**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-QSB**

**x**
**Quarterly      Report Under Section 13 or 15(**
**d**
**)      of the Securities Exchange Act of 1934.**

**For      the Quarterly Period and Six Months Ended May 31, 2007**

**or**

**o**
**Transition      Report Under Section 13 or 15(d) of the Securities Exchange Act of      1934.**

**For      the Transition Period From ____________________ To      __________________**

**Commission      File Number: 000-51007**

**NANOSENSORS,      INC.**

| **Nevada**                                                                                   | **200452700**                                       |
|----------------------------------------------------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation                or organization) | (I.R.S.                Employer Identification No.) |
|                                                                                         |                                                |
| **1800                Wyatt Drive, Suite #2****Santa                Clara, CA**              | **95054**                                           |
| (Address                of principal executive offices)                                      | (Zip                Code)                           |

**Issuer’s      telephone number: (408) 855-0051**

**N/A**

| Class                                                   |   | Outstanding                at July 13, 2007 |
|---------------------------------------------------------|--------|---------------------------------------------|
| Common                Stock, $0.001 par value per share |   | 406,726,698                shares           |

----

**NANOSENSORS,      INC.**

**INDEX**

|                                                                                                                                                                | Page(s) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
| **PART                  I. FINANCIAL INFORMATION**                                                                                                                  |    |
|                                                                                                                                                                |    |
| **ITEM                  1. CONDENSED FINANCIAL STATEMENTS**                                                                                                         | 3       |
|                                                                                                                                                                |    |
| Balance                  Sheets - May 31, 2007 (unaudited) and November 30, 2006                                                                                    | 3       |
|                                                                                                                                                                |    |
| Statements                  of Operations for the Period                                                                                                            |    |
| from                  date of inception to May 31, 2007 and the six and three month periods                  ended May 31, 2007 and May 31, 2006 (unaudited)        | 4       |
|                                                                                                                                                                |    |
| Statements                  of Cash Flows for the Period                                                                                                            |    |
| from                  date of inception to May 31, 2007 and the six month periods ended                  May 31,                  2007 and May 31, 2006 (unaudited) | 5       |
|                                                                                                                                                                |    |
| Statement                  of Shareholders’ Deficit for the Period                                                                                            |    |
| from                  the date of inception to May 31, 2007 (unaudited)                                                                                             | 6       |
|                                                                                                                                                                |    |
| Notes                  to Financial Statements (unaudited)                                                                                                          | 7       |
|                                                                                                                                                                |    |
| **ITEM                    2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL                    CONDITION AND RESULTS OF OPERATIONS**                       | 14      |
|                                                                                                                                                                |    |
| **ITEM                  3. CONTROLS AND PROCEDURES**                                                                                                                | 21      |
|                                                                                                                                                                |    |
| **PART                  II. OTHER INFORMATION**                                                                                                                     |    |
|                                                                                                                                                                |    |
| **ITEM                  1. LEGAL PROCEEDINGS**                                                                                                                      | 21      |
|                                                                                                                                                                |    |
| **ITEM                  2. CHANGES IN SECURITIES**                                                                                                                  | 21      |
|                                                                                                                                                                |    |
| **ITEM                  3. DEFAULTS UPON SENIOR SECURITIES**                                                                                                        | 21      |
|                                                                                                                                                                |    |
| **ITEM                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY                  HOLDERS**                                                                   | 22      |
|                                                                                                                                                                |    |
| **ITEM                  5. OTHER INFORMATION**                                                                                                                      | 22      |
|                                                                                                                                                                |    |
| **ITEM                  6. EXHIBITS**                                                                                                                               | 22      |
|                                                                                                                                                                |    |
| Signatures                                                                                                                                                          | 23      |
|                                                                                                                                                                |    |
| Certifications                                                                                                                                                      |    |

----

**PART      I. FINANCIAL INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS**

**NANOSENSORS,      INC.**

**(A      Development Stage Company)**

**CONDENSED      BALANCE SHEETS**

|                                                                                                                                                                                                                                                      |   | **May                  31, 2007** |       | **November                  30, 2006** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------------|--------|
|                                                                                                                                                                                                                                                      |   | **(Unaudited)**                   |       |                                   |   |
| **ASSETS**                                                                                                                                                                                                                                                |   |                              |       |                                   |   |
| **CURRENT                  ASSETS:**                                                                                                                                                                                                                      |   |                              |       |                                   |   |
| Cash                                                                                                                                                                                                                                                      |   | $                                 | 274,863    |                                   | $      | 244,915 |   |
| Cash                  held in escrow                                                                                                                                                                                                                      |   |                              | -          |                                   |   | 715,000 |   |
| Other                  current assets                                                                                                                                                                                                                     |   |                              | 8,061      |                                   |   | 28,426 |   |
|                                                                                                                                                                                                                                                      |   |                              |       |                                   |   |   |   |
| **TOTAL                  CURRENT ASSETS**                                                                                                                                                                                                                 |   |                              | 282,924    |                                   |   | 988,341 |   |
| **PROPERTY                    AND EQUIPMENT - net of accumulated depreciation                    of $6,163 and $5,440, respectively**                                                                                                                     |   |                              | 4,653      |                                   |   | 14,030 |   |
|                                                                                                                                                                                                                                                      |   |                              |       |                                   |   |   |   |
| **OTHER                  ASSETS:**                                                                                                                                                                                                                        |   |                              |       |                                   |   |   |   |
| Deposit                  and other assets - net of amortization                                                                                                                                                                                           |   |                              | 5,500      |                                   |   | 6,333 |   |
| Deferred                  acquisition cost                                                                                                                                                                                                                |   |                              | 73,273     |                                   |   | - |   |
| Notes                  receivable                                                                                                                                                                                                                         |   |                              | 40,000     |                                   |   | - |   |
| **TOTAL                  ASSETS**                                                                                                                                                                                                                         |   | $                                 | 406,350    |                                   | $      | 1,008,704 |   |
|                                                                                                                                                                                                                                                      |   |                              |       |                                   |   |   |   |
| **LIABILITIES                  AND SHAREHOLDERS' DEFICIT**                                                                                                                                                                                                |   |                              |       |                                   |   |   |   |
| **CURRENT                  LIABILITIES:**                                                                                                                                                                                                                 |   |                              |       |                                   |   |   |   |
| Accounts                  payable and accrued expenses                                                                                                                                                                                                    |   | $                                 | 221,734    |                                   | $      | 281,338 |   |
| Accounts                  payable - related party                                                                                                                                                                                                         |   |                              | 12,500     |                                   |   | 37,500 |   |
| Derivative                  liability from warrants issued                                                                                                                                                                                                |   |                              | 484,260    |                                   |   | 2,106,300 |   |
| Accrued                  employee benefits                                                                                                                                                                                                                |   |                              | 12,692     |                                   |   | 7,987 |   |
| Client                  escrow funds                                                                                                                                                                                                                      |   |                              | -          |                                   |   | 715,000 |   |
| **TOTAL                  CURRENT LIABILITIES**                                                                                                                                                                                                            |   |                              | 731,186    |                                   |   | 3,148,125 |   |
|                                                                                                                                                                                                                                                      |   |                              |       |                                   |   |   |   |
| **COMMITMENTS                  AND CONTINGENCIES**                                                                                                                                                                                                        |   |                              |       |                                   |   |   |   |
|                                                                                                                                                                                                                                                      |   |                              |       |                                   |   |   |   |
| **SHAREHOLDERS'                  DEFICIT:**                                                                                                                                                                                                               |   |                              |       |                                   |   |   |   |
|                                                                                                                                                                                                                                                           |   |                              |       |                                   |   |   |   |
| Preferred                    stock, $.001 par value; 20,000,000 shares authorized;                    no shares issued                                                                                                                                    |   |                              | -          |                                   |   | - |   |
|                                                                                                                                                                                                                                                           |   |                              |       |                                   |   |   |   |
| Common                      stock, $.001 par value; 950,000,000 and 500,000,000 shares                      authorized;                      406,726,698 and 332,226,698 shares issuedand                      outstanding in 2007 and 2006, respectively |   |                              | 406,727    |                                   |   | 332,227 |   |
| Additional                  paid-in capital                                                                                                                                                                                                               |   |                              | 778,038    |                                   |   | 714,250 |   |
| Deficit                  accumulated during the development stage                                                                                                                                                                                         |   |                              | (1,509,601 | )                                      |   | (3,185,898 | ) |
|                                                                                                                                                                                                                                                      |   |                              | (324,836   | )                                      |   | (2,139,421 | ) |
| **TOTAL                  LIABILITIES AND SHAREHOLDERS' DEFICIT**                                                                                                                                                                                          |   | $                                 | 406,350    |                                   | $      | 1,008,704 |   |

----

**NANOSENSORS,      INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF OPERATIONS**

**(Unaudited)**

|                                                                                           |   | **For                        the Cumulative****Period                        from Inception****(December                        23, 2003) to****May                        31, 2007** |       | **Six                      Months****Ended****May                      31, 2007** |   | **Six                          Months****Ended****May                          31, 2006** |   | **Three                      Months****Ended****May                      31, 2007** |        | **Three                    Months****Ended                    May 31, 2006** |   |
|------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|-------------|------------------------------------------------------------------------------|--------|
| **NET                  SALES**                                                                 |   | $                                                                                                                                                                                     | 11,688     |                                                                              | $      | -                                                                                         |   | $                                                                                   | -           |                                                                         | $      | - |   | $ | - |   |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **COSTS                  AND EXPENSES:**                                                       |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| General                  and administrative expense                                            |   |                                                                                                                                                                                  | 1,637,340  |                                                                              |   | 525,556                                                                                   |   |                                                                                | 128,813     |                                                                         |   | 227,349 |   |   | 36,959 |   |
| Research                  and development                                                      |   |                                                                                                                                                                                  | 623,438    |                                                                              |   | 68,479                                                                                    |   |                                                                                | -           |                                                                         |   | 17,465 |   |   | - |   |
| Depreciation                  and amortization                                                 |   |                                                                                                                                                                                  | 41,913     |                                                                              |   | 1,555                                                                                     |   |                                                                                | 1,633       |                                                                         |   | 887 |   |   | 816 |   |
| Write-off                  of licenses                                                         |   |                                                                                                                                                                                  | 61,750     |                                                                              |   | -                                                                                         |   |                                                                                | -           |                                                                         |   | - |   |   | - |   |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **TOTAL                  COSTS AND EXPENSES**                                                  |   |                                                                                                                                                                                  | 2,364,441  |                                                                              |   | 595,590                                                                                   |   |                                                                                | 130,446     |                                                                         |   | 245,701 |   |   | 37,775 |   |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **LOSS                  FROM OPERATIONS**                                                      |   |                                                                                                                                                                                  | (2,352,753 | )                                                                                 |   | (595,590                                                                                  | )      |                                                                                | (130,446    | )                                                                            |   | (245,701 | ) |   | (37,775 | ) |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE)**                                                    |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| Income                  (expense) related to fair value of warrant liability                   |   |                                                                                                                                                                                  | 870,866    |                                                                              |   | 2,265,540                                                                                 |   |                                                                                | (1,504,237  | )                                                                            |   | 1,037,700 |   |   | (1,504,237 | ) |
| Interest                  expense                                                              |   |                                                                                                                                                                                  | (40,357    | )                                                                                 |   | (253                                                                                      | )      |                                                                                | -           |                                                                         |   | - |   |   | - |   |
| Interest                  income                                                               |   |                                                                                                                                                                                  | 12,643     |                                                                              |   | 6,600                                                                                     |   |                                                                                | 35          |                                                                         |   | 2,628 |   |   | 29 |   |
| **INCOME                  (LOSS) BEFORE INCOME TAXES**                                         |   |                                                                                                                                                                                  | (1,509,601 | )                                                                                 |   | 1,676,297                                                                                 |   |                                                                                | (1,634,648  | )                                                                            |   | 794,627 |   |   | (1,541,983 | ) |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| Provision                  (credit) for income taxes                                           |   |                                                                                                                                                                                  | -          |                                                                              |   | -                                                                                         |   |                                                                                | -           |                                                                         |   | - |   |   | - |   |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **NET                  INCOME (LOSS)**                                                         |   | $                                                                                                                                                                                     | (1,509,601 | )                                                                                 | $      | 1,676,297                                                                                 |   | $                                                                                   | (1,634,648  | )                                                                            | $      | 794,627 |   | $ | (1,541,983 | ) |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **BASIC                  AND DILUTED NET INCOME (LOSS) PER SHARE**                             |   |                                                                                                                                                                                  | -          |                                                                              | $      | 0.00                                                                                      |   | $                                                                                   | (0.01       | )                                                                            | $      | 0.00 |   | $ | (0.01 | ) |
|                                                                                           |   |                                                                                                                                                                                  |       |                                                                              |   |                                                                                      |   |                                                                                |        |                                                                         |   |   |   |   |   |   |
| **WEIGHTED                  AVERAGE NUMBER OF **COMMON                  SHARES OUTSTANDING**** |   |                                                                                                                                                                                  | -          |                                                                              |   | 394,998,676                                                                               |   |                                                                                | 206,715,110 |                                                                         |   | 406,726,698 |   |   | 207,644,565 |   |

----

**NANOSENSORS,      INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF CASH FLOWS**

**(Unaudited)**

|                                                                          |   | For                      the Cumulative Period fromInception                      (December 23, 2003) to                      May 31, 2007 |       | Six                    Months EndedMay                    31, 2007 |   | Six                    Months EndedMay                    31, 2006 |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                    |   |                                                                                                                                       |       |                                                               |   |                                                               |   |
| Net                  Income (loss)                                            |   | $                                                                                                                                          | (1,509,601 | )                                                                  | $      | 1,676,297                                                          |   | $ | (1,634,648 | ) |
| Adjustment                  to reconcile net loss to net cash utilized in     |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| operating                  activities:                                        |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Depreciation                  and amortization                                |   |                                                                                                                                       | 41,913     |                                                               |   | 1,555                                                              |   |   | 1,633 |   |
| Write-off                  of licenses                                        |   |                                                                                                                                       | 61,750     |                                                               |   | -                                                                  |   |   | - |   |
| Stock                  based compensation and warrants issued                 |   |                                                                                                                                       | 181,940    |                                                               |   | 108,288                                                            |   |   | - |   |
| Expenses                  (income) related to fair value of warrant liability |   |                                                                                                                                       | (870,866   | )                                                                  |   | (2,265,540                                                         | )      |   | 1,504,237 |   |
| Change                  in operating assets and operating liabilities:        |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Prepaid                  expenses and other assets                            |   |                                                                                                                                       | (8,061     | )                                                                  |   | 20,365                                                             |   |   | (1,525 | ) |
| Accrued                  employee benefits                                    |   |                                                                                                                                       | 12,692     |                                                               |   | 4,705                                                              |   |   | - |   |
| Accounts                  payable and accrued expenses                        |   |                                                                                                                                       | 358,233    |                                                               |   | (84,604                                                            | )      |   | (75,659 | ) |
| **Net                  cash used by operating activities**                    |   |                                                                                                                                       | (1,732,000 | )                                                                  |   | (538,934                                                           | )      |   | (205,962 | ) |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES**                     |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Purchase                  of equipment                                        |   |                                                                                                                                       | (19,470    | )                                                                  |   | -                                                                  |   |   | - |   |
| Proceeds                  from return of equipment                            |   |                                                                                                                                       | 8,655      |                                                               |   | 8,655                                                              |   |   | - |   |
| Purchase                  of license                                          |   |                                                                                                                                       | (90,000    | )                                                                  |   | -                                                                  |   |   | - |   |
| Deposit                  and other deferred costs                             |   |                                                                                                                                       | (81,273    | )                                                                  |   | (73,273                                                            | )      |   | (5,000 | ) |
| Notes                  receivable                                             |   |                                                                                                                                       | (40,000    | )                                                                  |   | (40,000                                                            | )      |   | - |   |
| **Net                  cash used in investment activities**                   |   |                                                                                                                                       | (222,088   | )                                                                  |   | (104,618                                                           | )      |   | (5,000 | ) |
| **CASH                  FLOW FROM FINANCING ACTIVITIES:**                     |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Net                  proceeds from issuance of common stock and warrants      |   |                                                                                                                                       | 2,228,951  |                                                               |   | 673,500                                                            |   |   | 141,663 |   |
| **Net                  cash provided by financing activities**                |   |                                                                                                                                       | 2,228,951  |                                                               |   | 673,500                                                            |   |   | 141,663 |   |
|                                                                          |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| **NET                  INCREASE IN CASH**                                     |   |                                                                                                                                       | 274,863    |                                                               |   | 29,948                                                             |   |   | (69,299 | ) |
| Cash                  at beginning of period                                  |   |                                                                                                                                       | -          |                                                               |   | 244,915                                                            |   |   | 191,940 |   |
|                                                                          |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| **CASH                  AT END OF PERIOD**                                    |   | $                                                                                                                                          | 274,863    |                                                               | $      | 274,863                                                            |   | $ | 122,641 |   |
|                                                                          |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| **NON                  CASH FLOWS FROM OPERATING ACTIVITIES:**                |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Issuance                  of 116,350,000 common shares for services           |   |                                                                                                                                       | 12,902     |                                                               |   | -                                                                  |   |   | - |   |
|                                                                          |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| **SUPPLEMENTAL                  CASH FLOW INFORMATION:**                      |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| **Cash                  paid during the period for:**                         |   |                                                                                                                                       |       |                                                               |   |                                                               |   |   |   |   |
| Interest                                                                      |   |                                                                                                                                       | 25,204     |                                                               |   | 6,600                                                              |   |   | - |   |
| Cashless                  exercise of warrants into common stock              |   |                                                                                                                                       | 24,352     |                                                               |   | -                                                                  |   |   | 1,800 |   |
| Warrants                  issued recorded as liability                        |   |                                                                                                                                       | 1,355,126  |                                                               |   | 643,500                                                            |   |   | 86,163 |   |
| Dividend                  expenses on induced conversion of warrants          |   |                                                                                                                                       | 203,200    |                                                               |   | -                                                                  |   |   | 66,750 |   |
| Release                  of escrow funds and related liabilitiy               |   |                                                                                                                                       | 1,729,500  |                                                               |   | 715,000                                                            |   |   | 940,000 |   |
| Issue                  of common stock in payment of liability                |   |                                                                                                                                       | 124,000    |                                                               |   | -                                                                  |   |   | - |   |

----

**NANOSENSORS,      INC.**

**(A      Development Stage Company)**

**STATEMENT      OF SHAREHOLDERS’ DEFICIT**

**(Unaudited)**

|                                                                                                                                   |   | CommonShares |        | Amount |   | Additional                      Paid                      - inCapital |   | DeficitAccumulatedDuring                        theDevelopment                        Stage |     | Total  |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|----------|--------|--------|
| **BALANCE                  AT DECEMBER 23, 2003 (INCEPTION)**                                                                          |   |         |        |   | $      | -                                                                     |   | $                                                                                           | -        |   | $      | - |   | $ | - |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for license at $0.0001                                                                       |   |         | 50,000,000  |   |   | 50,000                                                                |   |                                                                                        | (45,000  | )      |   | - |   |   | 5,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for services and expenses at                  $0.0001 per share                              |   |         | 114,500,000 |   |   | 114,500                                                               |   |                                                                                        | (103,050 | )      |   | - |   |   | 11,450 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.005 per share                                                                 |   |         | 95,000      |   |   | 95                                                                    |   |                                                                                        | 380      |   |   | - |   |   | 475 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.020 per share- net                  of issuance costs                         |   |         | 27,500,000  |   |   | 27,500                                                                |   |                                                                                        | 435,500  |   |   | - |   |   | 463,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for note receivable - at $0.005                  per share - paid in June 2004               |   |         | 880,000     |   |   | 880                                                                   |   |                                                                                        | 3,520    |   |   | - |   |   | 4,400 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for payment of debt at                  $0.020 per share                                     |   |         | 6,200,000   |   |   | 6,200                                                                 |   |                                                                                        | 117,800  |   |   | - |   |   | 124,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for expenses at $0.00078 per share                                                           |   |         | 1,850,000   |   |   | 1,850                                                                 |   |                                                                                        | (398     | )      |   | - |   |   | 1,452 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Net                  Loss                                                                                                              |   |         | -           |   |   | -                                                                     |   |                                                                                        | -        |   |   | (741,499 | ) |   | (741,499 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| **BALANCE                  AS OF NOVEMBER 30, 2004**                                                                                   |   |         | 201,025,000 |   |   | 201,025                                                               |   |                                                                                        | 408,752  |   |   | (741,499 | ) |   | (131,722 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.020 per share                                                                 |   |         | 1,500,000   |   |   | 1,500                                                                 |   |                                                                                        | 28,500   |   |   | - |   |   | 30,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.10 per share, net of                  issuance costs                          |   |         | 2,500,000   |   |   | 2,500                                                                 |   |                                                                                        | 222,500  |   |   | - |   |   | 225,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Net                  Loss                                                                                                              |   |         | -           |   |   | -                                                                     |   |                                                                                        | -        |   |   | (334,125 | ) |   | (334,125 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| **BALANCE                  AS OF NOVEMBER 30, 2005**                                                                                   |   |         | 205,025,000 |   |   | 205,025                                                               |   |                                                                                        | 659,752  |   |   | (1,075,624 | ) |   | (210,847 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.025 per share                                                                 |   |         | 500,000     |   |   | 500                                                                   |   |                                                                                        | 12,000   |   |   | - |   |   | 12,500 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.030 per share                                                                 |   |         | 900,000     |   |   | 900                                                                   |   |                                                                                        | 26,100   |   |   | - |   |   | 27,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.01 per share net                  of fees and fair value of warrant liability |   |         | 16,000,000  |   |   | 16,000                                                                |   |                                                                                        | -        |   |   | - |   |   | 16,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Cashless                  exercise of 2,250,000 warrants into common stock                  net of fees and warrant liability          |   |         | 1,800,000   |   |   | 1,800                                                                 |   |                                                                                        | (1,800   | )      |   | - |   |   | - |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Adjustment                  resulting from warrant modification                                                                        |   |         | -           |   |   | -                                                                     |   |                                                                                        | 66,750   |   |   | - |   |   | 66,750 |   |
| Deemed                  dividends re: induced conversion of warrants                                                                   |   |         | -           |   |   | -                                                                     |   |                                                                                        | (66,750  | )      |   | - |   |   | (66,750 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.01 shares net                  of fees and fair value of warrant liability    |   |         | 65,450,000  |   |   | 65,450                                                                |   |                                                                                        | -        |   |   | - |   |   | 65,450 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Cashless                  exercise of 14,150,000 warrants into common stock                                                            |   |         | 12,270,645  |   |   | 12,271                                                                |   |                                                                                        | (12,271  | )      |   | - |   |   | - |   |
|                                                                                                                                        |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Adjustment                  resulting from warrant modification                                                                        |   |         | -           |   |   | -                                                                     |   |                                                                                        | 95,550   |   |   | - |   |   | 95,550 |   |
| Deemed                  dividends re: induced conversion of warrants                                                                   |   |         | -           |   |   | -                                                                     |   |                                                                                        | (95,550  | )      |   | - |   |   | (95,550 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.01 shares net                  of fees and fair value of warrant liability    |   |         | 20,000,000  |   |   | 20,000                                                                |   |                                                                                        | (20,000  | )      |   | - |   |   | - |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Cashless                  exercise of 12,950,000 warrants into common stock                                                            |   |         | 10,281,053  |   |   | 10,281                                                                |   |                                                                                        | (10,281  | )      |   | - |   |   | - |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Stock                  Based Compensation                                                                                              |   |         | -           |   |   | -                                                                     |   |                                                                                        | 60,750   |   |   | - |   |   | 60,750 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Adjustment                  resulting from warrant modification                                                                        |   |         | -           |   |   | -                                                                     |   |                                                                                        | 40,900   |   |   | - |   |   | 40,900 |   |
| Deemed                  dividends re: induced conversion of warrants                                                                   |   |         | -           |   |   | -                                                                     |   |                                                                                        | (40,900  | )      |   | - |   |   | (40,900 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Net                  Loss                                                                                                              |   |         | -           |   |   | -                                                                     |   |                                                                                        | -        |   |   | (2,110,274 | ) |   | (2,110,274 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| **BALANCE                  AS OF NOVEMBER 30, 2006**                                                                                   |   |         | 332,226,698 |   |   | 332,227                                                               |   |                                                                                        | 714,250  |   |   | (3,185,898 | ) |   | (2,139,421 | ) |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.01 shares net                  of fees and fair value of warrant liability    |   |         | 71,500,000  |   |   | 71,500                                                                |   |                                                                                        | (71,500  | )      |   | - |   |   | - |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Issuance                  of common stock for cash at $0.01 per share                                                                  |   |         | 3,000,000   |   |   | 3,000                                                                 |   |                                                                                        | 27,000   |   |   | - |   |   | 30,000 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Stock                  Based Compensation                                                                                              |   |         | -           |   |   | -                                                                     |   |                                                                                        | 108,288  |   |   | - |   |   | 108,288 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| Net                  Income                                                                                                            |   |         | -           |   |   | -                                                                     |   |                                                                                        | -        |   |   | 1,676,297 |   |   | 1,676,297 |   |
|                                                                                                                                   |   |         |        |   |   |                                                                  |   |                                                                                        |     |   |   |   |   |   |   |   |
| **BALANCE                  AS OF May 31, 2007**                                                                                        |   | $            | 406,726,698 |   | $      | 406,727                                                               |   | $                                                                                           | 778,038  |   | $      | (1,509,601 | ) | $ | (324,836 | ) |

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**NANOSENSORS,      INC.**

**(A      Development Stage Company)**

**NOTES      TO FINANCIAL STATEMENTS**

**May      31, 2007**

**(Unaudited)**

| 1. | ORGANIZATION: |
|----|---------------|

|   | 2. | GOING                CONCERN: |
|--------|----|-------------------------------|

** **

|   | 3. | SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES: |
|--------|----|------------------------------------------------------------|

*Basis      of Presentation *

----

*Basic      and Diluted Net Income (Loss) Per Share *

*Accounting      for Warrants and Freestanding Derivative Financial Instruments*

*Non-employee      Compensation*

----

*Stock      Based Compensation: Employees and Directors *

|   | 4. | STOCK                BASED COMPENSATION: |
|--------|----|------------------------------------------|

**Accounting      for Employee Awards:**

*Employee      and Director Option Grants *

| Name                        |   | Total                Amount |           | Vested                as of May 31, 2007 |   | Unvested                as of May 31, 2007 |   |
|-----------------------------|--------|-----------------------------|----------------|------------------------------------------|--------|--------------------------------------------|--------|
| Dr.                Ted Wong |   |                        | 18,000,000     |                                     |   | 6,733,332                                  |   |   | 11,266,668 |   |
| Joshua                Moser |   |                        | 14,200,000     |                                     |   | 5,360,000                                  |   |   | 8,840,000 |   |
| Robert                Baron |   |                        | 2,421,348      |                                     |   | 421,348                                    |   |   | 2,000,000 |   |
| **Totals**                  |   |                        | **34,621,348** |                                     |   | **12,514,680**                             |   |   | **22,106,668** |   |

**Accounting      for Non-employee Awards: **

----

*Classification      of Compensation Expense Associated with Share-Based Payment      Arrangements*

|                                                           |   | **Inception                  through** |    | **Six                  Months Ended May 31, 2007** |   | **Three                  Months Ended May 31, 2007** |   |
|----------------------------------------------------------------|--------|----------------------------------------|---------|----------------------------------------------------|--------|------------------------------------------------------|--------|
| **Stock based compensation expense**            |   | **May                  31, 2007**      |    | **2007**                                           |   | **2006**                                             |   | **2007** |   | **2006** |   |
|  Employee                  - research and development     |   | $                                      | 0       |                                               | $      | 0                                                    |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |
| Non-employee                  — research and development |   |                                   | 0       |                                               |   | 0                                                    |   |   | 0 |   |   | 0 |   |   | 0 |   |
| Employee                  — general and administrative   |   |                                   | 97,538  |                                               |   | 97,538                                               |   |   | 0 |   |   | 24,490 |   |   | 0 |   |
| Non-employee                  - general and administrative     |   |                                   | 50,000  |                                               |   | 10,750                                               |   |   | 0 |   |   | 3,333 |   |   | 0 |   |
| Total                  stock based compensation expense        |   | $                                      | 147,538 |                                               | $      | 108,288                                              |   | $ | 0 |   | $ | 27,823 |   | $ | 0 |   |

** **

|                                    |   | **Six                Months  Ended May 31, 2007** |                       |
|-----------------------------------------|--------|--------------------------------------------------------|----------------------------|
| Expected                volatility      |   |                                                   | 178                - 185   | % |
| Expected                dividend yield  |   |                                                   | 0                          | % |
| Risk-free                interest rate  |   |                                                   | 4.51                - 4.85 | % |
| Expected                term (in years) |   |                                                   | 2                - 5       |   |

----

The      following table represents all our stock options and warrants granted,      exercised, and forfeited during the six months ended as of May 31,      2007. 

| Stock                    Options & Warrants    |   | Number                    of Shares  |        | Weighted                    Average Exercise Price per Share |   | Weighted                    Average Remaining Contractual Term |   | Aggregate                    Intrinsic Value |                                 |
|----------------------------------------------------|--------|-------------------------------------------|-------------|--------------------------------------------------------------|--------|----------------------------------------------------------------|--------|----------------------------------------------|--------------------------------------|
| Outstanding                    at December 1, 2006 |   |                                      | 160,315,000 |                                                         | $      | 0.031                                                          |   |                                         | 4.7                                  |   |   | - |   |
| Granted                                            |   |                                      | 120,421,348 |                                                         | $      | 0.039                                                          |   |                                         |                                 |   |   |   |   |
| Cancelled                                          |   |                                      | -           |                                                         | $      | 0.00                                                           |   |                                         |                                 |   |   |   |   |
| Exercised                                          |   |                                      | (3,000,000  | )                                                            | $      | 0.010                                                          |   |                                         |                                 |   |   |   |   |
| Forfeited/expired                                  |   |                                      | (75,000     | )                                                            | $      | 0.020                                                          |   |                                         |        |   |   |        |   |
| Outstanding                    at May 31, 2007     |   |                                      | 277,661,348 |                                                         | $      | 0.04                                                           |   |                                         | 4.7                    years         |   | $ | 0 |   |
|                                               |   |                                      |        |                                                         |   |                                                           |   |                                         |                                 |   |   |   |   |
| Exercisable                    at May 31, 2007     |   |                                      | 251,013,000 |                                                         | $      | 0.03                                                           |   |                                         | 4.3                    years         |   | $ | 0 |   |

|   | 5. | WARRANT                DERIVATIVE LIABILITY: |
|--------|----|----------------------------------------------|

** **

----

|   | 6. | RELATED                PARTY TRANSACTIONS: |
|--------|----|--------------------------------------------|

|   | 7. | COMMITMENTS                AND CONTINGENCIES: |
|--------|----|-----------------------------------------------|

The      following table lists the future payments required on the Company’s commitments      for the remaining two quarters of fiscal 2007 and fiscal years ending in 2008      and thereafter:

| Obligations                                         |   | 2007   |        | 2008   |   | 2009        |   | 2010   |        | 2011   |   | Thereafter |   |
|-----------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|--------|------------|--------|
| Office                Lease                         |   | $      | 16,242      |   | $      | 8,121       |   | $      | —     |   | $      | —    |   | $ | — |   | $ | — |   |
| Michigan                State Technology License    |   |   | —     |   |   | 10,000      |   |   | 10,000      |   |   | 10,000     |   |   | 10,000 |   |   | 210,000 |   |
| Pohang                University Technology License |   |   | —     |   |   | 10,000      |   |   | 10,000      |   |   | 10,000     |   |   | 10,000 |   |   | 210,000 |   |
| Employment                Agreements                |   |   | 132,000     |   |   | 264,000     |   |   | 176,000     |   |   | —    |   |   | — |   |   | — |   |
| Technical                Advisory Board             |   |   | 45,000      |   |   | 52,500      |   |   | —     |   |   | —    |   |   | — |   |   | — |   |
| Accrescent                Research                  |   |   | 18,000      |   |   | 30,000      |   |   | —     |   |   | —    |   |   | — |   |   | — |   |
| **Totals**                                          |   | **$**  | **211,242** |   | **$**  | **374,621** |   | **$**  | **196,000** |   | **$**  | **20,000** |   | **$** | **20,000** |   | **$** | **420,000** |   |

|   | 8. | SUBSEQUENT                EVENTS: |
|--------|----|-----------------------------------|

*Extension      of Letter of Intent for the Acquisition of DKL International,      Inc.*

----

*Recent      Accounting Standards Affecting the Company*

----

**FACTORS      THAT MAY AFFECT FUTURE RESULTS **

*This      report contains forward-looking statements within the meaning of Section 27A      of      the Securities Act of 1933, as amended, and Section 21E of the Securities      Exchange Act of 1934, as amended. These forward-looking statements include,      but      are not limited to, statements concerning our plans to continue development      of      our current product candidates; address certain markets; engage third-party      manufacturers; and evaluate additional product candidates for subsequent      commercial development. In some cases, these statements may be identified by      terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,”“believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of      such terms and other comparable terminology. Although we believe that the      expectations reflected in the forward-looking statements contained herein are      reasonable, we cannot guarantee future results, levels of activity, performance      or achievements. These statements involve known and unknown risks and      uncertainties that may cause our or our industry’s results, levels of activity,      performance or achievements to be materially different from those expressed      or      implied by forward-looking statements. Factors that may cause or contribute      to      such differences include, among other things, those discussed under the captions      “Business,” “Risk Factors” and “Management’s Discussion and Analysis-Plan of      Operation” in our reports and registration statements filed with the Securities      and Exchange Commission. *

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

*This *
*anagement’s      Discussion and Analysis of Financial Condition and Results of Operations should      be read together with our financial statements and related notes included      elsewhere in this Quarterly Report on Form 10-QSB. This Quarterly Report on      Form      10-QSB, including the following discussion, contains trend analysis and other      forward-looking statements within the safe harbor provisions of the Private      Securities Litigation Reform Act of 1995. Any statements in this Quarterly      Report on Form 10-QSB that are not statements of historical facts are      forward-looking statements. These forward-looking statements are based on a      number of assumptions and involve risks and uncertainties. Actual results may      differ materially from those set forth in such forward-looking statements as      a      result of factors set forth elsewhere in this Quarterly Report on Form 10-QSB.      All share and per share data in this section, as well as in the entire report,      unless otherwise noted, give retroactive effect to the 10 for 1 forward split      declared by us on January 12, 2006. *
*Certain      of these risks are set forth under “Risk Factors” in our Annual Report on Form      10-KSB and our periodic reports filed with the SEC. Our expectations, beliefs      and projections are expressed in good faith and are believed by us to have      a      reasonable basis, including without limitation, management’s examination of      historical operating trends, data contained in our records and other data      available from third parties, but there can be no assurance that management’s      expectations, beliefs or projections will result or be achieved or accomplished.      Accordingly, to the extent that this Report contains forward-looking statements      regarding the financial condition, operating results, business prospects or      any      other aspect of our company, please be advised that our actual financial      condition, operating results and business performance may differ materially      from      that projected or estimated by us in forward-looking      statements.*

**Overview**

----

*Forward      Stock Split*

*Technology      Licenses*

----

*Extension      of Letter of Intent for Acquisition of DKL International, Inc.*

**Critical      Accounting Policies **

*Development      Stage Company*

*Research      and Development*

*Income      Taxes*

*Accounting      for Warrants and Freestanding Derivative Financial Instruments*

----

*Non-employee      Compensation*

*Stock      Based Compensation: Employees and Directors *

**Results      of Operations for the Three Months Ended May 31, 2007 as Compared to the Three      Months Ended May 31, 2006. **

----

**Results      of Operations for the Six Months Ended May 31, 2007 as Compared to the Six      Months Ended May 31, 2006. **

**Liquidity      and Capital Resources at May 31, 2007 **

** **

|                                |   | Six                months ended May 31, |     |
|-------------------------------------|--------|-----------------------------------------|----------|
|                                |   | **2007**                                |     | **2006** |   |
| Operating                activities |   | $                                       | (538,934 | ) | $ | (205,962 | ) |
|                                |   |                                    |     |   |   |   |   |
| Investing                activities |   |                                    | (104,618 | ) |   | (5,000 | ) |
|                                |   |                                    |     |   |   |   |   |
| Financing                activities |   |                                    | 673,500  |   |   | 141,663 |   |
|                                |   |                                    |     |   |   |   |   |
| Net                effect on cash   |   | $                                       | 29,948   |   | $ | (69,299 | ) |

----

**Six      Months Ended May 31, 2007**

**Plan      of Operation **
** **

----

|   | · |                  the scope and results of our product development                activities;                                            |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                         |
|   | · |                  potential acquisition or in-licensing of other product candidates,                commercial products or technologies; |
|   |   |                                                                                                                                         |
|   | · |                  the cost of manufacturing activities for product candidates;                and                                        |
|   |   |                                                                                                                                         |
|   | · |                  our ability to establish and maintain additional collaborative                arrangements.                            |

----

** **

**Off-Balance      Sheet Arrangements**

**ITEM      3. CONTROLS AND PROCEDURES **

*Disclosure      Controls*

* *

*Internal      Controls*

**PART      II. OTHER INFORMATION **

**ITEM      1. LEGAL PROCEEDINGS. **

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES. **

----

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

**ITEM      5. OTHER INFORMATION. **

*Extension      of Letter of Intent for Acquisition of Assets of DKL International, Inc.*

**ITEM      6. EXHIBITS. **

|                          |   |                                                                                                                                                                                                                                       |   | Incorporated                by Reference |   |   |
|-------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|--------|
| Exhibit                Number |   | Exhibit                Description                                                                                                                                                                                                         |   | Form                                     |   | Dated  |   | Exhibit |   | Filed                Herewith |
| 31.1                          |   | Certification                of Chief Executive Officer and Chief Financial Officer pursuant to                Section 302 of the Sarbanes-Oxley Act of 2002                                                                          |   |                                     |   |   |   |   |   | X |
|                          |   |                                                                                                                                                                                                                                       |   |                                     |   |   |   |   |   |   |
| 32.1                          |   | Certification                of Chief Executive Officer and Chief Financial Officer pursuant to                18                U.S.C. Section 1350, as adopted pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002. |   |                                     |   |   |   |   |   | X |

----

**SIGNATURES      **

|   |                                                                                         |   |
|--------|----------------------------------------------------------------------------------------------|--------|
|   | **NanoSensors,                Inc.**                                                         |
|   | /s/                Ted Wong                                                                  |
|   | Ted                Wong                                                                      |
|   | President,                Chief Executive Officer and Chief                Financial Officer |

----