SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)

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14a-6(e)(2))

GELSTAT CORPORATION
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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GELSTAT CORPORATION
SOUTHPOINT OFFICE CENTER
1650 WEST 82ND STREET, SUITE 1200
BLOOMINGTON, MN 55431
(952) 881-4105

July 12, 2004

Dear Shareholder:

You are cordially invited to attend the Company's Annual Meeting of
Shareholders to be held at 1:00 p.m., on Thursday, August 12, 2004, at
Southpoint Office Center (ground floor conference room), 1650 West 82nd Street,
Bloomington, MN 55431.

The agenda includes a proposal to elect two directors. We know of no other
business to come before the meeting.

Following the formal business of the meeting, we will report on the affairs
of the Company and respond to questions of general interest to shareholders.

We look forward to greeting personally those of you who are able to be
present at the meeting. However, whether or not you plan to attend, it is
important that your shares be represented, regardless of the number of shares
which you hold. Accordingly, you are requested to sign and date the enclosed
proxy and mail it in the envelope provided at your earliest convenience.

Very truly yours,

Stephen C. Roberts, M.D.
Chairman and Chief Executive Officer

GELSTAT CORPORATION
SOUTHPOINT OFFICE CENTER
1650 WEST 82ND STREET, SUITE 1200
BLOOMINGTON, MN 55431
(952) 881-4105

_________________________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 12, 2004
_________________________________________

To the Shareholders of GelStat Corporation:

The Annual Meeting of Shareholders of GelStat Corporation (the "Company")
will be held on Thursday, August 12, 2004, at 1:00 p.m., at Southpoint Office
Center (ground floor conference room), 1650 West 82nd Street, Bloomington, MN
55431, for the following purposes:

(1) To fix the number of Class II directors at two and to elect two
directors.

(2) To transact such other business as may properly come before the
meeting or any adjournments thereof.

We have fixed the close of business on July 8, 2004 as the record date for
the determination of shareholders entitled to receive notice of and to vote at
the Annual Meeting. Our transfer books will not be closed.

Whether or not you expect to be present personally at the Annual Meeting,
please complete, date, sign, and return the accompanying Proxy in the enclosed,
self-addressed envelope at your earliest convenience. This will insure your
participation in the decisions to be made by the shareholders. We sincerely hope
that all shareholders who can attend the Annual Meeting will do so.

By Order of the Board of Directors

July 12, 2004 Stephen C. Roberts
Secretary

TABLE OF CONTENTS

GENERAL INFORMATION............................................................1

RECORD DATE AND VOTING.........................................................1

RECOMMENDATIONS OF THE BOARD OF DIRECTORS......................................2

PRINCIPAL SHAREHOLDERS AND OWNERSHIP OF MANAGEMENT.............................3

PROPOSAL 1 - ELECTION OF DIRECTORS.............................................4

EXECUTIVE COMPENSATION.........................................................6

AUDIT COMMITTEE REPORT.........................................................9

INDEPENDENT AUDITORS..........................................................10

PROPOSALS FOR FISCAL 2004 ANNUAL MEETING......................................12

ACCESS TO OTHER INFORMATION...................................................12

APPENDIX A - AUDIT COMMITTEE CHARTER

GELSTAT CORPORATION
SOUTHPOINT OFFICE CENTER
1650 WEST 82ND STREET, SUITE 1200
BLOOMINGTON, MN 55431
(952) 881-4105

___________________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 12, 2004

__________________________________

GENERAL INFORMATION

This proxy statement is furnished to shareholders by the Board of Directors
of GelStat Corporation (the "Company") for solicitation of proxies for use at
the Annual Meeting of Shareholders on Thursday, August 12, 2004, to be held at
Southpoint Office Center (ground floor conference room), 1650 West 82nd Street,
Bloomington, MN 55431, at 1:00 p.m., and at all adjournments thereof. The
purposes of the meeting and the matters to be acted upon are set forth in the
preceding Notice of Annual Meeting of Shareholders. We are not currently aware
of any other matters which will come before the meeting.

A copy of our report on Form 10-KSB for the fiscal year ended December 31,
2003 is enclosed for your information. It is not a part of the proxy
solicitation material. The Report describes the financial condition of the
Company as of December 31, 2003.

We have asked brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of our
Common Stock and we will reimburse them for their expenses in so doing. To
ensure adequate representation at the meeting, our officers, agents and
employees may communicate with shareholders, banks, brokerage houses and others
by telephone, facsimile, or in person to request that proxies be furnished. We
will bear all expenses incurred in connection with this solicitation.

RECORD DATE AND VOTING

We have fixed July 8, 2004, as the record date for the determination of
shareholders entitled to receive notice of and to vote at the Annual Meeting. As
of the close of business on the record date, 7,330,216 shares of our common
stock, par value $.01 per share, were outstanding. Each share is entitled to one
vote on each proposal to be presented to the meeting. There is no right of
cumulative voting. The presence at the Annual Meeting in person or by proxy of
the holders of a majority of the outstanding shares of our common stock entitled
to vote constitutes a quorum for the transaction of business. All matters listed
in the Notice of Annual Meeting require the affirmative vote of a majority of
the shares present at the Annual Meeting either in person or by proxy, and
entitled to vote on that matter (but in no event less than a majority of a
quorum, or 26% of the shares issued and outstanding).

HOW TO VOTE By signing and returning the enclosed proxy card, you will
be giving your proxy to our Board of Directors and
authorizing them to vote your shares.

HOW YOUR PROXY Unless revoked, all properly executed proxies will be voted
WILL BE VOTED as specified. Proxies that are signed but that lack any
specification will, subject to the following, be voted FOR
each nominee and FOR each other proposal described in this
proxy statement. If any other matters properly come before
the Annual Meeting, or if any of the persons named to serve
as directors should decline or be unable to serve, the
persons named in the proxy will vote in accordance with
their discretion.

HOW TO REVOKE You have the power to revoke your proxy at any time before
YOUR PROXY the convening of the Annual Meeting. Revocations of proxy
will be honored if received by us, at the Company, addressed
to the attention of Stephen C. Roberts, Chief Executive
Officer, on or before August 11, 2004. In addition, on the
day of the meeting, prior to the convening thereof,
revocations may be delivered to the tellers who will be
seated at the door of the meeting room.

ABSTENTIONS If you abstain from voting as to any matter, your shares
shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the
vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions,
therefore, as to any proposal will have the same effect as
votes against such proposal.

BROKER NON-VOTES If a broker turns in a "non-vote" proxy, indicating a lack
of voting instruction by the beneficial holder of the shares
and a lack of discretionary authority on the part of the
broker to vote on a particular matter, then the shares
covered by such non-vote proxy will be considered present at
the meeting for purposes of determining a quorum but will
not be considered to be represented at the meeting for
purposes of calculating the vote required for approval of
such matter.

RECOMMENDATIONS OF THE BOARD OF DIRECTORS

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF EACH NOMINEE FOR
DIRECTOR NAMED IN THIS PROXY STATEMENT, FOR STEPHEN C. ROBERTS, M.D., AND FOR
DONALD MILLER.

PRINCIPAL SHAREHOLDERS AND OWNERSHIP OF MANAGEMENT

The following table sets forth as of July 8, 2004 the record and beneficial
ownership of Common Stock held by (i) each person who is known by us to be the
beneficial owner of more than 5% of our common stock; (ii) each of the current
directors; (iii) each current executive officer and the Named Executive Officer
(as defined in "EXECUTIVE COMPENSATION"); (iv) each nominee for election as
director; and (v) all of our executive officers and directors as a group.

Securities reported as "beneficially owned" include (a) securities which
the named person may exercise voting power or investment power, alone or with
others, and (b) the number of shares which the named person has the right to
acquire within sixty (60) days after July 12, 2004.

Name and Address Number of Shares Owned Percentage
---------------- ---------------------- ----------

Stephen C. Roberts, M.D. A, B, C 1,380,796 (1) 17.8
c/o GelStat Corporation
Southpoint Office Center
1650 West 82nd Street, Suite 1200
Bloomington, MN 55431

James W. Higgins C 441,460 6.0
c/o GelStat Corporation
Southpoint Office Center
1650 West 82nd Street, Suite 1200
Bloomington, MN 55431

Russell W. Mitchell A, C 1,456,814 19.9
c/o GelStat Corporation
Southpoint Office Center
1650 West 82nd Street, Suite 1200
Bloomington, MN 55431

Richard W. Ringold A, C 87,500 1.2
c/o GelStat Corporation
Southpoint Office Center
1650 West 82nd Street, Suite 1200
Bloomington, MN 55431

Donald Miller B 140,000 1.9
c/o GelStat Corporation
Southpoint Office Center
1650 West 82nd Street, Suite 1200
Bloomington, MN 55431

All executive officers and current 3,366,570 (1) 42.9
directors as a group (4 persons)

______________________

* indicates ownership of less than 1%.

(A) Currently a director.
(B) Nominee for election as director.
(C) Executive officer.
(D) The total number of shares outstanding for purposes of calculation of any
given individual's percentage ownership assumes the exercise of all
currently exercisable and vested options and warrants held by such person.
Does not assume the exercise of any other options and warrants.

(1) Includes 436,010 shares of common stock which may be purchased by Stephen
Roberts pursuant to exercise of a warrant at $.225 per share. The warrant
expires on January 12, 2008.

PROPOSAL 1
----------

ELECTION OF DIRECTORS

Our Bylaws provide that the number of directors shall be fixed by
resolution of the shareholders or the Board of Directors. The current number of
members of the Board of Directors is three. Peter L. Hauser served as a Class I
director (term 2003-2007) until his resignation in 2003. Mr. Hauser did not
appoint a replacement. Roger Schnobrich, a former director of Developed
Technology Resource, Inc, is designated by the Bylaws to fill the Class I
director seat if Mr. Hauser is unable to serve. On May 1, 2004 Mr. Schnobrich
elected to appoint Richard W. Ringold to fill the Class I director position. Mr.
Ringold is an executive officer of the Company. All other directors are Class II
directors and serve a term ending with the next annual meeting (approximately
one year). The two (2) persons designated by the Board of Directors as nominees
for election as Class II directors are, Stephen C. Roberts, M.D. and Donald
Miller. Dr. Roberts is currently an officer and member of the Board of Directors
of the Company.

None of the current members of the Board of Directors are "independent," as
defined by Nasdaq listing standards related to Board membership. Mr. Miller, if
elected, will be "independent."

In the event any nominee should be unavailable to stand for election at the
time of the Annual Meeting, the proxies may be voted for a substitute nominee
selected by the Board of Directors.

The following information about the nominees was supplied by the nominees:

Stephen C. Roberts, M.D., Chief Executive Officer, Chairman
-----------------------------------------------------------

Dr. Roberts, age 44, is a founder of GelStat Corp., which was acquired by
the Company in April 2003. He presently serves as CEO and Chairman of the
Company. He has served as a director of the Company since the acquisition of
GelStat Corp. on April 30, 2003. Prior to forming the Company he was employed by
The Oak Ridge Financial Group, Inc. (formerly Equity Securities Trading Co.,
Inc.). Prior to that, he was President of Naturewell, Inc., which was engaged
primarily in the research and development of nutraceutical products intended for
a variety of conditions, including migraine headaches and allergies. Dr. Roberts
previously founded AmTech Scientific, Inc., which was engaged in the development
and commercialization of a number of rapid diagnostic tests, including a unique
test for the detection of active tuberculosis. While at AmTech Scientific, Dr.
Roberts acted as Chief Executive Officer and also oversaw product development
and FDA submissions. AmTech Scientific was subsequently acquired by La Jolla
Diagnostics. Prior to that, Dr. Roberts was a Partner and Principal at Maven,
Inc., a Minneapolis investment banking firm. Dr. Roberts received his medical
degree from the

University Minnesota, Minneapolis, and received a B.A. from St. Olaf College in
Northfield, Minnesota, having majored in Chemistry and Biology.

Donald Miller, Director
-----------------------

Mr. Miller, age 64, worked for Schwan's enterprises between 1962 and 2001,
primarily as Chief Financial Officer. During that time Schwan's grew from a
small regional food company to an international multi-billion dollar frozen food
conglomerate. Along with his duties as CFO, Mr. Miller was highly involved in
all acquisitions and divestitures of the company. Mr. Miller additionally sits
on the Executive Committee of Schwan's Sales Enterprises. He is currently
employed by Schwan's as Special Assistant to the CEO.

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors held four meetings during 2003 and adopted certain
resolutions by written minutes of action. All directors attended all of the
meetings of the Board and the committees on which they served.

The Board of Directors has two standing committees - an audit committee and
a compensation committee.

The Audit Committee is responsible for reviewing the services rendered by
the Company's independent auditors and the accounting standards and principles
followed by the Company. The Audit Committee held one meeting during 2003, which
was attended by all Committee members. See "AUDIT COMMITTEE REPORT" in this
proxy statement.

The Compensation Committee is responsible for making recommendations to the
Board of Directors regarding the salaries and compensation of the Company's
executive officers. The Compensation Committee held one meeting during fiscal
2003. All members attended all meetings.

Peter L. Hauser was the sole member of the Audit and Compensation
Committees until his resignation on December 30, 2003.

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

Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10 percent of the registered class of
the Company's equity securities to file reports of ownership on Forms 3, 4, and
5 with the Securities and Exchange Commission ("SEC"). Officers, directors and
greater than 10 percent shareholders are required by SEC regulation to furnish
the Company with copies of all Forms 3, 4, and 5 they file.

Based upon the Company's review of the copies of such forms and reports it
has received from certain persons that they were not required to file Forms 5
for the year ended December 31, 2003, the Company believes that all of its
executive officers, directors and greater than 10% beneficial owners complied
with all filing requirements applicable to them with respect to transactions
during 2003.

CODE OF ETHICS

Effective June 2, 2003, the Company adopted a code of ethics applicable to
all personnel and a code of ethics applicable only to its chief executive
officer and senior financial officers. Copies are

available at no charge by request to the Company in writing, to the attention of
Stephen Roberts, CEO. Additionally, the code for the chief executive officer and
senior financial officers filed with the Securities and Exchange Commission as
an exhibit to the Company's Report on Form 10-KSB for the fiscal year ended
December 31, 2003.

NOMINATION OF DIRECTOR CANDIDATES

Nominees for election as Class II members of the Board of Directors are
selected by Class II members of our Board. A vacancy in the position of Class I
director is filled by appointment, as described in our bylaws. We do not have a
standing nominating committee or a charter with respect to the nominating
process. If we appointed such a committee, its membership would consist of the
directors, or a subset of them. To date, all director nominees have been
identified by current directors or management. We have never engaged a third
party (for a fee or otherwise) to identify candidates and we have never received
a proposed candidate from a source outside of the Company. However, the Board
would consider any candidate proposed in good faith by a shareholder. To do so,
a shareholder should send the candidate's name, credentials, contact
information, and his or her consent to be considered as a candidate to our chief
executive officer, Stephen C. Roberts. The proposing shareholder should also
include his or her contact information and a statement of his or her share
ownership (how many shares owned and for how long). The Board evaluates
candidates based on financial literacy, knowledge of the Company's industry or
other background relevant to the Company's needs, status as a stakeholder in the
Company, "independence" for purposes of compliance with the rules of the SEC and
Nasdaq, and willingness, ability, and availability for service.

SHAREHOLDER COMMUNICATION WITH THE BOARD

We do not have a formal procedure for shareholder communication with our
Board of Directors. In general, our officers are easily accessible by telephone
or mail. Any matter intended for the Board, or for any individual member or
members of the Board, should be directed to our chief executive officer or chief
financial officer at the Company address with a request to forward the same to
the intended recipient. All such communications will be forwarded unopened.

We encourage all incumbent directors, as well as all nominees for election
as director, to attend the annual meeting of shareholders. Two of the three
incumbent directors attended the annual meeting in July 2003.

EXECUTIVE COMPENSATION

The following table sets forth the cash and non-cash compensation for years
ended December 31, 2003, 2002 and 2001 awarded to or earned by the Named
Executive Officer (as defined in Item 402 of Regulation S-B of the SEC):

SUMMARY COMPENSATION TABLE

Long-Term Compensation
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------------------------------------------------
Securities
Restricted Underlying
Name and Principal Other Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Awards SARs Payouts Compensation
- ------------------------------------------------------------------------------------------------------------------------

Stephen Roberts, CEO 2003 $102,893 0 0 0 0 0 0
2002 $24,000 0 0 0 0 0 0
2001 N/A N/A N/A N/A N/A N/A N/A

AGGREGATED OPTION EXERCISES: LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table summarizes for the Named Executive Officer the number
of stock options exercised during the year ended December 31, 2003, the
aggregate dollar value realized upon exercise, the total number of unexercised
options held at December 31, 2003 and the aggregate dollar value of in-the-money
unexercised options held at December 31, 2003. Value realized upon exercise is
the difference between the fair market value of the underlying stock on the
exercise date and the exercise price of the option. Value of Unexercised
In-the-Money Options at year-end is the difference between its exercise price
and the fair market value of the underlying stock on December 31, 2003.

Number of Value of
securities unexercised
underlying in-the-money
unexercised options/ SARs at
options/ SARs at fiscal year end
fiscal year end (#) ($)
------------------- ------------------
Shares Acquired on Exercisable/ Exercisable/
Name and Principal Position Exercise Value Realized unexercisable unexercisable
- ---------------------------------------------------------------------------------------------------------------------

Stephen Roberts, CEO 0 0 0/0 $0/$0

OPTIONS AND SARs GRANTS: LAST FISCAL YEAR

There were no grants of options or SARs to the Named Executive Officer
during the fiscal year 2003.

COMPENSATION AGREEMENTS OF OFFICERS

The Company has entered into employment agreements with its three current
executive officers, Messrs. Roberts (CEO and CFO), Mitchell (President), and
Higgins (Executive Vice President). Each agreement is terminable upon notice by
either party. Annual salary amounts are $96,000 for Messrs. Roberts and
Mitchell, and $72,000 for Mr. Higgins. Mr. Higgins' salary will be increased to
$96,000 if certain milestones are attained. Each officer has also entered into
an agreement which provides for confidentiality of Company information,
assignment of his inventions to the Company, and no competition with the Company
during employment and for a period of two years thereafter.

COMPENSATION OF DIRECTORS

The sole non-employee director of the Company in fiscal 2003 was Peter
Hauser, who resigned on December 30, 2003. During 2003, Mr. Hauser received no
cash or other compensation for his services as a director or committee member.

Each director is reimbursed by the Company for his actual out-of-pocket
expenses for telephone, travel, and miscellaneous items incurred on behalf of
the Company.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 302A.521, Minnesota Statutes, the Company is required to
indemnify its directors, officers, employees, and agents against liability under
certain circumstances, including liability under the Securities Act of 1933, as
amended (the "Act"). The Company's Bylaws contain substantially similar
provisions and, in addition, specifically authorize adoption of agreements for
indemnification to the extent permitted by statute and purchase of insurance to
meet the Company's indemnification obligation. The general effect of such
provisions is to relieve the directors and officers of the Company from personal

liability that may be imposed for certain acts performed in their capacity as
directors or officers of the Company, except where such persons have not acted
in good faith.

As permitted under Minnesota Statutes, the Articles of Incorporation of the
Company provide that directors shall have no personal liability to the Company
or to its shareholders for monetary damages arising from breach of the
director's duty of care in the affairs of the Company. Minnesota Statutes do not
permit elimination of liability for breach of a director's duty of loyalty to
the Company or with respect to certain enumerated matters, including payment of
illegal dividends, acts not in good faith, and acts resulting in improper
personal benefit to the director.

CERTAIN TRANSACTIONS

On February 1, 2000, Erlan Sagadiev, a former employee, exercised his right
under an option to purchase 125,000 shares of the Company's Common Stock. He
paid the Company $70,000 and gave the Company a non-recourse promissory note
bearing interest at 4.87% per annum for the balance owed of $82,500. The
principal and interest are due in five equal installments beginning February
2001 and each year thereafter. This note is secured by 90,000 of the exercised
shares. In February 2003, the remaining principal balance of $52,457 was paid in
full.

On February 2, 2001, the Company's former president exercised his right to
purchase 247,500 shares of the Company's Common Stock and gave the Company a
non-recourse promissory note for $310,750. This note bears interest at the rate
of 5% per annum, is due in four equal annual installments beginning December 31,
2003, and is secured by all the shares exercised. On April 30, 2003, the Company
redeemed 142,700 of these shares at $1.50 per share, thereby reducing the note
balance to $96,700. The former president then paid the balance of the note, plus
the outstanding $20,863 of accrued interest, for the remaining 104,800 shares.

In April 2003, Peter L. Hauser, a director, exercised an option to purchase
10,000 shares of Common Stock by paying the Company $7,000 in cash.

On November 17, 2001, the Board of Directors agreed to borrow money from
the Company's chief financial officer to have funds available for working
capital. The funds received would be unsecured and bear interest at 12%.
Additionally, the Board also agreed to issue 10,000 stock options at the market
price of $.90 per share. By December 31, 2001, the Company borrowed $4,067 from
the chief financial officer. In January 2002, the Company borrowed an additional
$2,750. In April 2002, the Company repaid approximately $7,000 including
principal and interest on all amounts received.

During part of 2002 and part of 2003, the Company had a contract with
Mitchell Health Technologies ("MHT") in which the Company paid MHT for the use
of office space, personnel, equipment and other facilities at MHT's principal
offices in Schofield, Wisconsin. The usage fee was capped at the Company's
proportionate share of the actual cost paid by MHT. The offices in Schofield,
Wisconsin were designated as a branch office of the Company. During the year
ended December 31, 2003, the period from June 25, 2002 (inception) to December
31, 2002 and the period from June 25, 2002 (inception) to December 31, 2003, the
Company paid $600, $12,367 and $12,967, respectively, to MHT in accordance with
the contract. Russ Mitchell, a founder, a principal shareholder, and a former
director of the Company, owns 100% of MHT and is an employee, officer and
director of MHT. Jim Higgins, an officer of the Company, is an employee and
officer of MHT. This contract was terminated during 2003.

In September 2002, the Company entered into an agreement for consulting
services from MHT in exchange for a performance bonus not exceeding $75,000,
based on certain milestones to be achieved by

MHT prior to December 31, 2003. On May 9, 2003, the Company's Board of Directors
amended the agreement to allow for performance bonus payments of up to $125,000.
During the three months ended March 31, 2004, the period from June 25, 2002
(inception) to March 31, 2003, and the period from June 25, 2002 (inception) to
March 31, 2004, the Company paid $0, $25,000 and $85,000, respectively, to MHT
in accordance with this agreement. At March 31, 2004 and December 31, 2003, the
Company had accrued expenses due to MHT of $0 and $25,000, respectively. The
final payment in accordance with the agreement was made on March 9, 2004 and the
agreement was terminated.

During the year ended December 31, 2003, the Company purchased supplies and
research in process from Medicine Tree, Inc., which is owned by Stephen Roberts,
a founder, an office, a principal shareholder, an officer and a director of the
Company, in exchange for a $10,000 demand note without interest. Medicine Tree,
Inc. demanded payment on the note in March 2003 and was paid in full.

In March 2003, Steve Roberts purchased 436,010 five-year warrants
exercisable at $.225 per share for total consideration of $10,000.

During the year ended December 31, 2003, the Company was involved in a
legal proceeding which was subsequently settled. The Company agreed to pay
Messrs. Roberts, Mitchell and Higgins, officers of the Company, a total amount
of $40,000 as compensation for lost settlement awards. This amount was included
in accrued expenses at December 31, 2003 and paid on March 9, 2004.

AUDIT COMMITTEE REPORT

The Audit Committee of our Board of Directors is currently composed of two
directors. During the fiscal year ended December 31, 2003, the members of the
Committee were Peter L. Hauser, until his resignation from the Board, and then
Stephen Roberts and Russell Mitchell. None of the directors who currently serve
on the Audit Committee are "independent" as defined in rules of the Nasdaq Stock
Market or qualifies as an "audit committee financial expert" as defined in Rule
10A-3 under the Securities Exchange Act of 1934.

The Committee currently operates under a written charter adopted by the
Board on June 2, 2003, and amended on October 15, 2003, a copy of which is
included in this proxy statement as Appendix A. The Committee selects the
Company's independent accountants. Management is responsible for the Company's
internal controls and the financial reporting process; the independent
accountants are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards and for issuing a report thereon. The Committee's responsibility is to
monitor and oversee these processes. In this context, the Committee has met and
held discussions with management and the independent accountants.

The Committee has received from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees," and has
discussed with the auditors any relationships that may impact their objectivity
and independence, and has satisfied itself as to the auditors' independence.

The Committee has discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Company's internal controls
and the internal audit function's organization, responsibilities, budget and
staffing. The Committee has also reviewed with the independent auditors their
audit plans, audit scope, and identification of audit risks.

In addition, the Committee has discussed and reviewed with the independent
auditors all communications required by generally accepted accounting standards,
including those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.

Based upon the Committee's discussion with management and the independent
accountants, the Committee's review of the representation of management, and the
report of the independent accountants to the Committee, the Committee
recommended that the Board of Directors include the audited financial statements
in the Company's Annual Report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 2003.

Members of the Audit Committee:

Stephen C. Roberts
Russell W. Mitchell

INDEPENDENT AUDITORS

CHANGE IN AUDITORS IN FISCAL 2002

On June 27, 2002, KPMG LLP, the principal independent accountants
previously engaged by the Company to conduct an audit of its accounts for more
than the past two years, resigned as the Company's auditors. The resignation of
KPMG LLP was not sought, recommended or approved by the Audit Committee or Board
of Directors of the Company.

In connection with the audits of the two fiscal years ended December 31,
2001, and the subsequent interim period through June 27, 2002, (i) there were no
disagreements with KPMG LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to their satisfaction would have caused them to
make reference with their opinion to the subject matter of the disagreement, and
(ii) there were no reportable events, as defined in Item 304(a)(1)(v) of
Regulation S-K of the U.S. Securities and Exchange Commission.

The audit reports of KPMG LLP on the consolidated financial statements of
Developed Technology Resource, Inc. as of and for the years ended December 31,
2001 and 2000, did not contain any adverse or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles, except as follows:

KPMG LLP's independent auditors' report on the consolidated financial
statements for the Company as of and for the year ended December 31, 2000,
contained a separate paragraph stating that "the Company has a shareholders'
deficit and has suffered recurring losses from operations that raise substantial
doubt about its ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty." Management's plans in regard to these matters are
described in Note 2 to the Company's financial statements included in the
Company's annual report on form 10-KSB for the year ended December 31, 2000.

On August 12, 2002, the Company engaged Gallogly, Fernandez and Riley, LLP
("GFR"), with offices in Orlando, Florida, to audit DTR's consolidated financial
statements for 2002. Prior to August 12, 2002, DTR did not consult with GFR
regarding the application of accounting principles to a

specific or contemplated transaction, regarding the type of audit opinion that
might be rendered on the registrant's financial statements, or regarding any
other matter.

CHANGE IN AUDITOR IN FISCAL 2003

On January 6, 2004, GelStat Corporation ("GSC"), formally known as
Developed Technology Resource, Inc., dismissed Gallogly, Fernandez & Riley, LLP
("GFR") as its independent auditor. The dismissal of GFR was recommended and
adopted by our Audit Committee and approved by our Board of Directors. GFR
audited our financial statements for the fiscal year ended December 31, 2002.
Our financial statements for the fiscal year ended December 31, 2001 were
audited by KPMG, LLP.

GFR's report on our financial statements for the fiscal year ended December
31, 2002 did not contain any adverse opinion or disclaimer of opinion and was
not qualified as to uncertainty, audit scope or accounting principles. During
the fiscal years ended December 31, 2003 and 2002, and the subsequent interim
period ending January 6, 2004 (i) there were no disagreements between us and GFR
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure which, if not resolved to the
satisfaction of GFR, would have caused them to make reference to the subject
matter of the disagreement in connection with their reports and (ii) there were
no "reportable events," as defined in Item 304(a)(1)(v) of Regulation S-K of the
Securities and Exchange Commission (SEC). The decision to replace GFR was not
the result of any disagreement between us and GFR on any matter of accounting
principle or practice, financial statement disclosure or audit procedure.

Concurrently, on January 6, 2004, the Audit Committee of our Board of
Directors and our Board of Directors approved the appointment of Virchow, Krause
& Company, LLP ("VKCo") as our new independent accountant and auditor. VKCo will
audit our financial statements to be included in the Form 10-KSB for the fiscal
year ending December 31, 2003 and we intend to have VKCo continue to serve as
our independent accounting and audit firm thereafter. We did not consult with
VKCo on any matters related to accounting principles or practice, financial
statement disclosures or audit procedures during our two most recent fiscal
years and the subsequent interim periods through January 6, 2004 prior to
selecting and appointing VKCo as our auditor.

FEES PAID TO AUDITORS FOR FISCAL 2003

Audit Fees

During fiscal 2002 and 2003, the Company accrued or paid fees for audit
services of GFR and VKCo, including quarterly reviews and year-end audit fees as
follows:

2002 2003
---- ----
GFR -0- $13,984
VKCo -0- $20,850

No leased personnel were utilized by GFR or VKCo in connection with any
audit services provided to us.

Tax Fees and Other Fees

Neither GFR nor VKCo rendered any professional services related to
financial information systems design and implementation in fiscal 2002 or 2003.
There were no fees billed by GFR or VKCo

for nonaudit related services rendered to the Company during fiscal 2002 or
2003, including fees for tax related services.

PROPOSALS FOR FISCAL 2004 ANNUAL MEETING

We currently anticipate that the next annual meeting, for the fiscal year
ending December 31, 2004 (the "2004 Annual Meeting"), will be held on or around
July 14, 2005. If you wish to submit a proposal for inclusion in the proxy
statement and proxy for shareholder action at the 2004 Annual Meeting, you must
do so by sending the proposal and supporting statements, if any, to us no later
than March 14, 2005.

In addition, pursuant to the rules of the Securities and Exchange
Commission, proxies solicited by our management for the 2004 Annual Meeting may
grant management the authority to vote in its discretion on any proposal to be
submitted by a shareholder otherwise than through inclusion in the proxy
statement for the 2004 Annual Meeting, unless we have received notice of the
shareholder proposal on or before May 28, 2005.

ACCESS TO OTHER INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"). Therefore, the Company files periodic
reports, proxy statements, and other information with the Securities and
Exchange Commission (the "SEC"). Such reports, proxy statements, and other
information may be obtained by visiting the Public Reference Room of the SEC at
450 Fifth Street, NW, Washington, DC 20549 or by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically. The Company
currently maintains a corporate website at www.gelstat.com.

By Order of the Board of Directors

Stephen C. Roberts
Secretary

Dated: July 12, 2004
Bloomington, Minnesota

A COPY OF OUR ANNUAL REPORT ON FORM 10-KSB IS ENCLOSED. AN ADDITIONAL COPY
(WITHOUT EXHIBITS) WILL BE SENT WITHOUT CHARGE TO ANY SHAREHOLDER REQUESTING IT
IN WRITING FROM: GELSTAT CORPORATION, ATTENTION: STEPHEN C. ROBERTS, CEO,
SOUTHPOINT OFFICE CENTER, 1650 WEST 82ND STREET, SUITE 1200, BLOOMINGTON,
MINNESOTA 55431.

GELSTAT CORPORATION
SOUTHPOINT OFFICE CENTER
1650 WEST 82ND STREET, SUITE 1200
BLOOMINGTON, MN 55431

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned, having received the Notice of Annual Meeting and Proxy
Statement dated July 12, 2004, hereby appoints each of Stephen C. Roberts and
Richard W. Ringold as proxy, with full power of substitution, to vote all of the
shares of Common Stock which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders of GelStat Corporation
to be held on Thursday, August 12, 2004 at 1:00 p.m. at Southpoint Office Center
(ground floor conference room), 1650 West 82nd Street, Bloomington, MN 55431, or
at any adjournment thereof, upon any and all matters which may properly be
brought before the meeting or adjournment thereof, hereby revoking all former
proxies.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR EACH NOMINEE, AND IN THE DISCRETION OF THE PROXY HOLDER ON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

SEE REVERSE FOR VOTING INSTRUCTIONS.

PLEASE DETACH HERE

1. Election of Directors duly 01 Stephen C. Roberts
nominated: 02 Donald Miller

[ ] FOR ALL NOMINEES

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NUMBER(S) OF THE NOMINEE(S) IN THE SPACE PROVIDED BELOW.)

________________________________________________________________________________

2. The authority to vote, in his discretion, on all other business that may
properly come before the meeting.

[ ] GRANTED [ ] WITHHELD

I will [ ] / will not [ ] attend the Annual Meeting.

Address change? Mark Box [ ]
Indicate changes below:

PLEASE SIGN exactly as name appears below. When shares are held by joint
tenants, both should sign. If signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or authorized officer. If partnership,
please sign in partnership name by an authorized person.

Dated: ________________________, 2004 ___________________________________
Name (Print)

No. of Shares: __________ No. of Shares: __________

_____________________________________ ___________________________________
Signature of Shareholder Signature of Shareholder
(if jointly owned)

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.

APPENDIX A
----------

ADOPTED JUNE 2, 2003
AMENDED OCTOBER 15, 2003

GELSTAT CORPORATION

AUDIT COMMITTEE CHARTER

Objective
- ---------

The audit committee of the board of directors of GelStat shall use its best
efforts to ensure the independence of the company's independent accountants, the
integrity of management, and the adequacy of disclosure to the company's
shareholders, potential shareholders, and the investment community.

MEMBERS

The audit committee shall be appointed annually by the board of directors, with
its chairperson to be selected by the committee. The committee shall have at
least one member. Each member must also be a member of the board of directors.

In selecting members of the audit committee, the board shall give consideration
to each nominee's capacity to serve, business experience, knowledge of GelStat
operations, finance, accounting, and auditing, facility in obtaining information
by inquiry, and commitment and available time.

Each member shall have the ability to read and understand fundamental financial
statements.

The committee shall annually elect one of its members as chairperson. The
chairperson shall schedule meetings, preside over meetings, and report to the
board.

Vacancies on the committee shall be filled by the board of directors.

Meetings
- --------

The committee shall meet a minimum of two times per year and as scheduled by the
committee chairman. A majority of members shall constitute a quorum. Each member
shall be entitled to one vote. At the request of the committee, meetings may be
held with members of management or the company's internal accounting staff or
representatives of the company's independent accountants or consultants. The
committee shall prepare and preserve written minutes of its meetings. The
committee may appoint a committee member or a non-committee member as secretary.
The committee may take action by conference telephone call, which shall
constitute a meeting, or by written action signed by all members.

The activities and findings of the committee and minutes of committee meetings
shall be made available to each member of the board.

AUTHORITY

The committee shall have unrestricted access to the company's personnel and
records and will be given the resources to discharge its duties. The committee
shall have the authority to engage independent

counsel and other advisors, as it deems necessary, to carry out its duties. The
committee may conduct investigations into significant matters brought to its
attention during the conduct of its duties and may retain persons having special
competence as necessary. The committee shall have the sole authority and
responsibility to select, evaluate, and, where appropriate, replace the outside
auditors. The committee also has the sole authority and responsibility to
approve any significant non-audit relationship with the independent auditors.

Responsibility
- --------------

While the fundamental responsibility for the company's financial statements and
disclosures rests with management and the independent auditor, the audit
committee must review:

o major issues regarding accounting principles and financial statement
presentations, including any significant changes in the company's
selection or application of accounting principles, and major issues as
to the adequacy of the company's internal controls and any special
audit steps adopted in light of material control deficiencies;

o analyses prepared by management and/or the independent auditor setting
forth significant financial reporting issues and judgments made in
connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements;

o the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of the
company; and

o earnings press releases (paying particular attention to any use of
"pro forma," or "adjusted" non-GAAP, information), as well as
financial information and earnings guidance provided to analysts and
rating agencies.

o establish procedures for (1) the receipt, retention, and treatment of
complaints received by the company regarding accounting, internal
accounting controls, or auditing matters; and (2) the confidential,
anonymous submission by employees of the company of concerns regarding
questionable accounting or auditing matters.

The audit committee shall have such other responsibilities as may be designated
to it from time to time by the board of directors. In addition, the audit
committee shall annually review and assess the adequacy of its Charter and
recommend to the board of directors any modifications in its duties and
responsibilities.

Operations
- ----------

The audit committee shall:

o Assist board oversight of (1) the integrity of the company's financial
statements, (2) the company's compliance with legal and regulatory
requirements, (3) the independent auditor's qualifications and
independence, and (4) the performance of the company's independent
auditors.

o Prepare the report that SEC rules require be included in the company's
annual proxy statement.

o Retain and terminate the company's independent auditors (subject, if
applicable, to shareholder ratification).

o At least annually, obtain and review a report by the independent
auditor describing: such firm's internal quality-control procedures;
any material issues raised by the most recent internal quality-control
review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits
carried out by the firm, and any steps taken to deal with any such
issues; and (to assess the auditor's independence) all relationships
between the independent auditor and the company. The audit committee
should present its conclusions with respect to the independent auditor
to the full board

o Discuss the annual audited financial statements and quarterly
financial statements with management and the independent auditor,
including the company's disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

o Discuss earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies. The audit
committee's responsibility to discuss earnings releases as well as
financial information and earnings guidance may be done generally
(i.e., discussion of the types of information to be disclosed and the
type of presentation to be made). The audit committee need not discuss
in advance each earnings release or each instance in which the company
may provide earnings guidance.

o As appropriate, obtain advice and assistance from outside legal,
accounting or other advisors.

o Discuss policies with respect to risk assessment and risk management.
The audit committee should analyze the company's major financial risk
exposures and discuss with management the steps management has taken
to monitor and control such exposures. The audit committee is not
required to be the sole body responsible for risk assessment and
management.

o Periodically meet separately with management, with personnel
responsible for the internal preparation of financial reports and
records, and with independent auditors.

o Review with the independent auditor any audit problems or difficulties
and management's response. Among the items the audit committee may
want to review with the auditor are: any accounting adjustments that
were noted or proposed by the auditor but were "passed" (as immaterial
or otherwise); any communications between the audit team and the audit
firm's national office respecting auditing or accounting issues
presented by the engagement; and any "management" or "internal
control" letter issued, or proposed to be issued, by the audit firm to
the company. The review should also include discussion of the
responsibilities, budget and staffing of the company's internal
financial functions.

o Set clear hiring policies for employees or former employees of the
independent auditors which shall comply in all respects with the rules
of the Securities and Exchange Commission concerning independence of
auditors and similar rules of any stock exchange on which the
company's securities are listed.

o Report regularly to the board of directors. The audit committee should
review with the full board any issues that arise with respect to the
quality or integrity of the company's financial statements, the
company's compliance with legal or regulatory requirements, the
performance and

independence of the company's independent auditors, or the performance
of the internal financial accounting.

o Annually evaluate the performance of the audit committee.

o Review, discuss and report to the board of directors concerning
changes, if any, made or proposed by the government, accounting
profession, or the company relating to accounting principles and their
applications that could materially affect the company.

o Review, discuss and report to the board of directors concerning
significant issues reviewed by legal counsel concerning litigation,
contingencies, claims, or assessments.

o Review, discuss and report to the board of directors concerning
significant adjustments proposed by the independent accountants.

o Inquire of the independent accountants as to whether there have been
any disagreements with management which, if not satisfactorily
resolved, would have caused them to issue a nonstandard report on the
company's financial statements.

o Review unusual reporting issues prior to the issuance of any press
release on financial results.

o Advise the independent accountants and members of the internal
accounting staff that they may communicate directly with any member of
the committee on a confidential basis.

Internal Accounting Controls
- ----------------------------

The committee shall undertake such review as it deems necessary to ensure that
there exists an effective system of internal accounting controls. Without
limitation and as it deems appropriate, the committee shall:

o Meet privately with the independent accountants and appropriate
members of the company's financial staff to discuss pertinent matters.

o Review with the chief financial officer the activities, organizational
structure, and qualifications of the internal financial staff.

o Inquire of the chief financial officer and independent accountants the
extent to which their planned audit scope can be relied on to detect
material weaknesses in internal controls or the occurrence of
fraudulent financial reporting.

Corporate Compliance
- --------------------

The committee shall conduct such review as it deems necessary to ensure that the
company is maintaining effective controls against employee conflict of interest
and fraud and is in reasonable compliance with related laws. Without limitation
and as it deems appropriate, the committee shall:

o Review management's program to monitor compliance with the company's
code of conduct and the Foreign Corrupt Practices Act.

o Review significant related party transactions.

o Review the policies and procedures in effect for the review of officer
expenses and purchases.

o Review periodically the impact of significant accounting or reporting
developments that may affect the company.

o Review any legal matters that could have a significant impact on the
company's financial statements.

o If necessary, institute special investigations and, if appropriate,
hire special counsel or experts to assist.

Qualified Legal Compliance Committee
- ------------------------------------

The committee shall be the company's "qualified legal compliance committee" as
defined in the rules of the Securities and Exchange Commission. In this
capacity, the committee shall:

o Adopt written procedures for the confidential receipt, retention and
consideration of any report of a material violation of federal
securities laws, breach of fiduciary duty or similar violations by the
company or any officer, director, employee or agent of the company.

o Inform the company's chief legal officer and chief executive officer
of any report of evidence of a material violation.

o Determine whether an investigation is necessary regarding any report
of evidence of a material violation by the company, its officers,
directors, employees or agents and, if it determines an investigation
is necessary or appropriate:

o Notify the full board of directors;

o Initiate an investigation, which may be conducted either by the
chief legal officer (or the equivalent thereof) or by outside
attorneys; and

o Retain such additional expert personnel as the committee deems
necessary.

o At the conclusion of any such investigation:

o Recommend, by majority vote, that the company implement an
appropriate response to evidence of a material violation;

o Inform the chief legal officer and the chief executive officer
(or the equivalents thereof) and the board of directors of the
results of any such investigation and the appropriate remedial
measures to be adopted; and

o Acting by majority vote, take all other appropriate action,
including the notification of the Securities and Exchange
Commission in the event that the company fails in any material
respect to implement an appropriate response that the qualified
legal compliance committee has recommended.

Miscellaneous
- -------------

As to other related matters, without limitation and as it deems appropriate, the
committee shall:

o Discuss with the independent accountants the quality of the company's
financial and accounting personnel and any relevant recommendations
that the independent accountants may have, including those in their
"Report to Management."

o Review the extent of nonaudit services provided by the independent
accountants in relation to the objectivity needed in the audit.

o Evaluate the cooperation received by the independent accountants
during their audit examination, including the access to all requested
records, data, and information and elicit the comments of management
regarding the responsiveness of the independent accountants to the
company's needs.

o Request from outside auditors a formal written statement regarding all
relationships between the outside auditors and the company.

o Maintain an active dialogue with the outside auditors regarding any
undisclosed relations or services that could affect the objectivity
and independence of the outside auditors.

o Take, or recommend that the board of directors take, appropriate
action to oversee the outside auditors' independence.