U. S. SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   FORM 10-QSB

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended: June 30, 2004


                          Commission file No.333-90738
                                             ---------

                          BIOMODA, INC. AND SUBSIDIARY
           (Name of small business issuer as specified in its charter)

                NEW MEXICO                              85-0392345
           (State of incorporation)           (IRS Employer Identification No.)

           8301 WASHINGTON NE, SUITE 6, ALBUQUERQUE, NEW MEXICO 87113
           (Address of principal executive offices including zip code)

         Issuer's telephone number:                      (505) 821-0875

         Check whether the issuer (1) filed all reports  required to be filed by
         Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or
         for such shorter  period that the  registrant was required to file such
         reports),  and (2) has been subject to such filing requirements for the
         past 90 days. Yes X No____

         The number of issuer's shares of Common Stock outstanding as of  June
         30, 2004 was 6,832,282.

         Transitional Small Business Disclosure Format (check one): Yes __ No X
                                                                             ---

<PAGE>

                                TABLE OF CONTENTS

PART I. Financial Information

   Item 1. Condensed Consolidated Financial Statements................F-1 to F-7
   Item 2. Management's Discussion and Analysis or Plan of Operations..........4
   Item 3. Controls and Procedures.............................................9

Part II. Other Information

   Item 1. Legal Proceedings..................................................10
   Item 2. Changes in Securities..............................................10
   Item 3. Defaults Upon Senior Securities....................................10
   Item 4. Submission of Matters to a Vote of Security Holders................10
   Item 5. Other Information..................................................10
   Item 6. Exhibits and Reports On Form 8-K...................................10

Signatures....................................................................11

<PAGE>

                          PART I: FINANCIAL INFORMATION

Forward - Looking Statements
----------------------------

This  Form  10-QSB  contains  forward-looking  statements  about  the  business,
financial  condition and prospects of the Company that reflect  assumptions made
by management and management's beliefs based on information  currently available
to it. The Company can give no assurance that the expectations indicated by such
forward-looking  statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations  should  materialize,  the  Company's  actual  results  may  differ
materially from those indicated by the forward-looking statements.

The key factors  that are not within the  Company's  control and that may have a
direct  bearing  on  operating  results  include,  but are not  limited  to, the
acceptance by customers of the  Company's  products,  the  Company's  ability to
develop  new  products  cost-effectively,  the  ability of the  Company to raise
capital in the future, the development by competitors of products using improved
or alternative  technology,  the retention of key employees and general economic
conditions.

There may be other risks and circumstances that management is unable to predict.
When used in this Form 10-QSB, words such as, "believes,"  "expects," "intends,"
"plans,"  "anticipates"  "estimates"  and similar  expressions  are  intended to
identify   forward-looking   statements,   although   there   may   be   certain
forward-looking   statements   not   accompanied   by  such   expressions.   All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.

                                       3

<PAGE>

ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          BIOMODA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 June 30, 2004
                                    UNAUDITED

                                     ASSETS
Current Assets
       Cash                                                         $       198
       Prepaid expenses                                                   3,241
                                                                    -----------
       Total Current Assets                                               3,439

Patents, net                                                            202,874

Property and Equipment, net                                              15,067
                                                                    -----------

                                                                    $   221,380
                                                                    ===========
              LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
       Accounts payable and accrued liabilities                     $   255,119
       Advances from stockholders                                       130,543
       Line of credit from an affiliated entity                         608,582
                                                                    -----------
       Total Current Liabilities                                        994,244

Commitments and Contingencies

Stockholders' Deficit
       Common stock, no par value, 100,000,000 shares
         authorized; 6,832,282 issued and outstanding                 1,329,696
       Class A redeemable preferred stock; no par value
         2,000,000 shares authorized; cumulative and
         convertible; liquidation and redemption values
         of $1.50 and $1.80 per share; no shares issued
         and outstanding                                                     --
       Undesignated preferred stock; 2,000,000 shares
         authorized; no shares issued and outstanding                        --
       Deficit accumulated during development stage                 (2,102,560)
                                                                    -----------

       Deficit accumulated during development stage                   (772,864)
                                                                    -----------

       Total Stockholders' Deficit                                  $   221,380
                                                                    ===========

See accompanying notes to these condensed consolidated financial statements.


                                       F-1
<PAGE>

                          BIOMODA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     FOR THE SIX-MONTH AND THREE-MONTH PERIODS ENDED JUNE 30, 2004 AND 2003
      AND FOR THE PERIOD FROM JANUARY 3, 1990 (INCEPTION) TO JUNE 30, 2004
                                    UNAUDITED

<TABLE>
<CAPTION>

                                                                                                   January 3, 1990
                                                   Six Months                Three Months          (Inception) to
                                                  Ended June 30             Ended June 30           June 30, 2004
                                            ----------------------------------------------------------------------
                                                2004           2003         2004           2003           2004
                                            -----------    -----------  -----------    -----------    -----------
<S>                                         <C>            <C>          <C>            <C>            <C>
Revenue                                     $        --    $        --  $        --    $        --    $        --
                                            -----------    -----------  -----------    -----------    -----------
Operating expenses
Payroll and related taxes                            --             --           --             --        856,161
Professional fees                                51,992             --       30,628             --        350,913
General and administrative                       42,344        140,254       32,641        129,170        269,132
Licensing fees                                   15,000         22,056       15,000         22,056         88,017
Research and development                        255,415            650      123,980            650        383,032
Depreciation and amortization                     7,287          4,678        3,875          2,339         52,697
                                            -----------    -----------  -----------    -----------    -----------
Total Operating Expenses                        372,038        167,638      206,124        154,215      1,999,952
                                            -----------    -----------  -----------    -----------    -----------

Loss from operations                           (372,038)      (167,638)    (206,124)      (154,215)    (1,999,952)

Other Income (Expenses)
Gain on forgivness of debt                           --             --           --             --         24,721
Interest income                                      --             --           --             --          3,870
Interest expense                                (12,978)       (17,154)      (6,788)        (8,762)      (131,199)
Foreign currency transaction gain (loss)             --            551           --          1,018              0
                                            -----------    -----------  -----------    -----------    -----------
Total Other Expenses                            (12,978)       (16,603)      (6,788)        (7,744)      (102,608)
                                            -----------    -----------  -----------    -----------    -----------
Loss Before Provision For Income Taxes         (385,016)      (184,241)    (212,912)      (161,959)    (2,102,560)

Provision for income taxes                           --             --           --             --             --
                                            -----------    -----------  -----------    -----------    -----------
Net Loss and Losses Accumulated
  During the Development Stage              $  (385,016)   $  (184,241) $  (212,912)   $  (161,959)   $(2,102,560)
                                            ===========    ===========  ===========    ===========    ===========
Basic and diluted weighted average number
  of shares outstanding                       6,811,403      6,228,060    6,832,282      5,765,282
                                            ============   ===========  ===========    ===========

Basic and diluted loss per common share     $     (0.06)   $     (0.03) $     (0.03)   $     (0.03)
                                            ============   ===========  ===========    ===========
</TABLE>

See accompanying notes to these condensed consolidated financial statements.


                                       F-2
<PAGE>

                          BIOMODA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2004 AND 2003
      AND FOR THE PERIOD FROM JANUARY 3, 1990 (INCEPTION) TO JUNE 30, 2004
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                                                      January 3, 1990
                                                        Six-Months Ended       Six-Months Ended       (Inception) to
                                                         June 30, 2004          June 30, 2003          June 30, 2004
                                                       -------------------------------------------------------------
<S>                                                      <C>                    <C>                    <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                                 $  (385,016)           $ (184,241)            (2,102,560)
Adjustments to reconcile net loss to
     net cash used in operating activities:
  Stock options expense                                           --                 98,000                147,000
  Issuance of common stock for services                       17,500                     --                 17,500
  Loss on sale of assets                                          --                     --                    358
  Foreign currency transactions                                   --                     --                  3,247
  Depreciation and amortization                                7,285                  4,678                 52,696
Changes in operating assets and liabilities:
  Other Assets                                                    --                 2,760                 (3,241)
  Accounts payable and accrued liabilities                   100,585              (221,475)                342,020
  Advances from stockholders                                      --                  (769)                  9,564
                                                         ------------           -----------            -----------
Net cash flows used in operating activities                 (259,646)             (301,047)            (1,533,416)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                         (14,177)                    --               (24,176)
  Sale of property and equipment                                  --                     --                 1,139
  Patent, trademark and license fee                          (52,853)              (25,711)              (252,041)
                                                         -----------            -----------            -----------
Net cash flows used in investing activities                  (67,030)              (25,711)              (275,078)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from stockholders' advances                            --                     --                 86,014
  Proceeds from line of credit from
    an affiliated entity                                     292,127                329,765                608,582
  Issuance of common stock for cash                           30,000                     --              1,114,096
                                                         -----------            -----------            -----------
Net cash flows provided by financing activities              322,127                329,765              1,808,692

Net (decrease) increase in cash                               (4,549)                 3,007                    198
                                                         -----------            -----------            -----------
Cash, beginning of period                                      4,747                    155                     --
                                                         -----------            -----------            -----------
Cash, end of period                                      $       198            $     3,162            $       198
                                                         ===========            ===========            ===========
</TABLE>

See accompanying notes to these condensed consolidated financial statements.


                                       F-3

<PAGE>


--------------------------------------------------------------------------------
                                  BIOMODA, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003
--------------------------------------------------------------------------------

1.  NATURE OF BUSINESS AND BASIS OF PRESENTATION

Formation and Nature of Business
--------------------------------

Biomoda,  Inc.  ("Biomoda") is a development  stage company  incorporated in the
state of New Mexico on January 3, 1990 (Inception). In 2002, the Chief Executive
Officer  ("CEO") and the Chief  Financial  Officer  ("CFO") of  Advanced  Optics
Electronics,  Inc.  ("ADOT")  replaced  Biomoda's  management team,  affecting a
change in control.  ADOT also owns  approximately  17% of Biomoda's  outstanding
common  stock.  In  2003,  the  CEO  and  the CFO  each  acquired  7.27%  of the
outstanding  common stock of Biomoda.  On August 13, 2003, Biomoda formed a 100%
owned subsidiary known as Biomoda Holdings, Inc., a Nevada corporation,  for the
purpose of  research,  development,  production  and  marketing  of medical  and
biomedical  products.   Biomoda  and  Biomoda  Holdings,  Inc.  are  hereinafter
collectively referred to as the "Company".

The  Company's  primary  focus  is on early  cancer  detection  technology.  The
Company's novel cell-targeting technology is globally patented for the detection
of pre-cancerous and cancerous  conditions in all human tissue. This technology,
based  on a  compound  called  Tetrakis  Carboxy  Phenyl  Porphine  (TCPP),  was
developed at St. Mary hospital in Colorado and Los Alamos National Laboratories.
The Company obtained a worldwide  exclusive  license to the TCPP technology from
the University of California in late 1995, and began new research broadening the
scope of the original patent and technology. In November 2000, the Company filed
a new U.S.  provisional patent application defining the ability of the Company's
version of the TCPP to detect  pre-cancerous  and  cancerous  conditions  in all
human tissue.  The Company began the  commercialization  process by trademarking
the technology as CyPath. Management expects to start pre-clinical trials in the
fall of 2004 and clinical  trials in 2005,  which will culminate in applying for
the United States Food and Drug Administration ("FDA") approval.

Pursuant to a registration statement on Form SB-2 (the "Registration Statement")
under the Securities  Act of 1933, as amended,  the Company is offering for sale
up to  5,000,000  shares of its  common  stock at a price of $6 per  share.  The
Registration  Statement  was declared  effective on July 19, 2003.  The Offering
will  terminate on the earlier of July 11, 2005 or the date on which the maximum
number of shares have been sold.  The Company has not sold any shares under such
Registration  Statement as of June 30, 2004. On May 19, 2004 the Company's board
of  directors  approved  the  increase  in the number of shares of common  stock
authorized from 15,000,000 to 100,000,000.

--------------------------------------------------------------------------------
                                      F-4

<PAGE>

--------------------------------------------------------------------------------
                                  BIOMODA, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003
--------------------------------------------------------------------------------

1.  NATURE OF BUSINESS AND BASIS OF PRESENTATION (continued)

Development Stage and Going Concern
-----------------------------------

The  Company has been in the  development  stage  since it began  operations  on
January 3, 1990 and has not generated any revenues from  operations and there is
no assurance  of any future  revenues.  As of June 30, 2004,  the Company had an
accumulated deficit of approximately $2,103,000 and a working capital deficit of
approximately $991,000.

In addition,  the Company did not generate any cash from  operations  and had no
cash reserve dedicated to fund expenditures. These factors create an uncertainty
as to the Company's ability to continue as a going concern.

The Company will require substantial  additional funding for continuing research
and development,  obtaining regulatory approval and for the commercialization of
its  products.  Management  expects to be able to raise enough funds to meet its
working  capital  requirements  through the sale of the  Company's  common stock
offered in its Registration Statement.  Management's plan is to borrow from ADOT
to provide  the  Company  with bridge  financing  needed to fund the  day-to-day
operations  until  the  Company  has  raised  sufficient  capital  to  fund  its
operations (See Note 4).

There  is no  assurance  that  the  Company  will be able to  obtain  sufficient
additional  funds  when  needed,  or that  such  funds,  if  available,  will be
obtainable on terms  satisfactory  to the Company.  The  consolidated  financial
statements  do not include any  adjustments  that might be necessary  should the
Company be unable to continue as a going concern.

Basis of Presentation
---------------------

The  management  of  the  Company,   without   audit,   prepared  the  condensed
consolidated  financial  statements  for the  three-month  period  and six month
periods  ended  June 30,  2004 and  2003.  The  information  furnished  has been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America ("GAAP") for interim financial reporting.  Accordingly,
certain  information and disclosures  normally included in financial  statements
prepared in accordance with GAAP have been condensed or omitted.  In the opinion
of management, all adjustments considered necessary for the fair presentation of
the Company's financial position, results of operations and cash flows have been
included and are only of a normal  recurring  nature.  The results of operations
for the  quarter  ended  June 30,  2004 are not  necessarily  indicative  of the
results of operations for future periods.

These condensed  consolidated financial statements should be read in conjunction
with the Company's audited consolidated  financial statements as of December 31,
2003, which are included in the Company's Form 10-KSB,  which was filed on March
30, 2004.

--------------------------------------------------------------------------------
                                      F-5

<PAGE>

--------------------------------------------------------------------------------
                                  BIOMODA, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003
--------------------------------------------------------------------------------

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings Per Share
------------------

Statement of Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings Per
Share"  requires  basic  earnings  per share to be computed  by dividing  income
available  to  common  stockholders  by the  weighted  average  number of shares
assumed to be outstanding during the period of computation. Diluted earnings per
share  is  computed  similar  to  basic  earnings  per  share  except  that  the
denominator is increased to include the number of additional  common shares that
would have been  outstanding if the potential  common shares had been issued and
if the additional common shares were dilutive.  Because the Company has incurred
a net loss in the three and six months  periods  ended  June 30,  2004 and 2003,
basic and diluted  loss per share are equal since  additional  potential  common
shares would be anti-dilutive.

Patents and Patents Pending
---------------------------

Costs incurred in connection with securing a patent,  as well as attorneys fees,
have been  capitalized  and amortized  over  seventeen  years using the straight
line-method and are included in other assets on the accompanying  balance sheet.
Costs related to patents  pending are amortized  beginning  upon issuance of the
related  patents.  Such  costs  are  periodically  reviewed  by  management  for
impairment under SFAS 144.

3.  ADVANCES FROM STOCKHOLDERS

As of June 30, 2004, the Company had advances of approximately  $131,000 payable
to three of its  stockholders.  Such advances  historically bore interest at 10%
per annum and are due on demand.  No interest  expense  related to such advances
for the  three-month  and six month  periods ended June 30, 2004 was accrued for
because  the  Company is  negotiating  the pay off of such  advances  with these
stockholders.  Interest  expense  related to such  advances  for the period from
Inception through June 30, 2004 was approximately $27,000.

--------------------------------------------------------------------------------
                                      F-6

<PAGE>

--------------------------------------------------------------------------------
                                  BIOMODA, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003
--------------------------------------------------------------------------------

4.  LINE OF CREDIT FROM AN AFFILIATED ENTITY

On May 1, 2002,  the Company  entered into a one-year  line of credit  agreement
(the  "Agreement")  with ADOT with an annual interest rate of 5%. On May 1, 2003
the Agreement was amended to be payable on demand.  Interest  expense related to
such a line of credit for the three and six months  periods ended June 30, 2004,
and for the  period  from  Inception  through  June 30,  2004 was  approximately
$6,000, $13,000 and $20,000, respectively.

5.  OTHER RELATED PARTY TRANSACTIONS

On May 1, 2002,  the  Company  entered  into a sublease  agreement  with ADOT to
sublease  an  office  space for $300 a month.  The lease is on a  month-to-month
basis and the Company is to abide with all relevant terms of ADOT's master lease
with the landlord.

On December 1, 2003,  the Company  entered into a lease  agreement  with ADOT to
lease certain lab equipment for $500 a month.  The lease is on a  month-to-month
basis.

Rental  expense  related to the above leases for the three and six month periods
ended June 30, 2004 and for the period from Inception  through June 30, 2004 was
approximately $2,400, $4,800 and $7,400, respectively.


--------------------------------------------------------------------------------
                                      F-7

<PAGE>

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

COMPANY OVERVIEW

Biomoda, Inc. (the "Company") is a development stage company incorporated in the
state of New  Mexico on  January  3, 1990.  The  Company's  primary  focus is on
discovery,  development,   manufacture  and  marketing  of  proprietary  medical
diagnostic  and  treatment  products  used to treat life  threatening  and other
serious diseases.

Pursuant to a registration statement on Form SB-2 (the "Registration Statement")
under the Securities  Act of 1933, as amended,  the Company is offering for sale
up to  5,000,000  shares of its  common  stock at a price of $6 per  Share.  The
Registration  Statement  was declared  effective on July 11, 2003.  The Offering
will  terminate on the earlier of July 11, 2005 or the date on which the maximum
number of shares have been sold.  The Company has not sold any shares as of June
30, 2004. The Company is in the process of amending the  registration  statement
in order to sell 10,000,000 shares for $3 per share.

On May 19, 2004 the Company's  Board of Directors voted to amend the articles of
incorporation to increase the number of Common shares authorized from 15,000,000
to 100,000,000 without par value.

PLAN OF OPERATION

Our plan of  operations  for the next twelve  months is to verify and refine our
assay, design our kit, prepare for clinical trials, and initiate a dialogue with
the FDA relative to our approval submission.  The Company is relying on a bridge
financing  arrangement  with Advanced  Optics  Electronics,  Inc., an affiliated
public company,  and also intends to raise  additional  funds from its effective
Form SB-2  Registration  Statement during the next twelve months.  Currently the
Company is leasing Laboratory  equipment from Advanced Optics Electronics,  Inc.
on a month to month  basis and intends to purchase  this  equipment  if and when
adequate funds are raised.

Our initial  product is a diagnostic test for lung cancer that will be preformed
out of the  body by using a spit  sample  from the  patient.  Our test  does not
require any invasive  sample  taking.  The sample will be sent to a clinical lab
where the procedure will be performed to determine the presence, or not, of lung
cancer.  Our diagnostic test can be used for other cell samples and we intend to
create and market  products to diagnose and screen for other  prevalent  cancers
such as breast,  cervical and colon-rectal.  We have determined that our initial
markets will be the developed  nations of Europe,  North America and Japan. This
has been  determined  on the basis of  available  healthcare  delivery and payer
infrastructure. Japan is leading the world, and has instituted a nationwide lung
cancer-screening program.

                                       4

<PAGE>

In addition to augmenting laboratory research and development,  management plans
to further strengthen the corporate  infrastructure of the Company to adequately
manage the future growth and success of our  operations.  Management  expects to
hire  additional   personnel  and  enter  into   consulting  and   collaborative
arrangements over the next twelve months as needed to continue to strengthen and
enhance the effectiveness of implementing our plan as we grow.

Over the next twelve months  management will  continuously  evaluate and develop
our business plan which  includes  assessing  the  technology we utilize and the
markets  we  intend to serve and  evaluating  the  prospect  of  expanding  into
additional  products and markets as business  conditions  warrant. In connection
with this  continual  evaluation,  management  will also look at taking  actions
designed to mitigate any risks associated with our business plan.

Biomoda has  received a Notice of  Allowance  from the US Patent  Office for its
patent titled "Compositions and methods for Detecting Precancerous Conditions in
Cells and  Tissue  Samples  using 5, 10,  15,  20, 20  Tetrakis  (Carboxyphenyl)
Porphine".  This patent  represents a significant  addition to Biomoda's  patent
portfolio  and expands the  company's  intellectual  property to include  cancer
screening.

Contracts
---------

In the past eight  months,  Biomoda has entered into numerous  relationships  in
order to expedite and further perfect its patented and proprietary  developments
for regulatory approval,  accelerated  commercialization  and market acceptance.
Among  these  organizations  with whom  Biomoda  are  working:  Esocor  LLC,  JR
Associates,  Majestic  Sarl  and  D.  Lescasse-Laurent,   Triangulum  Consulting
Services,  Inc.,  TriCore Reference  Laboratories,  and PhenoPath  Laboratories,
PLLC.

Tricore Reference Laboratories
------------------------------

On  April  7,  2004   Biomoda,   Inc.   and   TriCore   Reference   Laboratories
(HTTP://TRICORE.ORG),  both  headquartered  in  Albuquerque  have entered into a
written  agreement for TriCore to handle sputum sample processing and management
for Biomoda and for TriCore to employ its expertise in  cytopathology to greatly
enhance and accelerate Biomoda's diagnostic development activities.

Biomoda's  patented  products,  primarily  involved  with  early  detection  and
targeted  treatment of specific  cancers  will be supported by its  relationship
with TriCore.

By teaming with TriCore, Biomoda is continuing to lessen the "time to market" by
outsourcing strategic areas of its research, development and marketing effort to
world class professional  medical  organizations both at home in Albuquerque and
around the world.

TriCore  Reference  Laboratories  (Albq. NM) is a  not-for-profit,  full service
medical reference  laboratory  serving  physicians and hospitals  throughout New
Mexico and the Southwest. In addition to clinical and anatomic pathology testing
and consultative  services,  TriCore participates in medical scientific research
through collaborations with local and national biotech firms. Founded in 1998 as
a regional laboratory  consolidation,  TriCore's sponsors include the University
of New Mexico Hospital and Presbyterian  Healthcare  Services in Albuquerque and
St. Vincent Hospital in Santa Fe.

                                       5
<PAGE>

Triangulum Consulting Services, Inc.
------------------------------------

On  January  26,  2004  Biomoda,  Inc.  entered  into a  written  contract  with
Triangulum Consulting Services,  Inc.  (www.trianguluminc.com)  headquartered in
Raleigh,  NC to provide  guidance  with  regulatory  approvals and to accelerate
"time to market" for Biomoda's  patented products  primarily involved with early
detection and targeted treatment of specific cancers.

Triangulum,  former JASA  Consulting  Services,  LLC.,  widely  recognized  as a
leading provider of consulting services in biopharmaceutical and related fields.
After a  review  of the  technologies  employed  and  patents  held by  Biomoda,
Triangulum  is prepared to commit  significant  resources  to enable  Biomoda to
efficiently  and cost  effectively  complete  the  regulatory  steps  and  bring
Biomoda's critically needed products to market quickly.

Madame Lescasse-Laurent/Majestic Sarl
-------------------------------------

On June 8, 2004 Biomoda, Inc. completed  negotiations on a written contract with
Mme. Lescasse-Laurent , based in Vaugrigneuse,  France. D. Lescasse-Laurent will
support the evaluation of Biomoda's cancer diagnostic products and systems. Mme.
Lescasse-Laurent  has  agreed  to  file  Biomoda's  application  of a CE Mark in
France. Upon approval by the Ministry of Health of France, and more specifically
at AFSSAPS  (Agence  Francaise  de  Securite  Sanitaire  de  Produits de Sante),
Biomoda's  patents and systems will be  processed  for other  European  markets.
AFSSAPS  combines  approvals  for both In Vivo and In  Vitro  products  into the
French market.

Majestic,  and in particular  Mme.  Lescasse-Laurent,  provide  medical  product
commercialization  consultation and management assistance to many of the world's
leading bio-medical organizations.

JR Associates
-------------

In June 2004 Biomoda,  Inc.  entered into a written  contract with JR Associates
WWW.1JRA.COM to help advance Biomoda's  patented  products,  primarily  involved
with early detection and targeted  treatment of specific cancers,  potential for
securing  positive  coverage,  coding,  and payment by Medicare  and  commercial
insurers.  Ultimately,  these activities will assure patient access to Biomoda's
products and systems.  JR  Associates,  Reseda,  CA is prominent in the field of
reimbursement  strategies  and has  provided  services  to many major  makers of
medical  products and systems.  Reimbursement  and coding are critical issues to
medical reference laboratories, Biomoda's anticipated primary market.

Esocor LLC
----------

As of April 19, 2004, Biomoda,  Inc.  has  announced  the  addition of a leading
clinical pathology  consulting firm, Esocor LLC,  WWW.ESOCOR.COM,  White Plains,
NY, to the group of world class  professionals  who have contracted with Biomoda
to assist and

                                       6
<PAGE>

assure  that  Biomoda's  patented  and  critically  needed  products,  primarily
involved  with early  detection and targeted  treatment of specific  cancers are
brought to market in an orderly and expedited manner.

Esocor's Managing Director,  Dr. Wolfgang  Hofgartner,  a world recognized board
certified  clinical  pathologist,  will support Biomoda's product entry to offer
the Company's patented systems and treatments.  Dr. Hofgartner, a Medical Doctor
and Doctor of  Sciences,  has built and  cultivated a  multinational  network of
academic  opinion leaders in clinical  pathology.  Dr.  Hofgartner has conducted
clinical research in conjunction with world class  institutions  including Sloan
Kettering  Cancer Center and Baylor College of Medicine,  and served as European
Medical Director for Becton Dickinson (Fortune 500 healthcare).

Dr.  Hofgartner  will be part of Biomoda's  carefully  assembled team of leading
outside  medical  professionals.  Biomoda  looks  to  his  significant  European
experience to provide a head start for the Company's global marketing.

Phenopath Laboratories, PLLC
----------------------------

On March 1, 2004 Biomoda,  Inc.  entered into a written  contract with PhenoPath
Laboratories,  PLLC,  WWW.PHENOPATH.COM  a research  and  development  pathology
laboratory in Seattle,  Washington.  PhenoPath will support Biomoda's diagnostic
development program for early detection and treatment of cancers, primarily lung
cancer.  Phenopath  is a widely  respected  and  highly  experienced  laboratory
organization  with  particular  skills and  expertise in pathology and biomarker
development and applications.

RESULTS OF OPERATIONS

Due  to  our  limited  operating  history,  we  believe  that   period-to-period
comparisons of our results of operations are not fully meaningful and should not
be relied upon as an indication of future performance.

Comparison of the Three-month Periods Ended June 30, 2004 and 2003
------------------------------------------------------------------

REVENUE.  As of June 30, 2004, there have been no revenues since inception.

PRODUCT DEVELOPMENT. Product development expenses consist primarily of personnel
expenses,  consulting  fees,  licensing fees and  depreciation  of the equipment
associated with the  development and enhancement of our disease  screening tool.
Research   development  and  other   operating   technical  costs  increased  to
approximately   $124,000  in  the  three   months   ended  June  30,  2004  from
approximately  $1, 000 in the three  months  ended June 30,  2003.  The  Company
believes  that  continued  investment  in product  development  is  critical  to
attaining our strategic objectives and, as a result, we expect

                                       7
<PAGE>

product  development  expenses to increase  significantly in future periods.  We
expense product development costs as they are incurred.

GENERAL AND  ADMINISTRATIVE.  General  and  administrative  expenses  consist of
expenses for executive and administrative  personnel,  facilities,  professional
services,  travel,  general  corporate  activities,  and  the  depreciation  and
amortization  of  office  furniture  and  leasehold  improvements.  General  and
administrative  costs, including  professional fees, decreased to  approximately
$63,000 in the three  months  ended  June 30,  2004 from  $129,170  in the three
months  ended June 30,  2003.  We expect  general  and  administrative  costs to
increase in the future as our  business  prospects  develop and we will  require
more staff. The costs associated with being a publicly traded company and future
strategic  acquisitions will also be a contributing  factor to increases in this
expense.

OTHER INCOME  (EXPENSE).  Other income (expense)  consists of interest and other
income and  expense.  Other  (expense)  decreased  to $6,778 in the three months
ended June 30, 2004 from $7,744 in the three months ended June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Since  inception,  we have  funded  our  operations  primarily  through  private
placement of equity securities and loans from Advanced Optics  Electronics,  Inc
("ADOT").  As of June 30,  2004 we have  raised net  proceeds  of  approximately
$1,330,000.

Product  development  expenditures were  approximately  $124,000 for the quarter
ended June 30,  2004.  Funds for  operations,  product  development  and capital
expenditures were provided from a bridge financing arrangement. The Company will
require substantial  additional funding for continuing research and development,
obtaining regulatory approval and for the commercialization of its products. The
Company's cash was $198 as of June 30, 2004.

Management believes that sales of securities will provide adequate liquidity and
capital resources to meet the anticipated development stage requirements through
the end of the second  quarter 2005. In addition,  ADOT will continue to provide
the Company with bridge financing needed to fund the day-to-day operations until
the Company has raised sufficient  capital to fund its operations.  At that time
it is  anticipated  that sales of our initial  screening  product will begin and
contribute  to  operating  revenues.  It is  anticipated  that these  sales will
provide the  additional  capital  resources to fund the  proportionately  higher
working capital  requirements of production and sales  initiatives and continued
product development for second-generation diagnostic and therapeutic products.

There  is no  assurance  that  the  Company  will be able to  obtain  sufficient
additional  funds  when  needed,  or that  such  funds,  if  available,  will be
obtainable on terms  satisfactory  to the Company.  The  consolidated  financial
statements  do not include any  adjustments  that might be necessary  should the
Company be unable to continue as a going concern.

                                       8
<PAGE>

INFLATION

Management  believes  that  inflation  has  not  had a  material  effect  on the
Company's results of operations.

ITEM 3. CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
our Chief  Executive  Officer ("CEO") and Chief Financial  Officer  ("CFO"),  we
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  (as defined in Rule  13a-15(e)  and  15d-15(e) of the
Exchange Act as of a date (the "Evaluation Date") within 90 days prior to filing
the Company's June 30, 2004 Form 10-QSB. Based upon that evaluation, the CEO and
CFO concluded that, as of June 30, 2004, our disclosure  controls and procedures
were of limited effectiveness.

The Company was in the infancy stages of its business operations and had limited
resources  available to plan,  develop,  and implement  disclosure and procedure
controls  and other  procedures  that are  designed to ensure  that  information
required to be disclosed in the  Company's  periodic  reports filed or submitted
under the Exchange Act is recorded,  processed,  summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules and
forms. Disclosure controls and procedures include, without limitation,  controls
and procedures  designed to ensure that information  required to be disclosed in
the Company's  periodic  reports filed under the Exchange Act is accumulated and
communicated to management,  including the Company's Chief Executive Officer and
Chief  Financial   Officer,   to  allow  timely  decisions   regarding  required
disclosure.

In March 2004,  the Company has hired an independent  third party  consultant to
re-evaluate  and revise its  existing  control  policies and  procedures  and to
implement  new  disclosure  controls  and  procedures.  As part of such plan and
implementation,  the Company is  re-evaluating  and re-designing and documenting
policies and procedures,  putting such  procedures in operation,  and monitoring
the effectiveness of the procedures.

Changes in Controls and Procedures
----------------------------------

There were no significant  changes made in our internal  controls over financial
reporting  during the quarter ended June 30, 2004 that have materially  affected
or  are  reasonably  likely  to  materially  affect  these  controls.  Thus,  no
corrective   actions  with  regard  to  significant   deficiencies  or  material
weaknesses were necessary.

Limitations On the Effectiveness of Internal Control
----------------------------------------------------

The Company's management, including the CEO, does not expect that our disclosure
controls and procedures or our internal  control over  financial  reporting will
necessarily  prevent all fraud and material errors.  An internal control system,
no matter how well  conceived and  operated,  can provide only  reasonable,  not
absolute,  assurance that the objectives of the control system are met. Further,
the design of a control  system must  reflect  the fact that there are  resource
constraints,  and the benefits of controls must be considered  relative to their
costs.  Because of the inherent  limitations on all internal control systems, no
evaluation of controls can provide  absolute  assurance  that all control issues
and instances of fraud,  if any,  within the Company have been  detected.  These
inherent limitations include the realities that judgments in decision-making can
be faulty,  and that  breakdowns  can occur  because of simple error or mistake.
Additionally,  controls  can be  circumvented  by the  individual  acts  of some
persons,  by collusion of two or more people,  and/or by management  override of
the control.  The design of any system of internal

                                       9

<PAGE>

control is also based in part upon certain  assumptions  about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in circumstances,  and/or the
degree of compliance with the policies and procedures may  deteriorate.  Because
of  the  inherent  limitations  in a  cost-effective  internal  control  system,
financial  reporting  misstatements  due to error or fraud  may occur and not be
detected on a timely basis.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The  Company may on occasion  be a party to  litigation  involving  claims by or
against the Company arising in the ordinary course of business. The officers and
directors know of no legal  proceedings  pending or  contemplated by any person,
entity or governmental  authority which would have a material  adverse effect on
the Company.

ITEM 2.  CHANGES IN SECURITIES - NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES - NONE

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

There were no matters  submitted  to a vote of the  Company's  security  holders
during the second quarter of fiscal year 2004.

ITEM 5.  OTHER INFORMATION -

On May 19, 2004 the Company's  Board of Directors voted to amend the articles of
incorporation  to increase  the number of Common Stock  shares  authorized  from
15,000,000 to 100,000,000 without par value.

ITEM 6.  EXHIBITS

(a) Exhibits

31.1 Certification  of  Principal   Executive  Officer  pursuant  to  Securities
     Exchange Act rules 13a-15 and 15d-15(c) as adopted  pursuant to section 302
     of the Sarbanes-Oxley act of 2002.

31.2 Certification  of  Executive   Financial  Officer  pursuant  to  Securities
     Exchange Act rules 13a-15 and 15d-15(c) as adopted  pursuant to section 302
     of the Sarbanes-Oxley act of 2002.


                                       10
<PAGE>

32.1 Certification of Principal  Executive and Accounting Officer pursuant to 18
     U.S.C.   section  1350,   as  adopted   pursuant  to  section  906  of  the
     Sarbanes-Oxley act of 2002.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the first or second quarter of 2004.



                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report on Form 10QSB to be signed on its behalf by the  undersigned,
thereunto duly authorized.

Dated:    August 16, 2004

BIOMODA, INC. AND SUBSIDIARY

                                    BY:/S/JOHN J. COUSINS
                                    ---------------------
                                    John J. Cousins
                                    President
                                    (Principal Executive and Accounting Officer)