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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, DC 20549

FORM 10-QSB



|[ x ]   | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|------- | ----------------------------------------------------------------------------------------
|        | FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2004                                        
|        |                                                                                         
|OR      |                                                                                         
|        |                                                                                         
|[     ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|        | For the transition period from ________ to ________                                     

Commission File Number: 000-27094

FIRST AMERICAN SCIENTIFIC CORP.



|NEVADA                                                         | 88-0338315                          
|-------------------------------------------------------------- | ------------------------------------
|(State of other jurisdiction of incorporation or organization) | (IRS Employer Identification Number)

100 Park Royal South 
Suite 811 
Vancouver, British Columbia 
Canada V7T 1A2(Address of principal executive offices)

(604) 913-9035 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [     ]

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PART I.

ITEM 1. FINANCIAL STATEMENTS

FIRST AMERICAN SCIENTIFIC CORP.
Consolidated Financial Statements

TABLE OF CONTENTS



|Financial Statements                      
|------------------------------------------
|                                          
|                                          
|                                          
|                                          
|Notes to Consolidated Financial Statements

















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FIRST AMERICAN SCIENTIFIC CORP.
CONSOLIDATED BALANCE SHEETS



|                                           |                                                       | December 31,                                               |                            |           | June 30, 
|------------------------------------------ | ----------------------------------------------------- | ---------------------------------------------------------- | -------------------------- | --------- | ---------
|                                           |                                                       | 2004                                                       |                            |           | 2004     
|ASSETS                                     |                                                       | (Unaudited)                                                |                            |           |          
|                                           |                                                       |                                                            |                            |           |          
|CURRENT ASSETS                             |                                                       |                                                            |                            |           |          
|                                           | Cash                                                  | $                                                          | 38,292                     |           | $        
|                                           | Accounts receivable, net of allowance                 |                                                            | 10,621                     |           |          
|                                           | Prepaid expenses and other assets                     |                                                            | 5,478                      |           |          
|                                           | Inventory                                             |                                                            | 155,204                    |           |          
|                                           |                                                       | TOTAL CURRENT ASSETS                                       |                            | 209,595   |          
|                                           |                                                       |                                                            |                            |           |          
|PROPERTY AND EQUIPMENT                     |                                                       |                                                            |                            |           |          
|                                           | Property and equipment                                |                                                            | 95,714                     |           |          
|                                           | Less: Accumulated depreciation                        |                                                            | (26,947)                   |           |          
|                                           |                                                       | TOTAL PROPERTY AND EQUIPMENT                               |                            | 68,767    |          
|                                           |                                                       |                                                            |                            |           |          
|OTHER ASSETS                               |                                                       |                                                            |                            |           |          
|                                           | Technology rights, net of amortization                |                                                            | 962,242                    |           |          
|                                           | Patents and manufacturing rights, net of amortization |                                                            | 151,331                    |           |          
|                                           | Deposits                                              |                                                            | -                          |           |          
|                                           |                                                       | TOTAL OTHER ASSETS                                         |                            | 1,113,573 |          
|                                           |                                                       |                                                            |                            |           |          
|                                           |                                                       |                                                            |                            |           |          
|TOTAL ASSETS                               | $                                                     | 1,391,935                                                  |                            | $         | 1,617,098
|                                           |                                                       |                                                            |                            |           |          
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                       |                                                            |                            |           |          
|                                           |                                                       |                                                            |                            |           |          
|CURRENT LIABILITIES                        |                                                       |                                                            |                            |           |          
|                                           | Accounts payable and accrued expenses                 | $                                                          | 43,482                     |           | $        
|                                           |                                                       | TOTAL CURRENT LIABILITIES                                  |                            | 43,482    |          
|                                           |                                                       |                                                            |                            |           |          
|LONG-TERM LIABILITIES                      |                                                       |                                                            |                            |           |          
|                                           | Notes and wages payable to related parties            |                                                            | 252,216                    |           |          
|                                           |                                                       | TOTAL LONG-TERM LIABILITIES                                |                            | 252,216   |          
|                                           |                                                       |                                                            |                            |           |          
|COMMITMENTS AND CONTINGENCIES              |                                                       | -                                                          |                            |           | -        
|                                           |                                                       |                                                            |                            |           |          
|STOCKHOLDERS' EQUITY                       |                                                       |                                                            |                            |           |          
|                                           | Common stock - $.001 par value,                       |                                                            |                            |           |          
|                                           |                                                       | 200,000,000 shares authorized; 174,673,865 and 169,564,976 |                            |           |          
|                                           |                                                       | shares issued and outstanding, respectively                |                            | 174,674   |          
|                                           | Additional paid-in capital                            |                                                            | 12,177,447                 |           |          
|                                           | Stock options                                         |                                                            | 254,291                    |           |          
|                                           | Accumulated deficit                                   |                                                            | (11,493,767)               |           |          
|                                           | Accumulated other comprehensive income/loss           |                                                            | (16,408)                   |           |          
|                                           |                                                       |                                                            | TOTAL STOCKHOLDERS' EQUITY |           | 1,096,237
|                                           |                                                       |                                                            |                            |           |          
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $                                                     | 1,391,935                                                  |                            | $         | 1,617,098



See accompanying notes.

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FIRST AMERICAN SCIENTIFIC CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)



|                                                |                                          | Three Months Ended         |         |             | Six Months Ended
|----------------------------------------------- | ---------------------------------------- | -------------------------- | ------- | ----------- | ----------------
|                                                |                                          | December 31,               |         |             | December 31,    
|                                                |                                          | 2004                       |         |             | 2003            
|                                                |                                          | (unaudited)                |         |             | (unaudited)     
|                                                |                                          |                            |         |             |                 
|REVENUES                                        | $                                        | 180,058                    |         | $           | 61,210          
|                                                |                                          |                            |         |             |                 
|COST OF SALES                                   |                                          | 65,932                     |         |             | -               
|                                                |                                          |                            |         |             |                 
|GROSS PROFIT                                    |                                          | 114,126                    |         |             | 61,210          
|                                                |                                          |                            |         |             |                 
|OPERATING EXPENSES                              |                                          |                            |         |             |                 
|                                                | Amortization and depreciation            |                            | 44,510  |             |                 
|                                                | Professional services                    |                            | 66,379  |             |                 
|                                                | Wages                                    |                            | 186,280 |             |                 
|                                                | Commissions                              |                            | 463     |             |                 
|                                                | Research and development                 |                            | 349     |             |                 
|                                                | General and administration               |                            | 43,193  |             |                 
|                                                |                                          | Total Operating Expenses   |         | 341,174     |                 
|                                                |                                          |                            |         |             |                 
|OTHER INCOME (EXPENSE)                          |                                          | -                          |         |             | -               
|                                                |                                          |                            |         |             |                 
|LOSS FROM CONTINUING OPERATIONS                 |                                          | (227,048)                  |         |             | (265,053)       
|                                                |                                          |                            |         |             |                 
|LOSS FROM DISTRIBUTED SUBSIDIARY                |                                          | -                          |         |             | -               
|                                                |                                          |                            |         |             |                 
|LOSS BEFORE INCOME TAXES                        |                                          | (227,048)                  |         |             | (265,053)       
|                                                |                                          |                            |         |             |                 
|INCOME TAXES                                    |                                          | -                          |         |             | -               
|                                                |                                          |                            |         |             |                 
|NET LOSS BEFORE ALLOCATION TO MINORITY INTEREST |                                          | (227,048)                  |         |             | (265,053)       
|                                                |                                          |                            |         |             |                 
|ALLOCATION OF LOSS TO MINORITY INTEREST         |                                          |                            |         |             | 35,885          
|                                                |                                          |                            |         |             |                 
|NET LOSS                                        |                                          | (227,048)                  |         |             | (229,168)       
|                                                |                                          |                            |         |             |                 
|OTHER COMPREHENSIVE INCOME (LOSS)               |                                          |                            |         |             |                 
|                                                | Foreign currency translation gain (loss) |                            | (3,333) |             |                 
|                                                |                                          |                            |         |             |                 
|COMPREHENSIVE NET LOSS                          | $                                        | (230,381)                  |         | $           | (230,508)       
|                                                |                                          |                            |         |             |                 
|                                                | NET LOSS PER COMMON SHARE,               |                            |         |             |                 
|                                                |                                          | BASIC AND DILUTED          | $       | nil         |                 
|                                                |                                          |                            |         |             |                 
|                                                | WEIGHTED AVERAGE NUMBER OF               |                            |         |             |                 
|                                                |                                          | COMMON SHARES OUTSTANDING, |         |             |                 
|                                                |                                          | BASIC AND DILUTED          |         | 173,257,198 |                 





See accompanying notes.

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FIRST AMERICAN SCIENTIFIC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                   |                                                                   |                                                      | Six Months Ended
|-------------------------------------------------- | ----------------------------------------------------------------- | ---------------------------------------------------- | ----------------
|                                                   |                                                                   |                                                      | December 31,    
|                                                   |                                                                   |                                                      | 2004            
|                                                   |                                                                   |                                                      | (unaudited)     
|CASH FLOWS PROVIDED (USED) IN OPERATING ACTIVITIES |                                                                   |                                                      |                 
|                                                   | Net loss                                                          |                                                      | $               
|                                                   | Loss allocated to minority interest                               |                                                      |                 
|                                                   |                                                                   |                                                      | (416,753)       
|                                                   |                                                                   |                                                      |                 
|                                                   | Depreciation and amortization                                     |                                                      |                 
|                                                   | Stock issued for services and compensation                        |                                                      |                 
|                                                   | Stock issued for expenses                                         |                                                      |                 
|                                                   | Stock issued for services and consulting                          |                                                      |                 
|                                                   | Options issued for compensation                                   |                                                      |                 
|                                                   | Adjustments to reconcile net loss to net cash used by operations: |                                                      |                 
|                                                   |                                                                   | Decrease (increase) in accounts receivable           |                 
|                                                   |                                                                   | Decrease (increase) in taxes and tax credits         |                 
|                                                   |                                                                   | Decrease (increase) in inventory                     |                 
|                                                   |                                                                   | Decrease (increase) in deposits and prepaid expenses |                 
|                                                   |                                                                   | (Decrease) increase in accounts payable              |                 
|                                                   |                                                                   | (Decrease) increase in wages payable, related party  |                 
|Net cash provided (used) by operating activities   |                                                                   |                                                      | (47,676)        
|                                                   |                                                                   |                                                      |                 
|CASH FLOWS PROVIDED (USED) IN INVESTING ACTIVITIES |                                                                   |                                                      |                 
|Net cash provided (used) by investing activities   |                                                                   |                                                      | -               
|                                                   |                                                                   |                                                      |                 
|CASH FLOWS PROVIDED (USED) IN FINANCING ACTIVITIES |                                                                   |                                                      |                 
|                                                   |                                                                   | Proceeds from stock                                  |                 
|                                                   |                                                                   | Notes payable, related parties                       |                 
|Net cash provided (used) by financing activities   |                                                                   |                                                      | 31,632          
|                                                   |                                                                   |                                                      |                 
|NET INCREASE (DECREASE) IN CASH                    |                                                                   |                                                      | (16,044)        
|                                                   |                                                                   |                                                      |                 
|Other comprehensive income (loss)                  |                                                                   |                                                      | (5,486)         
|                                                   |                                                                   |                                                      |                 
|CASH - Beginning of year                           |                                                                   |                                                      | 59,822          
|                                                   |                                                                   |                                                      |                 
|CASH - End of period                               |                                                                   | $                                                    | 38,292          
|                                                   |                                                                   |                                                      |                 
|SUPPLEMENTAL CASHFLOW DISCLOSURES:                 |                                                                   |                                                      |                 
|                                                   | Interest Expense Paid                                             |                                                      | $               
|                                                   | Income Taxes Paid                                                 |                                                      | $               
|                                                   |                                                                   |                                                      |                 
|NON-CASH TRANSACTIONS:                             |                                                                   |                                                      |                 
|                                                   | Common stock issued for services and compensation                 |                                                      | $               
|                                                   | Common stock issued for services                                  |                                                      | $               
|                                                   | Options issued for service & compensation                         |                                                      | $               
|                                                   | Stock issued for accrued compensation                             |                                                      | $               
|                                                   | Stock issued for expenses                                         |                                                      | $               



 

See accompanying notes.

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FIRST AMERICAN SCIENTIFIC CORP.
Notes to Consolidated Financial Statements
December 31, 2004

______________________________________________________________________________

NOTE 1 - BASIS OF PRESENTATION

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-QSB and Regulation S-B 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 audited financial statements for the year ended June 30, 2004. 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 six month period ended December 31, 2004 are not necessarily indicative of the results that may be expected for the year ending June 30, 2005.

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.

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 $11,493,767 through December 31, 2004 and has limited cash resources. The Company recorded increased sales during the period ended December 31, 2004, but generated a net loss of $416,753. 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 with AGES as well as the joint venture with FASC (Malaysia) SBN.BHD.



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FIRST AMERICAN SCIENTIFIC CORP.
Notes to Consolidated Financial Statements
December 31, 2004

______________________________________________________________________________

Management intends to seek new capital from new equity securities offerings that will, 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.

Revenue and Cost RecognitionRevenues 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 delivered. During the six months ended December 31, 2004, the Company sold two machines.

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.

ReclassificationsCertain prior year amounts in the accompanying financial statements have been reclassified to conform to the fiscal 2003 presentation.

Recent Accounting Pronouncements In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151, Inventory Costs -  an amendment of ARB No. 43, Chapter 4. This Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that ". . . under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. . . ." This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not believe the adoption of this Statement will have any immediate material impact on the Company.

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 152, which amends FASB statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to state that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. The accounting for those operations and costs is subject to the guidance in SOP 04-2. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005. Management believes the adoption of this Statement will have no impact on the financial statements of the Company.





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FIRST AMERICAN SCIENTIFIC CORP.
Notes to Consolidated Financial Statements
December 31, 2004

______________________________________________________________________________

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.153. This Statement addresses the measurement of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetrary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges incurred during fiscal years beginning after the date of this Statement is issued. Management believes the adoption of this Statement will have no impact on the financial statements of the Company.

NOTE 3 - COMMON STOCK

During the six months ended December 31, 2004, the Company issued 3,000,000 shares of common stock upon the exercise of options for compensation with a fair market value of $120,000; 1,1970,000 shares of common stock upon the exercise of options for services with a fair market value of $79,580; and 138,889 shares of common stock for $10,000 cash.

NOTE 4 - STOCK OPTIONS

The Company's board of directors approved the First American Scientific Corp. 2004 and 2004A Non-qualified Stock Option Plan. This plan allows the Company to distribute up to 20,000,000 shares of common stock options at a maximum share price of $0.05 to persons employed or associated with the Company. This plan was not approved by the Company's security holders.

During the six months ended December 31, 2004, the Company granted 5,108,889 options of which 5,108,889 were immediately exercised.

NOTE 5 - RELATED PARTIES

At December 31, 2004, the Company owes two of its shareholders $180,000 for accrued wages and $72,216 for loans made to the Company.







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FIRST AMERICAN SCIENTIFIC CORP.
Notes to Consolidated Financial Statements
December 31, 2004

______________________________________________________________________________

NOTE 6 - JOINT VENTURE

In July 2004, the Company signed an agreement to form a joint venture with two Malaysian companies to construct a fully operational palm waste processing plant to be 100% financed by the Malaysian partners. Upon completion, the joint venture will be granted exclusive license for 21 years, to market the KDS equipment in Malaysia. In addition to earning royalties from all KDS equipment sold in Malaysia, FASC will share equally in the operating profits of the joint venture. A machine was purchased by the joint venture and shipped to Malaysia in August 2004.

NOTE 7 - CONTRACTS

On August 6, 2004, the Company entered into an agreement with The Waste and Resources Action Programme (hereinafter "WRAP") which is a UK Government funded program that supports research to improve markets for recycled materials and products in the UK. WRAP intends to fund the cost of research and development (R&D), as WRAP determines appropriate, to determine the possibilities for the Company's KDS Technology and KDS Micronex Machine and ancillaries. In addition, WRAP will conduct R&D to develop a production scale ancillary sludge separation system which can be used with the KDS Micronex Machine to reduce the costs and environmental impact of the sludge produced by the paper industry. Under the terms of the agreement, WRAP will purchase a KDS Micronex Machine. Also, WRAP will provide agreed funding in the amount of ^540,000 to be disbursed at WRAP's sole discretion for R&D purposes.

 

 

 

 

 

 

 

 

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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. In addition to the core patent, new patents for two new applications, one for the cryogenic freezing and shattering scrap rubber and one for separation of precious metals from mineral rock using our equipment have been granted. One other patent application for drying and recovery of fuel and clay from biomass has been submitted and is pending status. Further new registrations have been submitted in Japan and Malaysia. We have now reached proven commercial viability for several of our applications and have entered our marketing phase. To date, we have sold systems which are operating in Canada, the Unites States, Poland, Malaysia, and have recently shipped one machine to a pulp mill in the UK.

On December 31, 2004, we had current assets of $209,595 and current liabilities of $43,482 compared to the previous year on December 31, 2003 when we had $258,228 in current assets and $181,776 in current liabilities . Our working capital ratio on December 31, 2004 was 4.8:1, which represents a significant improvement over last year when the working capital ratio was 1.42:1 on December 31, 2003.

Sustainable Development Technology Canada (SDTC) Funding

In October 2004, Sustainable Development Technology Canada (SDTC) awarded a CDN$600,000 research grant to AGES to construct and install a complete waste to energy KDS 3000 system at a Canadian pulp mill. The approved location will be announced when agreements are finalized.

Waste Resources Action Program (WRAP) Research Funding

In September 2004, we signed an agreement wherein WRAP has agreed to provide funding to develop "value enhanced end-products" from the output of the KDS machine. WRAP has agreed to provide $1,000,000 for the purchase and installation of one complete KDS system to be located at an industrial site in England. The fund will also pay for market research, scientific research, re-design and adaptation costs for the equipment and supplementary systems for industry-specific applications. FASC engineering staff will manage the project which will run for approximately 18 months. The goals of the project are to demonstrate the KDS technology in a working environment, optimize ancillary equipment to improve its efficiency, and identify markets for recycled end products. The first machine was shipped to London, England on December 27, 2004

University of Tennessee - USDA Funding

In July 2004, we were selected to participate with the University of Tennessee in a Biomass Research Initiative project funded by the US Department of Agriculture. First American Scientific Co. was identified as a key industry partner for its history of developing novel size reduction and separation processes. The first organizational meeting to establish priorities was attended by our Vice President of Research in December 2004.

US Department of Energy Grant

Although we were selected for a further US Department of Energy (DOE) Phase II grant, that application did not proceed as we did not have a principle place of business in the USA.



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After remedying the deficiency, we subsequently reapplied for a new Phase I grant on December 14, 2004.

Accounting issues

Management believes that the carrying value of its technology licenses, patents and manufacturing rights are fairly stated at cost less amortization using the straight line method over 15 years based upon the estimated present value of cash flows and the Company's projections to sell at least two machines each year through 2006. The Company met this minimum sales target in fiscal year 2004, and has already met the target for fiscal year 2005.

Our auditors have issued a going concern statement because we do not have sufficient cash flow for us to maintain our operation for the next year. Consequently, our management will have to seek additional capital from new equity securities offerings, loans, or other fund raising activities to maintain our operation should new sales and receipt of receivables not materialize. Some relief has come from deferment of payment of salaries and loans due to our senior management which aggregate approximately $250,000 as of this date. This cannot be expected to continue indefinitely.

As of December 31, 2004, there were 174,673,865 shares issued and outstanding.

Results of Operations - Quarter ending December 31, 2004

Revenue for the quarter ended December 31, 2004 was $180,058 compared to $61,210 for the same period last year. This quarter's revenue included the sale of one system to WRAP in England. There were no equipment sales in the same period last year. Sales efforts are ongoing with several major projects in final stage of negotiation.

Net losses for the quarter ending December 31, 2004 were $230,381or less than $0.01 per share compared to $230,508 for the same period last year. Efforts increase revenue and to control and reduce operating costs are continual.

The Company will participate in profits and royalties from three separate joint venture agreements as follows:

United Zeolite Products Ltd. Joint Venture - Halliburton contract

In February 2004, FASC became a 1/3rd partner, along with C2C Zeolite Corp and Zeotech Enviro Corp, in United Zeolite Products Ltd, a BC company formed to build and operate a specialty zeolite processing plant in Princeton, B.C. UZP has a CDN$5,000,000 contract to supply of micronized zeolite to Halliburton Group Canada. In August 2004, Thelon Ventures Ltd., a Canadian company committed CDN$450,000 in cash to UZP as a condition to become a fourth equal partner in UZP, thereby by reducing each of the existing partners' equity position to 25 % each of UZP's outstanding shares, but providing the balance of funds needed to complete the construction of the Princeton facility. As of the date of writing this report the building construction is complete. KDS equipment has been delivered in is operational. Delays were experienced in receiving electrical service to the site and recent road closures due to severe winter weather, but this has now been resolved and the first production runs are expected to begin in shortly.



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Malaysian Joint Venture

In September 2004 the Company signed an agreement to form a new Malaysian company, FASC (Malaysia) Sdn. Bhd to construct a fully operational palm waste processing plant to be 100 % financed by the Malaysian partners. Upon completion, FASC (Malaysia) Sdn. Bhd. will be granted exclusive license to market the KDS equipment in Malaysia. In addition to earning royalties for all KDS equipment sold in Malaysia, FASC will share equally in the operating profits of the joint venture and retain a 50 % ownership in FASC (Malaysia) Sdn. Bhd. A machine was purchased by FASCMBS and shipped to Malaysia in August 2004. Operation of the equipment is now ongoing with and sampling runs of empty bunch, shell & coconut fibre underway.

Alternative Green Energy Systems Inc - Joint Venture

In February 2004, AGES received was granted a new 21 year exclusive license to design, manufacture and sell a large scale KDS machine for exclusive use in the pulp & paper industry in Canada, the USA and Europe. FASC owns 40 % of AGES. Plans for a new KDS Model 3000 have been finalized with the first sale pending. The smaller Model 250 test machine remains at Atlantic Packaging Ltd.'s paper recycling facility in Whitby, Ontario for experimentation and demonstration purposes.

Other material contracts :

Waste Resourses Action Program - UK

Under agreement with FASC, WRAP has agreed to provide up to US$1,000,000 for the purchase and installation of one complete KDS system to be located at a local pulp mill in the UK and for market research, scientific research and re-design of supplementary systems for industry-specific applications. The site will be announced when details are finalized. FASC engineering staff will be working with WRAP for the duration of the project which will run for approximately 18 months. For the project, the KDS will be the key technology to dewater sludge and enable the separation and recycling of fiber and clay for a variety of applications.

Mitsui Engineering & Shipbuilding Co. Ltd - Collaboration Agreement for Japan

In July 2004, FASC signed a collaboration with Mitsui Engineering and Shipbuilding Co. Ltd. (MES) wherein Mitsui will conduct a feasibility study into the marketability of the KDS Micronex System in Japan and evaluate the opportunity of venturing into a licensing agreement with us to introduce the KDS technology to the Japanese market. It was further agreed that MES would undertake all necessary steps to file and protect First American's patents in Japan. Patent applications have been filed and the agreement was extended in order to allow time to negotiate an exclusive marketing agreement. More details will be provided when they materialize.

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. With the funding provided by SDTC, WRAP, the USDA, and possibly DOE, our research will continue into developing commercially viable applications for our technology.



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Summary of accomplishments this fiscal year:



| | July 2004      |  | USDA grant participation with University of Tennessee 
| | -------------- |  | ------------------------------------------------------
| | July 2004      |  | Sign Collaboration Agreement with Mitsui - Japan      
| | September 2004 |  | Sale to WRAP and grant awarded/sign funding agreement 
| | September 2004 |  | Sale of KDS to FASC Malaysia/sign JV agreement        
| | October 2004   |  | UZP/Halliburton $450,000 Cdn project funding secured  
| | October 2004   |  | CDN$600,000 SDTC grant awarded to AGES                
| | October 2004   |  | file patent applications in Malaysia                  
| | November 2004  |  | Equipment commissioned at UZP Princeton site          
| | December 2004  |  | Construct and ship machine to England for WRAP project

Inflation

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

Foreign Operations

We rent office space in West Vancouver, British Columbia, Canada which serve as administrative and rent a sales offices and demonstration facility in Delta, British Columbia. AGES rents office space in Montreal, Quebec.

Trends

Sales efforts are beginning to bring results with one system sold in each of the last four quarters and several new major projects in the final stage of negotiation, however, as of the date of this report we have no firm contracts to purchase any machines. Based upon the sale of a minimum of eight machines over a one year period, we have projected sales of at least $2,000,000 next year.

Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" (hereinafter "SFAS No. 150"). SFAS No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity and requires that those instruments be classified as liabilities in statements of financial position. Previously, many of those instruments were classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. At September 30, 2003, the Company determined that there was no impact to the adoption of this statement.

In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (hereinafter "SFAS No. 149"). SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a material impact on the financial position or results of operations of the Company.



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In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" (hereinafter "SFAS No. 148"). SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," 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, the statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosure 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 provisions of the statement effective for financial statements for fiscal years ending after December 15, 2002, are not expected to impact the Company's financial statements. The Company currently reports stock issued to employees under the rules of SFAS No. 123. Accordingly, there is no change in disclosure requirements due to SFAS No. 148.

ITEM 3. CONTROLS AND PROCEDURES

Quarterly evaluation of our disclosure controls and internal controls

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, First American Scientific Corp.'s Principal Executive Officer and their Principal Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, First American Scientific Principal Executive and Principal Financial Officer each concluded that the Company's disclosure controls and procedures are effective. There were no changes in the Company's internal controls over financial reporting that occurred during the Company's most recent quarter that may have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

CEO and CFO certifications

Appearing immediately following the signatures section of this report there are two separate forms of "Certifications" of the CEO and the CFO. The first form of Certification is required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). This section of the report which you are currently reading is the information concerning the Controls Evaluation referred to in the Section 302 Certifications.

Disclosure controls and internal controls

Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (Exchange Act), such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.



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Limitations on the Effectiveness of controls

Our management, including our CEO and CFO, confirm that the control systems are at the "reasonable assurance" level, however, management does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud as a control system. No matter how well conceived and operated, they cannot provide absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. However, upon discovery that the controls have become inadequate, they will be changed.

Scope of the Controls Evaluation

Our CEO/CFO evaluation of our Disclosure Controls and our Internal Controls included a review of the controls' objectives and design, the controls' implementation by us and the effect of the controls on the information generated for use in this quarterly report. In the course of the Controls Evaluation, we sought to identify data errors, controls problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken. This type of evaluation will be done on a quarterly basis so that the conclusions concerning controls effectiveness can be reported in our Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls and to make modifications as necessary; our intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant.

Among other matters, we sought in our evaluation to determine whether there were any "significant deficiencies" or "material weaknesses" in our Internal Controls, or whether we had identified any acts of fraud involving personnel who have a significant role in our Internal Controls. This information was important both for the Controls Evaluation generally and because items 5 and 6 in the Section 302 Certifications of the CEO and CFO require that the CEO and CFO disclose that information to our Board of Directors Audit Committee and to our independent auditors and to report on related matters in this section of the quarterly report. In the professional auditing literature, "significant deficiencies" are referred to as "reportable conditions"; these are control issues that could have a significant adverse effect on the ability to record, process, summarize and report financial data in the financial statements. A "material weakness" is defined in the auditing literature as a particularly serious reportable condition where the internal control does not reduce to a relatively low level the risk that misstatements caused by error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to deal with other controls matters in the Controls Evaluation, and in each case if a problem was identified, we considered what revision, improvement and/or correction to make in accord with our on-going procedures. In accord with SEC requirements, our CEO and CFO note that, since the date of the Controls Evaluation to the date of this Quarterly Report, there have been no significant changes in Internal Controls or in other factors that could significantly affect Internal Controls, including any corrective actions with regard to significant deficiencies and material weaknesses.



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Conclusions

Based upon the Controls Evaluation, our CEO and CFO have concluded that, our disclosure controls are effective to ensure that material information relating to us and our subsidiary is made known to management, including our CEO and CFO, particularly during the period when our periodic reports are being prepared. Our internal controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles.

PART II.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K



|(a) | Exhibit No. | Document                                                                                                                                                      
|--- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |             |                                                                                                                                                               
|    | 31.1        | Certification of Principal Executive Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended 
|    |             |                                                                                                                                                               
|    | 31.2        | Certification of Principal Financial Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.
|    |             |                                                                                                                                                               
|    | 32.1        | Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (Chief Executive Officer)              
|    |             |                                                                                                                                                               
|    | 32.2        | Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (Chief Financial Officer)              



















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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 8th day of February, 2005.



| | FIRST AMERICAN SCIENTIFIC CORP.(Registrant)
| | -------------------------------------------
| |                                            
| | By:                                        
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| |                                            
| | By:                                        
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