United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended October 31, 2004

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

        For the transition period from ______________ to ________________

                         Commission File Number: 0-24857

                             POWER TECHNOLOGY, INC.
                     (Exact name of small business issuer as
                            specified in its charter)

                  Nevada                                 88-0395816
     -------------------------------        ------------------------------------
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
      incorporation or organization)


               1770 St. James Place, Suite 116, Houston, TX 77056
               --------------------------------------------------
                    (Address of principal executive offices)

                                 (713) 621-4310
                ------------------------------------------------
                (Issuer's telephone number, including area code)

                                       N/A
   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                     report)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

      Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes [X]  No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 125,689,625 shares of common
stock as of December 17, 2004.

      Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X]

<PAGE>

                             POWER TECHNOLOGY, INC.


                                      INDEX


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements:

           Consolidated Balance Sheet as of October 31, 2004 (unaudited).....F-1

           Consolidated Statements of Operations for the three months and
           nine months ended October 31, 2004 and 2003.......................F-2

           Consolidated Statements of Cash Flows for the three months and
           nine months ended October 31, 2004 and 2003.......................F-3

           Notes to Consolidated Financial Statements........................F-4

Item 2.  Management's Discussion and Analysis or Plan of Operations.......... 2

Item 3.  Controls and Procedures............................................. 4

PART II.    OTHER INFORMATION

Item 1.  Legal Proceedings................................................... 5

Item 2.  Changes in Securities............................................... 5

Item 3.  Defaults on Senior Securities....................................... 5

Item 4.  Submission of Matters to a Vote of Security Holders................. 5

Item 5.  Other Information................................................... 5

Item 6.  Exhibits and Reports on Form 8-K.................................... 5

            Signatures....................................................... 6


                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                             POWER TECHNOLOGY, INC.
                         (a Development Stage Company)

                           CONSOLIDATED BALANCE SHEET
                                  (Unaudited)

                                                                    October 31,
                                                                       2004
                                                                   ------------
Assets
Current assets:
  Cash and equivalents                                             $     57,046
  Prepaid costs                                                          30,562
                                                                   ------------
    Total current assets                                                 87,608

Fixed assets, net                                                         1,883

Other Assets:
  Patents                                                                78,500
  Deferred costs                                                        142,625
                                                                   ------------
    Total other assets                                                  221,125

                                                                   $    310,616
                                                                   ============
Liabilities and Stockholders' (Deficit)

Current Liabilities
  Accounts payable                                                 $    169,163
  Short-term debt                                                        75,016
  Loans payable                                                          49,000
                                                                   ------------

    Total current liabilities                                           293,179

Long-term debt
  Convertible debentures                                                250,000
                                                                   ------------

    Total long-term debt                                                250,000

Stockholders' (deficit):
  Preferred stock, $0.01 par value, 1,000,000 shares
    authorized, none issued or outstanding Common stock,
    $0.001 par value, 750,000,000 shares authorized,
    125,089,625 shares issued and outstanding                           125,090
  Additional paid-in capital                                         10,925,865
  (Deficit) accumulated during development stage                    (11,283,518)
                                                                   ------------

                                                                       (232,563)
                                                                   ------------

                                                                   $    310,616
                                                                   ============


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

                                       F-1

<PAGE>

                             POWER TECHNOLOGY, INC.
                         (a Development Stage Company)

                      CONSOLIDATED STATEMENT OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2004 AND 2003
        AND FOR THE PERIOD JUNE 3, 1996 (INCEPTION) TO OCTOBER 31, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                For the three months ended    For the nine months ended     June 3, 1996
                                                     October 31, 2004              October 31, 2004        (inception) to
                                                --------------------------    --------------------------     October 31,
                                                    2004            2003          2004           2003           2004
                                                -----------    -----------    -----------    -----------    -------------
<S>                                             <C>            <C>            <C>            <C>            <C>
Consulting Revenue                              $        --    $        --    $        --    $        --    $     26,663
                                                -----------    -----------    -----------    -----------    ------------
Expenses:
  General administrative expenses                   125,997         35,053        354,781         55,080       3,053,342
  Reserch & development-related party                    --                        24,366             --       1,374,449
  Consulting fee                                     25,000                       175,000             --         175,000
  Stock-based executive compensation and
    reimbursed expenses                              70,018                       691,272             --         691,272
  Stock-based consulting fee                         76,312                       407,412        156,500         563,912
  Stock-based consulting-related party                   --                        22,500         97,700       4,687,522
  Stock-based patent litigation fees                     --                       152,000             --         152,000
  Loss from impairment of related party advances                                                      --         127,000
  Depreciation and amortization                       1,040          1,040          3,120          3,120          24,037
                                                -----------    -----------    -----------    -----------    ------------
                                                    298,367         36,093      1,830,451        312,400      10,848,534
Other income (expenses)
  Interest expense-related party                                    (5,498)       (58,215)            (7)       (139,155)
  Interest expense                                   (5,867)                       (5,867)                        (5,867)
  Financing fees                                   (315,487)                     (315,487)                      (315,487)
  Interest income                                        --                            --              2             779
  Loss on foreign currency                               --             --             --             --          (1,916)
                                                -----------    -----------    -----------    -----------    ------------

Net (loss)                                      $  (619,721)   $   (41,591)   $(2,210,020)   $  (312,405)   $(11,283,517)
                                                ===========    ===========    ===========    ===========    ============

Weighted average number of common
  shares outstanding-basic and fully diluted     79,838,467     46,020,738     77,195,486     39,384,738
                                                ===========    ===========    ===========    ===========

Net (loss) per share-basic and fully diluted    $     (0.01)   $     (0.00)   $     (0.03)   $     (0.01)
                                                ===========    ===========    ===========    ===========
</TABLE>


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

                                       F-2

<PAGE>

                             POWER TECHNOLOGY, INC.
                         (a Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOW
               FOR THE NINE MONTHS ENDED OCTOBER 31, 2004 AND 2003
        AND FOR THE PERIOD JUNE 3, 1996 (INCEPTION) TO OCTOBER 31, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For the nine months ended     June 3, 1996
                                                                              October 31, 2004        (inception) to
                                                                       ----------------------------     October 31,
                                                                           2004            2003            2004
                                                                       ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>
Cash flows from operating activities                                   $ (2,210,020)   $   (312,405)   $(11,283,518)
Net (loss)
Adjustments to reconcile net (loss) to net cash
  (used) by operating activities
  Depreciation expense                                                        3,120           3,120          24,037
  Loss from impairment of related party advances                                 --              --         127,000
  Stock issued for executive compensation and reimbursement expenses        691,272              --         691,272
  Stock issued for director fees                                             40,000              --          40,000
  Stock issued for consulting services                                      407,386         156,500         563,886
  Stock issued for consulting services-related party                         22,500          97,700       4,687,522
  Stock issued for patent litigation legal fees                             152,000              --         152,000
  Stock issued for interest expense                                          51,956              --         112,079
  Stock issued for financing fees                                           265,487              --         265,487
  Stock issued to acquire patents                                                --              --         (20,000)
  Increase (decrease) in accounts payable                                   125,918          (9,972)        184,191
                                                                       ------------    ------------    ------------
Net cash (used by operating activity                                       (450,381)        (65,057)     (4,456,044)
                                                                       ------------    ------------    ------------
Cash flows from investing activities
  Purchase of equipment                                                          --              --         (21,667)
  Patent acquisition                                                             --              --         (58,500)
                                                                       ------------    ------------    ------------
Net cash (used) by investing activities                                          --              --         (80,167)
                                                                       ------------    ------------    ------------
Cash flows from financing activities
  Proceeds from short-term notes payable                                     75,016              --          75,016
  Proceeds from loans                                                            --          52,591         780,086
  Proceeds (payments) on loans-related party                                 32,198         (15,081)        185,667
  Proceeds from convertible debentures                                      250,000              --         425,010
  Non-cash long-term debt                                                   150,000              --         150,000
  Payment of non-cash long-term debt                                       (150,000)             --        (150,000)
  Issuance of common stock                                                  150,000          30,000       3,127,478
                                                                       ------------    ------------    ------------

Net cash provided by financing activities                                   507,214          67,510       4,593,257
                                                                       ------------    ------------    ------------

Net increase (decrease) in cash                                              56,833           2,453          57,046

Cash and equivalents-beginning                                                  213             153              --
                                                                       ------------    ------------    ------------

Cash and equivalents-ending                                            $     57,046    $      2,606    $     57,046
                                                                       ============    ============    ============
Supplemental disclosures
  Interest paid                                                        $         --    $         --    $         --
                                                                       ============    ============    ============

  Income taxes paid                                                    $         --    $         --    $         --
                                                                       ============    ============    ============
  Non-cash investing and financing activities
    Number of shares issued for consulting services                      24,000,000       4,872,000      41,165,250
                                                                       ============    ============    ============
    Number of shares issued for executive compensation,
      note payable, and interest expense to related party                23,285,483              --      23,285,483
                                                                       ============    ============    ============

    Number of shares issued for executive compensation                    9,250,439              --       9,250,439
                                                                       ============    ============    ============

    Number of shares issued for note payable and interest expense        13,329,215              --      13,329,215
                                                                       ============    ============    ============

    Number of shares issued for patent legal fees                         5,000,000              --       5,000,000
                                                                       ============    ============    ============

    Number of shares issued for debt conversion                                  --      10,000,000      12,377,958
                                                                       ============    ============    ============

    Number of shares issued for interest expense                                 --              --         171,780
                                                                       ============    ============    ============

    Number of shares issued to acquire patents                                   --              --         200,000
                                                                       ============    ============    ============
</TABLE>

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

                                       F-3

<PAGE>

                             POWER TECHNOLOGY, INC.
                          (A Development Stage Company)

                                      NOTES
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND ABILITY TO CONTINUE AS A GOING CONCERN

The consolidated  interim  financial  statements  included herein,  presented in
accordance  with United States  generally  accepted  accounting  principles  and
stated in US dollars, have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed  or omitted  pursuant  to such  rules and  regulations,  although  the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not misleading.

These  statements  reflect  all  adjustments,  consisting  of  normal  recurring
adjustments,  which,  in the  opinion  of  management,  are  necessary  for fair
presentation of the information  contained  therein.  It is suggested that these
consolidated  interim  financial  statements  be read in  conjunction  with  the
financial  statements  of the  Company  for the year ended  January 31, 2004 and
notes  thereto  included in the  Company's  10-KSB  annual  report.  The Company
follows the same accounting policies in the preparation of interim reports.

Results of  operations  for the  interim  periods are not  indicative  of annual
results.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern which  contemplates the  recoverability
of assets and the  satisfaction of liabilities in the normal course of business.
As noted above, the Company is in the development  stage and,  accordingly,  has
not yet generated revenues from operations. Since its inception, the Company has
been engaged  substantially  in financing  activities and developing its product
line,  incurring  substantial  costs  and  expenses.  As a result,  the  Company
incurred net losses of $11,283,518 during the period June 3, 1996 to October 31,
2004. In addition,  the Company's  development  activities  since inception have
been financially sustained by debt and capital contributions from its affiliates
and others.

The ability of the Company to continue as a going concern is dependent  upon its
ability  to  raise  additional  capital  from  the  sale of  Common  Stock  and,
ultimately,  the achievement of significant operating revenues. The accompanying
financial  statements  do not  include  any  adjustments  that might be required
should the  Company be unable to recover  the value of its assets or satisfy its
liabilities.

NOTE 2 - FIXED ASSETS

Depreciation  expense  for the nine  months  ended  October 31, 2004 and 2003 is
$3,120 and $3,120, respectively.

NOTE 3 - SHORT-TERM NOTES PAYABLE

On May 21, 2004,  the Company  obtained a $100,000 line of credit from a private
entity.  The Promissory  Note bears interest at 18% per annum and is due in full
on December 31, 2004. The Company had drawn down $75,016 at October 31, 2004.

NOTE 4 - LONG-TERM DEBT

On March 29, 2004, the Company  entered into a consulting  agreement with SeaWay
Trading  for a period of 2 years.  The  contract is valued at  $150,000,  and is
payable with 5,000,000 shares of the Company's Common Stock. In August 2004, the
Company issued the shares to satisfy the debt and settle the contract.

NOTE 5 - CONVERTIBLE DEBENTURES.

The Company entered into a Securities  Purchase  Agreement  effective August 27,
2004 (the  "Agreement")  and  other  related  agreements  with  Cornell  Capital


                                       F-4
<PAGE>

                             POWER TECHNOLOGY, INC.
                          (A Development Stage Company)

                                      NOTES
                                   (Unaudited)

Partners,  L.P.  ("Cornell")  regarding  the issuance of 5% secured  convertible
debentures in the principal  amount of $500,000  (U.S.) (the  "Debenture").  The
Agreement  provides that $250,000 shall be funded by Cornell within five days of
the date of the Agreement and that $250,000  shall be funded within five days of
the filing of a  registration  statement  with the U.S.  Securities and Exchange
Commission covering the conversion of the Debenture into the Common Stock of the
Company  pursuant  to  the  requirements  of  an  Investor  Registration  Rights
Agreement with Cornell.

The Company has  executed  and  delivered a Security  Agreement  to Cornell that
provides Cornell with a security  interest in substantially all of the assets of
the Company.

The Debenture  issued to Cornell by the Company and the accrued interest thereon
are convertible into the Common Stock of the Company at any time until repayment
of the Debenture at the price per share equal to the lesser of:

         a.       an amount equal to 120% of the closing bid price of the Common
                  Stock  as  listed  on  its  principal  market,  as  quoted  by
                  Bloomberg L.P., as of the closing date; or

         b.       an amount  equal to 100% of the  average  of the three  lowest
                  closing  bid  prices  of  the  Common  Stock,   as  quoted  by
                  Bloomberg, L.P., for the 30 trading days immediately preceding
                  the conversion date.

However,  in no event shall Cornell  convert the  Debentures in such manner that
would cause Cornell and its  affiliates to  beneficially  own more than 4.99% of
the then total issued and outstanding shares of the Common Stock of the Company.

The Company,  at its option,  has the right to redeem the Debentures in whole or
in part  that was  issued to  Cornell  with  three  days  written  notice at the
redemption price equal to 120% of the amount redeemed plus accrued interest.  In
this  event,  the  Company is  required  to issue  Cornell a warrant to purchase
50,000  shares of its Common  Stock  exercisable  on a cash basis at an exercise
price equal to 120% of the closing bid price of the Common  Stock of the Company
on the closing date.

NOTE 6 - RELATED PARTY TRANSACTIONS

On May 11, 2004,  the  Company's  Board of  Directors  ratified and approved the
following:

    1)   All loans and  advances  to the  Company  during the fiscal  year ended
         January 31, 2004 from Lee A. Balak,  formerly a director and  Company's
         president,  to be evidenced by a promissory  note to be dated  December
         31, 2003,  in the amount of $65,423 with interest at the rate of 8% and
         due upon demand.
    2)   That the officers of the Company are  authorized  and directed to issue
         to Lee A. Balak  4,037,485  restricted  shares of the Company's  Common
         Stock as payment for the promissory  note in the amount of $65,423 plus
         interest of $5,233.
    3)   That the  officers of the  Company  are  directed to issue Lee A. Balak
         10,676,570  restricted  shares of the Company's Common Stock as payment
         for previous  loans to the Company in the principal  amount of $173,000
         plus interest of $13,840.
    4)   All loans and advances to the Company  during fiscal year ended January
         31, 2004 from Global  Alliance  Partners  Ltd.,  to be  evidenced  by a
         promissory note to be dated December 31, 2003, in the amount of $78,394
         and non-interest bearing.
    5)   That the officers of the Company are  authorized  and directed to issue
         to Global Alliance Partners Ltd. 4,479,657  restricted shares of Common
         Stock as payment for the promissory note in the amount of $78,394.
    6)   That the  officers of the Company are directed to issue to Lee A. Balak
         8,571,428 restricted shares of the Company's Common Stock in payment of
         his annual  salary for fiscal year ended January 31, 2004 in the amount
         of $150,000.


                                       F-5

<PAGE>

                             POWER TECHNOLOGY, INC.
                          (A Development Stage Company)

                                      NOTES
                                   (Unaudited)

NOTE 7 - STOCKHOLDERS' EQUITY

During the nine months ended  October 31, 2004,  the Company  issued  10,350,000
shares of its Common Stock to various  individuals  and entities for  consulting
services valued at $331,100.

During the nine months ended  October 31, 2004,  the Company  issued  23,285,483
shares of its Common  Stock to Mr. Lee Balak,  its  former  CEO,  for  executive
compensation valued at $426,254,  notes payable totaling $136,810,  and interest
expense totaling $19,073.

During the nine months ended  October 31,  2004,  the Company  issued  9,250,439
shares of its Common Stock to Mr. Bernard Walter, its  newly-appointed  CEO, for
executive compensation valued at $265,018.

During the nine months ended  October 31,  2004,  the Company  issued  4,479,657
shares  of its  Common  Stock to Global  Alliance  Partners  for  notes  payable
totaling $79,108 and interest expense totaling $32,883.

During the nine months ended  October 31,  2004,  the Company  issued  5,000,000
shares  of its  Common  Stock to  various  attorneys  for  legal  fees  totaling
$152,000.

During the nine months  ended  October 31,  2004 the  Company  issued  8,849,558
shares of its Common Stock to Cornell Capital Partners, L.P. as a commitment fee
for a Standby Equity Distribution Agreement valued at $ 265,487.

During the nine months  ended  October 31,  2004 the  Company  issued  5,000,000
shares of its Common  Stock to various  individuals  for  settlement  of debt of
$150,000.

During the nine months  ended  October 31,  2004 the  Company  issued  8,150,000
shares of its Common Stock to various  individuals  for settlement of debt and a
consulting agreement valued at $ 244,500.

NOTE 8 - COMMITMENTS

Consulting agreements

On April 15,  2004,  the Company  entered  into a  consulting  contract  with an
individual to provide  general  business  strategic  consulting  and  management
advisory services. The Company agreed to pay the sum of $5,000 per month in cash
or equity for a period of 12 months.  The Company also agreed to issue  warrants
for the right to purchase up to 5,000,000  shares of the Company's  Common Stock
exercisable at $0.01 per share.  The warrants  expire April 15, 2006. As of July
31, 2004,  the Company issued  3,250,000  shares of its Common Stock pursuant to
the terms of the consulting contract. The Company agreed to satisfy the contract
by issuing various  individuals  8,150,000  shares of its Common Stock valued at
$244,500. The individual cancelled all amounts owed and the warrants.

On  May 4,  2004,  the  Company  entered  into a  consulting  contract  with  an
individual to provide marketing and operation development services in Russia. As
of July 31, 2004, the Company issued 1,100,000 shares of its Common Stock valued
at $40,700 pursuant to the terms of the consulting contract.

On June 30, 2004,  the Company  entered into a consulting  contract with Mr. Lee
Balak, former CEO of the Company, wherein Mr. Balak resigned his position as CEO
of  the  Company,  and is  retained  as a  consultant  to  provide  information,
evaluation and  consulting  services to the Company for  consideration  totaling
$5,000 cash per month for a period of six months.

Employment agreement

On July 1, 2004,  the Company  entered  into an  employment  agreement  with Mr.
Bernard J. Walter to retain Mr. Walter as its CEO. The Company agreed to pay Mr.
Walter  $90,000 (Base Salary) per year through  December 31, 2004,  increase his
pay to $120,000 per year from January 1, 2005 to December 31, 2005, and increase


                                       F-6

<PAGE>

                             POWER TECHNOLOGY, INC.
                          (A Development Stage Company)

                                      NOTES
                                   (Unaudited)

his pay to  $180,000  per year plus annual  increases  of no less than 5% of the
Base Salary  thereafter.  The Company also issued Mr. Walter 7,500,000 shares of
its  restricted  Common Stock  valued at $195,000 on July 8, 2004 and  1,750,000
shares of its  restricted  Common  Stock  valued at $70,018 on October  13, 2004
pursuant to the employment agreement.

On October 30, 2004, the Company entered into an employment  agreement with Joey
Jung to retain Mr. Jung as an executive  through  November 21, 2006. The Company
agreed to pay Mr. Jung $86,250  (Canadian)(base  Salary) and to increase his pay
by no less than 10% of Base Salary each year of employment.  Mr Jung is entitled
to a stock option to acquire  100,000 shares of the Company's  Common Stock at a
price of one half of one cent,  $0.005 U.S. Dollars pursuant to the terms of the
Company's 2004-B Stock Option,  SAR, and Stock Bonus Plan (the"Plan").  Mr. Jung
is entitled to a stock  option to acquire an  additional  900,000  shares of the
Company's  Common Stock at a price of one half of one cent,  $0.005 U.S. Dollars
pursuant to the terms of the Company's 2004-B Stock Option, SAR, and Stock Bonus
Plan  (the"Plan").  Stock options for 450,000 of these  additional  shares shall
vest  upon  the  earlier  of  two  years  from  the  Commencement  Date  or  the
manufacturing and delivery of 100 prototype 12 Volt batteries. Stock options for
the other  450,000  additional  shares  shall vest upon the earlier of two years
from the  Commencement  Date or the completion of design and  fabrication of the
equipment necessary to manufacture the 12 Volt battery in commercial quantities.

NOTE 9 - OPTIONS AND WARRANTS

Stock option plan

On  August  1,  2004,  the  Company's  Board of  Directors  adopted  the  "Power
Technology,  Inc.  2004-B Stock Option,  SAR and Stock Bonus Plan" (the "Plan").
The terms of the Plan  allow for the  issuance  of up to  20,000,000  options to
purchase  20,000,000 shares of the Company's Common Stock or a comparable number
of SAR's or stock bonuses..

The Company had  16,990,000  warrants  issued and  outstanding as of October 31,
2004. The warrants are exercisable on a 1-for-1 basis into 16,990,000  shares of
the Company's Common Stock.

Stock options:

Disclosures  required by Statement of Financial  Accounting  Standards  No. 123,
"Accounting for Stock-Based  Compensation" ("SFAS No. 123"), including pro forma
operating  results  had  the  Company  prepared  its  financial   statements  in
accordance  with the fair value  based  method of  accounting  for stock-  based
compensation   prescribed   therein  are  shown  below.   Exercise   prices  and
weighted-average  contractual  lives of stock options  outstanding as of October
31, 2004 are as follows:

<TABLE>
<CAPTION>
                  Options Outstanding                                    Options Exercisable
---------------------------------------------------------  ------------------------------------------------
                                      Weighted Average       Weighted                           Weighted
                                                              Average                           Average
Exercise Prices        Number             Remaining          Exercise           Number          Exercise
                    Outstanding       Contractual Life        Prices         Exercisable         Price
----------------   ---------------   --------------------  --------------   ---------------   -------------
<C>                    <C>                  <C>               <C>               <C>              <C>
$0.005                  1,000,000            2.0              $0.005               100,000       $0.005
$0.06                   1,500,000            1.5               $0.06             1,500,000       $0.06
$0.024                    490,000           1.42              $0.024               490,000       $0.024
$0.10                  10,000,000           0.42               $0.10            10,000,000       $0.10
</TABLE>


                                       F-7

<PAGE>

                             POWER TECHNOLOGY, INC.
                          (A Development Stage Company)

                                      NOTES
                                   (Unaudited)

Summary of Options Granted and Outstanding:

<TABLE>
<CAPTION>
                                          For the nine months ended October 31,
                          -----------------------------------------------------------------------
                                        2004                                 2003
                          ---------------------------------   -----------------------------------
                                               Weighted
                                                Average                              Weighted
                                               Exercise                              Average
                              Shares             Price             Shares         Exercise Price
                          ----------------   --------------   -----------------   ---------------
<S>                            <C>               <C>                <C>               <C>
Options:
Outstanding at
beginning of year              16,990,000        $0.07                 490,000        $0.024
Granted                         1,000,000        $0.005             11,500,000        $0.09
Cancelled                      (5,000,000)       $0.01                       -            -
                          ----------------   --------------   -----------------   ---------------
Outstanding at end of
period                         12,990,000        $0.09              11,990,000        $0.09
                          ================   ==============   =================   ===============
</TABLE>

The following table  summarizes the pro forma  operating  results of the Company
for October 31, 2004 had  compensation  costs for the stock  options  granted to
employees  been  determined  in  accordance  with the fair value based method of
accounting for stock based compensation as prescribed by SFAS No. 123.

        Proforma  (loss) available to common stockholders   $ (2,210,020)
        Proforma basic and diluted loss per share           $       0.03


NOTE 10 - STANDBY EQUITY DISTRIBUTION AGREEMENT

The Company also entered into a Standby Equity Distribution  Agreement effective
August 27, 2004,  with Cornell (the "Equity  Agreement").  The Equity  Agreement
provides for Cornell to commit to purchase up to an aggregate of  $5,000,000  of
the Common Stock of the Company, subject to certain volume limitations and other
conditions,  as requested from time to time by the Company as its equity capital
needs arise during the two-year term of the Equity Agreement.

Upon written  notice from the Company,  Cornell is committed to purchase  Common
Stock of the Company at a purchase price equal to 97% of the then current market
price.  Market  price is defined to mean the  lowest  closing  bid price for the
Common Stock during a pricing period  beginning on the date following the notice
from the Company  and ending on the fifth  consecutive  trading day  thereafter.
Unless the Company specifically requests Cornell to purchase its Common Stock by
written notification to Cornell,  Cornell has no right to acquire any securities
of the Company and the  Company has no  obligation  to offer and sell its Common
Stock to Cornell.

In no event shall Cornell  purchase Common Stock of the Company that would cause
Cornell and its  affiliates  to own more than 9.9% of the then total  issued and
outstanding shares of the Common Stock of the Company.

The Company has issued 8,849,558 share of its restricted Common Stock to Cornell
as a commitment fee in connection with the Agreement and related agreements.

The  Company has  engaged  Newbridge  Securities  Corporation  as its  exclusive
placement  agent for its sale of Common  Stock to  Cornell  under the terms of a
Placement Agent Agreement.

NOTE 11 - SUBSEQUENT EVENTS

Director fees

The Company agreed to pay two directors a monthly fee of $6,000 per month.  Each
of the two directors  will receive $3,000 per month in cash and $3,000 per month
in the Company's Common Stock.


                                      F-8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

General

         Power  Technology,  Inc.  (the  "Company),  a Nevada  corporation,  was
incorporated  on June  3,  1996.  However,  the  Company  did  not  conduct  any
significant  operations  until March 1998 when it acquired all of the issued and
outstanding  capital stock and assets of PowerTek Technology  Corporation,  Inc.
(formerly  called  Power  Technology,  Inc.) which is  presently a  wholly-owned
subsidiary of the Company.  The Company changed its corporate name from "Zepplin
Production  Corp." to Power  Technology,  Inc.  during March 1998 to reflect the
change in the purposes and nature of its business.

         The Company is a research  and  development  company.  It is  presently
engaged in research and development activities regarding:  (1) batteries for the
automotive and electric car industries, (2) electronic sensors, and (3) pipeline
connection technology.

IN ADDITION TO  HISTORICAL  INFORMATION,  MANAGEMENT'S  DISCUSSION  AND ANALYSIS
INCLUDES  CERTAIN  FORWARD-LOOKING  STATEMENTS,  INCLUDING,  BUT NOT LIMITED TO,
THOSE  RELATED  TO THE GROWTH  AND  STRATEGIES,  FUTURE  OPERATING  RESULTS  AND
FINANCIAL  POSITION  AS WELL AS  ECONOMIC  AND  MARKET  EVENTS AND TRENDS OF THE
COMPANY.  ALL  FORWARD-LOOKING  STATEMENTS  MADE BY THE COMPANY,  INCLUDING SUCH
STATEMENTS  HEREIN,  INCLUDE MATERIAL RISKS AND UNCERTAINTIES AND ARE SUBJECT TO
CHANGE  BASED ON FACTORS  BEYOND THE CONTROL OF THE  COMPANY.  ACCORDINGLY,  THE
COMPANY'S  ACTUAL RESULTS AND FINANCIAL  POSITION COULD DIFFER  MATERIALLY  FROM
THOSE  EXPRESSED  OR IMPLIED  IN ANY  FORWARD-LOOKING  STATEMENT  AS A RESULT OF
VARIOUS FACTORS, INCLUDING WITHOUT LIMITATION FACTORS DESCRIBED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE  COMMISSION  REGARDING  RISKS AFFECTING
THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

         The  following  discussion  of  the  Company's  consolidated  financial
condition  and  results  of  operations  should be read in  connection  with the
Company's   consolidated   financial  statements  and  notes  thereto  appearing
elsewhere herein. Factors that could cause or contribute to differences from the
consolidated  financial  statements  include,  but are not limited to, risks and
uncertainties  related  to the need for  additional  funds,  any  change  in the
operations of the Company,  and the ability of the Company to operate profitably
after its development stage is completed.

Results of Operations for Three Months Ended October 31, 2004

         The following table sets forth certain operating  information regarding
the Company for the three months ended October 31, 2004 and 2003:

                                                          Three Months Ended
                                                               October 31
                                                       -----------------------
                                                          2003          2004
                                                       ---------    ----------
                                                                    (unaudited)
Revenues ...........................................   $       0    $       0
General and administrative expenses ................   $  35,053    $  86,012
Research and Development ...........................   $       0    $       0
Consulting fees ....................................   $       0    $  24,985
Stock-based consulting fees ........................   $  76,312            0
Stock-based executive compensation and
     reimbursement of expenses .....................   $       0    $  70,018
Financing fees and interest expense ................   $       0    $ 321,354
Net income (loss) ..................................   $ (41,591)   $(303,670)
Net income (loss) per share ........................   $   (0.00)   $   (0.01)


Three months ended October 31, 2004 compared with three months ended October 31,
2003

         Revenues.  The Company had no revenues  during the three  months  ended
October 31, 2004 and 2003, and is in the development stage.

         General  and  Administrative   Expenses.   General  and  administrative
expenses increased approximately 145% to $86,012 in the three month period ended
October  31,  2004,  from  $35,053 in 2003.  This  increase  is due  principally
attributable  to:  increased  year end audit fees;  legal fees for filing patent
applications in India, Canada, United States, Australia, Korea, Japan, China and
The European Regional Patent office; patent litigation expenses;  and additional
SEC filing expenses and increase in employee salaries and directors fees.

         Consulting  Fees.  Fees paid to consultants by the Company were $24,985
during the three month period ended October 31, 2004.  The fees were to L. Balak
for work done on the Company's behalf.


                                       2
<PAGE>

         Stock-based Consulting Fees. The Company incurred $76,312 in consulting
fees that were paid by issuance of stock.  The Company paid various  individuals
$71,312 in the  Company's  common stock for  consulting.  The Company paid James
Hill $5,000 in Common Stock for consulting services.

         Stock-based  Compensation and Reimbursed Expenses.  The Company paid BJ
Walter $70,018 of the Company's Common Stock as compensation  under the terms of
his employment contract for the third quarter ended October 31, 2004.

         Interest  and  Financing  Fees.  The  Company  incurred   interest  and
financing  fees of  $321,354  during the third  quarter of 2004.  These fees and
expense  came  from the  arrangement  of short  term and long  term debt and the
signing of a Standby Equity Distribution Agreement.

Results of Operations for the Nine Month Ended October 31, 2004.

         The net loss of the Company  increased to  $(303,670)  during the three
month period ended October 31, 2004, as compared with a loss of $(41,591) during
the same  period of 2003,  an  increase  of  approximately  1,294%,  and was due
primarily to the increase in executive  and directors  compensation,  consulting
fees and financing fees.

         The following table sets forth certain operating  information regarding
the Company for the nine months ended October 31, 2004 and 2003:

                                                         Nine Months Ended
                                                             October 31
                                                    ---------------------------
                                                        2003            2004
                                                    -----------     -----------
                                                                    (unaudited)
Revenues ........................................   $         0     $         0
General and administrative expenses .............   $    55,080     $   314,796
Research and Development ........................   $         0     $    24,366
Consulting fees .................................   $         0     $   174,985
Stock-based executive compensation and
         reimbursed expenses ....................   $    20,027     $   691,272
Stock-based consulting fees .....................   $   156,500     $   407,412
Stock-based consulting fees-related party .......   $    97,700     $    22,500
Stock-based patent litigation fees ..............   $         0     $   152,000
Financing fees and interest expense .............   $         0     $   379,569
Net income (loss) ...............................   $  (312,405)    $(2,170,020)
Net income (loss) per share .....................   $      (.01)    $      (.03)


Nine months ended  October 31, 2004  compared with nine months ended October 31,
2003

         Revenues.  The Company had no revenues  during the first nine months of
2004 and 2003, and is in the development stage.

         General  and  Administrative   Expenses.   General  and  administrative
expenses increased approximately 471% to $314,796 in the nine month period ended
October  31,  2003,   from  $55,080  in  2003.   This  increase  is  principally
attributable  to  increased  year end audit fees;  legal fees for filing  patent
applications in India, Canada, United States, Australia, Korea, Japan, China and
The European Regional Patent office; patent litigation expenses;  and additional
SEC filing Expenses and increase in employee salaries and directors fees.

         Research and Development Costs. Research and development costs expenses
were $24,366  during the nine months  period ended  October 31, 2004 compared to
$-0- during 2003.

         Consulting  Fees.  Consulting  fees  incurred in the  operations of the
Company  increased to $174,985  during the nine month  period ended  October 31,
2004,  from $ 0 during the nine month  period of 2003  primarily  as a result of
payment to Seaway Trading,Inc. for services rendered and to be rendered pursuant
to a two year contract.

         Stock-based Executive Compensation and Reimbursed Expenses.  Executives
of the Company received shares of Common Stock of the Company in lieu of accrued
salary and repayment of expenses incurred on behalf of the Company, which shares
were valued at $691,272 during the nine months ended October 31, 2004,  compared
to $20,027 during the first nine month period of 2003.

         Stock-based  Consulting Fees - Related Party.  The Company paid Stephen
A.  Zrenda,  Esq., a  shareholder  and legal  counsel of the Company,  shares of
common stock of the Company valued at $22,500 for legal services to the Company,
compared  to $97,700  paid as stock  based  consulting  fees to various  related
parties during the first nine month period of 2003.


                                       3
<PAGE>

         Stock-based  Patent  Litigation  Legal Fees. The Company paid attorneys
for the Company  shares of Common  Stock of the Company  valued at $152,000  for
their  fees  involving  the  patent  dispute  litigation  filed  by the  Company
regarding  its  battery  technology.  No shares of Common  Stock were  issued to
attorneys during the first nine month period for 2003.

         Results  of  Operations.  The net  loss  of the  Company  increased  to
$(2,170,020)  during the nine month period ended  October 31, 2004,  as compared
with a loss of  $(312,405)  during  the same  period  of 2003,  an  increase  of
approximately  595%,  and was due  primarily to  increased  year end audit fees;
legal fees for filing  patent  applications  in India,  Canada,  United  States,
Australia,  Korea, Japan, China and The European Regional Patent office;  patent
litigation  expenses;  additional SEC filing expenses;  additional  research and
development expenses; additional consulting fees; the market value of the shares
of Company's  Common Stock issued to pay Lee A. Balak's  fiscal year 2003 salary
during  fiscal year 2004;  the market  value of the shares of  Company's  Common
Stock  issued to Bernard J. Walter  pursuant  to his  employment  contract;  the
market  value of the shares of Company's  Common  Stock issued to the  Company's
patent  litigation  counsel to  prosecute  the civil  action  described in Legal
Proceedings,  Item  1 of  Part  II,  below.  The  Company  incurred  significant
financing  fees in obatiningg  proceeds  through  convertible  debentures  and a
Standby Equity Distribution Agreement.

Capital Expenditures, Capital Resources and Liquidity

         The following summary table (unaudited) presents comparative cash flows
of the Company for the periods indicated.

                                                   Nine Months Ended October 31,
                                                    ----------------------------
                                                        2004            2003
                                                    -----------     -----------

Net cash used in operating activities ...........   $(1,000,386)    $   (65,057)

Net cash used in investing activities ...........   $         0     $         0

Net cash provided by financing activities .......   $   700,005     $    30,000


         Capital Expenditures.  The Company incurred no capital expenditures for
office  equipment,  office furniture or other fixed assets during the nine-month
period ended October 31, 2004.

         Liquidity and Capital  Resources.  The Company's capital resources have
historically  been  provided by the sale of its Common  Stock,  the  exercise of
warrants and options,  the  conversion of  convertible  debt,  and by short-term
loans.

         The Company intends to raise additional  capital through an offering of
its Common Stock or other  securities to provide  additional  working capital to
fund future operations.

         At October 31,  2004,  the Company had current  assets of $87,608,  and
current  liabilities  of  $293,179,  resulting in a working  capital  deficit of
$(205,571).

         Net cash used in operating activities decreased approximately,  437% to
$(1,000,386)  for the nine months ended October 31, 2004, from $(65,057) for the
nine months ended  October 31, 2003.  The decrease in net cash used in operating
activities  was due primarily to increased  year end audit fees;  legal fees for
filing patent applications in India, Canada,  United States,  Australia,  Korea,
Japan,  China  and  The  European  Regional  Patent  office;  patent  litigation
expenses;  additional SEC filing expenses;  additional  research and development
expenses;  additional  consulting  fees;  the  market  value  of the  shares  of
Company's  Common  Stock  issued to pay Lee A.  Balak's  fiscal year 2003 salary
during  fiscal year 2004;  the market  value of the shares of  Company's  Common
Stock  issued to Bernard J. Walter  pursuant  to his  employment  contract;  the
market  value of the shares of Company's  Common  Stock issued to the  Company's
patent  litigation  counsel to  prosecute  the civil  action  described in Legal
Proceedings,  Item 1 of Part II, below. The Company also incurred financing fees
associated with the convertible debentures.

Item 3.  Controls and Procedures

         The disclosure  controls and  procedures of the Company,  as defined in
Rule 13a-14(c) and Rule 15d-14(c)  under the Securities and Exchange Act of 1934
have been  reviewed and  evaluated by the  President  and by the  Secretary  and
Treasurer  of the Company  within 90 days of the filing  date of this  quarterly
report for the nine month period ended October 31, 2003, and have concluded that
the controls and procedures have been and are effective.

         There have been no  significant  changes in  internal  controls  of the
Company  or  other  factors  that  could  significantly  affect  these  controls
subsequent to the date of their  evaluation,  including any  corrective  actions
with regard to significant deficiencies and material weaknesses.


                                       4
<PAGE>

                           PART II - OTHER INFORMATION

Item l.  Legal Proceedings

         The Company filed a civil action against Mr. Alvin A. Snaper,  a former
director  and  officer of the  Company,  and  against  Neo-Dyne  Research,  Inc.
("Neo-Dyne"),  his research and development  company,  based upon allegations of
breach  of  fiduciary  relationship  and  breach of  contract,  and  seeking  an
injunction,  declaratory relief and the turnover of Company property. Mr. Snaper
and  Neo-Dyne  filed an answer and  asserted  counterclaims  alleging  fraud and
misrepresentation,   breach  of  contract,  and  intentional  interference  with
prospective  economic  advantage,  and  seeking an  injunction  and  declaratory
relief.  The  litigation  involves  the  ownership  and  rights  to the  battery
technology  and patent  rights of the Company.  Because the  principal  business
operations of the Company has involved  research and  development of its battery
technology,  the rights to continue  its  research  and  development  activities
regarding  batteries  and its rights to license  and market such  technology  is
significantly  important  to the  Company  and its future  business  operations.
Presently,  the outcome of such  litigation is not reasonably  possible to fully
evaluate  and  predict;  however,  settlement  discussions  are  actively  being
conducted with Mr. Snaper.  The Court has ordered that the trial of this lawsuit
be commenced on January 31, 2005.

Item 2. Changes in Securities

         During the three  month  period  ended  October 31,  2004,  the Company
issued  500,000  shares of its Common Stock to Hugo P. Pomrehn in  consideration
for services rendered as a director of the Company.

         During the three  month  period  ended  October 31,  2004,  the Company
issued 500,000 shares of its Common Stock to F. Bryson Farrill in  consideration
for services rendered as a director of the Company.

         During the three  month  period  ended  October 31,  2004,  the Company
issued  13,650,000  shares  of its  Common  Stock  to a group  of 10  individual
consultants for services rendered

         During the three  month  period  ended  October 31,  2004,  the Company
issued 8,849,558 shares of its Common Stock to Cornell Capital  Partners,  LP in
consideration  under the terms of its  Securities  Purchase  Agreement  with the
Company.

         During the three  month  period  ended  October 31,  2004,  the Company
issued   1,750,439   shares  of  its  Common  Stock  to  Bernard  J.  Walter  in
consideration  for services rendered as President of the Company under the terms
of his employment contract.

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         None

Item 5.  Other Information.

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

               10.      Material Contracts

                        10.1     Employment  Contract  between  the  Company and
                                 Joey Jung dated October 30, 2004.

                        10.2     Securities   Purchase  Agreement  with  Cornell
                                 Capital Partners, L.P. dated August 27, 2004 is
                                 incorporated  herein by  reference  to  exhibit
                                 10.1 in the  Form  8-K  current  report  of the
                                 Company filed September 2, 2004.

                        10.3     5%  Secured  Convertible  Debenture  issued  to
                                 Cornell Capital Partners, L.P. dated August 27,
                                 2004 is  incorporated  herein by  reference  to
                                 exhibit 10.1 in the Form 8-K current  report of
                                 the Company filed September 2, 2004.

                        10.4     Security   Agreement   with   Cornell   Capital
                                 Partners,   L.P.   dated  August  27,  2004  is
                                 incorporated  herein by  reference  to  exhibit
                                 10.1 in the  Form  8-K  current  report  of the
                                 Company filed September 2, 2004.


                                       5
<PAGE>

                        10.5     Standby  Equity  Distribution   Agreement  with
                                 Cornell Capital Partners, L.P. dated August 27,
                                 2004 is  incorporated  herein by  reference  to
                                 exhibit 10.1 in the Form 8-K current  report of
                                 the Company filed September 2, 2004.

               99.1     Certification of Bernard J. Walter
               99.2     Certification of Bernard J. Walter

(b)   Reports on Form 8-K.

           On September  2, 2004,  the Company  filed a Form 8-K current  report
           concerning its issuance of a convertible debenture to Cornell Capital
           Partners, L.P.


                                   SIGNATURES

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

                                    Power Technology, Inc.


Date: December 20, 2004             By: /s/ Bernard J. Walter
                                        ------------------------------------
                                            Bernard J. Walter, President and
                                            Chief Financial Officer
                                            and Principal Accounting Officer


                                       6