SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-KSB





Annual
      Report Pursuant to Section 13 or 15(d) of


the
      Securities Exchange Act of 1934





For
      the
      Fiscal Year Ended June 30, 2005


Commission
      File Number: 333-118801





SMARTMETRIC,
                INC.(Name
                of Small Business Issuer in its charter)Nevada
            05-0543557(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)67
                Wall Street, 22ndFloor, New York, New York
            10005(Address
                of principal executive offices)
            (Zip
                Code)Registrant's
                telephone number, including area code (212) 859-5007Securities
                registered pursuant to Section 12(g) of the Act:Common
                Stock $.001 Par Value(Title
                of Class)





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





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 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





The
      issuer's revenues for its most recent fiscal year were $0.





The
      aggregate market value of the voting stock held by non-affiliates of the
      Registrant was approximately $12,832,590 on September 30, 2005 based on offering
      price of $1.50 in the registration statement on Form SB-2 declared effective
      with the Securities and Exchange Commission on August 13, 2005. For the purposes
      of the foregoing sentence, the term "affiliate" includes each director and
      officer of the Registrant.





The
      number of shares outstanding of the Registrant's common stock on September
      30,
      2005 was 59,115,060.





Documents
      Incorporated By Reference - See Item 13 to this Form 10-KSB.







1


TABLE
      OF
      CONTENTS







Page
                  #Item
                  1:
              Description
                  of Business
              3Item
                  2:
              Description
                  of Property
              9Item
                  3:
              Legal
                  Proceedings
              9Item
                  4:
              Submission
                  of Matters to a Vote if Security Holders
              9Item
                  5:
              Market
                  for the Registrant’s Common Stock and Related Stockholder
                  Matters
              9Item
                  6:
              Management’s
                  Discussion & Analysis of Financial Condition and Results of
                  Operations
              10Item
                  7:
              Financial
                  Statements
              13Item
                  8:
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              13Item
                  8A:
              Control
                  and Procedures
              13Item
                  8B:
              Other
                  Information
              13Item
                  9:
              Directors
                  and Executive Officers of the Registrant
              13Item
                  10:
              Executive
                  Compensation
              15Item
                  11:
              Security
                  Ownership of Certain Beneficial Owners and Management
              16Item
                  12:
              Certain
                  Relationships and Related Transactions
              17Item
                  13:
              Exhibits
              18Item
                  14:
              Principal
                  Accountant Fees and Services
              18




2




ITEM 1.
            DESCRIPTION
                OF BUSINESS





*General*





SmartMetric
      was incorporated pursuant to the laws of the State of Nevada on December 18,
      2002.





SmartMetric's
      Chief Executive Officer, Colin Hendrick, has created patented technology which
      is being used in the prototype of the SmartMetric "Biometric Card," a credit
      card-sized device which utilizes a finger print sensor to authenticate a
      person's identity. The embedded sensor takes the image of the person's
      fingerprint and matches it with a fingerprint stored on the card. On September
      14, 2004, Mr. Hendrick received a United States patent with regard to the use
      of
      the Biometric card. Mr. Hendrick transferred the patent which was then pending
      to Applied Cryptology, Inc., a Nevada corporation, owned by Mr. Hendrick, in
      June 2004. On August 1, 2004, Applied Cryptology, Inc. entered into a license
      agreement with SmartMetric pursuant to which SmartMetric has the right to use,
      manufacture and sell products utilizing the patented technology in perpetuity.
      This patent was granted on September 14, 2004. In March 2005, Mr. Hendrick
      transferred his shares of SmartMetric to Applied Cryptology.





As
      of
      June 30, 2005, SmartMetric had negative stockholders' equity of
      $254,668 ,
      and
      cash of $928 .
      SmartMetric is currently engaged in its initial public offering, which was
      declared effective by the commission on August 13, 2005. The minimum offering
      is
      $499,999 and the maximum is $10,000,000. As of September 30, 2005, SmartMetric
      has raised $590,949 in its public offering. Management of SmartMetric believes
      that in the event SmartMetric raises less than the Maximum Offering, SmartMetric
      expects it will have to raise additional funds 12 months after completion of
      the
      offering.





SmartMetric
      has no off-balance sheet arrangements that are reasonably likely to have a
      material current or future effect on SmartMetric's financial condition, results
      of operations or liquidity.





The
      SmartMetric Biometric Card





SmartMetric
      has designed a biometric card utilizing patented technology licensed to the
      company. A prototype of this card has recently been completed.





SmartMetric
      believes that its biometric card will have several functions:





§
            The
                fingerprint sensor will facilitate instant authorization
                verification;





§
            In
                card biometric measurement storage will safeguard personal
                information;





§
            In
                card biometric storage will permit access, identity and transaction
                control verification;





§
            Instant
                identity verification will be secure since such information is contained
                in the card and not in centralized
                database





The
      SmartCard has been designed to contain up to two on-card processors and up
      to1
      gigabyte of memory. SmartMetric believes this will enable the card to store
      the
      full image of a fingerprint and a database capable of storing information such
      as medical records, financial or banking records or human resource card.
      SmartMetric believes its SmartCard may be used as a credit card, building access
      card or computer access card.





3


The
      SmartMetric SmartCard, because it contains information unique to the individual
      user, will be useless in the hands of others. Unlike a picture-based
      identification system, the SmartMetric biometric card has been designed to
      operate exclusively with the registered user. And unlike biometric security systems
      where the biometric information is stored at a central location, we believe
      that
      confirmation of identify with the SmartMetric system may not be interrupted
      during the verification process or while it is stored at the remote location
      since the biometric information is embedded in the card, itself, in a memory
      chip protected by encryption. The fingerprint sensor built into the card has
      been designed to activate the card. Without a match with the encrypted
      fingerprint already stored on the card, the SmartCard will not
      operate.





The
      SmartMetric biometric card is a card that authorized persons will carry with
      them and activate to obtain access. Such activation will take place by placing
      a
      finger on a fingerprint sensor. The SmartMetric SmartCards are designed to
      be
      read by both contact and contact-less card acceptor devices. For contact card
      acceptor devices, the device must touch a chip mounted on the surface of the
      SmartCard. This contact allows the card to transmit data to the reading device.
      For contact less acceptor devices, a radio frequency signal will be sent from
      the card to a radio frequency signal receiver in the acceptor device. In both
      types of acceptor devices, the activation signal is sent only when there has
      been a positive match of fingerprint-by-fingerprint sensor. The card acceptor
      devices are available from several different third parties and do not require
      any licenses.





The
      memory and computational capacities of the SmartCard will be used to store
      a
      template of each user's fingerprint(s). The memory capacity will store a
      template of a user's fingerprint(s). The computational capacity will be used
      to
      process a digitized image from the fingerprint sensor to confirm a match (or
      no
      match) with the fingerprint template. Additional computational processes such
      as
      increased cryptology will depend on the requirements of specific
      customers.





SmartMetric
      believes its SmartCard may be used for a variety of security applications such
      as airport employed access and identity, building access and identity, computer
      network access, drivers licenses, passports and check cashing identity
      verification.





Fingerprint
      Sensor





The
      fingerprint sensor used in the SmartMetric SmartCard is known as the "Metric
      60"
      fingerprint sensor. The Metric 60 allows for fingerprints which are either
      wet
      or dry to be recognized or authenticated. It is also pressure sensitive.
      SmartMetric purchases the fingerprint sensor from an unrelated third party,
      but
      has no signed agreement with such party. The fingerprint sensor is available
      from other suppliers. SmartMetric has designed a method of integrating the
      fingerprint sensor on the card, which is then connected to a microprocessor,
      which is connected to a rechargeable power supply in the card and a memory
      chip
      for storage, retrieval and matching of the fingerprint on the card.





The
      SmartMetric biometric card has been designed to utilize a rechargeable, lithium
      polymer battery. Because this battery is available in a variety of shapes and
      sizes, SmartMetric can design its cards in similar variety of shapes. This
      lithium polymer battery is owned and manufactured by a third party unaffiliated
      with SmartMetric. This battery will be integrated into the card. SmartMetric
      has
      located a supplier for this battery, but has not entered into an agreement
      with
      such supplier. When negotiating an agreement for the purchase of lithium polymer
      batteries, we will take into such consideration the price of the batteries,
      the
      quality of the batteries, the reputation of the supplier, and its ability to
      supply us with batteries in the quantities we require.





The
      SmartMetric card has been designed to meet the International Standard
      Organization 7816 Flex requirements so that it will not break or crack when
      bent
      or flexed. The prototype card has been designed to meet ISO requirements for
      crush test, drop test and nail test. It has been designed to operate in a wide
      range of temperatures.





4


The
      SmartCard has been designed to offer the option of a built-in radio frequency
      transmitter for contactless entry and identity verification.





Marketing
      Agreement





On
      October 30, 2003, SmartMetric entered into an agreement with Information
      Spectrum, Inc., a company located in Annandale, Virginia. Information Spectrum,
      Inc. shall be referred to as ISI. Pursuant to this agreement, ISI shall seek
      to
      market SmartMetric's SmartCard technology by actively seeking customers
      interested in purchasing, credential cards which incorporate SmartMetric's
      patented SmartCard technology. Prior to ISI offering SmartMetric products by
      submitting a formal proposal, ISI and SmartMetric shall enter into a "Teaming
      Agreement" which will define each party's rights and obligations concerning
      that
      particular sales opportunity. Every proposal will require its own Teaming
      Agreement.





Pursuant
      to this Agreement, ISI is the exclusive reseller of SmartMetric products to
      agencies of the United States government and the Government of Canada. In
      addition, ISI has the right of first refusal for other marketing, sales or
      re-sales opportunities for customers other than the United States
      or


Canadian
      governments.





The
      terms
      of this agreement is two years and may be extended upon mutual agreement of
      the
      parties. This agreement may be terminated earlier by either party upon 30 days
      written notice.





The
      Security Technology Industry





*Biometrics*





Biometric
      technologies identify users by electronically capturing a specific biological
      or
      behavioral characteristic of that individual, such as a fingerprint or voice
      or
      facial feature, and creating a unique digital identifier from that
      characteristic. Because this process relies on largely unalterable human
      characteristics, positive identification can be achieved independent of any
      information possessed by the individual seeking authorization.





The
      process of identity authentication typically requires that a person present
      for
      comparison one or more of the following factors:





§
            Something
                known such as a password, PIN or mother's maiden
                name;





§
            Something
                carried such as a token, card, or key;
                or





§
            Something
                physical such as fingerprint, voice pattern, signature motion, facial
                shape or other biological or behavioral
                characteristic.





Comparison
      of biological and behavioral characteristics has historically been the most
      reliable and accurate of the three factors, but has also been the most difficult
      and costly to implement into a single product that can automatically verify
      the
      identity of a user accessing a computer network or the Internet. However, recent
      advances in biometric collection technologies (both biometric hardware products
      and their associated processing software) have increased the speed and accuracy
      and reduced the cost of implementing biometrics in commercial environments.
      Management believes that individuals, Web site operators, government
      organizations, and businesses will increasingly use this method of identity
      authentication.





5


Biometrics
      refers to the automatic identification of a person based on his/her
      physiological or behavioral characteristics. This method of identification
      is
      preferred over traditional methods involving passwords and personal
      identification numbers ("PINs") for various reasons: (i) the person to be
      identified is required to be physically present at the point of identification
      to be identification; (ii) identification based on biometric techniques obviates
      the need to remember a password or carry a token. By replacing PINs, biometric
      techniques can potentially prevent unauthorized access to or fraudulent use
      of
      cellular phones, SmartCards, desktop PCs, workstations and computer networks.
      It
      can be used during transactions conducted via telephone and Internet (e-commerce
      and e-banking). In automobiles, biometrics could replace keys-less entry
      devices.





PINs
      and
      passwords may be forgotten, and token-based methods of identification, e.g.,
      passports and driver's licenses, may be forged, stolen or lost. Various types
      of
      biometric systems are being used for real-time identification, with the most
      popular based on face recognition and fingerprint matching. Other biometric
      systems utilize iris and retinal scanning, speech, facial thermograms and hand
      geometry.





A
      biometric system is essentially a pattern recognition system, which makes a
      personal identification by determining the authenticity of a specific
      physiological or behavioral characteristic possessed by the user. An important
      issue in designing a practical system is to determine how an individual is
      identified.





There
      are
      two different ways to resolve a person's identity: verification and
      identification. Verification (Am I whom I claim I am?) involves confirming
      or
      denying a person's claimed identity. In identification, one has to establish
      a
      person's identity (Who am I?).





The
      SmartMetric SmartCard





The
      SmartMetric biometric SmartCard, an intelligent cryptographic platform, is
      a
      credit card sized plastic card embedded with an integrated circuit chip and
      biometric fingerprint sensor. While we have completed a prototype of this card,
      we have not yet begun to manufacture. The SmartMetric SmartCard has been
      designed to provide not only memory capacity, but also computational capability
      along with secure non-refutable identification of the user. We believe that
      the
      self-containment of SmartMetric's SmartCard will make it substantially resistant
      to attack, as it will not need to depend upon potentially vulnerable external
      resources. Because of this characteristic, we expect that the SmartMetric
      SmartCard may be used in different applications which require strong security
      protection and authentication.





The
      physical structure of a SmartCard is specified by the International Standards
      Organization ("ISO") 7810, 7816/1 and 7816/2. Generally, it is made up of three
      elements. The plastic card is the most basic one and has the dimensions of
      85.60mm x 53.98 x 0.80mm. A printed circuit and an integrated circuit chip
      are
      embedded on the card.





In
      the
      SmartMetric SmartCard the printed circuit conforms to ISO standard 7816/3 which
      provides five connection points for power and data. It will be hermetically
      fixed in the recess provided for the card and will be burned onto the circuit
      chip, filled with a conductive material and sealed with contracts protruding.
      The printed circuit is a part of, and not distinct from, the SmartCard. The
      printed circuit will protect the circuit chip from mechanical stress and static
      electricity. Communication with the chip will be accomplished through contacts
      that overlay the printed circuit. The integrated circuit chip defines the
      capability of a smart chip. Typically, an integrated circuit chip consists
      of a
      microprocessor, read only memory (ROM), non-static random access memory and
      electrically erasable programmable read only memory which will retain its state
      when the power is removed. The current circuit chip is made from silicon, which
      is not flexible and particularly easy to break. In order to avoid breakage
      when
      the card is bent, the chip is restricted to only a few millimeters in
      size.





6


Furthermore,
      the physical interface which allows data exchange between the integrated circuit
      chip and the card acceptor device will be limited to 9600 bits per second.
      The
      communication line is intended to be a bi-directional serial transmission line,
      which conforms to ISO standard 7816/3. All the data exchanges will be under
      the
      control of the central processing unit in the integrated circuit chip. Card
      commands and input data will be sent to the chip that responds with status
      words
      and output data upon the receipt of these commands and data. Information will
      be
      sent in half duplex mode (transmission of data is in one direction at a time).
      This protocol, together with the restriction of the bit rate, is designed to
      prevent massive data attack on the card.





In
      general, the size, the thickness and bend requirements for the SmartCard were
      designed to protect the card from being spoiled physically. However, this also
      limits the memory and processing resources that may be placed on the card.
      In
      the past, industry participants have encountered particular difficulty in
      attempting to integrate high memory chips and finger sensor technology that
      will
      withstand both the size constraints and physical daily usage such as bending
      in
      a user's wallet sitting in his back pocket. We believe SmartMetric has met
      and
      overcome the physical demands of the credit card to produce what is a powerful
      on-card computer processor with state-of-the-art biometric technology. However,
      we believe that additional engineering is necessary to reduce the size to the
      circuitry of the SmartCard prototype. We anticipate such engineering to cost
      $50,000. We expect that such re-engineering will be complete within 90 days
      after receipt of the Minimum Offering proceeds. The minimum offering proceeds
      were received by SmartMetric on September 14, 2005.





The
      Patent





Applied
      Cryptology, Inc., a company owned and controlled by Colin Hendrick, President
      and CEO of SmartMetric, owns a patent for a SmartCard process. This patent
      has
      been licensed to SmartMetric.





The
      patent asserts claims to the following processes:





§
            A
                system for managing digital rights of digital content over a
                network.





§
            A
                data card contains user information including digital rights information
                specific to a users, the data card having memory component for enabling
                information to be stored within the data
                card.





§
            A
                data card reader is adapted to access the user information contained
                on
                the data card when the data card is in communication with a card-reading
                device.





§
            A
                data processor in communication with the data card reader is adapted
                to be
                connected to the network.





§
            An
                application program resides on the memory component of the data card,
                the
                application program being configured to operate in conjunction with
                a
                universal language for creating and controlling digital rights, to
                manage
                user rights of the digital content available on the network based
                on the
                digital rights information specific to the user which is contained
                on the
                data card.





7


License
      Agreements





On
      August
      1, 2004, SmartMetric entered into a license agreement with Applied Cryptology,
      Inc., a Nevada corporation which holds a  United States 
      patent
      for certain SmartCard technology. Pursuant to the license agreement, SmartMetric
      has the right to make use of this technology for the purpose of developing
      software and systems to be used by SmartMetric to provide certain applications
      including any or all of the following: 1) secure transactions over the Internet
      from home and office computers; 2) an automatic method for connecting to remote
      computers; 3) a method of developing targeted advertising to home and/or office
      computers; 4) identity verification and access control as provided for in the
      patent. Colin Hendrick, President, Chief Executive Officer and Chairman of
      the
      Board of Directors of SmartMetric, is the sole officer and shareholder of
      Applied Cryptology, Inc.





Pursuant
      to this license agreement, Applied Cryptology, Inc. will receive 2% of all
      revenues generated by SmartMetric on products which utilize this patented
      technology. The license fee will be paid on a quarterly basis based on revenues
      received during that quarter. The license fee shall be due within 45 days of
      the
      end of each quarter. In the event no revenues were generated through the use
      of
      any of the licensed patents during a given quarter, no money shall be owed
      Applied Cryptology, Inc. for such quarter. Late license fees shall accrue
      interest at a rate of 2% per quarter. Applied Cryptology, Inc. may rescind
      the
      license agreement and reclaim all rights and interest in the patents if certain
      events, such as SmartMetric's filing for bankruptcy protection or
      reorganization, occur.





This
      license agreement will remain in effect for the life of the patent. SmartMetric
      may utilize its patented technological applications anywhere in the world
      without limitation.





Competition





SmartMetric
      is a company involved in identity management. This industry is dominated by
      several large international corporations such as BioNetrix, Keyware, Genplus
      and
      Precise Biometrics, all of which manufacture and/or distribute and market
      identity management products. These companies and many others are more
      established than SmartMetric, which will put it at a competitive disadvantage.
      For example, Precise Biometrics, a company whose stock is listed on the
      Stockholm stock exchange, sells products which utilize its patented biometric
      fingerprint authentication technology which allows it to isolate the
      characteristic features of a human fingerprint and to match such features with
      a
      stored template to secure identity. However, Precise Biometrics is publicly
      traded and better funded then SmartMetric, and thus better known. SmartMetric's
      licensed patent allows for such data to be stored on a credit card sized device;
      however, SmartMetric only has a prototype of its SmartCard.





BioNetrix
      offers a solution for systems security - user authentication and sign on. This
      company was founded in 1997.





SmartMetric
      is a newcomer to this industry, with no proven track record and an untested
      product. We are not as well known as our potential competitors, nor are we
      certain our SmartCard will work as intended or that it will meet clients' needs.
      We are at a competitive disadvantage when compared to those better known, better
      funded and experienced identity management companies. SmartMetric will be
      competing with these as well as smaller and mid-size identity management
      manufactures, distributors, and developers.





8


Employees





As
      of
      September 30, 2005, SmartMetric has one full time employee: Colin Hendrick,
      and
      three part-time employees. Mr. Hendrick does not belong to any
      unions.





ITEM 2.
            DESCRIPTION
                OF PROPERTY:





The
      company currently uses office space provided by its president at no cost to
      the
      company. SmartMetric will start paying rent for this space upon successful
      completion of the public offering.





In
      November 2004, SmartMetric executed a lease agreement for office space in
      Aventura, Florida. This agreement provides for a monthly rental fee of $800
      and
      an initial term of six months, ending May 31, 2005. Unless SmartMetric notifies
      the lessor of its intent to terminate the lease at least 60 days prior to the
      termination date (which notification was not made), it automatically renews
      for
      additional one-year terms.  This agreement was terminated in August
      2005.




On
      September 1, 2005, SmartMetric entered into a
      one-year lease agreement for office space in Surfside, Florida at a month rent
      of $583.00.  This lease terminates on August 31, 2006.





ITEM 3.
            LEGAL
                PROCEEDINGS:





Neither
      SmartMetric, nor any of its officers, directors or controlling shareholders
      are
      parties to any current litigation or aware of any threatened litigation against
      them.





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




None.





ITEM
                5.
            MARKET
                FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
                MATTERS:





As
      of the
      date of this Form 10-KSB, SmartMetric’s securities have not listed on any
      exchange. There is no market for such securities.





As
      of
      September 30, 2005 the approximate number of Shareholders of record of the
      Company was 650. Any payment of dividends will be within the discretion of
      the
      Company's Board of Directors and will depend, among other factors, on earnings,
      capital requirements and the operating and financial condition of the Company.
      At the present time, the Company's anticipated financial capital requirements
      are such that it intends to follow a policy of retaining earnings in order
      to
      finance the development of its business.





In
      October 2003, SmartMetric issued 50,000,000 shares of common stock to the
      President of SmartMetric, Colin Hendrick, at $.001 per share for a total of
      $50,000. From November 2003, to June 30, 2004 SmartMetric sold an additional
      8,560,257 shares to Mr. Hendrick at $.01 per share for a total of $85,602.57.
      Mr. Hendrick completed payment for these shares in October 2004. These sales
      were made pursuant to Section 4(2) of the Securities Act of 1933. There was
      no
      general solicitation or advertising, and Mr. Hendrick did not purchase the
      shares with the intent to resell them. In August 2004, Mr. Hendrick assigned
      8,560,257 shares to approximately 600 people for no consideration. Each of
      these
      transferees registered his/her shares in the public offering registration
      statement.





In
      September 2004 through October 2004, SmartMetric sold 68,207 shares to 9 people
      at $1.50 per share: Leslie Price; Peter Gummer and Kim Murray; Robert and
      Narelle Renfrew; Cheryl McLean; David Frank Walker; Jim Truant; Mark Edwards
      and
      Jenny Lee Stone Superannuation Fund, Jonathan Murphy; and Ronald D. and Susanne
      J. Leonard. These shares were sold by Peter Sleep, a director of SmartMetric.
      Of
      the nine, six persons were already shareholders of SmartMetric and all nine
      were
      friends and/or acquaintances of Mr. Sleep's. All were familiar with SmartMetric
      and Mr. Sleep prior to September 2004. These nine people were presented with
      the
      financial statements of SmartMetric, as well as a subscription agreement. They
      did not rely on the registration statement filed with the SEC when making the
      decision to invest in SmartMetric. SmartMetric relied upon Section 4(2) of
      the
      Securities Act when offering these securities to a limited number of persons
      without general solicitation or advertising.





9


In
      December 2004 through January 2005, SmartMetric sold 92,630 shares of common
      stock to 11 people at $1.50 per share for a total of $138,945. These 11 people
      were: Veronica Heather Hehir; Robert Michael Hehir; Jacqueline Stone; Wayne
      George Shirley; Colleen R. King Pty Ltd.; David Walker; Leslie Vago; Paul
      Southern; Julie Martin; Josef Wehr; and Robert Towers & Associates Pty Ltd.
      Of these 11 people, 8 were existing shareholders of SmartMetric. The shares
      were
      sold by Peter Sleep, a director of the company. These 11 people were presented
      with the financial statements of SmartMetric, as well as a subscription
      agreement. They did not rely on the registration statement filed with the SEC
      when making the decision to invest in SmartMetric. SmartMetric relied upon
      Section 4(2) of the Securities Act when offering these securities to a limited
      number of persons without general solicitation or advertising.





In
      August
      2005, SmartMetric commenced its initial public offering. SmartMetric is offering
      a minimum of 333,333 and a maximum of 6,666,666 shares of common stock at $1.50
      per share. As of September 30, 2005, Smart Metric has sold 393,966 shares for
      a
      total of $590,949. As of September 30, 2005, $500,000 has been released to
      Smart
      Metric.





ITEM
                6.
            MANAGEMENT'S
                DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS:





This
      analysis of the Company's financial condition, capital resources and operating
      results should be reviewed in conjunction with the accompanying Financial
      Statements, including the notes thereto.





SmartMetric
      was incorporated in the State of Nevada on December 18, 2002 to serve as a
      developer of identity management products. SmartMetric has been engaged in
      research and development of a biometric security solution, which can
      authenticate the identity of an individual in a self-contained credit card-sized
      device. SmartMetric refers to this device as a "biometric card" or a
      "SmartCard." A company controlled by Mr. Hendrick has granted SmartMetric a
      license to use, market and distribute this patented technology.





*Overview*





Incorporated
      in 2002, SmartMetric and its founder and CEO, Colin Hendrick, have been engaged
      in research and development of a biometric security solution which would
      authenticate the identity of a person in a self-contained credit card-sized
      device. SmartMetric's biometric card has been designed to use an on-board finger
      print sensor which is imbedded in the card along with an integrated circuit
      chip
      which will provide one gigabyte of memory capacity. SmartMetric has recently
      completed a prototype of its SmartCard but has not yet begun to manufacture
      SmartCards utilizing its licensed technology. To date, SmartMetric has had
      no
      sales revenues.





In
      February 2001 SmartMetric's CEO, Colin Hendrick, applied for a patent for this
      biometric card technology connecting SmartCards to networks, and providing
      secure access for such connections. In June 2004, Mr. Hendrick transferred
      his
      rights to this technology to Applied Cryptology, Inc., a Nevada corporation,
      he
      owns and controls, and which owns 49,500,000 shares of SmartMetric common stock.
      On August 1, 2004, Applied Cryptology entered into a license agreement with
      SmartMetric pursuant to which Applied Cryptology agreed to license this
      technology to SmartMetric in perpetuity in exchange for a royalty payment.
      This
      patent was granted on September 14, 2004.





10


We
      had $0
      sales revenue for the years ended June 30, 2004 and 2005, with a net loss of
      $35,978 in 2004 and a net loss of $258,355 for 2005.





In
      October 2003, we sold 50,000,000 shares of common stock to the President of
      SmartMetric at $.001 per share for a total of $50,000. From November 2003 to
      June 30, 2004, SmartMetric sold 8,560,257 shares of common stock to the
      President of the corporation, Colin Hendrick, at $.01 per share for a total
      of
      $85,602.57. Mr. Hendrick rendered complete payment for these shares by October
      2004. In August 2004, Mr. Hendrick transferred these shares to approximately
      600
      shareholders for no consideration. All shares are restricted from resale, except
      11,560,257 shares which are being registered for resale. Of these 11,560,257
      shares, 3,000,000 are Class A common shares which are identical to undesignated
      common stock. In March 2005, Mr. Hendrick transferred 49,500,000 shares to
      Applied Cryptology, Inc., a company owed and controlled by Mr. Hendrick. Applied
      Cryptology is party to a license agreement with SmartMetric.





In
      a
      private placement which occurred in September 2004 through October 2004, we
      sold
      68,207 shares to 9 people at $1.50 per share. All 68,207 shares are being
      registered in this registration statement.





In
      a
      private placement which occurred in December 2004 through January 2005, we
      sold
      92,630 shares to 11 people at $1.50 per share.  All 92,630 shares were
      registered in the public offering registration statement.





As
      of
      September 30, 2005, SmartMetric raised $590,949 in its initial public offering,
      pursuant to which it is selling shares of common stock at $1.50 per share.
      The
      company is seeking to raise a maximum of $10,000,000 in this offering.





*Plan
      of Operation*





Over
      the
      next 12 months, SmartMetric intends to commence marketing in an attempt to
      generate sales. We will use the proceeds of our initial public offering to
      contract the production of our prototype and commence marketing. We believe
      that
      proceeds from the Minimum Offering will be sufficient to cover these costs,
      as
      well as working capital, for at least 12 months. We expect that we will have
      to
      raise additional funds starting 12 months after completion of the offering
      if we
      raise less than the Maximum Offering. The amount we raise will depend on the
      amount raised in this offering. On September 14, 2005, we closed on the Minimum
      Offering which will allow us to contract the production of a maximum of 1,000
      SmartCards and commence marketing. The Minimum Offering gives us working capital
      for 12 months, but we may need to raise funds after that period.





We
      expect
      to outsource manufacturing of our SmartCards once we have sales orders. We
      do
      not intend to purchase any plants or significant equipment.





Once
      we
      have begun to generate sales, we intend to hire additional employees. However,
      until that time, we may only hire a few employees to market the SmartMetric
      SmartCard.





For
      the
      year ended June 30, 2004, we spent $29,335 on research and development. For
      the
      year ended June 30, 2005, we spent $107,517 on research and development. These
      funds were applied toward the production of a SmartCard prototype and its
      components and patent research.  To date, Mr. Hendrick
      has
      neither been paid, nor reimbursed, for any of these research and development
      costs.





11


*Completion
      of Prototype*





A
      prototype of our SmartCard was completed in February 2005. The finished product
      is the prototype or model for our SmartCards, which will be manufactured upon
      receipt of customer orders. We intend to revise some of the engineering of
      the
      prototype so as to decrease the size of the circuitry contained in the
      SmartCard.





*Production
      of SmartCards*





Now
      that
      we have a working prototype of our SmartCard, we will seek to obtain orders
      for
      it. Because SmartMetric does not own or rent a manufacturing facility, we will
      have to contract with one or more manufacturing facilities to produce our
      SmartCards. Although we have begun negotiations with two potential
      manufacturers, no contracts have been signed.





SmartMetric
      believes its current sources of credit and liquidity, including funds raised
      in
      its private placements, are insufficient to begin operations, including
      production of our SmartCards. SmartMetric believes the Maximum Offering proceeds
      will be sufficient to proceed with its plan of operations for the next twelve
      months. Our plan includes outsourcing or contract manufacturing of approximately
      75,000 SmartCards. A key element of SmartMetric's growth strategy is raising
      adequate funding to begin to outsource the manufacture of its biometric card.
      We
      believe that $499,999.50 will suffice to begin outsourcing the manufacturing
      of
      our SmartCard. The amount of funds required will depend on the size of the
      orders we receive. We estimate that $499,999.50 will allow us to outsource
      production of 1,000 SmartCards, begin marketing them and provide us with enough
      working capital to last 12 months. We expect that orders larger than that will
      require additional financing. Such financing may be in the form of debt or
      equity. Currently, SmartMetric has no material commitments for capital
      expenditures.





SmartMetric
      does not believe its business is seasonal in any way.





On
      October 30, 2003, we entered into an agreement with Information Spectrum, Inc.
      Pursuant to this agreement, ISI will seek to market our SmartCards. Once ISI
      begins such marketing efforts and is able to find companies and/or government
      agencies to purchase our SmartCards, we will begin production of our SmartCards.
      We intend to enter into an agreement with a third party to manufacture our
      SmartCards, but have not yet done so.




YEAR
                  ENDED
                JUNE
                  30, 20052005
              2004Net
                  Sales
              $
              0
              $
              0Cost
                  of Sales
              $
              0
              $
              0Selling,
                  general andadministrative
                  expenses
              $
              258,355
              $
              35,978Income
                  (loss) from operation
              $
              (258,355)
              $
              (35,978)




Net
      sales
      for the years ended June 30, 2004 and 2005 were $0. Administrative expenses
      for
      the years ended June 30, 2004 and 2005 were $6,643 and $150,838 respectively.
      SmartMetric expended $29,335 in research and development for the year ended
      June
      30, 2004, and $107,517 for the year ended June 30, 2005.  Net loss was
      $35,978 in the year ended June 30, 2004 and $258,838 in the year ended June
      30,
      2005.





12


*Forward
      Looking Statements*





This
      Form
      10-KSB and the preceding Management's Discussion and Analysis contain various
      forward-looking statements, which represent the Company's beliefs or
      expectations regarding future events. The words “believes,”“expect," "estimates"
      and similar expressions are intended to identify forward-looking statements.
      Forward-looking statements include, without limitation, discussions as to sales
      outlooks and outlooks for operating result. All forward-looking statements
      involve a number of risks and uncertainties that could cause the actual results
      to differ materially from the projected results, including problems that may
      arise on the part of third parties over whom the Company has little or no
      control. The impact of the foregoing could, in turn, have a material adverse
      effect on the Company's results of operations and financial
      condition.





ITEM 7.
            FINANCIAL
                STATEMENTS:




**SMARTMETRIC,
        INC. AND SUBSIDIARY**
 **(A
        Development Stage Company)**
 **Index
        to Financial Statements**
 
 PageReport
                  of Independent Auditor
              
              F-2Financial
                  Statements:Consolidated
                  Balance Sheets as of June 30, 2005 and 2004
              F-3Consolidated
                  Statements of Operations for the years endedJune
                  30, 2005 and 2004 and for the period December 18,2002
                  (inception) to June 30, 2005
              F-4Consolidated
                  Statements of Changes in Stockholders’ Equityfor
                  the period December 18, 2002 (inception)to
                  June 30, 2005
              F-5Consolidated
                  Statements of Cash Flows for the years endedJune
                  30, 2005 and 2004 and for the period December 18,2002
                  (inception) to June 30, 2005
              F-6Notes
                  to Consolidated Financial Statements
              F-7
 F-1
 **REPORT
            OF INDEPENDENT AUDITOR**
 
 To
            the
            Board of Directors and Stockholders of
 SmartMetric,
            Inc.
 
 I
            have
            audited the accompanying consolidated balance sheets of SmartMetric,
            Inc. and
            subsidiary (the “Company”), a development stage company, as of June 30, 2005 and
            2004, and the related consolidated statements of operations, changes
            in
            stockholders’ equity, and cash flows for the years then ended and for the period
            December 18, 2002 (inception) to June 30, 2005. These consolidated financial
            statements are the responsibility of the Company’s management. My responsibility
            is to express an opinion on these consolidated financial statements based
            on my
            audit.
 
 I
            conducted my audit in accordance with the standards of the Public Company
            Accounting Oversight Board (United States). Those standards require that
            I plan
            and perform the audit 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. I believe that my audit provides a
            reasonable
            basis for my opinion.
 
 In
            my
            opinion, the consolidated financial statements referred to above present
            fairly,
            in all material respects, the financial position of SmartMetric, Inc.
            and
            subsidiary, a development stage company, as of June 30, 2005 and 2004,
            and the
            results of their operations and cash flows for the years then ended and
            for the
            period December 18, 2002 (inception) to June 30, 2005 in conformity with
            accounting principles generally accepted in the United States.
 
 The
            accompanying financial statements referred to above have been prepared
            assuming
            that the Company will continue as a going concern. As discussed in Note
            2 to the
            consolidated financial statements, the Company’s present financial situation
            raises doubt about its ability to continue as a going concern. Management’s
            plans in regard to this matter are also described in Note 2. The financial
            statements do not include any adjustments that might result from the
            outcome of
            this uncertainty.
 
 
 /s/
                      Michael T. Studer CPA P.C.Freeport,
                      New YorkOctober
                      11, 2005
  F-2
 **SMARTMETRIC,
                        INC. AND SUBSIDIARY****(A
                        Development Stage Company)****Consolidated
                        Balance Sheets****June
                        30,****2005**
                    
                    
                    **2004****Assets**Current
                        assets:Cash
                    $
                    928
                    
                    $
                    64,142Stock subscriptions receivable
                    
                    15,000
                    
                    
                    35,602Due from related party
                    
                    20,873
                    
                    
                    -Prepaid expenses
                    
                    1,400
                    
                    
                    -Total
                        current
                        assets
                    
                    38,201
                    
                    
                    99,744Other
                        assets:Patent costs, less accumulated amortizationof
                        $1,225 and $0,
                        respectively
                    
                    13,875
                    
                    
                    -Deferred offering costs
                    
                    135,000
                    
                    
                    52,500Organization costs - net
                    
                    300
                    
                    
                    420Total
                        assets
                    $
                    187,376
                    
                    $
                    152,664**Liabilities
                        and Stockholders' Equity**Current
                        liabilities:Accounts payable and accrued expenses
                    $
                    115,788
                    
                    $
                    1,250Accrued salary due to president
                    
                    85,000
                    
                    
                    -Due to related party
                    
                    -
                    
                    
                    51,850Total
                        current
                        liabilities
                    
                    200,788
                    
                    
                    53,100Other
                        liabilities
                    
                    -
                    
                    
                    -Total liabilities
                    
                    200,788
                    
                    
                    53,100Common
                        stock subject to possible rescission (160,837 shares)
                    
                    241,256
                    
                    
                    -Stockholders'
                        equity :Preferred stock, $.01 par value; 5,000,000 sharesauthorized,
                        0
                        shares issued and outstanding
                    
                    -
                    
                    
                    -Class A common stock, $.001 par value; 50,000,000 sharesauthorized,
                        50,000,000 shares issued and outstanding
                    
                    50,000
                    
                    
                    50,000Common stock, $.001 par value; 45,000,000 sharesauthorized,
                        issued
                        and outstanding 8,560,257 and8,560,257
                        shares,
                        respectively
                    
                    8,560
                    
                    
                    8,560Additional paid-in capital
                    
                    (18,835)
                    
                    
                    77,042Deficit accumulated during the development stage
                    
                    (294,393)
                    
                    
                    (36,038)Total
                        stockholders'
                        equity (deficiency)
                    
                    (254,668)
                    
                    
                    99,564Total
                        liabilities and stockholders' equity
                    $
                    187,376
                    
                    $
                    152,664See
                        notes to consolidated financial statements.
  F-3
 **SMARTMETRIC,
                        INC. AND SUBSIDIARY****(A
                        Development Stage Company)****Consolidated
                        Statements of Operations****Cumulative****During
                        the****Development****Stage****Year
                        Ended**
                    
                    
                    **Year
                        Ended**
                    
                    
                    
                    **(December
                        18, 2002****June
                        30,**
                    
                    
                    **June
                        30,**
                    
                    
                    
                    **to
                        June 30,****2005**
                    
                    
                    **2004**
                    
                    
                    
                    **2005)**Revenues
                    $
                    -
                    
                    $
                    -
                    
                    
                    $
                    -Expenses:Officer's salary
                    
                    85,000
                    
                    
                    -
                    
                    
                    
                    85,000Other general and administrative
                    
                    65,838
                    
                    
                    6,643
                    
                    
                    
                    72,541Research and development
                    
                    107,517
                    
                    
                    29,335
                    
                    
                    
                    136,852Total
                        expenses
                    
                    258,355
                    
                    
                    35,978
                    
                    
                    
                    294,393Net
                        loss
                    $
                    (258,355)
                    
                    $
                    (35,978)
                    
                    
                    $
                    (294,393)Net
                        loss per share, basic and diluted
                    $
                    (0.00)
                    
                    $
                    (0.00)Weighted
                        average number of commonshares outstanding, basic and diluted
                    
                    58,560,257
                    
                    
                    58,560,257See
                        notes to consolidated financial statements.
 F-4
 **SMARTMETRIC,
                            INC. AND SUBSIDIARY****(A
                            Development Stage Company)****Consolidated
                            Statements of Changes in Stockholders' Equity****Deficit****Accumulated**
                        
                        **Total****Additional**
                        
                        ******During
                            the**
                        **Stockholders'****Class
                            A Common Stock**
                        **Common
                            Stock**
                        
                        **Paid-In**
                        
                        
                        **Development**
                        
                        **Equity****Shares**
                        
                        
                        **Amount**
                        
                        **Shares**
                        
                        
                        **Amount**
                        
                        
                        **Capital**
                        
                        
                        **Stage**
                        
                        **(Deficiency)**Net
                            loss for periodDecember 18, 2002(date of inception)to June 30, 2003
                        -
                        
                        $
                        -
                        
                        -
                        
                        $
                        -
                        
                        $
                        -
                        
                        $
                        (60)
                        $
                        (60)Balances,
                            June 30, 2003
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        (60)
                        
                        (60)Sale
                            of Class Acommon stock inOctober 2003 at a priceof $.001 per share
                        50,000,000
                        
                        
                        50,000
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        50,000Sale
                            of common stockfrom October 2003to June 2004 at aprice of $.01 per share
                        -
                        
                        
                        -
                        
                        8,560,257
                        
                        
                        8,560
                        
                        
                        77,042
                        
                        
                        -
                        
                        85,602Net
                            loss for year endedJune 30, 2004
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        (35,978)
                        
                        (35,978)Balances,
                            June 30, 2004
                        50,000,000
                        
                        
                        50,000
                        
                        8,560,257
                        
                        
                        8,560
                        
                        
                        77,042
                        
                        
                        (36,038)
                        
                        99,564Costs
                            associated withsale of common stocksubject to possiblerescission
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -
                        
                        
                        (95,877)
                        
                        
                        -
                        
                        (95,877)Net
                            loss for year endedJune 30, 2005
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        (258,355)
                        
                        (258,355)Balances,
                            June 30, 2005
                        50,000,000
                        
                        $
                        50,000
                        
                        8,560,257
                        
                        $
                        8,560
                        
                        $
                        (18,835)
                        
                        $
                        (294,393)
                        $
                        (254,668)See
                            notes to consolidated financial statements.
  F-5
 **SMARTMETRIC,
                            INC. AND SUBSIDIARY****(A
                            Development Stage Company)****Consolidated
                            Statements of Cash Flows****Cumulative****During
                            the****Development****Stage****Year
                            Ended**
                        
                        
                        **Year
                            Ended**
                        
                        
                        
                        **(December
                            18, 2002****June
                            30,**
                        
                        
                        **June
                            30,**
                        
                        
                        
                        **to
                            June 30,****2005**
                        
                        
                        **2004**
                        
                        
                        
                        **2005)**Cash
                            flows from operating activities:Net loss
                        $
                        (258,355)
                        
                        $
                        (35,978)
                        
                        
                        $
                        (294,393)Amortization of patent costs
                        
                        1,125
                        
                        
                        -
                        
                        
                        
                        1,125Changes in assets and liabilities:Loans
                            to related
                            party
                        
                        (20,873)
                        
                        
                        -
                        
                        
                        
                        (20,873)Prepaid
                            expenses
                        
                        (1,400)
                        
                        
                        -
                        
                        
                        
                        (1,400)Organization
                            costs
                        
                        120
                        
                        
                        120
                        
                        
                        
                        (300)Accounts
                            payable
                            and accrued expenses
                        
                        114,538
                        
                        
                        1,250
                        
                        
                        
                        115,788Accrued
                            salary due
                            to president
                        
                        85,000
                        
                        
                        -
                        
                        
                        
                        85,000Net
                            cash used for
                            operating activities
                        
                        (79,845)
                        
                        
                        (34,608)
                        
                        
                        
                        (115,053)Cash
                            flows from investing activities:Patent costs incurred
                        
                        (15,000)
                        
                        
                        -
                        
                        
                        
                        (15,000)Net cash used for investing activities
                        
                        (15,000)
                        
                        
                        -
                        
                        
                        
                        (15,000)Cash
                            flows from financing activities:Loans from related party
                        
                        2,577
                        
                        
                        1,250
                        
                        
                        
                        54,427Repayment of loans from related party
                        
                        (54,427)
                        
                        
                        -
                        
                        
                        
                        (54,427)Stock subscriptions collected, net
                        
                        165,981
                        
                        
                        100,000
                        
                        
                        
                        265,981Deferred offering costs incurred
                        
                        (82,500)
                        
                        
                        (2,500)
                        
                        
                        
                        (135,000)Net cash provided by financing activities
                        
                        31,631
                        
                        
                        98,750
                        
                        
                        
                        130,981Net
                            increase (decrease) in cash
                        
                        (63,214)
                        
                        
                        64,142
                        
                        
                        
                        928Cash,
                            beginning of period
                        
                        64,142
                        
                        
                        -
                        
                        
                        
                        -Cash,
                            end of period
                        $
                        928
                        
                        $
                        64,142
                        
                        
                        $
                        928Supplemental
                            disclosures of cash flow information:Interest paid
                        $
                        -
                        
                        $
                        -
                        
                        
                        $
                        -Income taxes paid
                        $
                        -
                        
                        $
                        -
                        
                        
                        $
                        -See
                            notes to consolidated financial statements.
  F-6
 **SMARTMETRIC,
                INC. AND SUBSIDIARY**
 **(A
                Development Stage Company)**
 **Notes
                to Consolidated Financial Statements**
 **For
                the Years Ended June 30, 2005 and 2004 and**
 **For
                the Period December 18, 2002**
 **(Date
                of Inception) to June 30, 2005**
 
 **NOTE
              1 - ORGANIZATION**
 
 SmartMetric,
              Inc. (“SmartMetric”) was incorporated in the State of Nevada on December 18,
              2002. SmartMetric is developing a credit card size plastic card embedded
              with an
              integrated circuit chip and biometric fingerprint sensor which provides
              identification of the user (the “SmartMetric Smart Card”) to market to
              government agencies, corporations, and organizations interested in
              identification cards.
 
 **NOTE
              2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Basis
              of
              presentation - The consolidated financial statements include the accounts
              of
              SmartMetric and its wholly owned subsidiary SmartMetric Australia Pty.
              Ltd.
              (collectively, the “Company”). The Company has been presented as a “development
              stage enterprise” in accordance with Statement of Financial Accounting Standards
              (“SFAS”) No.7, “Accounting and Reporting by Development Stage Enterprises”.
              Since inception, the Company’s activities have been limited to organizational
              efforts, obtaining initial financing, and product development.
 
 The
              consolidated financial statements have been prepared on a “going concern” basis,
              which contemplates the realization of assets and liquidation of liabilities
              in
              the normal course of business. However, at June 30, 2005 and 2004,
              the Company
              had working capital of $(162,587) and $46,674, respectively. For the
              years ended
              June 30, 2005 and 2004, the Company incurred net losses of $258,355
              and $35,978,
              respectively. These factors create uncertainty as to the Company’s ability to
              continue as a going concern. As discussed in Note 11 to the consolidated
              financial statements, the Company is seeking to raise capital through
              a public
              offering of its common stock to commence planned operations and achieve
              profitability. However, there is no assurance that the Company will
              be
              successful in raising sufficient capital to accomplish these objectives.
              The
              financial statements do not include any adjustments that might be necessary
              should the Company be unable to continue as a going concern.
 
 Use
              of
              estimates - The preparation of financial statements in conformity with
              accounting principles generally accepted in the United States 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.
 
 Fair
              value of financial instruments - The Company’s financial instruments consist of
              cash, due from related party, stock subscriptions receivable, accounts
              payable
              and accrued expenses, and due to related party, which approximate fair
              value
              because of their short maturity.
  Patent
              costs - Patent costs are amortized over the respective patent’s expected useful
              economic life (generally ten years) using the straight line method.
 
 Income
              taxes - The Company follows SFAS No. 109, “Accounting for Income Taxes”, which
              requires recognition of deferred tax assets and liabilities for the
              expected
              future tax consequences of events that have been included in the financial
              statements or tax returns. Under this method, deferred tax assets and
              liabilities are based on the differences between the financial statements
              and
              tax bases of assets and liabilities using enacted tax rates in effect
              for the
              year in which the differences are expected to reverse.
 
 Net
              loss
              per common share - Basic and diluted net loss per common share has
              been
              calculated based upon the weighted average number of common shares
              outstanding.
 
 **NOTE
              3 - DUE FROM RELATED PARTY**
 
 The
              balance due from related party does not bear interest and is due on
              demand.
 
 **NOTE
              4 - STOCK SUBSCRIPTIONS RECEIVABLE**
 
 The
              stock
              subscriptions receivable of $35,602 at June 30, 2004 was collected
              $35,000 in
              July 2004 and $602 in October 2004. The stock subscriptions receivable
              of
              $15,000 at June 30, 2005 was collected in July 2005.
 
 **NOTE
              5 - PATENT COSTS**
 
 Patent
              costs of $13,875 at June 30, 2005 represent $15,000 in legal fees paid
              in
              connection with patent applications for products covered under the
              Company’s
              license agreement with ACI (see note 12), less $1,125 accumulated
              amortization.
 
 Amortization
              expense relating to the patent costs for the year ended June 30, 2005
              was
              $1,125. Estimated amortization expense for each of the Company’s five succeeding
              fiscal years ending June 30, 2006, 2007, 2008, 2009 and 2010 is $1,500,
              $1,500,
              $1,500, $1,500, and $1,500, respectively.
 
 **NOTE
              6 - DEFERRED OFFERING COSTS**
 
 Deferred
              offering costs of $52,500 at June 30, 2004 and $135,000 at June 30,
              2005 consist
              of legal fees and audit fees incurred in connection with the Company’s public
              offering (see note 11). These costs were charged to additional paid-in
              capital
              in September 2005 upon the closing of the minimum amount of the public
              offering.
  **NOTE
                7 - DUE TO RELATED PARTY**
 
 The
              balance due to related party does not bear interest and is due on demand.
              The
              balance changed as follows:
  PeriodYear
                          Ended
                      
                      
                      Year
                          Ended
                      
                      
                      December
                          18,June
                          30,
                      
                      
                      June
                          30,
                      
                      
                      2002
                          to2005
                      
                      
                      2004
                      
                      
                      June
                          30, 2005Balance,
                          beginning of period
                      
                      $
                      51,850
                      
                      $
                      50,600
                      
                      $
                      -Company
                          expenditures paidby Company president
                      
                      
                      2,500
                      
                      
                      1,250
                      
                      
                      54,350Advance
                          from Company president
                      
                      
                      77
                      
                      
                      -
                      
                      
                      77Repayments
                          to Company president
                      
                      
                      (54,427)
                      
                      
                      -
                      
                      
                      (54,427)Balance,
                          end of period
                      
                      $
                      -
                      
                      $
                      51,850
                      
                      $
                      -
 **NOTE
              8 - COMMON STOCK SUBJECT TO POSSIBLE RESCISSION**
 
 On
              November 3, 2004, the Company deposited $102,311 from the sale of a
              total of
              68,207 shares of common stock to 9 investors at a price of $1.50 per
              share. The
              net proceeds to the Company, after deducting $44,052 in costs relating
              to this
              private placement for fees paid to an unrelated third party, was
              $58,259.
 
 On
              January 30, 2005, the Company closed a second private placement which
              resulted
              in the sale of a total of 92,630 shares of common stock to 11 investors
              at a
              price of $1.50 per share, or $138,945 gross proceeds. The net proceeds
              to the
              Company, after deducting $51,000 in fees paid to an unrelated third
              party and
              $825 in other costs, was $87,120.
 
 Since
              the
              private placements referred to in the two preceding paragraphs occurred
              after
              the Company’s filing of its Registration Statement on Form SB-2 on September 3,
              2004 (see note 11), the related investors may have rescission rights
              under the
              federal securities laws.
  Accordingly,
              the Company has classified the $241,256 gross proceeds from these private
              placements as temporary equity separate and apart from stockholders’ equity and
              has classified the $95,877 related costs as a deduction from stockholders’
              equity.
 
 In
              the
              event that a claim for rescission arises and is allowed, the Company
              will deduct
              such amount from “common stock subject to possible rescission”. In the event
              that it is determined an investor no longer has a possible rescission
              right, the
              gross proceeds will be recorded as stockholders’ equity.
 
 Management
              is unable to determine at this time whether any claim for rescission
              will be
              filed against the Company; however, there is no assurance that claims
              will not
              be asserted.
 
 **NOTE
              9 - STOCKHOLDERS’ EQUITY**
 
 In
              October 2003, the Company sold 50,000,000 shares of Class A common
              stock to the
              president of the Company at a price of $.001 per share, or $50,000
              total. From
              October 2003 to June 30, 2004, the Company sold 8,560,257 shares of
              common stock
              (the “Additional Shares”) to the president of the Company at a price of $.01 per
              share, or $85,602 total. These Additional Shares were assigned by the
              president
              of the Company in varying amounts to approximately 600 shareholders
              for no
              consideration.
 
 The
              Class
              A common stock and the common stock have identical voting and other
              rights.
 
 **NOTE
              10 - INCOME TAXES**
 
 No
              provisions for income taxes have been recorded since the Company has
              incurred
              losses since inception.
 Deferred
              tax assets consist of:
 June
                          30,2005
                      
                      
                      2004Net
                          operating loss carryforwards
                      
                      $
                      100,094
                      
                      $
                      12,253Less
                          valuation allowance
                      
                      
                      (100,094)
                      
                      
                      (12,253)Net
                      
                      $
                      -
                      
                      $
                      -
  Based
              on
              management ‘s present assessment, the Company has not yet determined it to be
              more likely than not that a deferred tax asset of $100,094 attributable
              to the
              future utilization of $294,393 of net operating loss carryforwards
              as of June
              30, 2005 will be realized. Accordingly, the Company has provided a
              100%
              allowance against the deferred tax asset in the financial statements
              at June 30,
              2005. The Company will continue to review this valuation allowance
              and make
              adjustments as appropriate. The net operating loss carryforwards expire
              $60 in
              2023, $35,978 in 2024, and $258,355 in 2025.
 
 **NOTE
              11 - PUBLIC OFFERING**
 
 The
              Company filed a Form SB-2 registration statement with the U.S. Securities
              and
              Exchange Commission in September 2004 in connection with a public offering
              (the
“Public Offering”) of, as amended, up to 6,666,666 shares of common stock at
              $1.50 per share or $9,999,999 total. The registration statement, which
              went
              effective on August 12, 2005, provides for offering the shares directly
              on a
“best efforts, all or none basis” as to the first 333,333 shares and on a best
              efforts basis as to the remaining 6,333,333 shares. The shares are
              to be sold by
              SmartMetric’s officers and directors in a self-underwritten offering (although
              the Company may decide to engage registered broker-dealers to assist
              in the
              sale) for a period of up to 90 days (which may be extended for an additional
              90
              days at the Company’s option). The Public Offering provides that subscription
              proceeds will be placed in an escrow account until the minimum offering
              of
              $500,000 is achieved, after which proceeds shall be released directly
              to the
              Company. Also, certain selling shareholders plan are offering 11,721,094
              shares
              for sale in this offering, 3,000,000 of which are shares of Class A
              Common
              Stock.
 
 **NOTE
              12 - COMMITMENTS AND CONTINGENCIES**
 
 Marketing
              agreement - On October 30, 2003, SmartMetric executed an agreement
              with
              Information Spectrum, Inc. (“ISI”). Pursuant to this agreement, ISI shall seek
              to market SmartMetric’s Smart Card technology by actively seeking customers
              interested in purchasing
 credential
              cards which incorporate SmartMetric’s patented Smart Card technology. Prior to
              ISI offering SmartMetric products by submitting a formal proposal,
              ISI and
              SmartMetric shall enter into a “Teaming Agreement” which will define each
              party’s rights and obligations concerning that particular sales opportunity.
              Every proposal will require its own Teaming Agreement. Pursuant to
              this
              Agreement, ISI is the exclusive reseller of SmartMetric products to
              agencies of
              the United States government and the Government of Canada. In addition,
              ISI has
              the right of first refusal for other marketing, sales or re-sales opportunities
              for customers other than the United States or Canadian governments.
              The term of
              this agreement is two years and may be extended upon mutual agreement
              of the
              parties. This agreement may be terminated earlier by either party upon
              30 days
              written notice.
 
 Patent
              license agreement - Effective August 1, 2004, SmartMetric executed
              a license agreement
              with Applied Cryptology, Inc. (“ACI”), a corporation controlled by
              SmartMetric’s president
              and the owner of certain technology. Pursuant to the license agreement,
              SmartMetric has the right to make use of this technology for the purpose
              of
              developing software and systems to be used by SmartMetric to provide
              any or all
              of the following: 1) secure transactions over the Internet from home
              and office
              computers; 2) an automatic method for connecting to remote computers;
              3) a
              method of developing targeted advertising to home and/or office computers;
              4)
              identity verification and access control as provided for in the patent.
              Pursuant
              to this license agreement, ACI will receive 2% of all revenues generated
              by
              SmartMetric on products which utilize this patented technology. The
              license fee
              will be paid on a quarterly basis based on revenues received during
              the quarter.
              The license fee shall be due within 45 days of the end of each
              quarter. In the event no revenues are generated through the use of
              any of the
              licensed patents
              during a given quarter, no money shall be owed ACI for such quarter.
              ACI may
              rescind the
              license agreement and reclaim all rights and interest in the patents
              if certain
              events, such as SmartMetric’s filing for bankruptcy protection or
              reorganization, occur. This license agreement will remain in effect
              for the
              lives of the patents. SmartMetric may utilize the technological applications
              anywhere in the world without limitation.
  Employment
              agreement - Effective July 1, 2004, SmartMetric executed an employment
              agreement
              with its president. Pursuant to this employment agreement, the president
              shall
              receive an annual salary of $170,000 commencing January 1, 2005. This
              salary
              will commence upon the Company achieving gross revenues of $1,000,000.
              Until
              that time, the salary shall be accrued and SmartMetric may pay the
              president as
              salary up to 25% of any offering proceeds received by the Company,
              which amount
              shall not exceed $170,000 in any given 12 month period. The president
              is also
              eligible for an annual bonus based on certain performance criteria
              to be
              determined by a Compensation Committee of the board of directors at
              a later
              date. His employment may be terminated for cause at any time. According
              to the
              employment agreement, any inventions, ideas, disclosures and improvements
              made
              or conceived by him during his employment, including adoptions and
              improvements
              to existing patents, shall be his property. The term of this agreement
              is one
              year and may be renewed by the mutual written agreement of the president
              and the
              Company for additional consecutive one year terms. In June 2005, the
              parties
              renewed this employment agreement for one year to June 30, 2006.
 
 Rental
              agreement - The Company currently uses office space provided by its
              president at
              no cost to the Company. It is anticipated that the Company will start
              paying
              rent for this space following the successful completion of the Public
              Offering.
 
 Lease
              agreement - In November 2004, SmartMetric executed a lease agreement
              for office
              space in Aventura, Florida. This agreement provides for monthly rentals
              of $800
              and an initial term of six months ending May 31, 2005. Unless the lessor
              is
              notified in writing at least 60 days prior to the Termination Date
              (which
              notification was not made), this agreement shall renew for additional
              one-year
              terms. Lessor has the right to terminate the lease agreement at any
              time upon 45
              days advance written notice to SmartMetric.
 
 **NOTE
              13 - SUBSEQUENT EVENTS**
 
 Loans
              payable - In July 2005, SmartMetric received a total of $60,000 in
              loans from
              two stockholders. The loans bear interest at a rate of 6% per annum
              and are due
              in full on December 31, 2007.
 
 Lease
              agreement - On September 1, 2005, SmartMetric executed a lease agreement
              for
              office space in Surfside, Florida. This agreement provides for monthly
              rentals
              of $583 and a term of one year ending August 31, 2006.
 
 Public
              offering - On September 14, 2005, the Company closed on the minimum
              amount of
              the public offering. The closing was for the sale of 333,333 shares
              of common
              stock at $1.50 per share, or $500,000 total. The net proceeds to the
              Company,
              after deducting $70,048 in costs and other liabilities, was
              $429,952.


F-7







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





NONE





ITEM 8A.
            CONTROL
                AND PROCEDURES:





Under
      the
      supervision and with the participation of our management, including our
      Principal Executive Officer and Principal Financial Officer, we evaluate the
      effectiveness of the design and operation of our disclosure controls and
      procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act
      of
      1934 (the “Exchange Act”)). Based on that evaluation, our Principal Executive
      Officer and Principal Financial Officer concluded that, as of the end of the
      period covered by this report, our disclosure controls and procedures are
      adequately designed to ensure that information required to be disclosed by
      us in
      the reports we file or submit under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the applicable
      rules and forms. During the period covered by this Annual Report on Form 10-KSB,
      there was no change in our internal control over financial reporting (as defined
      in Rule13a-15(f) under the Exchange Act) that materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.





ITEM 8B.
            OTHER
                INFORMATION





None




PART
      III





ITEM 9.
            DIRECTORS
                AND EXECUTIVE OFFICERS OF THE
                REGISTRANT:




The
      Company's Officers and Directors are as follows:


13




**Name**
            **Age**
            **Position
                with the Company**Colin
                Hendrick
              314
                Brooklyn Avenue Brooklyn, New York 11213
            49
            President,
                Chief Executive Officer, Chief Financial Officer and Chairman of
                the
                BoardPeter
                Sleep
              3
                Bernadette Court
              East
                Doncaster, Victoria Australia
            60
            Secretary,
                and DirectorJoseph
                Katzman
              790
                Montgomery Street Brooklyn, New York 11213
            48
            Director





*Biography*





**COLIN
      HENDRICK** ,
      has
      been President, Chief Executive Officer, Chief Financial Officer and Chairman
      of
      the Board of SmartMetric since the Company’s inception in 2002. He has served as
      President and CEO of Smart Micro Chip, Inc., an Australian corporation from
      2000
      to 2002. From 1999 to 2001, Mr. Hendrick was President and Chief Executive
      Officer of Smarticom Inc. and Fast Econ, Inc., Australian corporations. From
      1994 to 1998, Mr. Hendrick served as executive officer of Applied Computing
      Science (Australia), an Australian company involved in e-commerce systems,
      research and development. Mr. Hendrick attended Dandenong College in
      Australia.





**PETER
      SLEEP,** has been
      Secretary and a director of SmartMetric since January 2003. From November 1996
      to January 2003, Mr. Sleep was Vice President of Smart MicroChip, Inc., an
      Australian corporation. Mr. Sleep attended Brunswick Technology School and
      Footscray College, both located in Australia.





**JOSEPH
      KATZMAN** ,
      has
      been a director of SmartMetric since January 2003. Since 1993, he has been
      host
      and executive producer of A Cable To Jewish Life, a television talk show. From
      1991 to 2000, he was the New York office administrator of congregation Yeshiva
      Tomchei Tmimim Lubavitch. Mr. Katzman is a graduate of KfarChabad and the
      Rabbinical College of Canada.





*Family
      Relationships*





There
      are
      no family relationships among officers or directors of SmartMetric.





*Involvement
      in Certain Legal Proceedings*





Our
      directors, executive officers and control person have not been involved in
      any
      of the following events during the part five years:





1.
            any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that
                time;




14


2.
            any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor
                offenses);





3.
            being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                or





4.
            being
                found by a court of competent jurisdiction (in a civil action), the
                Commission or the Commodity Futures Trading Commission to have violated
                a
                federal or state securities or commodities law, and the judgment
                has not
                been reversed, suspended, or
                vacated.





*Audit
      Committee Financial Expert*





SmartMetric’s
      board of directors has determined that the company does not have an audit
      committee financial expert serving on its audit committee.





*Identification
      of the Audit Committee*





SmartMetric
      does not currently have a separately - designated standing committee established
      in accordance with Section 3(a) (58)(A) of the Exchange Act. The entire board
      of
      directors is acting as SmartMetric’s audit committee.





*Code
      of Ethics*





The
      Company has adopted a Code of Ethics that applies to its Chief Executive Officer
      and Chief Financial Officer.





*Compliance
      with Section 16(a) of the Securities Act of 1934*





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
      officers and directors and persons who own more than 10% of a registered class
      of our equity securities to file with the Securities and Exchange Commission
      initial statements of beneficial ownership, reports of changes in ownership
      and
      annual reports concerning their ownership of the our common stock and other
      equity securities, on Form 3, 4 and 5 respectively. Executive officers,
      directors and greater than 10% shareholders are required by the Securities
      and
      exchange Commission regulations to furnish our company with copies of all
      Section 16(a) reports they file.





Based
      solely on our review of the copies of such reports received by us, and on
      written representations by our officers and directors regarding their compliance
      with the applicable reporting requirements under Section 16(a) of the Exchange
      Act, we believe that, with respect to the fiscal year ended June 30, 2005,
      our
      officers and directors, and all of the persons known to us to own more than
      10%
      of our common stock, filed all required reports on a timely basis.





ITEM
      10.
      EXECUTIVE COMPENSATION:





The
      following table sets forth the amount of all cash compensation paid to the
      Company's most highly compensated executive officers and for all executive
      officers as a group for the fiscal years ended June 30, 2004 and June 30,
      2005.


15





SUMMARY
                COMPENSATION TABLEAnnual
                Compensation
            Long
                Term CompensationAwards
            PayoutsName
                and Principal
              Position
            Year
            Salary
                (US$)
            Bonus
                (US$)
            Other
                Annual Compen-sation (US$)
            Securities
                Underlying Options/
              SAR
                Granted
            Restricted
                Shares or Restricted Share Units
            LTIP
                Payouts (US$)
            All
                Other Compen-sationColin
                Hendrick(1)
              President,
                Chief Executive Officer, Chief Financial Officer, Chairman
            2004
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            Nilof
                the Board
            2005
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            NilPeter
                Sleep
              Vice
                President,
            2004
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            NilDirector
            2005
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil





**1.**
            SmartMetric
                has entered into an employment agreement with Mr. Hendrick. Pursuant
                to
                SmartMetric's one-year employment agreement with Mr. Hendrick, he
                shall
                receive an annual salary of $170,000, which shall commence upon
                SmartMetric's achieving $1,000,000 in sales revenues. Commencing
                January
                1, 2005, Mr. Hendrick shall begin accruing an annual salary of $170,000.
                Prior to SmartMetric's achieving $1,000,000 in sales revenues, SmartMetric
                may pay Mr. Hendrick a salary of 25% of offering proceeds received
                from
                the initial public offering or subsequent offerings, up to
                $170,000.
                Mr. Hendrick is eligible for an annual bonus based on certain performance
                criteria to be determined by a Compensation Committee of the board
                of
                directors at a later date. The Compensation Committee shall be comprised
                of at least three directors, the majority of whom shall be independent.
                Mr. Hendrick's employment may be terminated for cause at any time
                and may
                be renewed upon mutual agreement of SmartMetric and Mr. Hendrick.
                According to the employment agreement, any inventions, ideas, disclosures
                and improvements made or conceived by Mr. Hendrick during his employment,
                including adoptions and improvements to existing patents, shall be
                the
                property of Mr. Hendrick.





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





The
      following table sets forth as of June 30, 2005, certain information regarding
      the beneficial ownership of all officers, directors, nominees, and the
      beneficial ownership of those persons owning five (5%) percent or more of the
      outstanding shares of SmartMetric's Common Stock, and the beneficial ownership
      of all officers and directors as a group. Each of these person’s exercises sole
      discretion to vote and dispose of the shares beneficially owned.




16


**NAME/ADDRESS**
              **BENEFICIAL**
              **OWNER****(1)**
            **NUMBER**
              **OF**
              **SHARES**
            **%
                OF CLASS(2)**
            **TITLE
                OF CLASS**Colin
                Hendrick(3)
              314
                Brooklyn Avenue
              Brooklyn,
                New York 11213
            49,500,000
            83.8%
            Common
                StockPeter
                Sleep
              3
                Bernadette Court
              East
                Doncaster, Victoria
              Australia
            1,060,000(4)
            1.8%
            Common
                StockJoseph
                Katzman
              790
                Montgomery Street
              Brooklyn,
                New York 11213
            0
            0%
            Common
                StockAll
                Officers and Directors
              as
                a Group (3 persons)
            50,560,000
            85.6%
            Common
                Stock





1.
            Each
                shareholder has sole voting and investment power with respect to
                his/her
                shares. Each shareholder has sole voting and investment power with
                respect
                to his/her shares.





2.
            Based
                on 59,054,427 shares to be outstanding after the Minimum
                Offering.





3.
            All
                shares held by Mr. Hendrick are Class A common stock and were transferred
                to Applied Cryptology, Inc., a Nevada corporation owned and controlled
                by
                Mr. Hendrick, in March 2005.





4.
            Includes
                500,000 shares owned by Trinity Trust. Mr. Sleep is trustee of the
                Trinity
                Trust.




ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:





SmartMetric
      was incorporated in the State of Nevada on December 18, 2002. In October 2003,
      SmartMetric sold 50,000,000 shares of common stock to its president and chief
      executive officer, Colin Hendrick, at $.001 per share for a total of $50,000.
      Between November 2003 and June 30, 2004 SmartMetric sold 8,560,257 shares to
      Mr.
      Hendrick at $0.01 per share for a total of $85,602.57. In August 2004, these
      8,560,257 shares were assigned to approximately 600 people for no consideration.
      The transferees were all friends, family and business acquaintances of Mr.
      Hendrick. Mr. Hendrick distributed shares because he wanted to create a large
      shareholder base for SmartMetric.





On
      August
      1, 2004, SmartMetric entered into a license agreement with Applied Cryptology,
      Inc., a company owned and controlled by Colin Hendrick, President and CEO of
      SmartMetric, pursuant to which Applied Cryptology, Inc. has agreed to license
      a
      patent owned by that company. Applied Cryptology, Inc. shall receive
      a
      licensed fee of the greater of 2% of the sales price of any licensed product
      or
      2% of the fair market value of any license products. SmartMetric believes the
      license agreement is on terms at least as favorable to SmartMetric as those
      it
      would expect to negotiate with an unaffiliated party.





17


Item
      13.
      Exhibits:




(a)
            The
                exhibits required by Item 601 of Regulation S-B are as
                follows:3.1
            Certificate
                of Incorporation of SmartMetric, Inc.(1)3.2
            By-laws
                of SmartMetric, Inc.(1)4.1
            Specimen
                Certificate of Common Stock.(1)10.1
            License
                Agreement between SmartMetric and Applied Cryptology, Inc.(3)10.2
            Employment
                Agreement - Colin Hendrick(2)10.3
            Agreement
                between SmartMetric and ISI(1)10.4
            Employment
                Agreement Extension(4)14.1
            Code
                of Ethics(1)21.1
            Subsidiaries
                of SmartMetric(2)23.2
            Independent
                Auditor’s Consent(5)31.1
            Certification
              pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
              302 of
              the Sarbanes-Oxley Act of 2002 executed by Chief Executive
              Officer31.2
            Certification
              pursuant
              to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002 executed by Chief Financial
              Officer32.1
            Certification
              pursuant
              to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
              of the
              Sarbanes-Oxley Act of 2002 executed by Chief Executive
              Officer32.2
            Certification
              pursuant
              to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002 executed by Chief Financial
              Officer99.1
            Subscription
                Agreement.(4)99.2
            Lease
                Agreement for Florida Office(3)


1.
                Filed
                    with original registration statement on September 3,
                    2004
 2.
                Filed
                    with Amendment No. 1 to the Registration Statement on Form SB-2
                    on
                    February 3, 2005
 3.
                Filed
                    with Amendment No. 3 to the Registration Statement on Form SB-2
                    May 23,
                    2005
 4.
                  Filed with Amendment No. 5 to the Registration
                    Statement
                    on Form SB-2 June 27, 2005
 5.
                  Filed
                    with Amendment No. 7 to the Registration Statement on Form SB-2
                    August 13,
                    2005


ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





*Audit
      Fees*





The
      Audit
      fees relating to years ended June 30, 2004 and 2005 were $17,000 and $8,000,
      respectively. All services provided by the principal accountants were approved
      by the audit committee.





*Audit
      - Related Fees*





The
      Audit-related fees relating to years ended June 30, 2004, and 2005 were
      $0
      and $0 respectively.


*Tax
      fees*





Fees
      relating to periods ended June 30, 2004 and 2005 for professional services
      rendered by the principal accountant for tax compliance, tax advice and/or
      tax
      planning were $1,000 and $0, respectively.





*All
      other Fees*





There
      were no other fees for 2004 or 2005.





18


*Audit
      Committee Pre-Approval Policies and Procedures*





The
      Audit
      Committee is directly and solely responsible for oversight, engagement and
      termination of any independent auditor employed by the Company for the purpose
      of preparing or issuing an audit report or related work.





The
      Committee meets with the independent auditor prior to the audit and discusses
      the planning and staffing of the audit, approves in advance the engagement
      of
      the independent auditor for all audit services and non-audit services and
      approves the fees and other terms of any such engagement; and obtains
      periodically from the independent auditor a formal written statement of the
      matters required to be discussed by Statement of Auditing Standards No. 61,
      as
      amended, and, in particular, describing all relationships between the auditor
      and the Company, and discusses with the auditor any disclosed relationships
      or
      services that may impact auditor objectivity and independence.


19


SIGNATURES





Pursuant
      to the requirements of Section 13 of 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.





SMARTMETRIC,
                INC. (Registrant)BY:
            /s/Colin
              HendrickCOLIN
                HENDRICKPresident,
                Chief Executive OfficerDated:





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the following
      persons on behalf of the Registrant and in the capacities and on the date
      indicated have signed this report below.


BY:
            /s/Colin
              HendrickColin
                HendrickPresident,
                Chief Executive Officer, Chief Financial Officer, Chairman of the
                BoardDated:
            October
              13, 2005




BY:
            /s/Peter
              J. SleepPeter
                J. SleepVice
                President, Secretary, DirectorDated:
            October 13,
              2005





BY:
            /s/Joseph
              KatzmanJoseph
                KatzmanDirectorDated:
            October 13,
              2005





20