U.S. Securities and Exchange Commission

Washington, D.C. 20549



FORM 10-QSB





|(Mark One)                                                                                                                                                                                                                                                                                                             |                                                                                  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------
|[X]                                                                                                                                                                                                                                                                                                                    | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the quarterly period ended March 31, 2004                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|[  ]                                                                                                                                                                                                                                                                                                                   | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                  
|For the transition period from ______________ to _______________                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|Commission File Number 0-21092                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|OCTuS, INC.                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                      
|(Exact name of small business issuer as specified in its charter)                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|NEVADA                                                                                                                                                                                                                                                                                                                 | 33-0013439                                                                       
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|(State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                         | (I.R.S. Employer Identification No.)                                             
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|16117 Martincoit Road, Poway CA 92064-2117                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                      
|(Address of principal executive offices)                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|858-922-1219                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                      
|(Issuer's telephone number)                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|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 |_|
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:                                                                                                                                                                                           
|April 28, 2004
(Date)                                                                                                                                                                                                                                                                                                  | Common Stock, $0.001par value
(Class)                                            
|                                                                                                                                                                                                                                                                                                                       | Series C Preferred Stock $0.001 par value
(Class)                                
|                                                                                                                                                                                                                                                                                                                       |                                                                                  
|Transitional Small Business Disclosure Format (check one):                                                                                                                                                                                                                                                            
|Yes [  ]                                                                                                                                                                                                                                                                                                               | No [X]                                                                           



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OCTuS, INC.
FORM 10-QSB
FOR THE PERIOD ENDED MARCH 31, 2004



INDEX





|           |                       |                                                                                                        | PAGE
|---------- | --------------------- | ------------------------------------------------------------------------------------------------------ | ----
|PART I.    | FINANCIAL INFORMATION |                                                                                                       
|           |                       |                                                                                                        |     
|           | ITEM 1.               | FINANCIAL STATEMENTS                                                                                   |     
|           |                       | Consolidated Balance Sheet at March 31, 2004 (unaudited)                                               | 3   
|           |                       | Consolidated Statements of Operations for the three months ended  March  31, 2004 and 2003 (unaudited) | 4   
|           |                       | Consolidated Statements of Cash Flows for the three months ended March  31, 2004 and 2003 (unaudited)  | 5   
|           |                       | Notes to Consolidated Financial Statements (unaudited)                                                 | 6   
|           |                       |                                                                                                        |     
|           | ITEM 2.               | MANAGEMENT'S DISCUSSION AND ANALYSIS                                                                   | 7   
|           |                       |                                                                                                        |     
|           |                       |                                                                                                        |     
|PART II.   | OTHER INFORMATION     | 9                                                                                                     
|           |                       |                                                                                                        |     
|           | ITEM 1.               | LEGAL PROCEEDINGS                                                                                      | 9   
|           |                       |                                                                                                        |     
|           | ITEM 2.               | CHANGES IN SECURITIES AND USE OF PROCEEDS                                                              | 9   
|           |                       |                                                                                                        |     
|           | ITEM 3.               | DEFAULTS UPON SENIOR SECURITIES                                                                        | 9   
|           |                       |                                                                                                        |     
|           | ITEM 4.               | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                   | 9   
|           |                       |                                                                                                        |     
|           | ITEM 5.               | OTHER INFORMATION                                                                                      | 9   
|           |                       |                                                                                                        |     
|           | ITEM 6.               | EXHIBITS AND REPORTS ON FORM 8-K.                                                                      | 9   
|           |                       |                                                                                                        |     
|           |                       |                                                                                                        |     
|SIGNATURES | 9                    



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|OCTuS, INC.                            
|---------------------------------------
|CONSOLIDATED BALANCE SHEET             
|March 31, 2004                         
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|ASSETS                                 
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|CURRENT ASSETS                         
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|LIABILITIES AND STOCKHOLDERS' (DEFICIT)
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|CURRENT LIABILITIES                    
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|STOCKHOLDERS' (DEFICIT)                
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The accompanying notes are an integral part of these consolidated financial statements



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|OCTuS, INC.                                    
|-----------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS          
|(UNAUDITED)                                    
|                                               
|                                               
|                                               
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|Revenues                                       
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|General and administrative expenses            
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|(Loss) from operations                         
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|Interest expense                               
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|Net (loss)                                     
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|Preferred dividends                            
|                                               
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|Net (loss) available to common shareholders    
|                                               
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|Per share information - basic and fully diluted
|Weighted average shares outstanding            
|                                               
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|Net (loss) per common share                    
|                                               
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|                                               



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



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|OCTuS, INC.                          
|-------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|(UNAUDITED)                          
|                                     
|                                     
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|OPERATING ACTIVITIES                 
|                                     
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|INVESTING ACTIVITIES                 
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|FINANCING ACTIVITIES                 
|                                     
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|BEGINNING CASH                       
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|ENDING CASH                          
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The accompanying notes are an integral part of these consolidated financial statements



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OCTuS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(UNAUDITED)



Note 1.  Basis Of Presentation



The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Item 310(b) of Regulation S-B.  They do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.  The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.  For further information, refer to the audited financial statements of the Company as of December 31, 2003 and for the two years then ended, including notes thereto, included in the Company's Form 10-KSB.



Note 2.  Earnings Per Share



The Company calculates net income (loss) per share as required by Statement of Financial Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods presented, common stock equivalents were not considered, as their effect would be anti-dilutive.



Note 3.  Going Concern



The accompanying consolidated financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern.  The Company has working capital and shareholders' deficits of $177,144 and an accumulated deficit of $23,027,278 as of March 31, 2004.



The Company is currently seeking a viable business to merge with and, in addition, is seeking equity capital.  However, the Company has no commitment from any party to provide additional capital and there is no assurance that such funding will be available when needed, or if available, that its terms will be favorable or acceptable to the Company.  The Company is reliant on a related party to provide working capital.



The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.



Note 4.  Related Party Transactions



During the three months ended March 31, 2004, a related party loaned the Company $3,500 for operations at 10% interest.  The loan is unsecured and no terms have been determined on the repayment of these funds. The Company has recorded interest expense of $1,548 related to the note payable - related party during the three months ended March 31, 2004.  As of March 31, 2004, $9,628 of interest expense related to this note payable was unpaid and included in accounts payable and accrued expenses - related parties.



During the three months ended March 31, 2004, the Company incurred $3,000 of consulting expense, related to an agreement with the President of the Company in which he will provide consulting services at a monthly rate of $1,000.



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Item 2. Management's Discussion and Analysis of Operations



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED March 31, 2004



NET SALES. There were no revenues for the three months ended March 31, 2004.



GENERAL AND ADMINISTRATIVE. The Company recorded $13,970 for general and administrative expenses for the three months ended March 31, 2004, a increase of $5,366 from the same period in 2003.  The primary expenses of the Company are consulting fees of $3,000 paid to the President of the Company and professional fees associated with being a publicly traded company.



NET LOSS. Net loss from operations for the three months ended March 31, 2004 was $15,518 as compared to a $9,645 loss for the same period in 2003.



LIQUIDITY AND CAPITAL RESOURCES. For the three months ended March 31, 2004, the Company posted a net loss of$17,768. Cash on hand on March 31, 2004 was $51. Although the Company has actively been pursuing licensing arrangements and new investment, there can be no assurance that any licensing agreements and/or new investment will be entered into by the Company, or that the terms of any such agreements will be on terms favorable to the Company. Should the Company be unable to obtain additional revenues and/or raise additional capital, it could be forced to curtail operations or cease business activities altogether.



RISK FACTORS, WHICH MAY AFFECT FUTURE RESULTS



HISTORY OF OPERATING LOSSES



For the calendar year ended December 31, 2003, the Company recorded a net loss of $28,626. For the calendar year ended December 31, 2002, the Company recorded a loss of $69,334.



At December 31, 2003, the Company had no tangible assets, negative working capital, an accumulated deficit of $23,011,760 and a shareholders' deficit of $161,625.



NEED FOR ADDITIONAL CAPITAL



The Company's cash on hand as of March 31, 2004 was $51, which is inadequate to meet the Company's budgeted operating requirements. Additional cash resources are required to sustain the Company's operations. Since September 2000 operations have been funded by loans from Grupo Dynastia S.A a Panamanian company, the Company's majority shareholder. It should be noted that the Company has no commitment from any party to provide additional capital and there is no assurance that such funding will be available when needed or, if available, that its terms will be favorable or acceptable to the Company. Should the Company be unable to obtain additional capital when and as needed, it could be forced to cease business activities altogether. It is unlikely that the Company will be able to raise additional capital without dramatically diluting the existing equity ownership of the Company's Common stockholders.



TRANSACTIONS WITH AFFILIATES



The Company has been a party to certain transactions with related persons and affiliates. The Company believes that all such transactions were in its best interests on terms no less favorable to the Company than could have been obtained from unaffiliated third parties and disinterested and independent members of the Board of Directors approved each transaction.



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TRADING MARKET/DELISTING FROM NASDAQ SMALLCAP MARKET/VOLATILITY OF STOCK PRICE



In January 1993, the Company completed an initial public offering of 100,000 Units, each unit comprised of one share of Common Stock and one Common Stock Purchase Warrant. These securities were quoted on the Nasdaq SmallCap Market until February 1, 1995, at which time they were delisted due to the Company's inability to meet that market's minimum capital and surplus requirements. The securities now trade on the OTC Bulletin Board that is generally considered to be less efficient markets. While the Company intends to reapply for listing on the Nasdaq SmallCap Market if conditions are favorable for it to do so, there can be no assurance that the Company's securities will be accepted by the Nasdaq SmallCap Market upon application by the Company for relisting.



The market price of the Common Stock, Units, and Warrants, like that of the securities of many other high technology companies, has been highly volatile. Factors such as fluctuation in the Company's operating results, announcements of technological innovations or new products by the Company or its competitors, developments in the Company's strategic alliances with other companies, and general market conditions may have a significant effect on the market price of the Common Stock.



EFFECT OF CERTAIN ANTI-TAKEOVER CHARTER AND BYLAW PROVISIONS



Certain provisions of the Company's Amended and Restated Articles of Incorporation (the Articles) and Bylaws could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from attempting to acquire, control of the Company. Such provisions may limit or reduce the price that investors might be willing to pay for shares of the Common Stock. Certain of such provisions allow the Company to issue preferred stock with rights senior to those of the Common Stock and impose various procedural and other requirements that could make it more difficult for shareholders to effect certain corporate actions. The Articles also provide for a classified board in the event the Company's shares are traded on a national securities exchange or the Nasdaq National Market. A classified board could make it more difficult for a third party to acquire control, or could discourage a third party from attempting to acquire, control of the board.



DESCRIPTION OF PROPERTY.



From November 1999 to December 2003, the Company used only floor space in the office of its sole officer, John Belden at 600"B" Street 18th Floor San Diego, CA.  Since December 15, 2003, the Company's offices are located in Mr. Belden's office at 16117 Martincoit Road Poway, CA 92064.  The Company pays no rent, which would be negligible, for the use of this space.

The Company does not maintain any other leases for office space and owns no real property.





Item 3. Controls and Procedures



An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures within 90 days before the filing date of this quarterly report.  Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective.  There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subject to their evaluation.



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PART II.

OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



The Company is not currently involved in any legal proceedings and has no legal proceedings pending.



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



NOTES AND ADVANCES PAYABLE



For the three months ended March 31 2004, Grupo Dynastia S. A. advanced $3,500 to the company bearing interest at the rate of 10% per annum.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None.



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



No matters were submitted to a vote of security holders during the first quarter of the fiscal year covered by this report.



ITEM 5. OTHER INFORMATION



None



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.





|Exhibits.
|---------
|31.1     
|32.1     







SIGNATURES



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



OCTuS, INC.





|Date:  May 13, 2004 | /s/  John C. Belden
     ----------------------------
     John C. Belden
     President & CEO /
     Chief Financial Officer
|------------------- | -----------------------------------------------------------------------------------------------------------------------------



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