U.S. 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 March 31, 2003
                           Commission File No. 0-23339

                            US GLOBAL AEROSPACE, INC.
                      ------------------------------------
                 (Name of small business issuer in its charter)

                   Delaware                         13-3720542
         -------------------------------         ----------------
         (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)         Identification No.)

                      2533 North Carson Street, Suite 5107
                            Carson City, Nevada 89706
                    (Address of principal executive offices)

                     Issuer's telephone number: 775-841-3246

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:
                                                    Common Stock, $.01 par value

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best or 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]

Issuer's revenues for its most recent fiscal year:  $0

Aggregate market value of the voting stock held by non-affiliates computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within the past 60 days: $5,244,278
as of June 26, 2003.

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 and 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Not applicable

At June 26, 2003, a total of 78,903,787 shares of registrant's common stock were
outstanding.

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




                                       1
<PAGE>



                                TABLE OF CONTENTS

PART I
                                                                            Page

Item 1.   Description of Business                                              3

Item 2.   Description of Properties                                            9

Item 3.   Legal Proceedings                                                    9

Item 4.   Submission of Matters to a Vote of Security Holders                  9

PART II

Item 5.   Market Information                                                  10

Item 6.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                           12

Item 7.   Financial Statements                                                20

Item 8.   Changes and Disagreements with Accountants on Accounting and
          Financial Disclosure                                                33

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act                   33

Item 10.  Executive Compensation                                              34

Item 11.  Security Ownership of Certain Beneficial Owners and Management      34

Item 12.  Certain Relationships and Related Transactions                      35

Item 13.  Exhibits, Lists and Reports on Form 8-K                             36




                                       2
<PAGE>



PART I

ITEM 1.  DESCRIPTION OF BUSINESS

CORPORATE HISTORY

         US Global Aerospace, Inc. (referred to in this report as "USGA", "we",
"us" or "our") is a development stage company with expertise in the emerging
field of nanotechnology. Through March 31, 2003, the end of our fiscal year, our
operations included research and development of our products, the acquisition
and development of intellectual property, raising capital and designing and
building prototype equipment.

         We were originally incorporated in the Province of British Columbia in
1984 as First West Canada Capital Corporation, or FWCC. On December 20, 1993,
FWCC became a Wyoming corporation. On December 23, 1993, FWCC merged into its
wholly owned subsidiary, FWCC Merger Corp., which was incorporated in the state
of Delaware.

         On November 4, 1992, Caring Products International, Inc. was
incorporated under the laws of the state of Delaware. On December 30, 1993,
Caring Products merged with and into FWCC Merger Corp., and FWCC Merger Corp.
became the surviving corporation. The name of the surviving entity was changed
to Caring Products International, Inc.

         On September 26, 2002, Caring Products International, Inc. changed its
name to US Global Aerospace, Inc.

         As Caring Products International, Inc., USGA and its subsidiaries
designed a line of proprietary urinary incontinence products with disposable
liners that were sold under the Rejoice brand name in the U.S., Canada and
Europe. Due to a lack of funding necessary to support full retail distribution
in chain stores and hospitals, we closed our marketing offices and liquidated
our remaining inventory. We discontinued all operations related to the
production, marketing and sale of our incontinence products during the fiscal
year ended March 31, 2001.

         On March 30, 2001, we consummated a private placement of 90,000 shares
of our common stock to Raymond Bills, a previously unaffiliated accredited
investor. Mr. Bills paid $250,000 in consideration for the issuance. After
giving effect to the transaction and including the 30,563 previously issued and
outstanding shares of common stock, Mr. Bills was the beneficial owner of
approximately 75% of our issued and outstanding common stock. In connection with
the transaction, Mr. Bills joined our board of directors. Concurrently, four of
the five members of the board resigned. Ian Rice also joined the board of
directors, serving as its chairman.

         On May 17, 2002, we completed a share exchange with USDR Global
Aerospace, Ltd., a Delaware corporation ("USDRGA"), and the USDRGA stockholders.
At the closing, we issued an aggregate of 20,000,000 unregistered, restricted
shares of our pre-split common stock to the USDRGA stockholders in exchange for
all of the issued and outstanding shares of capital stock of USDRGA, consisting
of an aggregate of 5,000,000 unregistered, restricted pre-split shares of common
stock. The four to one exchange ratio was determined by taking into account the
fair market value of USDRGA, which included an evaluation of the assets and
liabilities and management expertise of USDRGA. USDRGA stockholders John
Robinson and Gerald Wiener exchanged their shares of USDRGA common stock for
12,000,000 and 8,000,000 pre-split shares of our common stock, respectively. At
the closing of the share exchange, Robinson and Wiener owned approximately 48%
and 32% of our issued and outstanding pre-split shares of common stock,
respectively, and USDRGA became our wholly owned subsidiary.

                                       3
<PAGE>

         Effective on the closing date, our two officers and directors, Raymond
Bills and Ian Rice, resigned as officers and appointed:

          o    John  Robinson,  the  Chairman  and Chief  Executive  Officer  of
               USDRGA, as our Chairman of the Board and Chief Executive Officer;

          o    Gerald  Wiener,  the  President  and Chief  Operating  Officer of
               USDRGA, as our President;

          o    Gaddy Wells, the Secretary of USDRGA, as our Secretary; and

          o    Julie  Seaman,  the  Treasurer  and Chief  Financial  Officer  of
               USDRGA, as our Treasurer.

         In addition, subject to and effective upon compliance with Rule 14f-1
under the Securities Exchange Act of 1934, Rice and Bills resigned as our
directors and appointed Robinson, Wiener, Wells and Seaman as our new board of
directors. However, effective June 14, 2002, Mr. Wells resigned his positions as
an officer and future director of USGA, as well as his positions as an officer
and director of USDGRA, as a result of issues regarding potential conflicts of
interest. Effective June 17, 2002, Ms. Seaman was appointed as Secretary of
USGA, in addition to being Treasurer and a director of USGA. Effective July 29,
2002, Mr. Wiener resigned as a director and as President of USGA, and as the
President and Chief Operating Officer of USDRGA. As of the date of this report,
the officers and directors of USGA are as follows: John Robinson, Chief
Executive Officer and Chairman of the Board, and Julie Seaman, Treasurer,
Secretary and director.

         Effective December 31, 2002, USGA filed a Certificate of Ownership with
the Secretary of State of Delaware effecting the merger of USDRGA with and into
USGA, and USGA assumed all the assets and liabilities of USDRGA.

         On February 13, 2003, our Board of Directors approved a 3 for 1 forward
split of our common stock for shareholders of record as of February 24, 2003.
The 3 for 1 stock split became effective on March 5, 2003. Unless otherwise
specified, all references to the number of shares and per share data in this
report give effect to this stock split.

         On May 29, 2003, our Board of Directors and our majority stockholder
consented to amend our Certificate of Incorporation to change our name to US
Global Nanospace, Inc.

OUR BUSINESS

         USGA is a nanotechnology company that specializes in identifying,
developing, and commercializing advanced products the core technologies of which
are primarily nanoscience derived. These products include complex polymer
materials, polymer nanofiber materials, nanofiber filter materials, biological
and chemical decontaminants, blast mitigation materials and nano and micro sound
generating devices for breach barriers and non-lethal weapon applications. We
are currently focusing our efforts on developing a broad range of defense and
law enforcement applications for the materials we create, including products
suitable for homeland security and force protection applications. Currently,
most of our products are developed for use by the military and homeland
security.

         Many of our products incorporate our lightweight, anti-ballistic
material, G-Lam(TM). G-Lam is a nanofiber derived material created with a
complex consolidation process. The material has superior tensile performance and
remarkable impact energy absorbing properties. G-Lam is infinitely scalable,
making it suitable for a broad range of characterized threats. Because it is
moldable, G-Lam is suitable for a wide array of applications, such as
anti-ballistic building materials, shaped body armor, vehicle and aircraft
protective panels, shelters, fuel tanks, cargo containers and munitions cases.
The complex nanofibers developed for G-Lam provided the basis for a variety of
other unique exotic materials that are widening our proprietary materials base.

                                       4
<PAGE>

OUR PRODUCTS

         Our products, some of which are still being developed, include the
following:

          o    airborne pathogen air filter and purification systems using
               nanofiber filter mediums for use in commercial, industrial and
               airborne applications;

          o    micro-wire 3 dimensional products for breach barriers, rapidly
               deployable passive restraint systems, and non-lethal weapons;

          o    nanomaterials, for light weight armor systems, air and water
               filtration, and various other applications; and

          o    blast mitigation and containment materials for defense,
               commercial, and industrial application.

AIRBORNE PATHOGEN AIR FILTER/PURIFICATION SYSTEMS USING NANOFIBER FILTER MEDIUM
FOR COMMERCIAL, INDUSTRIAL, AND AIRBORNE APPLICATIONS.

         The core of this filter technology was initially developed for NASA for
use during crewed space flight applications that lasted for more than 120 days
to provide ultra-fine particulate matter air filtration and purification. The
performance has been enhanced further with the addition of nanofiber filter
element materials. The porous nanofilter media is enveloped with an electronic
field that causes the airborne particulate matter to move in a churning motion
perpendicular to the airflow direction without ionization, thus significantly
enhancing the London/Van der Waals force interaction (a method of intermolecular
attraction), and resulting in a super-efficient air filtration and purification
system. This system effectively captures bacteria, viruses, smoke, dust,
odorants, and other sub-micron sized particulate matter. Unlike traditional
filter technology that relies on ever more restrictive filter elements and
reduced flow rates in order to catch smaller particles, nanofilter technology
provides nearly unrestricted air flow, minimal pressure drop, and a substantial
increase in energy efficiency. We have tested this filter using both the SARS
virus and anthrax, and found that it effectively filtered both.

         We believe that immediate applications for this technology exist for
installation in industrial, commercial, and residential buildings, as well as in
mass transit vehicles. Filters suitable for commercial HVAC applications are
currently in prototype production, and we anticipate that they will be available
for installation by December 31, 2003. We believe that immediate opportunities
to market this product exist in Asia, with the most urgent requirements being
hospitals and health facilities that are combating the SARS epidemic. A single
hospital HVAC system currently contains 4000 standard filter elements. These
elements require changing at least 4 times a year. By installing a nanofilter, a
hospital can reduce the energy consumption of the HVAC system by up to 35% and
have a more effective filtration system.

MICRO-WIRE 3 DIMENSIONAL PRODUCTS FOR BREACH BARRIERS, RAPIDLY DEPLOYABLE
PASSIVE RESTRAINT SYSTEMS, AND NON-LETHAL WEAPONS.

         Micro-wires are extremely strong, extremely fine, spring wires. These
wires are shaped and joined to form rapidly deployable 3D structures that
provide restraint and/or containment barriers. A three-inch diameter cylinder

                                       5
<PAGE>

that is 12 inches long can easily contain a sufficient quantity of micro-wire to
cover a football field with a 3 dimensional blanket of entangled wire. Immediate
applications exist using micro-wire as breach barrier controls at government
facilities, and transit centers. We anticipate that micro-wire may also be used
as a passive riot control device, for emergency building lockdown, for hallway
and pedestrian flow control and as a non-lethal weapon.

NANO MATERIALS FOR LIGHTWEIGHT ARMOR SYSTEMS, AIR AND WATER FILTRATION, AND
VARIOUS OTHER APPLICATIONS.

         Our G-Lam technology is being enhanced and combined with ceramics in
order to address supersonic ballistic threats. Currently many high threat level
ballistic solutions are only satisfied with ceramics which tend to be costly,
difficult to work with, fragile, and difficult to shape. Additionally, we are
evaluating advanced polymers for cross-linking to aerogels, conversion to
nanofibers, and/or optimizing for high volume, low cost process ability.

         We are currently developing a polymer based, nanofiber-reinforced armor
material that we believe will not only be 25% lighter, but will also be
substantially more durable, easily processed, and less costly than armor
materials that are currently available. This seamless armor can be molded into
any shape, thereby allowing it to be used in a number of different ways and in a
number of different products.

THE GUARDIAN(TM) ANTI-BALLISTIC PANEL COCKPIT SECURITY DOOR

         Our original product was a cockpit security door for airplane flight
decks known as the Guardian(TM) Anti-Ballistic Panel Cockpit Security Door (the
"Guardian Door"). USGA's patent on the Guardian Door is currently pending. We
developed the Guardian Door to comply with the regulations promulgated by the
Federal Aviation Administration in response to the terrorist attacks that took
place in the United States on September 11, 2001. The FAA and its international
counterparts are requiring the installation, by November 2003, of secure cockpit
doors to prevent unauthorized access in all planes used by commercial airlines.

         The Guardian Door was the only cockpit security door to pass rigorous
tests implemented by the Israeli Secret Service.

         Included in the design of the Guardian Door is a specially designed,
proprietary passive vent system. The passive vent system provides access
security and ballistic and decompression protection to the flight crew while
eliminating the need for costly and time-consuming airframe structural
enhancements. The passive vent system is designed to safely handle rapid
decompression events and manage blast energies from an explosion on board.

         In April 2003 El Al Israel Airlines, while it was under the control of
the government of Israel, submitted an order to USGA for the purchase of
Guardian Doors for its fleet of aircraft. Since that time, however, the airline
has been privatized. Currently we are unsure whether the change in ownership
will have any effect on the purchase of the doors. In April 2003 we also
received a purchase order from Aer Lingus, the national airline of Ireland, for
Guardian Doors. Shortly after we received the purchase order, Aer Lingus
notified us that it intended to award the contract for the cockpit doors to
Airbus. We believe that the major original equipment manufacturers (OEMs) in the
aircraft industry have such overwhelming resources and influence in the
marketplace that it will be difficult or impossible for us to gain entry, even
though we believe that the Guardian Door is the best product available. We are
currently reassessing our ability to compete successfully in the OEM-controlled
market for secure cockpit doors. However, we will continue to obtain a wide
range of STC's for very specific markets, as we have identified a number of
profitable custom door opportunities in areas that we believe the major OEMs are
unwilling or unable to supply. We will also continue to monitor the performance
of existing OEM doors worldwide, as the opportunity to supply the Guardian Door
may reappear if performance of OEM doors proves to be unsatisfactory. We are
also pursuing new opportunities for highly secure doors in military aircraft
worldwide.




                                       6
<PAGE>

BLAST-X(TM) PANELS

         In March 2003 we introduced a new line of Blast-X(TM) lightweight blast
mitigation materials available in flat and conformable panels. This technology
has successfully demonstrated reductions in blast energies up to 80% when
compared to unmitigated applications. These panels will reduce the impact of
explosions, whether the explosion is accidental or caused by terrorist
activities. Blast-X panels are comprised of four unique materials - a face sheet
is designed to quench hot gases instantly and attenuate shock waves, a honeycomb
core cushions impact and adds structure to the assembly, a core medium inside
the honeycomb is devised to rapidly cool the blast environment and extinguish
flame fronts from burning gases, dust and mist, and a back panel made of G-Lam
contains blast fragments and debris.

         Blast-X wallboard is designed for installation and retrofit in building
construction. It is easily installed using customary wallboard installation
techniques. Blast-X is also available for ceiling panels, mailboxes and trash
receptacles. A Blast-X vehicle shield was developed for the military, to help
protect military vehicles from explosive mines and bombs. We anticipate that a
consumer market for the Blast-X vehicle shield will develop. The vehicle shield
can be installed on most sport utility vehicles and limousines.

SAVE A GUNNER(TM) TURRET SYSTEM

         The Save a Gunner Turret System ("SAG Turret") is a lightweight
shielded turret designed for installation on Hum-Vees, although we are also
designing similar units for Land Rover and Unimog vehicles. The SAG Turret
weights less than 200 pounds and offers rapid rotational capability. It will
allow a gunner to effectively and rapidly rotate the turret during battle
situations, while offering exceptional protection against many types of
ammunition. Two people can install the SAG Turret in less than one hour using
common hand tools. Because it is made from G-Lam, it is impervious to petroleum
distillates and will continue to perform at temperatures in excess of 400
degrees Fahrenheit.

ANTI-BALLISTIC VESTS

         Israeli law enforcement services asked us to design and manufacture
anti-ballistic personnel vests. We are upgrading the original specifications in
order to respond to an increased threat from new ammunition and we expect to
commence manufacturing 6,000 of these improved vests for Israeli law enforcement
services during the last quarter of 2003.

RADOMES

         We are currently using G-Lam material technology to produce a line of
direct replacement aircraft radomes that will be substantially more durable than
products currently offered, with the ultimate goal of providing a replacement
radome with a lifetime warranty.

DISTRIBUTION/MANUFACTURING

         We will not engage in manufacturing the products we develop. As
products are ordered, we will contract with third parties for their manufacture.
The primary market for our products is the defense industry, although we
anticipate that some of our products may eventually be sold to police and many
will have commercial and consumer uses. As the market for our products will be
worldwide, manufacturers will be chosen based on quality, location and price.

         We will continue to use consultants knowledgeable in the industries we
target to obtain orders. We anticipate that during the next 6 months we will
hire a sales coordinator to manage fulfillment of orders and coordinate with
representatives.



                                       7
<PAGE>



COMPETITION

         Nanotechnology is an emerging industry. We believe that the global
number of development-stage companies involved in the development of
nanomaterials will continue to grow, eventually posing significant and
increasing competitive risks. We anticipate that many of these companies will be
associated with university or national laboratories. We believe that most of
these companies will be engaged primarily in funded research, and we are not
aware of any that have commercial production capabilities, however, they may
represent competitive risks in the future. Some of these development stage
companies, especially in other countries, are receiving significant government
assistance. To date, the United States government has allocated $274 billion for
nanotechnology research.

         The manufacture of the products made with our nanotechnology is
intense. We face current and potential competition from companies that develop
products for similar uses, as well as the in-house capabilities of several of
our potential customers, such as the military. Many of these competitors are
larger and more diversified than we are. Although we believe that our materials
and technologies are superior to other products, competitive companies pose
risks to us because they may have substantially greater financial and technical
resources, larger research and development staffs, and greater manufacturing and
marketing capabilities.

         We have a continuing need for skilled and professional personnel for
the research and development of our products. The demand for workers with
specialized engineering and technical skills is high and we anticipate that it
will remain so for the foreseeable future. We will be competing with other
companies with similar needs in hiring skilled employees, and we may incur
increased labor, recruiting or training costs so as to have access to the
required skills.

SOURCES AND AVAILABILITY OF RAW MATERIALS AND NAMES OF PRINCIPAL SUPPLIERS

         The raw materials used to produce our products, including our G-Lam
material, are easily obtained from multiple sources at competitive prices. If
any of these supply sources becomes unavailable, we believe that we would be
able to secure alternate supply sources within a short period of time and with
minimal or no disruption.

INTELLECTUAL PROPERTY

         We have applied for patents for our G-Lam material and, as our products
are developed we apply for patents if we believe it advantageous. We do not
believe that our business would be materially affected by the expiration of any
patents, if they are issued. We do not have trademarks, franchises or
concessions that are considered to be of material importance to us in the
conduct of our business. When we consider it to be advantageous, we enter into
patent license agreements for technologies that are synergistic to our current
products, or expand our security products range.

GOVERNMENT REGULATION

         In general, the development of our products is not subject to
government regulation. However, because we intend to sell our products in
countries other than the United States, we are required to comply with federal
rules governing such sales.

         Our Guardian Door requires approval of the FAA before it can be
installed in commercial aircraft manufactured in the United States. We have not
yet received approval from the FAA, and we are not certain that we will invest
the time and money necessary to obtain such approval.

                                       8
<PAGE>

RESEARCH AND DEVELOPMENT

         Research and development is a critical component of our business and is
ongoing. During the last fiscal year, we spent $1,627,662 on research and
development. Our research and development costs will continue to be substantial.

EMPLOYEES

         We currently have 11 full-time employees. Depending on the project, we
also retain the services of between 12 and 15 consultants.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our corporate office will continue to be based in Nevada as management
believes that the state strongly supports small business. However, because the
majority of our existing research personnel are domiciled in Texas, we have
leased approximately 39,000 square feet of industrial space on 2.4 acres,
located at 1016 Harris Road, Arlington, Texas, at a gross rental rate of $11,000
per month, which is market rate. The lease term ends on May 31, 2006. We have an
option to purchase the property for $950,000. The option expires on March 31,
2004. The property is in satisfactory condition for USGA's operations and is
being upgraded. USGA expects that the property will be adequate for its needs
for the lease term.

ITEM 3.  LEGAL PROCEEDINGS

         There is no current outstanding legal action in which we are involved
and we are unaware of any pending actions or claims against us.

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

         Delaware General Corporation Law sections 228(a) and (c) provide that
any action that may be taken at a special meeting of the shareholders may be
taken by written consent of shareholders holding a majority of a company's
shares. On August 28, 2002 and again on May 29, 2003, shareholder action was
taken by written consent.

         On August 28, 2002, we received shareholder consent approving our
Amended and Restated Certificate of Incorporation filed with the Secretary of
State of Delaware on September 26, 2002, effecting a change of our name from
Caring Products International, Inc. to US Global Aerospace, Inc. A shareholder
owning and having the right to vote 15,500,000 pre-split shares, which
constituted a majority of the then outstanding shares, consented to this matter.
There were no votes cast against or withheld, and no abstensions or broker
non-votes regarding this matter. In accordance with section 228(e) of the
Delaware General Corporation Law, notice of this action was provided to
shareholders on or about August 30, 2002.

         On May 29, 2003, we received shareholder consent approving our Amended
and Restated 2002 Stock Plan and an amendment to our Certificate of
Incorporation effecting a change of our name to US Global Nanospace, Inc. and
changing our registered address in the State of Delaware. A shareholder owning
and having the right to vote 46,500,000 shares of common stock, which
constituted a majority of the then outstanding shares, consented to these
matters. There were no votes cast against or withheld, and no abstensions or
broker non-votes regarding this matter. Notice of these actions was provided to
shareholders on or about June 24, 2003.



                                       9
<PAGE>



PART II

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

MARKET INFORMATION

         Our common stock has traded on the NASD OTC Bulletin Board under the
symbol USGA since October 4, 2002. From July 12, 2001 to October 4, 2002, our
common stock traded on the NASD OTC Bulletin Board under the symbol CPRD. From
June 21, 1999 to July 12, 2001 our common stock traded on the OTC Bulletin Board
under the symbol BDYR. From December 15, 1997 through June 20, 1999, our common
stock traded on the Nasdaq SmallCap Market under the symbol BDRY. Previously,
our common stock traded on the OTC Bulletin Board under the symbol CGPD from
November 21, 1997 through December 14, 1997, under the symbol CGPDD from October
21, 1997 through November 20, 1997 and under the symbol CGPD from August 14,
1997 through October 20, 1997. We voluntarily delisted our common shares from
the Vancouver Stock Exchange in January 1998 and from the British Columbia Stock
Exchange on June 17, 2002.

         The table below sets forth the range of high and low bid quotes of our
common stock for each quarter for the last two fiscal years as reported by Yahoo
Finance. The bid prices represent inter-dealer quotations, without adjustments
for retail mark-ups, markdowns or commissions and may not necessarily represent
actual transactions. The following prices reflect the 3 for 1 stock split that
was effected on March 5, 2003.

<TABLE>
<CAPTION>

                                                             PERIOD            HIGH         LOW
                                                       -------------------   ---------    ---------

<S>                                                    <C>                     <C>          <C>
          Fiscal Year Ended March 31, 2003             First Quarter           $2.083       $0.283
                                                       Second Quarter          $0.933       $0.083
                                                       Third Quarter           $0.216       $0.116
                                                       Fourth Quarter          $0.183       $0.080

          Fiscal Year Ended March 31, 2002             First Quarter           $0.026       $0.013
                                                       Second Quarter          $0.336       $0.166
                                                       Third Quarter           $1.666       $0.116
                                                       Fourth Quarter          $0.666       $0.250
</TABLE>

HOLDERS

         There were approximately 138 shareholders of record of common stock as
of March 31, 2003.

DIVIDENDS

         We have never declared or paid cash dividends on our common stock, and
our present policy is not to pay cash dividends on our common stock. Any payment
of cash dividends in the future will be wholly dependent upon our earnings,
financial condition, capital requirements and other factors deemed relevant by
our board of directors. It is not likely that cash dividends will be paid in the
foreseeable future.



                                       10
<PAGE>



SALE OF UNREGISTERED SHARES

         During the last fiscal year we sold securities that were not registered
under the Securities Act of 1933. The transactions were not reported in our
previously filed quarterly reports. The transactions are as follows:

         In August 2002 we issued 1,687,500 shares to an individual for business
consulting services, of which 1,265,625 were subject to vesting conditions to be
met by the consultant.


         In September 2002 we issued 150,000 shares to a consultant for investor
relations services.

         In September 2002 we issued 635,889 shares for legal services.

         From November 2002 through February 2003, we issued a total of 152,502
shares to a consultant for investor relations services.

         In November 2002 we entered into settlement agreements resulting in the
issuance of 4,163,928 shares of restricted common stock for the repayment of
$660,000 in principal and $33,532 in accrued interest related to loans advanced
to us by an existing shareholder and unrelated third-party lenders.

         We relied on the exemption provided by Section 4(2) of the Securities
Act of 1933, as amended, to issue the stock in the above-reported transactions.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY INCENTIVE PLAN

         Set forth in the table below is information regarding awards made
through compensation plans or arrangements through March 31, 2003, the most
recently completed fiscal year.(*)

<TABLE>
<CAPTION>
----------------------------- -------------------------- ------------------------- --------------------------
                                                                                   Number of securities
                                                                                   remaining available for
                                                                                   future issuance under
                              Number of securities to    Weighted average          equity compensation
                              be issued upon exercise    exercise price of         plans (excluding
                              of outstanding options,    outstanding options,      securities reflected in
Plan Category                 warrants and rights        warrants and rights       column 2)
----------------------------- -------------------------- ------------------------- --------------------------

----------------------------- -------------------------- ------------------------- --------------------------
<S>                                   <C>                         <C>                    <C>
Equity Compensation Plans
Approved by Security Holders          13,875(1)                   $0.06                  12,211,702(2)
----------------------------- -------------------------- ------------------------- --------------------------

----------------------------- -------------------------- ------------------------- --------------------------
Equity Compensation Plans
Not Approved by Security
Holders                                  N/A                       N/A                        N/A
----------------------------- -------------------------- ------------------------- --------------------------

----------------------------- -------------------------- ------------------------- --------------------------
</TABLE>

(1) As of March 31, 2003, options to purchase 13,875 shares of USGA common stock
were outstanding. The options had been issued pursuant to individual
compensation arrangements prior to May 17, 2002, the date of the share exchange
between USDRGA and US Global. As of March 31, 2003, the average weighted
exercise price of the options was $0.06.
(2) The US Global Aerospace, Inc. (formerly Caring Products International, Inc.)
2002 Consultant Stock Plan permitted USGA to issue options or to make awards of
common stock solely to consultants. The 2002 Consultant Stock Plan was amended
and restated by the Board effective April 10, 2003 to include employees and was
renamed "US Global Aerospace, Inc. Amended and Restated 2002 Stock Plan". As of
March 31, 2003 no options were granted under the US Global Aerospace, Inc.
Amended and Restated 2002 Stock Plan, however USGA had awarded 2,788,298 shares
of common stock to consultants in exchange for services rendered to USGA.
Therefore, as of March 31, 2003 there was available for future issuance under
the US Global Aerospace, Inc. Amended and Restated 2002 Stock Plan 12,211,702
shares of common stock. In the future, awards of options may be granted.

                                       11
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

         Management's discussion and analysis of results of operations and
financial condition are based upon USGA's financial statements. These statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America. These principles require management to make
certain estimates, judgments and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         In consultation with our Board of Directors, we have identified the
following accounting principles that we believe are key to an understanding of
our financial statements. These important accounting policies require
management's most difficult, subjective judgments.

         The Chairman and Chief Executive Officer of USGA controls USDR
Aerospace, Ltd. ("Aerospace"), which has licensed its intellectual property to
USGA. Aerospace has also provided employees and product development services to
USGA. Today, USGA employs 11 individuals previously employed through Aerospace.
Aerospace will continue to provide office and lab space and supplies to USGA.
During the period from May 17, 2002 through May 1, 2003 management was required
to estimate the value of the property and services (including product
development services) provided to us by Aerospace. For the year and period ended
March 31, 2003 and 2002 and since inception (March 20, 2002), management
estimated that Aerospace provided property and services to us totaling
approximately $2.9 million. During the current fiscal year, we intend to
purchase the office furniture and small business equipment still owned by
Aerospace.

PLAN OF OPERATION

         We are a development stage company with expertise in the emerging field
of nanotechnology. We specialize in identifying, developing, and commercializing
advanced products the core technologies of which are primarily nanoscience
derived. These products include complex polymer materials, polymer nanofiber
materials, nanofiber filter materials, biological and chemical decontaminants,
blast mitigation materials and nano and micro sound generating devices for
breach barriers and non-lethal weapon applications. We are currently focusing
our efforts on developing a broad range of defense and law enforcement

                                       12
<PAGE>

applications for the materials we create, including products suitable for
homeland security and force protection applications. Currently, most of our
products are developed for use by the military and homeland security.

         Our capital requirements, particularly as they relate to product
research and development, have been and will continue to be significant. Our
future cash requirements and the adequacy of available funds will depend on many
factors, including the pace at which we are able to launch our products, whether
or not a market develops for our products and, if a market develops, the pace at
which it develops, and the pace at which the technology involved in making our
products changes.

         To date, we have funded our operations through loans in the amount of
$1,650,000 from a bank and loans in the amount of $1,280,000 from unrelated
third parties and an existing shareholder. During the next 12 months, if we fail
to earn revenues in an amount sufficient to fund our operations, we intend to
raise capital through an offering of our securities or from additional loans. We
cannot guarantee that financing will be available to us, on acceptable terms or
at all. If we do not earn revenues sufficient to support our business and we
fail to obtain other financing, either through an offering of our securities or
by obtaining additional loans, we may be unable to maintain our operations.

         During the fiscal year ended March 31, 2003 we spent $1,627,662 on
research and development as compared to no expense for research and development
during the fiscal period ended March 31, 2002. Our research and development
expenses related to the development of the products discussed in Part I of this
Annual Report.

         During the fiscal year ended March 31, 2003 we incurred $3,088,327 in
expense related to non-cash compensation as compared to no expense related to
non-cash compensation during the fiscal period ended March 31, 2002. During the
fiscal year ended March 31, 2003, we paid our consultants with our common stock
in order to conserve cash.

         During the fiscal year ended March 31, 2003 other operating expense
totaled $2,805,665 as compared to other operating expense of $8,052 for the
fiscal period ended March 31, 2002, an increase of approximately 347%. This
increase reflects expenses related to the development of our business following
the share exchange.

         We had an operating loss of $7,521,654 for the fiscal year ended March
31, 2003 as opposed to an operating loss of $8,052 for the fiscal period ended
March 31, 2002. The increase in operating loss is attributable to the costs
associated with the development of our business following the share exchange. We
had a net loss of $7,046,303 for the fiscal year ended March 31, 2003.

         Other income (expense) for the fiscal year ended March 31, 2003 was
made up of $617,904 in debt restructuring, $10,045 of other income consisting of
interest income and $152,598 of other expense consisting of interest expense.
The debt restructuring related to a loan of $920,000 from an existing
shareholder and loans totaling $360,000 from third party lenders. Portions of
these loans were forgiven, while the balances remaining were paid with USGA's
common stock.

         During the next 12 months we will continue upgrading our current
products and developing new products and methods of using our lightweight,
anti-ballistic material, G-Lam. For the fiscal year ended March 31, 2003 our
research and development expenses totaled $1,627,662. We anticipate that our
research and development expenses will continue to be significant.

         At March 31, 2003 we had cash on hand of $3,239. Our primary source of
cash during the fiscal year was loans. Net cash used in operating activities was
$2,934,707. The primary uses of cash for the fiscal year ended March 31, 2003

                                       13
<PAGE>

consisted of general operating costs and product research and development
expenses. At this time, to conserve cash, we outsource the manufacture of our
products and our sales and marketing functions. We have applied for grants from
various government agencies that, if approved, will provide funding for the
development of new products and for the enhancement of our current products. We
are also negotiating with various government agencies and private companies in
the areas of defense, homeland security, law enforcement and aerospace for the
sale of our products. We cannot be certain, however, that we will be awarded any
funds through grants or that sales of our products will ever generate enough
cash to fund our business. During the next 12 months, if we cannot generate
sufficient funds to operate our business from grants and product sales, we will
be required to seek financing from our largest stockholder, who has provided
financing and a loan guarantee for us in the past. We may also consider selling
debt or equity securities. We cannot be certain that we will be successful in
obtaining financing if we need it.

         Cash flows from investing activities consisted of $2,946 for the fiscal
year ended March 31, 2003 and related to cash acquired in conjunction with the
share exchange. Cash flows from financing activities for the fiscal year ended
March 31, 2003 included loan proceeds in the amount of $1,280,000 from a
shareholder and certain third parties and proceeds in the amount of $1,650,000
from a bank line of credit. The line of credit is a revolving line that expires
on June 30, 2003. The bank has extended the lines of credit through August 31,
2003.

         The use of nanotechnology is a novel and unproven business model, which
may not be successful and will ultimately depend on demand for such products,
primarily by the military. We anticipate that any business model we develop will
be subject to change. At this time it is impossible for us to predict the degree
to which demand for our products will evolve or whether any potential market
will be large enough to provide any meaningful revenue or profit for us.

NEW ACCOUNTING PRONOUNCEMENTS

         The FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement No. 13, and Technical Corrections," on April
30, 2002.  Statement No. 145 rescinds  Statement No.4,  which required all gains
and losses from  extinguishments  of debt to be  aggregated  and,  if  material,
classified as an  extraordinary  item,  net of related  income tax effect.  Upon
adoption of Statement No. 145,  companies will be required to apply the criteria
in APB Opinion No. 30,  "Reporting  the Results of  Operations  - reporting  the
Effects of Disposal of a Segment of a Business,  and Extraordinary,  Unusual and
Infrequently   Occurring   Events   and   Transactions"   in   determining   the
classification of gains and losses resulting from the  extinguishments  of debt.
Statement No. 145 is effective for fiscal years beginning after May 15, 2002. In
the current year, USGA adopted SFAS 145, which resulted in the recording of debt
restructuring as other income in the financial statements.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This standard requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity. SFAS
No. 146 is to be applied prospectively to exit or disposal activities initiated
after December 31, 2002. The initial application of SFAS 146 did not have an
impact on USGA's financial statements.

                                       14
<PAGE>

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure." This standard amends FASB
Statement No. 123, Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
Statement amends the disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The amendments to Statement 123
of this Statement shall be effective for financial statements for fiscal years
ending after December 15, 2002. The initial application of SFAS 148 did not have
an impact on USGA's financial statements.

         In November 2002, FASB Interpretation 45, Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (FIN 45), was issued. FIN 45 requires a guarantor entity,
at the inception of a guarantee covered by the measurement provisions of the
interpretation, to record a liability for the fair value of the obligation
undertaken in issuing the guarantee. USGA previously did not record a liability
when guaranteeing obligations unless it became probable that USGA would have to
perform under the guarantee. FIN 45 applies prospectively to guarantees USGA
issues or modifies subsequent to December 31, 2002, but has certain disclosure
requirements effective for interim and annual periods ending after December 15,
2002. The initial application of FIN 45 did not have an impact on USGA's
financial statements.

         In January 2003, the FASB issued FASB Interpretation 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 clarifies the application of
Accounting Research Bulletin 51, Consolidated Financial Statements, for certain
entities that do not have sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support from other
parties or in which equity investors do not have the characteristics of a
controlling financial interest ("variable interest entities"). Variable interest
entities within the scope of FIN 46 will be required to be consolidated by their
primary beneficiary. The primary beneficiary of a variable interest entity is
determined to be the party that absorbs a majority of the entity's expected
losses, receives a majority of its expected returns, or both. FIN 46 applies
immediately to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. It applies in the first fiscal year or interim period beginning after June
15, 2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. USGA is in the process of
determining what impact, if any, the adoption of the provisions of FIN 46 will
have upon its financial condition or results of operations.

FORWARD-LOOKING STATEMENTS

         This Form 10-KSB and other reports and statements filed by USGA with
the Securities and Exchange Commission include "forward-looking" statements
within the meaning of Section 27A of the Securities Act of 1933, Section 21E of
the Securities Exchange Act of 1934, and the Private Securities Litigation
Reform Act of 1995, and we desire to take advantage of the "safe harbor"
provisions in those laws. Therefore, we are including this statement for the
express purpose of availing ourselves of the protections of these safe harbor
provisions with respect to all of the forward-looking statements we make. These
forward-looking statements reflect our current views with respect to possible
future events and financial performance. They are subject to certain risks and
uncertainties, including specifically the absence of significant revenues,
financial resources, a history of losses, competition, the uncertainty of patent
and proprietary rights, trading risks of low-priced stocks and those other risks
and uncertainties discussed in this report that could cause our actual results
to differ materially from our historical results or those we hope to achieve. In
this report, the words "anticipates," "believes," "expects," "intends," "future"
and similar expressions identify certain forward-looking statements. Except as
required by law, we undertake no obligation to announce publicly revisions we
make to these forward-looking statements to reflect the effect of events or

                                       15
<PAGE>

circumstances that may arise after the date of this prospectus. All written and
oral forward-looking statements made subsequent to the date of this report and
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by this section.

FACTORS AFFECTING BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION

         An investment in our securities is very speculative and involves a high
degree of risk. You should carefully consider the following risk factors, along
with the other matters referred to in this Annual Report, before you decide to
buy our securities. If you decide to buy our securities, you should be able to
afford a complete loss of your investment.

RISKS ASSOCIATED WITH OUR BUSINESS

WE ARE A DEVELOPMENT STAGE COMPANY AND HAVE HAD NO OPERATIONS TO DATE, THEREFORE
YOU HAVE NO BASIS ON WHICH TO DETERMINE IF OUR BUSINESS CAN BE SUCCESSFUL. IF WE
ARE NOT SUCCESSFUL, YOUR SECURITIES MAY BECOME WORTHLESS.

         Current management acquired control of USGA on May 17, 2002. We are a
development stage company and, to date, we have had no operations. During the
fiscal year ended March 31, 2003 we had a net loss of $7,046,303. Our auditor,
Grant Thornton LLP, has issued a "going concern" opinion for our financial
statements at March 31 2003. In that opinion and in the notes to the financial
statements, the auditor noted that we have generated no revenues and that
attainment of profitable operations is dependent upon obtaining adequate
financing to fulfill our development activities. These factors raise substantial
doubt about our ability to continue as a going concern. Because we have no
operating history, you will have no basis upon which to accurately forecast our
future operations, including sales, or to judge our ability to develop our
business. If we are unsuccessful in developing our products, your securities may
become worthless.

OUR PRODUCTS ARE STILL BEING DEVELOPED AND, AS YET, THEY ARE UNPROVEN, THEREFORE
WE CANNOT ASSURE YOU THAT WE WILL BE SUCCESSFUL. IF WE ARE NOT SUCCESSFUL, THE
SECURITIES YOU ACQUIRE MAY BECOME WORTHLESS.

         Our current business model depends on generating revenue through sales
of our products. These products are in varying stages of development and
testing. Our products have not been proven. If we cannot successfully develop
and prove our products, we may not become profitable and the securities you
acquire may become worthless.

THE SUCCESS OF OUR BUSINESS  REQUIRES  CONTINUED  FUNDING.  IF WE DO NOT RECEIVE
ADEQUATE FUNDING, THE SECURITIES YOU ACQUIRE MAY BECOME WORTHLESS.

         Our ability to continue in existence and to develop our business
depends upon our ability to obtain funding for our operations. If we do not
receive adequate funding, it is unlikely that we could continue our business, in
which case you would lose your entire investment.

THE SUCCESS OF OUR BUSINESS REQUIRES ACCEPTANCE OF OUR PRODUCTS IN THE
MARKETPLACE. IF A DEMAND FOR OUR PRODUCTS DOES NOT DEVELOP, OUR BUSINESS WILL BE
UNSUCCESSFUL AND YOU MAY LOSE YOUR ENTIRE INVESTMENT.

         The use of nanotechnology is a novel and unproven business model, which
may not be successful and will ultimately depend on demand for our products. Our
ability to grow and sustain our business is dependent upon our ability to gain
significant acceptance of our products, primarily in the defense and homeland
security markets. Without significant acceptance in these markets, we will not
be able to achieve and sustain profitable operations and your securities will

                                       16
<PAGE>

likely become worthless. At this time it is impossible for us to predict the
degree to which demand for our products will evolve or whether any potential
market will be large enough to provide any meaningful revenue or profit for us.

WE ARE SUBJECT TO THE RISKS AND UNCERTAINTIES INHERENT IN NEW BUSINESSES. OUR
FAILURE TO PLAN OR FORECAST ACCURATELY COULD HAVE A MATERIAL ADVERSE IMPACT ON
OUR DEVELOPMENT, WHICH MAY CAUSE THE VALUE OF YOUR SECURITIES TO DECLINE
SUBSTANTIALLY OR BECOME WORTHLESS.

         We are subject to the risks and uncertainties inherent in new
businesses, including the following:

     o   Our projected capital needs may be inaccurate, and we may not have
         enough money to develop our products and bring them to market;

     o   We may experience unanticipated development or marketing expenses,
         which may make it more difficult to develop our products and bring
         them to market;

     o   Even if we are able to develop our products and bring them to market,
         we may not earn enough revenue from the sales of our products to cover
         the costs of operating our business.

         If, because of our failure to plan or project accurately, we are
unsuccessful in our efforts to develop our products or if the products we
provide do not produce revenues as we project, we are not likely to ever become
profitable and we may be required to curtail some or all of our operations. In
that event, the value of your investment could decline substantially or become
worthless.

WE WILL CONTINUE TO NEED MONEY TO FUND FUTURE OPERATIONS, AND WE ARE NOT SURE WE
CAN OBTAIN ADDITIONAL FINANCING. IF WE DO NOT RECEIVE ADEQUATE FINANCING WE
WOULD BE UNABLE TO CONTINUE OUR OPERATIONS AND YOUR SECURITIES WOULD BECOME
WORTHLESS.

         Until we are able to generate significant revenues from the sale of our
products, we will require financing for our operations. We cannot assure you
that funds will be available to us on favorable terms, or at all. To the extent
that money is raised through the sale of our securities, the issuance of those
securities could result in dilution to our shareholders. Unavailability of funds
could have a material adverse effect on our ability to continue our operations.
If we were not able to continue our operations, your securities become
worthless.

WE ARE DEPENDENT FOR OUR SUCCESS ON OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER,
MR. JOHN ROBINSON. THE LOSS OF MR. ROBINSON'S SERVICES WOULD HAVE AN ADVERSE
EFFECT ON OUR OPERATIONS, AND ON THE VALUE OF YOUR SECURITIES.

         Our future success will depend, to a significant degree, on the
continued services of our President and Chief Executive Officer, Mr. John
Robinson. We do not have, and currently we do not intend to acquire, key-man
life insurance on the life of Mr. Robinson. The loss of Mr. Robinson's services
would have a material adverse effect on our business and operations.

OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE NEGATIVELY
IMPACTED IF DEMAND FOR OUR PRODUCTS IS LESS THAN WE ANTICIPATE OR IF WE FAIL TO
HIRE QUALIFIED EMPLOYEES. AS A RESULT, THE VALUE OF YOUR SECURITIES MAY DECLINE.

         Our growth depends on our ability to successfully develop and market
our products. The development and marketing of our products is dependent on a
number of factors, including our ability to:

                                       17
<PAGE>

     o   recruit and maintain a base of qualified scientists and engineers;

     o   initiate, develop and sustain corporate and government relationships;

     o   attract, hire, integrate and retain qualified sales and sales support
         employees; and

     o   accurately assess the demands of the market.

         Demand for our products might be less than we anticipate, or we may not
be successful in recruiting and maintaining the personnel we need to develop and
sell our products. In either case, our business, operating results and financial
condition could be negatively impacted and the value of your securities may
decline.

WE ARE DEPENDENT ON PROPRIETARY TECHNOLOGY, WHICH WE MAY NOT BE ABLE TO
ADEQUATELY PROTECT. ADDITIONALLY, THIRD PARTIES MAY ALLEGE THAT WE INFRINGE ON
THEIR INTELLECTUAL PROPERTY. IF WE WERE TO BECOME INVOLVED IN LITIGATION, IT
WOULD BE COSTLY AND WOULD DIVERT MANAGEMENT'S ATTENTION FROM OUR BUSINESS
OPERATIONS. THIS COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS AND ON THE VALUE
OF YOUR SECURITIES.

         We rely on a combination of trade secret and patent laws, nondisclosure
and other contractual and technical measures to protect our proprietary rights
in our products. However, we cannot assure you that these provisions will be
adequate to protect our proprietary rights. In addition, the laws of certain
foreign countries do not protect intellectual property rights to the same extent
as the laws of the United States. Although we believe that our intellectual
property rights do not infringe upon the proprietary rights of third parties, a
competitor may claim that we have infringed on its products. Any litigation
relating to our intellectual property could result in substantial expense to us
and result in significantly diverting our technical and management personnel
from their routine activities. This could have an adverse effect on our business
and the value of your securities.

RISKS ASSOCIATED WITH OWNERSHIP OF OUR SECURITIES

WE HAVE NOT PAID CASH DIVIDENDS AND IT IS UNLIKELY THAT WE WILL PAY CASH
DIVIDENDS IN THE FORESEEABLE FUTURE.

         We plan to use all of our earnings, to the extent we have earnings, to
fund our operations. We do not plan to pay any cash dividends in the foreseeable
future. We cannot guarantee that we will, at any time, generate sufficient
surplus cash that would be available for distribution as a dividend to the
holders of our common stock. You should not expect to receive cash dividends on
our common stock.

WE HAVE THE ABILITY TO ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK WITHOUT
ASKING FOR SHAREHOLDER APPROVAL, WHICH COULD CAUSE YOUR INVESTMENT TO BE
DILUTED.

         Our Articles of Incorporation currently authorize the Board of
Directors to issue up to 100,000,000 shares of common stock. The power of the
Board of Directors to issue shares of common stock or warrants or options to
purchase shares of common stock is generally not subject to shareholder
approval. Accordingly, any additional issuance of our common stock may have the
effect of further diluting your investment.



                                       18
<PAGE>



WE MAY RAISE ADDITIONAL CAPITAL THROUGH A SECURITIES OFFERING THAT COULD DILUTE
YOUR OWNERSHIP INTEREST.

         We require substantial working capital to fund our business. If we
raise additional funds through the issuance of equity, equity-related or
convertible debt securities, these securities may have rights, preferences or
privileges senior to those of the holders of our common stock. The issuance of
additional common stock or securities convertible into common stock by our
management will also have the effect of further diluting the proportionate
equity interest and voting power of holders of our common stock.

A MAJORITY OF OUR CAPITAL STOCK IS OWNED BY OUR EXECUTIVE OFFICERS AND
DIRECTORS, WHICH WILL ALLOW THEM TO CONTROL THE OUTCOME OF MATTERS SUBMITTED TO
OUR SHAREHOLDERS FOR VOTE.

         As of the date of this Annual Report, management owns the majority of
our issued and outstanding shares of capital stock. Because management owns a
majority of the capital stock, management will retain the ability to elect a
majority of the Board of Directors and thereby control our management. Although
they are under no obligation to do so, if our executive officers and directors
(and their affiliates) were to vote together, they would also have the ability
to control the outcome of corporate actions requiring shareholder approval,
including mergers and other changes of corporate control, going private
transactions, and other extraordinary transactions. This concentration of
ownership may have the effect of delaying or preventing a change of control,
even if a change of control would benefit shareholders.

THERE IS NO ACTIVE PUBLIC MARKET FOR OUR SECURITIES, SO YOU MAY NOT BE ABLE TO
LIQUIDATE YOUR SECURITIES IF YOU NEED MONEY.

         Trading of our common stock is sporadic. It is not likely that an
active market for our common stock will develop or be sustained soon. You may
not be able to liquidate our securities if you need money.

WE ARE SUBJECT TO THE PENNY STOCK RULES AND THESE RULES MAY ADVERSELY AFFECT
TRADING IN OUR COMMON STOCK.

         Our common stock is a "low-priced" security under rules promulgated
under the Securities Exchange Act of 1934. In accordance with these rules,
broker-dealers participating in transactions in low-priced securities must first
deliver a risk disclosure document which describes the risks associated with
such stocks, the broker-dealer's duties in selling the stock, the customer's
rights and remedies and certain market and other information. Furthermore, the
broker-dealer must make a suitability determination approving the customer for
low-priced stock transactions based on the customer's financial situation,
investment experience and objectives. Broker-dealers must also disclose these
restrictions in writing to the customer, obtain specific written consent from
the customer, and provide monthly account statements to the customer. The effect
of these restrictions probably decreases the willingness of broker-dealers to
make a market in our common stock, decreases liquidity of our common stock and
increases transaction costs for sales and purchases of our common stock as
compared to other securities.


                                       19
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'

The Board of Directors and Stockholders
US Global Aerospace, Inc.

We have audited the accompanying balance sheet of US Global Aerospace, Inc. (the
Company), a development stage company, as of March 31, 2003, and the related
statements of operations, stockholders' deficit, and cash flows for the year
then ended, period ended March 31, 2002, and from inception (March 20, 2002)
through March 31, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we 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. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of US Global Aerospace, Inc. as of
March 31, 2003, and the results of its operations and its cash flows for the
year then ended, period ended March 31, 2002 and from inception (March 20, 2002)
through March 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred a net loss of $7,046,303 for the year ended March 31, 2003,
and, as of that date, the Company's total liabilities exceeded its total assets
by $2,699,198. These factors, among others, as discussed in note 3 to the
financial statements, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/S/ GRANT THORNTON LLP

Seattle, Washington
May 31, 2003



                                       20
<PAGE>



                            US Global Aerospace, Inc.
                          (A development stage company)
                                  BALANCE SHEET
                                 March 31, 2003


<TABLE>
<CAPTION>
                                            ASSETS

<S>                                                                          <C>
CURRENT ASSETS
Cash                                                                         $             3,239
                                                                             -------------------


Total current assets                                                                       3,239
                                                                             -------------------

Total assets                                                                 $             3,239
                                                                             ===================

                             LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Lines of credit                                                               $        1,650,000
Accounts payable                                                                         366,242
Related party payable                                                                    306,519
Accrued salaries                                                                         297,980
Accrued interest                                                                          81,696
                                                                             -------------------


Total current liabilities                                                              2,702,437


Commitments                                                                                   --

STOCKHOLDERS' DEFICIT
Preferred stock authorized, 1,000,000 shares $0.01 par value, none
     issued or outstanding                                                                    --
Common stock authorized, 100,000,000 shares $0.001 par value                              75,789
Additional paid-in capital                                                             8,000,120
Deferred compensation and services                                                    (3,720,752)
Accumulated development stage deficit                                                 (7,054,355)
                                                                             -------------------


Total stockholders' deficit                                                           (2,699,198)
                                                                             -------------------

Total liabilities and stockholders' deficit                                  $             3,239
                                                                             ===================
</TABLE>




The accompanying notes are an integral part of this financial statement.


                                       21
<PAGE>





                            US Global Aerospace, Inc.
                          (A development stage company)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                 Cumulative
                                                                                             Results of operations
                                                                                              from March 20, 2002
                                                   Year ended           Period ended          (date of inception)
                                                    March 31,             March 31,            through March 31,
                                                      2003                  2002                   2003
                                                      ----                  ----                   ----

<S>                                              <C>                     <C>                     <C>
OPERATING EXPENSES
Research and development                         $ 1,627,662             $      --               $ 1,627,662
General and administrative
   Non-cash compensation and services
                                                   3,088,327                    --                 3,088,327
   Other                                           2,805,665                   8,052               2,813,717
                                                 -----------             -----------             -----------

Total operating expenses                           7,521,654                   8,052               7,529,706
                                                 -----------             -----------             -----------

Operating loss
                                                  (7,521,654)                 (8,052)             (7,529,706)

OTHER INCOME (EXPENSE)
   Debt restructure                                  617,904                    --                   617,904
   Other income                                       10,045                    --                    10,045
   Other expense                                    (152,598)                   --                  (152,598)
                                                 -----------             -----------             -----------

Total other income (expense)                         475,351                    --                   475,351
                                                 -----------             -----------             -----------

NET LOSS                                         $(7,046,303)            $    (8,052)            $(7,054,355)
                                                 ===========             ===========             ===========

Net loss per share, basic and diluted            $     (0.10)            $     (0.00)            $     (0.10)
</TABLE>




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


                                       22
<PAGE>



                            US Global Aerospace, Inc.
                          (A development stage company)
                       STATEMENT OF STOCKHOLDERS' DEFICIT
             From inception (March 20, 2002) through March 31, 2003

<TABLE>
<CAPTION>

                                                                                     Additional          Deferred
                                                           Common Stock                Paid-in         Compensation
                                                        Shares       Amount            Capital         and Services


<S>                                                  <C>            <C>              <C>               <C>
Balance at inception (March 20, 2002)                         --    $        --       $      --         $      --


Issuance of common stock on March 20, 2002
to founder for cash                                   15,000,000          5,000              --                --

Exchange of common stock of USDR Global
Aerospace, Ltd. for CPI common stock                 (15,000,000)        (5,000)             --                --

Issuance of CPI common stock in conjunction
with share exchange with USDR Global
Aerospace, Ltd.                                       60,362,157         60,362           (55,362)             --

Net loss for the period                                     --             --                --                --
                                                     -----------    -----------       -----------       -----------

Balance at March 31, 2002                             60,362,157         60,362           (55,362)             --

Issuance of common stock on May 16, 2002
in conjunction with consulting agreements at
$1.17 per share                                        5,437,500          5,438         6,338,312        (6,343,750)

Net assets acquired in share exchange agreement
on May 17, 2002
                                                            --             --                 446              --

Issuance of common stock on July 23, 2002
in exchange for accounts payable at $0.67 per
share                                                    210,486            210           140,114              --

Issuance of common stock on August 22, 2002
in exchange for accounts payable at $0.36 per
share                                                    211,638            212            75,272              --

Issuance of common stock on September 17, 2002
in exchange for accounts payable at $0.16 per
share                                                    349,212            349            55,525              --

Issuance of common stock on September 24, 2002
in consideration for consulting services at
$0.18 per share                                        1,687,500          1,688           307,687          (309,375)

Issuance of common stock on September 25, 2002
in exchange for accounts payable at $0.20 per
share                                                    635,889            636           126,542              --

Issuance of common stock on September 30, 2002
in consideration  for professional  services at
$0.20 per share                                          150,000            150            29,850              --

Issuance of common stock on October 23, 2002,
in consideration  for professional  services at
$0.14 per share                                           45,000             45             6,105              --

Issuance of common stock on November 11, 2002,
in exchange for  accounts  payable at $0.10 per
share                                                    549,999            550            54,450              --

Issuance of common stock on November 19, 2002,
in settlement of  outstanding  notes payable at
$0.16 per share                                        4,163,928          4,164           648,185              --

Issuance of common stock on November 19, 2002,
in consideration  for professional  services at
$0.16 per share                                           87,996             88            13,698              --

Issuance of common stock on December 27, 2002,
in exchange for  accounts  payable at $0.14 per
share                                                    468,381            468            65,105              --





<CAPTION>

                                                          Accumulated
                                                          Development          Total
                                                             Stage         Stockholders'
                                                            Deficit           Deficit


<S>                                                    <C>               <C>
Balance at inception (March 20, 2002)                  $      --         $


Issuance of common stock on March 20, 2002
to founder for cash                                           --               5,000

Exchange of common stock of USDR Global
Aerospace, Ltd. for CPI common stock                          --              (5,000)

Issuance of CPI common stock in conjunction
with share exchange with USDR Global
Aerospace, Ltd.                                               --               5,000

Net loss for the period                                     (8,052)           (8,052)
                                                       -----------       -----------

Balance at March 31, 2002                                   (8,052)           (3,052)

Issuance of common stock on May 16, 2002
in conjunction with consulting agreements at
$1.17 per share                                               --                --

Net assets acquired in share exchange agreement
on May 17, 2002
                                                              --                 446

Issuance of common stock on July 23, 2002
in exchange for accounts payable at $0.67 per
share                                                         --             140,324

Issuance of common stock on August 22, 2002
in exchange for accounts payable at $0.36 per
share                                                         --              75,484

Issuance of common stock on September 17, 2002
in exchange for accounts payable at $0.16 per
share                                                         --              55,874

Issuance of common stock on September 24, 2002
in consideration for consulting services at
$0.18 per share                                               --                --

Issuance of common stock on September 25, 2002
in exchange for accounts payable at $0.20 per
share                                                         --             127,178

Issuance of common stock on September 30, 2002
in consideration  for professional  services at
$0.20 per share                                               --              30,000

Issuance of common stock on October 23, 2002,
in consideration  for professional  services at
$0.14 per share                                               --               6,150

Issuance of common stock on November 11, 2002,
in exchange for  accounts  payable at $0.10 per
share                                                         --              55,000

Issuance of common stock on November 19, 2002,
in settlement of  outstanding  notes payable at
$0.16 per share                                               --             652,349

Issuance of common stock on November 19, 2002,
in consideration  for professional  services at
$0.16 per share                                               --              13,786

Issuance of common stock on December 27, 2002,
in exchange for  accounts  payable at $0.14 per
share                                                         --              65,573
</TABLE>

The accompanying notes are an integral part of this financial statement.


                                       23
<PAGE>



                            US Global Aerospace, Inc.
                          (A development stage company)
                 STATEMENT OF STOCKHOLDERS' DEFICIT - CONTINUED
             From inception (March 20, 2002) through March 31, 2003



<TABLE>
<CAPTION>
                                                                                                        Accumulated
                                                                            Additional     Deferred     Development       Total
                                                      Common Stock             Paid      Compensation      Stage      Stockholders'
                                                  Shares        Amount       Capital     and Services     Deficit        Deficit

<S>                                             <C>           <C>         <C>            <C>            <C>            <C>
Issuance of common stock on January 1, 2003,
in consideration for consulting services at
$0.17 per share                                    122,502         123         20,377           --             --           20,500

Issuance of common stock on January 16, 2003,
in consideration for consulting services at
$0.13 per share                                    453,948         454         57,046           --             --           57,500

Issuance of common stock on February 1, 2003,
in consideration for services at $0.14 per
share                                               30,000          30          4,170           --             --            4,200

Issuance of common stock on February 3, 2003,
in settlement of outstanding notes payable at
$0.15 per share                                    323,121         323         48,145           --             --           48,468

Issuance of common stock on March 5, 2003,
in exchange for accounts payable at $0.13 per
share                                              316,418         316         40,818           --             --           41,134

Issuance of common stock on March 5, 2003,
in consideration for services at $0.13 per
share                                              183,215         183         23,635        (23,818)          --             --

Amortization of deferred compensation and
services                                              --          --             --        2,956,191           --        2,956,191

Net loss for the year
                                                      --          --             --             --       (7,046,303)    (7,046,303)
                                                ----------    --------    -----------    -----------    -----------    -----------

Balance at March 31, 2003                       75,788,890    $ 75,789    $ 8,000,120    $(3,720,752)   $(7,054,355)   $(2,699,198)
                                                ==========    ========    ===========    ===========    ===========    ===========
</TABLE>






The accompanying notes are an integral part of this financial statement.


                                       24
<PAGE>



                            US Global Aerospace, Inc.
                          (A development stage company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                    Cumulative
                                                                                                               results of operations
                                                                                                                from March 20, 2002
                                                                         Year ended           Period ended      (date of inception)
Increase (Decrease) in Cash                                              March 31,              March 31,        through March 31,
                                                                           2003                   2002                 2003
                                                                           ----                   ----                 ----
<S>                                                                    <C>                     <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                               $(7,046,303)            $    (8,052)            $(7,054,355)
Adjustments to reconcile net loss to net
 cash used in operating activities
    Common stock issued for services
                                                                         3,088,327                    --                 3,088,327
    Forgiveness of loans and accounts payable                             (617,904)                   --                  (617,904)
    Changes in assets and liabilities
      Accrued interest                                                     119,537                    --                   119,537
      Accounts payable                                                     917,137                   8,052                 925,189
      Accrued salaries                                                     297,980                 297,980
      Related party payable                                                306,519                    --                   306,519
                                                                       -----------             -----------             -----------

 Net cash used in operating activities                                  (2,934,707)                   --                (2,934,707)
                                                                       -----------             -----------             -----------

CASH FLOWS FROM INVESTING ACTIVITIES
 Cash acquired in conjunction with share exchange agreement                  2,946                    --                     2,946
                                                                       -----------             -----------             -----------

 Net cash provided by investing activities                                   2,946                    --                     2,946
                                                                       -----------             -----------             -----------

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from issuance of common stock                                       --                     5,000                   5,000
 Proceeds from loan payable                                              1,280,000                    --                 1,280,000
 Proceeds from lines of credit                                           1,650,000                    --                 1,650,000
                                                                       -----------             -----------             -----------

 Net cash provided by financing activities                               2,930,000                   5,000               2,935,000
                                                                       -----------             -----------             -----------

Net increase (decrease) in cash                                             (1,761)                  5,000                   3,239

Cash at beginning of period                                                  5,000                    --                      --
                                                                       -----------             -----------             -----------

Cash at end of period                                                  $     3,239             $     5,000             $     3,239


NON-CASH INVESTING AND FINANCING ACTIVITIES
 Accounts payable acquired in conjunction with share
 exchange agreement                                                    $     2,500             $     2,500             $     2,500
                                                                       ===========             ===========             ===========

 Common stock issued in exchange for accounts payable                  $   560,567             $      --               $   560,567
                                                                       ===========             ===========             ===========


 Common stock issued in exchange for loans payable
 and accrued interest                                                  $   700,817             $      --               $   700,817
                                                                       ===========             ===========             ===========
</TABLE>






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


                                       25
<PAGE>



                            US Global Aerospace, Inc.
                          (A development stage company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USDR Global Aerospace, Ltd. (USDRGA), a development stage company, was
incorporated in the state of Delaware on March 20, 2002. As discussed in note 3,
the Company entered into a share exchange agreement with US Global Aerospace,
Inc. (USGA or the Company) (formerly known as Caring Products International
Inc.) on May 17, 2002, which resulted in the exchange of one share of the
Company's common stock for four shares of USGA. As a result of the transaction,
the Company became a wholly owned subsidiary of USGA. Effective September 26,
2002, the Company changed its name from Caring Products International, Inc. to
US Global Aerospace, Inc. On December 31, 2002, the Company completed a merger
of its wholly owned subsidiary, USDR Global Aerospace, Ltd. with and into the
Company. US Global Aerospace, Inc. was the resulting company from the mergers.

USGA is an aerospace research, development and engineering company with
expertise in the emerging field of nanotechnology. Activities to date include
conducting research and development, acquiring and developing intellectual
property, raising capital, and designing and building prototype equipment.

A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows.

RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred.

NET LOSS PER SHARE
Basic loss per share is based on the weighted average number of shares
outstanding during each period and income available to common shareholders. Loss
per share assuming dilution is based on the assumption that outstanding stock
options and warrants were exercised. The weighted average shares for computing
basic loss per share were 68,917,889, 60,362,158 and 68,667,588 for the year and
period ended March 31, 2003 and 2002 and from inception (March 20, 2002) through
March 31, 2003, respectively. At March 31, 2003, there were 72,338 shares of
potentially issueable common stock. Because of the net loss for the years and
period ended March 31, 2003 and 2002 and since inception (March 20, 2002)
through March 31, 2003, potentially issueable common stock was not included in
the calculation of diluted loss per share as their inclusion would be
anti-dilutive.

STOCK SPLIT
On February 13, 2003, the Board of Directors approved a three-to-one stock split
for the Company's common stock, with a record date of February 24, 2003. All
shares and per share amounts have been retroactively restated to reflect the
split.

STOCK-BASED COMPENSATION
The Company has a stock-based compensation plan, which is described more fully
in Note 10. The Company applies APB Opinion 25, Accounting for Stock Issued to
Employees, and related Interpretations in accounting for its plans. No options
were granted under the plan for the year and period ended March 31, 2003 and
2002 and since inception (March 20, 2002). Options outstanding as of March 31,
2003, as described in Note 10, were granted under the stock option plan of USGA
(fka Caring Products International) prior to the merger with the Company and


                                       26
<PAGE>

were fully vested as of the merger date (May 17, 2002). Accordingly, no
compensation expense would have been recognized under the recognition provisions
of FASB Statement 123, Accounting for Stock-Based Compensation, during the year
and period ended March 31, 2003 and 2002 and since inception (March 20, 2002).

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

NOTE 2.  BASIS OF PRESENTATION

The share exchange transaction resulted in the owners and management of USDRGA
having effective operating control of the combined entity. Under accounting
principles generally accepted in the United States of America, the share
exchange is considered to be a capital transaction in substance, rather than a
business combination. That is, the share exchange is equivalent to the issuance
of stock by USDRGA for the net monetary assets of US Global Aerospace, Inc.
(USGA fka Caring Products International) accompanied by a recapitalization, and
is accounted for as a change in capital structure. Accordingly, the accounting
for the share exchange is identical to that resulting from a reverse
acquisition, except that no goodwill is recorded. Under reverse takeover
accounting, the post-reverse-acquisition financial statements of the "legal
acquirer" USGA, are those of the "legal acquiree" (USDRGA), (i.e. the accounting
acquirer).

Accordingly, the financial statements of USGA as of and for the year and period
ended March 31, 2003 and 2002 and since inception (March 20, 2002), are the
historical financial statements of USDRGA. All references to common stock have
been retroactively restated to reflect the share exchange and recapitalization
of the Company. In conjunction with the share exchange and recapitalization, the
Company recorded net assets of USGA totaling $446, which included cash of $2,946
and payables of $2,500.

NOTE 3 - MANAGEMENT PLANS

The Company is a development stage enterprise as defined under Statement of
Financial Accounting Standards No. 7. The Company is a nanotechnology company
that specializes in identifying, developing, and commercializing advanced
products the core technologies of which are primarily nanoscience derived. These
products include complex polymer materials, polymer nanofiber materials,
nanofiber filter materials, biological and chemical decontaminants, blast
mitigation materials and nano and micro sound generating devices for breach
barriers and non-lethal weapon applications. The Company is focusing its efforts
on developing a broad range of defense and law enforcement applications for the
materials it creates. Currently, most of the Company's products are being
developed for use by the military and homeland security. Accordingly, no
operating revenues have been generated. In 2002, the Company obtained three
loans from a bank for amounts totaling up to $1,650,000. In addition, the
Company has received $1,280,000 in loans since inception from third parties and
an existing shareholder. At this time, to conserve revenues, the Company does
not manufacture its products nor does it maintain a sales force. These functions
are outsourced. The Company has applied for grants from various government
agencies that, if approved, will provide funding for the development of new
products and for the enhancement of our current products. The Company is also
negotiating with various government agencies and private companies for the sale
of its products. During the next 12 months, if the Company cannot generate
sufficient funds to operate its business from grants and product sales, it will
be required to seek financing from its largest stockholder, who has provided
financing and a loan guarantee for the Company in the past. The stockholder is
under no obligation to provide such funds. The Company may also consider selling

                                       27
<PAGE>

debt or equity securities. There is no guarantee that the Company will obtain
funds sufficient to continue its operations during the next 12 months.

NOTE 4.  INTELLECTUAL PROPERTY ASSIGNMENT AND ROYALTY AGREEMENT

On May 14, 2002, USDR Aerospace, Ltd. (Aerospace) entered into an agreement with
the Company to assign certain of its Intellectual Property to the Company for
consideration of $10, and a promise to pay a royalty of 3.5% on all of the
Company's sales until Aerospace has received a total of $15 million and a
royalty of 1% of all of the Company's sales thereafter until all patent rights
of the Intellectual Property have expired.

NOTE 5.  RELATED PARTY PAYABLE

The Chairman and CEO of the Company controls Aerospace, which has licensed the
intellectual property to the Company as described in note 4. Aerospace has
provided employees and product development services to the Company. Certain
expenses are allocated between Aerospace and the Company, as determined by
management. For the year and period ended March 31, 2003 and 2002 and since
inception (March 20, 2002), Aerospace has provided such services totaling
approximately $2.9 million, for which the Company currently owes Aerospace
$306,519 as of March 31, 2003. As of January 1, 2003, Aerospace substantially
discontinued all of its operations and the Company hired 25 individuals
previously employed through Aerospace. Aerospace continued to provide office and
lab to the Company through April 30, 2003 until the Company obtained its new
facility on May 1, 2003. Aerospace continues to provide certain supplies and
services to the Company. The Chairman and CEO of the Company will continue to
provide cash to support the Company's operations until such time the Company
generates cash through operations or financing is obtained from the issuance of
debt or equity.

NOTE 6.  STOCKHOLDER LOAN PAYABLE AND LINES OF CREDIT

Through November 2002, the Company has received loan advances from an existing
shareholder totaling $920,000. In November 2002, the Company entered into a
settlement agreement resulting in the issuance 3,008,316 shares of restricted
common stock for the repayment of $475,000 in principal and $26,386 in accrued
interest of the outstanding advances and the remaining payable of $445,000 was
forgiven and recognized as debt restructure income in the statement of
operations for the year ended March 31, 2003.

In addition, the shareholder arranged a loan transaction pursuant to which the
Company received $360,000 from third-party lenders. In November 2002, the
Company entered into a settlement agreement resulting in the issuance of
1,155,612 shares of restricted common stock for the repayment of $185,000 in
outstanding principal and $7,146 in accrued interest of the outstanding loan
advances. Additionally, a total of $125,000 in advances was forgiven and
recognized as debt restructure income in the statement of operations for the
year ended March 31, 2003. In connection with this transaction, the shareholder
pledged 750,000 shares of the Company's common stock as security for the loan,
which shares were ultimately released from escrow to the lenders in connection
with the settlement agreement. On February 18, 2003, the Company settled its
remaining outstanding loan payable of $50,000 plus accrued interest in exchange
for 323,121 shares of common stock.

During the year ended March 31, 2003, the Company recognized approximately
$47,900 of additional income as a result of the difference between the fair
value of common stock issued and the principal amount of debt exchanged.

On September 30, 2002, the Company entered into a line of credit agreement with
a bank for $1,000,000. The line of credit bears interest at 13% and matures on
June 30, 2003. The line of credit is secured by the assets of the Company and is

                                       28
<PAGE>

guaranteed by an officer of the Company. On November 27, 2002, the Company
secured an additional $400,000 line of credit with the same bank and on January
28, 2003, the Company secured an additional $250,000. The additional lines have
the same terms as the September line of credit and are due on June 30, 2003. As
of March 31, 2003, the Company had a total outstanding principal balance of
$1,650,000 and accrued interest of $81,696. The bank has extended the lines of
credit through August 31, 2003.

NOTE 7.  CONSULTING AGREEMENTS

On May 15, 2002, the Company entered into various consulting agreements for
services in exchange for 15,000,000 shares of the Company's common stock, which
were issued under the 2001 Employee Stock Compensation Plan. However, in August
2002, the Company and certain of the consultants mutually agreed to terminate
their respective consulting agreements and 9,562,500 that had been issued were
returned to the Company and cancelled. Accordingly, the 9,562,500 cancelled
shares are not considered issued or outstanding at March 31, 2003.

The remaining 5,437,500 shares issued under the consulting agreements were
recorded at their fair value totaling $6,343,750 as deferred compensation and
services. The deferred compensation and services is being recognized over the
period of the consulting agreement of two years.

In August 2002, the Company entered into an agreement incident to an existing
consulting agreement pursuant to which an additional 1,687,500 shares of
restricted common stock were issued subject to vesting conditions. The shares
were recorded at their fair value totaling $309,375 and are being recognized
over the vesting period.

For the years ended March 31, 2003, the Company recognized $2,956,191 of
non-cash expense relating to these agreements.

NOTE 8.  COMMITMENTS

On April 28, 2003, the Company entered into an operating lease for its office
space and research facilities expiring in May 2006. The following is a schedule
by years of future minimum lease payments under operating the lease.


                Year ending March 31,
-------------------------------------------------------

                         2004                                $      121,000
                         2005                                       132,000
                         2006                                       132,000
                         2007                                        11,000
                                                             ---------------

      Future minimum lease payments                          $      396,000
                                                             ===============

                                       29
<PAGE>

NOTE 9.  INCOME TAXES

The Company accounts for income taxes using the liability method as prescribed
by Statement of Financial Accounting Standards No.109, Accounting for Income
Taxes. The income tax benefit reconciled to the tax computed at the statutory
rate was approximately as follows for the year ended March 31, 2003:

         Tax benefit computed at federal statutory rate      $  ( 2,396,000)
         Research and development tax credit
                                                                    (49,000)
         Increase in valuation allowance                          2,445,000
                                                             ------------------

                                                             $
                                                             ==================

The Company's tax benefit computed at the federal statutory rate for the period
ended March 31, 2002 totaled approximately $2,700.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's net deferred tax assets are as follows at March 31, 2003:


         Net deferred tax asset                                 $  7,298,000
         Research and development tax credit Start up costs           49,000
                                                                ------------
                                                                   7,347,000

         Less valuation allowance                                 (7,347,000)
                                                                ------------

                                                                $         --
                                                                ------------

The Company has established a valuation allowance of approximately $7,347,000 to
offset the deferred tax asset, due to the uncertainty of future utilization.
Internal Revenue Code Section 382 places a limitation on the amount of taxable
income that can be offset by carryforwards or built-in deductions after a change
in control (generally greater than 50% change in ownership). As a result of
these provisions, utilization of the net operating loss costs carryover may be
been limited.

NOTE 10.        STOCK OPTIONS AND WARRANTS

On April 10, 2003, the Company adopted the Amended and Restated 2002 Stock Plan
(2002 Stock Plan). Under the 2002 Stock Plan, officers, directors, employees,
consultants, advisors and others related to the Company may be granted incentive
stock options or nonqualified stock options to purchase up to an authorized
15,000,000 shares of common stock. The options are to be granted at not less
than 85% of the fair value of the Company's common stock on the date of the
grant. The options generally vest over five years and expire ten years from date
of grant. The plan also allows for the granting of a stock award whereby the
purchase price of the stock award granted also may not be less than 85% of the
fair value of the Company's common stock. In addition the plan allows for the
granting of stock bonuses. The terms of the awards and bonuses are to be
determined by a committee appointed by the Board of Directors.

The Company has adopted only the disclosure provisions of Financial Accounting
Standard No. 123, "Accounting for Stock-Based Compensation" (SFAS 123). It
applies APB Opinion No. 25, "Accounting for Stock Issued to Employees," and
related Interpretations in accounting for its plan and does not recognize
compensation expense for its stock-based compensation plans. As of March 31,
2003, there were no options granted under the 2002 Stock Plan.

On April 10, 2003, the Company granted 2,794,684 shares of common stock under
the 2002 Stock Plan to employees in lieu of salaries totaling $210,000.

Prior to the merger with the Company, USGA (fka Caring Products International)
had a 2001 Employee Stock Compensation Plan (2001 Plan) that allowed for the
granting of stock options to employees and consultants. As of March 31, 2003,
options outstanding and exercisable under the 2001 plan totaled 13,875. The

                                       30
<PAGE>

options have a weighted average price of $0.06 and remaining contractual life of
..18 years. No options were granted under the 2001 plan for the year and period
ended March 31, 2003 and 2002. During the year and period ended March 31, 2003
and 2002, 3,375 and 3,015 shares with weighted average exercise prices of $0.06
to $0.15 expired, respectively. The remaining options under the 2001 plan will
expire during the fiscal year ended March 31, 2004 and the Company does not
expect to grant any further options under the 2001 plan.

Also, prior to the merger between USGA and the Company, warrants to purchase
shares of common stock were outstanding. As of March 31, 2003, 58,463 warrants
with a weighted average exercise price of $0.17 were outstanding and
exercisable.

NOTE 11.        RECENTLY ISSUED ACCOUNTING STANDARDS

The FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections," on April 30,
2002. Statement No. 145 rescinds Statement No.4, which required all gains and
losses from extinguishments of debt to be aggregated and, if material,
classified as an extraordinary item, net of related income tax effect. Upon
adoption of Statement No. 145, companies will be required to apply the criteria
in APB Opinion No. 30, "Reporting the Results of Operations - reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions" in determining the
classification of gains and losses resulting from the extinguishments of debt.
Statement No. 145 is effective for fiscal years beginning after May 15, 2002. In
the current year, the Company has adopted SFAS 145, which resulted in the
recording of debt restructuring as other income in the accompanying financial
statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This standard requires companies to recognize
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31, 2002. The initial application of SFAS 146 did not have an impact on the
Company's financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." This standard amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The amendments to Statement 123 of this
Statement shall be effective for financial statements for fiscal years ending
after December 15, 2002. The initial application of SFAS 148 did not have an
impact on the Company's financial statements.

In November 2002, FASB Interpretation 45, Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others (FIN 45), was issued. FIN 45 requires a guarantor entity, at the
inception of a guarantee covered by the measurement provisions of the
interpretation, to record a liability for the fair value of the obligation
undertaken in issuing the guarantee. The Company previously did not record a
liability when guaranteeing obligations unless it became probable that the
Company would have to perform under the guarantee. FIN 45 applies prospectively
to guarantees the Company issues or modifies subsequent to December 31, 2002,
but has certain disclosure requirements effective for interim and annual periods
ending after December 15, 2002. The initial application of FIN 45 did not have
an impact on the Company's financial statements.

                                       31
<PAGE>

In January 2003, the FASB issued FASB Interpretation 46 (FIN 46), Consolidation
of Variable Interest Entities. FIN 46 clarifies the application of Accounting
Research Bulletin 51, Consolidated Financial Statements, for certain entities
that do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties
or in which equity investors do not have the characteristics of a controlling
financial interest ("variable interest entities"). Variable interest entities
within the scope of FIN 46 will be required to be consolidated by their primary
beneficiary. The primary beneficiary of a variable interest entity is determined
to be the party that absorbs a majority of the entity's expected losses,
receives a majority of its expected returns, or both. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date. It
applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The Company is in the process
of determining what impact, if any, the adoption of the provisions of FIN 46
will have upon its financial condition or results of operations.



                                       32
<PAGE>



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

         None.

PART III

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

DIRECTORS AND OFFICERS

         As of March 31, 2003, our officers and directors were:

NAME                 AGE         TITLE

John Robinson        49          Chief Executive Officer, Chairman of the Board

Julie Seaman         43          Treasurer, Secretary, Director

         There are no family relationships among any of the directors or
officers of USGA.

         The size of our board of directors is currently fixed at two members.
Members of the board serve until the next annual meeting of stockholders and
until their successors are elected and qualified. Meetings of the board are held
when and as deemed necessary or appropriate. Officers are appointed by and serve
at the discretion of the board.

         John Robinson, Chief Executive Officer, Chairman of the Board of
Directors. Mr. Robinson became a director and our Chief Executive Officer in
conjunction with the share exchange that took place with USDR Global Aerospace,
Ltd. on May 17, 2002. Prior to joining USGA, Mr. Robinson served from March 1997
until May 17, 2002 as President and Chief Executive Officer to USDR, Inc. Mr.
Robinson served in the same capacities to each of USDR Inc.'s affiliates,
including USDR Aerospace, Ltd., from October 2001. From 1993 to 1996, Mr.
Robinson was President and Chief Executive Officer of United States Defense
Research, Inc., a U.S. government contractor that manufactured precision parts
for military equipment.

         Julie Seaman, Treasurer, Secretary and director. Ms. Seaman became a
director and officer on June 17, 2002. Prior to joining USGA, Ms. Seaman served
as Treasurer and Director of Administration to USDR, Inc. from March 1997, and
held the same positions for each of USDR, Inc.'s affiliates, including USDR
Aerospace, Ltd., since October 2001. From 1993 to 1996, Ms. Seaman was Treasurer
and Director of Administration to United States Defense Research, Inc., a U.S.
government contractor that manufactures precision parts for military equipment.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Section 16(a) of the Exchange Act requires our executive officers and
directors, and persons who own more than ten percent of our common stock to file
reports of ownership and change in ownership with the Securities and Exchange
Commission and the exchange on which the common stock is listed for trading.
Executive officers, directors and more than ten percent stockholders are
required by regulations promulgated under the Exchange Act to furnish us with
copies of all Section 16(a) reports filed. Based solely on our review of copies
of the Section 16(a) reports filed for the fiscal year ended March 31, 2003, we
believe that all reporting requirements applicable to our executive officers,
directors and more than ten percent stockholders were complied with for the
fiscal year ended March 31, 2003.

                                       33
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

         The following tables and discussion set forth information with respect
to all incentive stock option plan and non-plan compensation awarded to, earned
by or paid to the President or Chief Executive Officer for all services rendered
in all capacities to USGA for each of its last three completed fiscal years. No
disclosure has been made for any executive officer, other than the Chief
Executive Officer and President, because, during the last three completed fiscal
years, no other executive officer received compensation exceeding $100,000.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                                                       LONG TERM COMPENSATION
                                                                       -----------------------------------------
                                 ANNUAL COMPENSATION                    AWARDS                              PAYOUTS
                             --------------------------------------------------------------------------------------
                                                    Other           Restricted                            All Other
                                                     Annual         Stock        Securities     LTIP      Compen-sation
Name and Principal            Salary       Bonus    Compensation    Awards       Underlying     Payout       ($)
Position               Year       ($)        ($)         ($)            ($)      Options/SARs     ($)
                                                           -

<S>                    <C>    <C>             <C>         <C>            <C>           <C>         <C>        <C>
John Robinson, Chief
Executive Officer      2003   125,000(1)      0           0              0             0           0          0

Susan A. Schreter
President              2002        0          0           0              0             0           0          0

Susan A. Schreter
President              2001     66,000        0           0              0             0           0          0
</TABLE>

(1) Mr. Robinson's salary was accrued but was not paid as of March 31, 2003.

STOCK OPTIONS

         There were no stock options granted to executive officers during the
fiscal year ended March 31, 2003 and there was no exercise of incentive stock
options during the last completed fiscal year by the executive officers.

DIRECTOR COMPENSATION

            There is no standard or individual compensation package for any of
the directors.

EMPLOYMENT CONTRACTS

            There are no employment contracts with the executive officers listed
in the Summary Compensation Table.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as of June 26, 2003 as to
each person who is known to USGA to be the beneficial owner of more than 5% of
USGA's outstanding common stock and as to the security and percentage ownership
of each executive officer and director of USGA and all officers and directors of
USGA as a group. Except where specifically noted, each person listed in the
table has sole voting and investment power with respect to the shares listed.
The number of shares listed in the table reflects the 3 for 1 stock split that
was effective on March 5, 2003.



                                       34
<PAGE>


<TABLE>
<CAPTION>
------------------- ------------------------------------ -------------------------- -------------------------
                             Name and Address               Security Ownership             Percentage
     Title of                       Of                       Amount and Nature                 Of
      Class                  Beneficial Owners            Of Beneficial Ownership            Class
------------------- ------------------------------------ -------------------------- -------------------------
<S>                 <C>                                         <C>                          <C>
      Common        John Robinson                               46,500,000                   58.93%
                    2533 North Carson Street, #5107
                    Carson City, NV 89706
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Julie Seaman                                 1,555,095                   1.97%
                    2533 North Carson Street #5107
                    Carson City, NV 89706
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Carolyn Robinson                             6,000,000                   7.60%
                    4455 Camp Bowie Boulevard
                    Suite 114
                    Ft. Worth, TX 76107
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Gerald H. Wiener                             6,000,000                   7.60%
                    11111 Santa Monica Blvd.
                    Suite 850
                    Los Angeles, CA 90025
------------------- ------------------------------------ -------------------------- -------------------------
                    Officers and Directors as a group
                    (2 persons)                                 48,055,095                   60.95%
------------------- ------------------------------------ -------------------------- -------------------------
</TABLE>

(1) There are no shares that would be required to be reported pursuant to Rule
13d-3 of the Securities Exchange Act of 1934.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On May 14, 2002, USDR Aerospace, Ltd., a company controlled by our
Chief Executive Officer, entered into an agreement with USGA to assign its
patent rights to the Guardian Door to USGA for consideration of $10 and a
promise to pay a royalty of 3.5% on all of USGA's sales until USDR Aerospace,
Ltd. received a total of $15,000,000, at which time the royalty would be reduced
to 1% on all sales until all patent rights related to the G-Lam ballistic
material expired.

         Furthermore, USDR Aerospace, Ltd. has provided employees and product
development services to USGA. During the fiscal year ended March 31, 2003, USDR
Aerospace, Ltd. provided approximately $2,889,300 in services to USGA. As of
March 31, 2003, USGA owed USDR Aerospace, Ltd. $306,519 for these services.

         As of March 31, 2003, USGA received loan advances from a shareholder
totaling $920,000. In November 2002 USGA entered into a settlement agreement
resulting in the issuance of 3,008,316 shares of restricted common stock for the
repayment of $475,000 in principal and $26,386 in accrued interest of the
outstanding advances. The remainder was forgiven and recognized as debt
restructure income during the fiscal year ended March 31, 2003.

         As of March 31, 2003, our largest shareholder guaranteed USGA's bank
line of credit in the amount of $1,650,000. The line of credit is due to be
repaid on August 31, 2003. As of March 31, 2003, interest accrued on the line of
credit was $81,696.

         On May 1, 2003, one of our directors guaranteed our payment and
performance of a lease entered into for our research division.

                                       35
<PAGE>

ITEM 13.  CONTROLS AND PROCEDURES

         (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Regulations under
the Securities Exchange Act of 1934 require public companies to maintain
"disclosure controls and procedures," which are defined to mean a company's
controls and other procedures that are designed to ensure that information
required to be disclosed in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms. Within 90
days prior to the filing date of this Report (the "Evaluation Date"), USGA's
principal executive officer ("CEO") and its principal financial officer ("PFO")
carried out an evaluation of the effectiveness of USGA's disclosure controls and
procedures. Based on those evaluations, as of the Evaluation Date, USGA's CEO
and PFO believe:

                  (i) that USGA's disclosure controls and procedures are
         designed to ensure that information required to be disclosed by USGA in
         the reports it files under the Securities Exchange Act of 1934 is
         recorded, processed, summarized and reported within the time periods
         specified in the SEC's rules and forms and that such information is
         accumulated and communicated to USGA's management, including the CEO
         and CFO, as appropriate to allow timely decisions regarding required
         disclosure; and

                  (ii) that USGA's disclosure controls and procedures are
         effective.

         In connection with their audit of USGA's financial statements as of and
for the year ended March 31, 2003, Grant Thornton LLP ("GT") advised USGA that
it had identified certain deficiencies in USGA's internal control procedures
that GT considered to be a "material weakness" under standards established by
the American Institute of Certified Public Accountants. GT advised the Board of
Directors on July 1, 2003, that it identified certain deficiencies in USGA's
ability to timely and accurately present our financial reports.

         (b) CHANGES IN INTERNAL CONTROLS. There were no significant changes in
our internal controls or, to our knowledge, in other factors that could
significantly affect our internal controls subsequent to the evaluation date
referred to above. Although we have not yet taken any corrective actions with
respect to the material weaknesses we have disclosed above, these matters have
been discussed by GT with USGA's Board of Directors. We intend to take
corrective actions during the 2003 reporting period.

ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         2.       Agreement and Plan of Share Exchange between Caring Products
                  International, Inc. and USDR Global Aerospace, Ltd. and the
                  Shareholders of US Global Aerospace, Ltd. dated
                  as of May 15, 2002(1)
         3.1      Certificate of Incorporation, as amended(2)
         3.2      Bylaws(3)
         10.1     Gross Lease Agreement dated April 28, 2003 between USGA and
                  West Harris Property, Inc.(5)
         10.2     Addendum E to Lease/Guarantee executed by Julie Seaman.(5)
         10.3     Intellectual Property Assignment and Royalty Agreement dated
                  May 14, 2002 between USDR Aerospace, Ltd. and USDR Global
                  Aerospace, Ltd.(5)
         10.4     US Global Aerospace, Inc. Amended and Restated 2002 Stock
                  Plan(4)
         10.5     Settlement Agreement and Mutual Release among ERBC Holdings,
                  Ltd., USGA, USDR Global Aerospace, Ltd., USDR Aerospace, Ltd.,
                  Live Oak Capital, LLC, Nicholas Lattanzio, Margeret K. Curtis,
                  Smith Point Capital, Ltd. and Daniel T. Guilfoile dated
                  November 20, 2002(5)
         10.6     Settlement Agreement and Mutual Release among USGA, USDR
                  Global Aerospace, Ltd., USDR Aerospace, Ltd., and Richard Wall
                  dated November 19, 2002(5)
         10.7     Settlement Agreement and Mutual Release among USGA, USDR
                  Global Aerospace, Ltd., USDR Aerospace, Ltd., Richard A. Wall,
                  ECON Investor Relations, Inc. and Dawn Van Zant dated November
                  19, 2002(5)
         10.8     Promissory Note and Commercial Security Agreement between USGA
                  and Western Security Bank dated June 30, 2003(6)
         10.9     Commercial Guaranty between John D. Robinson and Western
                  Security Bank(6)
         23.      Consent by Grant Thornton LLP(5)
         99.1     Certification by Chief Executive Officer (5)
         99.2     Certification by Principal Financial Officer(5)
--------------------------------------

                                       36
<PAGE>

(1) Incorporated by reference from a Form 8-K filed by USGA with the Securities
and Exchange Commission on May 30, 2002.
(2) Incorporated by reference from amendment number 1 to the registration
statement on Form SB-2 filed with the Securities and Exchange Commission
on March 20, 1996.
(3) Incorporated by reference from the registration statement on Form SB-2 filed
with the Securities and Exchange Commission on September 12, 1995.
(4) Incorporated by reference from a definitive information statement filed by
USGA with the Securities and Exchange Commission on June 20, 2003.
(5) Attached hereto.
(6) To be filed by amendment.

(b) Reports on 8-K

         On February 20, 2003 USGA filed a Form 8-K announcing a 3 for 1 forward
stock split that was effective on February 13, 2003 for holders of record on
February 24, 2003.

         On March 25, 2003 USGA filed an amended Form 8-K that included audited
financial statements for USDR Global Aerospace, Ltd.



                                       37
<PAGE>

                                   SIGNATURES

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


                           US GLOBAL AEROSPACE, INC.


Date: July 11, 2003
                           By:/s/John Robinson
                              -----------------------------------------
                                John Robinson, Chairman and Chief Executive
                                Officer

                           By:/s/Julie Seaman
                              -----------------------------------------
                                 Julie Seaman, Secretary and Principal Financial
                                 Officer

         In accordance with the requirements of the Exchange Act, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
Name                                Title                                               Date

<S>                                 <C>                                             <C>
                                    Chairman, Chief Executive Officer               July 11, 2003
/s/John Robinson                       and director
--------------------------
John Robinson

                                    Treasurer, Principal Financial Officer          July 11, 2003
/s/Julie Seaman                        and director
--------------------------
Julie Seaman
</TABLE>



                                       38
<PAGE>




                                  CERTIFICATION
     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002

I, John Robinson, certify that:

1.       I have reviewed this annual report on Form 10-KSB of US Global
         Aerospace, Inc.;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the consolidated financial statements, and other
         financial information included in this annual report, fairly present in
         all material respects the financial condition, results of operations
         and cash flows of the registrant as of, and for, the periods presented
         in this annual report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.       The registrant's other certifying officer and I have indicated in this
         annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



/s/John Robinson                                  July 11, 2003
---------------------------
John Robinson
Chief Executive Officer



<PAGE>



                                  CERTIFICATION
     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002

I, Julie Seaman, certify that:

1.       I have reviewed this annual report on Form 10-KSB of US Global
         Aerospace, Inc.;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the consolidated financial statements, and other
         financial information included in this annual report, fairly present in
         all material respects the financial condition, results of operations
         and cash flows of the registrant as of, and for, the periods presented
         in this annual report;

4.       The other certifying officer and I are responsible for establishing and
         maintaining disclosure controls and procedures (as defined in Exchange
         Act Rules 13a-14 and 15d-14) for the registrant and have: d) designed
         such disclosure controls and procedures to ensure that material
         information relating to the registrant, including its consolidated
         subsidiaries, is made known to us by others within those entities,
         particularly during the period in which this annual report is being
         prepared;

     e)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     f)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.       The other certifying officer and I have disclosed, based on our most
         recent evaluation, to the registrant's auditors and the audit committee
         of registrant's board of directors (or persons performing the
         equivalent functions):

     c)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     d)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.       The other certifying officer and I have indicated in this annual report
         whether there were significant changes in internal controls or in other
         factors that could significantly affect internal controls subsequent to
         the date of our most recent evaluation, including any corrective
         actions with regard to significant deficiencies and material
         weaknesses.



/s/Julie Seaman                                  July 11, 2003
---------------------------
Julie Seaman
Principal Financial Officer