UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                                   (MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                        COMMISSION FILE NUMBER 000-26067

                         NANOSCIENCE TECHNOLOGIES, INC.
                 (Name of small business issuer in its charter)

            NEVADA                                      87-0571300
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or organization)

  101 Hudson Street, Jersey City, NJ.                   07302
(Address of principal executive offices)                (Zip Code)

ISSUER'S TELEPHONE NO.:                                 (201) 985-8300
SECURITIES REGISTERED PURSUANT TO SECTION 12(b)         NONE
OF THE EXCHANGE ACT:
SECURITIES REGISTERED PURSUANT TO SECTION 12(g)         COMMON
OF THE EXCHANGE ACT:

                        FORMER ADDRESS & TELEPHONE NUMBER

281 Eighth Street, Jersey City, NJ 07302                          (239) 437-5255

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [_]

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

State the issuer's revenues for its most recent fiscal year. $ -0-

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and ask prices of such stock as of a specified date within 60 days. $999,175

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

COMMON STOCK, $.001 PAR VALUE 19,057,755, AS OF DECEMBER 17, 2007.

DOCUMENTS INCORPORATED BY REFERENCE:
 NONE

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT. YES [_] NO [X]


<PAGE>

<TABLE>
                                          NANOSCIENCE TECHNOLOGIES, INC.
                                                 TABLE OF CONTENTS

                                                      PART I

<S>          <C>                                                                                               <C>
ITEM 1.      DESCRIPTION OF BUSINESS.............................................................................1

ITEM 2.      DESCRIPTION OF PROPERTY............................................................................16

ITEM 3.      LEGAL PROCEEDINGS..................................................................................16

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................16

                                                      PART II

ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........................................17

ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........................................18

ITEM 7.      FINANCIAL STATEMENTS...............................................................................21

ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...............22
ITEM 8A.     CONTROLS AND PROCEDURES............................................................................22
ITEM 8b.     OTHER INFORMATION..................................................................................22

                                                     PART III

ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT................................................. 22

ITEM 10.     EXECUTIVE COMPENSATION.............................................................................23

ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................................24

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................................24

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K...................................................................25

ITEM 14.     PRINCIPAL ACCOUNTANTS FEES AND SERVICES............................................................26

SIGNATURES   ...................................................................................................26
</TABLE>


<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

This report contains certain forward-looking statements. These statements relate
to future events or our future  performance  and involve known and unknown risks
and   uncertainties.   Actual  results  may  differ   substantially   from  such
forward-looking statements, including, but not limited to, the following:

o our  ability  to  search  for  an  appropriate  business  opportunity  and  to
subsequently acquire or merge with such entity;

o to meet our cash and working capital needs;

o our ability to maintain our corporate existence as a viable entity; and

o other risks detailed in our periodic report filings with the SEC.

In some cases, you can identify  forward-looking  statements by terminology such
as  "may,"  "will"  "should,"  "expects,"  "intends,"  "plans,"   "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or the negative of
these terms or other comparable terminology.

These statements are only predictions. Although we believe that the expectations
reflected in the forward-looking  statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.

RECENT DEVELOPMENTS

CESSATION OF OPERATIONS

As  disclosed  prior to the date of the  filing  of this  Annual  Report on Form
10-KSB,  we have  experienced a chronic  working capital  deficiency,  which has
severely  handicapped our ability to meet our business  objectives.  At the date
hereof,  we have no current assets and liabilities of approximately  $2,214,000.
We  recorded  no  revenues  during the fiscal  year ended  September  30,  2007.
Further,  we are in default  with  respect to loans in the  principal  amount of
$1,858,100 from our principal creditor as described in Note 6.

We have expended  efforts to secure  additional  capital from both our principal
creditor  and other third  parties,  but such  efforts  have been  unsuccessful.
Currently, we have a severe working capital deficiency.

We are party to an Amended and Restated  Research and License  Agreement,  dated
September 12, 2003, (the "License  Agreement") with New York University  ("NYU")
that was further amended on November 11, 2003. The License Agreement is our sole
material asset.  Under the terms of the License  Agreement,  NYU granted to us a
license to certain pre-existing  inventions and certain intellectual property to
be generated by a designated research project being conducted at NYU relating to
DNA nanotechnology. Pursuant to the License Agreement, we are required to pay to
NYU an annual  licensing  fee.  At the date  hereof,  we are in  default  of our
payment  obligations  under the License  Agreement in the amount of $347,500 and
have  received  notice  from NYU that  NYU  intends  to  terminate  the  License
Agreement.  Further,  we are required to reimburse  NYU  additional  amounts for
patent fees and other  expenses.  As of September 30, 2007 we have a payable due
NYU of $433,615.


                                        1


<PAGE>


Accordingly,  we  have  determined  on  December  1,  2006 to  cease  operations
immediately and, at the request of such creditor appointed a director designated
by  such  creditor  to  our  Board  of  Directors.  Immediately  following  such
appointment,   our  existing  directors   resigned  effective   immediately  and
terminated their association with us.  Accordingly,  such creditor may be deemed
to control us at the date of the filing of this Report.

SHELL COMPANY STATUS

As a result of our cessation of operations  and the  termination  of the License
Agreement,  we became a "blank check" or "shell  company"  whose sole purpose at
this time is to locate and  consummate  a merger or  acquisition  with a private
entity.  Many states have enacted statutes,  rules and regulations  limiting the
sale of securities of "blank check" companies in their respective jurisdictions.
Management  does not believe it will  undertake any efforts to cause a market to
develop in our securities  until such time as we have  successfully  implemented
our business plan  described  herein.  However,  if we intend to facilitate  the
eventual creation of a public trading market in our outstanding  securities,  we
must consider that our securities,  when available for trading,  will be subject
to a Securities and Exchange Commission rule that imposes special sales practice
requirements upon  broker-dealers who sell such securities to persons other than
established  customers or accredited  investors.  For purposes of the rule,  the
phrase "accredited investors" means, in general terms,  institutions with assets
in  excess  of  $5,000,000,  or  individuals  having a net  worth in  excess  of
$1,000,000  or having an annual  income that  exceeds  $200,000  (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker-dealer  must make a special  suitability  determination for
the purchaser and receive the purchaser's  written  agreement to the transaction
prior to the sale.  Consequently,  the rule may  affect  the  ability of broker-
dealers to sell our securities and also may affect the ability of holders of our
securities to sell their securities in any market that might develop therefore.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to regulate  "penny  stocks."  Because our  securities  are "penny stocks"
within  the  meaning  of the  rules,  the  rules  would  apply  to us and to our
securities.  See "Risk Factors - Our Common Stock is penny stock." The rules may
further  affect the ability of owners of the Common Stock to sell our securities
in any market that might develop for them.

Our business plan is to seek,  investigate,  and, if  warranted,  acquire one or
more properties or businesses,  and to pursue other related activities  intended
to enhance  shareholder value. The acquisition of a business  opportunity may be
made by purchase,  merger,  exchange of stock,  or otherwise,  and may encompass
assets  or  a  business  entity,  such  as  a  corporation,  joint  venture,  or
partnership.  We have very limited  capital,  and it is unlikely that we will be
able to take  advantage  of more  than one  such  business  opportunity.  At the
present time, we have not identified any business  opportunity  that it plans to
pursue,  nor have we reached any agreement or definitive  understanding with any
person concerning an acquisition.

It is anticipated that our officers and directors may contact broker-dealers and
other  persons  with whom they are  acquainted  who are  involved  in  corporate
finance  matters to advise them of our  existence and status and to determine if
any companies or businesses  they  represent  have an interest in  considering a
merger or  acquisition  with us. We can  provide  no  assurance  that we will be
successful in finding or acquiring a desirable business  opportunity,  given the
limited funds that are expected to be available to us for acquisitions,  or that
any  acquisition  that occurs will be on terms that are  favorable  to us or our
stockholders.

We  anticipate  that  the  business  opportunities  presented  to us will (i) be
recently  organized  with  no  operating   history,   or  a  history  of  losses
attributable  to  under-capitalization  or other factors;  (ii) be  experiencing
financial or operating difficulties;  (iii) be in need of funds to develop a new
product or  service  or to expand  into a new  market;  (iv) be relying  upon an
untested  product  or  marketing  concept;  or  (v)  have a  combination  of the
characteristics  mentioned in (i) through  (iv).  We intend to  concentrate  our
acquisition   efforts  on  properties  or  businesses  that  we  believe  to  be
undervalued.   Given  the  above  factors,  investors  should  expect  that  any
acquisition candidate may have a history of losses or low profitability.


                                        2


<PAGE>


We do not propose to restrict  our search for  investment  opportunities  to any
particular  geographical  area  or  industry,  and  may,  therefore,  engage  in
essentially any business, to the extent of our limited resources.  This includes
industries such as service,  finance,  natural  resources,  manufacturing,  high
technology, product development,  medical,  communications,  construction,  real
estate development, and others.

As a consequence of the registration of its securities,  any entity which has an
interest in being  acquired  by, or merging into us, is expected to be an entity
that desires to become a public  company and establish a public  trading  market
for its  securities.  In  connection  with such a merger or  acquisition,  it is
highly likely that an amount of stock constituting control of us would be issued
by us or purchased  from our current  principal  shareholders  by the  acquiring
entity or its affiliates.

In our  judgment,  none of our officers and directors  would  thereby  become an
"underwriter"  within the meaning of the Section 2(11) of the  Securities Act of
1933, as amended. The sale of a controlling interest by certain of our principal
shareholders could occur at a time when our other shareholders remain subject to
restrictions on the transfer of their shares.

Depending upon the nature of the transaction, our current officers and directors
may resign their management positions with us in connection with our acquisition
of a  business  opportunity.  In the event of such a  resignation,  our  current
management would not have any control over the conduct of our business following
our combination with a business opportunity.

It is anticipated  that business  opportunities  will come to our attention from
various sources,  including our officers and directors,  our other stockholders,
professional   advisors   such  as   attorneys   and   accountants,   securities
broker-dealers,  venture capitalists,  members of the financial  community,  and
others who may present unsolicited proposals. We have no plans,  understandings,
agreements,  or  commitments  with any  individual  for such  person to act as a
finder of opportunities for us.

While we will evaluate other business  opportunities with which our officers and
directors are currently affiliated, we do not foresee that we would enter into a
merger or acquisition  transaction  with any business with which our officers or
directors are currently affiliated.  Should we determine in the future, contrary
to the foregoing expectations,  that a transaction with an affiliate would be in
the best interests of us and its  stockholders,  we are in general  permitted by
Nevada law to enter into such a transaction if:

1. The material facts as to the relationship or interest of the affiliate and as
to the  contract  or  transaction  are  disclosed  or are  known to the Board of
Directors, and the Board in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested  directors,  even though
the disinterested directors constitute less than a quorum; or

2. The material facts as to the relationship or interest of the affiliate and as
to the contract or  transaction  are disclosed or are known to our  stockholders
entitled to vote  thereon,  and the  contract  or  transaction  is  specifically
approved in good faith by vote of the stockholders; or

3. The contract or transaction is fair as to us as of the time it is authorized,
approved or ratified, by the Board of Directors or the stockholders.


                                        3


<PAGE>


INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES

To a large extent, a decision to participate in a specific business  opportunity
may be made upon  management's  analysis of the  quality of the other  company's
management  and  personnel,  the  anticipated  acceptability  of new products or
marketing concepts,  the merit of technological  changes,  the perceived benefit
the company will derive from becoming a publicly held entity, and numerous other
factors  which  are  difficult,  if  not  impossible,  to  analyze  through  the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may not necessarily
be indicative  of the  potential for the future  because of the possible need to
shift marketing approaches substantially,  expand significantly,  change product
emphasis,  change or substantially augment management, or make other changes. We
anticipate  that we will be dependent upon the owners of a business  opportunity
to identify any such problems which may exist and to implement,  or be primarily
responsible for the implementation of, required changes.

Because we may participate in a business opportunity with a newly organized firm
or with a firm which is  entering a new phase of growth,  we  emphasize  that we
will incur further  risks,  because  management in many  instances will not have
proved its abilities or  effectiveness,  the eventual  market for such company's
products or services will likely not be established, and such company may not be
profitable when acquired.

We anticipate  that we will not be able to diversify,  but will  essentially  be
limited to one such  venture  because  of our  limited  financing.  This lack of
diversification  will not permit us to offset potential losses from one business
opportunity  against  profits from another,  and should be considered an adverse
factor affecting any decision to purchase our securities.

We emphasize that our management  may effect  transactions  having a potentially
adverse impact upon our shareholders pursuant to the authority and discretion of
our management to complete  acquisitions  without submitting any proposal to the
stockholders  for their  consideration.  Holders  of our  securities  should not
anticipate that we necessarily will furnish such holders, prior to any merger or
acquisition, with financial statements, or any other documentation, concerning a
target  company  or its  business.  In some  instances,  however,  the  proposed
participation in a business opportunity may be submitted to the stockholders for
their   consideration,   either  voluntarily  by  such  directors  to  seek  the
stockholders' advice and consent or because state law so requires.

Since our  management  has no current  plans to use any outside  consultants  or
advisors to assist in the investigation and selection of business opportunities,
no policies have been adopted regarding use of such consultants or advisors, the
criteria to be used in selecting such  consultants or advisors,  the services to
be provided, the term of service, or regarding the total amount of fees that may
be paid. We anticipate that we will consider,  among other things, the following
factors:

1.  Potential  for  growth  and  profitability,  indicated  by  new  technology,
anticipated market expansion, or new products;

2. Our perception of how any particular business opportunity will be received by
the investment community and by our stockholders;

3. Whether,  following the business combination,  the financial condition of the
business  opportunity  would be, or would  have a  significant  prospect  in the
foreseeable  future of becoming  sufficient to enable our  securities to qualify
for  listing on an  exchange  or on a national  automated  securities  quotation
system,  such as NASDAQ,  so as to permit the trading of such  securities  to be
exempt from the requirements of Rule 15c2-6.


                                        4


<PAGE>


4. Capital  requirements  and anticipated  availability of required funds, to be
provided by us or from  operations,  through the sale of additional  securities,
through joint ventures or similar arrangements, or from other sources;

5. The extent to which the business opportunity can be advanced;

6.  Competitive  position  as compared to other  companies  of similar  size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

7. Strength and diversity of existing  management,  or management prospects that
are scheduled for recruitment;

8. The cost of  participation  by us as compared to the  perceived  tangible and
intangible values and potential; and

9. The accessibility of required management expertise, personnel, raw materials,
services, professional assistance, and other required items.

No one of the factors  described above will be determinative in the selection of
a business  opportunity,  and  management  will  attempt to analyze  all factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative  measures  and  available  data.  Potentially  available  business
opportunities  may occur in many  different  industries and at various stages of
development,  all of which will make the task of comparative  investigation  and
analysis  of  such  business  opportunities  extremely  difficult  and  complex.
Potential  investors  must  recognize  that,  because  of  our  limited  capital
available for  investigation  and  management's  limited  experience in business
analysis,  we may not discover or  adequately  evaluate  adverse facts about the
opportunity to be acquired.

As part of our  investigation,  our  executive  officers and  directors may meet
personally  with  management and key personnel,  may visit and inspect  material
facilities,  obtain independent  analysis or verification of certain information
provided,  check  references of  management  and key  personnel,  and take other
reasonable  investigative  measures,  to the  extent  of our  limited  financial
resources and management expertise.

Our  management  believes that various types of potential  merger or acquisition
candidates  might find a business  combination  with us to be attractive.  These
include  acquisition  candidates  desiring  to create a public  market for their
shares in order to  enhance  liquidity  for  current  shareholders,  acquisition
candidates  which have long-term  plans for raising  capital  through the public
sale of  securities  and believe that the possible  prior  existence of a public
market for their  securities  would be beneficial,  and  acquisition  candidates
which plan to acquire  additional  assets through issuance of securities  rather
than for cash,  and believe  that the  possibility  of  development  of a public
market for their  securities will be of assistance in that process.  Acquisition
candidates who have a need for an immediate cash infusion are not likely to find
a potential business combination with us to be an attractive alternative.

FORM OF ACQUISITION

We cannot currently predict the manner in which we may participate in a business
opportunity.  Specific  business  opportunities  will be reviewed as well as the
respective  needs and desires of us and the  promoters of the  opportunity  and,
upon the basis of that review and the  relative  negotiating  strength of us and
such  promoters,  the legal  structure  or method  deemed  by  management  to be
suitable will be selected.  Such  structure  may include,  but is not limited to
leases,  purchase  and sale  agreements,  licenses,  joint  ventures  and  other
contractual arrangements.  We may act directly or indirectly through an interest
in a partnership,  corporation or other form of organization.  Implementing such
structure may require our merger,  consolidation  or  reorganization  with other
corporations or forms of business organization, and although it is likely, there
is no assurance that we would be the surviving entity. In addition,  our present
management and  stockholders  most likely will not have control of a majority of
our voting  shares  following a  reorganization  transaction.  As part of such a
transaction,  our  existing  directors  may  resign  and  new  directors  may be
appointed without any vote by stockholders.


                                        5


<PAGE>


Management  may actively  negotiate or otherwise  consent to the purchase of any
portion  of their  common  shares  as a  condition  to or in  connection  with a
proposed merger or acquisition transaction. We emphasize that our management may
effect  transactions  having a potentially  adverse impact upon our shareholders
pursuant  to  the  authority  and  discretion  of  our  management  to  complete
acquisitions  without  submitting  any  proposal to the  stockholders  for their
consideration.   Holders  of  our  securities  should  not  anticipate  that  we
necessarily will furnish our holders,  prior to any merger or acquisition,  with
financial statements, or any other documentation, concerning a target company or
its  business.  In some  instances,  however,  the proposed  participation  in a
business   opportunity   may  be  submitted  to  the   stockholders   for  their
consideration,  either  voluntarily by such directors to seek the  stockholders'
advice and consent or because state law so requires.

We  believe  that it is  likely  that we will  acquire  our  participation  in a
business  opportunity  through  the  issuance  of our common  stock or our other
securities.  Although  we  cannot  currently  predict  the  terms  of  any  such
transaction,  we note that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986,  depends upon the issuance to the stockholders of
the acquired company of a controlling  interest (i.e. 80% or more) of the common
stock of the combined entities  immediately  following the reorganization.  If a
transaction  were structured to take advantage of these  provisions  rather than
other "tax free"  provisions  provided  under the  Internal  Revenue  Code,  our
current  stockholders  would  retain in the  aggregate  20% or less of the total
issued and  outstanding  shares.  This could  result in  substantial  additional
dilution  in the  equity  of  those  who  were  our  stockholders  prior to such
reorganization.  Any such  issuance  of  additional  shares  might  also be done
simultaneously  with a sale or transfer  of shares  representing  a  controlling
interest in us by the current officers, directors and principal shareholders.

We anticipate that any new securities that we issue in any reorganization  would
be issued in reliance upon exemptions,  if any are available,  from registration
under  applicable  federal and state  securities  laws.  In some  circumstances,
however,  as a negotiated  element of the transaction,  we may agree to register
such  securities  either at the time the  transaction is  consummated,  or under
certain conditions or at specified times thereafter. The issuance of substantial
additional  securities  and their  potential  sale into any trading  market that
might develop in our securities may have a depressive effect upon such market.

We will  participate in a business  opportunity  only after the  negotiation and
execution of a written agreement. Although the terms of such agreement cannot be
predicted,  generally such an agreement would require  specific  representations
and warranties by all of the parties thereto, specify certain events of default,
detail the terms of closing and the  conditions  which must be satisfied by each
of the  parties  thereto  prior to such  closing,  outline the manner of bearing
costs if the  transaction is not closed,  set forth  remedies upon default,  and
include miscellaneous other terms.


                                        6


<PAGE>


As a general  matter,  we anticipate  that we, and/or our officers and principal
shareholders will enter into a letter of intent with the management,  principals
or owners  of a  prospective  business  opportunity  prior to  signing a binding
agreement.  Such a letter  of intent  will set  forth the terms of the  proposed
acquisition but will not bind any of the parties to consummate the  transaction.
Execution of a letter of intent will by no means indicate that  consummation  of
an  acquisition  is  probable.  Neither  we nor any of the other  parties to the
letter of intent will be bound to consummate the acquisition  unless and until a
definitive  agreement  concerning the  acquisition as described in the preceding
paragraph is  executed.  Even after a  definitive  agreement is executed,  it is
possible that the acquisition would not be consummated should any party elect to
exercise  any right  provided in the  agreement  to  terminate  it on  specified
grounds.

We anticipate that the investigation of specific business  opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial  costs for accountants,  attorneys and others. If a decision is made
not to participate in a specific  business  opportunity,  the costs  theretofore
incurred  in the  related  investigation  would  not be  recoverable.  Moreover,
because many providers of goods and services require compensation at the time or
soon after the goods and services are  provided,  our  inability to pay until an
indeterminate future time may make it impossible to procure goods and services.

INVESTMENT COMPANY ACT AND OTHER REGULATION

We may participate in a business  opportunity by purchasing,  trading or selling
the securities of such business. We do not, however,  intend to engage primarily
in such activities.  Specifically,  we intend to conduct our activities so as to
avoid being classified as an "investment  company" under the Investment  Company
Act of 1940 (the "Investment  Act"),  and therefore to avoid  application of the
costly and restrictive  registration and other provisions of the Investment Act,
and the regulations promulgated thereunder.

Section 3(a) of the  Investment  Act contains the  definition of an  "investment
company,"  and it  excludes  any entity  that does not engage  primarily  in the
business of investing,  reinvesting or trading in  securities,  or that does not
engage in the  business of  investing,  owning,  holding or trading  "investment
securities"  (defined as "all  securities  other than  government  securities or
securities of  majority-owned  subsidiaries")  the value of which exceeds 40% of
the value of its total assets  (excluding  government  securities,  cash or cash
items).  We intend to implement  our business plan in a manner which will result
in the  availability  of this  exception  from  the  definition  of  "investment
company."  Consequently,  our participation in a business or opportunity through
the purchase and sale of investment securities will be limited.

Our plan of business may involve changes in our capital  structure,  management,
control and business,  especially if we consummate a reorganization as discussed
above.  Each of these  areas is  regulated  by the  Investment  Act, in order to
protect purchasers of investment company securities.  Since we will not register
as an investment company, stockholders will not be afforded these protections.

Any  securities  which we might acquire in exchange for our common stock will be
"restricted  securities"  within the meaning of the  Securities  Act of 1933, as
amended (the  "Act").  If we elect to resell such  securities,  such sale cannot
proceed  unless a  registration  statement  has been  declared  effective by the
Securities  and  Exchange  Commission  or  an  exemption  from  registration  is
available.  Section  4(1) of the Act,  which  exempts  sales of  securities  not
involving a  distribution,  would in all  likelihood  be  available  to permit a
private  sale.  Although the plan of operation  does not  contemplate  resale of
securities acquired,  if such a sale were to be necessary,  we would be required
to comply with the provisions of the Act to effect such resale.


                                        7


<PAGE>


An  acquisition  made by us may be in an industry which is regulated or licensed
by federal, state or local authorities.  Compliance with such regulations can be
expected to be a time-consuming and expensive process.

COMPETITION

We  expect  to  encounter  substantial  competition  in our  efforts  to  locate
attractive opportunities, primarily from business development companies, venture
capital  partnerships  and  corporations,  venture  capital  affiliates of large
industrial and financial  companies,  small  investment  companies,  and wealthy
individuals.  Many of these entities will have significantly greater experience,
resources and  managerial  capabilities  than we have and will therefore be in a
better   position  than  we  are  to  obtain   access  to  attractive   business
opportunities.  We also will  experience  competition  from other public  "blind
pool" companies, many of which may have more funds available than we do.

EMPLOYEES

We currently have 1 employee,  our Chief Executive  Officer,  John T. Ruddy. Our
management  expects to use consultants,  attorneys and accountants as necessary,
and does not anticipate a need to engage any other  full-time  employees so long
as it is seeking and  evaluating  business  opportunities.  The need for further
employees  and their  availability  will be  addressed  in  connection  with the
decision  whether  or  not  to  acquire  or  participate  in  specific  business
opportunities.

RISK FACTORS

AN INVESTMENT IN OUR  SECURITIES IS HIGHLY  SPECULATIVE  AND SUBJECT TO NUMEROUS
AND SUBSTANTIAL  RISKS.  THESE RISKS INCLUDE THOSE SET FORTH BELOW AND ELSEWHERE
IN THIS ANNUAL  REPORT ON FORM 10-KSB.  READERS ARE  ENCOURAGED  TO REVIEW THESE
RISKS CAREFULLY BEFORE MAKING ANY INVESTMENT DECISION.

OUR  FINANCIAL  STATEMENT  INCLUDE  SUBSTANTIAL  NON-OPERATING  GAINS OR  LOSSES
RESULTING  FROM REQUIRED  QUARTERLY  REVALUATION  UNDER GAAP OF OUR  OUTSTANDING
DERIVATIVE INSTRUMENTS.

GAAP requires that we report the value of certain derivative instruments we have
issued as current  liabilities  on our balance  sheet and report  changes in the
value of these derivatives as non-operating  gains or losses on our statement of
operations.  The value of the  derivatives is required to be  recalculated  (and
resulting non-operating gains or losses reflected in our statement of operations
and resulting  adjustments to the associated  liability amounts reflected on our
balance  sheet) on a quarterly  basis,  and is based on the market  value of our
common  stock.  Due to the nature of the  required  calculations  and the larger
number of shares of our common stock involved in such  calculations,  changes in
our common  stock  price may result in  significant  changes in the value of the
derivatives and resulting gains and losses on our statement of operations.

WE MAY NOT CONTINUE AS A GOING CONCERN.

Our financial  statements  were prepared on the assumption that we will continue
as a going concern,  and the independent  accountants have expressed doubt as to
that  assumption.  If sufficient  capital is not  available,  we would likely be
required  to  discontinue  our  operations.  We have  recurring  net  losses  of
approximately  $813,000  and  $1,880,000  in 2007 and 2006  respectively  and an
accumulated deficit of approximately $5,142,000 as of September 30, 2007. We are
trying to raise additional  capital through sales of our common stock as well as
financing  from third  parties.  However  if we are  unable to raise  additional
capital or financing we may not continue as a going concern.


                                        8


<PAGE>


THERE MAY BE CONFLICTS OF INTEREST BETWEEN OUR MANAGEMENT AND OUR NON-MANAGEMENT
STOCKHOLDERS.

Conflicts of interest  create the risk that  management may have an incentive to
act  adversely to the interests of other  investors.  A conflict of interest may
arise between our  management's  personal  pecuniary  interest and its fiduciary
duty to our stockholders.  Further,  our management's own pecuniary interest may
at some point  compromise its fiduciary duty to our  stockholders.  In addition,
our  officers  and  directors  are  currently  involved  with other  blank check
companies and conflicts in the pursuit of business  combinations with such other
blank check  companies with which they and other members of our management  are,
and may in the future be,  affiliated  with may arise. If we and the other blank
check  companies that our officers and directors are  affiliated  with desire to
take advantage of the same  opportunity,  then those officers and directors that
are  affiliated   with  both  companies  would  abstain  from  voting  upon  the
opportunity.  In the event of identical officers and directors, the officers and
directors  will  arbitrarily  determine  the  company  that will be  entitled to
proceed with the proposed transaction.

THERE  IS  COMPETITION  FOR  THOSE  PRIVATE  COMPANIES  SUITABLE  FOR  A  MERGER
TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.

We  are  in  a  highly  competitive  market  for  a  small  number  of  business
opportunities  which could reduce the  likelihood of  consummating  a successful
business  combination.   We  are  and  will  continue  to  be  an  insignificant
participant  in the business of seeking  mergers with,  joint  ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have  significantly  greater
financial resources, technical expertise and managerial capabilities than we do;
consequently,  we will be at a competitive  disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive   factors  may  reduce  the  likelihood  of  our   identifying   and
consummating a successful business combination.

FUTURE  SUCCESS IS HIGHLY  DEPENDENT ON THE ABILITY OF  MANAGEMENT TO LOCATE AND
ATTRACT A SUITABLE ACQUISITION.

The nature of our  operations  is highly  speculative  and there is a consequent
risk of loss of your  investment.  The  success  of our plan of  operation  will
depend to a great extent on the operations,  financial  condition and management
of the  identified  business  opportunity.  While  management  intends  to  seek
business combination(s) with entities having established operating histories, we
cannot assure you that we will be successful in locating candidates meeting that
criterion.  In the event we complete a business combination,  the success of our
operations  may be dependent  upon  management of the successor  firm or venture
partner firm and numerous other factors beyond our control.

WE HAVE NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION.

We have no arrangement, agreement or understanding with respect to engaging in a
merger with,  joint venture with or acquisition  of, a private or public entity.
No  assurances  can be given that we will  successfully  identify  and  evaluate
suitable business opportunities or that we will conclude a business combination.
Management  has not  identified  any  particular  industry or specific  business
within an industry for evaluation.  We cannot  guarantee that we will be able to
negotiate a business combination on favorable terms, and there is consequently a
risk that funds  allocated to the purchase of our shares will not be invested in
a company with active business operations.


                                        9


<PAGE>


THE TIME AND COST OF  PREPARING A PRIVATE  COMPANY TO BECOME A PUBLIC  REPORTING
COMPANY MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE MOST
ATTRACTIVE PRIVATE COMPANIES.

Target  companies that fail to comply with SEC reporting  requirements may delay
or  preclude  acquisition.  Sections  13 and 15(d) of the  Exchange  Act require
reporting   companies  to  provide   certain   information   about   significant
acquisitions, including certified financial statements for the company acquired,
covering  one,  two,  or three  years,  depending  on the  relative  size of the
acquisition.  The time and additional  costs that may be incurred by some target
entities to prepare these  statements  may  significantly  delay or  essentially
preclude   consummation  of  an  acquisition.   Otherwise  suitable  acquisition
prospects  that  do not  have or are  unable  to  obtain  the  required  audited
statements  may be  inappropriate  for  acquisition  so  long  as the  reporting
requirements of the Exchange Act are applicable.

WE MAY BE SUBJECT TO FURTHER GOVERNMENT  REGULATION WHICH WOULD ADVERSELY AFFECT
OUR OPERATIONS.

Although we will be subject to the  reporting  requirements  under the  Exchange
Act,  management  believes  we will  not be  subject  to  regulation  under  the
Investment  Act,  since we will not be engaged in the  business of  investing or
trading in securities. If we engage in business combinations which result in our
holding  passive  investment  interests  in a number  of  entities,  we could be
subject to regulation  under the Investment  Act. If so, we would be required to
register as an  investment  company  and could be expected to incur  significant
registration and compliance costs. We have obtained no formal determination from
the SEC as to our status under the Investment Act and,  consequently,  violation
of the Investment Act could subject us to material adverse consequences.

ANY  POTENTIAL  ACQUISITION  OR MERGER WITH A FOREIGN  COMPANY MAY SUBJECT US TO
ADDITIONAL RISKS.

If we enter  into a  business  combination  with a foreign  concern,  we will be
subject to risks inherent in business  operations  outside of the United States.
These risks include, for example,  currency  fluctuations,  regulatory problems,
punitive tariffs, unstable local tax policies, trade embargoes, risks related to
shipment  of raw  materials  and  finished  goods  across  national  borders and
cultural and language  differences.  Foreign  economies may differ  favorably or
unfavorably from the United States economy in growth of gross national  product,
rate of inflation, market development,  rate of savings, and capital investment,
resource  self-sufficiency  and  balance  of  payments  positions,  and in other
respects.

OUR BUSINESS  WILL HAVE NO REVENUE  UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN
OPERATING BUSINESS.

We are a development  stage company and have had no revenue from operations.  We
may not  realize  any  revenue  unless and until we  successfully  merge with or
acquire an operating business.

WE INTEND TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION,  WHICH WILL RESULT IN
SUBSTANTIAL DILUTION.

As of September  30, 2007,  our  Certificate  of  Incorporation  authorized  the
issuance  of a maximum  of  100,000,000  shares of common  stock.  Any merger or
acquisition  effected by us may result in substantial dilution in the percentage
of our common stock held by our then existing stockholders. Moreover, the common
stock issued in any such merger or acquisition  transaction  may be valued on an
arbitrary  or  non-arm's-length  basis  by  our  management,   resulting  in  an
additional reduction in the percentage of common stock held by our then existing
stockholders.


                                       10


<PAGE>


To the extent that  additional  shares of common  stock or  preferred  stock are
issued in connection with a business  combination or otherwise,  dilution to the
interests of our stockholders will occur and the rights of the holders of common
stock might be materially adversely affected.

WE MAY NOT BE ABLE TO IDENTIFY A BUSINESS TO MERGE WITH OR ACQUIRE.

There is assurance  that market  demand  exists for a merger or  acquisition  as
contemplated  by us. Our management  has not  identified  any specific  business
combination or other  transactions for formal evaluation by us, such that it may
be expected  that any such target  business or  transaction  will present such a
level of risk that  conventional  private or public  offerings of  securities or
conventional bank financing will not be available. There is no assurance that we
will be able to  acquire  a  business  opportunity  on  terms  favorable  to us.
Decisions  as  to  which   business   opportunity  to  participate  in  will  be
unilaterally made by our management,  which may act without the consent, vote or
approval of our stockholders.

BECAUSE  WE MAY SEEK TO  COMPLETE  A  BUSINESS  COMBINATION  THROUGH A  "REVERSE
MERGER",  FOLLOWING  SUCH A  TRANSACTION  WE MAY  NOT BE  ABLE  TO  ATTRACT  THE
ATTENTION OF MAJOR BROKERAGE FIRMS.

Additional  risks may exist since we will assist a  privately  held  business to
become public through a "reverse merger." Securities analysts of major brokerage
firms may not provide  coverage of us since there is no  incentive  to brokerage
firms to recommend the purchase of our common  stock.  No assurance can be given
that brokerage  firms will want to conduct any secondary  offerings on behalf of
our post-merger company in the future.

OUR COMMON STOCK IS CONSIDERED TO BE "PENNY STOCK".

Our common  stock is deemed to be "penny  stock" as that term is defined in Rule
3a51-1,  promulgated  under the  Securities and Exchange Act of 1934, as amended
(the "Exchange Act"). Penny stocks are stocks:

o with a price of less than $5.00 per share;

o that are not traded on a "recognized" national exchange;

o whose prices are not quoted on the NASDAQ automated quotation system; or

o of issuers with net tangible  assets less than  $2,000,000  (if the issuer has
been in  continuous  operation  for at least three years) or  $5,000,000  (if in
continuous operation for less than three years), or with average revenue of less
than $6,000,000 for the last three years.

Section 15(g) of the Exchange Act and Rule 15g-2 promulgated  thereunder require
broker-dealers  dealing in penny stocks to provide  potential  investors  with a
document  disclosing  the risks of penny stocks and to obtain a manually  signed
and dated written receipt of the document before  effecting any transaction in a
"penny stock" for the investor's  account. We urge potential investors to obtain
and read this disclosure  carefully before purchasing any shares that are deemed
to be "penny stock."

Rule 15g-9 promulgated  under the Exchange Act requires  broker-dealers in penny
stocks to approve the account of any  investor for  transactions  in such stocks
before selling any "penny stock" to that investor.  This procedure  requires the
broker-dealer to:


                                       11


<PAGE>


   o  obtain from the investor information about his or her financial situation,
      investment experience and investment objectives;

   o  reasonably  determine,  based on that  information,  that  transactions in
      penny  stocks are  suitable  for the  investor  and that the  investor has
      enough knowledge and experience to be able to evaluate the risks of "penny
      stock" transactions;

   o  provide the investor with a written  statement  setting forth the basis on
      which the broker-dealer made his or her determination; and

   o  receive  a signed  and  dated  copy of the  statement  from the  investor,
      confirming that it accurately reflects the investor's financial situation,
      investment experience and investment objectives.

Compliance  with  these  requirements  may make it harder for  investors  in our
common stock to resell their shares to third  parties.  Accordingly,  our common
stock should only be purchased by investors, who understand that such investment
is a long-term and illiquid investment,  and are capable of and prepared to bear
the risk of holding the common stock for an indefinite period of time.

A LIMITED PUBLIC TRADING MARKET MAY CAUSE  VOLATILITY IN THE PRICE OF OUR COMMON
STOCK.

Our common stock is currently quoted on the OTC Bulletin Board. The quotation of
our common  stock on the OTC Bulletin  Board does not assure that a  meaningful,
consistent and liquid trading market currently exists,  and in recent years such
market  has  experience   extreme  price  and  volume   fluctuations  that  have
particularly  affected the market prices of many smaller  companies like us. Our
common stock is thus subject to this volatility. Sales of substantial amounts of
common stock,  or the perception  that such sales might occur,  could  adversely
affect  prevailing  market  prices of our common  stock and our stock  price may
decline  substantially in a short time and our shareholders  could suffer losses
or be unable to liquidate their holdings.

WE MAY NOT BE ABLE TO ACHIEVE  SECONDARY  TRADING OF OUR STOCK IN CERTAIN STATES
BECAUSE OUR COMMON STOCK IS NOT NATIONALLY TRADED.

Because our common  stock is not  approved  for  trading on the Nasdaq  National
Market or listed for trading on a national securities exchange, our common stock
is subject to the securities laws of the various states and jurisdictions of the
United States in addition to federal  securities law. This regulation covers any
primary offering we might attempt and all secondary trading by our stockholders.
While we  intend to take  appropriate  steps to  register  our  common  stock or
qualify  for  exemptions  for  our  common  stock,  in  all of  the  states  and
jurisdictions  of the United States,  if we fail to do so the investors in those
jurisdictions  where we have not taken such steps may not be allowed to purchase
our stock or those who presently  hold our stock may not be able to resell their
shares without substantial effort and expense.  These restrictions and potential
costs could be significant burdens on our stockholders.

IT IS  UNCERTAIN  WHETHER  WE  WILL  EVER  PAY  DIVIDENDS  OR  EVER  PROVIDE  AN
OPPORTUNITY FOR ANY RETURN ON INVESTMENT. OUR SECURITIES SHOULD NOT BE PURCHASED
BY PERSONS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.

It is uncertain whether we will ever pay dividends on our common stock. Our
securities  should not be  purchased  by persons  who can not afford the loss of
their entire investment.


                                       12


<PAGE>


HISTORY

Nanoscience  Technologies,  Inc.  ("NTI") was incorporated in Idaho on September
14, 1987.  In July 2001, we formed a new Nevada  corporation  for the purpose of
changing our corporate  domicile  from Idaho to Nevada.  On November 8, 2001, we
implemented  the  change of  domicile  to Nevada  by filing  Articles  of Merger
between the Idaho and Nevada corporations. Also in November 2001, we changed our
authorized capitalization to 100,000,000 shares of Common Stock, par value $.001
per share.  On November 16, 2001, we affected a forward split of our outstanding
shares of common  stock on a 12.5  shares  for 1 share  basis.  In May 2002,  we
changed  our  corporate  name from Eagles  Nest  Mining  Company to  Nanoscience
Technologies, Inc.

BUSINESS PRIOR TO CESSATION OF OPERATIONS

We have a limited  operating  history and no  representation is made, nor is any
intended,  that  we will be able to  carry  on our  future  business  activities
successfully.  As a result of the License Agreement with NYU, we were engaged in
the  development  and  commercialization  of  the  inventions  and  intellectual
property to be generated by the research project being conducted at NYU relating
to DNA  Nanotechnology.  Structural  DNA  Nanotechnology  seeks to  exploit  the
architectural  properties of DNA with the ultimate goal of organizing  matter in
three dimensions. Pharmaceutical development,  nano-electronics and the creation
of new materials are among the potential applications of this research.

BACKGROUND OF TECHNOLOGY

We were originally formed to commercialize  significant  nanotechnology research
and intellectual property developed at New York University (NYU). The technology
and its related  intellectual  property are the result of twenty-three  years of
research at NYU by Dr.  Nadrian C. Seeman,  Ph.D.  and his research  group.  Dr.
Seeman is an internationally  recognized scientist and a pioneer in developments
pertaining to DNA  nanotechnology.  In September 2003, NTI executed an exclusive
worldwide  Research and License Agreement with NYU for all of Dr. Seeman's past,
current and future developments pertaining to nanotechnology.

Nanotechnology is the "cutting edge" of science and technology on our planet. It
is technology at the molecular  level.  The nano scale is measured in billionths
of a meter, one nanometer being one-billionth of a meter. To provide a reference
for the size of a nanometer,  the average human hair measures  between 50,000 to
75,000 nanometers in diameter, and there are approximately 24,500,000 nanometers
in an inch.

Nanotechnology will allow the ability to construct precise molecular  formations
by combining  individual  molecules with other molecules to make larger and more
defined  constructs.  Applications for  nanotechnology are vast and include huge
areas of opportunity in chemicals,  physics, engineered materials, life sciences
and a long list of other applications.  It is an enabling technology expected to
create in excess of one million jobs and  contribute  billions of dollars to the
U.S. Economy over the next decade.

The U.S. National Science Foundation estimates the global market opportunity for
nanotechnology  products  and  service-related  industries  will be $25  billion
annually by 2007 and $1 trillion annually by 2015.

We believed that the commercial  applications that will result from the research
and development programs at NYU are scientifically significant, highly extensive
and novel. In addition, the technology is well patented.

We had identified a two-phase  research and  development  plan which is based on
the research  conducted/accomplished to date and planned future research and the
need to meet long-term business objectives that will result in viable commercial
product opportunities.


                                       13


<PAGE>


Prior to our  cessation of  operations,  our  commercialization  strategy was as
follows:

   o  Enter into research collaboration  relationships early in the research and
      development  process with market leaders in each industry  sector that NTI
      plans to pursue;

   o  Establish  relationships  with  targeted  companies  that  will  result in
      exclusive,  or in certain instances,  non-exclusive licenses for a DEFINED
      field of use; and

   o  Focus  on  collaboration   partners/licensees   that  have  a  substantial
      manufacturing and marketing  capability which may result in a more defined
      product development effort and a shorter time to commercialization.

The  intellectual  property  portfolio  contained  five issued  patents and five
patent applications.

POTENTIAL COMMERCIAL APPLICATIONS

Nanotechnology  is in its  commercial  infancy;  however,  there  is  already  a
substantial   market  in  place  for  nanotechnology   products.   The  earliest
application of nanoscale  materials  occurred in systems where nanoscale powders
and  particles  could be used in  their  free  form,  without  consolidation  or
blending. For example, nanoscale titanium dioxide and zinc oxide powders are now
commonly  used by cosmetics  manufacturers  for facial base creams and sunscreen
lotions.  Nanoscale  iron oxide powder is now being used as a base  material for
rouge  and  lipstick.   Paints  with   reflective   properties  are  also  being
manufactured using nanoscale titanium dioxide particles.

Nanotechnology   is  also  being  used  in  various   technology   and   defense
applications.  Nano-structured  cemented  carbide coatings are used on some U.S.
Navy ships for their increased durability. Nano-structured materials are in wide
use in information technology, integrated into complex products such as the hard
disk drives that store information and the silicon integrated circuit chips that
process information in every Internet server and personal computer.  In 2003 IBM
announced  the  introduction  of  an  atomically  thin  layer  of  ruthenium  to
substantially increase the information storage density of its products.  Greater
storage density translates directly to less expensive storage cost.

In biomedical  areas,  structures  called  liposomes have been  synthesized  for
improved delivery of therapeutic  agents.  Liposomes are lipid spheres about 100
nanometers in diameter. They have been used to encapsulate anti-cancer drugs for
the  treatment  of Kaposi's  Sarcoma.  Several  companies  are  presently  using
magnetic nanoparticles in the analyses of blood, urine, and other body fluids to
speed up separation  and improve  selectivity.  Other  companies  have developed
derivatized  fluorescent  nanospheres and nanoparticles  that form the basis for
new detection technologies.  These reagent nanoparticles are used in new devices
and systems for infectious and genetic disease analysis and for drug discovery.

Many uses of nanoscale  particles  have appeared in specialty  markets,  such as
defense  applications,  and  markets for  scientific  and  technical  equipment.
Producers of optical  materials and  electronics  substrates such as silicon and
gallium arsenide have embraced the use of nanosize particles for chemomechanical
polishing of these substrates.  Nanosize  particles of silicon carbide,  diamond
and boron  carbide are used as  "lapping  compounds"  to reduce the  waviness of
finished  surfaces from corner to corner and produce surface finishes to one and
two  nanometer  smoothness.  The ability to produce  high-quality  components is
significant as electric devices shrink and optical communications systems become
a larger part of the nation's communications network.


                                       14


<PAGE>


OTHER APPLICATIONS

As nanoscale  science and  technology  continue to grow, it is certain that many
new materials, properties and applications will be discovered. Research in areas
related to nanofabrication  is needed to develop new and advanced  manufacturing
techniques.   These  new  techniques  would  allow  the  fabrication  of  highly
integrated  two- and  three-dimensional  devices and  structures to form diverse
molecular  and  nanoscale  components.  They  would  allow  many  of the new and
promising nanostructures, such as carbon nanotubes, organic molecular electronic
components,  and  quantum  dots,  to be  rapidly  assembled  into  more  complex
circuitry to form useful logic and memory  devices.  Such new devices would have
computational  performance  characteristics  and data  storage  capacities  many
orders of magnitude higher than present devices,  and would come in even smaller
packages.

Nanomaterials  and their  performance  properties will also continue to improve.
Thus, even better and cheaper  nanopowders,  nanoparticles,  and  nanocomposites
will  be  available  for  more  widespread   applications.   Another   important
application  for future  nanomaterials  will be highly  selective  and efficient
catalysts for chemical and energy conversion  processes.  This will be important
economically  not  only  for  energy  and  chemical  production,  but  also  for
conservation and environmental applications.  Thus, nanomaterial-based catalysis
may play an  important  role in  photoconversion  devices,  fuel  cell  devices,
bioconversion  (energy) and bioprocessing  (food and agriculture)  systems,  and
waste and pollution control systems.

Nanoscale  science and technology  could have a continuing  impact on biomedical
areas such as therapeutics,  diagnostic devices, and biocompatible materials for
implants and prostheses.  There will continue to be opportunities for the use of
nanomaterials  in  drug  delivery   systems.   Combining  new  nanosensors  with
nanoelectronic components could lead to a further reduction in size and improved
performance  for many  diagnostic  devices and  systems.  Ultimately,  it may be
possible to make  implantable in vivo  diagnostic  and  monitoring  devices that
approach the size of cells. New biocompatible  nanomaterials and  nanomechanical
components  could lead to the  creation  of new  materials  and  components  for
implants, artificial organs, and greatly improved mechanical,  visual, auditory,
and other prosthetic devices.

Exciting  predictions  aside,  these  advances  will  not  be  realized  without
considerable  research  and  development.  For  example,  the  present  state of
nanodevices and  nanotechnology  resembles that of semiconductor and electronics
technology  in 1947,  when the first  point  contact  transistor  was  realized,
ushering in the INFORMATION AGE, which blossomed in the 1990s. The full power of
the  transistor  was not fully  evident  until the  invention of the  integrated
circuit  with  reliable  processing  techniques  that produce  numerous  uniform
devices  and  connect  them  across a large  wafer,  wafer-scale  packaging  and
interconnection  techniques for large-scale integrated circuits.  Similarly,  it
will  require an era of advances in the  development  of  processes to integrate
nanoscale components into devices, both with other nanoscale components and with
microscale and larger  components,  accompanied by the ability to do so reliably
and cost-effectively.

Since nanoscale technology spans a much broader range of scientific disciplines
and potential applications than does solid state electronics, its societal
impact may be many times greater than that of the Microelectronics and Computing
Revolution. Nanotechnology is definitely a "disruptive technology", that is, a
technology that will have a widespread effect and change many societal norms. It
will eventually precipitate massive shifts in industries and their importance to
the world economy.

At the date  hereof,  we are in default  of our  payment  obligations  under the
License  Agreement in the amount of $347,500 and have  received  notice from NYU
that NYU intends to terminate the License Agreement. Further, we are required to
reimburse NYU additional amounts for patent fees and other expenses estimated to
be approximately  $80,000 at the date hereof.  Presently,  we have no marketable
products or licensable technology. Our collaboration with NYU has terminated. We
have  been  dependent  upon  NYU's  successful  research  and  development  of a
marketable  product or  licensable  technology.  At this time,  we have lost our
license with NYU and have no other  technology,  products or services from which
we can expect to generate revenues.


                                       15


<PAGE>


GOVERNMENT REGULATION

Presently,  we are not presently  subject to government  regulations or consents
because we do not have any marketable or licensable  technology.  We can provide
no  assurances  that  in the  foreseeable  future  we  will  not be  subject  to
government  regulation or will not have to obtain government consents to conduct
our business and there is no guarantee  that we will be in compliance  with such
regulations at the time they become  applicable.  The relevant  regulations  and
necessary consents cannot be discerned until the type of technology developed is
determined.

RESEARCH AND DEVELOPMENT

We have  incurred $0 and $447,288 in research and  development  expenses in 2007
and 2006 respectively.

EMPLOYEES

As of the date hereof,  we have only one  employee.  We may find it necessary to
periodically hire part-time clerical help on an as-needed basis. We also fulfill
several of our management functions through the use of independent  contractors.
These functions include legal, accounting and investor relations.

FACILITIES

We currently use as our principal place of business the business  offices of our
President  and  Chief  Executive  Officer  located  in  Jersey  City,  NJ. It is
contemplated  that at such  future  time as  business  warrants,  we will secure
commercial  office  space.  However,  we have no  current  plans to secure  such
commercial office space.

INDUSTRY SEGMENTS

ITEM 2. DESCRIPTION OF PROPERTY

We do not own any material property.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any material pending legal proceedings and, to best of our
knowledge, no such action by or against us, has been threatened.

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

There were no matters  submitted  to a vote of our security  holders  during the
year ended September 30, 2007.


                                       16


<PAGE>


PART II

ITEM 5.  MARKET FOR COMMON  EQUITY AND  RELATED  STOCKHOLDER  MATTERS  AND SMALL
BUSINESS ISSUER PURCHASES OFEQUITY SECURITIES

Our common stock is currently  quoted on the OTC Bulletin Board under the symbol
"NANS."  Inclusion on the OTC Bulletin  Board permits price  quotations  for our
shares to be published by such service. For the periods indicated, the following
table sets forth the high and low bid  prices per share of common  stock.  These
prices represent  inter-dealer  quotations without retail markup,  markdown,  or
commission and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
                                 Fiscal 2007                   Fiscal 2006                   Fiscal 2005
---------------------    --------------------------    --------------------------    ---------------------------
Quarter Ended               High            Low            High           Low            High            Low
---------------------    --------------------------    --------------------------    ---------------------------
<S>                      <C>            <C>            <C>            <C>            <C>             <C>
March 31                 $      0.09    $      0.05    $      0.91    $      0.18    $      1.55     $      0.70
June 30                  $      0.05    $      0.03    $      0.40    $      0.15    $      1.45     $      0.65
September 30             $      0.03    $      0.02    $      0.20    $      0.11    $      0.92     $      0.62
December 31              $              $              $      0.14    $      0.04    $      0.92     $      0.32
</TABLE>


On November  16, 2001,  we affected a forward  split of our  outstanding  common
stock on a 12.5 shares for 1 share  basis.  The  forward  split was treated as a
stock dividend.

The ability of an individual  shareholder  to trade their shares in a particular
state may be subject to various rules and regulations of that state. A number of
states  require  that an issuer's  securities  be  registered  in their state or
appropriately  exempted from registration before the securities are permitted to
trade in that state.  Presently,  we have no plans to register our securities in
any  particular  state.  Further,  our shares will most likely be subject to the
provisions  of Section  15(g) and Rule 15g-9 of the  Securities  Exchange Act of
1934,  commonly referred to as the "penny stock" rule.  Section 15(g) sets forth
certain  requirements  for  transactions  in penny  stocks and Rule  15g-9(d)(1)
incorporates  the  definition  of penny stock as that used in Rule 3a51-1 of the
Exchange Act.

The SEC  generally  defines  penny  stock to be any equity  security  that has a
market  price  less than $5.00 per share,  subject to certain  exceptions.  Rule
3a51-1  provides  that any equity  security  is  considered  to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting  specified  criteria set by the Commission;  authorized for quotation on
The Nasdaq Stock Market;  issued by a registered  investment  company;  excluded
from the  definition  on the basis of price (at  least  $5.00 per  share) or the
issuer's net tangible assets; or exempted from the definition by the SEC. If our
shares are deemed to be a penny stock,  trading in the shares will be subject to
additional sales practice  requirements on broker-dealers  who sell penny stocks
to persons other than established customers and accredited investors,  generally
persons with assets in excess of $1,000,000 or annual income exceeding  $200,000
or $300,000 together with their spouse.

For  transactions  covered by these  rules,  broker-dealers  must make a special
suitability  determination  for the  purchase of such  securities  and must have
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.  Additionally,  for any  transaction  involving a penny stock,  unless
exempt,  the rules require the delivery,  prior to the first  transaction,  of a
risk  disclosure  document  relating to the penny stock market.  A broker-dealer
also must disclose the  commissions  payable to both the  broker-dealer  and the
registered representative,  and current quotations for the securities.  Finally,
monthly  statements  must be sent  disclosing  recent price  information for the
penny stocks held in the account and  information on the limited market in penny
stocks. Consequently,  these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in our common stock and may affect the ability of
shareholders to sell their shares.


                                       17


<PAGE>


As of December  17, 2007 there were  approximately  181 holders of record of our
common stock,  which figure does not take into account those  shareholders whose
certificates are held in the name of broker-dealers or other nominees.

As of December  17, 2007 we had  19,176,755  shares of common  stock  issued and
outstanding. Of the total outstanding shares, 5,626,772 may be sold, transferred
or otherwise traded in the public market without restriction,  unless held by an
affiliate or controlling  shareholder.  Of these 5,626,772  shares,  we have not
identified any shares as being held by affiliates.  A total of 13,549,983 shares
are considered restricted securities.

Under Rule 144 as  currently  in effect,  a person (or persons  whose shares are
aggregated) who has beneficially  owned restricted shares for at least one year,
including any person who may be deemed to be an "affiliate" as defined under the
Act, is entitled to sell,  within any  three-month  period,  an amount of shares
that does not exceed the greater of (i) the average weekly trading volume in the
security as reported  through the  automated  quotation  system of a  registered
securities  association,  during the four calendar weeks  preceding such sale or
(ii) 1% of the  shares  then  outstanding.  A person  who is not deemed to be an
"affiliate" and has not been an affiliate for the most recent three months,  and
who has held restricted  shares for at least two years would be entitled to sell
such shares without regard to the resale limitations of Rule 144.

RECENT ISSUANCE OF SECURITIES

In connection with the License Agreement and Stock Purchase Agreement, we issued
in  October  2003 a total of  4,812,377  shares  of our  common  stock to NYU in
further consideration for entering into the License Agreement. This issuance was
made in an isolated,  private  transaction  to a single  accredited  investor in
reliance upon the  exemptions  from  registration  provided by Sections 4(2) and
4(6) of the Securities Act of 1933.

On October 17, 2003, we sold an aggregate of 1,222,192  shares of our authorized
but previously  unissued common stock in a private  placement to four accredited
investors (305,548 shares each) for the aggregate purchase price of $400,000. We
used the funds to make the  initial  $300,000  payment to NYU under the  License
Agreement,  the payment of various expenses and fees related to finalization and
execution of the License Agreement,  professional fees, and for working capital.
The sale of  securities  was made in an isolated,  private  transaction  to four
accredited  investors only and in reliance upon the exemption from  registration
provided by Section 4(6) of the Securities Act.

On December 15, 2004, we issued 125,000 shares of our common stock to one person
as a loan  commitment fee valued at $218,750,  or $1.75 per share.  The issuance
was made  pursuant  to a private,  isolated  transaction  in  reliance  upon the
exemption from the  registration  provided by Section 4(2) of the Securities Act
of 1933.

On January 17, 2005, we issued  130,000 shares of our common stock to one person
for cash consideration of $130,000,  or $1.00 per share. The funds realized were
used for general corporate operating expenses. The issuance was made pursuant to
a  private,  isolated  transaction  in  reliance  upon  the  exemption  from the
registration provided by Section 4(2) of the Securities Act of 1933.

On December 31, 2006, we issued  250,000 shares of our common stock for services
and fees in the amount of $15,000 @ $0.06 per share.

On  January  17,  2007  a  principal   shareholder  converted  $4,359  of  their
convertible  debenture into 108,980  restricted shares of common stocks at $0.04
per share.

On March 28, 2007 a principal  shareholder converted $2,900 of their convertible
debenture into 113,281 restricted shares of common stocks at $0.0256 per share.

On July 13, 2007 a principal  shareholder  converted $5,000 of their convertible
debenture into 312,500 restricted shares of common stocks @ $0.016 per share.

DIVIDEND POLICY

We have not declared or paid cash dividends or made  distributions  in the past,
and we do not anticipate  that we will pay cash dividends or make  distributions
in the foreseeable  future.  We currently intend to retain and invest any future
earnings to finance our operations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  information  should be read in conjunction  with the consolidated
financial  statements and notes thereto appearing elsewhere in this Form 10-KSB.
We have determined on December 1, 2007 to cease  operations  immediately and, at
the request of our principal  creditor  appointed a director  designated by such
creditor to our Board of Directors.  Immediately following such appointment, our
existing directors


                                       18


<PAGE>


resigned  effective  immediately  and  terminated  their  association  with  us.
Accordingly, such creditor may be deemed to control us at the date of the filing
of this Report.  As a result of our cessation of operations and the  termination
of the License  Agreement,  we became a "blank check" or "shell  company"  whose
sole purpose at this time is to locate and  consummate  a merger or  acquisition
with a private entity.

RESULTS OF OPERATIONS - YEAR ENDED SEPTEMBER 30, 2007 COMPARED TO THE YEAR ENDED
SEPTEMBER 30, 2006

OPERATIONS. We incurred a loss from operations of approximately $813,000 for the
year ended September 30, 2007 compared to a loss of approximately $1,880,000 for
the year ended  September  30, 2006.  The  decrease was due to our  discontinued
operations since December 1, 2006.

RESEARCH  AND  DEVELOPMENT.  Included  in the  loss for 2007 and 2006 was $0 and
$447,288,  respectively,  to NYU for research and development of Nanotechnology.
In  connection  with  our  fund  raising  activities  and  securities  reporting
requirements  we incurred  approximately  $50,000 in 2007 on  professional  fees
compared to approximately $269,000 in 2006.

GENERAL AND  ADMINISTRATIVE.  We also expended $0 in 2007 in consulting costs in
our fund raising efforts compared to $24,250 in 2006.

INTEREST EXPENSE, OTHER. Our interest expense was approximately $785,800 in 2007
because our funding came  primarily from  convertible  debentures as compared to
approximately $620,000 in 2006.

LIQUIDITY AND CAPITAL RESOURCES

We used cash of approximately  $696,000 during the year ended September 30, 2007
compared  to  approximately  $702,000  in 2006.  We had cash on hand of $0 as of
September  30, 2007 and $2,803 as of September  30, 2006.  Our source of cash in
2007  were the  sale of  convertible  notes  in  December  2006 of  $60,000  and
shareholder loans of approximately $23,000.

Our cash was short of covering our accounts  payable and accrued  liabilities by
approximately  $1,063,000  at September  30, 2007.  This  includes an accrual of
$433,615 for which we are in default on our  obligation  to pay to NYU on May 1,
2006.  The related  party loans of  approximately  $347,810 are due upon demand,
unless we are able to persuade our creditors to convert the debts to equity.

We expect that we will need  approximately  $1,000,000 to fund our operations in
2008.  We intend to raise the  needed  funds  from the sale of our shares of our
common  stock.  There is no  assurance  that the funds will be available or that
even if they are available that the terms will be acceptable to us.

PLAN OF OPERATION

In  September  2003,  we entered into a License  Agreement  with NYU whereby NYU
granted  to  us  a  license  to  certain  pre-existing  inventions  and  certain
intellectual  property to be generated by a designated  research  project  being
conducted at NYU relating to DNA  Nanotechnology.  The License Agreement further
provides  that NYU  grants to us an  exclusive  worldwide  license  to  develop,
manufacture,  use, lease or sell any licensed  products and/or processes related
to the  research  project,  together  with the right to grant  sublicenses.  The
Company is required to pay NYU a royalty fee relating to sales  generated  using
technology  developed by NYU. The term of the License  Agreement is equal to the
life of the longest  patent  licensed to the Company.  There is no provision for
renewal in the License Agreement.


                                       19


<PAGE>


We intended to re-license the technology we acquired from NYU and to license any
newly developed  technology to companies  which have the financial  resources to
economically  market the related  products  to the public.  We did not intend to
market the  products  ourselves.  We expected  that the  licensees  would pay us
royalties  as a  percentage  of  their  sales  of any  products  which  use  our
technology.

However,  in November 2006, we forfeited our technology  rights and licenses due
to our failure to pay the  research and license fees under the terms the License
Agreement.  Presently  we are  seeking a merger or  acquisition  of an  existing
operating company by which we can continue to operate.

NET OPERATING LOSS

We  have   accumulated   approximately   $3,360,000   of  net   operating   loss
carry-forwards  as of September 30, 2007,  which may be offset  against  taxable
income  and  income  taxes in future  years.  The use of these  losses to reduce
future income taxes will depend on the  generation of sufficient  taxable income
prior  to  the  expiration  of  the  net  operating  loss  carry-forwards.   The
carry-forwards  expire in the year  2027.  In the event of  certain  changes  in
control,  there will be an annual limitation on the amount of net operating loss
carry-forwards  which  can be used.  No tax  benefit  has been  reported  in the
financial  statements  for the year ended  September 30, 2007 because there is a
50% or greater chance that the carry-forward will not be used. Accordingly,  the
potential  tax  benefit  of the loss  carry-forward  is  offset  by a  valuation
allowance of the same amount.

NEW ACCOUNTING PRONOUNCEMENTS

In February  2006,  the FASB issued SFAS No. 155,  ACCOUNTING FOR CERTAIN HYBRID
FINANCIAL  INSTRUMENTS ("SFAS No. 155"),  which amends SFAS No. 133,  ACCOUNTING
FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES,  and SFAS No. 140, ACCOUNTING
FOR  TRANSFERS  AND  SERVICING  OF  FINANCIAL  ASSETS  AND   EXTINGUISHMENTS  OF
LIABILITIES.  SFAS No. 155 simplifies  the  accounting  for certain  derivatives
embedded in other financial  instruments by allowing them to be accounted for as
a whole if the holder elects to account for the whole instrument on a fair value
basis.  SFAS No. 155 also clarifies and amends certain other  provisions of SFAS
No.  133 and  SFAS  No.  140.  SFAS  No.  155 is  effective  for  all  financial
instruments acquired,  issued, or subject to a re-measurement event occurring in
fiscal years beginning after September 15, 2006.  Earlier adoption is permitted,
provided  the company has not yet issued  financial  statements,  including  for
interim periods,  for that fiscal year. The Company does not expect the adoption
of SFAS No. 155 to have a material impact on its financial position,  results of
operations, or cash flows.

In June  2006,  the FASB  ratified  the  Emerging  Issues  Task  Force  ("EITF")
consensus  on EITF  Issue No.  06-3,  HOW TAXES  COLLECTED  FROM  CUSTOMERS  AND
REMITTED TO GOVERNMENTAL AUTHORITIES SHOULD BE PRESENTED IN THE INCOME STATEMENT
(THAT IS,  GROSS  VERSUS NET  PRESENTATION)  ("EITF No.  06-3").  EITF No.  06-3
provides  guidance for income  statement  presentation and disclosure of any tax
assessed by a  governmental  authority  that is both  imposed on and con current
with a specific  revenue-producing  transaction between a seller and a customer,
including  but not limited to sales,  use,  value added,  and some excise taxes.
Presentation  of taxes within the scope of this EITF issue may be made on either
a gross basis  (included  in revenues and costs) or a net basis  (excluded  from
revenues),  with  appropriate  accounting  policy  disclosure.  EITF No. 06-3 is
effective for reporting periods beginning after December 15, 2006. The impact of
adoption of this statement is not expected to be significant.

In July  2006,  the FASB  issued  FASB  Interpretation  No. 48,  ACCOUNTING  FOR
UNCERTAINTY IN INCOME TAXES - AN  INTERPRETATION OF FASB STATEMENT 109 ("FIN No.
48"),  which is effective in fiscal years beginning after December 15, 2006. FIN
48 prescribes a comprehensive model for recognition, measurement,  presentation,
and  disclosure of uncertain tax positions  taken or expected to be taken on the
Company's tax return.  The  cumulative  effect of applying the provisions of FIN
No. 48 will be reported  as an  adjustment  to the  opening  balance of retained
earnings for that fiscal year, presented  separately.  The impact of adoption of
this statement is not expected to be significant.


                                       20


<PAGE>


In March 2006, the FASB issued FASB Statement No. 156,  ACCOUNTING FOR SERVICING
OF FINANCIAL  ASSETS - AN AMENDMENT OF FASB  STATEMENT NO. 140.  This  Statement
amends FASB  Statement  No. 140 with respect to the  accounting  for  separately
recognized servicing assets and servicing liabilities. The impact of adoption of
this statement is not expected to be significant.

In  September  2006,  the  FASB  issued  FASB  Statement  No.  157,  FAIR  VALUE
MEASUREMENT  ("SFAS No. 157"), which addresses how companies should measure fair
value when they are  required  to use a fair value  measure for  recognition  or
disclosure purposes under generally accepted accounting  principles (GAAP). As a
result of SFAS No. 157,  there will be a common  definition  of fair value to be
used  throughout  GAAP.  SFAS 157 is effective for fiscal years  beginning after
November  15, 2007.  The Company is  currently  evaluating  the  accounting  and
disclosure requirements of SFAS No. 157.

EITF 00-19.2--In December 2006, the FASB issued Staff Position No. EITF 00-19-2.
This FSP addresses an issuer's accounting for registration  payment arrangements
and  specifies  that  the  contingent  obligation  to make  future  payments  or
otherwise transfer consideration under a registration payment arrangement should
be  separately  recognized  and  measured  in  accordance  with  FASB No. 5. The
guidance in this FSP amends FASB Statements 133 and 150 and FASB  Interpretation
No. 45 to include scope exceptions for registration payments arrangements.  This
FSP further  clarifies  that a financial  instrument  subject to a  registration
payment  arrangement  should be accounted for without  regard to the  contingent
obligation  to  transfer  consideration  pursuant  to the  registration  payment
arrangement.  This  guidance is effective for  financial  statements  issued for
fiscal  years  beginning  after  December  15,  2006.  The Company is  currently
assessing the impact this pronouncement will have on its financial statements if
any.

In February  2007, the FASB issued FASB Statement No. 159, THE FAIR VALUE OPTION
FOR FINANCIAL ASSETS AND FINANCIAL  LIABILITIES - INCLUDING AN AMENDMENT OF FASB
STATEMENT NO. 115. This  Statement  permits  entities to choose to measure meany
financial instruments and certain other items at fair value. The objective is to
improve  financial  reporting  by providing  entities  with the  opportunity  to
mitigate  volatility in reported earnings caused by measuring related assets and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.  The effective  date will be as of the  beginning of each  reporting
entity's  first fiscal year that begins after  November 15, 2007.  The impact of
adoption of this statement is not expected to be significant.


ITEM 7. FINANCIAL STATEMENTS

Our  financial  statements,  as of and for the fiscal years ended  September 30,
2007 and September 30, 2006,  have been examined to the extent  indicated in its
report by Moore and Associates Chartered, independent certified accountants, and
have been prepared in accordance with generally  accepted  accounted  principles
and  pursuant to  Regulation  S-B  promulgated  by the SEC.  The  aforementioned
financial  statements  are  included  herein in  response to Item 7 of this Form
10-KSB.


                                       21


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2007

                                 C O N T E N T S

       Report of Independent Registered Public Accounting Firm              F-1

       Balance Sheet                                                        F-2

       Statements of Operations                                             F-3

       Statements of Stockholders' Equity                                   F-4

       Statements of Cash Flows                                             F-8

       Notes to the Financial Statements                                    F-10



<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


TO THE BOARD OF DIRECTORS
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)

We have audited the accompanying balance sheet of NanoScience Technologies, Inc.
(A  Development  Stage  Company)  as of  September  30,  2007,  and the  related
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended September 30, 2007 and September 30, 2006, and from inception on September
14,  1987  through  September  30,  2007.  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  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  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 NanoScience Technologies,  Inc.
(A  Development  Stage  Company)  as of  September  30,  2007,  and the  related
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended September 30, 2007 and September 30, 2006, and from inception on September
14, 1987 through  September 30, 2007, in conformity with  accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company  has  accumulated  deficit of  approximately
$5,142,000 and has a working  capital  deficiency of  approximately  $1,063,000,
which raises substantial doubt about its ability to continue as a going concern.
Management's  plans  concerning  these matters are also described in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/S/ MOORE & ASSOCIATES, CHARTERED

Moore & Associates Chartered
Las Vegas, Nevada
December 28, 2007


                                      F-1


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                                  BALANCE SHEET

                                     ASSETS


                                                                SEPTEMBER 30,
                                                                    2007
                                                              =================
Current assets
    Cash                                                       $            --
                                                              -----------------

      Total current assets                                                  --
                                                              -----------------

Total Assets                                                   $            --
                                                              =================

                  LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
    Accounts payable and accrued liabilities                   $       777,874
    Accrued interest                                                   262,123
    Notes payable - related parties                                     22,750
                                                              -----------------
      Total current liabilities                                      1,062,747

    Warrant liability                                                    3,137
    Convertible debentures, net                                      1,148,231
                                                              -----------------
Total Liabilities                                                    2,214,115
                                                              -----------------


Stockholders' deficit
    Common stock; $0.001 par value; authorized 100,000,000
      shares, 11,101,946 shares issued and outstanding
     shares issued and outstanding for September 30, 2007 and           11,887
    Additional paid-in capital                                       2,916,234
    Deficit accumulated during the development stage                (5,142,236)
                                                              -----------------
      Total stockholders' deficit                                   (2,214,115)
                                                              -----------------

Total liabilities and stockholders' deficit                    $             0
                                                              =================


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


                                      F-2


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                       From Inception of the
                                                   For the Years Ended                 Development Stage on
                                           --------------------------------------       September 14, 1987
                                             September 30,          September 30,      Through September 30,
                                                 2007                   2006                   2007
                                           -----------------    -----------------      ---------------------
<S>                                         <C>                  <C>                      <C>
REVENUES                                    $            --      $            --          $            --

OPERATING EXPENSES
    General and administrative                       51,785               46,879                2,218,195
    Research and development                             --              447,288                1,293,038
    Licensing fees                                        0                   --                   96,248
                                           -----------------    -----------------        -----------------
      TOTAL OPERATING EXPENSES                        51,785           1,294,167                3,607,481
                                           -----------------    -----------------        -----------------

    LOSS FROM OPERATIONS                            (51,785)          (1,294,167)              (3,607,481)

OTHER INCOME (EXPENSES)
    Other income                                     24,257               33,748                   86,376
    Interest expense                               (785,800)            (619,610)              (1,621,131)
                                           -----------------    ------------------------------------------
      TOTAL OTHER INCOME (EXPENSES)                (761,543)            (585,862) #            (1,534,755)
                                           -----------------    ------------------------------------------

NET LOSS                                    $      (813,328)     $    (1,880,029)         $    (5,142,236)
                                           =================    =================        =================

BASIC AND DILUTED LOSS
    PER COMMON SHARE                                 $ (0.04)    $         (0.17)
                                           =================    =================

BASIC AND DILUTED WEIGHTED AVERAGE
    NUMBER OF SHARES OUTSTANDING                 19,057,707           11,011,823
                                           =================    =================
</TABLE>


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


                                      F-3


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                            Common Stock                                  Stock       Deficit Accumulated
                                   ------------------------------     Additional      Subscriptions       During the
                                       Shares         Amount        Paid-in Capital    Receivable      Development Stage
                                   ---------------------------------------------------------------------------------------
<S>                                <C>              <C>               <C>              <C>                <C>
 Balance from inception of
   the development stage at
   September 14, 1987                        --     $        --       $        --      $        --        $        --

 Common stock issued to
   directors for services on
   September 17, 1987 at
   $0.008 per share                   3,750,000           3,750            26,250               --                 --

 Common stock issued for
    for cash on September 17,
    1987 at $0.008 per share             27,500              28               192               --                 --

 Common stock issued for
    for cash on January 12, 1988
    at $0.008 per share                   6,250               6                44               --                 --

 Common stock issued to a
   director for cash on
   October 10, 1997 at
   $0.0004 per share                 12,500,000          12,500            (7,500)              --                 --

 Common stock issued to
   directors for services on
   November 12, 1997 at
  $0.0004 per share                   1,125,000           1,125              (675)              --                 --

Net loss for the period
  from inception on
  September 14, 1987 through
  September 30, 1999                         --              --                --               --            (37,470)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 1999          17,408,750          17,409            18,311               --            (37,470)

Net loss for the year
  ended September 30, 2000                   --              --                --               --             (3,200)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2000          17,408,750          17,409            18,311               --            (40,670)

Net loss for the year
  ended September 30, 2001                   --              --                --               --             (7,097)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2001          17,408,750          17,409            18,311               --            (47,767)

</TABLE>


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


                                      F-4


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<S>                                <C>              <C>               <C>              <C>                <C>
 Common stock issued for
    for cash on October 2, 2001
    at $0.01 per share                  250,000             250                --               --                 --

Net loss for the year
  ended September 30, 2002                   --              --                --               --             (9,140)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2002          17,658,750          17,659            18,311               --            (56,907)

 Common stock issued for
    for cash on September 18,
    2003 at $0.33 per share           1,222,192           1,222           398,778               --                 --

 Common stock issued for
    for licensing fees at $0.02
    per share on September
   18, 2003                           4,812,377           4,812            91,436               --                 --

 Forgiveness of debt by a
   related party                             --              --            30,367               --                 --

 Contributed services                        --              --               290               --                 --

Net loss for the year
  ended September 30, 2003                   --              --                --               --           (429,380)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2003          23,693,319          23,693           539,182               --           (486,287)

 Common stock cancelled on
   October 10, 2003                 (12,846,373)        (12,846)           12,846               --                 --

 Common stock warrants
   granted for services                      --              --             6,875               --                 --

Net loss for the year
  ended September 30, 2004                   --              --                --               --           (532,409)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2004          10,846,946          10,847           558,903               --         (1,018,696)

 Common stock issued for
   stock subscriptions at
   $1.00 per share                      130,000             130           129,870               --                 --

 Common stock issued  as a
   loan commitment fee at
   $1.75 per share                      125,000             125           218,625               --                 --

 Preproduction coss
   contributed by shareholders               --              --           110,000         (110,000)                --

 Completed preproduction work                --              --                --           44,000                 --

</TABLE>

(Continued)


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


                                      F-5


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<S>                                <C>              <C>               <C>              <C>                <C>
 Accrued interest contributed
   by shareholders                           --              --            38,530               --                 --

 Termination of derivatives
   feature of debenturess                    --              --           113,481               --                 --

 Common stock warrants
   issued for services                       --              --            68,555               --                 --

Net loss for the year
  ended September 30, 2005                   --              --                --               --         (1,430,183)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2005          11,101,946          11,102         1,237,964          (66,000)        (2,448,879)

 Completed preproduction work                --              --                --           66,000                 --

 Fair value of beneficial
   conversion feature of the
   convertible debt                          --              --         1,527,284               --                 --

 Accrued interest contributed
   by shareholders                           --              --            32,006               --                 --

Net loss for the year
  ended September 30, 2006                   --              --                --               --         (1,880,029)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2006          11,101,946          11,102         2,797,254               --         (4,328,908)

 Accrued interest contributed
   by shareholders                           --              --            32,506               --                 --

 Common stock issued for
   fee on Dec. 31, 2006 @ $0.06         250,000             250            14,750               --                 --

 Fair value of beneficial
   conversion feature of the
   convertible debt                                                        60,000               --                 --

 Conversion of convertible
   debenture into stock on
   January 17, 2007 @ $0.04
   per share.                           108,980             109             4,250               --                 --

 Conversion of convertible
   debenture into stock on
   March 29, 2007 @ $0.0256
   per share.                           113,281             113             2,787               --                 --

 Conversion of convertible
   debenture into stock on
   July 13, 2007 @ $0.016
   per share.                           312,500             313             4,687               --                 --

</TABLE>

(Continued)


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


                                      F-6


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<S>                                <C>              <C>               <C>              <C>                <C>
Net loss for the year
  ended September 30, 2007                   --              --                --               --           (813,328)
                                   -----------------------------------------------------------------------------------

Balance, September 30, 2007          11,886,707          11,887         2,916,234               --         (5,142,236)
                                   ===================================================================================

</TABLE>

(Continued)


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


                                      F-7


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                      From Inception of the
                                                                      For the Years Ended             Development Stage on
                                                                         September 30,                  September 14, 1987
                                                             ------------------   ----------------    Through September 30,
                                                                    2007                2006                  2007
                                                             ------------------   ----------------    ---------------------

<S>                                                                 <C>               <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                        $ (813,328)       $(1,880,029)                 (5,142,236)

    Adjustments to reconcile loss to net cash used by
    operating activities:
      Change in fair value of warrant liability                         (7,572)           (33,748)                    (41,320)
      Accrued interest contributed by sharehoulders                     32,506             32,006                     103,042
      Common stock issued for services and fees                         14,750                 --                     345,448
      Common stock warrants granted for services                            --                 --                      75,430
      Depreciation and amortization expense                                 --             38,762                      43,658
      Amortization of marketing expense                                     --             66,000                     110,000
      Contributed services                                                  --                 --                         290
      Amortization of discount on debt                                 553,859            447,939                   1,115,279
    Changes in operating assets and liabilities
      (Increase) Decrease in prepaid expenses                               --             30,438                           -
      Increase (Decrease) in accounts payable and
         accrued expenses                                               85,941            596,260                     647,361
                                                             ------------------   ----------------   -------------------------

         Net cash used in operating activities                        (133,844)          (702,372)                 (2,743,048)
                                                             ------------------   ----------------   -------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of  property and equipment                                   --                 --                      (4,931)
      Lease deposits                                                       550                 --                           0
       Patent costs                                                         --                 --                     (38,727)
                                                             ------------------   ----------------   -------------------------

         Net cash used in investing activities                             550                 --                     (43,658)
                                                             ------------------   ----------------   -------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from notes payable - related parties                       22,750             25,200                     398,377
    Proceeds from convertible debentures payable                        60,000            650,593                   1,710,593
    Proceeds from stock subscriptions payable                               --                 --                     130,000
    Repayment of notes payable - related parties                            --            (15,200)                    (20,200)
    Common stock issued for cash                                            --                 --                     405,520
    Fair value of beneficial conversion feature of debt                 60,000                 --                      60,000
    Conversion of convertible debentures to stock                      (12,259)                --                     (12,259)
                                                             ------------------   ----------------   -------------------------

         Net cash provided by financing activities                    130,491            660,593                   2,672,031
                                                             ------------------   ----------------   -------------------------

NET INCREASE (DECREASE) IN CASH                                         (2,803)           (41,779)                   (114,675)

CASH AT BEGINNING OF PERIOD                                              2,803             44,582                          --
                                                             ------------------   ----------------   -------------------------

CASH AT END OF PERIOD                                                      $ -            $ 2,803                  $ (114,675)
                                                             ==================   ================   =========================


</TABLE>

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

                                       F-8



<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS


SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION:
<TABLE>
<S>                                                         <C>          <C>            <C>
 Cash paid during the year for:
   Interest                                                 $      -     $      487     $      487
   Income taxes                                             $      -     $        -     $        -

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 Forgiveness of debt by related party                       $      -     $        -     $   30,367
 Common stock warrants granted for services                 $      -     $        -     $   75,430
 Common stock issued for services and fees                  $ 14,750     $        -     $  360,198
 Accrued interest converted to debt                         $      -     $   31,801     $   41,148
 Production costs contributed by shareholders               $      -     $        -     $  111,000
 Issuance of common stock for stock subscription payable    $      -     $        -     $  130,000
 Termination of derivative feature of debentures            $      -     $        -     $  113,418
 Allocation of convertible debt proceeds to beneficial
   conversion feature                                       $ 60,000     $1,527,284     $1,587,284
 Conversion of convertible debentures to common stock       $ 12,259     $        -     $   12,259

</TABLE>


(Continued)

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

                                       F-9


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Business and Organization

Nanoscience  Technologies,  Inc. (the  "Company") was organized on September 14,
1987,  under the laws of the State of Idaho,  under the name Eagle's Nest Mining
Company. As set forth in its Articles of Incorporation,  the Company was created
to  engage in the  business  of  acquiring  and  developing  mining  claims  and
prospecting,   developing,   processing  and  marketing  all  types  of  mineral
resources.  However,  from the time of its inception the Company has not engaged
in  any  material  business  operations.  Pursuant  to  Statement  of  Financial
Accounting  Standards  No. 7,  "Accounting  and Reporting by  Development  Stage
Enterprises," the Company is classified as a development stage company.

On July 31, 2001,  the Company formed a corporation in Nevada with the intent to
move its domicile to Nevada.  On November 8, 2001, the Company  implemented  its
change of  domicile  and  became a Nevada  Corporation.  As a result,  the Idaho
corporation was dissolved.

On October 12, 2001, the Company elected to change the authorized capitalization
from 10,000 shares of no par value common stock to 100,000,000  shares of $0.001
par value common stock.  All share and per share values  within these  financial
statements have been adjusted to reflect this change.

On November 5, 2001, the Company  approved a 12.5 for 1 forward stock split. All
share and per share values within these financial  statements have been adjusted
to reflect this change.

On May 23, 2002 the Company  changed its name from Eagles Nest Mining Company to
Nanoscience Technologies, Inc. As a result of the License Agreement with NYU, we
have become engaged in the development and  commercialization  of the inventions
and  intellectual  property  to be  generated  by  the  research  project  being
conducted at NYU relating to DNA  Nanotechnology.  Structural DNA Nanotechnology
seeks to exploit the  architectural  properties of DNA with the ultimate goal of
organizing   matter   in   three   dimensions.    Pharmaceutical    development,
nano-electronics  and the  creation  of new  materials  are among the  potential
applications of this research.

b. Accounting Method

The Company's  financial  statements  are prepared  using the accrual  method of
accounting. The Company has elected a September 30 year-end.

c. Cash and Cash Equivalents

For purposes of financial  statement  presentation,  the Company  considers  all
highly liquid investments with a maturity of three months or less, from the date
of purchase, to be cash equivalents.



                                      F-10

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)



NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (Continued)

d. Use of Estimates

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

e. Revenue Recognition

The Company currently has no source of revenues.  Revenue  recognition  policies
will be determined when principal operations begin.

f. Basic and Diluted Loss Per Common Share

The Computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period. Common stock equivalents
if any are not included in the weighted average shares outstanding  because they
would be anti-dilutive.

g. Research and Development

The Company follows the policy of expensing its research and  development  costs
in the period in which they are incurred.

h. Income Taxes

Deferred taxes are provided on a liability  method  whereby  deferred tax assets
are recognized for deductible  temporary  differences and operating loss and tax
credit  carryforwards  and deferred tax  liabilities  are recognized for taxable
temporary  differences.  Temporary  differences are the differences  between the
reported  amounts of assets and  liabilities  and their tax bases.  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 fail to be realized.  Deferred tax assets and  liabilities are adjusted for
the effects of changes in tax laws and rates on the date of enactment.



                                      F-11


<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (Continued)

h. Income Taxes (continued)

Net deferred tax assets consist of the following  components as of September 30,
2007 and 2006:

                                                    2007               2006
                                                ------------      -------------
         Deferred tax assets:
         NOL Carryover                          $  1,310,723      $   1,222,207
         Deferred tax liabilities:
         Valuation allowance                      (1,310,723)        (1,222,207)
                                                ------------      -------------
         Net deferred tax asset                 $          -      $           -
                                                ============      =============

The income tax  provision  differs from the amount of income tax  determined  by
applying  the U.S.  federal and state  income tax rates of 39% to pretax  income
from  continuing  operations for the years ended September 30, 2007 and 2006 due
to the following:


                                                    2007               2006
                                                ------------      -------------
         Book Income                            $   (317,198)          (733,212)
         Stock, Discount and Warrants Expense        216,005            164,843
         Other                                        12,677             12,482
         Valuation allowance                          88,516            555,887
                                                ------------      -------------
                                                $          -      $           -
                                                ============      =============


At September  30, 2007,  the Company had net  operating  loss  carryforwards  of
approximately  $3,360,000  that may be offset against future taxable income from
the year 2003 through  2026.  No tax benefit has been  reported in the September
30, 2007  financial  statements  since the  potential tax benefit is offset by a
valuation allowance of the same amount.

Due to the change in  ownership  provisions  of the Tax Reform Act of 1986,  net
operating  loss carry  forwards for Federal  income tax  reporting  purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carryforwards may be limited as to use in future years.

i. Advertising

The Company expenses advertising costs in the period in which they are incurred.
Advertising expense was $0 and $66,000 for the 2007 and 2006, respectively.



                                      F-12

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (Continued)

j. Patents

Qualifying  patent costs totaling $38,728 have been capitalized at September 30,
2005.  The patents which have been granted are being  amortized over a period of
10 years.  Costs  associated with patent  applications  which are pending or are
being  developed  are not being  amortized.  Amortization  expense for the years
ended September 30, 2007 and 2006 was $0 and $34,406, respectively.

The  Company  evaluates  the  recoverability  of  intangibles  and  reviews  the
amortization period on a continual basis utilizing the guidance of SFAS No. 142,
"Goodwill and Other  Intangible  Assets."  Several  factors are used to evaluate
intangibles,  including,  but not  limited  to,  management's  plans for  future
operations, recent operating results and projected,  undiscounted cash flows. In
2006, the Company  amortized the balance of its capitalized  patent costs due to
their  forfeiture  for non  payment  of the fees due NYU  under  the  technology
licensing agreement.

k. Fixed Assets

The Company has no fixed assets. The computer was depreciated over its estimated
useful life of 5 years under the straight-line method.  Depreciation expense for
the years ended September 30, 2007 and 2006 was $0 and $4,356, respectively.  In
2006, the Company  depreciated the balance of the cost of its computer equipment
as it was determined that the equipment's useful life was reduced to zero.

l. Recent Accounting Pronouncements

During the year ended  September  30, 2007,  the Company  adopted the  following
accounting pronouncements:

                                    ADOPTED:

SFAS NO. 123(R) -- In December 2004, the FASB issued SFAS No.123  (Revised 2004)
(SFAS 123 (R))  "Share-based  payment".  SFAS 123 (R) will require  compensation
costs  related to  share-based  payment  transactions  to be  recognized  in the
financial statements.  With limited exceptions,  the amount of compensation cost
will be measured based on the  grant-date  fair value of the equity or liability
instruments  issued.  In addition,  liability  awards will be  re-measured  each
reporting  period.  Compensation cost will be recognized over the period that an
employee  provides service in exchange for the award. FASB 123 (R) replaces FASB
123,  Accounting for Stock-Based  Compensation and supersedes APB option No. 25,
Accounting  for Stock Issued to Employees.  This guidance is effective as of the
first  interim or annual  reporting  period  after  December  15, 2005 for Small
Business filers.

Under review:

EITF 00-19.2--In December 2006, the FASB issued Staff Position No. EITF 00-19-2.
This FSP addresses an issuer's accounting for registration  payment arrangements
and  specifies  that  the  contingent  obligation  to make  future  payments  or
otherwise transfer consideration under a registration payment arrangement should
be  separately  recognized  and  measured  in  accordance  with  FASB No. 5. The
guidance in this FSP amends FASB Statements 133 and 150 and FASB  Interpretation
No. 45 to include scope exceptions for registration payments arrangements.  This
FSP further  clarifies  that a financial  instrument  subject to a  registration
payment  arrangement  should be accounted for without  regard to the  contingent
obligation  to  transfer  consideration  pursuant  to the  registration  payment
arrangement.  This  guidance is effective for  financial  statements  issued for
fiscal  years  beginning  after  December  15,  2006.  The Company is  currently
assessing the impact this pronouncement will have on its financial statements if
any.



                                      F-13

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 2 - GOING CONCERN

The Company's  financial  statements  are prepared using  accounting  principles
generally  accepted  in the  United  States  of  America  applicable  to a going
concern,  which  contemplates  the  realization  of assets  and  liquidation  of
liabilities  in  the  normal  course  of  business.  The  Company  has  not  yet
established  an ongoing  source of revenues  sufficient  to cover its  operating
costs and allow it to continue as a going concern. Historically, the Company has
incurred significant annual loses, which have resulted in an accumulated deficit
of approximately  $5,142,000,  has a working capital deficiency of approximately
$1,063,000,  shareholders'  deficiency of approximately  $2,214,000 at September
30, 2007, which raises substantial doubt about the Company's ability to continue
as a going concern. The ability of the Company to continue as a going concern is
dependent on the Company  obtaining  adequate  capital to fund operating  losses
until it  becomes  profitable.  If the  Company  is unable  to  obtain  adequate
capital,  it could be  forced to cease  operation.  The  accompanying  financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of asset carrying  amounts or the amount and  classification  of
liabilities that might result from the outcome of this uncertainty.

Management's  plans to obtain such resources for the Company  include  obtaining
capital in the form of loans from  significant  shareholders  sufficient to meet
its minimal operating  expenses and from the sale of shares of its common stock.
However,  management  cannot  provide any  assurances  that the Company  will be
successful in accomplishing any of its plans.

NOTE 3 - COMMON STOCK

On September 17, 1987, the Company issued  3,750,000  shares of $0.001 per value
common stock to directors of the Company, for services, at $0.008 per share.

On September  17, 1987,  the Company  issued  27,500  shares of $0.001 par value
common stock, for cash, at $0.008 per share.

On January 12, 1988,  the Company issued 6,250 shares of $0.001 par value common
stock, for cash, at $0.008 per share.

On October 10, 1997,  the Company issued  12,500,000  shares of $0.001 par value
common stock to directors of the Company, for services, at $0.0004 per share.

On November 12, 1997, the Company issued  1,125,000  shares of $0.0001 par value
common stock to directors of the Company, for services, at $0.0004 per share.

On October 2, 2001, the Company issued 250,000 shares of $0.001 par value common
stock for cash at $0.001.

On October 12, 2001, the Company elected to change the authorized capitalization
from  10,000,000  shares of no par value common stock to  100,000,000  shares of
$0.001 par value  common  stock.  All share and per share  values  within  these
financial statements have been adjusted to reflect this change.

On November 5, 2001, the Company  approved a 12.5 for 1 forward stock split. All
share and per share values within these financial  statements have been adjusted
to reflect this change.



                                      F-14

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 3 - COMMON STOCK (CONTINUED)

On September  18, 2003,  the Company sold  1,222,192  common  shares for cash at
$0.33 per share, or an aggregate of $400,000.

Additionally,  on September 18, 2003, the Company  entered into a Stock Purchase
Agreement  with New  York  University  (NYU)  (see  Note 5)  whereby  it  issued
4,812,377  shares of common  stock to NYU as partial  consideration  for certain
licensing rights related to NYU-developed technologies.

On October 10, 2003, the Company  cancelled an aggregate of 12,846,373 shares of
its previously issued common stock,  pursuant to the terms of the Stock Purchase
Agreement with NYU.

In June 2004,  the Company  received  $130,000  from an unrelated  individual as
payment for 86,667  shares of the  Company's  common stock (at $1.50 per share).
However,  before the shares could be properly issued, the Company began drafting
a Private Placement  Memorandum ("the PPM"), under which the Company would issue
shares of common  stock to  various  investors  at $1.00 per  share.  Therefore,
management deemed it most appropriate to issue shares to this investor under the
terms of the PPM, at $1.00 per share,  rather than according to the terms of the
original subscription agreement,  which was at $1.50 per share. In January 2005,
the Company  issued 130,000  shares of its common stock in  satisfaction  of the
subscription payable.

The Company  issued  130,000  stock  purchase  warrants in  connection  with the
funding  which  allows the holder to purchase an  additional  130,000  shares of
common stock at $1.50 per share.

In April 2004,  the Company  entered into an Investment  Banking  Agreement "the
Agreement") with Divine Capital Markets  ("Divine") whereby Divine contracted to
perform  certain  "financial  advisory  services"  for a term  of one  year.  In
exchange for these services,  the Company  contracted to grant to Divine a total
of 250,000 common stock warrants  exercisable for five years with a strike price
of $6.88 per share.  Pursuant to the Agreement,  the first 125,000 warrants were
considered  fully  vested upon  consummation  of the  Agreement.  The  remaining
125,000  warrants were to have been considered  fully vested upon the closing of
$1,000,000 in future financing within the scope of the Agreement.  Subsequent to
the  consummation  of the  Agreement as a commitment  fee,  Divine was unable to
secure  financing  for the  Company,  and the non- vested  125,000  common stock
warrants were cancelled. The Company recognized an expense of $6,875 relating to
the 125,000 common stock warrants granted to Divine.

On December 13, 2004, the Company issued 125,000 shares of its common stock as a
one time loan commitment fee under the financing agreement described in Note 6.

On December 31, 2006,  the Company  issued  250,000 shares of its common stock @
$0.06 per share for fee.

On January 17, 2007, the Company issued 108,980  restricted shares of its common
stock to a major shareholder at $0.04 per share for debt conversion.

On March 29, 2007, the Company issued  113,281  restricted  shares of its common
stock to a major shareholder at $0.0256 per share for debt conversion.

On July 13, 2007,  the Company issued  312,500  restricted  shares of its common
stock to a major shareholder at $0.016 per share for debt conversion.


                                      F-15

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 4 - RELATED PARTY TRANSACTIONS

During the year ended  September  30,  2007,  related  parties  lent the Company
$25,200, non-interest bearing.

NOTE 5 - LICENSING AGREEMENT

In September 2003, the Company entered into a Research and License Agreement (as
subsequently   amended,  the  "License  Agreement")  with  New  York  University
(hereafter  "NYU"),  whereby  NYU granted to the  Company  certain  pre-existing
inventions and  intellectual  property to be generated by a designated  research
project being conducted by NYU relating to DNA technology.  As consideration for
these  inventions and  technology,  the Company is required to pay NYU a royalty
fee relating to sales generated using  technology  developed by NYU. The term of
the License Agreement is equal to the life of the longest patent licensed to the
Company. There is no provision for renewal in the License Agreement.  As part of
the  License  Agreement,  to reduce the  dilution to NYU,  certain  shareholders
returned  to the  Company  for  cancellation  12,846,873  of its  common  stock.
Additionally,  the Company agreed to provide funding for NYU totaling $1,657,690
in installments commencing on September 15, 2003 through May 1, 2007 as follows:

                     September 15, 2003       $     300,000
                     May 1, 2004                    315,000
                     May 1, 2005                    330,750
                     May 1, 2006                    347,288
                     May 1, 2007                    364,652
                                              -------------
                     Total                    $   1,657,690
                                              =============


In  connection  with the  Licensing  Agreement,  the Company also entered into a
Stock Purchase Agreement,  whereby in further consideration of entering into the
License Agreement, the Company issued 4,812,377 shares of the Company's stock to
NYU. These shares were valued at $0.02 per share, and were expensed as licensing
fees expense.

As an additional  stipulation of the Agreement,  the Company was required to pay
$19,162  in cash to NYU,  being  50% of all costs  and fees  incurred  by NYU in
relation to patents on its technology covered in the Agreement.  This amount was
capitalized by the Company, and is being amortized over a ten-year period.

The  Company  paid  $230,750  to NYU in 2005 for the May 1,  2005  research  and
development  fee.  NYU has  extended the due date for the payment of $100,000 of
the May 1, 2005 fee until November 1, 2005.

During  November 2006 the Company  determined that it would be unable to fulfill
its payment obligations under the terms of the Licensing Agreement and forfeited
its rights to the  licensed  technology.  The  Company  has  accrued in accounts
payable and accrued expenses $433,615 owed to NYU as of September 30, 2006.


                                      F-16

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 6 - CONVERTIBLE DEBENTURES

On December 13, 2004, the Company entered into a Securities  Purchase  Agreement
with Highgate  House,  LP and Montgomery  Equity  Partners,  LP, each a Delaware
limited partnership.  Pursuant to the Agreement,  the Company issued $500,000 in
convertible  debentures dated December 13, 2004. The debentures were convertible
into shares of the Company's  common stock at the holder's option any time up to
maturity at a conversion price equal to the lower of (i) 120% of the closing bid
price  of the  common  stock on the  date of the  debentures  or (ii) 80% of the
lowest  closing  bid  price  of the  common  stock  for the  five  trading  days
immediately  preceding the conversion  date. The debentures  were secured by the
assets of the Company. The debentures had a three-year term and accrued interest
at 5% per year. At maturity,  the  outstanding  principal and accrued and unpaid
interest under the debentures are, at the Company's  option, to be either repaid
by the Company in cash or converted  into shares of common  stock.  In addition,
the related  Securities  Purchase Agreement requires the Company to register the
underlying   shares  of  common  stock  with  the  US  Securities  and  Exchange
Commission.

On April 28, 2005, this $500,000 of convertible  debentures along with $9,247 of
accrued  interest were  exchanged for amended  convertible  debentures  having a
fixed conversion price of $1.20 at a time when the market value of the Company's
common  stock was $1.15 per  share of common  stock.  Accordingly,  there was no
beneficial  conversion amount related to these amended  convertible  debentures.
All other terms and conditions of the amended  convertible  debentures  remained
substantially  the  same  as  the  original  convertible   debentures  with  the
three-year term recommencing on April 28, 2005.

Also on April 28, 2005, and in accordance with terms of the Securities  Purchase
Agreement,  the Company issued an additional $500,000 of convertible  debentures
based on the terms of the amended convertible debentures.

The Company  recorded a  liability  of  $141,852  for the value of the  embedded
derivative  related to the conversion option of the convertible  debenture.  The
Company recomputed the value of the embedded  derivative  quarterly and recorded
the decrease in the value as other income of $28,371.  Upon the  refinancing  of
the $500,000 convertible debenture,  the Company recorded contributed capital of
$113,481 for the remaining balance of the embedded derivative  liability for the
conversion feature.  The newly issued debenture included the interest accrued on
the prior  debenture.  A total  liability of $1,009,347  has been recorded as of
April 28, 2005.

On December  14, 2005,  the  $1,009,347  of  convertible  debentures  along with
$31,801  of  accrued  interest  were  exchanged  for a new  Securities  Purchase
Agreement with the same investors ("Note Holders") including new net proceeds of
$530,593 for the sale of $1,690,359 Secured  Convertible Notes (the "Convertible
Notes") and warrants to purchase up to 100,000  shares of its common stock.  The
Convertible  Notes bear  interest at 8% and have a maturity  date of three years
from the date of  issuance.  The Company is not  required to make any  principal
payments during the term of the  Convertible  Notes.  The Convertible  Notes are
convertible  into  7,171,000  shares of the  Company's  common stock at the Note
Holders' option as described in the agreement.  The full principal amount of the
Notes is due upon the  occurrence  of an event  of  default.  The  warrants  are
exercisable  for a period of three years from the date of  issuance  and have an
exercise price of $0.01 per share. In addition, the Company has granted the Note
Holders  registration rights and a security interest in substantially all of the
Company's assets.

In accordance  with Emerging  Issues Task Force 00-27,  Application of Issue No.
98-5 to Certain Convertible Instruments, the Company allocated the proceeds from
the sale of $1,690,359 of  Convertible  Notes on December 14, 2005,  between the
relative  fair  values  of the  warrants  and the  debt.  The fair  value of the
warrants  was  calculated  using  the  Black-Scholes  valuation  model  with the
following  assumptions:  market  price of  common  stock on the date of grant of
$0.45,  exercise  price of warrants of $0.01,  risk free  interest rate of 3.5%,
expected volatility of 124% and expected life of three years. The resulting fair
value of the  warrants of $44,457 was recorded as a debt  discount.  The Company
also  recorded  $118,618 of fees  withheld by the lender as an  additional  debt
discount.  The Company calculated a beneficial conversion feature related to the
remaining  proceeds allocated to the debt portion of the Convertible Notes. This
calculation  resulted in a beneficial  conversion feature which was greater than
the amount of the allocated  proceeds of  $1,527,284.  Accordingly,  the Company
recorded an additional  debt discount of $1,527,284.  The total debt discount of
$1,690,359  is being  amortized to interest  expense over the three year term of
the Convertible Notes.



                                      F-17
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 6 - CONVERTIBLE DEBENTURES (CONTINUED)

Similarly,  the  Company  allocated  the  proceeds  from the sale of $120,000 of
Convertible  Notes on July 28,  2006,  between the  relative  fair values of the
warrants and the debt. The fair value of the warrants was  calculated  using the
Black-Scholes  valuation model with the following  assumptions:  market price of
common stock on the date of grant of $0.17, exercise price of warrants of $0.20,
risk free interest rate of 3.5%,  expected  volatility of 106% and expected life
of two years.  The resulting  fair value of the warrants of $44,457 was recorded
as a debt  discount.  The Company also recorded  $20,000 of fees withheld by the
lender as an  additional  debt  discount.  The Company  calculated  a beneficial
conversion  feature  related to the  remaining  proceeds  allocated  to the debt
portion of the  Convertible  Notes.  This  calculation  resulted in a beneficial
conversion  feature which was greater than the amount of the allocated  proceeds
of $100,000.  Accordingly,  the Company  recorded an additional debt discount of
$100,000.  The total debt  discount of $120,000 is being  amortized  to interest
expense over the two year term of the Convertible  Notes. The Convertible  Notes
bear  interest  at 8% and have a  maturity  date of two  years  from the date of
issuance.  The Company is not required to make any principal payments during the
term of the  Convertible  Notes.  The  Convertible  Notes are  convertible  into
1,200,000  shares of the Company's  common stock at the Note Holders'  option as
described in the agreement.  The full principal  amount of the Notes is due upon
the occurrence of an event of default. The warrants are exercisable for a period
of three years from the date of issuance and have an exercise price of $0.01 per
share. In addition, the Company has granted the Note Holders registration rights
and a security interest in substantially all of the Company's assets.

Also, the Company allocated the proceeds from the sale of $60,000 of Convertible
Notes in December 2006, between the relative fair values of the warrants and the
debt.  The fair value of the warrants  was  calculated  using the  Black-Scholes
valuation model with the following assumptions:  market price of common stock on
the date of grant of $0.06,  exercise  price of  warrants  of  $0.06,  risk free
interest rate of 4.35%, expected volatility of 219% and expected life of one and
one half years. The resulting fair value of the warrants of $23,905 was recorded
as a debt  discount.  The Company also recorded  $20,000 of fees withheld by the
lender as an  additional  debt  discount.  The Company  calculated  a beneficial
conversion  feature  related to the  remaining  proceeds  allocated  to the debt
portion of the  Convertible  Notes.  This  calculation  resulted in a beneficial
conversion  feature which was greater than the amount of the allocated  proceeds
of $60,000.  Accordingly,  the Company  recorded an additional  debt discount of
$60,000.  The total debt  discount  of $60,000 is being  amortized  to  interest
expense over the two year term of the Convertible  Notes. The Convertible  Notes
bear  interest at 8% and have a maturity of two years from the date of issuance.
The Company is not required to make any  principal  payments  during the term of
the  Convertible  Notes.  The Convertible  Notes are convertible  into 1,200,000
shares of the Company's common stock at the Note Holders' option as described in
the agreement. The full principal amount of the Notes is due upon the occurrence
of an event of default.  The  warrants  exercisable  for a period of three years
from the date of  issuance  and have an  exercise  price of $0.01 per share.  In
addition,  the Company has granted the Note  Holders  registration  rights and a
security interest in substantially all of the Company's assets.



                                      F-18

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 6 - CONVERTIBLE DEBENTURES (CONTINUED)

A summary of the Secured Convertible Notes at


          September 30, 2007:

          Convertible secured notes: 8% per annum         $ 1,678,100
            due December 14, 2008, less conversion
            of $12,259
          Convertible secured notes: 8% per annum
            due July 28, 2008                                 180,000
          Discount on debt, net of accumulated
            amortization of $532,551                         (709,869)
                                                          -----------
          Net convertible secured debentures                1,148,231
                                                          -----------


Pursuant to the terms of a registration  rights agreement  entered into with the
Note Holders, the Company is obligated to register for resale,  within a defined
time period,  the shares  underlying  the warrants  that were issued to the Note
Holders  under  the  Securities  Act of  1933,  as  amended.  The  terms  of the
registration  rights  agreement  provide that in the event that the registration
statement  does not become  effective  within 90 days after the date filed,  the
Company is required to pay to the Note Holders as liquidated  damages, an amount
equal to 2% per month of the  outstanding  principal  amount of the  Convertible
Notes.


In accordance with EITF 00-19,  "Accounting for Derivative Financial Instruments
Indexed To, and Potentially  Settled In, a Company's Own Common Stock," the fair
value of the  warrants  amounting  to $45,457 was recorded as a liability on the
closing date of December 14, 2005. The fair value of the warrants was calculated
using the Black-Scholes  valuation model with the following assumptions:  market
price of common stock on the date of grant of $0.45,  exercise price of warrants
of $0.01,  risk free  interest  rate of 3.5%,  expected  volatility  of 124% and
expected  life of three years.  The Company is required to  re-measure  the fair
value of the warrants at each reporting period until the registration  statement
is declared effective.  Accordingly,  the Company measured the fair value of the
warrants at December 31, 2005 using the  Black-Scholes  valuation model with the
following  assumptions:  market  price of  common  stock on the date of grant of
$0.45,  exercise  price of warrants of $0.01,  risk free  interest rate of 3.5%,
expected volatility of 185% and expected life of 2.96 years. The decrease in the
fair market value of the warrants  from $44,457 to $10,709  resulted in non-cash
other income of $33,748.  Upon the Company  meeting its  obligations to register
the securities, the fair value of the warrants on that date will be reclassified
to equity.



                                      F-19

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)

NOTE 7 - STOCK OPTION PLANS

                             2005 STOCK OPTION PLAN

The Company has made  available an  aggregate of 1,100,000  shares of its common
stock for  issuance  upon the exercise of options  granted  under the 2005 Stock
Option Plan. The purchase price per Share  deliverable upon the exercise of each
option  shall be 100% of the Fair Market  Value per Share on the date the option
is granted.  For  purposes of this Plan,  Fair Market Value shall be the closing
sales  price as reported on the Nasdaq  National  Market or such other  national
securities exchange,  inter-dealer quotation system or electronic bulletin board
or over the counter market as the Company's Common Stock shall then be traded on
the date in question,  or, if the Shares shall not have traded on such date, the
closing  sales price on the first date prior thereto on which the Shares were so
traded.

Options may be  exercised  only upon payment of the  purchase  price  thereof in
full. Such payment shall be made in cash or, unless otherwise  determined by the
Board, in Shares, which shall have a Fair Market Value (determined in accordance
with the rules of paragraph (i) above) at least equal to the aggregate  exercise
price of the Shares being purchased, or a combination of cash and Shares.

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

In accordance with EITF 00-19,  "Accounting for Derivative Financial Instruments
Indexed To, and Potentially  Settled In, a Company's Own Common Stock," the fair
value of the  warrants  amounting  to $45,457 was recorded as a liability on the
closing date of December 14, 2005. The fair value of the warrants was calculated
using the Black-Scholes  valuation model with the following assumptions:  market
price of common stock on the date of grant of $0.45,  exercise price of warrants
of $0.01,  risk free  interest  rate of 3.5%,  expected  volatility  of 124% and
expected  life of three years.  The Company is required to  re-measure  the fair
value of the warrants at each reporting period until the registration  statement
is declared effective.  Accordingly,  the Company measured the fair value of the
warrants at December 31, 2005 using the  Black-Scholes  valuation model with the
following  assumptions:  market  price of  common  stock on the date of grant of
$0.45,  exercise  price of warrants of $0.01,  risk free  interest rate of 3.5%,
expected volatility of 185% and expected life of 2.96 years. The decrease in the
fair market value of the warrants  from $44,457 to $10,709  resulted in non-cash
other income of $33,748.  Upon the Company  meeting its  obligations to register
the securities, the fair value of the warrants on that date will be reclassified
to equity.



             2005 STOCK OPTION PLAN FOR INDEPENDENT AND NON-EMPLOYEE
                                    DIRECTORS

The Company has made  available  an  aggregate  of 500,000  shares of its common
stock for  issuance  upon the exercise of options  granted  under the 2005 Stock
Option Plan for Independent and Non-Employee  Directors.  The purchase price per
Share  deliverable  upon the  exercise of each option  shall be 100% of the Fair
Market  Value per Share on the date the option is granted.  For purposes of this
Plan,  Fair Market  Value  shall be the  closing  sales price as reported on the
Nasdaq National Market or such other national securities exchange,  inter-dealer
quotation system or electronic  bulletin board or over the counter market as the
Company's Common Stock shall then be traded on the date in question,  or, if the
Shares shall not have traded on such date,  the closing sales price on the first
date prior thereto on which the Shares were so traded.

Options may be  exercised  only upon payment of the  purchase  price  thereof in
full. Such payment shall be made in cash or, unless otherwise  determined by the
Board, in Shares, which shall have a Fair Market Value (determined in accordance
with the rules of paragraph (i) above) at least equal to the aggregate  exercise
price of the Shares being purchased, or a combination of cash and Shares.

The creation of the 2005 Stock Option Plans is subject to  shareholder  approval
accordingly, no options have been issued under the plan.

NOTE 8 - SUBSEQUENT EVENTS

On October 11, 2007 the Company received an additional  $15,250  promissory note
from Cornell Capital Partners, LP.


                                      F-20


<PAGE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES

As of  the  end of  the  period  covered  by  this  report,  we  carried  out an
evaluation,  under the  supervision  and with the  participation  of management,
including  our chief  executive  officer  and chief  financial  officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  as  defined  in Rules  13a-15(e)  and  15d-15(e)  of the  Securities
Exchange Act of 1934.  Based upon that evaluation,  our chief executive  officer
and  chief  financial  officer  concluded  that  our  disclosure   controls  and
procedures  are  effective  to cause the  material  information  required  to be
disclosed  by us in the reports that we file or submit under the Exchange Act to
be  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the SEC's rules and forms.  There have been no significant  changes
in our internal  controls or in other factors which could  significantly  affect
internal controls subsequent to the date we carried out our evaluation.

ITEM 8B. OTHER INFORMATION

None

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

     The  following  table  sets  forth the names and ages of the members of our
Board of Directors and our executive officers and the positions held by each.

             NAME                 AGE                   POSITION
             ----                 ---                   --------

John T. Ruddy                     35               Chief Executive Officer

JAMES H. SCHNEIDER

On March 13, 2007,  James H. Schneider  resigned as President,  Chief  Executive
Officer and as a member of the Board of Directors  of the Company.  In addition,
on March 13,  2007 Fed J.  Griddin  also  resigned  as interim  Chief  Financial
Officer.  Subsequent to the foregoing  resignations,  on March 13, 2007, John T.
Ruddy was appointed as the President,  Chief Executive Officer,  Chief Financial
Officer and as a member of the Board of Directors of the Company.  In connection
with such  appointment  it was  agreed  that Mr.  Ruddy  would only work for the
Company  on a  part-time  basis and would be paid a salary of $1,000  per month,
which  could be paid in  either  cash or  common  stock of the  Company,  at the
discretion of the Company.

JOHN T. RUDDY

Mr.  Ruddy has  served  as the  President,  Chief  Executive  Officer  and Chief
Financial Officer of Lite King, Inc., since November 2006 and as a member of its
Board of Directors since 2004. Mr. Ruddy has also served as the President, Chief
Executive  Officer,  Chief  Financial  Officer  and as a member  of the Board of
Directors  of  Americana  Distribution,  Inc.  since  May 21,  2007.  He is also
currently a Managing  Director for Highgate House,  LLC since January,  2006 and
has been serving as a Captain at the Jersey City Fire Department since 1995. Mr.
Ruddy has also  served as a  director  of  Bio-One  Corp.  from July 2005  until
December 2005. Mr. Ruddy earned a B.A. from Rutgers University in 1994.



                                       22

<PAGE>

BOARD COMPOSITION

All  directors  hold office until the next annual  meeting of  stockholders  and
until  their  successors  have been duly  elected  and  qualified.  There are no
agreements  with respect to the election of directors.  We have not  compensated
our directors for service on the Board or any committee  thereof,  but directors
are entitled to be reimbursed  for expenses  incurred for attendance at meetings
of the Board and any committee of the Board.  However, due to our lack of funds,
the directors will defer their expenses and any compensation  until such time as
we have sufficient liquidity. As of the date hereof, no director has accrued any
expenses  or  compensation.  Officers  are  appointed  annually  by the Board of
Directors and each executive  officer serves at the discretion of the Board.  We
do not have any standing committees.

No  director,  officer,  affiliate  has,  within the past five years,  filed any
bankruptcy  petition,  been  convicted  in or been the  subject  of any  pending
criminal proceedings,  or is any such person the subject or any order, judgment,
or decree involving the violation of any state or federal securities laws.

Currently,   there  is  no  arrangement,   agreement  or  understanding  between
management   and   non-management   shareholders   under  which   non-management
shareholders  may  directly  or  indirectly  participate  in  or  influence  the
management of our affairs. Present management openly accepts and appreciates any
input or  suggestions  from  shareholders.  However,  the Board of  Directors is
elected by the shareholders  and the  shareholders  have the ultimate say in who
represents them on the Board.  There are no agreements or understandings for any
officer or director  to resign at the request of another  person and none of our
current  officers  or  directors  are  acting on  behalf  of, or will act at the
direction of, any other person.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires our
directors and executive  officers and persons who own more than ten percent of a
registered class of our equity securities (collectively, "Reporting Persons") to
file with the SEC  initial  reports  of  ownership  and  reports  of  changes in
ownership  of our Common  Stock and other equity  securities  of NTI.  Reporting
Persons are required by SEC regulation to furnish NTI with copies of all Section
16(a) forms that they file.  To our  knowledge,  based solely on a review of the
copies of such reports furnished to us, we believe that during fiscal year ended
September 30, 2007 all Reporting  Persons  complied with all  applicable  filing
requirements.

CODE OF CONDUCT

On September 20, 2005 the Board of Directors  adopted a Code of Business Conduct
and Ethics for its directors,  officers and employees which it believes complies
with the requirements  for a company code of ethics for financial  officers that
were  promulgated  by the SEC  pursuant to the  Sarbanes-Oxley  Act of 2002 (the
"Sarbanes-Oxley Act") as well as for the members of our Board of Directors.  The
directors will be surveyed annually regarding their compliance with the policies
as set forth in the Code of Conduct for  Directors.  We intend to  disclose  any
amendment  to, or waiver of, a  provision  of the Code of  Business  Conduct and
Ethics for Directors in a report filed under the Securities Exchange Act of 1934
within five business days of the amendment or waiver.

ITEM 10. EXECUTIVE COMPENSATION

We do not have a bonus,  profit sharing,  or deferred  compensation plan for the
benefit of our  employees,  officers  or  directors.  We paid  salaries or other
compensation to our officers,  directors or employees of $6,000 and $254,000 for
the years ended September 30, 2007 and 2006, respectively.  For 2007, John Ruddy
received  $6,000.  For 2006,  David  Rector  received  $132,000 and David Keenan
received  $122,000.   As  of  June  30,  2006  all  employment  agreements  were
terminated.  We expect that our directors will defer any compensation until such
time as business and financial  conditions  warrant.  As of the date hereof,  no
person has accrued any compensation.

In November  2003, by unanimous  consent of the board of directors,  the company
adopted a resolution to authorize an employee stock option plan. Under the plan,
1,000,000 shares of authorized,  but previously  unissued common stock,  will be
held in  reserve  in order  that  they may be issued  pursuant  to the terms and
conditions  set forth in the plan.  Precise terms and  conditions  for issuances
under  the plan have not yet been  finalized.  In  October  2005,  by  unanimous
consent of the board of directors, the company adopted a resolution to authorize
the 2005 Stock  Option Plan  ("Option  Plan") and the 2005 Stock Option Plan for
Independent and Non-Employee Directors  ("Independent Director Plan"). Under the
Option Plan,  1,100,000 shares, and under the Independent Director Plan, 500,000
shares,  of authorized,  but previously  unissued common stock,  will be held in
reserve in order that they may be issued  pursuant  to the terms and  conditions
set  forth in each of the  Plans,  respectively.  Both the  Option  Plan and the
Independent Director Plan are subject to the approval of the stockholders at the
next annual meeting.

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<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table  provides  information,  to the best of our knowledge as of
September 30, 2007, regarding beneficial ownership of our common stock by:

o each person known to us to own beneficially  more than 5% of our common stock;
o each of the  named  executive  officers;
o each or our  directors;  and
o all executive officers and directors as a group.


                                                  Common Stock     Percentage of
         Name and Address                         Beneficially     Common Stock
         of Beneficial Owner                        Owned (1)           (1)
         -----------------------------------------------------------------------
         Cornell/Highgate House Funds, Ltd.        7,483,500           39.27%
         101 Hudson Street
         Jersey City, NJ 07302

         New York University
         Office of Industrial Liaison
         650 First Avenue, 6th Floor
         New York, NY 10016                        4,812,377           25.25%





Note:  Unless  otherwise  indicated in the footnotes below, we have been advised
that each person above has sole voting power over the shares indicated above.

(1) Based upon  19,057,707  shares of common stock  outstanding on September 30,
2007.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the past two fiscal  years,  except as set forth below there have been no
transactions  between us and any  officer,  director,  nominee  for  election as
director,  or any  shareholder  owning  greater  than five  percent  (5%) of our
outstanding  shares,  nor  any  member  of  the  above  referenced  individuals'
immediate family.

In  October  2003,  our  former  President,  Edward  F.  Cowle,  was one of four
investors that  participated in the private  placement of our common stock.  Mr.
Cowle purchased  305,548 shares for the purchase price of $100,000 each. We used
the proceeds from the private placement to make the initial payment to NYU under
the License Agreement and related expenses.

In July and August 2004, we received  loans of $320,060 were received from major
shareholders  and  directors  of our company.  We repaid  $5,000 of the loans in
September  2005.  The loans are  unsecured,  due upon  demand  and non  interest
bearing.  We are  seeking  to  convert  the loans to  equity or repay  them from
proceeds of an equity  financing.  As of September 30, 2005,  $150,060 is due to
Deworth  Williams,  $5,000 to  Edward F.  Cowle,  $125,000  to Adrien  Ellul and
$35,000 to Viking Investment Group.

During the year ended  September 30, 2005,  shareholders  contributed  shares of
their own common stock to pay for  preproduction  advertising  costs. The shares
were  valued at  $110,000  when they were  transferred  to pay the costs.  As of
September  30,  2005 the $44,000 of the  advertising  costs were  completed  and
expensed.



                                       24

<PAGE>


During the year ended  September 30, 2006, we received loans of $15,200 from our
former CFO, David Rector which were repaid in full during the year.

Our   officers  and   directors   are  subject  to  the  doctrine  of  corporate
opportunities  only insofar as it applies to business  opportunities in which we
have indicated an interest,  either through our proposed business plan or by way
of an express statement of interest contained in our minutes. If any director is
presented with a business opportunity that may conflict with a business interest
identified by us, such  opportunity  must be promptly  disclosed to the Board of
Directors  and  made  available  to us.  In  the  event  the  Board  rejects  an
opportunity  so  presented,  and  only in that  event,  any of our  officers  or
directors may avail themselves of such an opportunity. Every effort will be made
to resolve any conflicts that may arise in favor of the company. There can be no
assurance, however, that these efforts will be successful.



ITEM 13. EXHIBITS.

       (a)  Exhibits

            2(1)        Articles of Merger
            3.1(2)      Articles of Incorporation filed as Exhibit to Form 10-SB
            3.2(2)      By-Laws filed as Exhibit to Form 10-SB
            3.3(3)      Nevada Articles of Incorporation
            3(ii)(1)    Amendment to Articles of Incorporation (Nevada)
            3(iii)(1)   Amendment to Articles of Incorporation (Idaho)
            3(iv)(1)    Articles of Dissolution
            3(v)(1)     Nevada By-Laws
            4(2)        Specimen  Stock  Certificate  filed as  Exhibit  to Form
                        10-SB
            10.1(3)     Agreement and Plan of Merger
            10.2(4)     Amended and  Restated  Research and License Agreement
            10.3(4)     Amended  and Restated Stock Purchase  Agreement
            14          The  Code  of  Ethics  was  previously  filed  with  the
                        September 30, 2005 10KSB.
            31.1        Certification of  C.E.O.  Pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002
            31.2        Certification of Principal  Accounting  Officer Pursuant
                        to Section 302 of the Sarbanes-Oxley Act of 2002
            32.1        Certification  of C.E.O.  Pursuant to 18 U.S.C.  Section
                        1350,  as  Adopted   Pursuant  to  Section  906  of  the
                        Sarbanes-Oxley Act of 2002
            32.2        Certification of Principal  Accounting  Officer Pursuant
                        to 18  U.S.C.  Section  1350,  as  Adopted  Pursuant  to
                        Section 906 of the Sarbanes-Oxley Act of 2002
               (1)        Incorporated  by  reference to our  annual
                          report  on  Form 10-KSB filed February 13, 2002
               (2)        Incorporated  by  reference to our registration
                          statement on Form 10-SB, filed May 14, 1999.
               (3)        Incorporate by reference to the attachment to our
                          Definitive Proxy Statement, filed December 31, 2001.
               (4)        Incorporated by reference to the report filed on
                          Form 8-K Current Notice on November 13, 2003


(b) Reports on Form 8-K.  Since  September  30, 2005,  the Company has filed the
following  current  reports  on  Form  8-K  with  the  Securities  and  Exchange
Commission:

Form 8-K dated December 1, 2006 relating to Items 1.02 and 8.01

Form 8-K dated December 5, 2006 relating to Items 4.01 and 9.01

Form 8-K filed December 12, 2006 relating to Items 5.01, 5.02, and 9.01

Form 8-K filed March 19, 2007 relating to Items 1.01, 2.03 and 3.02

Form 8-K filed August 20, 2007 relating to Items 1.01, 2.03, and 5.02



                                       25
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

We do not have an audit  committee and as a result our entire board of directors
performs the duties of an audit  committee.  Our board of directors will approve
in advance the scope and cost of the engagement of an auditor before the auditor
renders  audit  and  non-audit  services.  As  a  result,  we  do  not  rely  on
pre-approval policies and procedures.

                                   AUDIT FEES

Our  independent  auditors,  Moore and Associates,  Chartered,  were not engaged
until after the end of our fiscal year on  September  30, 2006.  Accordingly  no
fees have been paid or accrued to them for the year ended September 30, 2006.

The aggregate fees billed by our independent auditors, Moore and Associates, for
professional  services rendered for the audit of our annual financial statements
included in our Annual Report on Form 10-KSB for the fiscal year ended September
30, 2006, and for the review of quarterly  financial  statements included in our
Quarterly  Reports on Form 10-QSB for the  quarters  ending  December  31, 2006,
March 31, 2007 and June 30, 2007 were $7,500.

                                    TAX FEES

For the  fiscal  year  ended  September  30,  2007,  the fee billed by Moore and
Associates for tax compliance, tax advice and tax planning was included in their
audit fees.  For the fiscal year ended  September  30, 2006,  the  aggregate fee
billed by RSM McGladrey,  Inc.  ("RSM") for tax  compliance,  tax advice and tax
planning totaled $-0-.

We do not use RSM for financial  information  system design and  implementation.
These services, which include designing or implementing a system that aggregates
source data underlying the financial statements or generates information that is
significant  to our financial  statements,  are provided  internally or by other
service providers.

SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                         NANOSCIENCE TECHNOLOGIES, INC.


Dated:   December 27, 2007            By:  /s/  John T. Ruddy
                                           ------------------
                                           John T. Ruddy
                                           President and Chief Executive Officer
                                           (Chief Executive Officer)


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.




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