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, 2004

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

                         COMMISSION FILE NUMBER 0-26067

                         NANOSCIENCE TECHNOLOGIES, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

                       NEVADA                            87-0571300
       (STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                IDENTIFICATION NO.)

            45 ROCKEFELLER PLAZA, SUITE 2000 #43, NEW YORK, NY 10111
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)


ISSUER'S TELEPHONE NO.:  (212)332-3443

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:    NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:    COMMON

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. [X]

      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. $ 0

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

                CLASS                        OUTSTANDING AS OF DECEMBER 31, 2004
Common Stock, $.001 par value                  10,846,946

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

Transitional Small Business Disclosure Format.   Yes [ ]      No [X]

<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                                TABLE OF CONTENTS

                                     PART I

Item 1.    Description of Business..........................................   3

Item 2.    Description of Property..........................................   7

Item 3.    Legal Proceedings................................................   7

Item 4.    Submission of Matter to a Vote of Security Holders...............   7

                                     PART II

Item 5.    Market for Common Equity and Related Stockholder Matters.........   7

Item 6.    Management's Discussion and Analysis or Plan of Operation........   9

Item 7.    Financial Statements.............................................  12

Item 8.    Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure......................................  27

Item 8A.   Controls and Procedures..........................................  27

                                    PART III

Item 9.    Directors, Executive Officers, Promoters and Control persons;
              Compliance with Section 16(a) of the Exchange Act.............  27

Item 10.   Executive Compensation...........................................  28

Item 11.   Security Ownership of Certain Beneficial Owners and Management...  29

Item 12.   Certain Relationships and Related Transactions...................  30

Item 13.   Exhibits and Reports on Form 8-K.................................  30

Item 14.   Principal Accountants Fees and Services..........................  31

           Signatures.......................................................  32

<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.

HISTORY

        Nanoscience Technologies, Inc. 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 effected 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.

        We are considered a development stage company and, for several years,
were inactive other than searching for an operating business or business
opportunity with the intent to acquire or merge with such business. On September
12, 2003, we finalized an Amended and Restated Research and License Agreement
(the "License Agreement") with New York University ("NYU"), that was further
amended on November 11, 2003. 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.

        As compensation to NYU for work to be performed on its research
projects, we agreed to provide to NYU funding in the aggregate amount of
$1,657,690 in installments commencing on September 15, 2003 through, May 1,
2007, and additional fees and expenses. 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. We in turn will
pay to NYU a royalty fee of a varying amount from sales of products and for
sublicenses.

        In connection with the License Agreement, we also entered into an
Amended and Restated Stock Purchase Agreement ("Stock Purchase Agreement")
whereby in further consideration for entering into the License Agreement, we
issued 4,812,377 shares of our common stock to NYU.

<PAGE>


        Further, 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.

BUSINESS

        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 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.

        BACKGROUND OF TECHNOLOGY


        We were 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 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 2006 and $1 trillion annually by 2015.

        We believe 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.

        NYU and we have identified a two-phase research and development plan
which is based on:

            o   The research conducted/accomplished to date and planned future
                research

            o   The need to meet long-term business objectives that will result
                in viable commercial product opportunities
<PAGE>


        Our commercialization strategy is as follows:

            o   To enter into research collaboration relationships, early, 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

            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

        As NYU continues to enhance the core technology by identifying and
developing new and relevant technologies, we will also continue to evaluate
technology opportunities licensed from, or developed by third parties.

        The intellectual property portfolio currently contains five issued
patents and five patent applications. As research and development continues, NYU
and we will aggressively protect new developments and technologies in the U.S.
and in logical foreign domains.

        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.

        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

<PAGE>


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.

        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

<PAGE>


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.

PATENTS

        Dr. Nadrian Seeman has been granted five U.S. patents for his work in
DNA nanotechnology, with three additional patents applied for and currently
pending. Furthermore, it is expected that two more patent applications will be
filed during 2004. Under the our license agreement with NYU, we have the
exclusive worldwide license to develop commercially and/or license products
and/or processes related to the patents. Professor Seeman first conceived the
idea for using DNA as a structural element in the fall of 1980 while a member of
the faculty at SUNY Albany and published the first design for such a molecule in
1981. Dr. Seeman brought this project to NYU in 1988. The following year he
constructed the first geometrical DNA object and in 1991 the first 3-D DNA
object, a cube.

        The Research and License Agreement grants NTI the exclusive worldwide
rights to the following intellectual property.



ISSUED PATENTS

        U.S. PATENT 5,278,051: 11 Jan 1994
        CONSTRUCTION OF GEOMETRICAL OBJECTS FROM POLYNUCLEOTIDES

        U.S. PATENT 5,386,020: 31 Jan 1995.
        MULTIPLY CONNECTED, THREE-DIMENSIONAL NUCLEIC ACID STRUCTURES

        U.S. PATENT 5,468,851: 21 Nov 1995.
        CONSTRUCTION OF GEOMETRICAL OBJECTS FROM POLYNUCLEOTIDES

        U.S. PATENT 6,072,044: 6 June 2000.
        NANOCONSTRUCTIONS OF GEOMETRICAL OBJECTS AND LATTICES FROM ANTIPARALLEL
        NUCLEIC ACID DOUBLE CROSSOVER MOLECULES

        U.S. PATENT 6,255,469: 3 July 2001.
        PERIODIC TWO AND THREE DIMENSIONAL NUCLEIC ACID STRUCTURES

The SUMMARY subject matter of each is as follows:

    o   An invention relating to molecular scale mechanical devices

    o   An invention relating to nanotechnology and to a nucleic acid-based
        nano-robotic system

    o   An invention relating to ladder copolymers in which one of two backbones
        is formed of a nucleic acid or nucleic acid-like polymer

    o   An invention relating to polynucleic acid nanostructures and lattices

    o   An invention relating to molecular scale mechanical devices using other
        molecular structures

        PATENT STRATEGY

        The Research and License Agreement requires that we reimburse NYU for
all patent and prosecution costs. As such, we and NYU are in agreement with
respect to the following patent strategy:

<PAGE>


    o   Aggressively protect all current and future technological developments
        to ensure strong and broad protection by filing patents and/or
        continuations-in-part as appropriate

    o   Protect technological developments at various levels, in a complementary
        manner, including the base technology, as well as specific applications
        of the technology

    o   Establish comprehensive coverage in the U.S. and in all relevant foreign
        domains in anticipation of future commercialization opportunities

        Our patent counsel is Browdy and Neimark, P.L.L.C., a highly regarded
patent law firm, with specialized expertise, located in Washington, D.C.

EMPLOYEES

        As of the date hereof, we have one full-time employee and have plans for
retaining employees as our business warrants the expense, or when the technology
developed pursuant to our License Agreement becomes commercially feasible. 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. Our sole full time employee is our President and CEO.

        In the next twelve months we plan to fill the following positions with
full time employees:

     Vice President, Corporate Development and Licensing - Material Sciences
     Vice President, Corporate Development and Licensing - Life Sciences
     Director, Technology and Product Development
     Chief Financial Officer and Controller

FACILITIES

        We currently conduct our primary business operations using a "virtual
office" located in New York City. We pay a monthly fee of $275 per month for the
use of this virtual office. It is contemplated that at such future time as
business warrants, we will secure commercial office spaces. We are also planning
to lease laboratory facilities. However, we have no current plans to secure such
commercial office or laboratory space.

INDUSTRY SEGMENTS

        No information is presented regarding industry segments. We are
presently a research company that will market and/or license products and
technology developed under the License Agreement with NYU. Please refer to the
statements of operations included herein in response to Item 7 of this Form
10-KSB for a report of our operating history for the past two fiscal years.


ITEM 2. DESCRIPTION OF PROPERTY

        We do not own any material property.

<PAGE>


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, 2004.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        Our common stock has been accepted for trading on the OTC Bulletin Board
under the trading symbol "NANS." Inclusion on the OTC Bulletin Board permits
price quotations for our shares to be published by such service. There has not
been an active trading market for our common stock nor has there been
significant trading in the public market in recent years. We have made no
proposals, arrangements or understandings with any person concerning the
development of a trading market in any of our securities. Because there has not
been a regular, active trading market in our shares, no trading history is
presented herein.

        On November 16, 2001, we effected 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.

<PAGE>


        As of December 15, 2004 there were approximately 45 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 15, 2004 we had 10,846,946 shares of common stock issued
and outstanding. Of the total outstanding shares, 1,915,344 may be sold,
transferred or otherwise traded in the public market without restriction, unless
held by an affiliate or controlling shareholder. Of these 1,915,344 shares, we
have not identified any shares as being held by affiliates. A total of 8,931,602
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 ISSUANCES 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 October 2, 2001, we issued 250,000 shares of our common stock to one
person for cash consideration of $250, or $0.001 per share. The funds realized
are to be 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.

SUBSEQUENT EVENTS

CONSULTING SERVICES AGREEMENT

        Subsequent to September 30, 2004 the Company consummated a Consulting
Services Agreement with Trilogy Capital Partners, Inc. ("Trilogy"). According to
the terms of the Agreement, Trilogy would provide certain consulting, marketing,
and media relations services for a fee of $10,000 per month. The Company made
its first payment relating to this Agreement in October 2004.

EQUITY DISTRIBUTION AGREEMENT

        On December 13, 2004, the Company entered into a Standby Equity
Distribution Agreement with Cornell Capital Partners, LP ("Cornell"). Pursuant
to the Agreement, the Company may, at its discretion and subject to certain
conditions, periodically sell to Cornell shares of its common stock, for a total
purchase price of up to $5.0 million. For each share of common stock purchased
under the Agreement, Cornell will pay the Company 97% of the lowest volume
weighted average price of the Company's common stock as quoted by Bloomberg, LP
on the Over-the-Counter Bulletin Board or other principal market on which the
common stock is traded for the five trading days immediately following the
relevant notice date. Cornell will also retain 5% of each advance under the
Agreement.

        In addition, Cornell received a one-time commitment fee in the form of
125,000 shares of common stock on December 13, 2004, piggy-back registration
rights with respect to such shares, and a non-refundable due diligence fee of
$2,500.

        The Company is also obligated to pay Newbridge Securities Corporation a
fee of 5,556 shares of common stock equal to $10,000 based on the volume
weighted average price of the common stock on December 13, 2004 under a separate
placement agent agreement relating to the Agreement.

SECURITIES PURCHASE AGREEMENT

        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, and shall issue an
additional $500,000 in such convertible debentures within five days of the
effectiveness of a registration statement related to the shares of common stock
issuable upon conversion of such convertible debentures. The debentures are
convertible 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 are secured by the assets of the Company. The debentures
have a three-year term and accrue 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 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.

INVESTOR REGISTRATION RIGHTS AGREEMENT

        Pursuant to the terms of an Investor Registration Rights Agreement dated
December 13, 2004 the Company is obligated to prepare and file with the SEC a
registration statement on Form S-1 or Form SB-2 in order to formally register of
the shares of common stock issuable upon conversion of Convertible Debentures,
and fee shares.

        The Company is obligated to maintain the effectiveness of this
registration statement until either all of the registrable securities are
eligible to be sold pursuant to Rule 144(k), or the date on which the investor
shall have sold all of the common stock covered by such registration statement,
whichever period is shorter.

        In the event such registration statement is not filed by the scheduled
filing deadline or is not declared effective by the SEC within 120 days of the
closing date, or if after the registration statement has been declared effective
by the SEC, sales cannot be made pursuant to the registration statement, the
Company will be obligated to pay as liquidated damages to the holder, at the
holder's option, either a cash amount or shares of the Company's common stock
equal to 2% of the liquidated value of the convertible debentures outstanding
for each 30-day period after the relevant deadline until the filing or
effectiveness requirement is satisfied.

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.

<PAGE>


RESULTS OF OPERATIONS

        We incurred a loss from operations of $429,380 for the year ended
September 30, 2003 compared to a loss of $532,409 for the year ended September
30, 2004. The increase was due to our decision to enter into the licensing and
development of Nanotechnology. Included in the loss for 2003 and 2004 was
$300,000 and $315,000, respectively, in cash paid to NYU for research and
development of Nanotechnology. The loss for 2003 also includes $96,248 for the
value of the 4,812,377 shares issued to NYU. In 2004 we engaged consultants to
manage its operations, to serve on its Board of Directors, to raise operational
capital and to interface with NYU. We paid $55,500 to those consultants in 2004.
In connection with our fund raising activities and securities reporting
requirements we incurred $61,082 in legal and accounting fees compared to
$28,796 in 2003. We also expended $20,000 in insurance costs as result of
engaging the management consultants. Our travel costs were $15,444 in 2004 as
our consultants worked to raise the capital needed to fund our agreement with
NYU. We had no travel costs in 2003.

LIQUIDITY AND CAPITAL RESOURCES

        We used $309,976 of cash in operations during the year ended September
30, 2003 compared to $518,658 during the year ended September 30, 2004.

        We had cash on hand of $80,738 as of September 30, 2003 compared to
$11,590 as of September 30, 2004. Our primary source of cash in 2003 was due to
the issuance of 1,222,192 shares of common stock for $400,000 of cash. In our
2004 fiscal year we received loans of $320,060 from shareholders and a payment
of $130,000 toward the purchase of common stock in the future. In the 2003
fiscal year, we also paid $19,162 in legal fees to obtain patents on our
technology. Our cash balance was $13,158 short of our accounts payable and
accrued liabilities at September 30, 2004. We have the obligation to pay
$330,750 to NYU on May 1, 2005. We are obligated to repay the related party
loans of $320,060, plus accrued interest, 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 2005. 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 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. We in
turn will pay to NYU a royalty fee of a varying amount from sales of products
and for sublicenses.

        We intend 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 do not
intend to market the products ourselves. We expect that the licensees will pay
us royalties as a percentage of their sales of any products which use our
technology.

NET OPERATING LOSS

        We have accumulated approximately $555,000 of net operating loss
carryforwards as of September 30, 2004, 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 carryforwards. The
carry-forwards expire in the year 2024. In the event of certain changes in
control, there will be an annual limitation on the amount of

<PAGE>


net operating loss carryforwards which can be used. No tax benefit has been
reported in the financial statements for the year ended September 30, 2004
because there is a 50% or greater chance that the carryforward will not be used.
Accordingly, the potential tax benefit of the loss carryforward is offset by a
valuation allowance of the same amount.

NEW ACCOUNTING PRONOUNCEMENTS

        On August 16, 2001, the Financial Accounting Standards Board, or FASB,
issued Statement of Financial Accounting Standards (SFAS) No. 143, ACCOUNTING
FOR ASSET RETIREMENT OBLIGATIONS, which is effective for fiscal years beginning
after June 15, 2002. It requires that obligations associated with the retirement
of a tangible long-lived asset be recorded as a liability when those obligations
are incurred, with the amount of the liability initially measured at fair value.
Upon initially recognizing an accrued retirement obligation, an entity must
capitalize the cost by recognizing an increase in the carrying amount of the
related long-lived asset. Over time, the liability is accreted to its present
value each period, and the capitalized cost is depreciated over the useful life
of the related asset. Upon settlement of the liability, an entity either settles
the obligation for its recorded amount or incurs a gain or loss upon settlement.
Although we have not completed the process of determining the effect of this new
accounting pronouncement, we currently expect that the effect of SFAS No. 143 on
our consolidated financial statements, when it becomes effective, will not be
significant.

        In October 2001, the FASB issued SFAS 144, ACCOUNTING FOR THE IMPAIRMENT
OR DISPOSAL OF LONG-LIVED ASSETS, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. Although SFAS 144
supersedes SFAS 121, it retains many of the fundamental provisions of SFAS 121.
SFAS 144 also supersedes the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, Reporting-the Results of Operations-Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions, for the disposal of a
segment of a business. However, it retains the requirement in APB 30 to report
separately discontinued operations and extends that reporting to a component of
an entity that either has been disposed of, by sale, abandonment, or in a
distribution to owners, or is classified as held for sale. SFAS 144 is effective
for fiscal years beginning after December 15, 2001 and interim periods within
those fiscal years. We believe the adoption of SFAS 144 will not have a
significant effect on our consolidated financial statements.

        In April 2002, the FASB issued Statement No. 145, RESCISSION OF FASB
STATEMENTS NO. 4, 44, AND 62, AMENDMENT OF FASB STATEMENT NO. 13, AND TECHNICAL
CORRECTIONS (SFAS 145). SFAS 145 will require gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under
Statement of Financial Accounting Standards No. 4 (SFAS 4). Extraordinary
treatment will be required for certain extinguishments as provided in APB
Opinion No. 30. SFAS 145 also amends Statement of Financial Accounting Standards
No. 13 to require certain modifications to capital leases be treated as a
sale-leaseback and modifies the accounting for sub-leases when the original
lessee remains a secondary obligor (or guarantor). SFAS 145 is effective for
financial statements issued after May 15, 2002, and with respect to the impact
of the reporting requirements of changes made to SFAS 4 for fiscal years
beginning after May 15, 2002. The adoption of the applicable provisions of SFAS
145 did not have an effect on our financial statements.

        In June 2002, the FASB issued Statement No. 146, ACCOUNTING FOR COSTS
ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES. SFAS 146 nullifies Emerging Issues
Task Force Issue No. 94-3 "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." SFAS 146 applies to costs associated with
an exit activity that does not involve an entity newly acquired in a business
combination or with a disposal activity covered by SFAS 144. SFAS 146 is
effective for exit or disposal activities that are initiated after December 31,
2002, with earlier application encouraged. We are currently reviewing SFAS 146
and intend to implement it in January 2004.

<PAGE>


        In October 2002, the FASB issued SFAS No. 147, ACQUISITIONS OF CERTAIN
FINANCIAL INSTITUTIONS-AN AMENDMENT OF FASB STATEMENTS NO. 72 AND 144 AND FASB
INTERPRETATION NO. 9. SFAS No. 147 is an industry specific standard and is not
applicable to us; therefore, it will not have an impact on our consolidated
results of operations or financial position.

        In December 2002, the FASB issued SFAS No. 148, ACCOUNTING FOR
STOCK-BASED COMPENSATION - TRANSITION AND DISCLOSURE. SFAS No. 148 amends SFAS
No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, to provide alternative methods
of transition to SFAS No. 123's fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions in
SFAS No. 123 and Accounting Principles Board Opinion No. 28, INTERIM FINANCIAL
REPORTING, to require disclosure in the summary of significant accounting
policies of the effects of an entity's accounting policy with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. We adopted the interim financial
reporting for interim periods beginning after December 15, 2002. The adoption of
SFAS No. 148 did not have a material impact on our consolidated results of
operations or financial position.

        In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
CONSOLIDATION OF VARIABLE INTEREST ENTITIES, which addresses the consolidation
of business enterprises (variable interest entities), to which the usual
condition of consolidation, a controlling financial interest, does not apply.
FIN 46 requires an entity to assess its business relationships to determine if
they are variable interest entities. As defined in FIN 46, variable interests
are contractual, ownership or other interests in an entity that change with
changes in the entity's net asset value. Variable interests in an entity may
arise from financial instruments, service contracts, guarantees, leases or other
arrangements with the variable interest entity. An entity that will absorb a
majority of the variable interest entity's expected losses or expected residual
returns, as defined in FIN 46, is considered the primary beneficiary of the
variable interest entity. The primary beneficiary must include the variable
interest entity's assets, liabilities and results of operations in its
consolidated financial statements. FIN 46 is immediately effective for all
variable interest entities created after January 31, 2003. For variable interest
entities created prior to this date, the provisions of FIN 46 were originally
required to be applied no later than our first quarter of Fiscal 2004. On
October 8, 2003, the FASB issued FASB Staff Position (FSP) FIN 46-6, EFFECTIVE
DATE OF FASB INTERPRETATION NO. 46, CONSOLIDATION OF VARIABLE INTEREST ENTITIES.
The FSP provides a limited deferral (until the end of our second quarter of
2004) of the effective date of FIN 46 for certain interests of a public entity
in a variable interest entity or a potential variable interest entity. We will
continue to evaluate FIN 46, but due to the complex nature of the analysis
required by FIN 46, we have not determined the impact on our consolidated
results of operations or financial position.

        In April 2003, the FASB issued SFAS No. 149, AMENDMENT OF STATEMENT 133
ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. In particular, this Statement clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
and when a derivative contains a financing component that warrants special
reporting in the statement of cash flows. We adopted this standard for contracts
entered into or modified after June 30, 2003. The adoption of SFAS No. 149 did
not have a material impact on our consolidated results of operations or
financial position.

        In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN
FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND Equity. This
Statement requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be classified
as liabilities. We adopted this standard for financial instruments entered into
or modified after May 31, 2003. The adoption of SFAS No. 150 did not have a
material impact on our consolidated results of operations or financial position.

<PAGE>


ITEM 7. FINANCIAL STATEMENTS

        Our financial statements, as of and for the fiscal years ended September
30, 2004 and 2003, have been examined to the extent indicated in its report by H
J & Associates, LLC, independent certified accountant, 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.












                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2004

<PAGE>


                                 C O N T E N T S


Report of Independent Public Accounting Firm        16

Balance Sheet                                       17

Statements of Operations                            18

Statements of Stockholders' Equity (Deficit)        19

Statements of Cash Flows                            21

Notes to the Financial Statements                   23

<PAGE>


                  REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
                  --------------------------------------------


The Board of Directors
Nanoscience Technologies, Inc.
(A Development Stage Company)
New York, New York

We have audited the accompanying balance sheet of Nanoscience Technologies, Inc.
(a  development  stage  company),  as of  September  30,  2004,  and the related
statements of operations, stockholders' equity (deficit), and cash flows for the
years ended  September 30, 2004 and 2003 and from  inception of the  development
stage on  September  14,  1987  through  September  30,  2004.  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, 2004 and the results of its
operations  and its cash flows for the years ended  September  30, 2004 and 2003
and from  inception  of the  development  stage on  September  14, 1987  through
September 30, 2004 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  is a  development  stage  company  with no
significant  operating results to date, which raises substantial doubt about its
ability to continue as a going  concern.  Management's  plans in regard to 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/ HJ & Associates, LLC

HJ & Associates, LLC
Salt Lake City, Utah
January 10, 2005


                                      -16-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
                                 Balance Sheet

                                     ASSETS
                                     ------

                                                                   September 30,
                                                                       2004
                                                                   -------------

CURRENT ASSETS

    Cash                                                                 11,590
    Prepaid expenses                                              $       3,000
                                                                  -------------

            Total Current Assets                                         14,590
                                                                  -------------

OTHER ASSETS

   Lease deposit                                                            550
   Patents, net                                                          17,246
                                                                  -------------

         Total Other Assets                                              17,796
                                                                  -------------

         TOTAL ASSETS                                             $      32,386
                                                                  =============


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

   Accounts payable and accrued expenses                          $      24,748
   Interest payable                                                       6,524
   Notes payable - related parties                                      320,060
                                                                  -------------

         Total Current Liabilities                                      351,332
                                                                  -------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock; 100,000,000 shares authorized,
     at $0.001 par value, 10,846,946 shares issued
     and outstanding, respectively                                       10,847
   Additional paid-in capital                                           558,903
   Stock subscriptions payable                                          130,000
   Deficit accumulated during the development stage                  (1,018,696)
                                                                  -------------

         Total Stockholders' Equity (Deficit)                          (318,946)
                                                                  -------------

         TOTAL LIABILITIES AND STOCKHOLDERS'
            EQUITY (DEFICIT)                                      $      32,386
                                                                  =============


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

                                      -17-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            Statements of Operations

                                                                From Inception
                                                                    of the
                                                               Development Stage
                                     For the Years Ended       on September 14,
                                        September 30,            1987 through
                                 ----------------------------    September 30,
                                     2004            2003            2004
                                 ------------    ------------  -----------------


REVENUES                         $         --    $         --    $         --

EXPENSES

   General and administrative         217,409          33,132         307,448
   Research and development           315,000         300,000         615,000
   Licensing fees                          --          96,248          96,248
                                 ------------    ------------    ------------

         Total Expenses               532,409         429,380       1,018,696
                                 ------------    ------------    ------------


LOSS FROM OPERATIONS                 (532,409)       (429,380)     (1,018,696)
                                 ------------    ------------    ------------


NET LOSS                         $   (532,409)   $   (429,380)   $ (1,018,696)
                                 ============    ============    ============


BASIC LOSS PER SHARE             $      (0.05)   $      (0.02)
                                 ============    ============


WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING               11,198,901      17,874,147
                                 ============    ============


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

                                      -18-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>
                                      Common Stock            Additional         Stock
                               ---------------------------      Paid-In     Subscriptions    Accumulated
                                  Shares         Amount         Capital         Payable        Deficit
                               ------------   ------------   ------------    ------------   ------------
<S>                            <C>            <C>            <C>             <C>            <C>
Balance from inception of
  the development stage on
  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
  cash on September 17,
  1987 at $0.008 per share           27,500             28            192              --             --

Common stock issued 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)

Common stock issued 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)
                               ============   ============   ============    ============   ============
</TABLE>


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

                                      -19-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
            Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>
                                       Common Stock             Additional         Stock
                               ----------------------------       Paid-In     Subscriptions   Accumulated
                                  Shares          Amount          Capital         Payable       Deficit
                               ------------    ------------    ------------   ------------   ------------
<S>                            <C>             <C>             <C>            <C>            <C>
Balance, September 30, 2002      17,658,750    $     17,659    $     18,311   $         --   $    (56,907)

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

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

Cash received on stock
  subscription payable                   --              --              --        130,000             --

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   $    130,000   $ (1,018,696)
                               ============    ============    ============   ============   ============
</TABLE>

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

                                      -20-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                        From Inception
                                                                                            of the
                                                                                       Development Stage
                                                             For the Years Ended       on September 14,
                                                                September 30,            1987 Through
                                                        ----------------------------    September 30,
                                                            2004            2003            2004
                                                        ------------    ------------   -----------------
<S>                                                     <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                                             $   (532,409)   $   (429,380)   $ (1,018,696)

   Adjustments to reconcile net loss to
     net cash used by operating activities:
        Common stock issued for services and fees                 --          96,248         126,698
        Common stock warrants granted for services             6,875              --           6,875
        Amortization expense                                   1,916           1,916
        Services contributed by shareholder                       --             290             290
   Changes in operating assets and liabilities:
        Increase in prepaid expenses                          (3,000)             --          (3,000)
        Increase (decrease) in accounts payable
          and accrued expenses                                 7,960          22,866          31,272
                                                        ------------    ------------    ------------

                Net Cash Used by Operating Activities       (518,658)       (309,976)       (854,645)
                                                        ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES

        Cash paid for lease deposits                            (550)             --            (550)
        Cash paid for patents                                     --         (19,162)        (19,162)
                                                        ------------    ------------    ------------

                Net Cash Used by Investing Activities           (550)        (19,162)        (19,712)
                                                        ------------    ------------    ------------

CASH FLOWS FROM FINIANCING ACTIVITIES

        Increase in notes payable - related parties          320,060           9,626         350,427
        Increase in stock subscriptions payable              130,000              --         130,000
        Common stock issued for cash                              --         400,000         405,520
                                                        ------------    ------------    ------------

                Net Cash Provided by Operating
                  Activities                                 450,060         409,626         885,947
                                                        ------------    ------------    ------------

        NET DECREASE IN CASH                                 (69,148)         80,488          11,590

        CASH AT BEGINNING OF PERIOD                           80,738             250              --
                                                        ------------    ------------    ------------

        CASH AT END OF PERIOD                           $     11,590    $     80,738    $     11,590
                                                        ============    ============    ============
</TABLE>

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

                                      -21-
<PAGE>


                         NANOSCIENCE TECHNOLOGIES, INC.
                          (A Development Stage Company)
                      Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>
                                                                                From Inception
                                                                                    of the
                                                                               Development Stage
                                                       For the Years Ended     on September 14,
                                                          September 30,          1987 Through
                                                   ---------------------------   September 30,
                                                       2004           2003           2004
                                                   ------------   ------------   ------------
<S>                                                <C>            <C>            <C>
SUPPLIMENTAL DISCLOSURES OF
   CASH FLOW INFORMATION

   CASH PAID FOR:

      Interest                                     $         --   $         --   $         --
      Income Taxes                                 $         --   $         --   $         --

   NON-CASH FINANCING ACTIVITIES

      Forgiveness of debt by related party         $         --   $     30,367   $     30,367
      Common stock issued for services and fees    $         --   $     96,248   $    126,698
      Common stock warrants granted for services   $      6,875   $         --   $      6,875
</TABLE>


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

                                      -22-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


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.


         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. 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.

                                      -23-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


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

         d. Revenue Recognition

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

         e. Basic Loss Per Share

         The Computation of basic loss per share of common stock is based on the
         weighted average number of shares outstanding during the period.

                                                      For the Years Ended
                                                          September 30,
                                                   ------------    ------------
                                                        2004            2003
                                                   ------------    ------------

         Loss (numerator)                          $   (532,409)   $   (429,380)
         Shares (denominator)                        11,198,901      17,874,147
                                                   ------------    ------------

         Per share amount                          $      (0.05)   $      (0.02)
                                                   ============    ============

         f. 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 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.

         Net  deferred  tax assets  consist of the  following  components  as of
         September 30, 2004 and 2003:

                                                       2004            2003
                                                   ------------    ------------

         Deferred tax assets:
         NOL Carryover                             $    216,800    $    140,200

         Accrued Expenses                               125,390              --

         Deferred tax liabilities:                           --              --

         Valuation allowance                           (342,190)       (140,200)
                                                   ------------    ------------

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

                                      -24-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


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

         f. Income Taxes (continued)

         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, 2004 and 2003 due to the following:

                                                       2004            2003
                                                   ------------    ------------

         Book Income                               $   (207,640)   $   (167,460)
         Stock for Services/Options Expense               2,650          37,540
         Meals and Entertainment                          3,000              --
         Valuation allowance                            201,990         129,920
                                                   ------------    ------------

                                                   $         --    $         --
                                                   ============    ============

         At September 30, 2004, the Company had net operating loss carryforwards
         of  approximately  $2,098,000 that may be offset against future taxable
         income  from  the year  2003  through  2024.  No tax  benefit  has been
         reported in the  September  30,  2004  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.

         g. Patents

         Qualifying  patent  costs  totaling  $19,162 have been  capitalized  at
         September  30,  2004.  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, 2004
         and 2003 was $1,916 and $-0-.  Net patent costs at  September  30, 2004
         and 2003 totaled $17,246 and $19,162, 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.

                                      -25-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


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
         $1,018,696 at September 30, 2004, 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.

         In order to continue as a going concern,  the Company will need,  among
         other  things,  additional  capital  resources.  Management's  plans to
         obtain such  resources for the Company  include (1)  obtaining  capital
         from  management and  significant  shareholders  sufficient to meet its
         minimal  operating  expenses,  and (2)  seeking  out and  completing  a
         transaction with an existing  operating  company.  However,  management
         cannot  provide any  assurances  that the Company will be successful in
         accomplishing any of its plans.

         The ability of the Company to continue as a going  concern is dependent
         upon its ability to successfully  accomplish the plans described in the
         preceding  paragraph and  eventually  secure other sources of financing
         and attain profitable operations. The accompanying financial statements
         do not include any  adjustments  that might be necessary if the Company
         is unable to continue as a going concern.

NOTE 3-  EQUITY ACTIVITY

         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.

                                      -26-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


NOTE 3-  EQUITY ACTIVITY (Continued)

         On November 12, 1997, the Company issued 1,125,000 shares of $0.001 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.

         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. As of
         September  30,  2004 the  $130,000  received  by the  Company  has been
         classified as a stock  subscription  payable,  for which shares will be
         issued once the PPM has been executed.

                                      -27-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


NOTE 3-  EQUITY ACTIVITY (Continued)

         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 $0.069 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.

NOTE 4-  RELATED PARTY TRANSACTIONS

         During the year ended  September  30,  2003,  a related  party  forgave
         certain Company debts totaling  $30,367.  This amount has been recorded
         as additional paid-in capital in the Company's financial statements.

         During the year ended September 30, 2004 certain  shareholders  entered
         into an agreement with the Company to cancel  12,846,373  shares of the
         Company's  common stock in order to facilitate the  consummation of the
         Licensing  Agreement with New York  University (see Note 5), as amended
         on November 11, 2003.

         During the year ended  September  30,  2004,  related  parties lent the
         Company $320,060.  The loans are non interest bearing,  due upon demand
         and unsecured. The Company has imputed interest on the loans at 10% per
         annum.

                                      -28-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


NOTE 5 - LICENSING AGREEMENT

         In  September  2003,  the Company  entered  into a Research and 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.
         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 (see Note 3).  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.

NOTE 6 - SUBSEQUENT EVENTS

         CONSULTING SERVICES AGREEMENT

         Subsequent to September  30, 2004 the Company  consummated a Consulting
         Services  Agreement with Trilogy Capital  Partners,  Inc.  ("Trilogy").
         According to the terms of the Agreement,  Trilogy would provide certain
         consulting,  marketing,  and  media  relations  services  for a fee  of
         $10,000 per month.  The Company made its first payment relating to this
         Agreement in October 2004.

                                      -29-
<PAGE>


                          NANOSCIENCE TECHNLOGIES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           September 30, 2004 and 2003


NOTE 6 - SUBSEQUENT EVENTS (Continued)

         EQUITY DISTRIBUTION AGREEMENT

         On  December  13,  2004,  the  Company  entered  into a Standby  Equity
         Distribution  Agreement with Cornell Capital Partners,  LP ("Cornell").
         Pursuant to the  Agreement,  the Company  may,  at its  discretion  and
         subject to certain  conditions,  periodically sell to Cornell shares of
         its common stock, for a total purchase price of up to $5.0 million. For
         each share of Common Stock purchased under the Agreement,  Cornell will
         pay the Company 97% of the lowest volume weighted  average price of the
         Company's   common   stock  as   quoted   by   Bloomberg,   LP  on  the
         Over-the-Counter  Bulletin Board or other principal market on which the
         Common Stock is traded for the 5 trading days immediately following the
         relevant notice date. Cornell will also retain 5% of each advance under
         the Agreement.

         In addition,  Cornell received a one-time commitment fee in the form of
         125,000  shares  of  common  stock on  December  13,  2004,  piggy-back
         registration  rights with respect to such shares,  and a non-refundable
         due diligence fee of $2,500.

         The Company is also obligated to pay Newbridge Securities Corporation a
         fee of 5,556  shares  of common  stock  equal to  $10,000  based on the
         volume weighted  average price of the common stock on December 13, 2004
         under a separate placement agent agreement relating to the Agreement.

         SECURITIES PURCHASE AGREEMENT

         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, and shall issue an additional $500,000 in such convertible
         debentures within five days of the effectiveness of a registration
         statement related to the shares of common stock issuable upon
         conversion of such convertible debentures. The debentures are
         convertible 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 are
         secured by the assets of the Company. The debentures have a three-year
         term and accrue 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 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.

<PAGE>

         INVESTOR REGISTRATION RIGHTS AGREEMENT

         Pursuant to the terms of an Investor Registration Rights Agreement
         dated December 13, 2004 the Company is obligated to prepare and file
         with the SEC a registration statement on Form S-1 or Form SB-2 in order
         to formally register of the shares of common stock issuable upon
         conversion of Convertible Debentures, and fee shares.

         The Company is obligated to maintain the effectiveness of this
         registration statement until either all of the registrable securities
         are eligible to be sold pursuant to Rule 144(k), or the date on which
         the investor shall have sold all of the common stock covered by such
         registration statement, whichever period is shorter.

         In the event such registration statement is not filed by the scheduled
         filing deadline or is not declared effective by the SEC within 120 days
         of the closing date, or if after the registration statement has been
         declared effective by the SEC, sales cannot be made pursuant to the
         registration statement, the Company will be obligated to pay as
         liquidated damages to the holder, at the holder's option, either a cash
         amount or shares of the Company's common stock equal to 2% of the
         liquidated value of the convertible debentures outstanding for each
         30-day period after the relevant deadline until the filing or
         effectiveness requirement is satisfied.




                                      -30-
<PAGE>


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

         Not applicable.

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.

                                    PART III

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

        Our executive officers and directors are as follows:

            NAME                AGE          POSITION
            ----                ---          --------
        David Rector             58          President, C.E.O. and Director
        Albert Passner           66          Director
        Steven Katz              56          Chairman of the Board of Directors

        David Rector             58          Chief Accounting Officer

----------------------

        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 can consummate a successful acquisition or merger. 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.

        The following is a summary of the past involvement by management in
other shell or blank check companies.

        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.

        Our present directors have other full-time employment and will routinely
devote only such time to our business that is necessary. It is estimated that
each director will devote less than ten hours per month to our activities.

                                      -31-
<PAGE>


        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 resign at the request of another person and none of our
current offers or directors are acting on behalf of, or will act at the
direction of any other person.

        The business experience of each of the persons listed above during the
past five years is set forth below:

        ALBERT PASSNER is a consultant in the fields of physics and engineering
following an illustrious career at Lucent/AT&T Bell Labs. Among his many
achievements with a Lucent team were: the development of ultra-low noise
amplifiers used to measure transistor noise; the design of the world's most
powerful pulsed electromagnet; produced a positron plasma in the laboratory;
produced the first optical bi-stability in a semi-conductor; produced the first
transverse lasing in a semi-conductor thin film and demonstrated that stellar
images could be corrected in real time using an electronically deformed mirror.
In addition, Mr. Passner has authored and co-authored more than fifty
publications. Prior to his thirty plus years at Lucent /AT&T Bell Labs, Mr.
Passner served as an engineer at RCA (1961-1963) and a Member of Staff at
Princeton-Penn Accelerator in Princeton, NJ (1963 - 1969). He received a BS in
Physics from CCNY in 1960 and an MS in Physics from NYU in 1966.

        STEVEN KATZ is President of Steven Katz & Associates, Inc., a health
care and technology-based management consulting firm specializing in strategic
planning, corporate development, new product planning, technology licensing, and
structuring and securing various forms of financing. Mr. Katz has been President
of Steven Katz & Associates, Inc. since 1982 and is presently a member of the
Boards of Directors of a number of publicly-held corporations and several
private companies. From January 2000 to October 2001, Mr. Katz was also
President and Chief Operating Officer of Senesco Technologies, Inc., an American
Stock Exchange company engaged in the identification and development of
proprietary gene technology with application to human, animal and plant systems.
From 1983 to 1984 he was a co-founder and Executive Vice President of S.K.Y.
Polymers, Inc., a biomaterials company. Prior to this, Mr. Katz was Vice
President and General Manager of a non-banking division of Citicorp. From 1976
to 1981 he held various senior management positions at National Patent
Development Corporation, including President of three subsidiaries. Prior
positions were with Revlon, Inc. (1975) and Price Waterhouse & Co. (1969 to
1974). Mr. Katz received a Bachelors of Business Administration degree in
Accounting from the City College of New York in 1969.

        DAVID RECTOR Since 1985, Mr. Rector has been the principal of the David
Stephen Group, which provides enterprise consulting services to emerging and
developing companies in a variety of industries. Mr. Rector currently serves as
a member of the Board of Directors of Senseco Technologies, Inc., an American
Stock Exchange biotech agricultural and life sciences company developing
technology in the area of cell death genomics addressing agricultural
applications and human chronic diseases including cancer, heart disease,
glaucoma, arthritis, among others. Mr. Rector also serves as a Director of
Superior Galleries, Inc., a publicly traded company. From 1983 until 1985, Mr.
Rector served as President and General Manager of Sunset Designs, Inc., a
domestic and international manufacturer and marketer of consumer product craft
kits, a wholly-owned subsidiary of Reckitt & Coleman, N.A. From 1980 until 1983,
Mr. Rector served Director of Marketing of Sunset Designs. From 1971 until 1980,
Mr. Rector served in progressive roles with Crown Zellerbach Corporation, a
multi-billion dollar pulp and paper Industry corporation. Mr. Rector received a
Bachelor

                                      -32-
<PAGE>


of Science degree in business/ finance from Murray State University in 1969.


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 $55,500 and $-0-
for the years ended September 30, 2004 and 2003, respectively. Further, on
August 1, 2004 we entered into an employment agreement with our President, CEO
and director. Additional agreements are anticipated in the next twelve months.
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 board of directors, we adopted
a resolutions 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 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.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table provides information, to the best of our knowledge
as of December 15, 2004, 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.

   NAME AND ADDRESS                   AMOUNT AND NATURE OFPERCENT
   OF BENEFICIAL OWNER                BENEFICIAL OWNERSHIP           OF CLASS(1)
   -------------------                ---------------------------    -----------
   Edward F. Cowle *                          1,453,000                 13.4%
     300 Park Avenue, Suite 1712
     New York, NY 10022

   J. Rockwell Smith *                           26,581                   .2%
     P.O. Box 3033
     Park City, UT 84060

   Jim Ruzicka *                                 15,000                   .1%
     P.O. Box 3813
     Park City, UT 84060

   New York University                        4,812,377                 44.4%
     Office of Industrial Liaison
     650 First Avenue, 6th Floor
     New York, NY 10016

   Viking Investment Group II, LTD.(2)        1,067,876                  9.8%
     630 Third Avenue, 5th Floor
     New York, NY 10017

   H. Deworth Williams                        1,000,360                  9.2%
     56 West 400 South, Suite 220
     Salt Lake City, UT 84101

   Defiance Capital, L.L.C.(3)                  740,000                  6.8%
     1180 Avenue of the Americas,
     14th Floor,
     New York, NY 10036

                                      -33-
<PAGE>


   Defiance Fund Ltd(3)                         305,548                  2.8%
     Caracasbaaiweg 199
     P.O. Box 6050
     Curacao, Netherlands Antilles

   All directors and executive officers         80,000                      .7%
     as a group (4 persons)

----------
*  Director and/or executive officer

   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 10,846,946 shares of common stock outstanding on January
            23, 2003.

   (2)      Viking Investment Group II, LTD. is an unrelated private investor.

   (3)      Defiance Capital, L.L.C. is a New York limited liability company and
            the investment manager of Defiance Fund, Ltd., a Cayman Islands
            exempted company. Francois Parenteau is the principal manager,
            member and controlling person of Defiance Capital.

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 $450,060 were received
from major shareholders and directors of our company. The loans are unsecured,
due upon demand and accrue interest at 10% per annum. We are seeking to convert
the loans to equity or repayment them from proceeds of an equity financing.

        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 its proposed business plan or by way
of an express statement of interest contained in our minutes. If any directors
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 our company. There can be no
assurance, however, that these efforts will be successful.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

      (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

                                      -34-
<PAGE>


            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

            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 None.


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

        The aggregate fees billed by our independent auditors, H J & 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 years
ended September 30, 2004 and 2003, and for the review of quarterly financial
statements included in our Quarterly Reports on Form 10-QSB for the quarters
ending June 30 and March 31, 2004 and December 31, 2003 were $19,500.

        AUDIT RELATED FEES

        For the fiscal years ended September 30, 2004 and 2003, the aggregate
fees billed for assurance and related services by H J & Associates relating to
the performance of the audit of our financial statements which are not reported
under the caption "Audit Fees" above, was $0.

        TAX FEES

        For the fiscal years ended September 30, 2004 and 2003, the aggregate
fees billed by H J & Associates for tax compliance, tax advice and tax planning
totaled $-0-.

        We do not use H J & Associates 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. We do not engage H J &
Associates to provide compliance outsourcing services.

        The board of directors has considered the nature and amount of fees
billed by H J & Associates and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining H J &
Associates' independence.

                                      -35-
<PAGE>


                                   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.



                                         By:      /s/   DAVID RECTOR
                                            ------------------------------------
                                                   DAVID RECTOR
                                                   President and Director
                                                   (Chief Executive Officer)
Dated:  January 7, 2005


        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.

            SIGNATURE                TITLE                       DATE
            ---------                -----                       ----

By:  /s/   DAVID RECTOR                                   President and Director
   ----------------------                                 January 7, 2005
       DAVID RECTOR         (Chief Executive Officer)



By:  /s/   DAVID RECTOR                                   President and Director
   ----------------------                                 January 7, 2005
       DAVID RECTOR        (Principal Accounting Officer)


                                      -36-