a-15(f) of the Exchange
Act) during the period ended September 30, 2009, that materially affected, or
are reasonably likely to materially affect, the Company’s internal control over
financial reporting.








PART
II. OTHER INFORMATION





ITEM
1A.      RISK FACTORS





We are a smaller reporting company as
defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not
required to provide the information under this item.





ITEM
6.        EXHIBITS.





The
following documents are included herein:





Exhibit
      No.
            Document
      Description31.1
            Certification
      of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
            Certification
      of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
            Certification
      of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act
      of 2002.32.2
            Certification
      of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act
      of 2002.





-16-





SIGNATURES





In accordance with the requirements of
the Exchange Act, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on this 13th day
of November, 2009.





FIRST
      AMERICAN SCIENTIFIC CORP.(Registrant)BY:
            J. BRIAN
      NICHOLSJ.
      Brian NicholsPresident,
      Principal Executive Officer and a member of the Board of
      DirectorsBY:
            CALVIN L.
      KANTONENCalvin
      L. KantonenPrincipal
      Financial Officer, Treasurer, and Chairman of the Board Of
      Directors




















































-17-





EXHIBIT
INDEX








Exhibit
      No.
            Document
      Description31.1
            Certification
      of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
            Certification
      of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
            Certification
      of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act
      of 2002.32.2
            Certification
      of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act
      of 2002.




















































-18-