UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED JUNE 30, 2010





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, British Columbia


Canada V2T 6L4


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





(604) 850-8959


(Registrants telephone number, including area code)





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   YES [   ]   NO [X]





Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act:    YES [X]   NO [   ]





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 [   ]





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [   ]   NO [X]





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[   ]





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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large Accelerated Filer
[   ]
Accelerated Filer
[   ]Non-accelerated Filer
[   ]
Smaller Reporting Company
[X](Do not check if a smaller reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [   ]   NO [X]





State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of October 6, 2010,   $5,878,565





At October 6, 2010, 199,952,195 shares of the registrant’s common stock were outstanding.

















TABLE OF CONTENTS





Page No.PART IItem 1.
Business
3Item 1A.
Risk Factors
9Item 1B.
Unresolved Staff Comments
9Item 2.
Properties
9Item 3.
Legal Proceedings
9PART IIItem 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
10Item 6.
Selected Financial Data
11Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
11Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
15Item 8.
Financial Statements and Supplementary Data
15Item 9.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
33Item 9A.
Controls and Procedures
33Item 9B.
Other Information
33PART IIIItem 10.
Directors, Executive Officers and Corporate Governance
35Item 11.
Executive Compensation
37Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
40Item 13.
Certain Relationships and Related Transactions, and Director Independence
40Item 14.
Principal Accountant Fees and Services
41PART IVItem 15.
Exhibits, Financial Statement Schedules
42Signatures
44Exhibit Index
45











-2-


PART I





ITEM 1.            DESCRIPTION OF BUSINESS





General





FIRST AMERICAN SCIENTIFIC CORP. (the “Company”) was incorporated under the laws of Nevada on April 12, 1995. The Company owns the patented kinetic disintegration system called the KDS Micronex System and three additional process patents using the equipment. The System consists of an electrically powered disintegration/drying chamber and feeding system that utilizes kinetic energy and standing sound waves to pulverize various waste materials such as biomass (wood waste), pulp sludge, animal waste, food waste, rubber, glass, and other feed stocks into valuable, fine, dry, talcum-like powders that can be used as a combustible fuel or a high nutrient fertilizer. The goal of the Company is to identify and develop commercially viable “waste to resources” industrial applications for the KDS System, then market, manufacture, sell, lease and/or license it to end users in the forest and pulp and paper industries, in agriculture, in recycling, and others.





Applications of the KDS System





1.           Converting Biomass to Combustible Fuel or Fertilizer





The Company’s research and testing to date indicates that the highest potential use for the equipment is found in pulverizing and drying (micronizing) biomass (wood waste) into a fine, dry combustible fuel that can be incinerated in specialized burners to create BTUs (heat energy), which, in turn, can be converted to electrical power through conventional means. For biomass, the critical value of the process is its ability to act as an industrial dryer which can extract water from wood at below boiling temperature at a significantly lower cost than through other conventional methods.





2.           Drying and Grinding of Pulp Sludge





The Company has processed wet (80% moisture) pulp sludge, and has shown that potential exists in converting waste pulp sludge to a dry, fibre-like powder and releasing the kaolin clay concurrently, then burning to create BTUs which are recycled back into the paper making process as heat and/or electrical power. This could reduce energy costs, disposal costs, and environmental problems in the pulp and paper industry.





3.           Drying and Grinding Animal Waste/Municipal Sewage/Food Waste





When micronizing animal manures, the system has proven its ability to kill 99% of all pathogens and coliforms during processing earning it an EPA rating as a pesticide device with registered establishment number 73753 CAN - 001 granted to the Company in January 2001. This cleansing of these types of waste products could bring large animal and poultry producers into compliance with EPA regulations as well as create a nutrient rich “clean” end product suitable for recycling as fertilizer.  When micronizing a mixture of food waste, wood waste and chicken manure, a fine, dry, pathogen-free dry powder is produced which is suitable as a high nutrient fertilizer base, as a filler, or, depending on the content, as cattle feed.





4.           Pulverizing of Mineral Rock to Release Precious Metals





When micronizing mineral rock, the process reduces the rock to a consistent fine dry powder as small as -400 mesh which has proven sufficient to separate and release precious and heavy metals mechanically without the use of chemicals. Development work continues to increase the durability of the equipment to withstand the heavy wear imposed when processing hard rock. Although the process has proven to be 97% efficient, commercially viable processing volumes have not yet been achieved. This process has now been patented.





-3-


5.           Micronizing Scrap Rubber





When micronizing rubber, a cryogenic cooling process can facilitate the recycling of scrap rubber by pre-freezing it in a cooling chamber and injecting it through a pneumatic feed system into a pulverizing chamber. The method has proven that the KDS system can pulverize (shatter) rubber into a fine mesh suitable for re-cycling as a base material for other rubber based products. Commercially viable quantities are not yet proven. This process has now been patented, but no further work has been done due to lack of funding.





6.           Micronizing of Recycled Glass





When micronizing glass, the process reduces it to a consistent fine dry powder as small as 20 microns which can be used as a strengthener in asphalt, concrete and ceramics.





The KDS Equipment





The KDS uses a patented high speed rotary action to create sufficient kinetic energy to pulverize and dry (micronize) raw materials that are introduced into the chamber without cutting.





The KDS machine weighs approximately five tons and measures sixteen feet high, by ten feet long by eight feet wide. It is powered by a 150 or 250 hp main drive electric motor and uses 5 smaller ancillary motors to move product through the chamber and discharge. The feed material is typically one inch in diameter and carried by a pneumatic lift or conveyor and material grading system, passing through the KDS system at various rates, dependent up product size, moisture content and hardness. The life span of the KDS machine is greater than ten (10) years and requires ongoing service and replacement of consumables. Routine maintenance is minimal and requires less than thirty minutes per day and twenty-four hour servicing twice a year.





There are currently three models and variations thereof available designed for various feedstocks and applications.





Patents issued:





Device and Method for Comminution - US Patent #6,024,307 and Canadian patent # 2,218,429





A patent was issued for the KDS as a device for comminution on November 24, 1998 under U.S. patent number is 6,024,307.





Cryogenic Comminution of Rubber - US Patent # 6,655,167 B2





On April 20, 2001, the Company filed a patent application in the United States to protect its research into developing a process for cryogenically freezing non-tire scrap rubber and processing in into a micro-fine powder using the KDS equipment. The patent was issued on December 2, 2003.





Method of Recovery of Precious Metal and Heavy Minerals - US Patent # 6,682,005 B2





On May 4, 2001, the Company filed a patent application in the United States to protect its research into developing a process for disintegrating and separating precious metal from hard rock without the use of chemicals. The patent was issued on January 27, 2004.





Method for Recovery of Fuel and Clay from Biomass – US Patent # 7481385 B2





In November 2002, the Company filed a patent application in the United States to protect its research for the processing wet biomass through the KDS equipment. Some of the subject matter in the application was approved as unique and the new patent was issued on January 27, 2009.


-4-


Recovery of Fuel and Clay from Biomass – Japanese Patent # 4487268





In January 2004, the Company filed a patent application in Japan to protect its research for the processing wet biomass through the KDS equipment. Some of the subject matter in the application was approved as unique and the new patent was issued on April 9, 2010.





A Comminuting and Drying Method and its Process  – Japanese Patent # 4546409





In March 2006, the Company filed a patent application in Japan to protect its technology for the process of comminution and drying of materials and its process. The application was approved as unique and the new patent was issued on July 9, 2010.





Dispositivo y Metodo Para Pulverizar  - Mexico Patent # 212680





A patent for a “machine and method for pulvering” based on the core US patent on was issued by the Instituto Mexicano de la Propiedad Industrial was issued on February 27, 2003.





Ownership of Patents





All patents issued and rights to the technology are owned by the company free and clear of any encumbrances.





Research and Development





The Company continues to focus on improving the KDS equipment’s processing capacity and improve efficiencies for several different applications. The Company has 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.





Government/Environment Regulation





The Company is subject to various federal, provincial and local environmental laws and regulations. Management believes that the Company’s operations currently comply in all material respects with applicable laws and regulations. Management believes the trend in environmental litigation and regulation is toward stricter standards, and that these stricter standards may result in higher costs for the Company and its competitors. Such changes in the laws and regulations may require the Company to make additional capital expenditures which, while not presently estimable with certainty, are not presently expected to be material. Costs for environmental compliance and waste disposal have not been material in the past. In the future, stricter regulations may increase the demand for our products which offer solutions to some environmental problems.





Manufacturing





The Company contracts with a Canadian manufacturer for the production of the KDS machine at a fixed price on a case by case basis. Engineering and design assistance are also provided by the manufacturer. Our licensees in Malaysia, Japan, and Korea provide for local manufacturing in those countries subject to certain conditions.











-5-


Technology Licenses granted as of June 30, 2010





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





In July 2004, the Company entered into a joint venture agreement with two Malaysian companies to sell and market the KDS Micronex Machine in Malaysia.  Under the terms of the agreement the joint venture was required to purchase one KDS Micronex Machine and set up a demonstration plant in Malaysia. In August 2004, the Company received 50 % of the outstanding shares of common stock of the joint venture in lieu of payment of a license fee.  The license covers Malaysia, Thailand, Singapore, and Indonesia. FASCM pays a royalty to FASC for each machine manufactured and sold in the territory.





The joint venture sold two KDS machines during the current fiscal year with three more units to be expected to be delivered in October 2010. Royalties in the amount of  $ 40,910 USD were received on two sales during fiscal year 2009 and none in fiscal year 2010. .





As of June 30, 2010, FASC owns 50 % of the outstanding shares of FASCM.





JP Steelplantech Company – License for Japan





In September 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 were sold in fiscal year 2009 and four machines were sold this year for a total of six to date in Japan.  Royalties in the amount of  $27,000 and $45,000 were received in fiscal years 2009 and 2010 respectively.





JP Steel Plantech Co. is a well established engineering and equipment manufacturing company owned by four Japanese steel industry companies; Kawasaki Heavy Industries (KHI), Hitachi Zosen (HITZ), JFE Engineering (JFE) and Sumitomo Heavy Industries (SHI).





JP FASKorea Co. Ltd. -  50/50 joint venture - South Korea





In October 2008, the Company signed a new exclusive license agreement for the manufacturing and marketing of the KDS System in South Korea with JP FASKorea Co. Ltd. As part of the agreement, JP FASKorea Co. Ltd assumes prior obligations of JNK Heaters, the previous Korean licensee who purchased and installed a fully operational KDS at its facility in Seoul. JP FASKorea Co Ltd. pays royalties to FASC for each machine sold in Korea.





The Company received its 50 % of the outstanding shares of common stock of the joint venture in lieu of payment of a license fee.





The joint venture sold one KDS machine in the current fiscal year.  Royalties in the amount of $13,500 and $13,500 were received in fiscal years 2009 and 2010 respectively.





As of June 30, 2010, the Company owns 50 % of the outstanding shares of JP FASKorea Co. Ltd.





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





In June 2007 we signed an exclusive marketing agreement with Sodif S.A. de C.V. 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 plans to launch in 2010 or early 2011.  No other KDS machines have been sold so far under this agreement.


-6-


No KDS machines were sold this year in Mexico.





Cover Technologies Inc – License for eastern USA





In October 2008, we signed an exclusive marketing license with Cover Technologies Inc. for the states of New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire, Maine and Florida. 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 other KDS machines have been sold so far under this agreement.





Other than the demonstration machine sold in fiscal year 2009,  no KDS machines were sold this year under this agreement.





SIA EHT Engineering  – License for Latvia





In October 2009 we signed an exclusive marketing – distributor agreement with SIA EHTEngineering allowing them to purchase our equipment at wholesale prices for resale in Latvia, Lithuania, and Estonia.  One condition of exclusivity was that they purchase a demonstration machine and adapt it to the local market conditions.  The customer has developed a unique algae-based fertilizer which it sells in Northern Africa. The demonstration machine was delivered in 2009 and is operational. A second machine representing a sale to a customer was delivered in fiscal year 2010.





Summary of Agreements





Other material contracts or 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. During subsequent negotiations, it was decided to grant a license to the Brazilian group rather than enter into a joint venture.  A new agreement has been reached and is now being translated into Portuguese which we expect to be signed in October 2010.





Marketing Agreements





During the year, we signed non-exclusive marketing agreements with several groups to promote and sell the KDS equipment to customers in the USA and Canada.





Employment Agreements





On July 1, 2008, the Company signed 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. In case of early termination, these agreements provide for an acceleration of the total contracted amount due until the end of term of the contract, and an immediate vesting of all stock options to be granted therein.





Deposits received on future sales











-7-


In May 2007, Company received a deposit of $ 118,764 for the sale of one KDS machine from a customer in Europe. The machine was fabricated and ready for shipment. The balance of the purchase price was never received as the customer was unable to obtain financing and the machine was not delivered to the customer.  At this point in time all communications with the customer ceased. Since specialty components were used and we had no further contact with the customer, the deposit was deemed non-refundable and recorded as income in fiscal year 2008. In August 2010, the customer resurfaced and requested a refund. We advised them that the deposit was non-refundable, but agreed to apply the deposit as a credit against a future machine purchase at current market prices. The customer is not prepared to complete the purchase at present, but if they do, we will apply their original deposit and record a settlement amount at that time.





Market





The KDS machine has proven viable for softer industrial rock, such as gypsum and zeolite, wood chips or chicken manure (embedded in sawdust), and any biomass at moisture levels below 60%. The Company continues to research and seek potential markets where operation of the equipment is economically viable. Improvements to the equipment continue and we are constantly experimenting to find solutions that increase throughput on various types of products. Each situation presents unique hurdles to be overcome. In the case of rubber, feedstock becomes elastic with rise in temperature and must be pre-frozen before processing to maintain efficient shattering. In the case of biomass and pulp sludge, the product should not exceed 60% moisture content to avoid clogging of the equipment. Wetter feedstock up to 80% can be processed when mixed with a dryer material. In the case of minerals rock, chains must be replaced with hardened steel bars to avoid rapid wear and breakage. In the case of human and animal waste, a de-watering is required prior to processing. Some of these adaptations require additional research and until implemented, there is no certainty that the equipment will be accepted in all the proposed markets.





Competition





The Company has competition from other producers of microfine powders, most of who must use a series of equipment to achieve similar results. Some have much greater financial resources than the Company, but the Company believes its system is more cost effective than these competitors and that we can reasonably expect to attract a share of the marketplace.





Company Facilities





The Company’s corporate offices and demonstration facility are located at 201 -30758 South Fraser Way, Abbotsford, British Columbia, Canada, V2T 6L4. The phone numbers are (604) 850 - 8959 and the fax numbers are (604) 850 - 8904.





Subsidiaries and other equity positions





Canada - First American Scientific ( Canada ) Ltd. - 100 % owned by FASC





The Company owns 100% of the outstanding shares of common stock of First American Scientific (Canada) Ltd, a BC company which was formed for the purpose of providing research, development, and other services to FASC and its Canadian customers and licensees. The Company changed its name from First American Power Corp to First American Scientific (Canada) Ltd. on May 26, 2005.





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





As of June 30, 2010, the Company had a 50% non-controlling joint venture ownership interest in First American Scientific Malaysia Bhd. Sdn. The joint venture acts as marketing and manufacturing representative under licenses for Malaysia, Thailand, Singapore, and Indonesia. On June 30, 2009, due to the lack of availability of audited financial reports from Malaysia, it was concluded that there is some doubt regarding the ability of the joint venture to continue as a going concern and we have fully impaired the carrying value of our interest in the Malaysian joint venture.





-8-


JP FASKorea Co. Ltd. 50/50 joint venture – South Korea





As of June 30, 2010, the Company had a 50% non-controlling joint venture ownership interest in JP FASKorea Co. Ltd. The joint venture acts as marketing and manufacturing representative under licenses for South Korea. On June 30, 2009, due to the lack of availability of audited financial reports, it was concluded that there is some doubt regarding the ability of the joint venture to operate as going concern and we have fully impaired the carrying value of our interest in the Korean joint venture.





Employees





First American Scientific (Canada) Ltd. currently has two full-time employees in Canada.  The company also retains outside consultants and sub-contractors when necessary.





ITEM 1A.
RISK FACTORS.





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





ITEM 1B.
UNRESOLVED STAFF COMMENTS.





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





ITEM 2.            DESCRIPTION OF PROPERTIES.





The Company owns no real property. It leases a 2000 square feet of office space at 201 – 30758 South Fraser Way, Abbotsford, British Columbia, Canada V2T 6L4. The office is leased from ConWest Developments Ltd. pursuant to a 3 year lease agreement. The rent is Cdn $1,200 per month.





In addition, the Company’s demonstration facility is set up on the adjacent site operated by Mainland Machinery Ltd., our equipment fabricator.





As of June 30, 2010, the Company owned one KDS demonstration machine with hoppers and conveyors, an electrical generator system and related test and office equipment. This KDS demo unit has been shipped to a customer in Hong Kong on a 90 day trial basis, and may result in a sale if the testing is successful.





ITEM 3.            LEGAL PROCEEDINGS.





Pending Litigation





On October 1, 2010, the Company’s subsidiary, First American Scientific ( Canada ) Ltd, received notice that they have been jointly named as a defendant along with our manufacture in a statement of claim filed in the Supreme Court of Newfoundland and Labrador Action 2010 01 G 4632 for breach of warranty and compensatory damages.  The claim is for unspecified general, special, punitive and aggravated damages.  The Company denies any wrong doing, and considers the claims to be frivolous.  At this time, the Company is unable to determine if any loss is probable or estimate a range of a loss.











-9-





PART II





ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.





The Company’s shares of common stock are traded on the OTC Bulletin Board operated by the Financial Industry Regulatory Authority or FINRA under the symbol FASC.





The following table sets forth the quarterly high and low bid prices per share for the Company’s common stock, as reported by the OTC Bulletin Board for the calendar years indicated. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.





Quarter ended
High
Low2010June 30, 2010
$
0.035
$
0.030March 31, 2010
$
0.027
$
0.031December 31, 2009
$
0.016
$
0.018September 30, 2009
$
0.026
$
0.0272009June 30, 2009
$
0.027
$
0.020March 31, 2009
$
0.019
$
0.010December 31, 2008
$
0.013
$
0.010September 30, 2008
$
0.023
$
0.016





On September 22, 2010, the closing price of the Company’s common stock, as reported by the OTC Bulletin Board was $0.03. As of June 30, 2010, there were a total of 199,952,185 shares of common stock issued and outstanding. Of these shares, all are free trading with the exception of approximately 12,000,000 shares which may only be resold in compliance with Rule 144 of the Securities Act of 1933. As of June 30, 2010, the Company had approximately 5,000 holders of record of its common stock.





Dividends





The Company has not declared any cash dividends, nor does it intend to do so. The Company is not subject to any legal restrictions respecting the payment of dividends, except that dividends may not be paid to render the Company insolvent. Dividend policy will be based on the Company’s cash resources and needs and it is anticipated that all available cash will be needed for the Company’s operations in the foreseeable future.





Securities authorized for issuance under equity compensation plans





The Company currently has one equity compensation plan. Prior to 2000, the Company had three additional stock option plans. There are 47,805 options for shares which authorized under those plans that have not been granted.





The Company has recorded the following information under its continuing Incentive Stock Option Plans:





The 2006 Incentive Stock Option Plan provides for the issuance of stock options for services rendered to us.  The board of directors is vested with the power to determine the terms and conditions of the options.  The Plan includes 5,000,000 shares.  At June 30, 2010, options to purchase 4,952,195 shares have been granted and exercised, leaving 47,805 shares available for issuance under the 2006 Plan.











-10-


Pursuant to employment agreements with its two senior officers, the Company granted options to purchase a total of 28,000,000 shares each at an exercise price of $0.02. As of June 30, 2010, 8,000,000 options have vested under these agreements. Additionally under the terms of these agreements, the officers may, at their election, accept stock or stock options in settlement of any amounts due them. As of June 30, 2010, approximately, $1,300,000 is owed to the officers for back wages and advances and subject to settlement under these terms. As of June 30, 2010, the Company has insufficient authorized shares available to issue in settlement of the terms of these agreements.





Number of securitiesNumber of securities to
Weighted-average
remaining available forbe issued upon exercise
exercise price of
Future issuance underof outstanding options,
outstanding options,
equity compensation planswarrants and rights
warrants and rights
(excluding securitiesPlan category
(a)
(b)
in column (a)) (c)Equity compensation plansapproved by security holders
None
None
NoneEquity compensation plansnot approved by securities holders
None
$0.04
47,805Other options granted pursuantto Employment Agreements
8,000,000
$0.02
NoneTotal
8,000,000
$0.02
47,805





ITEM 6.            SELECTED FINANCIAL DATA.





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





ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance.  Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events.  You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.





Liquidity and Capital Resources





On June 30, 2010 we had current assets of $158,203 and current liabilities of $ 1,868,466 compared to June 30, 2009 when we had $ 272,724 in current assets and $1,475,554 in current liabilities. The current liabilities include amounts owed to its two senior Officers in the amount of $1,304,665.  The Company has $ 29,904 in debt under a 48 month capital lease agreement for the purchase of a new generator and a loader.  Our working capital ratio on June 30, 2010 remains 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 short term loans and salary deferments from senior management to maintain operations.





-11-


Critical Accounting Policies





Intangible Assets





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. Revenue is recognized when the equipment is delivered.





Revenue Recognition





The Company generally requires 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 and any performance conditions are met at which time it is recognized as revenue. Generally, deposits received are non-refundable.





Performance guarantees





In a special case, the Company sold one machine during the year and received a partial payment. The intent was to allow the customer, with our assistance, to adapt the equipment to their specific use and local conditions. The final payment is contingent upon achieving those certain performance conditions. To date, those conditions have not been met and the related revenues have not yet been recorded.





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.  Last year, due to the lack of availability of audited financial reports, we concluded that there was 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 zero.





During the year ended June 30, 2009, we entered into an agreement to form a joint venture in Korea. Last year, due to the lack of availability of audited financial reports, we concluded that there was   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.





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.  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





As of June 30, 2010 there were 199,952,195 shares of our common stock issued and outstanding; unchanged from the previous year. The Company’s authorized shares are 200,000,000.





Results of Operations – June 30, 2010





Total revenue for the year was $ 1,218,066 compared to $ 714,862 for last year. Revenue this year included the sale of five KDS machine, royalties and the recovery of expenses. Net losses for the year were $664,023 compared to a net loss of $484,560 last year.








-12-


Generally, sales have been increasing as our marketing efforts system wide are gaining momentum and our products are achieving market acceptance





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. Sales are recorded when the equipment is shipped as per our revenue recognition policy.





Deposits received on future sales





In May 2007, Company received a deposit of $ 118,764 for the sale of one KDS machine from a customer in Europe. The machine was fabricated and ready for shipment. The balance of the purchase price was never received as the customer was unable to obtain financing and the machine was not delivered to the customer.  At this point in time all communications with the customer ceased. Since specialty components were used and we had no further contact with the customer, the deposit was deemed non-refundable and recorded as income in fiscal year 2008. In August 2010, the customer resurfaced and requested a refund. We advised them that the deposit was non-refundable, but agreed to apply the deposit as a credit against a future machine purchase at current market prices. The customer is not prepared to complete the purchase at present, but if they do, we will apply their original deposit and record a settlement amount at that time.





Project Updates





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





The joint venture sold two KDS machines during the fiscal year 2009 with three more units expected to be delivered in fiscal year 2011. Royalties received in fiscal year 2009 amounted to $ 40,291 USD on two sales.





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





The joint venture sold one KDS machines last year, has a second sale is to complete next year.  Royalties received in fiscal year 2010 year were $13,500 compared to $13,500 in fiscal year 2009.





Cover Technologies Inc – License for Eastern USA





In October 2008, we signed an exclusive marketing license with Cover Technologies Incfor the states of New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire, Maine and Florida.  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 other KDS machines have been sold so far under this agreement.





SIA EHT Engineering  – License for Latvia





In October 2009 we signed an exclusive marketing agreement with SIA EHT Engineeringfor Latvia, Lithuania, and Estonia.  One condition of exclusivity was that they purchase a demonstration machine and adapt it to the local market conditions.  The customer is has developed a unique algae-based fertilizer which it sells in Northern Africa. The first demonstration machine was delivered in 2009 and is operational. A second machine was delivered this year.











-13-


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. During subsequent negotiations, it was decided to grant a license to the Brazilian group rather than form a joint venture.  A new agreement has been reached and is now being translated into Portuguese which we expect to be signed in October 2010.





Memorandum of Understanding – Hong  Kong





The Company has reached an agreement with a Hong Kong engineering firm to run demonstration trials processing sludge from a waste water treatment site in Mainland China. Formal plans and documentation have been finalized and the machine has been shipped. The project, if successful, will result in the sale of one KDS machine, and could expand to include further multiple sales.





Marketing Agreements





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





Employment Agreements with Senior Management





On July 1, 2008, the Company signed 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. In case of early termination, these agreements provide for an acceleration of the total contracted amount due until the end of term of the contract, and an immediate vesting of all stock options to be granted therein.








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.





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.








-14-


Foreign exchange exposure





The Company uses the US dollar as its functional currency and records all international contracts 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.  Fluctuations in the value of the US dollar vs. the Canadian dollar affect our Canadian dollar based assets and liabilities. These changes are reported as exchange gains and losses and are included in Net Income. Relative to our total financial position, these changes 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, particularly in the waste to green energy sector, a sector where international government support and funding is growing.  The Company sold one system this quarter and has orders in progress for four units to complete next quarter.





To meet the expected growth in demand we have hired new marketing staff and we continue to expand our marketing network throughout the USA, Canada and Mexico, Asia, Europe, and South America.





Based upon recent sales and current prospects, we anticipate revenue for the fiscal year ending June 30, 2010 to be in the range of $ 2,000,000 to $ 2,500,000.





Pending Litigation





On October 1, 2010, the Company’s subsidiary, First American Scientific ( Canada ) Ltd, received notice that they have been jointly named as a defendant along with our manufacture in a statement of claim filed in the Supreme Court of Newfoundland and Labrador Action 2010 01 G 4632 for breach of warranty and compensatory damages.  The claim is for unspecified general, special, punitive and aggravated damages.  The Company denies any wrong doing, and considers the claims to be frivolous.  At this time, the Company is unable to determine if any loss is probable or estimate a range of a loss.





ITEM 7A.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





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





ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





INDEXReport of Independent Registered Public Accounting Firm
F-1Financial StatementsConsolidated Balance Sheets
F-2Consolidated Statements of Operations and Comprehensive Income (Loss)
F-3Consolidated Statement of Stockholders’ Equity
F-4Consolidated Statements of Cash Flows
F-5Notes to Consolidated Financial Statements
F-6





-15-


To the Board of Directors and Stockholders
 First American Scientific Corp.
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 We have audited the accompanying consolidated balance sheets of First American Scientific Corp. and subsidiaries as of June 30, 2010 and 2009, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First American Scientific Corp. and subsidiaries as of June 30, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 2, the Company has a history of operating losses, has limited cash resources, has negative working capital and its viability is dependent upon its ability to meet its future financing requirements and the success of future operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 BEHLERMICK PS
 BehlerMick PS
 Spokane, Washington
 October 9, 2010
 
 
 
 F-1







-16-





FIRST AMERICAN SCIENTIFIC CORP.CONSOLIDATED BALANCE SHEETSJune 30,

June 30,2010

2009ASSETSCURRENT ASSETSCash
$
3,274
$
33,891Accounts receivable, net of allowance

30,432

69,759Sales tax refunds

3,660

8,115Inventory

119,844

156,502Prepaid expenses

993

4,457TOTAL CURRENT ASSETS

158,203

272,724PROPERTY AND EQUIPMENTProperty and equipment

267,815

218,798Less: accumulated depreciation

(181,497)

(159,010)TOTAL PROPERTY AND EQUIPMENT

86,318

59,788OTHER ASSETSPatents and manufacturing rights, net of amortization

315,076

460,256Investments in joint ventures ( see Note 9 )

-

-TOTAL OTHER ASSETS

315,076

460,256TOTAL ASSETS
$
559,597
$
792,768LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
$
445,037
$
209,804Deposits on Future Sales

-

156,697Salaries payable - related parties ( see Note 7 )

1,145,000

1,027,000Current portion of Capital lease Obligation

10,018

-Advances payable to related parties

159,665

82,053TOTAL CURRENT LIABILITIES

1,759,720

1,475,554LONG-TERM LIABILITIESCapital lease obligations

19,886

-TOTAL LONG-TERM LIABILITIES

19,886

-COMMITMENTS AND CONTINGENCIES

-

-TOTAL LIABILITIES

1,779,606

1,475,554STOCKHOLDERS’ EQUITYCommon stock - $.001 par value,200,000,000 shares authorized;199,952,195 shares issued and outstanding

199,952

199,952Stock Options

253,600

126,800Additional paid-in capital

13,255,636

13,255,636Accumulated deficit

(14,929,198)

(14,265,175)TOTAL STOCKHOLDERS’ EQUITY

(1,220,009)

(682,786)TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
559,597
$
792,768


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


F-2


-17-





FIRST AMERICAN SCIENTIFIC CORP.CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE LOSSYearsJune 302010

2009REVENUESRevenues from equipment and machine sales
$
1,144,518

480,529Royalty & Licensing fees

58,500

224,205Expenses recovered

15,048

10,127Total Revenue

1,218,066

714,862COST OF SALES

758,562

250,987GROSS PROFIT

459,504

463,874OPERATING EXPENSESAdvertising

5,901

5,370Amortization and depreciation

187,942

175,948Marketing

59,382

3,000Professional services

91,785

99,324Wages

114,738

76,885Management Compensation

426,800

426,800Commissions

4,734

-Research and development

107,565

40,942General and administration

73,677

54,869Warranty claims

4,866

-Bad debt expense

3,611

2,296Rent

12,172

15,335Total Operating Expenses

1,093,173

900,769LOSS FROM OPERATIONS

(633,669)

(436,895)OTHER INCOME (EXPENSE)Deposits forfeited (reinstated)

-

229,515Forgiveness of Debt

-

5,500Foreign Exchange Gains ( Losses)

(30,354)

(33,341)Impairment of Interest in joint ventures

-

(249,338)Total Other Income (Expense)

(30,354)

(47,664)LOSS BEFORE INCOME TAXES

(664,023)

(484,560)INCOME TAX  PROVISION

-

-NET INCOME (LOSS)
$
(664,023)

(484,560)NET LOSS PER COMMON SHARE,BASIC AND DILUTED
$
nil

nilWEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING,BASIC AND DILUTED

199,952,195

199,927,537


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


F-3


-18-





FIRST AMERICAN SCIENTIFIC CORP.CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY31/06/2008Additional





Other

TotalCommon Stock

Paid-in

Stock

Accumulated

Comprehensive

Stockholders’Shares

Amount

Capital

Options

Deficit

Income (Loss)

EquityBalance, June 30, 2008
199,852,195

199,852

12,965,445

287,291

(13,780,613)

(40,072)

(368,096)Common stock issued for Marketing












-100,000 shares @ $0.03
100,000

100

2,900







3,000-Foreign currency translation gain










40,072

40,072Options expired




287,291

(287,291)





-Options vested






126,800





126,800Net Income for the period ended June 30, 2009








(484,562)



(484,562)Balance, June 30, 2009
199,952,195

199,952

13,255,636

126,800

(14,265,175)

-

(682,786)Common stock issued












-Options expired












-Options vested






126,800





126,800Net Income for the period ended June 30, 2010








(664,023)



(664,023)Balance, June 30, 2010
199,952,195

199,952

13,255,636

253,600

(14,929,198)

-

(1,220,009)
















































































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


F-4


-19-





FIRST AMERICAN SCIENTIFIC CORP.CONSOLIDATED STATEMENTS OF CASH FLOWSTwelve months endedJune 302010

2009CASH FLOWS FROM OPERATING ACTIVITIESNet Income (loss)
$
(664,023)
$
(484,562)Depreciation and amortization

187,942

175,949Stock and options issued for compensation

126,800

126,800Share of JV revenues not included in income

-

27,445Loss on Investment in joint ventures

-

249,338Salary accrued as long term liabilities

-

277,000Adjustments to reconcile net loss to net cashused by operations:Decrease (increase) in accounts receivable

39,327

10,523Forgiveness of debt

-

(5,500)Decrease(increase) in allowance for bad debt

-

2,296Decrease (increase) in sales tax refunds

4,455

15,437Decrease (increase) in inventory

36,658

(127,560)Decrease (increase) in prepaid expenses

3,464

(3,490)Increase (decrease)  in customer deposits held

(156,697)

(219,266)Increase (decrease)  in accounts payable & accrued expenses

235,233

49,639Increase (decrease)  in payables to related parties

195,612

23,143Net cash provided (used) by operating activities

8,771

117,192CASH FLOWS FROM INVESTING ACTIVITIESPurchase of equipment

(54,709)

-Net Investments in Joint Venture

-

(123,543)Net cash provided (used) in investing activities

(54,709)

(123,543)CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payment on capital leases

(15,033)

-Net cash used by financing activities

(15,033)

-NET INCREASE (DECREASE) IN CASH

(60,971)

(6,351)Foreign exchange (gains) losses

30,354

33,341CASH - Beginning of period

33,891

6,901CASH - End of period
$
3,274
$
33,891SUPPLEMENTAL CASH FLOW DISCLOSURES:Interest expense
$
-
$
-Income taxes
$
-
$
-NON-CASH FINANCING AND INVESTING TRANSACTIONS:Common stock issued for services and compensation



3,000Purchase of equipment with capital lease

49,017





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


F-5


-20-





FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





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 Abbotsford, British Columbia, Canada and a demonstration and sales center on the adjacent site.  The Company’s year-end is June 30th.





First American Scientific (Canada) Ltd.





The Company owns 100% of the outstanding shares of common stock of First American Scientific (Canada) Ltd, a BC company which was formed for the purpose of providing research, development, and other services to FASC and its Canadian customers and licensees. The Company changed its name from First American Power Corp to First American Scientific (Canada) Ltd. on May 26, 2005





First American Scientific Corp ( Malaysia ) Bhd. Sdn,





As of June 30, 2010 the Company had a 50% non-controlling joint venture ownership interest inFirst American Scientific Malaysia Bhd Sdn. The joint venture acts as marketing and manufacturing representative under license for Malaysia, Thailand, Singapore and Indonesia. On June 30, 2009, due to the lack of availability of audited financial reports from Malaysia, it was concluded that there is some doubt regarding the ability of the joint venture to continue as a going concern and we have fully impaired the carrying value of our interest in the Malaysian joint venture.





JP FASKorea Co Ltd, - ( South Korea )





As of June 30, 2009, the Company had a 50% non-controlling joint venture ownership interest inJP FASKorea Co. Ltd. The joint venture acts as marketing and manufacturing representative under license for South Korea.  On June 30, 2009, due to the lack of availability of audited financial reports, it was concluded that there is some doubt regarding the ability of the joint venture to operate as going concern and we have fully impaired the carrying value of our interest in the Korean joint venture.








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.





Accounting Method


The Company uses the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.














F-6


-21-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





Accounts Receivable


The Company carries its accounts receivable at cost less an allowance for doubtful accounts.  At June 30, 2010 and 2009 accounts receivable were $30,432 and $69,759. Management determined that no allowance for doubtful accounts was required at either date based upon their assessment of individual account balances.





A receivable is considered past due if payments have not been received by the Company for 90 days.  The Company recognized a bad debt expense of $ 103,611 and $ 2,296 for the years ended June 30, 2010 and 2009 respectively. Any amounts collected at a later date will be included in income.





Advertising Expenses


Advertising expenses consist primarily of costs incurred in the design, development, and printing of Company literature and marketing materials.  The Company expenses all advertising expenditures as incurred.  The Company’s advertising expenses were $ 5,901   and $ 5,370 for the years ended June 30, 2010 and 2009 respectively.





Cash and Cash Equivalents


For purposes of its statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.





Compensated Absences


Employees of the Company are entitled, by Canadian law, for paid time off equal to four percent of their wages.  At June 30, 2010, no amounts were accrued as the amounts were deemed to be immaterial.





Concentration of Risk


The Company maintains its Canadian cash accounts in primarily one commercial bank in Vancouver, British Columbia, Canada.  Its U.S. dollars are maintained in a US dollar bank account in Vancouver, British Columbia, Canada and in a US bank in Washington state, USA.





All accounts receivables and sales are booked in US dollars. All manufacturing costs and operating costs are primarily incurred in Canadian dollars.





The Company uses the US dollar as its primary currency and records all international contacts in US dollars, except for sales to Canadian customers which are generally recorded in Canadian dollars.





The majority of our operational expenses, 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 and a gain in the value our Canadian assets. 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 included in Net Income. Relative to our total financial position, these fluctuations are not considered material at this time.





The Company attempts 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.





The Company contracts primarily with one Canadian manufacturer for the production of the KDS machine for customers in the North American and European markets.  To the extent that we rely on them to supply our equipment and provide us with engineering and design assistance locally, we could face delays or cost increases if our relationship with them ceased.  In this event, we could utilize the manufacturing facilities of our joint venture partners in Malaysia or Korea as backup while seeking alternate arrangements in North America.


F-7


-22-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





Derivative Instruments


Historically, the Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes.  At June 30, 2010, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.





Fair Value of Financial Instruments  -  ( see Note 10 )


Our financial statements include the following financial instruments: cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. We believe the carrying amounts of these assets and liabilities in the financial statements approximate the fair values of these financial instruments at June 30, 2010 and June 30, 2009. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.





Foreign Currency Translation


Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at the period-end exchange rates, and revenue and expenses are translated at the average exchange rates during the period.  Exchange gains and losses arising on translation are included as a separate component of net income. Any material fluctuations in foreign currency exchange rates could have an impact on our balance sheet as expressed in US dollars.





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 $ 14,929,198 through June 30, 2010 and has limited cash resources.  The Company recorded increased revenues during the year ended June 30, 2010, but generated a net loss of $664,023. As a result, there is substantial doubt about the Company’s ability to continue as a going concern as working capital remains negative.





Management plans to increase sales through current channels and develop new sales opportunities.  Management has also established plans to increase the sales of the Company’s products by continued research and development and combining technology with its licensees in Canada and Japan, and through its joint ventures in Malaysia and Korea. If the Company is unable to increase revenue, then it will need to re-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 Company reviews its long-lived assets quarterly to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable.  The Company determines impairment by comparing the present value of future cash flows estimated to be generated by its assets to their respective carrying amounts. As of June 30, 2010, no impairments were deemed necessary.











F-8


-23-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





Inventory


The Company utilizes a third party contract manufacturer for the production of the KDS machine. The Company has negotiated fixed production costs. Inventory included finished goods and work in progress is based on an estimated percentage of completion for each machine. The value of the inventory is stated at cost and based upon the specific identification of each unit.


As of June 30, inventory included:

2010


2009Work in progress
$
119,844

$
156,502Finished goods
$
0

$
0Total Inventory
$
119,844

$
156,502





Net loss per share


Basic net loss per share is computed using the weighted average number of common shares outstanding.  Diluted net loss per share for FASC is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.





Losses per share for the year ending June 30, 2010 were less than $0.0038 and less than$ 0.0024 per share for the year ended June 30, 2009. The losses have been rounded to the nearest $0.01 and reported as nil in both years.





Principles of Consolidation


The consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant inter-company transactions and balances have been eliminated in consolidation.





The Company consolidates its financial statements with First American Scientific (Canada) Ltd as it is wholly owned and controlled by FASC.





The Company accounts for its investment in joint ventures using the equity method.





Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary, therefore the Company’s share of its equity method investees earnings or losses are included in other income in the accompanying Consolidated Statements of Operations. The Company eliminates its pro rata share of gross profit on sales to its equity method investees for inventory on hand at the investee at the end of the year. Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.





Provision for Taxes


The Company follows the asset and liability method of accounting for income. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.





At June 30, 2010, the Company had net deferred tax assets of approximately $5,000,000 principally arising from net operating loss carry forwards at an expected average rate of 33 %. As management of the Company cannot determine if it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established. The change in the deferred tax asset valuation allowance from June 30, 2009 to June 30, 2010 was $150,000 leaving the net value of the deferred tax asset to zero.


F-9


-24-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





The significant components of the deferred tax asset at June 30, 2010 and June 30, 2009 were as follows:





June 30, 2010

June 30, 2009Net operating loss carry forward
$
14,929,198
$
14,265,175Stock options issued under a non-qualified plan:For the year ended June 30, 2009
$
126,800
$
126,800For the year ended June 30, 2010
$
126,800
$
-Deferred tax asset
$
5,000,000
$
4,850,000Deferred tax asset valuation allowance
$
(5,000,000)
$
(4,850,000)





At June 30, 2010, the Company has net operating loss carry forwards of approximately $15,000,000.





Recent Accounting Pronouncements


During the first quarter of 2010, the Company adopted the Accounting Standards Codification (ASC) as issued by the Financial Accounting Standards Board (FASB). The ASC has become the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. The ASC is not intended to change or alter existing GAAP. The adoption of the ASC did not have a material impact on our consolidated financial statements.





Effective June 15, 2009, the Company adopted the updated guidance related to subsequent events issued by the FASB, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The updated guidance initially required the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date – that is, whether that date represents the date the financial statements were issued or were available to be issued. However, in February 2010, the FASB amended the guidance to remove the requirement to disclose the date through which subsequent events were evaluated. Adoption of the updated guidance did not have a material impact on the Company’s consolidated financial condition, results of operations or statements of cash flows.





In January 2010, the FASB issued a new accounting standard which amends guidance on fair value measurements and disclosures. The new guidance requires disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. This standard is effective for annual and interim reporting periods beginning after December 15, 2009, except for the requirements related to Level 3 disclosures, which are effective for annual and interim reporting periods beginning after December 15, 2010. The Company adopted the relevant provisions of this guidance, and the adoption did not have a material impact on the Company’s financial statements.





Reclassifications


Certain prior year amounts in the accompanying financial statements have been reclassified to conform to the fiscal 2010 presentation. These reclassifications have resulted in no changes to the Company’s accumulated deficit or net losses presented.





Revenue and Cost Recognition


Revenues from the sale of KDS machines are recognized when there is a sales contract, the products are delivered, all terms and conditions of the contract have been met, and collectability is reasonably assured.











F-10


-25-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





KDS machine costs include applicable direct material and labor costs and related indirect costs including costs related to meeting contracted performance conditions. 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.





Sales Tax Refunds-Goods and Services tax (GST)


The Canadian Government requires Canadian resident companies to collect sales taxes from customers when goods and services are sold in Canada.  These taxes collected can be offset by taxes paid (tax credits) for goods and services purchased in Canada.  Any sale outside of Canada is not taxed for this purpose.  At the end of each quarter, all taxes paid on goods and services purchased are netted against the taxes due on sales of goods and services sold.  Because the Company has more tax credits than taxes collected, as of June 30, 2010 the Company is due a refund of $3,660.





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.








NOTE 3 – PROPERTY AND EQUIPMENT





Property and equipment is stated at cost.  Depreciation is provided using the straight-line method over the estimated useful lives of the assets.  The useful lives of property, plant and equipment for purposes of computing depreciation is five years.





The following is a summary of property, equipment, and accumulated depreciation:





June 30, 2010


June 30, 2009Plant assets and equipment
$
267,815

$
218,798Total assets

267,815


218,798Less accumulated depreciation

(181,497)


(159,010)$
86,318

$
59,788





Depreciation expense for the years ended June 30, 2010 and 2009 was $ 42,761 and $39,295 respectively.  The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired.








NOTE 4 – TECHNOLOGY RIGHTS AND PATENTS





On December 1, 1999 the Company finalized negotiations with Spectrasonic Corp to purchase all rights and patents issued, or to be issued or pending, including all data pertaining to the patent process with respect to the Kinetic Disintegration Machine (“KDS Machine”). Consideration paid to Spectrasonic was 1,000,000 common shares of the Company’s stock at a deemed value of $0.25 per share.








F-11


-26-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





Technology licenses, patents and manufacturing rights are stated at costs accumulated to date.  Amortization is provided using the straight-line method over the estimated useful lives of the assets, which is fifteen years.





The following is a summary of technology licenses, patents and manufacturing rights and accumulated amortization:





June 30, 2010


June 30, 2009Technology rights & patents
$
2,177,727

$
2,177,727Less accumulated amortization

(1,862,654)


(1,717,471)$
315,076

$
460,356





Amortization expense for the year ended June 30, 2010 and 2009 was $145,182 and $145,182 respectively.





The Company reassesses the underlying value of its intangible assets annually for impairment.





The Company has determined that the carrying value of its technology rights and patents is fairly stated, based upon the estimated present value of future cash flows and the Company’s ability to sell a minimum of two machines each year.








NOTE 5 – COMMON STOCK





During the year ended June 30, 2009, the Company issued 100,000 shares of its common stock for marketing and website development valued at $ 3,000.





During the year ended June 30, 2010, no stock was issued.








NOTE 6 – STOCK OPTIONS





Stock Based Compensation


The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” (originally issued as SFAS 123R). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the award is recognized as an expense over the requisite service periods in the calculation of net loss.





In determining the fair value of options vested in the current fiscal year, the Company applied the Black-Scholes model using a market value of$ 0.037, a strike price of $0.02, a ten year term with 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 year and the prior year.





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.  47,805 shares remain unissued under the Plan. This plan was not approved by the Company’s security holders.





On July 1, 2009, pursuant to the Employment Agreements with two senior officers, the Company was required to grant options to purchase 4,000,000 at an exercise price of $ 0.02.  The options will be issued upon registration of a new Stock Option Plan.





F-12


-27-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





On July 1, 2010, pursuant to the Employment Agreements with two senior officers, the Company was required to grant options to purchase 8,000,000 at an exercise price of $ 0.02.  The options will be issued upon registration of a new Stock Option Plan.





On June 30, 2009 the Board of Directors was committed to pay outstanding salaries due to two of its Officers by way of the grant of stock options to purchase shares at the fair market at the time of grant. As of June 30, 2010, the amounts of $ 1,304,665 remains unpaid, and the options are scheduled to be issued upon the registration of a new Stock Option Plan.





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.





The following is a summary of the Company’s open stock option plans:





Number of securitiesNumber of securities



remaining availableEquity compensation

to be issued upon

Weighted-average

for future issuanceplans not approved by

exercise of

exercise price of

under equitysecurity holders

outstanding options

outstanding options

compensation plans2006 Stock Option Plan

none

$0.00

47,805Future Plans

28,000,000

$  0.02

28,047,805Total

28,000,000



28,047,805





The following is a summary of stock option activity:





Number of

Weighted AverageShares

Exercise PriceOptions outstanding and exercisable at June 30, 2008
Nil

0.00Vested during 2009
4,000,000

0.02Options outstanding and exercisable at June 30, 2009
4,000,000

0.02Vested during 2010
4,000,000Options outstanding and exercisable at June 30, 2010
8,000,000
$
0.02








NOTE 7 – RELATED PARTIES





Periodically, loans and accrued wages payable to related parties are paid, at the Company’s discretion, by the issuance of common stock.  During the year ended June 30, 2007, 1,875,000 shares were issued to Company Officers to pay management salaries and no stock was issued for this purpose in the year ended June 30, 2008.


F-13


-28-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





At June 30, 2009, the Company owed its officers and directors $1,027,000 for unpaid salary and approximately $82,053 for loans made to the Company.





At June 30, 2010, the Company owed its officers and director $1,145,000 for unpaid salary and approximately $159,665 for loans made to the Company





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





During the fiscal year ending June 30, 2010 and 2009, the Company received $ 58,500 and $54,420 respectively in royalties from our joint ventures. Since the carrying value of the JointVentures is zero, we recorded the total amounts received in revenue.








NOTE 8 – COMMITMENTS AND CONTINGENCIES





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 $ 38,624 including taxes and interest.  After the final payment, the Company will have the option to purchase the equipment for $10 at the end of the lease term. This lease commitment is personally guaranteed by two of the Company’s Officers. The acquisition of the generator has been recorded under Property and Equipment net of tax and interest in the amount of $27,709 USD.





On February 12, 2010, the Company signed a thirty seven month leasing agreement to finance the acquisition of a bobcat / loader. The total lease commitment is $ 23,421 including taxes and interest.  After the final payment, the Company will have the option to purchase the equipment for $ 1,800 at the end of the lease term. This lease commitment is personally guaranteed by two of the Company’s Officers. The acquisition of the bobcat has been recorded under Property and Equipment net of tax and interest in the amount of $18,149 USD.





The combine schedule of lease commitments in Canadian dollars is as follows:





Year ended
Principle

Taxes

Insurance

Interest

TotalJune 30th2011
$10,273

$1,488

$864

$4,625

$17,2502012
$10,273

$1,488

$864

$4,625

$17,2502013
$8,717

$1,216

$864

$3,921

$14,7182014
$1,401

$168

$216

$628

$3,413





Lease Commitments


The Company signed a 36 month lease in July 2009 for its current premises payable at a rate of approximately $ 916 US per month ($ 11,520 per year) and a total commitment during the lease term of $ 34,560 US.














F-14


-29-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





Product Warranties


The Company provides a one year warranty with the sale of new equipment limited to non-electrical components. During the warranty period, the Company will repair or replace, at the Company’s sole option, without charge to purchaser, any defective component part of the KDS MicronexTM.  The Limited Warranty does not apply to any consumable parts, such as the chains, bars or belts.  Upon receipt of a valid claim, the Company will promptly repair or replace the defective product. The warranty is conditional upon proper use of the product by the purchaser as per Customer’s Purchase and Sale Agreement.  The Purchaser must document regular maintenance as per Owner’s Manual. The warranty does not cover: (a) defects or damage resulting from accident, misuse, abuse, neglect, unusual physical, electrical or electromechanical stress, modification of the product or use of the product with unauthorized equipment or accessories. Electrical motors and electrical panel are specifically excluded from the warranty.





The Company has an offsetting guarantee from its manufacture to cover any costs caused by a manufacturers’ defect during the warranty period, and consequently does not anticipate any liability to be incurred under the warranty program.





Used equipment over one year old is covered a 90 day limited warranty, but not the manufacturer’s guarantee.  During the year ending June 30, 2010, we sold one used machine and incurred a repair cost under its warranty of $ 4,866.





Performance guarantees


In a special case, the Company sold one machine during the year and received a partial payment. The intent was to allow the customer, with our assistance, to adapt the equipment to their specific use and local conditions. The final payment is contingent upon achieving those certain performance conditions. To date, those conditions have not been met.  In fiscal; 2010, the partial payment was included in revenue, and if and when the final payment of $ 100,000 is collected, it will be included in revenue.





Deposits received on future sales


In May 2007, Company received a deposit of $ 118,764 for the sale of one KDS machine from a customer in Europe. The machine was fabricated and ready for shipment. The balance of the purchase price was never received as the customer was unable to obtain financing and the machine was not delivered to the customer.  At this point in time all communications with the customer ceased. Since specialty components were used and we had no further contact with the customer, the deposit was deemed non-refundable and recorded as income in fiscal year 2008. In August 2010, the customer resurfaced and requested a refund. We advised them that the deposit was non-refundable, but agreed to apply the deposit as a credit against a future machine purchase at current market prices. The customer is not prepared to complete the purchase at present, but if they do, we will apply their original deposit and record a settlement amount at that time.





Employment Agreements  - ( see Note 7 )





Default in payment of outstanding salaries and amounts due to senior officers


On June 30, 2010 the Board of Directors acknowledged default in the payment of outstanding salaries due in the amount of $ 1,304,665 to two of its senior officers and acknowledged the provision in their employment agreements providing for the issuance of stock and/or stock options, or the provision of collateral to satisfy or secure the debt. On June 30, 2010, the Officers agreed to defer action, giving the Company a reasonable opportunity to register a new Stock Option Plan, failing which, the provision to provide collateral can be invoked.

















F-15


-30-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010








NOTE 9 – INVESTMENT IN JOINT VENTURES





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





As of June 30, 2010 the Company had a 50% non-controlling joint venture ownership interest inFirst American Scientific Malaysia Bhd Sdn. The joint venture acts as marketing and manufacturing representative under license for Malaysia, Thailand, Singapore and Indonesia. On June 30, 2009, due to the lack of availability of audited financial report from Malaysia, it was concluded that there is doubt regarding the ability of the joint venture to continue a as going concern and we have fully impaired the carrying value of our interest in the Malaysian joint venture.





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





As of June 30, 2010, the Company had a 50% non-controlling joint venture ownership interest inJP FASKorea Co. Ltd. The joint venture acts as marketing and manufacturing representative under license for South Korea. On June 30, 2009, due to the lack of availability of audited financial reports, it was concluded that there is doubt regarding the ability of the joint venture to operate as going concern and we have fully impaired the carrying value of our interest in the Korean joint venture.








NOTE 10 – FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS





We use a three-level hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available under the circumstances.





Level 1 – Quoted prices are available in active markets for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.





Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.





Level 3 – Pricing inputs include significant inputs that are generally unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to the Company’s needs.














F-16


-31-


FIRST AMERICAN SCIENTIFIC CORP.


Notes to Consolidated Financial Statements


June 30, 2010





The following table discloses the fair value the Company’s assets and liabilities measured and reported on the Consolidated Balance Sheet as of June 30, 2010 at fair value on a recurring basis:





Total

Level 1

Level 2

Level 3Assets:Investment in joint ventures

-

-

-

-$
-
$
-
$
-
$
-





The equity securities acquired in 2009 are not actively traded on a stock exchange. Due to lack of reliable financial information, the value of the investment was fully impaired on June 30, 2009.








NOTE 11– SUBSEQUENT EVENTS





Pending Litigation





On October 1, 2010, the Company received notice that they have been jointly named as a defendant along with our manufacture in a statement of claim for breach of warranty and compensatory damages.  At this time, the Company is unable to determine if a loss is probable or estimate a range of a loss.





The Company has evaluated subsequent events through to October 8, 2010, the date the financial statements were available for issue.










































































F-17


-32-


ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.





Our financial statements for the period from inception to June 30, 2010, included in this report have been audited by BehlerMick PS., 601 West Riverside Avenue, Suite 430, Spokane, Washington 99201, telephone (509) 838-5111, as set forth in their report. Their report is given upon their authority as experts in accounting and auditing.








PART III





ITEM 9A.
CONTROLS AND PROCEDURES.





Evaluation of Disclosure Controls and Procedures





In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by First American Scientific Corp.’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”)) as of June 30, 2010.  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 SEC 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 Securities and Exchange Commission’s rules and forms.





Management’s Report on Internal Control over Financial Reporting





Management of First American Scientific Corp. is responsible for establishing and maintaining adequate internal control over financial reporting.  The Company’s internal control over financial reporting is a process, under the supervision of the Chief Executive Officer and the Chief Financial Officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP).  Internal control over financial reporting includes those policies and procedures that:





·
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;


·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and


·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.





-33-


The Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2010, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  As a result of this assessment, management identified a material weakness in internal control over financial reporting.





A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.





The material weakness identified is described below.





Lack of Appropriate Independent Oversight.  The board of directors has not provided an appropriate level of independent oversight of the Company’s consolidated financial reporting and procedures for internal control over financial reporting.  The one independent director does not provide oversight of the adequacy of financial reporting and internal control procedures.  In addition, management lacks the necessary technical accounting resources to prepare the Company’s financial reporting with an appropriate degree of technical accuracy.





Lack of Appropriate Accounting Policies, Procedures, and Personnel.  Management has not established with appropriate rigor the accounting policies, procedures, and documentation of significant judgments and estimates made by management in the preparation of the financial statements, including accounting policies related to accounting for revenue recognition, deposits, and sales of fixed assets.   As a result, required material adjustments were identified by the auditors.





As a result of the material weaknesses in internal control over financial reporting described above, the Company’s management has concluded that, as of June 30, 2010, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.





The Company intends, as capital resources allow, to remedy its material weaknesses by:





Forming an audit committee made up of independent directors that will oversee management.





Engaging an individual to serve as principal accounting officer to segregate the duties of chief financial officer and principal accounting officer.





Despite the Company’s intention to remedy its material weaknesses in the manner described above, the actions required to accomplish these objectives will require the Company to engage additional personnel which may not be possible in the near term due to our limited financial resources and operations.





This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.  We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.





Changes in Internal Control over Financial Reporting





As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended June 30, 2010, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.





ITEM 9B.
OTHER INFORMATION.





None





-34-


ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.





Officers and Directors





The directors and officers of the Company are:





Name
Age
PositionJohn Brian Nichols
73
President, Chief Executive Officer and member of the Board of DirectorsCal Kantonen
60
Treasurer, Chief Financial Officer and Chairman of the Board of DirectorsDavid Gibson
69
Secretary and member of the Board of Directors





John Brian Nichols - President, Chief Executive Officer and a member of the Board of Directors.





Since April 2001, Mr. Nichols has been the President, Chief Executive Officer and a member of the Board of Directors. For the past 32 years, Mr. Nichols has been a self-employed producer and marketer of a live entertainment show and circus which plays in over in 260 cities annually in Canada and the United States.





Calvin L. Kantonen - Chairman of the Board of Directors, Treasurer and Chief Financial Officer





Since February 2000, Mr. Kantonen has been the chairman of the Board of Directors, Treasurer and Chief Financial Officer of the Company. From September 1999 to August 2002, Mr. Kantonen was the President, Secretary/Treasurer and sole member of the Board of Directors of VMH VideoMovieHouse.com Inc., a previous subsidiary of the Company. Prior to joining the Company in 1999, Mr. Kantonen spent five years as a commercial lender with one of Canada’s largest financial institutions. Mr. Kantonen, CGA has been a member in good standing of the Certified General Accountants of British Columbia since 1984, during which time he practiced in the field of public accounting for ten years providing taxation and business advice to small business.





David L. Gibson - Secretary and member of the Board of Directors





Since April 2001, Mr. Gibson has been the Secretary and a member of the Board of Directors. Mr. Gibson received a BA in Economics and Political Science in 1968 and obtained his law degree from the University of British Columbia in 1971. Mr. Gibson is retired from the practice of law in Canada after 30 years specializing in the areas of corporate law, commercial practices and estate planning.





Involvement in Certain Legal Proceedings





During the past ten years, Mssrs. Nichols, Kantonen and Gibson have not been the subject of the following events:





1.
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;





2.
Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);





3.
The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;


-35-


i)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator,  floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or anassociated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;





ii)
Engaging in any type of business practice; or





iii)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;





4.
The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;





5.
Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;





6.
Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;





7.
Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:


i)
Any Federal or State securities or commodities law or regulation; or





ii)
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or





iii)
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or





8.
Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.





Audit Committee and Charter





We do not have a separately designated, independent audit committee.  Audit committee functions are performed by our board of directors, none of whom are deemed independent. All directors also hold positions as our officers. Audit committee responsibilities that the board currently fulfills are: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by future employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditors and any outside advisors engagement by the audit committee. Specifically with respect to audit committee responsibilities, our board met once last year.  All directors participated in the meeting.


-36-


Audit Committee Financial Expert





Because of our limited operations, we believe the services of a financial expert are not warranted at this time.





Code of Ethics





We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.





Disclosure Committee and Charter





We have a disclosure committee and disclosure committee charter. Our disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.





Section 16(a) of the Securities Exchange Act of 1934





Our officers, directors and owners of 10% or more of our outstanding shares of common stock have filed all reports required by section 16(a) of the Securities Exchange Act of 1934.





ITEM 11.          EXECUTIVE COMPENSATION





Compensation Discussion and Analysis





We have no compensation policies.  Compensation arrangements and policies for these directors and officers are established by the board of directors on a case by case basis.





We do not currently have any long-term incentive plans that provide compensation intended to serve as incentive for performance.  While we have granted some stock options, no formal plans have been adopted.





Executive Officer Compensation Table


Non-
NonqualifiedEquity
Deferred
AllIncentive
Compensa-
OtherStock
Option
Plan
tion
Compen-Name and

Salary
Bonus
Awards
Awards
Compensation
Earnings
sation
TotalPrincipal Position
Year
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)Brian Nichols
2010
150,000
0
0
63,400
0
0
0
213,400President and CEO
2009
150,000
0
0
63,400
0
0
0
213,4002008
150,000
0
0
0
0
0
0
150,000Cal Kantonen
2010
150,000
0
0
63,400
0
0
0
213,400CFO and Treasurer
2009
150,000
0
0
63,400
0
0
0
213,4002008
150,000
0
0
0
0
0
0
150,000David Gibson
2010
0
0
0
0
0
0
0
0Secretary
2009
0
0
0
0
0
0
0
02008
0
0
0
0
0
0
0
0





-37-


The Company accounts stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” and estimates the fair value of equity-based payment awards on the date of grant the Black-Scholes option-pricing model.





Future Compensation of Our Officers





The Company plans to pay the following salaries in 2011, subject to the Company being able and generating sufficient funds to pay the same:





Cal Kantonen
Treasurer and CFO
$180,000Brian Nichols
President and CEO
$180,000





Employment Agreements





On  July 1, 2008, the Company signed Employment Agreements with two of its senior officers providing base salaries, a grant of annual stock options, an option for the issue of stock in lieu of payment for unpaid salaries, and provisions for compensation on termination due to change of control.  In case of early termination, these agreements provide for an acceleration of the total contracted amount due until the end of term of the contract, and an immediate vesting of all stock options to be granted therein.





Compensation of Directors





The Company does not have any plans to pay its directors any money until sufficient cashflow is available. The directors did not receive any other compensation for serving as members of the board of directors. There are no contractual arrangements with any member of the board of directors.  The board has not implemented a plan to award options to any directors.  We have no director’s service contracts.





Director’s Compensation Table


FeesEarned



Nonqualifiedor


Non-Equity
DeferredPaid in
Stock
Option
Incentive Plan
Compensation
All OtherCash
Awards
Awards
Compensation
Earnings
Compensation
TotalName
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)Brian Nichols
0
0
0
0
0
0
0Cal Kantonen
0
0
0
0
0
0
0David Gibson
0
0
0
0
0
0
0





Pension Benefits and Compensation Plans





We do not have any pension benefits or compensation plans.





Option/SAR Grants





There are no stock options, retirement, pension, or profit sharing plans for the benefit of the Company’s officers and directors, other than three incentive stock option plans.  Under each Plan, the board of directors is vested with discretionary authority to grant options to persons furnishing services to the Company.





The 2001 Plan registered 30,000,000 shares.  All shares have been issued as a result of the exercise of options. No shares remain in the Plan.





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The 2001A Plan registered 20,000,000 shares.  All shares have been issued as a result of the exercise of options. No shares remain in the Plan.





The 2003 Plan registered 10,000,000 shares.  All shares have been issued as a result of the exercise of options. No shares remain in the Plan.





The 2004 Plan registered 10,000,000 shares, all 10,000,000 options have been granted and no shares remain in the Plan.





The 2005 Plan registered 10,000,000 shares, 10,000,000 options have been granted and no shares remain in the Plan.





The 2006 Plan registered 5,000,000 shares, 4,952,195 options have been granted and 47,805 shares remain unissued in the Plan.





Information concerning individual grants of stock options, whether or not in tandem with stock appreciation rights (“SARs”), and freestanding SARs made during fiscal 2009 to each of the named executive officers is reflected in the table below.





Option/SAR Grants in Fiscal 2010


Individual Grants





Number of
Percent of TotalSecurities Underlying
Options/SARs
ExerciseOptions/SARs Granted
Granted to Employees
or Base
ExpirationName
(#)
in Fiscal Year
Price
DateBrian Nichols [1]
4,000,000
50%
$0.02
September 30, 2030Cal Kantonen [1]
4,000,000
50%
$0.02
September 30, 2030





Aggregated Option/SAR Exercises and Fiscal 2010 Year-End Option/SAR Value Table





The following table sets forth certain information with respect to each exercise of stock options and SARs during fiscal 2010 by each of the named executive officers, and the fiscal 2010 year-end value of unexercised options and SARs. The dollar values are calculated by determining the difference between the exercise or base price of the options and the fair market value of the underlying stock at the time of exercise and at fiscal year-end if unexercised, respectively.  The unexercised options, some of which may be exercisable, have not been exercised and it is possible they might never be exercised.  Actual gains realized, if any, on stock option exercises and common stock holdings are dependent on the future performance and value of the common stock and overall stock market conditions. There can be no assurance that the projected gains and values shown in this Table will be realized.





Aggregated Option/SAR Exercises in Fiscal 2010


and Option/SAR Values at June 30, 2010





Number of Securities
Value of UnexercisedShares

Underlying Unexercised
In-the-MoneyAcquired on
Value
Options/SARs
Options/SARsName
Exercise (#)
Realized
at FY-End (#)
at FY-End ($)Exercisable
Unexercisable
Exercisable
UnexercisableBrian Nichols
nil
nil
4,000,000
10,000,000
126,800
317,000Cal Kantonen
nil
nil
4,000,000
10,000,000
126,800
317,000





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Long-Term Incentive Plan Awards





The Company does not have any formalized long-term incentive plans, excluding restricted stock, stock option and SAR plans, which provide compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to financial performance of the Company or an affiliate, the Company’s stock price, or any other measure.





The employment agreements with two of its senior officers provides for the grant of stock options to purchase 2,000,000 shares each at $ 0.02 each at the beginning of each employment year.





Potential Payments Upon Termination or Change-in-Control





SEC regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of the company.





On July 1, 2008 the Company signed 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, provisions for compensation on termination due to change of control or otherwise, and to provide for collateral for unpaid debts.





These agreements 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.





Family Relationships





There are no familial relationships among the executive officers and directors.





Director Independence





Messrs. Nichols, Gibson and Kantonen are not independent because they are our officers.





ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.





The following table sets forth, as of June 30, 2010, the total number of shares owned beneficially by each of our directors and officers individually and as a group, and each person who is known by us to beneficially own more than 5% of our total outstanding shares.  Percentage of beneficial ownership is based on 199,952,185 shares of common stock outstanding as of June 30, 2008.  The stockholders listed below have direct ownership of their shares and possess sole voting and dispositive power with respect to the shares.  Unless provided otherwise, the address of each person listed on the table is c/o First American Scientific Corp., # 201 – 30758 South Fraser Way, Abbotsford, British Columbia, Canada V2T 6L4.


Number of

Percent ofName of owner
Shares
Position
ClassBrian Nichols
4,981,700
President, Principal Executive Officer
2.5 %and a DirectorCal Kantonen
8,580,000
Chairman of Board of Directors,
4.3 %Treasurer and Principal FinancialOfficerDavid Gibson
450,000
Secretary and a Director
0.02%All officers and directorsas a group (3)
14,011,700

7.0 %





-40-


Future Sales of Shares





A total of 199,952,185 shares of common stock were issued and outstanding as of June 30, 2010. Of the 199,952,185 shares outstanding, all are free trading with the exception of approximately 14,000,000 shares which may only be resold in compliance with Rule 144 of the Securities Act of 1933.  Under Rule 144, the restricted shares can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after their acquisition.







ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.





At June 30, 2010, the Company owed its officers a total of $1,304,665 for loans and unpaid salaries.





Schedule of options granted to Officers


Name and

Option Awards
Exercise PricePrincipal Position
Date of grant
# of shares
(US$)
Expiry DateBrian Nichols
July 1, 2009
2,000,000
$0.02
July 1, 2019President and CEO
July 1, 2008
2,000,000
$0.02
July 1, 2018Calvin Kantonen
July 1, 2009
2,000,000
$0.02
July 1, 2019CFO and Treasurer
July 1, 2008
2,000,000
$0.02
July 1, 2018





ITEM 14.                      PRINCIPAL ACCOUNTING FEES AND SERVICES





(1)   Audit Fees





The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:





2010
$
39,500

BehlerMick PS.2009
$
48,500

BehlerMick PS.





(2)   Audit-Related Fees





The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:





2010
$
0

BehlerMick PS.2009
$
0

BehlerMick PS.





(3)   Tax Fees





The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:





2010
$
0

BehlerMick PS.2009
$
0

BehlerMick PS.





-41-


(4)   All Other Fees





The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:





2010
$
0

BehlerMick PS.2009
$
0

BehlerMick PS.





(5)   Our pre-approval policies and procedures for the board, acting in lieu of a separately designated, independent audit committee, described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.





(6)   The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.








PART IV





ITEM 15.
EXHIBITS





Incorporated by referenceExhibit
Document Description
Form
Date
Number
Filed herewith3.1
Articles of Incorporation.
10-SB
10/26/95
3.13.2
Bylaws.
10-SB
10/26/95
3.23.3
Articles of Incorporation.
10-KSB
4/29/98
3.33.4
Amended Articles of Incorporation.
10-KSB
3/16/99
3.43.5
Amended Articles of Incorporation.
S-8
6/27/00
3.510.1
1996 Nonqualified Stock Option Plan.
S-8
6/26/96
10.110.2
1998 Nonqualified Stock Option Plan.
S-8
9/08/98
10.110.3
1999 Nonqualified Stock Option Plan.
S-8
9/13/99
10.1110.4
2001 Nonqualified Stock Option Plan.
S-8
6/27/00
10.110.5
2001A Nonqualified Stock Option Plan.
S-8
5/01/01
10.1510.6
2003 Nonqualified Stock Option Plan.
S-8
1/17/03
10.110.7
2004 Nonqualified Stock Option Plan.
S-8
12/11/03
10.110.8
2004A Nonqualified Stock Option Plan.
S-8
7/22/04
10.110.9
2005 Nonqualified Stock Option Plan.
S-8
2/14/05
10.1


-42-


10.10
Termination Agreement with Zeo-Tech Enviro Corp., C2C Zeolite Corp., Thelon Ventures Ltd. and United Zeolite Products Ltd.
10-QSB
1/30/06
10.110.11
2006 Nonqualified Stock Option Plan.
S-8
10/30/06
10.110.12
Technology License Agreement – Malaysia.
10-KSB
9/28/06
10.110.13
Technology License Agreement – Japan.
10-KSB
9/28/06
10.210.14
Technology License Agreement – Korea.
10-KSB
9/28/06
10.310.15
Technology License Agreement - Alternative Green Energy Systems, Inc.
10-KSB
9/28/06
10.410.16
Joint Venture & Shareholders’ Agreement with Ulimec Sdn. Bhd. and Itfx Sdn. Bhd.
10-K
10/01/09
10.110.17
Joint Venture & Shareholders’ Agreement with Hae Sung Chang and Park Jae Kwon.
10-K
10/01/09
10.210.18
Employment Agreement with J. Brian Nichols.
10-K
10/01/09
10.310.19
Employment Agreement with Calvin L. Kantonen.
10-K
10/01/09
10.410.20
Technology License Agreement - Korea. (Supersedes Exhibit 10.3 filed with Form 10-KSB on September 28, 2006).
10-K
10/01/09
10.514.1
Code of Ethics.
10-KSB
6/30/03
14.128.1
Consultant and Employee Stock Compensation Plan.
10-SB

28.131.1
Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.



X31.2
Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.



X32.1
Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.



X32.2
Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.



X99.1
Representative Agreement with Environmental Management Systems Institute Inc.
10-KSB
6/30/03
99.199.2
Audit Committee Charter.
10-KSB
6/30/03
99.299.3
Disclosure Committee Charter.
10-KSB
6/30/03
99.3
 -43-





SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 12th day of October, 2010.





FIRST AMERICAN SCIENTIFIC CORP.BY:
J. BRIAN NICHOLSJ. Brian NicholsPresident, Principal Executive Officer and member of the Board of DirectorsBY:
CALVIN L. KANTONENCalvin L. KantonenTreasurer, Principal Financial Officer and Chairman of the Board of Directors





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities.





Signatures
Title
DateJ. BRIAN NICHOLS
President, Principal Executive Officer and
October 12, 2010J. Brian Nichols
Member of the Board of DirectorsCALVIN L. KANTONEN
Treasurer, Principal Financial Officer and
October 12, 2010Calvin L. Kantonen
Chairman of the Board of Directors____________________________
Secretary and member of the Board of
October ____, 2010David Gibson
Directors


























-44-


EXHIBIT INDEX





Incorporated by referenceExhibit
Document Description
Form
Date
Number
Filed herewith3.1
Articles of Incorporation.
10-SB
10/26/95
3.13.2
Bylaws.
10-SB
10/26/95
3.23.3
Articles of Incorporation.
10-KSB
4/29/98
3.33.4
Amended Articles of Incorporation.
10-KSB
3/16/99
3.43.5
Amended Articles of Incorporation.
S-8
6/27/00
3.510.1
1996 Nonqualified Stock Option Plan.
S-8
6/26/96
10.110.2
1998 Nonqualified Stock Option Plan.
S-8
9/08/98
10.110.3
1999 Nonqualified Stock Option Plan.
S-8
9/13/99
10.1110.4
2001 Nonqualified Stock Option Plan.
S-8
6/27/00
10.110.5
2001A Nonqualified Stock Option Plan.
S-8
5/01/01
10.1510.6
2003 Nonqualified Stock Option Plan.
S-8
1/17/03
10.110.7
2004 Nonqualified Stock Option Plan.
S-8
12/11/03
10.110.8
2004A Nonqualified Stock Option Plan.
S-8
7/22/04
10.110.9
2005 Nonqualified Stock Option Plan.
S-8
2/14/05
10.110.10
Termination Agreement with Zeo-Tech Enviro Corp., C2C Zeolite Corp., Thelon Ventures Ltd. and United Zeolite Products Ltd.
10-QSB
1/30/06
10.110.11
2006 Nonqualified Stock Option Plan.
S-8
10/30/06
10.110.12
Technology License Agreement – Malaysia.
10-KSB
9/28/06
10.110.13
Technology License Agreement – Japan.
10-KSB
9/28/06
10.210.14
Technology License Agreement – Korea.
10-KSB
9/28/06
10.310.15
Technology License Agreement - Alternative Green Energy Systems, Inc.
10-KSB
9/28/06
10.410.16
Joint Venture & Shareholders’ Agreement with Ulimec Sdn. Bhd. and Itfx Sdn. Bhd.
10-K
10/01/09
10.110.17
Joint Venture & Shareholders’ Agreement with Hae Sung Chang and Park Jae Kwon.
10-K
10/01/09
10.2


-45-


10.18
Employment Agreement with J. Brian Nichols.
10-K
10/01/09
10.310.19
Employment Agreement with Calvin L. Kantonen.
10-K
10/01/09
10.410.20
Technology License Agreement - Korea. (Supersedes Exhibit 10.3 filed with Form 10-KSB on September 28, 2006).
10-K
10/01/09
10.514.1
Code of Ethics.
10-KSB
6/30/03
14.128.1
Consultant and Employee Stock Compensation Plan.
10-SB

28.131.1
Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.



X31.2
Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.



X32.1
Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.



X32.2
Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.



X99.1
Representative Agreement with Environmental Management Systems Institute Inc.
10-KSB
6/30/03
99.199.2
Audit Committee Charter.
10-KSB
6/30/03
99.299.3
Disclosure Committee Charter.
10-KSB
6/30/03
99.3





















-46-