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

FORM  10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended: June 30, 2004

                                       OR

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

                        Commission file number: 000-23339

                            US GLOBAL NANOSPACE, INC.
             (Exact name of registrant as specified in its charter)

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


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


                                  775-841-3246
               (Registrant's telephone number including area code)


                            US Global Aerospace, Inc.
              (Former name, former address and former fiscal year,
                         if changed since last report)


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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: As of August 19, 2004 the issuer had
89,279,699 shares of Common Stock issued and outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x]

<PAGE>

                            US GLOBAL NANOSPACE, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                PAGE
PART I                                                                                         NUMBER

Item 1 - Financial Information
<S>                                                                                           <C>
            Balance Sheets as of June 30, 2004 (unaudited) and March 31, 2004                   1

            Statements of Operations (Unaudited) - Three Months Ended
                        June 30, 2003 and 2004 and since inception (March 20, 2002) through     2
                        June 30, 2004

            Statement of Stockholders' Deficit - Three Months Ended June 30, 2004 (unaudited)   3

            Statements of Cash Flows (Unaudited) - Three Months Ended
                        June 30, 2003 and 2004 and since inception (March 20, 2002) through     4
                        June 30, 2004

            Notes to the Financial Statements                                                   5

Forward Looking Statements                                                                      9

Item 2 - Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                                               9

Item 3 - Controls and Procedures                                                                12

PART II

Item 1 - Legal Proceedings                                                                      12

Item 2 - Changes in Securities and Use of Proceeds                                              12

Item 3 - Defaults Upon Senior Securities                                                        13

Item 4 - Submission of Matters to a Vote of Security Holders                                    13

Item 5 - Other Information                                                                      13

Item 6 - Exhibits and Reports on Form 8-K                                                       13

Signature Page                                                                                  16
</TABLE>


<PAGE>

                            US Global Nanospace, Inc.
                          (A development stage company)
                                 Balance Sheets

<TABLE>
<CAPTION>
                                                                                  June 30,             March 31,
                                                                                    2004                 2004
                                                                                 (Unaudited)
                                                                                 ------------        ------------
ASSETS

CURRENT ASSETS
<S>                                                                              <C>                 <C>
  Cash                                                                           $      8,491        $     18,437
  Accounts receivable                                                                  32,664              11,405
  Other receivables                                                                    51,960              71,278
  Inventory                                                                             4,695               4,695
                                                                                 ------------        ------------

      Total current assets                                                             97,810             105,815

NONCURRENT ASSETS
   Deposits                                                                            13,485              13,485
                                                                                 ------------        ------------

      Total assets                                                               $    111,295        $    119,300
                                                                                 ============        ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Bank note payable                                                             $    925,000        $  1,225,000
   Accounts payable                                                                   425,975             258,673
   Loans payable                                                                    1,219,303           1,201,526
   Related party payable                                                              310,427             307,114
   Accrued salaries and expense                                                       257,035             125,158
   Accrued interest                                                                    86,857              63,439
                                                                                 ------------        ------------

      Total current liabilities                                                     3,224,597           3,180,910
                                                                                 ------------        ------------

STOCKHOLDERS' DEFICIT
  Preferred stock authorized, 10,000,000 shares $0.01 par value,
      none issued or outstanding                                                           --                  --
  Common stock authorized, 300,000,000 shares $0.001 par value,
     89,188,219 and 87,429,116 shares issued and outstanding, respectively             89,187              87,428
  Additional paid-in capital                                                       12,237,128          11,590,401
  Deferred compensation and services                                                       --            (399,743)
  Deficit accumulated during the development stage                                (15,439,617)        (14,339,696)
                                                                                 ------------        ------------

      Total stockholders' deficit                                                  (3,113,302)         (3,061,610)
                                                                                 ------------        ------------

      Total liabilities and stockholders' deficit                                $    111,295        $    119,300
                                                                                 ============        ============
</TABLE>

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

                                       1
<PAGE>

                            US Global Nanospace, Inc.
                          (A development stage company)
                      Statements of Operations (Unaudited)

<TABLE>
<CAPTION>
                                                                                         Cumulative
                                                                                    results of operations
                                                                                     from March 20, 2002
                                                Three Months         Three Months    (date of inception)
                                               Ended June 30,       Ended June 30,     through June 30,
                                                   2004                  2003               2004
                                                ------------        ------------        ------------
<S>                                             <C>                 <C>                 <C>
REVENUES                                        $     94,688        $     53,174        $    235,037

COST OF REVENUES                                      73,271                  --              99,999
                                                ------------        ------------        ------------

  Gross profit                                        21,417              53,174             135,038
                                                ------------        ------------        ------------

OPERATING EXPENSES
   Research and development                          137,549             174,468           3,030,078
   General and administrative
      Non-cash compensation and services             488,049             899,020           7,271,640
      Other general and administrative               439,156             548,947           5,466,045
                                                ------------        ------------        ------------

      Total operating expenses                     1,064,754           1,622,435          15,767,763
                                                ------------        ------------        ------------

      Operating loss                              (1,043,337)         (1,569,261)        (15,632,725)
                                                ------------        ------------        ------------

OTHER INCOME (EXPENSE)
    Debt restructure                                      --                  --             918,573
    Other income                                          --                  --              10,045
    Interest expense                                 (56,584)           (107,750)           (735,510)
                                                ------------        ------------        ------------

     Total other income (expense)                    (56,584)           (107,750)            193,108
                                                ------------        ------------        ------------

NET LOSS                                        $ (1,099,921)       $ (1,677,011)       $(15,439,617)
                                                ============        ============        ============

    Net loss per share, basic and diluted       $      (0.01)       $      (0.02)       $      (0.18)
                                                ============        ============        ============

Basic and diluted weighted average
   number of common shares                        88,656,206          78,613,737          87,527,802
                                                ============        ============        ============
</TABLE>

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

                                       2
<PAGE>

                            US Global Nanospace, Inc.
                          (A development stage company)
                       Statement of Stockholders' Deficit
                  Three Months Ended June 30, 2004 (Unaudited)

<TABLE>
<CAPTION>


                                                                                                Additional          Deferred
                                                                  Common Stock                   Paid-in          Compensation
                                                              Shares           Amount            Capital          and Services
                                                              ------           ------            -------          ------------
<S>                                                       <C>                <C>               <C>             <C>
Balance at April 1, 2004                                      87,429,116       $ 87,428         $ 11,590,401       $ (399,743)

Issuance of common stock on April 7, 2004 in
consideration for wages at $0.70 per share                        35,392             35               24,739

Issuance of common stock on April 15, 2004 in
consideration for services at $0.67 per share                     90,000             90               60,210

Issuance of common stock on April 23, 2004 in
consideration for notes payable at $0.33 per share             1,147,950           1148              377,675

Issuance of common stock on May 5, 2004 in
consideration for wages at $0.38 per share                       485,761             486             184,103

Amortization of deferred compensation and
services                                                                                                              399,743

Net loss for the period

                                                           ----------------------------------------------------------------------
Balance at June 30, 2004                                      89,188,219       $ 89,187         $ 12,237,128        $       -
                                                           ======================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                Deficit
                                                              Accumulated
                                                               During the             Total
                                                              Development         Stockholders'
                                                                 Stage               Deficit
                                                                 -----               -------
<S>                                                        <C>                 <C>
Balance at April 1, 2004                                      $(14,339,696)       $ (3,061,610)

Issuance of common stock on April 7, 2004 in
consideration for wages at $0.70 per share                                               24,774

Issuance of common stock on April 15, 2004 in
consideration for services at $0.67 per share                                            60,300

Issuance of common stock on April 23, 2004 in
consideration for notes payable at $0.33 per share                                      378,823

Issuance of common stock on May 5, 2004 in
consideration for wages at $0.38 per share                                              184,589

Amortization of deferred compensation and
services                                                                                399,743

Net loss for the period                                         (1,099,921)         (1,099,921)

                                                        ---------------------------------------
Balance at June 30, 2004                                      $(15,439,617)      $ (3,113,302)
                                                        =======================================
</TABLE>

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

                                       3
<PAGE>

                            US Global Nanospace, Inc.
                          (A development stage company)
                      Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                                                               Cumulative
                                                                                                           results of operations
                                                                                                            from March 20, 2002
                                                                  Three Months Ended  Three Months Ended    (date of inception)
                                                                     June 30, 2004        June 30, 2003    through June 30, 2004
                                                                      ------------        ------------        ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                   <C>                 <C>                 <C>
       Net loss                                                       $ (1,099,921)       $ (1,677,011)       $(15,439,617)
       Adjustments to reconcile net loss to net
         cash used in operating activities
              Common stock issued for services                             460,043             899,020           7,243,634
              Forgiveness of loans and accounts payable                         --                  --            (918,573)
       Changes in operating assets and liabilities
                  Accounts receivable                                      (21,259)            (31,581)            (32,664)
                  Inventory                                                     --                  --              (4,695)
                  Accounts payable                                         167,302             128,330           1,427,533
                  Accrued salaries and expense                             341,240             492,092           3,251,453
                  Accrued interest                                          23,418              27,519             425,366
                                                                      ------------        ------------        ------------

                          Net cash used in operating activities           (129,177)           (161,631)         (4,047,563)
                                                                      ------------        ------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
          Increase in other receivables                                     19,318                  --             (51,960)
          Increase in deposits                                                  --             (11,000)            (13,485)
          Cash acquired in conjunction with share
               exchange agreement                                               --                  --               2,946
                                                                      ------------        ------------        ------------

                         Net cash provided by (used in)
                           investing activities                             19,318             (11,000)            (62,499)
                                                                      ------------        ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES
         Proceeds from bank note payable                                        --                  --           1,650,000
         Payments on bank note payable                                    (300,000)                 --            (725,000)
         Proceeds from loans payable                                       396,600             173,221           2,891,045
         Payments on loans payable                                              --                  --             (12,919)
         Increase (decrease) in related party payable                        3,313              (2,441)            310,427
         Proceeds from issuance of common stock                                 --                  --               5,000
                                                                      ------------        ------------        ------------

                         Net cash provided by financing
                          activities                                        99,913             173,221           4,118,553
                                                                      ------------        ------------        ------------

Net increase (decrease) in cash                                             (9,946)             (1,851)              8,491

Cash at beginning of period                                                 18,437               3,239                  --
                                                                      ------------        ------------        ------------
Cash at end of period                                                 $      8,491        $      1,388        $      8,491
                                                                      ============        ============        ============
SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND
FINANCING ACTIVITIES
          Cash paid for:
               Interest                                               $     31,556        $     80,232        $    310,702
                                                                      ============        ============        ============
               Income taxes                                           $          0        $          0        $          0
                                                                      ============        ============        ============
          Accounts payable acquired in conjunction
               with share exchange agreement                          $         --        $         --        $      2,500
          Common stock issued in exchange for
               accounts payable                                       $         --        $     35,000        $  1,003,178
          Common stock issued in exchange for loans
               payable and accrued interest                           $    378,823        $         --        $  1,079,640
          Common stock issued in exchange for wages                   $    209,363        $    237,547        $  2,994,418
</TABLE>

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


                                       4
<PAGE>

                            US Global Nanospace, Inc.
                          (A development stage company)
                        NOTES TO THE FINANCIAL STATEMENTS
        (Three Month Periods Ended June 30, 2004 and 2003 are Unaudited)


NOTE 1. FINANCIAL STATEMENTS

The unaudited  financial  statements of US Global Nanospace,  Inc. (the Company)
have been prepared by the Company  pursuant to the rules and  regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed  or omitted  pursuant  to such rules and  regulations.  The results of
operations for interim periods are not necessarily  indicative of the results to
be expected for the entire fiscal year ending March 31, 2005.  The  accompanying
unaudited  financial  statements and related notes should be read in conjunction
with the audited financial statements and the Form 10-KSB of the Company for its
fiscal year ended March 31, 2004.

On January  14,  2004,  our Board of  Directors  approved  an  amendment  to the
Company's  Amended and Restated  Certificate  of  Incorporation  to increase the
authorized  common stock from 100,000,000 to 300,000,000  shares and to increase
the authorized preferred stock from 1,000,000 to 10,000,000 shares.

NOTE 2.  RESEARCH AND DEVELOPMENT

Research and development costs are charged to expense as incurred.

NOTE 3. 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.  At June 30, 2004, all options and warrants
have  expired and there were no shares of  potentially  issuable  common  stock.
Because of the net loss for the three  month  periods  ended  June 30,  2004 and
2003,  and from  inception  (March 20, 2002) through June 30, 2004,  potentially
issuable  common stock was not included in the  calculation  of diluted loss per
share as their inclusion would be anti-dilutive.

NOTE 4. MANAGEMENT PLANS

The Company is  considered  a  development  stage  enterprise  as defined  under
Statement of Financial  Accounting  Standards  ("SFAS") No. 7,  "Accounting  and
Reporting by Development  Stage  Enterprises."  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,
and  blast  mitigation  materials.  The  Company  is  focusing  its  efforts  on
developing a broad range of defense, commercial 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.  Upon completion
of the  development  of such  products,  the Company  intends to market and sell
primarily to the aerospace and defense industries.  Operating revenues have been
generated in the amount of $94,688 for the three months ended June 30, 2004.

During the year ended March 31, 2003, the Company obtained loans from a bank for
amounts up to $1,650,000.  In addition,  the Company has received  $2,891,045 in
loans since inception from third parties,  existing  stockholders and directors.
At this time,  to  conserve  revenues,  the  Company  does not  manufacture  its
products nor does it maintain a sales force. These functions are outsourced.  In
addition,  officers of the Company and  certain  employees  have been  deferring
their  salaries and accepting  shares of the  Company's  common stock in lieu of
cash. The Company is 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 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  debt or equity  securities.  There is no  guarantee  that the
Company will obtain funds sufficient to continue its operations  during the next
12 months.


                                       5
<PAGE>

NOTE 5.  INVENTORY

Inventory  consists  of  finished  goods  and is  stated at the lower of cost or
market. Cost is determined using the first-in, first-out method.

NOTE 6.  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.  For the period ended June 30, 2004,
the Company has  incurred a total of $8,206 in  royalties  associated  with this
agreement.

NOTE 7.  LOANS PAYABLE

On April 18, 2003, the Company  entered into a loan agreement with Aerospace for
amounts up to 100,000.  The loan bears  interest at 10% per annum and matured on
June 30, 2004. On June 30, 2004,  the loan was amended to include  amounts up to
$200,000, and to extend the maturity date to December 31, 2004. The Company owes
Aerospace $113,537,  including accrued interest,  as of June 30, 2004 under this
loan agreement.

The Chairman and CEO of the Company has continued to provide cash to support the
Company's  operations until such time as the Company  generates  sufficient cash
through operations or financing is obtained from the issuance of debt or equity.
The Chairman and CEO of the Company also controls USDR(NV),  Inc.  ("USDR").  On
June 6, 2003, the Company entered into a loan agreement with USDR for amounts up
to  $125,000.  On June 11, 2004,  the loan was amended to include  amounts up to
$500,000.  The loan bears  interest  at 10% per annum and matures on October 31,
2004. The Company owes USDR $152,305, including accrued interest, as of June 30,
2004 under this loan agreement.

On April  11,  2003 and April  18,  2003,  the  Company  entered  into two loans
totaling  $16,000 from an existing  stockholder.  The loans bear interest at 10%
per annum and  matured  on April 30,  2004.  The  Company  owes the  stockholder
$17,947,  including accrued  interest,  as of June 30, 2004. The stockholder has
agreed to extend the loans, date to be determined.

On April 29,  2003,  April 30, 2003 and May 9, 2003,  the Company  entered  into
three loans totaling $35,000 from Directors.  The loans bear interest at 10% per
annum  and  matured  on June 30,  2004.  The  Directors  have  agreed  to accept
restricted  common  stock in exchange for these  loans.  On August 7, 2003,  the
Company  entered  into a  loan  agreement  with a  Director  for  amounts  up to
$150,000,  and on December 19, 2003, the loan was amended to include  amounts up
to  $500,000.  The loan bears  interest at 10% per annum and matured on June 30,
2004. The Company owes the Director $558,993,  including accrued interest, as of
June 30,  2004  under this loan  agreement.  The  Director  has agreed to accept
restricted  common  stock in  exchange  for this loan.  On October 3, 2003,  the
Company  entered  into a  loan  agreement  with a  Director  for  amounts  up to
$100,000. The loan bears interest at 10% per annum and matured on June 30, 2004.
The Company owes the Director $132,836,  including accrued interest,  as of June
30, 2004 under this  agreement.  The  Director  has agreed to accept  restricted
common stock in exchange for this loan.

On January 8, 2004,  January 9, 2004 and January 27, 2004,  the Company  entered
into three loans totaling  $292,934 from existing  stockholders.  The loans bear
interest at 10% per annum and  matured on June 30,  2004.  The Company  owes the
stockholders  $305,947  including  accrued  interest,  as of June 30, 2004 under
these agreements. The stockholders have agreed to accept restricted common stock
in exchange for these loans.

On April 23, 2004, the Company entered into agreements resulting in the issuance
of 1,147,950 shares of restricted  common stock for the repayment of $378,823 of
principal, related to loans advanced to us by our Directors.


                                       6
<PAGE>

NOTE 8.  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 6.  Aerospace  has
provided  employees  and  product  development  services to the  Company.  Since
inception  (March 20,  2002),  Aerospace  has provided  such  services  totaling
approximately  $2.9  million  for which the  Company  currently  owes  Aerospace
$310,427 as of June 30,  2004.  As of January 1, 2003,  Aerospace  substantially
discontinued  all of its  operations  and the Company hired certain  individuals
previously  employed through Aerospace.  Aerospace  continues to provide certain
supplies and services to the Company.

NOTE 9.  BANK NOTES PAYABLE

The  Company  previously  had  lines of  credit  with a bank for  amounts  up to
$1,650,000.  The lines of credit have been consolidated  into one loan,  bearing
interest at 10% per annum and matures on December  30, 2004.  The terms  require
two  principal  payments of $300,000,  plus  interest due on August 30, 2004 and
September 30, 2004, and one final principal and interest payment of $333,215 due
on  December  30,  2004.  The loan is secured by the assets of the  Company  and
guaranteed by our largest  stockholder.  As of June 30, 2004,  the Company had a
total  outstanding  principal  balance of $925,000 and accrued  interest totaled
$24,596.

NOTE 10.  LICENSE AND TECHNOLOGY AGREEMENTS

On June 25, 2004, the Company  entered into an agreement  with Vitusa  Products,
Inc.  ("Vitusa").  Vitusa is a leading  supplier of  additives to the filter and
tobacco filter manufacturing industries and has acquired distribution rights for
the Company's NanoFilterCX Cigarette Filter Material.

NOTE 11.  STOCK-BASED COMPENSATION

The Company has a stock-based  compensation plan that is accounted for under APB
Opinion  25,   "Accounting   for  Stock  Issued  to   Employees",   and  related
Interpretations.  No options were granted  under the plan for the periods  ended
June  30,  2004,  and  2003  and  since  inception  (March  20,  2002).  Options
outstanding that were granted under the stock option plan of US Global Aerospace
(fka  Caring  Products  International)  prior to the merger with the Company and
were  fully  vested as of the  merger  date (May 17,  2002),  have all  expired.
Accordingly,  no  compensation  expense  would  have been  recognized  under the
recognition  provisions  of FASB  Statement  123,  "Accounting  for  Stock-Based
Compensation",  during  the  periods  ended  June 30,  2004  and 2003 and  since
inception (March 20, 2002).

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 the Company's  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.

On April 7, 2004,  the Company  granted  35,392 shares of common stock under the
2002 Stock Plan to an  employee  in lieu of salary  with an award  valuation  of
$21,058, equaling 85% of the fair market value per share on the date of grant of
the award. The Company  recognized an additional  $3,717 as additional  non-cash
expense  for the  difference  between the fair value of the stock and the salary
due.

On May 5, 2004,  the Company  granted  485,761  shares of common stock under the
2002 Stock Plan to  employees  in lieu of salaries  with an award  valuation  of
$160,300,  equaling  85% of the fair market value per share on the date of grant
of the award.  The  Company  recognized  an  additional  $24,289  as  additional
non-cash expense for the difference  between the fair value of the stock and the
salaries due.


                                       7
<PAGE>

On June 2, 2004, the Board of Directors  approved an amendment to the 2002 Stock
Plan to increase the shares of common stock included in the 2002 Stock Plan from
15,000,0000  shares to 30,000,000 shares. The amendment also changed the name of
the 2002 Stock Plan from "US Global  Aerospace,  Inc." to "US Global  Nanospace,
Inc.", and changed  paragraph 7.2 of the 2002 Stock Plan so that the calculation
of the purchase price of stock awards may be the same for all recipients of such
awards.

The Company has accrued  payroll taxes  relating to the issuance of common stock
granted in lieu of wages in accrued  salaries  and expense for the period  ended
June 30, 2004, and has recorded employee  receivables for the employees' portion
of the payroll taxes due to the Company.

NOTE 12.  RECENTLY ISSUED ACCOUNTING STANDARDS

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.

In April 2003, the FASB issued  Statement No. 149,  "Accounting for Amendment of
Statement 133 on Derivative  Instruments and Hedging  Activities,"  which amends
and clarifies  financial  accounting and reporting for  derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities".  This Statement is generally effective for
contracts  entered  into or modified  after June 30,  2003,  and all  provisions
should be applied prospectively.  The adoption of Statement 149 did not have any
effect on the  Company's  financial  position,  results of  operations,  or cash
flows.

In May  2003,  the FASB  issued  Statement  No.  150,  "Accounting  for  Certain
Financial  Instruments  with  Characteristics  of both  Liabilities and Equity".
Statement  No. 150 requires  that  certain  financial  instruments,  which under
previous  guidance were  accounted  for as equity,  must now be accounted for as
liabilities.  Statement  No.  150 is  effective  for all  financial  instruments
entered into or modified after May 31, 2003. The Company  adopted  Statement No.
150 on June 1, 2003.  The adoption of Statement  No. 150 did not have any effect
on the Company's financial position, results of operations, or cash flows.

NOTE 13.  SUBSEQUENT EVENT

On August 13, 2004 (the "Effective  Date"),  the Company and Kidde Fire Fighting
Inc., a  Pennsylvania  corporation  ("Kidde"),  entered into a  Development  and
License  Agreement  (the  "Agreement"),  pursuant to which,  among other things,
Kidde  agreed to  purchase  from the  Company  for cash an  exclusive  worldwide
license  of  (i)  the  Company's  rights  in  and to  certain  patents  licensed
exclusively  to the  Company by TIAX LLC  pursuant  to that  certain  Patent and
Technology License Agreement, dated as of July 24, 2003, between the Company and
TIAX LLC, a Delaware limited liability company,  and (ii) the Company's know-how
with respect to the development  and formulation of the Company's  ALL-CLEAR(TM)
Chemical and Biological Agent Decontamination Foam product ("ALL-CLEAR(TM)"). In
addition,  Kidde  agreed to purchase  for cash all of the  Company's  rights and
interests in and to the ALL-CLEAR(TM) trademark. Under the Agreement, Kidde will
be responsible for the  manufacturing,  marketing and worldwide  distribution of
ALL-CLEAR(TM).   The  Company  will  earn  royalty  payments  on  all  sales  of
ALL-CLEAR(TM) by Kidde.  The information  herein is qualified in its entirety by
reference  to the  Agreement,  including  all annexes,  exhibits  and  schedules
attached  thereto,  and any  related  documents  that the  Company  has filed as
exhibits to its Current Report on Form 8-K on August 17, 2004.


                                       8
<PAGE>

FORWARD-LOOKING STATEMENTS

      This  report  by  US  Global  Nanospace,   Inc.  (the  "Company)  contains
forward-looking  statements.   These  are  statements  regarding  financial  and
operating  performance and results and other  statements that are not historical
facts.  The words  "expect,"  "project,"  "estimate,"  "believe,"  "anticipate,"
"intend," "plan,"  "forecast," and similar  expressions are intended to identify
forward-looking  statements.  Certain  important  risks could  cause  results to
differ  materially  from  those  anticipated  by  some  of  the  forward-looking
statements.  Some,  but not all, of the risks that could cause actual results to
differ from those suggested by the  forward-looking  statements  include,  among
other things:

      o     the loss of the services of any member of our  management  team and,
            in  particular,  the  loss of the  services  of John  Robinson,  our
            Chairman and Chief Executive Officer;

      o     our ability to  successfully  market the products we have  developed
            and to continue to develop  products with  demonstrated  competitive
            advantages for the defense and homeland security markets;

      o     whether or not our  products are able to compete  successfully  with
            products  of other  suppliers  and whether or not some or all of our
            products are rendered obsolete by newer products;

      o     the  implementation of any government  regulation that could make it
            more difficult or more costly to bring our products to market;

      o     our ability to obtain financing as and when we need it; and

      o     other  factors,  all of which are  difficult  to predict and many of
            which are beyond our control.

      You are  cautioned  not to place undue  reliance on these  forward-looking
statements,  which relate only to events as of the date on which the  statements
are made. We undertake no obligation  to publicly  revise these  forward-looking
statements to reflect events or circumstances  that arise after the date hereof.
You  should  refer  to  and  carefully  review  the  following   information  in
conjunction  with other risk  factors  detailed in our  filings,  including  our
Annual Report on Form 10-KSB filed with the Securities  and Exchange  Commission
on July 14, 2004.

PART 1 - ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATION

      Management's   discussion  and  analysis  of  results  of  operations  and
financial  condition are based upon our 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 USGN controls USDR Aerospace,
Ltd. ("Aerospace"), which has licensed its intellectual property to USGN. 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.  Since  inception  (March  20,  2002),
management  estimated  that  Aerospace  provided  property  and  services  to us
totaling  approximately  $2.9 million for which,  as of June 30,  2004,  we owed
Aerospace $310,427.


                                       9
<PAGE>

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  optimized  polymer and organic  materials and
nanofibers  to produce  variable  threat armor  solutions,  superior  filtration
systems for air, water, and cigarettes,  biological and chemical decontaminants,
and blast mitigation and fire protection  materials.  We are currently  focusing
our efforts on licensing and  marketing the products that we have  developed for
threat  reduction and health and safety  applications.  Our target customers for
these materials,  formulas,  and processes include agencies and/or organizations
under the  direct  control  of the  federal  government  of the  United  States,
domestic  and  foreign  businesses  and  foreign   government   agencies  and/or
organizations, to the extent permitted by applicable law or regulation.

      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  $2,891,045  from  unrelated
third parties and existing  shareholders.  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.

RESULTS OF OPERATIONS

QUARTER ENDED JUNE 30, 2004 COMPARED TO THE QUARTER ENDED JUNE 30, 2003

      Our  revenues  from  operations  for the quarter  ended June 30, 2004 were
$94,688 as compared to $53,174 for the quarter  ended June 30, 2003, an increase
of 78%.  This  increase  in  revenues  was due to the  increase  in sales of our
products.

      During the quarter ended June 30, 2004, we spent  $137,549 on research and
development  as compared to $174,468 for the quarter  ended June 30,  2003.  Our
research  and  development  costs  declined  because  many of our  products  are
developed  and are now ready to market.  We expect our research and  development
costs to be significant  during the next twelve months as we continue to upgrade
our  current  products  and  develop  new  products  and  methods  of using  our
lightweight, anti-ballistic material, G-Lam.

      During the quarter ended June 30, 2004,  we incurred  $488,049 in expenses
related to non-cash  compensation  as  compared  to $899,020  during the quarter
ended June 30,  2003.  Included in the  current  quarter is $399,743 of non-cash
general  and  administrative  expense for  deferred  compensation  and  services
related  to the  issuance  of  7,308,215  shares of  common  stock  pursuant  to
consulting  agreements  we entered  into  during the  fiscal  year 2002.  We had
continued  to  recognize  such  non-cash  expense,   having  a  total  value  of
$6,560,317,  over a two-year period.  At June 30, 2004, this two-year period has
ended.  The remaining  $88,306 in the current quarter relates to the issuance of
common stock in exchange for  services  and employee  wages.  During the quarter
ended June 30, 2004, we paid our consultants and employees with our common stock
in order to conserve cash.

      During the quarter ended June 30, 2004,  other general and  administrative
expenses totaled $439,156 as compared to $548,947 for the quarter ended June 30,
2003, a decrease of approximately 20%. This decrease reflects the implementation
of cost cutting  measures  during fiscal 2004 as well as a reduction in research
and development costs for products that are completed.


                                       10
<PAGE>

      We had an  operating  loss of  $1,043,337  for the quarter  ended June 30,
2004, as opposed to  $1,569,261  for the quarter ended June 30, 2003, a decrease
of approximately 33%. We had a net loss of $1,099,921 for the quarter ended June
30, 2004, as compared to a net loss of $1,677,011 for the quarter ended June 30,
2003, a decrease of approximately  40%. The decrease in operating and net losses
is also  attributable  to cost  cutting  measures  during  the year as well as a
reduction in research and development costs for products that are completed.

      Other income (expense) for the quarter ended June 30, 2004 totaled $56,584
as compared to $107,750 for the quarter  ended June 30, 2003.  Interest  expense
decreased  because we have  reduced the  principal on our bank note by $725,000,
and the interest rate on this note was lowered.

LIQUIDITY AND CAPITAL RESOURCES

      At June 30,  2004,  we had cash on hand of $8,491.  Our primary  source of
cash during the  quarter  ended June 30, 2004 was loans  totaling  $396,600  and
revenues totaling $94,688.  Net cash used in operating  activities was $129,177.
The  primary  uses of cash for the  quarter  ended June 30,  2004  consisted  of
general operating costs and reducing our bank note payable.

      At this time,  to conserve  cash,  we  outsource  the  manufacture  of our
products and our sales and marketing  functions.  In addition,  our officers and
certain employees have been deferring their salaries and accepting shares of our
common  stock  in lieu of  cash.  We are  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 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 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. If we cannot obtain  financing when we need it, we may be unable to maintain
our operations.

      We had no  investing  activities  that used or  generated  cash during the
quarter  ended  June 30,  2004.  Cash flows from  financing  activities  for the
quarter  ended June 30, 2004  included  loan  proceeds in the amount of $396,600
from our directors.

      During the quarter  ended June 30,  2004,  in order to conserve  cash,  we
issued our common stock to satisfy  notes  payable  totaling  $378,823 and wages
totaling $209,363.

      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.

RECENTLY ISSUED ACCOUNTING STANDARDS

      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.  We are 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.


                                       11
<PAGE>

      In  April  2003,  the FASB  issued  Statement  No.  149,  "Accounting  for
Amendment of Statement 133 on Derivative  Instruments  and Hedging  Activities,"
which amends and clarifies  financial  accounting  and reporting for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts and for hedging  activities under FASB Statement No. 133,  "Accounting
for Derivative Instruments and Hedging Activities".  This Statement is generally
effective for contracts  entered into or modified  after June 30, 2003,  and all
provisions  should be applied  prospectively.  The adoption of Statement 149 did
not have any effect on our financial  position,  results of operations,  or cash
flows.

      In May 2003, the FASB issued  Statement No. 150,  "Accounting  for Certain
Financial  Instruments  with  Characteristics  of both  Liabilities and Equity".
Statement  No. 150 requires  that  certain  financial  instruments,  which under
previous  guidance were  accounted  for as equity,  must now be accounted for as
liabilities.  Statement  No.  150 is  effective  for all  financial  instruments
entered into or modified  after May 31, 2003.  We adopted  Statement  No. 150 on
June 1, 2003.  The adoption of Statement  No. 150 did not have any effect on our
financial position, results of operations, or cash flows.

PART 1 - ITEM 3 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.

      We  carried  out  an  evaluation,  under  the  supervision  and  with  the
participation of our management, including our Chief Executive Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls and  procedures as of the quarter ended June 30, 2004.  The
evaluation was undertaken in consultation with our accounting  personnel.  Based
on that  evaluation,  the Chief Executive  Officer and Chief  Financial  Officer
concluded  that our  disclosure  controls and procedures are effective to ensure
that information  required to be disclosed by us in the reports that it files or
submits  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized  and  reported  in  accordance   with  the  Securities  and  Exchange
Commission's rules and forms. We have experienced considerable problems from our
accounting software and equipment. We have upgraded our equipment in response to
these problems.  We have also improved our segregation of duties among personnel
by hiring another individual to assist in finance and accounting procedures. Our
internal procedures have been adjusted to reflect these changes.

      There were no other  significant  changes in our  internal  controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of their evaluation.

PART II

      ITEM 1. LEGAL PROCEEDINGS

      Not applicable.

      ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      On April 23, 2004, we entered into agreements resulting in the issuance of
1,147,950 restricted shares of our common stock for the repayment of $378,823 of
principal,  related to loans advanced to us by our directors. These transactions
were effected under Section 4(2) of the Securities Act of 1933, as amended.

      The   recipients  of  securities  in  the   above-described   transactions
represented  their  intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any  distribution  thereof and
appropriate legends were affixed to the share certificates and other instruments
issued in such transactions. The recipients either received adequate information
about us or had access, through other relationships, to such information.


                                       12
<PAGE>

      ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      Not applicable.

      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
June 2, 2004, we received  shareholder written consent approving an amendment to
our Amended and Restated  2002 Stock Plan (the "Plan") to increase the shares of
common stock included in the Plan from 15,000,000  shares to 30,000,000  shares,
to  reflect  our name  change  from "US  Global  Aerospace,  Inc." to "US Global
Nanospace,  Inc.",  and to amend Section 7.2 of the Plan so that the calculation
of the purchase price of stock awards may be the same for all recipients of such
awards. A shareholder  owning and having the right to vote 46,686,658  shares of
common  stock,  which  constituted  a majority of the then  outstanding  shares,
consented  to each of  these  matters.  There  were no  votes  cast  against  or
withheld,  and no  abstensions  or  broker  non-votes  regarding  each of  these
matters.  Notice of these actions was given to our stockholders on or about July
23, 2004.

      ITEM 5. OTHER INFORMATION

      Not applicable.

ITEM 6. 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 stockholders
      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 USGN and West Harris
      Property, Inc. (4)

10.2  Addendum E to Lease/Guarantee executed by Julie Seaman (4)

10.3  Intellectual  Property Assignment and Royalty Agreement dated May 14, 2002
      between USDR Aerospace, Ltd. and USDR Global Aerospace, Ltd. (4)

10.4  US Global Nanospace, Inc. Amended and Restated 2002 Stock Plan (7)

10.5  Settlement  Agreement and Mutual Release among ERBC Holdings,  Ltd., USGN,
      USDR Global Aerospace,  Ltd., USDR Aerospace, Ltd., Live Oak Capital, LLC,
      Nicholas  Lattanzio,  Margaret K. Curtis,  Smith Point  Capital,  LTD. and
      Daniel T. Guilfoile dated November 20, 2002. (4)

10.6  Settlement Agreement and Mutual Release among USGN, USDR Global Aerospace,
      Ltd., USDR Aerospace, Ltd. and Richard Wall dated November 19, 2002. (4)

10.7  Settlement Agreement and Mutual Release among USGN, USDR Global Aerospace,
      Ltd., USDR Aerospace, Ltd., Richard A. Wall, ECON Investor Relations, Inc.
      and Dawn Van Zant dated November 19, 2002 (4)

10.8  Promissory Note and Commercial Security Agreement between USGN and Western
      Security Bank dated June 30, 2003 (4)

10.9  Commercial Guaranty between John D. Robinson and Western Security Bank(4)


                                       13
<PAGE>

10.10 Promissory  Note in the amount of $12,000 dated April 29, 2003 in favor of
      Julie Seaman (5)

10.11 Promissory  Note in the amount of $10,000 dated April 30, 2003 in favor of
      John Robinson (5)

10.12 Promissory  Note in the  amount of  $13,000  dated May 9, 2003 in favor of
      Julie Seaman (5)

10.13 Promissory  Note in the amount of $125,000  dated June 6, 2003 in favor of
      U.S.D.R. (NV), Inc. (5)

10.14 Promissory  Note in the amount of $100,000 dated April 8, 2003 in favor of
      USDR Aerospace, Ltd. (5)

10.15 Patent and Technology  License  Agreement dated July 24, 2003 between USGN
      and TIAX, LLC (6)

10.16 Amendment  No. 1 dated  October 3, 2003 to Patent and  Technology  License
      Agreement between USGN and TIAX LLC(6)

10.17 Master Agreement by and between Y2-Ultra-Filter,  Inc. and USGN dated June
      19, 2003 (6)

10.18 Promissory  Note in the amount of  $195,649.94  dated  January 27, 2004 in
      favor of Steve Squires (7)

10.19 Promissory Note in the amount of $50,000 dated January 9, 2004 in favor of
      Paula Boozer (7)

10.20 Promissory Note in the amount of $47,283.50 dated January 8, 2004 in favor
      of Robin Bailey (7)

10.21+Development  and License  Agreement  between USGN and Kidde Fire  Fighting
      Inc. dated August 13, 2004 (8)

14    Code of Ethics (7)

16    Letter on change in certifying accountant (9)

31.1  Certification by Chief Executive Officer (10)

31.2  Certification by Chief Financial Officer (10)

32    Certification pursuant to 18 U.S.C. section 1350 (10)


+ Confidential  treatment requested as to certain portions,  which portions were
omitted and filed separately with the Securities and Exchange Commission.

(1)  Incorporated  by reference  from a Form 8-K filed with the  Securities  and
Exchange Commission on May 30, 2002.

(2) Incorporated by reference from Amendment No. 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 with
the Securities and Exchange Commission on June 20, 2003.

(5)  Incorporated  by reference from a Form 10-QSB filed with the Securities and
Exchange Commission on September 10, 2003.

(6)  Incorporated  by reference from a Form 10-QSB filed with the Securities and
Exchange Commission on November 14, 2003.

(7)  Incorporated  by reference from a Form 10-KSB filed with the Securities and
Exchange Commission on July 14, 2004.

(8)  Incorporated  by reference  from a Form 8-K filed with the  Securities  and
Exchange Commission on August 17, 2004.

(9)  Incorporated  by reference  from a Form 8-K filed with the  Securities  and
Exchange Commission on April 21, 2004.

(10) Filed herewith.


                                       14
<PAGE>

      (B)   Reports on Form 8-K

      We filed one report on Form 8-K dated April 21, 2004 related to the change
in our certifying accountant.


                                       15
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                         US GLOBAL NANOSPACE, INC.


                                      By: /s/ John Robinson
                                          --------------------------------------
Date:  August 23, 2004                    John Robinson, Chief Executive Officer


                                      By: /s/Julie Seaman
                                          -----------------------------------
Date:  August 23, 2004                    Julie Seaman, Chief Financial Officer



                                       16