SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a 6(e)(2))

NATIONAL SCIENTIFIC CORPORATION
------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11:

(1) Title of each class of securities to which transaction applies;

(2) Aggregate number of securities to which transaction applies;

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which
the filing fee is calculated and state how it was determined.);

(4) Proposed maximum aggregate value of transaction;

(5) Total fee paid.

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number or the
Form or Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement Number:

(3) Filing party:

(4) Date filed.

NATIONAL SCIENTIFIC CORPORATION
14455 N. HAYDEN RD., SUITE 202
SCOTTSDALE, ARIZONA 85260

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 26, 2002

To the Shareholders of National Scientific Corporation:

Notice is hereby given that the Annual Meeting of Shareholders of National
Scientific Corporation, a Texas corporation (NSC), will be held on Tuesday,
February 26, 2002, at the Chaparral Suites Hotel, 5001 North Scottsdale Rd.,
Scottsdale, Arizona 85250, at 8:00 a.m., local time, for the following purposes:

1. To elect five directors to the Board of Directors to serve for a
one-year term.

2. To ratify the appointment of Hurley & Company to serve as the auditors
for the Company for the fiscal year ending September 30, 2002.

3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

Shareholders of record at the close of business on December 31, 2001 (the
"Record Date"), are entitled to vote at the Annual Meeting or any adjournment
or postponement thereof. Shares may be voted at the Annual Meeting only if the
holder is present or represented by proxy. A list of shareholders entitled to
vote at the Annual Meeting will be available for inspection at the Company's
corporate headquarters for any purpose germane to the Annual Meeting during
ordinary business hours for ten (10) days prior to the Annual Meeting.

A copy of NSC's Annual Report to Shareholders, which includes audited financial
statements, is included with this mailing, which is being first mailed on
approximately the date shown below. Management and the Board of Directors
cordially invite you to attend the Annual Meeting.

By Order of the Board of Directors

/s/ Sam H. Carr

Sam H. Carr, Secretary

Phoenix, Arizona
January 21, 2002

SHAREHOLDERS ARE ENCOURAGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY. A
PRE-ADDRESSED ENVELOPE IS PROVIDED FOR THEIR CONVENIENCE. SHAREHOLDERS ARE
ENCOURAGED TO VOTE REGARDLESS OF WHETHER OR NOT THEY ATTEND THE ANNUAL MEETING
OF SHAREHOLDERS.

NATIONAL SCIENTIFIC CORPORATION
14455 NORTH HAYDEN ROAD, SUITE 202
SCOTTSDALE, ARIZONA 85260-6947

PROXY STATEMENT
2002 ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 26, 2002

This Proxy Statement is furnished by the Board of Directors of National
Scientific Corporation, a Texas corporation (the "Company" or "NSC"), in
connection with the solicitation of proxies to be used for the purposes of
voting at the 2002 Annual Meeting of Shareholders (the "Annual Meeting") of the
Company. The Annual Meeting will be held on Tuesday, February 26, 2002, at 8:00
a.m., local time at the Chaparral Suites Hotel, 5001 North Scottsdale Road,
Scottsdale, Arizona 85250.

SOLICITATION AND VOTING OF PROXIES

The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy materials related to the Annual Meeting were mailed on or about
January 21, 2002, to shareholders of record at the close of business on December
21, 2001 (the "Record Date"). Only shareholders of record at the close of
business on the Record Date will be entitled to vote at the Annual Meeting, or
any adjournment or postponement thereof, either in person or by valid proxy. As
of the Record Date, there were outstanding 48,328,067 shares of common stock,
$.01 par value per share (the "Common Stock") of the Company.

Shareholders are entitled to one vote for each share of Common Stock held
of record on each matter of business to be considered at the Annual Meeting.
Ballots cast at the Annual Meeting will be counted by the Inspector of Elections
and determinations of whether a quorum exists and whether the proposals are
approved will be announced at the Annual Meeting. The five nominees receiving a
plurality of votes by shares represented and entitled to vote at the Annual
Meeting, if a quorum is present, will be elected as a director of the Company.

All valid proxies received before the Annual Meeting and not revoked will
be exercised. All shares represented by proxy will be voted, and where a
shareholder specifies by means of his, her or its proxy a choice with respect to
any matter to be acted upon, the shares will be voted in accordance with the
specifications so made. If no specification is indicated and authority to vote
is not specifically withheld, the shares will be voted (i) "for" the election of
the persons named in the proxy to serve as Directors; and (ii) "for" the
ratification of Hurley & Company as the independent auditors of the Company. The
Inspector of Elections will treat abstentions and broker non-votes received as
shares that are present and entitled to vote for purposes of determining a
quorum, but as unvoted for purposes of determining the approval of any matter.
If a broker indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.

The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation materials to the beneficial owners of the outstanding Common Stock.
In addition to soliciting proxies by mail, proxies may be solicited by personal
interview or telephone. A person giving the enclosed proxy has the power to
revoke it at any time before it is exercised by: (i) attending the Annual
Meeting and voting in person; (ii) duly executing and delivering a proxy bearing
a later date; or (iii) sending a written notice of revocation to the Secretary
of the Company at its corporate offices. The corporate offices of the Company
are located at 14455 North Hayden Road, Suite 202, Scottsdale, Arizona 85260 and
its telephone number is (480) 948-8324.

The information included herein should be reviewed in conjunction with the
financial statements, notes to financial statements, independent accountants'
report and other information included in the Company's 2001 Annual Report to
Shareholders that was mailed with this Proxy Statement to all shareholders of
record on the Record Date. The Board of Directors knows of no other matters that
may be brought before the Annual Meeting. However, if any other matters are
properly brought before the Annual Meeting, persons named in the enclosed proxy
or their substitutes will vote in accordance with their best judgment on such
matters.

ELECTION OF DIRECTORS

The Board of Directors of NSC (the "Board") has recommended the number of
directors to be elected for the coming year be set at four. The Board recommends
that the shareholders elect the nominees named below as directors of NSC for the
ensuing year and until their successors are elected and qualified. The persons
named in the enclosed form of proxy intend to vote for the election of the five
nominees listed below. Mr. Ross is currently the Chairman of the Board, and Mr.
Grollman, Mr. Martin and Mr. Carr also currently serve as directors. Each
nominee has indicated a willingness to serve, but in the event any one or more
of such nominees for any reason should not be available as a candidate for
director, votes cast will be cast pursuant to authority granted by the enclosed
proxy for such other candidate or candidates as may be determined by the holders
of such proxy. The Board knows of no reason to anticipate that any of the
nominees will not be a candidate at the Meeting.

NAME CURRENT POSITION WITH NSC AGE
- ---- ------------------------- ---
Lou L. Ross Chief Executive Officer and Chairman of the Board 72
Michael A. Grollman President, Director 40
Sam H. Carr Chief Financial Officer, Secretary, Director 45
Charles E. Martin Director 42
William J. Keilen Director 61

LOU L. ROSS

Mr. Ross has served as Chairman of the Board of Directors since 1996 and
assumed President & CEO duties in March 1998. From 1970 to 1975, Mr. Ross served
as Chairman & CEO of Intel Malaysia, established Intel's Manila plant and
started Intel's military products operation. From 1976 to 1996, Mr. Ross served
in a technical consulting capacity for various electronics manufacturing firms,
including Labelab and Advanced Semiconductor Engineering.

MICHAEL A. GROLLMAN

Mr. Grollman became Chief Operation Officer of NSC in October 2000 and
was elected to its Board in November 2000. Prior to joining NSC, Mr. Grollman
was Regional Service Director of MicroAge, Inc. in Phoenix, Arizona beginning in
1998. He served as General Manager, Executive Vice President and Chief
Technology Officer for Advanced Information Systems from 1987 to 1998.

SAM H. CARR

Mr. Carr joined NSC as its Chief Financial Officer in October 2000 and was
elected to its Board in November 2000. From 1997 to 2000, he served as Senior
Vice President of Finance and Chief Financial Officer for e-dentist.com,
formerly known as the Pentegra Dental Group, Inc. Prior to that, Mr. Carr was
Chief Financial Officer and Chief Development Officer for a consolidator of
podiatry practices.

CHARLES E. MARTIN

Mr. Martin was appointed Director of NSC in December 2000. Since November
1999 he has been the President of Kinetic Thinking, a technology consulting
firm. He served as the Chief Technology Officer for MicroAge from July 1997
until November 1999. Mr. Martin was employed by Solutions Consulting from July
1996 until July 1997. From February 1995 until July 1996 he worked as a
consultant with Ernst & Young.

WILLIAM J. KEILEN

Mr. Keilen has been nominated to serve as a Director of the Company. Mr.
Keilen served as Vice President and Director of the Semiconductor Products
Sector of Motorola since 1985. In 2001, Mr. Keilen retired in Phoenix, Arizona
from Motorola. Mr. Keilen currently serves on several non-profit organization
boards. He holds a bachelors degree from Michigan State University.

The nominees receiving a plurality of votes by Common Shares present,
in person or by proxy, at the Annual Meeting, if a quorum is present, will be
elected as a director of the Company.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH NOMINEE FOR THE BOARD OF
DIRECTORS.

COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

The business of NSC is managed under the direction of the Board. The Board
meets on a regularly scheduled basis to review significant developments
affecting NSC and to act on matters requiring Board approval. It also holds
special meetings when an important matter requires Board action between
scheduled meetings. The Board met eight (8) times during fiscal 2001 and did not
act by unanimous consent in lieu of any meetings. Each director attended in
excess of 75% of the meetings held in 2001 by the Board and the committees of
the Board on which such director served.

At September 30, 2001, there was one committee of the Board. In December
2000, the Board established an audit committee (the "Audit Committee"), whose
membership currently consists of Messrs. Martin and Grollman. NSC believes that
Mr. Martin is "independent" as that term is used in Sections 303.01(B)(2)(a) and
(3) of the New York Stock Exchange Listing Standards, but that Mr. Grollman is
not "independent" as that term is used in such standards. The Audit Committee of
the Board of Directors (the "Audit Committee") is responsible for, among other
things, reviewing and discussing the audited financial statements with
management, discussing with the Company's auditors information relating to the
auditors' judgments about the quality of the Company's accounting principles,
recommending to the Board of Directors that the Company include the audited
financials in its Annual Report on Form 10-KSB and overseeing compliance with
the Securities and Exchange Commission requirements for disclosure of auditors'
services and activities. Currently, the Audit Committee does not have a charter.

Directors of NSC who are not employees of NSC are compensated at a rate of
$2,000 per month and $100 per Board meeting. In addition, Board members are
granted 5,000 restricted Common Shares upon their election to the Board, and are
entitled to receive an additional 5,000 options to purchase Common Shares at the
current market value in NSC at the end of each complete year serving as a
Director. These options vest 12 months from the date of grant. The options
granted under the 2000 Plan to directors who are not employees of the Company
are intended to be "nonqualified options" under the Internal Revenue Code of
1986, as amended.

The above standards of Board compensation were formally established in
December 2000. Prior to the adoption of a formal policy, 20,000 restricted
Common Shares were issued by NSC to Dr. Richard Kim, a former board member, in
consideration of his services as a Director of NSC. Dr. Kim resigned from the
Board in October 2001.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below sets forth certain information, as of the Record Date,
concerning the beneficial ownership by (i) each director and nominee of the
Company, (ii) each of the Company's executive officers, (iii) each person known
to the Company to be the beneficial owner of more than five percent (5%) of
NSC's outstanding Common Shares, and (iv) all directors and executive officers
of the Company as a group. To the knowledge of the Company, all persons listed
in the table have sole voting and investment power with respect to their shares,
except to the extent that authority is shared by their respective spouses under
applicable law.

NUMBER OF
COMMON SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER(1) OWNED(2) SHARES
- ------------------------------------ ------------ -----------
Lou L. Ross 3,455,040(3) 8%
Majid Hashemi, Ph.D -- *
Michael A. Grollman 781,000(4) 2%
Sam H. Carr 750,000(5) 2%
Charles E. Martin 5,000(6) *
All executive officers and directors
as a group (5 persons) 4,999,040 12%

- ---------
* Less than 1%
(1) The business address for all directors and officers of the Company is c/o
the Company, 14455 North Hayden Road, Suite 202, Scottsdale, Arizona 85260.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired within 60 days from the date set forth above through the exercise
of any option, warrant or right. Shares of Common stock subject to options,
warrants or rights that are currently exercisable or exercisable within 60
days are deemed outstanding for computing the percentage of the person

holding such options, warrants or rights, but are not deemed outstanding
for computing the percentage of any other person. The amounts and
percentages are based upon 48,328,067 shares of Common Stock outstanding as
of December 31, 2001.
(3) Includes 1,000,000 shares held by Mr. Ross' wife.
(4) Includes 650,000 shares underlying currently exercisable stock options.
(5) Includes 750,000 shares underlying currently exercisable stock options.
(6) Includes 5,000 shares underlying currently exercisable stock options.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's outstanding Common Stock, to file certain
reports of ownership with the Commission within specified time periods. Such
officers, directors and shareholders are also required by Commission's rules to
furnish the Company with copies of all Section 16(a) forms they file.

Based solely on its review of such forms all requirements received by it,
or written representations from certain reporting persons, the Company believes
that between October 1, 2000 and September 30, 2001, all Section 16(a) filing
requirements applicable to its officers, directors and 10% shareholders were
met.

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding annual and
long-term compensation for services rendered to the Company during the fiscal
years ended September 30, 2001, 2000 and 1999 by the Chief Executive Officer of
the Company and each other executive officer whose total salary and non-cash
compensation exceeded $100,000 for the applicable fiscal periods.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
-----------------------------------
OTHER ANNUAL
FISCAL SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)
- -------------------------- ------ -------- ----- ------------

Lou L. Ross, CEO, Chairman of the Board 2001 120,465 - -
2000 110,591 - -
1999 14,600 - -

Michael A. Grollman, President (4) 2001 172,500 - 165,600
2000 - - -
1999 - - -

Sam H. Carr, CFO (1) 2001 158,075 - 138,000
2000 - - -
1999 - - -

Majid Hashemi, President (1)(3) 2001 206,666 - 112,500
2000 238,500 - 9,082,239(2)
1999 - - -

Vernon M. Traylor 2001 - - -
2000 117,591 - 531,360(2)
1999 68,700 - 216,000(2)

- --------------
(1) Other compensation for Mr. Carr and Dr. Hashemi includes the value of
options granted at an exercise price below the market value of the stock on
the date of grant.

(2) Represents restricted Common Shares valued at 90% of the closing sales
price for such shares on the date of issuance, which were issued in lieu of
cash compensation.
(3) Dr. Hashemi served as the Company's President from September 1, 2000 to
November 30, 2000. Dr. Hashemi is no longer employed by the Company.
(4) Includes 100,000 shares of restricted stock granted to Mr. Grollman in
connection with his employment agreement.

EMPLOYMENT AGREEMENTS

Throughout fiscal 2000, Mr. Ross was engaged as an independent contractor
for the Company. As such, Mr. Ross was paid a monthly fee of $9,500, subject to
cash availability. Effective December 1, 2001, Mr. Ross became an employee of
the Company. Throughout fiscal 2001 and continuing into the current fiscal year,
Mr. Ross served without a written contract and was paid $9,500 monthly. In
addition, in connection with an equity transaction involving Mr. Ross and his
spouse in September 1999, the Board granted Mr. Ross the right to receive 4% of
the gross revenues of NSC. In partial consideration for the forgiveness of this
right to 4% of NSC's future revenues, the Company agreed to issue 500,000
restricted shares of common stock in NSC to Mr. Ross. The 500,000 shares are
subject to the terms of a Restricted Stock Award Agreement, which requires that
the shares issued will be released only when the market price of the stock
exceeds $2.50 per share.

Subsequent to fiscal year end 2001, the Company granted Mr. Ross options to
purchase an aggregate of 750,000 shares of common stock. These options consist
of ten separate tranches of 75,000 shares each, whose exercise prices range from
$1 to $10 per share, which vest when the previous five day average market price
exceeds even dollar levels beginning with $1 per share through $10 per share.

Dr. Hashemi was appointed President of NSC on September 1, 2000. Effective
that date, Dr. Hashemi was contracted as an independent contractor to receive
annual base compensation of $240,000, plus $12,000 annually to assist in the
purchase of health insurance and other benefits. On September 1, 2000, he was
paid $100,000 as an initial payment for contracting with NSC. In addition, he
received one million restricted shares of Common Stock on September 1, 2000. His
contract also called for three additional grants of Common Shares of 250,000
each on December 1, 2000, February 1, 2001 and April 1, 2001. The contract is a
one-year contract with automatic renewals for one year unless either party
chooses to terminate the contract. The stock issued and to be issued to Dr.
Hashemi is to be returned to NSC should his contract be terminated by either
party for any reason other than death on or before January 1, 2003.

In the first quarter of fiscal 2001, Dr. Majid Hashemi and the Company
executed an employment agreement that superceded his independent contractor
agreement. Under his employment agreement Dr. Hashemi agreed to serve as the
Division President of the California Division. His employment agreement contains
the same terms as the previous contractor agreement, including a base annual
salary of $252,000, the continuation of the stock awards, and a provision
requiring return of the shares should his employment be terminated by either
party for any reason other than death prior to January 1, 2003. As part of his
employment agreement, he received 2,766,667 common stock options in exchange for
1,325,000 previously issued shares of common stock. This employment agreement
represented a modification of his September 1, 2000 consulting agreement. The
stock options, as valued under the Black-Scholes model, had a fair value of
$3,478,000, and the returned stock had a fair value of $2,672,500 on the date of
the exchange, resulting in a net charge to operations of $805,500. Additionally,
$3,712,500 in deferred stock compensation, arising from the initial consulting
agreement and being amortized over a 3-year service period, was expensed in
full. In the fourth quarter of fiscal 2001, the Company rescinded the employment
agreement, which included the stock option grant. As a result, the Company
reversed the charge to compensation expense representing the original grant of
vested options by $3,478,000. The net compensation expense associated with these
transactions recognized in the financial statements during the fiscal year ended
September 30, 2001 was $1,040,000, the difference between the amortization of
the deferred stock compensation and the market value of the returned stock. Dr.
Hashemi is no longer employed by the Company.

Mr. Traylor served as an independent contractor for NSC until August 1,
2000. The terms of his agreement included a base compensation of $8,500 per
month. Mr. Traylor is no longer affiliated with NSC.

Mr. Grollman was engaged by NSC as an independent contractor from October
7, 2000 until November 30, 2000. He was paid $15,000 monthly for his services as
an independent contractor. Effective December 1, 2000, Mr. Grollman became an
employee of NSC under a one year contract to serve as NSC's Chief Operating

Officer. Mr. Grollman was promoted to President in April 2001. The contract
automatically renews for additional one-year terms unless either party chooses
to terminate. Mr. Grollman's contract calls for an annual gross salary of
$180,000, payable semi-monthly. Also in accordance with the contract, on
December 1, 2000, NSC granted Mr. Grollman 100,000 restricted Common Shares.
Also on December 1, 2000, NSC granted Mr. Grollman 500,000 vested options to
purchase Common Shares at the closing sales price of the Common Shares on
December 1, 2000. Additional option grants are included in Mr. Grollman's
employment contract for each whole dollar amount increase in the market value of
NSC's Common Shares. The whole dollar amount increase is measured over a moving
two-week average. For each whole dollar amount attained between $1 and $15
inclusive, Mr. Grollman will receive 75,000 options at the whole dollar amount
option price. Mr. Grollman is also entitled to additional options at various but
declining levels for increases in stock value up to $50 per Common Share. In the
event of a change in control or sale of substantially all the assets of NSC, the
employment agreement between Mr. Grollman and NSC automatically terminates, and
Mr. Grollman is to receive one hundred fifty percent (150%) of the then current
year's annual salary.

Mr. Carr served NSC as an independent contractor from October 15, 2000
until November 30, 2000. He was paid $13,750 monthly for his services. Effective
December 1, 2000, Mr. Carr became employed under a one year contract to serve as
NSC's Chief Financial Officer. The contract automatically renews for additional
one-year terms unless either party chooses to terminate. Mr. Carr's contract
calls for an annual gross salary of $180,000, payable semi-monthly. Also in
accordance with the contract, on December 1, 2000, NSC granted Mr. Carr 100,000
vested options to purchase Common Shares at a price equal to 25% of the closing
price per share on December 1, 2000. Also on December 1, 2000, NSC granted Mr.
Carr 500,000 vested options to purchase Common Shares at the closing sales price
of the shares on December 1, 2000. Additional option grants are included in Mr.
Carr's employment contract for each whole dollar amount increase in the market
value of NSC's Common Shares. The whole dollar amount increase is measured over
a moving two-week average. For each whole dollar amount attained between $1 and
$15 inclusive, Mr. Carr will receive 75,000 options at the whole dollar amount
option price. Mr. Carr is also entitled to additional options at various but
declining levels for increases in stock value up to $50 per Common Share. In the
event of a change in control or sale of substantially all the assets of NSC, the
employment agreement between Mr. Carr and NSC automatically terminates, and Mr.
Carr is to receive 150% of the then current year's annual salary.

REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee of the Board of Directors (the "Audit Committee") is
responsible for, among other things, reviewing and discussing the audited
financial statements with management, discussing with the Company's auditors
information relating to the auditors' judgments about the quality of the
Company's accounting principles, recommending to the Board of Directors that the
Company include the audited financials in its Annual Report on Form 10-KSB and
overseeing compliance with the Securities and Exchange Commission requirements
for disclosure of auditors' services and activities.

REVIEW OF AUDITED FINANCIAL STATEMENTS

The Audit Committee, which was established in December 2000, does not yet
have a charter. The Audit Committee met once during fiscal 2001, and again
subsequent to the end of fiscal 2001. The Audit Committee has reviewed the
Company's financial statements for the fiscal year ended September 30, 2001, as
audited by Hurley & Company, the Company's independent auditors, and has
discussed these financial statements with management. In addition, the Audit
Committee has discussed the audit process and results with Hurley & Company.

AUDIT FEES

Hurley & Company billed the Company and its subsidiaries approximately
$12,000 for the following professional services: audit of the annual financial
statements of the Company for the fiscal year ended September 30, 2001, and
review of the interim financial statements included in quarterly reports on Form
10-QSB for the quarterly periods ended December 31, 2000, March 31, and June 30,
2001.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

The Company did not engage Hurley & Company to provide services to the
Company regarding financial information systems design and implementation during
the fiscal year ended September 30, 2001.

ALL OTHER FEES

Hurley & Company billed the Company and its subsidiary approximately
$21,474 for other services for the fiscal year ended September 30, 2001, for
audit services in connection with the filing of a registration statement on Form
SB-2 with the Securities and Exchange Commission.

OTHER

The Board of Directors has considered whether the provision of non-audit
services is compatible with maintaining Hurley & Company's independence.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During fiscal 2000, NSC loaned Lou L. Ross, the Company's Chairman,
$200,000, for which he signed a ten percent (10%) note payable to NSC, with a
due date of December 1, 2000. At September 30, 2000, NSC had recorded interest
income and accrued interest receivable of $9,275. In December 2000, the Board
authorized the extension of the loan to officer until December 1, 2001. At
September 30, 2001, the Company had recorded interest income of $20,000 and
accrued interest receivable of $29,275. In December 2001, the Board authorized
the extinguishment of such indebtedness in return for 250,000 shares of NSC
Common Stock held by Mr. Ross, together with the assignment to NSC of all rights
to pursue recovery from an investment Mr. Ross made in a local manufacturer of
firewall hardware, in exchange for the note and accrued interest. The 250,000
shares have a market value of $100,000 at September 30, 2001. As a result,
compensation expense of $129,275 has been recorded for the year ended September
30, 2001 for the difference of the note including accrued interest and the value
of common stock at September 30, 2001 to be returned.

In September 1999, Mr. Ross purchased from NSC 1,580,040 shares of
restricted Common Stock in exchange for 840,000 shares of Common Stock then held
by him. In connection with this transaction, NSC agreed to pay to Mr. Ross 4% of
NSC's gross revenues. In partial consideration for the forgiveness of this right
to future revenues, the Company agreed to issue 500,000 restricted shares of NSC
common stock to Mr. Ross. These shares are subject to a Restricted Stock Award
Agreement that restricts the transfers of such shares until such time as the
market price of the stock exceeds $2.50 per share. Subsequent to the fiscal year
ended September 30, 2001, the Company granted Mr. Ross options to purchase an
aggregate of 750,000 shares of common stock. These options consist of ten
separate tranches, which vest when the previous five-day average market price of
NSC common stock exceeds even dollar levels beginning with $2 per share through
$10 per share. The option grants are for 75,000 shares each when the five-day
average stock price exceeds even dollar amounts from $1 per share through $10
per share.

APPROVAL AND RATIFICATION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)

The Board of Directors has selected Hurley & Company ("Hurley") as the
independent public accountants for the Company for fiscal 2002, and recommends
that the shareholders vote for ratification of such appointment. Shareholder
ratification of the selection of Hurley as the Company's independent auditors is
not required by the Company's Bylaws or otherwise. However, the Board is
submitting the selection of Hurley for shareholder ratification as a matter of
good corporate practice. Hurley has audited the Company's financial statements
since fiscal 1998. Notwithstanding the selection, the Board, in its discretion,

may direct the appointment of a new independent accounting firm at any time
during the year if the Board feels that such a change would be in the best
interests of the Company and its shareholders. A representative of Hurley is
expected to be present at the Annual Meeting with the opportunity to make a
statement if he so desires and to be available to respond to appropriate
questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL.

PROPOSALS FOR NEXT ANNUAL MEETING

Any shareholder who wishes to present any proposal for shareholder action
at the next Annual Meeting of Shareholders to be held in 2003, must have been
received by the Company's Secretary, at the Company's offices, not later than
Friday, October 18, 2002, in order to be included in the Company's proxy
statement and form of proxy for that meeting. Such proposals should be addressed
to the Corporate Secretary, 14455 North Hayden Road, Suite 202, Scottsdale,
Arizona 85260. If a shareholder proposal is introduced at the 2001 Annual
Meeting of Shareholders without any discussion of the proposal in the Company's
proxy statement, and the shareholder does not notify the Company on or before
Wednesday, November 20, 2002, as required by SEC Rule 14(a)-4(c)(1), of the
intent to raise such proposal at the Annual Meeting of Shareholders, then
proxies received by the Company for the 2003 Annual Meeting will be voted by the
persons named as such proxies in their discretion with respect to such
proposals. Notice of such proposal is to be sent to the above address.

By Order of the Board of Directors

/s/ Sam H. Carr, Secretary

Sam H. Carr, Secretary

Dated January 21, 2002

REQUESTS FOR FORM 10-KSB

UPON WRITTEN REQUEST, NATIONAL SCIENTIFIC CORPORATION WILL FURNISH, WITHOUT
CHARGE TO PERSONS SOLICITED BY THIS PROXY STATEMENT, A COPY OF OUR REPORT ON
FORM 10-KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL
YEAR ENDED SEPTEMBER 30, 2001. REQUESTS SHOULD BE ADDRESSED TO: NATIONAL
SCIENTIFIC CORPORATION, 14455 NORTH HAYDEN ROAD, SUITE 202, SCOTTSDALE, ARIZONA
85260, ATTENTION: SAM H. CARR.