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: September 30, 2003

                                       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
        Incorporation 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 November 13, 2003 the issuer
had 86,237,839 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>
PART I                                                                                  PAGE
                                                                                       NUMBER

<S>      <C>                                                                            <C>
Item 1 - Financial Information

         Balance Sheets as of September 30, 2003 (unaudited) and March 31, 2003         F-1

         Statements of Operations - Three and Six Months Ended
                  September 30, 2003 and 2002,  and since  inception  (March 20,
                  2002) through September 30, 2003 (unaudited)                          F-2

         Statement of Stockholders' Deficit - Six Months Ended
                  September 30, 2003 (unaudited)                                        F-3

         Statements of Cash Flows - Six Months Ended
                  September 30, 2003 and 2002, and since inception (March 20, 2002)
                  through September 30, 2003 (unaudited)                                F-4

         Notes to the Financial Statements (unaudited)                                  F-5 - F-9

Forward Looking Statements                                                              1

Item 2 - Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                          2 - 6

Item 3 - Controls and Procedures                                                        6

PART II

Item 1 - Legal Proceedings                                                              7

Item 2 - Changes in Securities and Use of Proceeds                                      7

Item 3 - Defaults Upon Senior Securities                                                7

Item 4 - Submission of Matters to a Vote of Security Holders                            7

Item 5 - Other Information                                                              7

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

Signature Page
</TABLE>


<PAGE>


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

           Balance Sheets as of September 30, 2003 and March 31, 2003


<TABLE>
<CAPTION>
                                                                    September 30        March 31
ASSETS                                                                  2003              2003
                                                                    ------------      ------------
                                                                    (unaudited)
<S>                                                                 <C>               <C>
CURRENT ASSETS
  Cash                                                              $      1,595      $      3,239
  Accounts Receivable                                                     82,474                --
  Deposits                                                                11,000                --
  Inventory                                                                2,960                --
                                                                    ------------      ------------
   Total current assets                                                   98,029      $      3,239
                                                                    ------------      ------------
      Total assets                                                  $     98,029      $      3,239
                                                                    ============      ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Lines of credit                                                  $  1,650,000      $  1,650,000
   Accounts payable                                                      291,200           366,242
   Shareholder loans payable                                             300,099                --
   Related party payable                                                 308,477           306,519
   Accrued salaries                                                      349,273           297,980

   Accrued interest                                                       88,195            81,696
                                                                    ------------      ------------
       Total current liabilities                                       2,987,244         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            82,670            75,789
  Additional paid-in capital                                           9,254,151         8,000,120
  Deferred compensation and services                                  (2,045,600)       (3,720,752)
  Accumulated development stage deficit                              (10,180,436)       (7,054,355)
                                                                    ------------      ------------
      Total stockholders' deficit                                     (2,889,215)       (2,699,198)
                                                                    ------------      ------------
      Total liabilities and stockholders' deficit                   $     98,029      $      3,239
                                                                    ============      ============
</TABLE>

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


<PAGE>


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

                            Statements of Operations
  Three and Six Months Ended September 30, 2003 and 2002, and since inception
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                                               Cumulative
                                                                                                               results of
                                                                                                            operations from
                                                                                                             March 20, 2002
                                      Three months      Three months       Six months        Six months    (date of inception)
                                          ended            ended             ended              ended            through
                                      September 30,     September 30,     September 30,     September 30,     September 30,
                                          2003              2002              2003              2002              2003
                                      ------------      ------------      ------------      ------------      ------------
<S>                                   <C>               <C>               <C>               <C>               <C>
REVENUES                              $     72,505      $         --      $    125,679      $         --      $    125,679
COST OF REVENUES                            19,918                --            27,761                --            27,761
                                      ------------      ------------      ------------      ------------      ------------
      Gross profit                          52,587                --            97,918                --            97.918

OPERATING EXPENSES
   Research and development                325,328           460,368           499,796           981,251         2,127,458
   General and administrative
      Non-cash compensation
        and services                      882,8539           995,750         1,781,873        1,378,1134         4,870,200
      Other                                221,277           924,746           762,381        1,511,5973         3,576,098
                                      ------------      ------------      ------------      ------------      ------------
      Total operating expenses           1,429,458         2,380,864         3,044,050         3,870,961        10,573,756
                                      ------------      ------------      ------------      ------------      ------------
      Operating loss                    (1,376,871)       (2,380,864)       (2,946,132)       (3,870,961)      (10,475,838)

OTHER INCOME (EXPENSE)
    Debt restructure                            --                --                --                --           617,904
    Other income                                --                --                --                --            10,045
    Interest expense, net                  (72,199)                9          (179,949)             (746)         (332,547)
                                      ------------      ------------      ------------      ------------      ------------
     Total other income (expense)          (72,199)                9          (179,949)             (746)          295,402
                                      ------------      ------------      ------------      ------------      ------------
    NET LOSS                          $ (1,449,070)     $ (2,380,855)     $ (3,126,081)     $ (3,871,707)     $(10,180,436)
                                      ------------      ------------      ------------      ------------      ------------
    Net loss per share,
      basic and diluted               $      (0.02)     $      (0.04)     $      (0.04)     $      (0.06)     $      (0.13)
                                      ------------      ------------      ------------      ------------      ------------
</TABLE>


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


                                       F-2


<PAGE>


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

                       Statement of Stockholders' Deficit
                       Six Months Ended September 30, 2003
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                                                   Accumulated
                                                                                   Additional       Deferred       Development
                                                          Common Stock              Paid-in       Compensation        Stage
                                                     Shares          Amount         Capital       and Services       Deficit
                                                  ------------    ------------    ------------    ------------    ------------

<S>                                                 <C>           <C>             <C>             <C>             <C>
Balance at April 1, 2003                            75,788,890    $     75,789    $  8,000,120    $ (3,720,752)   $ (7,054,355)

Issuance of common stock on April 10, 2003 in
consideration for wages at $0.10 per share           2,794,684           2,795         276,674              --              --

Issuance of common stock on May 13, 2003 in
consideration for accounts payable at $0.06
per share                                              583,334             583          34,417              --              --

Issuance of common stock on June 23, 2003 in
consideration for services at $0.06 per share           60,000              60           3,540              --              --

Issuance of common stock on July 8, 2003 in
consideration for accounts payable at $0.20
per share                                              388,622             389          77,335

Issuance of common stock on July 9, 2003 in
consideration for accounts payable at $0.22
per share                                              136,364             136          29,864

Issuance of common stock on July 9, 2003 in
consideration for accounts payable at $0.22
per share                                              500,000             500         109,500

Issuance of common stock on July 14, 2003 in
consideration for services at $0.06 per share           20,000              20           1,180

Issuance of common stock on July 18, 2003 in
consideration for wages at $0.40 per share             860,343             860         343,277

Issuance of common stock on July 23, 2003 in
consideration for services at $0.34 per share           20,000              20           6,780

Issuance of common stock on July 25, 2003 in
consideration for wages at $0.29 per share           1,000,000           1,000         249,000

Redemption of common stock on July 28, 2003 in
consideration for wages at $0.40 per share             (13,647)            (14)         (5,445)

Issuance for common stock on July 30, 2003 in
consideration for services at $0.34 per share           60,000              60          20,340

Issuance for common stock on August 23, 2003
in consideration for services at $0.23 per
share                                                   20,000              20           4,580

Issuance for common stock on September 22,
2003 in consideration for services at $0.22
per share                                               60,000              60          13,140

Issuance for common stock on September 22,
2003 in consideration for services at $0.23
per share                                               65,218              65          14,935

Issuance for common stock on September 23,
2003 in consideration for legal services at
$0.23 per share                                        327,134             327          74,914

Amortization of deferred compensation and
Services                                                                                             1,675,152

Net loss for the period                                                                                             (3,126,081)
                                                  ------------    ------------    ------------    ------------    ------------
Balance at September 30, 2003                       82,670,942    $     82,670    $  9,254,151    $ (2,045,600)   $(10,180,436)
                                                  ============    ============    ============    ============    ============


<CAPTION>
                                                         Total
                                                     Stockholders'
                                                       Deficit
                                                     ------------

<S>                                                  <C>
Balance at April 1, 2003                             $ (2,699,198)

Issuance of common stock on April 10, 2003 in
consideration for wages at $0.10 per share                279,469

Issuance of common stock on May 13, 2003 in
consideration for accounts payable at $0.06
per share                                                  35,000

Issuance of common stock on June 23, 2003 in
consideration for services at $0.06 per share               3,600

Issuance of common stock on July 8, 2003 in
consideration for accounts payable at $0.20
per share                                                  77,724

Issuance of common stock on July 9, 2003 in
consideration for accounts payable at $0.22
per share                                                  30,000

Issuance of common stock on July 9, 2003 in
consideration for accounts payable at $0.22
per share                                                 110,000

Issuance of common stock on July 14, 2003 in
consideration for services at $0.06 per share               1,200

Issuance of common stock on July 18, 2003 in
consideration for wages at $0.40 per share                344,137

Issuance of common stock on July 23, 2003 in
consideration for services at $0.34 per share               6,800

Issuance of common stock on July 25, 2003 in
consideration for wages at $0.29 per share                250,000

Redemption of common stock on July 28, 2003 in
consideration for wages at $0.40 per share                 (5,459)

Issuance for common stock on July 30, 2003 in
consideration for services at $0.34 per share              20,400

Issuance for common stock on August 23, 2003
in consideration for services at $0.23 per
share                                                       4,600

Issuance for common stock on September 22,
2003 in consideration for services at $0.22
per share                                                  13,200

Issuance for common stock on September 22,
2003 in consideration for services at $0.23
per share                                                  15,000

Issuance for common stock on September 23,
2003 in consideration for legal services at
$0.23 per share                                            75,241

Amortization of deferred compensation and
Services                                                1,675,152

Net loss for the period                                (3,126,081)
                                                     ------------
Balance at September 30, 2003                        $ (2,889,215)
                                                     ============
</TABLE>


                                       F-3


<PAGE>


                            US Global Nanospace, Inc.
                      (Formerly US Global Aerospace, Inc.)
                          (A development stage company)
                            Statements of Cash Flows
        Six Months Ended September 30, 2003 and 2002, and since inception
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                                                     Cumulative
                                                                                                               results of operations
                                                                                                                from March 20, 2002
                                                                         Six months            Six months       (date of inception)
                                                                     ended September 30   ended September 30,  through September 30,
                                                                            2003                  2002                  2003
                                                                     ------------------   -------------------  ---------------------
<S>                                                                      <C>                 <C>                 <C>
Increase  (Decrease) in Cash
CASH FLOWS FROM OPERATING ACTIVITIES
       Net loss                                                          $ (3,126,081)       $ (3,871,707)       $(10,180,436)
       Adjustments to reconcile net loss to net
                cash used in operating activities
              Common stock issued for services                              1,781,873           1,378,113           4,870,200
              Forgiveness of loans and accounts payable                            --                  --            (617,904)
              Changes in assets and liabilities
                  Accounts receivable                                         (82,474)                 --             (82,474)
                  Inventories                                                  (2,960)                 --              (2,960)
                  Accrued interest                                              6,500                  --             126,037
                  Deposits                                                    (11,000)                 --             (11,000)
                  Accounts payable                                            252,923             547,240           1,178,112
                  Accrued salaries                                            877,518                  --           1,175,498
                  Related party payable                                         1,958             666,438             308,477
                                                                         ------------        ------------        ------------
                          Net cash used in operating activities              (301,743)         (1,279,916)         (3,236,450)
                                                                         ------------        ------------        ------------

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
         Proceeds from shareholder and other loans payable                    300,099           1,280,000           1,580,099

         Proceeds from lines of credit                                             --                  --           1,650,000
                                                                         ------------        ------------        ------------
                        Net cash provided by financing activities             300,099           1,280,000           3,235,099
Net increase (decrease) in cash                                                (1,644)              3,030               1,595
Cash at beginning of period                                                     3,239               5,000                  --
                                                                         ------------        ------------        ------------
Cash at end of period                                                    $      1,595        $      8,030        $      1,595
                                                                         ============        ============        ============

NON-CASH INVESTING AND FINANCING ACTIVITIES
         Accounts payable acquired in conjunction with share
           exchange agreement                                            $         --        $      2,500        $      2,500
         Common stock issued in exchange for accounts payable            $    327,965        $    355,695        $    888,532
         Common stock issued in exchange for loans payable
              and accrued interest                                                 --                  --        $    700,817
         Common stock issued in exchange for wages                       $    826,225        $         --        $    826,225
</TABLE>


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


                                       F-4


<PAGE>


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

                        Notes to the Financial Statements

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, 2004. 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, 2003.

Effective July 21, 2003, the Company changed its name from US Global Aerospace,
Inc. to US Global Nanospace, Inc.

NOTE 2. 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 81,710,052 and 80,179,097, for the three and six
months ended September 30, 2003 and 66,241,197 and 64,625,118 for the three and
six months ended September 30, 2002 and 79,633,322 since inception (March 20,
2002) through September 30, 2003, respectively. At September 30, 2003, there
were 56,963 shares of potentially issuable common stock. Because of the net loss
for the three and six months ended September 30, 2003 and 2002 and since
inception (March 20, 2002) through September 30, 2003, potentially issuable
common stock was not included in the calculation of diluted loss per share as
their inclusion would be anti-dilutive.

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. Upon the completion of
the development of such products, the Company intends to market and sell to the
aerospace and defense industries. Operating revenues have been generated in the
amount of $125,679 for the six months ended September 30, 2003.


                                       F-5


<PAGE>


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

                  Notes to the Financial Statements (Continued)

NOTE 3. MANAGEMENT PLANS (CONTINUED)

In fiscal 2003, the Company obtained loans from a bank for amounts up to
$1,650,000. In addition, the Company has received $1,580,099 in loans since
inception from third parties, existing shareholders and directors. At this time,
to conserve cash, 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. 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 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. INVENTORIES

Inventories consist of finished goods and are stated at the lower of cost or
market. Cost is determined using a first-in, first-out method

NOTE 5. 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 six months ended September
30, 2003, the Company has incurred a total of $6,256 in royalties from this
agreement.

NOTE 6. 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 5. 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 owes Aerospace $308,477 as of
September 30, 2003. As of January 1, 2003, Aerospace substantially discontinued
all of its operations and the Company hired 25 individuals previously employed
through Aerospace. Aerospace continues to provide certain supplies and services
to the Company.



                                       F-6


<PAGE>


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

                  Notes to the Financial Statements (Continued)

NOTE 7. SHAREHOLDER 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% and matures on December
31, 2003. The Company owes Aerospace $92,072 as of September 30, 2003 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 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) and on June
6, 2003 the Company entered into a loan agreement with USDR for amounts up to
$125,000. The loan bears interest at 10% and matures on October 31, 2003. USDR
has extended this loan through April 30, 2004. The Company owes USDR $105,357 as
of September 30, 2003 under this loan agreement.

On April 11, 2003 and April 18, 2003, the Company entered into two loans
totaling $16,000 from an existing shareholder. The loans bear interest at 10%
and matured on October 31, 2003. The shareholder has extended these loans
through April 30, 2004.

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%.
$10,000 matured on October 31, 2003 and has been extended to April 30, 2004, and
$25,000 matures on December 1, 2003. On August 7, 2003 the Company entered into
a loan agreement with a Director for amounts up to $150,000. The loan bears
interest at 10% and matures on June 30, 2004. The Company owes the Director
$56,829 as of September 30, 2003 under this loan agreement.

Note 8. LINES OF CREDIT

The Company had lines of credit with a bank for amounts up to $1,650,000. The
lines of credit have been consolidated into one loan and bear interest at 13%
and mature on December 31, 2003. The loan is secured by the assets of the
Company and guaranteed by our largest shareholder. As of September 30, 2003, the
Company had a total outstanding principal balance of $1,650,000 and accrued
interest totaled approximately $81,400.

NOTE 9. 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
September 30, 2003 and 2002 and since inception (March 20, 2002). Options
outstanding as of September 30, 2003 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 September 30, 2003 and
2002 and since inception (March 20, 2002).


                                       F-7


<PAGE>


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

                  Notes to the Financial Statements (Continued)

NOTE 9. STOCK BASED COMPENSATION (CONTINUED)

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.

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 and expenses with an award
valuation of $237,547, equaling 85% of the fair market value per share on the
date of grant of the award. When granting stock, accounting principles generally
accepted in the United States of America requires companies to record the
issuance of stock for services at the fair market value of the stock on the
grant date, and as a result, the Company recognized an additional $41,922 as
additional non-cash expense for the difference between the fair value of the
stock and the salaries due.

On July 18, 2003, the Company granted 860,343 shares of common stock under the
2002 Stock Plan to employees in lieu of salaries and expenses with an award
valuation of $344,147, equaling 100% of the fair market value per share on the
date of grant of the award. However, on July 28, 2003, the Company cancelled and
redeemed 13,647 of these shares from an employee in exchange for monies owed the
Company, having a total value of $5,459.

On July 25, 2003, the Company granted 1,000,000 shares of common stock under the
2002 Stock Plan to our CEO in lieu of salary with an award valuation of
$250,000, which was the fair market value per share on the date of grant of the
award.

NOTE 10. LICENSE AND TECHNOLOGY AGREEMENTS

On June 19, 2003, the Company entered into an agreement with Y2 Ultra-Filter,
Inc. The Company has the exclusive world rights for the Ultra-Filter technology
for all aircraft applications worldwide and will offer our new Nanofilters(TM)
for long-range commercial aircraft including the Boeing 7X7 series, Airbus A3X0
series and the MD 11.

On July 24, 2003, the Company entered into an exclusive license agreement with
TIAX LLC, to market and sell "All Clear" Chem/Bio Decontaminant Foam. A license
fee in the amount of $21,751.23 is due and payable by October 25, 2003 and
$60,000 is due and payable in four installments beginning January 31, 2004,
March 31, 2004, June 30, 2004, and December 31, 2004. A royalty fee of 6% on net
sales is applicable on net sales in excess of the first one million dollars.


                                       F-8


<PAGE>


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

                  Notes to the Financial Statements (Continued)

NOTE 11. 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 May 2003, FASB issued Statement 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. Statement 150
requires that certain financial instruments, which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. Statement 150
is effective for all financial instruments entered into or modified after May
31, 2003. The Company adopted Statement 150 on June 1, 2003. The adoption of
Statement 150 did not have any effect on the Company's financial position,
results of operations, or cash flows.





                                       F-9


<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

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 information in future documents we
file with the Securities and Exchange Commission.


<PAGE>


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.

         Our Chairman and Chief Executive Officer controls USDR Aerospace, Ltd.
("Aerospace"), which has licensed its intellectual property to us. In the past,
Aerospace provided employees and product development services to us. 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 September 30, 2003, we owed
Aerospace $308,477.

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
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 $1,580,099 from unrelated
third parties, directors and a shareholder. 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 for
the

                                       2

<PAGE>


sale of our products. We cannot guarantee that we will be awarded any grants or
that a market for our products will develop. 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 have no commitments for financing for our future needs and 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 SEPTEMBER 30, 2003 COMPARED TO THE QUARTER ENDED SEPTEMBER 30,
2002

         Our revenues from operations for the quarter ended September 30, 2003
were $72,505 as compared to revenues of $0 for the quarter ended September 30,
2002. Our cost of revenues from operations for the quarter ended September 30,
2003 were $19,918 as compared to cost of revenues of $0 from the quarter ended
September 30, 2002. This increase in revenues and cost of revenues was due to
sales of our products to Lockheed-Martin Corp. and Agusta Aerospace Company.

         During the quarter ended September 30, 2003 we spent $325,328 on
research and development as compared to $460,368 for research and development
during the quarter ended September 30, 2002. Our research and development costs
declined because the development of many of our products is complete. We are
currently beginning to market these products.

         During the quarter ended September 30, 2003 we incurred $882,853 in
expense related to non-cash compensation as compared to $995,750 in expense
related to non-cash compensation during the quarter ended September 30, 2002. Of
this amount, $821,653 is 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
prior year. We will continue to recognize such non-cash expense, having a total
value of $6,676,943, over a two-year period. The remaining $61,200 relates to
the issuance of common stock in exchange for services and employee wages. We
paid for these services and wages by issuing 2,091,914 shares of our common
stock. We pay our consultants and certain of our employees with our common stock
in order to conserve cash. We used, and will continue to use as necessary,
consultants for the development and marketing of our products.

         During the quarter ended September 30, 2003 other operating expense
totaled $221,277 as compared to other operating expense of $924,746 for the
quarter ended September 30, 2002, a decrease of approximately 76%. This decrease
reflects the implementation of cost cutting measures during the period as well
as a reduction in development expenses for products that are completed.

         We had an operating loss of $1,376,871 for the quarter ended September
30, 2003 as compared to an operating loss of $2,380,864 for the quarter ended
September 30, 2002 and a net loss of $1,449,070 for the quarter ended September
30, 2003 as compared to a net loss of $2,380,855 for the quarter ended September
30, 2002. The decrease in operating and net loss is attributable to the fact
that many of our products are fully developed, therefore our research and
development costs have declined significantly. Also attributed to this decrease
is the decrease in amortization of deferred compensation and services related to
the consulting agreements described above.

                                       3

<PAGE>


         Interest expense for the quarter ended September 30, 2003 totaled
$72,199. We had no interest expense for the quarter ended September 30, 2002.
Interest expense increased because our borrowing increased.

SIX MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO SIX MONTHS ENDED SEPTEMBER
30, 2002

         Our revenues from operations for the six month period ended September
30, 2003 were $125,679 as compared to revenues of $0 for the six month period
ended September 30, 2002. Our cost of revenues from operations for the six month
period ended September 30, 2003 were $27,761 as compared to cost of revenues of
$0 from the quarter ended September 30, 2002. This increase in revenues and
costs of revenues was due to sales of our products.

         Research and development costs were $499,796 for the six month period
ended September 30, 2003 as compared to research and development costs of
$981,251 for the six month period ended September 30, 2002, a decrease of
approximately 49%. Our research and development costs declined because the
development of many of our products is complete. We are currently beginning to
market these products.

         Expense related to non-cash compensation was $1,781,873 for the six
month period ended September 30, 2003 as compared to $1,378,133 in expense
related to non-cash compensation for the six month period ended September 30,
2002. Of this amount, $1,675,152 is 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 prior year. We will continue to recognize such non-cash expense, having a
total value of $6,676,943, over a two-year period. The remaining $106,721
relates to the issuance of common stock in exchange for services and employee
wages. We paid for these services and wages by issuing 2,091,914 shares of our
common stock. We pay our consultants and certain of our employees with our
common stock in order to conserve cash. We used, and will continue to use as
necessary, consultants for the development and marketing of our products.

         Other operating expense totaled $762,381 for the six month period ended
September 30, 2003 as compared to other operating expense of $1,511,597 for the
six month period ended September 30, 2002, a decrease of approximately 50%. This
decrease reflects the implementation of cost cutting measures during the period
as well as a reduction in development expenses for products that are completed.

         We had an operating loss of $2,946,132 for the six month period ended
September 30, 2003 as compared to an operating loss of $3,870,961 for the six
month period ended September 30, 2002, and a net loss of $ 3,126,081 for the six
month period ended September 30, 2003 as compared to a net loss of $3,871,707
for the six month period ended September 30, 2002. The decrease in operating and
net loss is attributable to the fact that many of our products are fully
developed, therefore our research and development costs have declined
significantly. Also attributed to this decrease is the decrease in amortization
of deferred compensation and services related to the consulting agreements
described above.

         Interest expense for the six month period ended September 30, 2003
totaled $179,949 as compared to interest expense of $746 for the six month
period ended September 30, 2002. Interest expense increased because our
borrowing increased.

         During the next 12 months we will continue upgrading our current
products and developing new products and methods using our lightweight,
anti-ballistic material, G-Lam. We

                                       4
<PAGE>


anticipate that expenses relating to upgrading our products will continue to be
significant.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2003 we had cash on hand of $1,595. Our primary source
of cash during the six months ended September 30, 2003 was loans totaling
$300,099 and revenues totaling $125,679. Net cash used in operating activities
was $301,743 during the six months ended September 30, 2003. The primary uses of
cash for the quarter ended September 30, 2003 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. In addition, our officers and certain employees have deferred their
salaries. 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, although he is under no obligation to loan any money to us.
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 generated cash during the six
months ended September 30, 2003 as compared to $2,946 of cash from investing
activities that was acquired in conjunction with the share exchange we entered
into on May 17, 2002 with USDR Global Aerospace, Ltd., a Delaware corporation,
and its stockholders.

         Cash flows from financing activities for the six months ended September
30, 2003 included loan proceeds in the amount of $300,099. Cash flows from
financing activities for the six months ended September 30, 2002 consisted of
loan proceeds in the amount of $1,280,000. The loans were from a shareholder and
other third parties.

         During the six months ended September 30, 2003, in order to conserve
cash, we issued our common stock to satisfy accounts payable totaling $327,965
and wages totaling $826,225.


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,

                                       5
<PAGE>


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.

In May 2003, FASB issued Statement 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. Statement 150
requires that certain financial instruments, which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. Statement 150
is effective for all financial instruments entered into or modified after May
31, 2003. We have adopted Statement 150 on June 1, 2003. The adoption of
Statement 150 did not have any effect on our financial position, results of
operations, or cash flows.

PART 1 - ITEM 3   CONTROLS AND PROCEDURES

         The Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including the Company's President
and Chief Financial Officer of the effectiveness of the design and operation of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. The evaluation was undertaken in consultation with the
Company's accounting personnel. Based on that evaluation, the President and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company 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 Securities and Exchange Commission's rules and
forms.

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

                                       6

<PAGE>


PART II

ITEM 1.   LEGAL PROCEEDINGS

Not applicable.


ITEM 2.   CHANGES IN SECURITIES

Not applicable.


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

Not applicable.


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

Not applicable.


ITEM 5.   OTHER INFORMATION

Not Applicable





                                        7


<PAGE>



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
                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  Master Agreement between the Company and Y2 Ultra-Filter, Inc.
                dated June 19, 2003. (4)

          10.2  Patent and Technology License Agreement between the Company and
                TIAX LLC. Dated July 24, 2003. (4)[

          10.3  Amendment No. 1 dated October 3, 2003 to Patent and Technology
                License Agreement between the Company and TIAX, LLC. (4)

          31.1  Certification Pursuant to Rule 13a-14(a) and 15d-14(a). (4)

          31.2  Certification Pursuant to Rule 13a-14(a) and 15d-14(a). (4)

          32.   Certification Pursuant to Section 1350 of Title 18 of the United
                States Code. (4)

----------
(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)  Attached hereto.


(b)      Reports on Form 8-K

         Not applicable.

                                        8
<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:  November 14, 2003                 John Robinson, Chief Executive Officer




                                    By:  /s/ Julie Seaman
                                         ---------------------------------------
Date:  November 14, 2003                 Julie Seaman, Chief Financial Officer


                                       9