SECURITIES AND EXCHANGE COMMISSION
                 Washington, D.C.  20549
                     FORM 10-KSB
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934.

         For the fiscal year ended December 31, 2002

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

  For the transition period from ___________ to ___________

              Commission file number 0-15888


                   IGENE Biotechnology, Inc.
        ______________________________________________
        (Name of Small Business Issuer in Its Charter)

            Maryland	                   52-1230461
_______________________________   _________________________________
(State of other jurisdiction of   (IRS Employer Identification No.)
 incorporation or organization)

  9110 Red Branch Road, Columbia, Maryland          21045
  ________________________________________       __________
  (Address of principal executive offices)       (Zip Code)

                      (410) 997-2599
      ________________________________________________
      (Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the
Exchange Act:

Title of Each Class       Name of Each Exchange on Which Registered
___________________       _________________________________________
      None                                None

Securities registered pursuant to Section 12(g) of the
Exchange Act:

         Common Stock (par value $.01 per share)
         _______________________________________
                    (Title of class)

     Check  whether  the  issuer (1) has 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
           ___              ___

     Check  if  there  is  no  disclosure  of delinquent filers in
response  to  Item  405  of Regulation S-B contained in this form,
and  no  disclosure will be contained, to the best of registrant's
knowledge,  in  definitive   proxy   or   information   statements
incorporated  by  reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [  ]

     State  issuer's  revenues  for  its  most  recent fiscal year
$3,491,765
__________

     State  the  aggregate  market value  of  the voting and non-
voting  common   equity  held  by  non-affiliates   computed   by
reference  to  the  price at which the common equity was sold, or
the  average  bid  and asked price of such common equity, as of a
specified  date within the past 60 days.
$415,478 as of February 24, 2003
________________________________
(Note:  The officers and directors of the issuer  are  considered
affiliates for purposes of this calculation.)

     State  the  number  of  shares  outstanding of each  of  the
issuer's classes of common equity, as of the latest   practicable
date. As of February 24, 2003 there were 92,943,746 shares of the
      ___________________________________________________________
issuer's common stock outstanding.
__________________________________

<PAGE>

CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR  PROVISIONS" OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

EXCEPT  FOR  HISTORICAL  FACTS,  ALL  MATTERS  DISCUSSED  IN THIS
REPORT, WHICH ARE FORWARD LOOKING, INVOLVE A HIGH DEGREE OF  RISK
AND UNCERTAINTY. CERTAIN  STATEMENTS  IN THIS  REPORT  SET  FORTH
MANAGEMENT'S   INTENTIONS,   PLANS,   BELIEFS,  EXPECTATIONS   OR
PREDICTIONS  OF  THE  FUTURE BASED ON CURRENT FACTS AND ANALYSES.
WHEN  WE  USE  THE  WORDS  "BELIEVE,"  "EXPECT,"    "ANTICIPATE,"
"ESTIMATE,"  "INTEND"  OR  SIMILAR  EXPRESSIONS,  WE  INTEND   TO
IDENTIFY FORWARD-LOOKING STATEMENTS.  YOU SHOULD NOT PLACE  UNDUE
RELIANCE ON THESE  FORWARD-LOOKING  STATEMENTS.   ACTUAL  RESULTS
MAY DIFFER MATERIALLY  FROM  THOSE  INDICATED  IN SUCH STATEMENT,
DUE TO A VARIETY OF FACTORS, RISKS AND UNCERTAINTIES.   POTENTIAL
RISKS  AND  UNCERTAINTIES  INCLUDE,  BUT  ARE  NOT  LIMITED   TO,
COMPETITIVE  PRESSURES  FROM  OTHER  COMPANIES  AND  WITHIN   THE
BIOTECH INDUSTRY, ECONOMIC CONDITIONS IN  THE  COMPANY'S  PRIMARY
MARKETS,  EXCHANGE  RATE  FLUCTUATIONS,  REDUCED  PRODUCT DEMAND,
INCREASED  COMPETITION,  UNAVAILABILITY  OF  PRODUCTION CAPACITY,
UNAVAILABILITY   OF  FINANCING,   GOVERNMENT   ACTION,    WEATHER
CONDITIONS  AND  OTHER UNCERTAINTIES, INCLUDING THOSE DETAILED IN
"RISK  FACTORS"  BELOW  AND  FROM  TIME-TO-TIME IN THE  COMPANY'S
SECURITIES AND EXCHANGE COMMISSION FILINGS.


                          PART I

ITEM 1.     DESCRIPTION OF BUSINESS

General

     IGENE  Biotechnology,  Inc.  ("Igene") is  engaged  in  the
business  of  developing, marketing, and manufacturing specialty
ingredients  for  human and animal nutrition.   Igene was formed
on  October  27, 1981 to develop, produce and market value-added
specialty  biochemical products.  Igene is a supplier of natural
astaxanthin,    an   essential   nutrient  in   different   feed
applications  and  as  a  source  of pigment for coloring farmed
salmon species.  Igene  also supplies nutraceutical ingredients,
as  well  as  consumer  ready health food supplements, including
astaxanthin.   Igene  is  focused  on  fermentation  technology,
pharmacology,  nutrition and health in its marketing of products
and applications worldwide.

     During the  year  2001,  Igene  purchased  its sales agent,
ProBio  Nutraceuticals  AS  ("ProBio"),  a  Norwegian   company.
ProBio  specializes in sales and marketing to the pharmaceutical
industry  and feed ingredients markets.  In addition to ProBio's
nutraceuticals  business, it was hoped the purchase would add to
Igene's  management  structure  and  enhance  sales development.
Following  the  acquisition, Stein Ulve and Per Benjaminsen, the
managing  director  and  director  of   marketing   and   sales,
respectively,  of  ProBio became our chief executive officer and
chief  marketing  officer,  respectively,  pursuant  to  written
employment  agreements.   This  division is referred to as Igene
Norway AS.

     Igene Biotechnology Inc., in an effort to focus on and grow
its  core business, on February 5, 2003 disposed of its interest
in  its  former  subsidiary, ProBio.  Fermtech AS, a joint stock
company  incorporated in the Kingdom of Norway and owned equally
by our former chief executive officer, Stein Ulve and our former
chief  marketing  officer, Per Benjaminsen, purchased the shares
of  ProBio.   Mr. Ulve has resigned as CEO and director of Igene
while  Mr.  Benjaminsen  continues  to serve  the  Company as in
independent   consultant,   effective  as  of December 31, 2002.

     Igene has devoted its  resources  to  the  development  of
proprietary  processes to  convert  selected  agricultural  raw
materials  or  feedstocks  into  commercially  useful  and cost
effective  products for the food, feed, flavor and agrochemical
industries.   In developing these processes and products, Igene
has  relied  on  the  expertise  and  skills  of  its  in-house
scientific staff and, for special projects, various consultants.

<PAGE>
     Igene leases manufacturing capacity in Mexico City, Mexico,
and also has administrative, research and pilot plant facilities
in  Columbia, Maryland. Igene is manufacturing its own products
through   a  contract manufacturer. During the year 2000, Igene
formed a wholly owned subsidiary, Igene Chile Comercial, Ltda.,
in Chile. The  subsidiary  has a  sales  and  customer   service
office in Puerto Varas, Chile, and a product warehouse in Puerto
Montt, Chile.

Government Regulation

     The manufacturing and marketing of  most  of  the  products
Igene has developed are, and will likely continue to be, subject
to  regulation  by  various  governmental agencies in the United
States,  including the Food and Drug Administration ("FDA"), the
Department of Agriculture ("USDA"), the Environmental Protection
Agency  ("EPA"),  and  comparable  agencies  in other countries.
Igene, as a matter of policy, requires that its products conform
to current Good Manufacturing  Practices  ("GMPs")  (as  defined
under the Federal Food, Drug and Cosmetic Act and the rules  and
regulations thereunder) and Igene believes all of  its  products
so  conform.  The  extent of any adverse governmental regulation
that  might  arise  from  future  administrative  or legislative
action,  including  current  rules and regulations pertaining to
the process of GRAS (Generally Recognized as Safe) affirmations,
cannot be predicted.

     In a notice published in the Federal Register July 6, 2000,
the  FDA   announced  the  amendment  of   its  color   additive
regulations  to  provide for the safe use of Phaffia yeast, such
as that in the Company's product, AstaXin(R),as a color additive
in  aquaculture  feeds.   This  ruling,  which  became effective
August  8, 2000, allows Igene to market its product, AstaXin(R),
for  aquaculture  feeds  and fish produced in, or imported into,
the  United  States.   This ruling is available to the public in
the  Federal  Register.   Igene  has  also  previously  obtained
approval for AstaXin(R) from the Canadian Food Inspection Agency
(CFIA). Additional foreign approval applications for AstaXin(R),
including  those for the European Union, are in progress.  Igene
is  required  to perform tests and prepare documentation as part
of the application process.  It is hoped the application will be
submitted  in  the  first  half of 2003 and be approved in 2004.

     In July 2000, Igene also obtained clearance from the FDA to
market its product, AstaXin(R), as a human dietary supplement in
the United States.  Scientific literature indicates that natural
astaxanthin,  such as that in the Company's product, AstaXin(R),
may  offer  health  benefits  for  humans due to its antioxidant
properties.   The FDA notification and the Company's submissions
are  available to the public from the FDA.   Comparable agencies
in the European Union and other foreign countries may have their
own   additional   registration   procedures.    No   additional
applications for  approval  of AstaXin(R) as a human nutritional
supplement  have yet been submitted.

     Igene has not incurred and does not anticipate any material
environmental compliance costs.

Research and Development

     As of December 31, 2002, Igene had expended  approximately
$13,028,781 on research and development since its inception  on
October  27,  1981  and  has, as of December 31, 2002, received
revenues  from  product  sales  and  royalties of approximately
$10,410,397  from the proprietary processes resulting from such
research and development. Igene will continue to incur research
and  development  costs  in connection with improvements in its
existing  processes  and  products,  but it does not anticipate
development  of  new   processes   and   products   in    2003.

     Research and development expenditures for each of the last
two years are as follows:

     2001     $ 536,638
     2002     $ 609,781

     Igene's research and development activities have resulted
in the  development  of  processes  to  produce  the  products
hereinafter discussed.

<PAGE>

Commercial Products

AstaXin(R)

     AstaXin(R) is Igene's registered trademark for  its  dried
yeast product made from a proprietary strain of yeast developed
by Igene.  AstaXin(R) i s a natural source  of  astaxanthin,  a
pigment which imparts the characteristic red color to the flesh
of salmon, trout, prawns and certain  other  types of  fish and
shellfish.  In the ocean, salmon and trout  obtain  astaxanthin
from  krill   and   other   planktonic  crustaceans   in  their
diet.   A     krill     and       crustacean      diet    would
be prohibitively expensive  for  farm-raised salmonids.  Without
the addition of astaxanthin, the  flesh  of such fish is a pale,
off-white color, which is less  appealing to consumers expecting
"salmon-colored" fish.  Fish feeding trials in Europe, Asia, and
North and South America   have  demonstrated  the  efficacy   of
AstaXin(R) in pigmenting fish.   An  estimated  1,000,000 metric
tons of farm-raised  salmon  are  produced  annually  worldwide.
Igene derived revenue during 2002 and 2001 from  sales  of   the
product, AstaXin(R).   Substantially  all  of Igene's AstaXin(R)
2002 and 2001 sales were to fish producers in  the   aquaculture
industry in Chile.   During  2002,  three  customers,  who   are
located in Chile, represented over 10% of  sales  each,  for   a
total of 83% in the aggregate. Accordingly, all of Igene Chile's
receivables are located in Chile.   All of Igene's manufacturing
operations   for  AstaXin(R)  are   conducted   in   a    single
manufacturing facility in Mexico City, Mexico.

     On  May   20,  2000,  Igene   renewed   its   manufacturing
arrangement  with  Fermic,  S.A. de C.V., of Mexico City, Mexico
("Fermic"),  for  the  production  of  its  natural  astaxanthin
pigment, AstaXin(R), in Fermic's manufacturing facility in Mexico.
Commercial production  began  in  January  of  1998,  and  Igene
continues to manufacture and sell AstaXin(R) worldwide, directly
or through distributors to meet an anticipated increasing demand
for  the  product.  All  of Igene's manufacturing operations for
AstaXin(R) are conducted  in   Fermic's   single   manufacturing
facility located in Mexico City, Mexico.

     The Fermic contract executed in May 2000, provides that the
manufacturer has the right and license to produce AstaXin(R) for
Igene, is paid a cash fee based on manufacturing  capacity,  and
may  receive  up  to  20,000,000 shares of Igene common stock in
lieu   of  additional  cash   based   on   quantity  of  product
manufactured  over  the six  year term. Of the 20,000,000 shares
available to be earned, 8,303,269 have been earned and issued to
date.   Fermic  provides  equipment  and facilities necessary to
manufacture  and  store  the  product  and  is  responsible  for
purchasing  raw  materials.   Igene  is  responsible  for  sales
efforts and for ensuring the quality of the pigment.  Igene also
has a role in ensuring  that  the  manufacturing  process  works
effectively.    The   contract  expires  May  20,  2006,  unless
terminated earlier by either party. See Item 2.  Description  of
Property, incorporated herein by reference.

     Based on estimates of worldwide production of  farm  raised
salmon,  Igene  believes  the  market for astaxanthin as a color
additive in salmon feed exceeds $200,000,000 per year worldwide,
which would require approximately 10,000 metric tons of AstaXin(R)
to serve 100% of the market. A single competitor, who produces a
chemically synthesized product, presently controls more than 80%
of   the   world  market  for  astaxanthin  as  a  pigment  for
aquaculture.   Igene's production for the year 2003 will depend
on  the  successful completion of production increases by their
current  manufacturing  partner  in Mexico City, in addition to
management   locating   additional   satisfactory    production
providers. Demand is currently projected  to exceed the current
contracted  production  capacity  of  Igene's current producer.
However,there can be no assurance that the Company will be able
to  find  and  subsequently be able to utilize other additional
sources of production capacity,or that, if it is able to obtain
additional production capacity,that it will be able to do so on
terms favorable to Igene or that any  level  of   demand   will
continue.

     Igene, after  successfully completing commercial trials of
AstaXin(R) with fish farming companies in Chile,  has  achieved
total sales in 2000, 2001 and 2002, of approximately $8,375,335
in the aggregate.

     Effective January 1, 2001, Igene appointed ProBio  as  its
exclusive worldwide agent for the marketing,promotion and sales
of  all of its natural astaxanthin products.  In December 2001,
Igene  purchased  ProBio to further this development as well as
the  development  of it's management structure.  As a result of
this  purchase,  Igene  terminated its exclusive agreement with
ProBio.

<PAGE>
     During 1997, Archer-Daniels Midland, Inc. (ADM) filed suit
against Igene alleging patent infringement regarding AstaXin(R).
Igene filed a counter-suit against ADM alleging theft of  trade
secrets.   This  litigation  is  on-going.  See  Item  3. Legal
Proceedings, incorporated herein by reference.

     During 2001 and  2002  Igene  began  investigating  other
possible   commercial  uses  of   astaxanthin,  including  its
application  as  a  human  nutritional  supplement.  Igene has
formulated  natural   astaxanthin  as   a   super-antioxidant,
AstaXin(R), for  the North American dietary supplement market.
Antioxidants are one of the largest product categories in  the
health and nutrition industry.

Patents and Trademarks

<PAGE>

     It is Igene's policy to protect its intellectual property
rights by a variety of means, including applying  for  patents
and  trademarks  in  the United States and in other countries.
Igene also  relies  upon  trade  secrets   and   improvements,
un-patented  proprietary know-how and continuing technological
innovation to  develop  and maintain its competitive position.
In this regard,  Igene  places  restrictions in its agreements
with third parties with respect  to  the use and disclosure of
any of its proprietary technology.  Igene  also  has  internal
nondisclosure safeguards, including confidentiality agreements
with employees and consultants.

    All patents and trademarks are carefully reviewed and those
with no foreseeable commercial value are abandoned to eliminate
costly maintenance fees.  Patents, trademarks on technology and
products with recognized commercial value, and which  Igene  is
currently maintaining, include those for AstaXin(R) ,which have
remaining lives ranging from 6 to 10 years.

Competition

     Competitors in the biotechnology field in the United States
and   elsewhere   are  numerous  and  include  major   chemical,
pharmaceutical  and  food  companies,  as  well  as  specialized
biotechnology   companies.    Competition  can  be  expected  to
increase  as  small  biotechnology   companies  continue  to  be
purchased  by  major multinational corporations with substantial
resources.   Competition  is  also expected to increase with the
introduction of more diverse products developed by biotechnology
firms,   increasing    research   cooperation   among   academic
institutions  and  large  corporations, and continued government
funding  of  research  and   development   activities   in   the
biotechnology  field,  both  in  the United States and overseas.
Unlike  the  majority  of  biotechnology  companies,  which  are
developing products principally for the pharmaceutical industry,
Igene  has  focused  its  own  activities  on the development of
proprietary  products  for  use  in  aquaculture and nutritional
supplement  industries.  In the future, however, competitors may
offer  products,  that, by reason of price, or efficacy, or more
substantial  resources  for technology advances, may be superior
to Igene's existing or future products.

     A single large pharmaceutical company  presently  dominates
the  market  for  astaxanthin  pigment for aquaculture in  which
Igene's product,AstaXin(R),is presently marketed and sold. Igene
believes that AstaXin(R), which is made from yeast, will compete
with  this dominant producer, and other producers whose products
are  chemically  synthesized,  based  on  its  use  of   natural
ingredients.   As  consumers  and  producers of fish become more
aware  of  other  alternatives,  Igene  believes  that they will
desire natural ingredients, such as those in AstaXin(R).

     Several companies are also  known  to  be  developing  and
marketing  other  natural  astaxanthin products.  Some of these
companies'  products are made from algae, while others are made
from yeast.  Igene  believes  that AstaXin(R) will compete with
other  companies'  astaxanthin  products  which  are  made from
algae, due to Igene's  higher  production capacity  and   lower
production costs, but can provide no assurances in that regard.
Igene also  believes  that  AstaXin(R) will compete  with other
companies' astaxanthin products which are also made from  yeast
due to our  proprietary  process  to  disrupt yeast cell walls,
which, as studies  have shown,  makes  AstaXin(R)  more readily
absorbed by the fish.

     Igene is also beginning to explore the  possible  use  of
AstaXin(R)  as a human nutritional supplement.  This market is
attractive because of potentially higher profit margins. Other
companies  are  known  to  also  be  developing  and marketing
astaxanthin  products  for  the  human  nutritional supplement
market.  Igene can not yet predict how competitive it would be
in this market.

<PAGE>

Sources and Availability of Raw Materials

   Raw materials used in the manufacture of AstaXin(R) consist
principally of agricultural commodities  widely  available  in
world  markets  from  many  suppliers,  which  may   be   used
interchangeably.   We  do  not   anticipate   material   price
fluctuations or changes in availability in these raw materials
in the near future.

Employees

    At December 31, 2002, Igene had 15 full time and two part-
time  employees.   Ten   full time employees and one part-time
employee  are  in  administration and/or marketing,  while the
remainder  are  engaged  in  research, process development and
support of manufacturing activities.   The full time marketing
employees   include   Igene's   two   sales   and    technical
representatives  in Chile and three representatives in Norway.
Additionally, two    of    the    employees  located in Norway
are     administrative.      With     the    disposition    of
ProBio the five individuals that are located in Norway will no
longer be Igene employees.  The remainder of the employees are
based in the U.S.  Igene  also utilizes various consultants on
an as-needed or short-term basis.

     None of Igene's employees are represented by a labor union
and Igene has experienced no work stoppages. Igene believes its
relations with its employees are satisfactory.


ITEM 2.     DESCRIPTION OF PROPERTY

     Igene leases approximately 8,500 square feet of space  in
the  Oakland  Ridge Industrial Park located at 9110 Red Branch
Road,  Columbia,  Maryland.   Igene occupies the space under a
lease  extension expiring on January 31, 2004. The approximate
rental expense for the remaining year is $93,600.Approximately
2,000  square  feet  of  this  space is used for executive and
administrative offices and approximately 2,500 feet is used for
research and development activities. The remaining 4,000 square
feet   of   space   is  used  for Igene's intermediate-stage or
scale-up pilot plant facility.

     Igene  also leases, under a contract  expiring  May  2006,
manufacturing capacity at Fermic S.A. de C.V. (Fermic)in Mexico
City,  Mexico and leases warehouse space for product storage in
Mexico City.   The lease for warehouse space is on an as needed
basis, and Igene is under no obligation to lease space.

     Igene began a one year  lease  in  December  2001,   which
renewed  in  December 2002, of approximately 220 square feet of
office  space,  in  Chile,  for  the  conduct  of marketing and
technical  support  activities  by  its  full-time    technical
representatives.   Igene also leases warehouse space on a month
to month basis as needed for product storage in Chile.

     During the fourth quarter of 2001, Igene  executed  a  six
month lease on a three bedroom residence in Annapolis, Maryland
to  be  used  by  the representatives traveling from Norway, in
order to reduce travel costs while those relocating are able to
get situated.   In January 2003 this lease was cancelled.

     Igene currently owns or leases  sufficient  equipment  and
facilities for its research operations and all of this equipment
is  in satisfactory condition and is adequately insured.  There
are  no  current  plans for  improvement of this property.   If
demand for Igene's product continues to increase,Igene plans to
lease additional manufacturing capacity and additional warehouse
space  as  needed in both Mexico City and Chile and continue to
pursue   an  additional   manufacturing arrangement with third-
parties.

ITEM 3.     LEGAL PROCEEDINGS

     Archer Daniels Midland, Inc. ("ADM") sued Igene,  alleging
patent infringement and requesting injunctive relief as well as
an unspecified amount of damages (suit filed July 21, 1997,U.S.
District Court, Baltimore, MD).  Igene has filed a $300,450,000
counterclaim concerning the theft  of  trade  secrets  (counter
claim filed August 4, 1997). The court denied ADM's request for
preliminary injunctive relief.    Mediation efforts during 1999
did  not  resolve  this dispute, which has been returned to the
court  for  a  judicial  disposition.  Presently, a stay on all
discovery  remains  in  effect  while  a court-appointed expert
analyzes  the  yeast  products of both parties.  Igene believes
that it  is

<PAGE>

not  probable  that   this    dispute   will   result  in   an
unfavorable  outcome  to  Igene.  Accordingly, no liability has
been  reflected  in  the  December  31,  2002  balance   sheet.
Nonetheless,  should  ADM  prevail,  Igene  could be liable for
damages,and Igene could also lose the right to use a particular
strain  of  yeast.   However,  Igene expects that this will not
affect Igene's ability to make and sell its product,AstaXin(R).
Igene  had  expenses  of $47,159  and  $65,258 in 2002 and 2001
respectively,   associated   with   this   on-going litigation.

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

     None.

<PAGE>
                          PART II

ITEM 5.     MARKET FOR COMMON  EQUITY AND  RELATED  STOCKHOLDER
            MATTERS.

Common Stock

     Commencing on or about June 12, 1989, Igene's common stock
began trading on the over-the-counter market on a limited basis
and is quoted on the National Quotation Bureau's OTC  "bulletin
board".  The following table shows,  by  calendar quarter,  the
range of representative bid prices for Igene's common stock for
2002 and 2001.
<TABLE>
<CAPTION>
           Calendar Quarter          High                Low
           ________________        ________            ________
           <S>                     <C>                 <C>
2002:      First Quarter           $ .0800             $ .0400
           Second Quarter          $ .0575             $ .0230
           Third Quarter           $ .0400             $ .0200
           Fourth Quarter          $ .0270             $ .0070

2001:      First Quarter           $ .1700             $ .0620
           Second Quarter          $ .1000             $ .0575
           Third Quarter           $ .0795             $ .0480
           Fourth Quarter          $ .0575             $ .0341

</TABLE>

     Igene obtained the above information through Pink Sheets,
LLC, a national quotation bureau.  Such quotations are inter-
dealer  quotations   without  retail  mark-up, mark-downs, or
commissions,  and may not represent actual transactions.  The
above quotations do not reflect the "asking price" quotations
of the stock.

     The approximate number of record holders of Igene's common
stock  as  of  February  24, 2003 was 250.  As of  February 24,
2003,the high bid and low offer prices for the common stock, as
shown  on the "over-the-counter bulletin board" were $0.035 and
$0.02, respectively.

Preferred Stock

     There was no public market for  Igene's  preferred  stock
during 2002 and 2001 and since January 25, 1988, no quotations
for  the preferred stock have been reported on any market. The
approximate  number of record holders of preferred stock as of
February 24, 2003 was 11.

Dividend Policy

     When and if funds are legally available for such  payment
under  statutory restrictions, Igene may pay annual cumulative
dividends  on  the  preferred  stock  of $.64  per  share on a
quarterly basis.   During  1988 Igene declared and paid a cash
dividend of $.16 per share of its preferred stock. In December
1988,Igene suspended payment of the quarterly dividend of $.16
per share of preferred stock.  No dividends have been declared
or  paid  since  1988.  Any resumption of dividend payments on
preferred  stock would require significant improvement in cash
flow.   Preferred  stock  dividends  are  payable  when and if
declared  by  Igene's  board.  Unpaid dividends accumulate for
future  payment  or addition to the liquidation preference and
redemption  price  of the preferred stock.  As of December 31,
2002  the total amount of dividends in arrears with respect to
Igene's preferred stock was $238,534 (or $9.12 per share).

     Dividends on common stock are currently prohibited because
of the preferential rights of holders of preferred stock. Igene
has paid no cash dividends on its common stock in the past  and
does not intend to declare or pay any dividends on  its  common
stock in the foreseeable future.

<PAGE>


Sales of Unregistered Securities

     On February 22nd 2002,Igene issued and sold $1,000,000 in
aggregate principal amount  of  8%   convertible debentures to
certain  directors of Igene.  These debentures are convertible
into shares of Igene's common stock at $.04 per share based on
the  market price of Igene's shares at the time the debentures
were agreed to. In consideration of the commitment to purchase
the 8% convertible debenture, these directors also received an
aggregate  of  25,000,000 warrants to purchase common stock at
$.04  per  share.  These debentures, if not converted earlier,
become  due  on  February  22nd 2012.  Igene believes that the
issuance  and sale of the convertible debenture is exempt from
registration  under Section 4(2) of the Securities Act of 1933,
as  amended,  based  on, among other things, the fact that the
purchasers  of  the  securities were directors of Igene at the
time of purchase.

     On  July  17th  2002, Igene issued and sold  $300,000  in
aggregate  principal  amount  of  8% convertible debentures to
certain  directors of Igene.  These debentures are convertible
into shares of Igene's common stock at $.03 per share based on
the  market price of Igene's shares at the time the debentures
were agreed to. In consideration of the commitment to purchase
the 8% convertible debenture, these directors also received an
aggregate  of  10,000,000 warrants to purchase common stock at
$.03  per  share.  These debentures, if not converted earlier,
become due on July 17th 2012. Igene believes that the issuance
and  sale  of  the  convertible  debenture   is  exempt   from
registration under Section 4(2) of the Securities Act of 1933,
as  amended,  based  on, among other things, the fact that the
purchasers of the securities  were  directors  of Igene at the
time of purchase.

     On December 21st  2002, Igene issued and sold $250,000 in
aggregate  principal   amount  of  8%  demand notes to certain
directors of Igene. Should Igene be unable to repay them under
the  terms  of  the  notes, they would become convertible into
shares  of  Igene's  common stock based on the market price of
Igene's shares at the time the notes are due.   Igene believes
that  the  issuance  and  sale of the convertible debenture is
exempt  from registration under Section 4(2) of the Securities
Act of 1933,as amended, based on, among other things, the fact
that the purchasers of the securities were directors  of Igene
at the time of purchase.

     On August 13, 2002, the Board of  Directors,  in  further
attempts  to  ascertain  a manufacturing  partner,  authorized
retention  of  the  services  of   Mr.  Martin   Gerson.   His
responsibility would be to locate and  negotiate a deal with a
manufacturing  partner and act as liason for the expected two-
year term of the service. In compensation for this service, Mr.
Gerson was awarded 12,000,000 shares of Igene common stock. The
12,000,000 shares were issued on September 3, 2002 and expensed
in  the  third  quarter at  fair value of  approximately,  $.01
per share, or  $125,000,  as compensation  at  the  time of the
award. The value of the services to be performed by Mr.  Gerson
was $125,000,  as  determined  by the Board  of Directors.   In
determining the number  of shares issued for the services to be
performed,  consideration was given to such factors as blockage
discounts  and  that the shares of common stock are restricted.
The total amount  was  expensed  immediately  as  there  is  no
service requirement   for   Mr.   Gerson.   These  shares  were
issued in reliance  upon  Rule  506 of Regulation D promulgated
under the Securities  Act  of  1933,  based upon certifications
from Mr. Gerson  that  Mr. Gerson was an accredited investor at
the time the shares were acquired.

     On August 13, 2002, the Board of Directors,  in  lieu   of
additional compensation,authorized the payment of shares to Mr.
Stephen  Hiu  and Mr. Patrick Monahan.  In compensation each of
them  was  awarded  800,000  shares of Igene common stock.  The
aggregate  1,600,000 shares was issued on December 26, 2002 and
expensed in the fourth quarter based on market  value  at   the
time of award, $.025 per share, or $40,000 as compensation.

     In  December  of  2001,  Igene  issued 8,000,000 shares of
common stock in addition to $1,000,000 of convertible debentures
and $400,000 in cash, as consideration for the  purchase of its
sales  agent  ProBio  pursuant to a written purchase agreement.
Based  on  the  current market price of the shares in December,
2001,  at  the  completion of the purchase, the transaction was
recorded at $.05 per share. In consideration for the payment of
stock, convertible debentures and cash as described above,Igene
received  all  10,000  of  the  issued and outstanding stock of
ProBio.  ProBio's assets were valued at $577,462.  These assets
included  all  tangible  and intangible fixed assets as well as
accounts  payable, accounts receivable, and cash.  Igene relied
on  Section  4(2) of the Securities Act of 1933, as amended, to
issue  the  shares to the former stockholders of ProBio without
registration   under   that   act.    Igene   relied   on   the
representations  and  warranties of the selling stockholders in
claiming the aforementioned exemption.

<PAGE>

     During  the course of 2002 and 2001, Fermic, Igene's manu-
facturing  agent,  earned  3,260,246 and 5,043,019 shares, res-
pectively,  of common stock as part of the manufacturing agree-
ment.  Fermic earns 2,250 shares of common stock for each kilo-
gram  pure  astaxanthin  produced  and delivered as part of the
agreement.The average price is based on the market value of the
shares  at the time the product was produced.   Fermic can earn
up to 20,000,000 shares in  total   under   the  contract.  The
3,260,246  shares  were  earned at an average price of $.03 per
share  for 2002, and 5,043,019 shares were earned at an average
price of $.06 per share over the period and issued at the end of
2001.   Through  December  31, 2002, 8,303,269 shares have been
earned.  Any future shares earned by Fermic will be issued on a
quarterly basis. Igene relied on Section 4(2) of the Securities
Act  of  1933,  as  amended, to issue the shares Fermic without
registration   under   that   act.    Igene   relied   on   the
representations   and   warranties   of   Fermic   made  in the
manufacturing agreement in claiming the aforementioned exemption.

    Igene issued 40,000 shares in 2002 and 80,000 shares in 2001
on  a  variable  rate  subordinated  debenture  with a principal
balance of $1,500,000, in lieu of interest payable thereunder of
$45,000 and $90,000 for 2002 and 2001, respectively.  On October
1, 2002,  Igene  exercised its right to satisfy this debt in its
entirety  by paying the holder of the variable rate subordinated
debenture  187,500  shares  of  its newly designated Series B 8%
Cumulative  Convertible  Preferred Stock, valued pursuant to the
terms of  the  debenture  at  a  rate  of $8.00 per share. Igene
relied  on  Section  4(2)  of  the  Securities  Act  of 1933, as
amended,  to issue the shares to the holder of the variable rate
subordinated debenture without registration under the Securities
Act of 1933, as amended.

ITEM 6.	    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
            OPERATION

     Certain  statements  in  this report set forth management's
intentions,  plans,  beliefs, expectations or predictions of the
future  based on current facts and analyses.  Actual results may
differ  materially  from those indicated in such statements, due
to  a  variety  of  factors including competitive pressures from
other  companies  and  within  the  biotech  industry,  economic
conditions  in   Igene's    primary   markets,   exchange   rate
fluctuations,  reduced  product  demand,  increased competition,
unavailability   of  production   capacity,   unavailability  of
financing,  government  action,  weather  conditions  and  other
uncertainties,  including those detailed in "Risk Factors" below
and  from  time-to-time  in  Igene's  Securities  and   Exchange
Commission filings.

Recent Developments

     March  19,  2003,  Tate & Lyle PLC and Igene Biotechnology,
Inc. (Igene)  announced  a  50:50  joint   venture  to   produce
AstaXin(R), a  natural  source of the pigment astaxanthin, which
is widely used in the aquaculture industry.

     AstaXin(R)  will  be  produced  utilizing  Tate  &  Lyle's
fermentation  capability   together  with   unique   technology
developed  by  Igene.  Part  of Tate  &  Lyle's existing Selby,
England,  citric  acid facility will be modified to include the
production of 1,500 tons per annum of this new product.  Tate &
Lyle's  investment  of  $25  million  includes  certain  of its
facility  assets  currently  used  in  citric  acid production.
Commercial  production  is expected to commence in the calendar
year 2004.

Results of Operations

Sales and other revenue

     Sales of AstaXin(R) for 2002 and 2001, were $3,491,765 and
$4,181,037,  respectively--a decrease of $689,272 or 16.5%. The
reduction  in  sales  is due to the lack of a satisfactory level
of production coupled with current market  condition  pressures,
including  increased  competition  and  a reduction in the sales
price.  It is expected sales for subsequent quarters will return
to  the  levels  of  2001,  provided  we will be able to achieve
satisfactory  production.   However,  there  can be no assurance
that  these,  or any increases in sales will occur, or that they
will be material.

Cost of sales and gross profit

     Gross Profit on sales of AstaXin? was $324,131  for  2002.
This is a decrease of  $339,478 from the profit of $663,609 for
2001.   Gross  profit  was 9.3% of sales for 2002 and 15.9% for
2001.   Igene  attributes  the  fall  in  gross

<PAGE>
profit to a combination of  pricing pressures in the market and
inefficiencies  in production.  Igene expects that gross profit
can  return  to  the  2001 levels and can be maintained at that
percentage  of  sales,  but  can  provide no assurances.  It is
expected  that  increased  future  production efficiencies will
reduce the cost of product produced and offset the reduced sales
price. In addition, these efficiencies would provide additional
product       to     meet     additional    demand,         but
Igene can provide no  assurances in this regard.  If demand for
AstaXin(R) continues  to increase, as Igene expects, sales  and
gross profits may  be limited by the quantities  of  AstaXin(R)
Igene is able to  produce with its presently available capacity
with its contract  manufacturer, as has  been  the  case during
the past year.   To avoid this limitation, Igene  is  presently
investigating  other additional sources of available production
capacity.   However, there can be no assurance that Igene  will
be able to  find and subsequently  be  able  to  utilize  other
additional  sources of production capacity  as  quickly as they
are  needed, and sales and gross profit growth may continue  to
be   limited  unless  augmented  by  increases  in   production
efficiency resulting from process research and development.

     The preceding resulted in cost of sales for the year ended
December  31,  2002  and  2001  of  $3,167,634  and $3,517,428,
respectively, a decrease of $349,794 or 9.9%, due mainly to the
reduced quantity produced.

Marketing and selling expenses

     Marketing  and selling expenses for 2002 were $554,224, a
decrease of $533,949,  or 49.1% from the marketing and selling
expenses  of  $1,088,173  for  2001.   Marketing  expenses for
AstaXin(R) are expected to increase beyond 2002.   In order to
achieve increased  sales,  and  to  enter  other  markets  for
AstaXin(R), Igene  will  need  to  make  additional  marketing
efforts.  Levels  in 2002 were partially reduced as production
was unsure and  stronger  marketing  efforts  and   trade show
activities were curtailed.  As  additional  production arises,
the need to continue  these  types  of  marketing  and   sales
activities will return.   It  is  not  expected that marketing
will increase to the  level  of  2001  as  2001  marketing and
selling expense includes  $164,882  currency   exchange   loss
resulting from sales  in  Chile.  As  a  function  of  selling
product in Chile, Igene is required  to invoice it's customers
in Chilean Peso, the currency loss is  recorded  as   part  of
selling expense because it is  incurred  on  the  balance   of
accounts receivable outstanding for product sold in Chile, and
maintaining the currency risk  is  necessitated   as  part  of
product sales in Chile. These additional expenses are expected
to be funded by cash flow from operations or  from  additional
financing, however neither of these sources are assured.

Research, development and pilot plant expenses

   Research, development and pilot plant expenses for 2002 and
2001 were $609,781 and $536,638, respectively,  reflecting  an
increase of $73,143 or 13.6%.  These  costs  are  expected  to
continue to increase at a moderate rate in support of increasing
the  efficiency   of   the   manufacturing   process   through
experimentation  in   Igene's   pilot plant, developing higher
yielding  strains  of  yeast and other improvements in Igene's
AstaXin(R) technology.  These expenses  are  expected  to   be
funded  through  additional funding from stockholders, if any,
and by cash  flows from operations to the extent available for
such purposes,  though neither of these funding sources can be
assured.

General and administrative expenses

     General and administrative expenses for 2002 and 2001 were
$963,907  and $611,620,  respectively, an increase of $352,287,
or 57.6%.  This increase is due mainly to a one time charge for
shares  issued  as  compensation.   The  Board of Directors, in
further  attempts  to  ascertain   a   manufacturing   partner,
authorized retention of the services of Mr. Martin Gerson.  The
expected term of the service is two (2) years.  In compensation
for this service, Mr. Gerson was awarded 12,000,000  shares  of
Igene common stock. As there is only an expectation for term of
service,  but  not a  requirement, the total amount of $125,000
was  expensed  during  the  third  quarter.   The  value of the
services  to  be  performed  by  Mr.  Gerson  was  $125,000, as
determined by the Board of Directors. In determining the number
of   shares   issued   for   the   services  to  be  performed,
consideration was given  to  such factors as blockage discounts
and that the shares of common stock are restricted.In addition,
increases resulted from the purchase   of ProBio Nutraceuticals
and the additional   management  compensation  expense, and the
overhead incurred.  Igene  also  experienced  increases  in its
cost of  insurance  coverage, increased legal fees and expenses
related to administrative travel due to the expansion of Igene.
General and administrative  expenses  are  expected  to  remain
at the current level with the exception of the one time payment
to Mr.  Gerson.   These  expenses  are expected to be funded by
additional funding  from  stockholders,  and by cash flows from
operations, to the extent available for such purposes.

<PAGE>
However, we can provide  no  assurances  that  such  additional
funding will   become  available or  that such funding, if any,
will be available upon terms favorable to us.

Litigation expenses

     Management  expects  to ultimately recover, through damage
awards, some portion of litigation expenses previously incurred
in connection with the suit filed  against  Igene  by  ADM  and
Igene's counterclaim, and expects to preserve its commercial
product   rights    associated      with        AstaXin(R).
However, there can be no assurance that Igene will receive damage
or   expense  awards  or  that  its  rights  will  be  preserved.
Litigation  expenses  for 2002 and 2001 were $47,159 and $65,258,
respectively.  Expenses associated with this on-going  litigation
continued  despite  the  fact  that  a  stay on all discovery has
remained  in  effect  while a court appointed expert analyzes the
yeast  product  of both parties to the suit.  Costs of litigation
may  be  incurred  in  the future at levels based on management's
continuing  assessments  of  the  potential costs and benefits of
various  litigation  strategies and alternatives.  These expenses
are  expected  to  be  funded by additional funding, if any, from
stockholders  and from expected cash flow from operations, though
neither  of these can be assured.  A range of reasonably possible
losses  from the litigation cannot be estimated at this time, and
accordingly,  no  liability  has  been reflected in the financial
statements.

Interest expense (net of interest income)

     Interest expense (net of interest income) for 2002 and 2001
was  $901,989  and $813,423 respectively, an increase of $88,566
or  10.9%.   This  interest expense (net of interest income) was
almost  entirely  composed  of  interest  on  Igene's  long term
financing from its directors and other stockholders and interest
on  Igene's  subordinated  and  convertible  debentures, and has
increased  due  to  increased  financing  from   directors.   In
addition, interest expense increased in 2002 due to the issuance
of  $1,000,000 of convertible debentures related to the purchase
of ProBio.

Expense of contract termination

     Igene acquired all of the issued and outstanding shares of
capital  stock   of  ProBio  Nutraceuticals,  AS,  a  Norwegian
corporation ("ProBio"),as of December 21, 2001.  As a result of
the  stock purchase, ProBio became our wholly-owned subsidiary,
and  we  intended  to  continue  its  historical  business as a
specialty marketing and sales company within the nutraceuticals
and  feed  ingredients  markets.  As previously reported in our
annual report on Form 10-KSB for the fiscal year ended December
31, 2000, we entered into an exclusive marketing agreement with
ProBio  as of January 1, 2001, which was terminated in December
2001.

     In connection with the acquisition, we acquired all 10,000
issued and outstanding shares of capital stock of from thirteen
individual and corporate sellers in exchange for $1.8 million in
aggregate consideration, consisting of $1 million in debentures
convertible into our common stock at $.10 per share (reflecting
the price at which our common stock was trading on the over-the-
counter  bulletin  board when we agreed as to price), 8,000,000
shares  of our  common  stock,  valued  for the purposes of the
acquisition  at $.05 per share, and $400,000 in cash.  The cash
used  to  acquire  ProBio  constituted   proceeds  of   private
placements of our common stock received during 2001 and revenues
from operations.  Following the acquisition, Stein Ulve and Per
Benjaminsen,the managing director and director of marketing and
sales,  respectively,  of  ProBio  became  our  chief executive
officer  and chief marketing officer, respectively, pursuant to
written employment agreements.

    Igene has accounted for the purchase under the requirements
of SFAS No. 141,  "Business Combinations."    It was determined
that the excess purchase price paid over the identifiable assets
of  ProBio  would  not  meet  the  criteria  under SFAS No. 142
"Goodwill  and  Other  Intangible  Assets"  to be classified as
goodwill.  As a result, the excess purchase price paid over the
identifiable  assets was classified as the cost to terminate a-
then-existing  exclusive sales agreement contract between Igene
and ProBio.  As a result of the purchase and the elimination of
the  sales agency agreement, Igene recorded a one time contract
termination charge of $1,231,176 in the year ended December 31,
2001.  Igene believed the purchase was in its best interest for
marketing and future company and management growth.

<PAGE>
Disposition of ProBio Subsidary and net loss from  discontinued
operations

     As reported on Form 8-K, Igene, in an effort to  focus  on
and grow its core business,disposed of all 10,000 of the issued
and outstanding shares of capital stock of ProBio. Fermtech AS,
a joint stock company incorporated in the Kingdom of Norway and
owned equally by our former chief executive officer, Stein Ulve
and  our  former  chief  marketing  officer,  Per  Benjaminsen,
purchased  the  shares of ProBio.  Mr. Ulve has resigned as CEO
and  director of Igene while Mr. Benjaminsen continues to serve
the  Company  as  in  independent  consultant,  effective as of
December 31, 2002.


     Igene sold ProBio to Fermtech AS in exchange for aggregate
consideration  valued  at approximately $343,000, consisting of
7,000,000 shares of Igene common stock that  Fermtech  received
in  consideration  for  the  purchase of ProBio in January 2002
(including 2,000,000 shares that were placed  into  escrow  and
may be returned to Fermtech as described below), valued for the
purposes of the acquisition at $.03 per share, plus forgiveness
of approximately $168,000 of debt that Igene owed to ProBio  at
the time of purchase in 2001. Provided Mr. Benjaminsen  remains
employed by Igene through 2003,1,000,000 of the escrowed shares
of  common  stock  will  be  delivered  to  Fermtech.  If   Mr.
Benjaminsen  remains  employed  by  Igene  through  2004,   the
remaining 1,000,000 escrowed shares will be released from escrow
and  delivered  to Fermtech.  The remaining 5,000,000 shares of
common  stock of Igene were retired effective February 5, 2003.

     The amount of consideration paid for ProBio was determined
through  arms-length  negotiations between Igene management, on
behalf  of  Igene,  and  Mr.  Ulve, on behalf of Fermtech.  The
principles  followed  in  determining  the  amount paid for the
ProBio  shares  involved a consideration of ProBio's cash flow,
cash position, revenue and revenue prospects.

     The  equipment  and  other  physical property disposed  of
belonging  to  ProBio includes inventory, personal computers, a
web  site  and trademark, other office equipment and furniture,
and  accounts  receivables  and  accounts  payables  related to
nutraceuticals.   The  2002  net operating loss of the division
being sold as ProBio are $437,051 ($0.01 loss per common share)
on  sales  of  $2,306,193  and  are   reflected  on  the   2002
consolidated statement of operations as loss from  discontinued
operations.

Net loss and basic and diluted net loss per common share

     As a result of the foregoing, Igene reported net losses of
$3,189,980  and  $3,672,959, respectively, for 2002 and 2001, a
decreased loss of $482,979 or 13.1%, a loss of $(.04) and $(.06)
per  basic  and  diluted  common  share  in   2002   and  2001,
respectively.   The weighted average number of shares of common
stock outstanding of 81,544,079 and 62,657,780 respectively,for
2002 and 2001 has increased by 18,886,299 shares. This resulted
from  the weighted average adjustment of the issuance of 40,000
shares in lieu of interest payment on a subordinated debenture,
the  issuance  of  1,600,000  shares of common stock in lieu of
salary  increases to certain officers of Igene, the issuance of
3,260,246 shares to Igene's manufacturer under the manufacturing
agreement  with Fermic, 194,400 shares in exercise of warrants,
and  12,000,000  shares  to  Mr.  Gerson  under  his consulting
agreement with Igene.

Financial Position

     During 2002 and 2001, the following also affected  Igene's
     financial position:

     -  Igene  maintained  inventory  from  the  manufacture of
        AstaXin(R) of  $374,709  and $812,145, respectively, as
        of December 31, 2002 and 2001.  Inventory of AstaXin(R)
        decreased by $437,436 during 2002.

     -  Igene issued 40,000 shares in 2002 and 80,000 shares in
        2001 on a variable rate subordinated debenture  with  a
        principal balance  of  $1,500,000,  recording  interest
        expense and increasing common stock and paid-in capital
        by $90,000 in 2002 and $180,000 in 2001.  On October 1,
        2002, Igene exercised its right to satisfy this debt by
        paying the  holder  of  the  variable rate subordinated
        debenture 187,500  shares  of  Series  B  8% Cumulative
        Convertible Preferred  Stock,  valued  pursuant  to the
        terms of the debenture at a rate of $8.00 per share.

<PAGE>
     -  The carrying value of redeemable  preferred  stock  was
        increased  and  paid-in  capital  available  to  common
        shareholders  was decreased by $16,900 in both 2002 and
        2001,  reflecting  cumulative   unpaid   dividends   on
        redeemable preferred stock.

     -  Holders of  Series  A  preferred  stock  converted  250
        shares of  preferred stock in 2002 into 500  shares  of
        common  stock,  reducing   the   liquidation  value  of
        redeemable preferred stock by $4,280.

     -  Accounts payable, accrued expenses and accrued interest
        increased  in 2002 by $965,564.  Of this, approximately
        $773,609 related to accrued and unpaid interest.


     -  During the year ended December 31, 2002 and 2001, Igene
        purchased  equipment  in  the  amount of  $113,025  and
        $211,380, respectively, to be used by its manufacturing
        agent related to  an  investment  agreement  of  up  to
        $500,000  to  be  spent  by the manufacturing agent for
        improvements.   These  funds  will be credited to Igene
        production costs  over  the  remaining  term   of   the
        manufacturing agreement.

     -  During  the  year  ended  December  31,  2002,  194,400
        warrants were  exercised  using  $14,300  of  8%  notes
        payable in a cashless exercise.   194,400 new shares of
        common stock were issued pursuant to these exercises of
        warrants and $14,300 of 8% notes were cancelled.

     -  During  the  year  ended  December  31,  2001,  170,910
        warrants were  exercised  using  $17,091  of  8%  notes
        payable  in a cashless exercise.  170,910 new shares of
        common stock were issued pursuant to these exercises of
        warrants and $17,091 of 8% notes were cancelled.

     In December 1988, as part of an overall effort to  contain
costs and conserve working capital, Igene suspended payment  of
the  quarterly  dividend on its preferred stock.  Resumption of
the dividend will require significant improvements in cash flow.
Unpaid dividends cumulate for future payment or addition to the
liquidation  preference  or  redemption  value of the preferred
stock.   As of December 31, 2002, total dividends in arrears on
Igene's preferred stock equal $238,534 (or $9.12 per share) and
are  included in the carrying value of the redeemable preferred
stock.

Liquidity and Capital Resources

     Historically, Igene has been funded primarily  by  equity
contributions  and loans from stockholders. As of December 31,
2002, Igene had working capital of $818,402, and cash and cash
equivalents of $497,711.

   Cash used by operating activities in 2002 and 2001 amounted
to $1,312,880 and $2,139,517, respectively, a decrease in cash
used of $826,637.

     Cash used by investing activities decreased by  $399,856,
from $536,814 in 2001 to $136,958 in 2002.

     Cash  provided  by  financing  activities  decreased  by
$1,374,184 from $2,927,246 in 2001 to $1,553,062 in 2002.Cash
provided   by  financing  activities  during  2001   included
$1,900,000   from   issuances  of  debentures  to  directors,
$1,000,000 from issuances of debentures as part of the ProBio
purchase, and the remainder was from the exercise of options,
warrants, and long  term  debt.   Cash  provided by financing
activities during 2002  included $1,550,000 from issuances of
debentures to directors,and the remainder was net proceeds of
a new equipment lease.

     As Igene attempts to develop the company over the coming
years, Igene will need additional working capital. Additional
funding  will  be  required  to  finance  increased  customer
receivables and inventory levels caused by expansion of sales
and  manufacturing  and  to  continue  operations  as a going
concern.  However,  there can be no assurance that additional
funding from  directors  or stockholders will be available to
Igene to fund its continued operations.

<PAGE>
     Approximately $6,300,000 in long-term debt was scheduled
to  become  payable  in March 2003, and  has been extended to
March 2006.  We do not have the ability to repay such debt at
this time and management feels any  attempts to  satisfy  the
debt at  this time would have adverse effects on the Company.
Management  is negotiating  with  the  holders of the debt to
extend the debt's  maturity  to  a  time  when the Company is
better able to satisfy it's obligation.

     Igene does not believe that inflation had a  significant
impact on its operations during 2002 and 2001.

Critical Accounting Policies

     The  preparation  of   our   financial   statements   in
conformity  with  accounting  principles  generally  accepted
in the U.S. requires management to make judgments,assumptions
and estimates  that  affect  the  amounts   reported  in  our
financial statements and  accompanying notes.  Actual results
could   differ   materially   from   those   estimates.   The
following are critical accounting policies important  to  our
financial  condition  and  results presented in the financial
statements  and  require  management  to  make  judgments and
estimates that are inherently uncertain:

     Our  inventories  are  stated  at  the lower  of cost or
market. Cost is determined using a weighted-average approach,
which approximates the first-in first-out method. If the cost
of the  inventories  exceeds  their   expected  market value,
provisions are  recorded  for the difference between the cost
and the market  value.   Inventories consist of our currently
marketed product, AstaXin(R).

     We are currently involved in certain legal proceedings as
discussed  in  Item  3, "Legal Proceedings," in part I.  As of
December 31, 2002, Igene believes that it is not probable that
this  dispute  will result in an unfavorable outcome to Igene.
Accordingly,  no  liability has been reflected in the December
31, 2002 balance sheet.

     We recognize revenue from product  sales  when  there  is
persuasive  evidence  that an arrangement exists, delivery has
occurred,  the  price   is   fixed   and   determinable,   and
collectibility   is   reasonably   assured.    Allowances  are
established  for  estimated  uncollectible  amounts,   product
returns and discounts.

Risk Factors

We have a history of losses and anticipate continued losses.

     Since our formation, we have incurred operating losses and
negative cash flow. To the extent that we are unable to achieve
profitability in the future, our business, prospects, financial
condition and results of operations will suffer.  In  2002,  we
incurred a net loss of $3,189,980,and have incurred accumulated
net losses through December 31, 2002 of $37,120,502.  We cannot
assure  you  that we will ever achieve or sustain profitability
or that our operating losses will not increase in the future.

We  expect  that our current strategy will result in continuing
net losses for the foreseeable future.

     Our current focus is on expanding our client base  in  our
current  markets  for fish feed additives, expanding our market
for  fish  feed  additives to other countries, and beginning to
market  our product globally as a human nutritional supplement.
As  a result, we will continue to make capital expenditures and
incur  substantial  marketing  and operating costs and increase
our  expenses  in order to hire additional personnel to provide
adequate levels of support to management.  Our current strategy
can be expected to have an adverse impact on our profit margins
for at least the near-term,and we cannot assure you that we can
increase our revenues and customer base sufficiently to recover
the  costs  of  these  anticipated   expenses.   In   addition,
acceleration in the growth of our client base or changes in the
way  our  clients use our products may also increase costs as a
percentage of revenues.

<PAGE>
We had a substantial amount of debt coming due in March 2003.

    Approximately $6,300,000 in long-term debt was scheduled to
become payable in March 2003, it has been extended and  is  now
due March 2006.  Management felt any attempts  to  satisfy  the
debt  at this time would have materially adverse effects on the
Company.  Management negotiated with the holders of the debt to
extend the debt's maturity to a time when the Company is better
able  to  satisfy  its obligation.  However the company can not
guarantee  that  it will successfully be able to repay the debt
at that time.

We  have  limited  manufacturing  capacity  that  impairs   our
ability to generate revenues.

     Our revenues in 2002  were  limited  by  our  ability  to
manufacture  our  principal product, AstaXin.  While we are in
discussions with sources of additional manufacturing capacity,
including  our current manufacturer, Fermic, we can provide no
assurances  that  we  will be successful in obtaining adequate
manufacturing  capacity  at  all or on terms that permit us to
operate profitably. A failure to obtain adequate manufacturing
capacity  in the near term will have a material adverse effect
on our business,financial condition and results of operations.

We  have  a  history  of negative cash flows, and will need to
raise additional capital to continue as a going concern.


     Negative  cash  flow  from  operations for the year ended
December  31,  2002  was $1,312,880.  Our operating activities
continue  to  consume  net cash.  We believe that we will have
sufficient cash liquidity  to  operate  through  December  31,
2003,  provided no debt that is now or that will become due or
callable during such period is in fact called for payment.

     In  order  for cash flow from operating activities to  be
sufficient to sustain our operations beyond that date, we will
be  required  to  achieve  an  increase  in  revenue  or raise
additional  financing.  There can be no assurance that such an
increase  in  revenue will occur or that it will be sufficient
to  maintain  adequate cash to continue operations beyond that
date.  Nor  can  we  provide any assurance that we will obtain
additional  financing on terms favorable to us or at all.  Any
failure to  obtain  additional required financing would have a
material  adverse effect on our business, prospects, financial
condition  and  results  of  operations,  and  may  impair our
ability to continue as a going concern.

We  are  not generating sufficient revenues from operations to
make  scheduled  dividend  payments  on  our  preferred stock.

     We are not generating sufficient revenues from operations
to  cover  our  fixed  charges,  including  scheduled dividend
payments  on  our  preferred  stock,  or  to fund the ultimate
redemption of all of the preferred stock. In December 1988, we
suspended payment of the fourth quarter  dividend  payable  on
our preferred stock and have not paid any such dividends since
that date.Any resumption of dividend payments on our preferred
stock  would require significant improvements in cash flow. As
of  December  31,  2002, total dividends in arrears on Igene's
preferred  stock  total  $238,534  ($9.12  per  share) and are
included  in  the  carrying  value of the redeemable preferred
stock.   Until we pay our accrued dividends, we cannot pay any
dividends on our common stock. We cannot provide any assurance
that  our cash flow will improve, and we were unable to redeem
the  preferred stock at the required mandatory redemption date
of  October  2002,  and will be unable to pay dividends on our
common  stock  until  the  aggregate  amount  expected  to  be
required to redeem,$447,774, has been satisfied. In any event,
we do not  intend  to pay dividends on our common stock in the
foreseeable future.

We  received  a  "going  concern" opinion from our independent
auditors.

     Due  to  our  past  history  of  losses,  the independent
auditors' report for the year ended December 31, 2002 contains
an explanatory paragraph that states that our recurring losses
and limited capitalization raise substantial doubt  about  our
ability to  continue  as  a  going  concern.  In addition, our
independent  auditor issued a going concern opinion for Igene.

<PAGE>
We have substantial debt obligations, which we may not be able
to service.

     We  have  debt obligations maturing in 2003 and beyond of
approximately $11 million dollars as of December 31, 2002, and
will  continue  to  have  significant preferred stock dividend
obligations.  Our ability to meet our debt service obligations
will  depend  on a number of factors, including our ability to
generate  operating  cash flow. There can be no assurance that
targeted levels of operating cash flow, or any cash flow, will
actually  be  achieved.  We had a debt to capitalization ratio
which is negativeas of December 31, 2002.

The  issuance  of  all 371,013,409 shares of common stock upon
exercise of all options, warrants and other rights to purchase
common  stock  could  adversely affect the market price of our
common stock.

     The  issuance  of  371,013,409  shares  of  common  stock
pursuant  to outstanding options, warrants and other rights to
purchase  our  common  stock  would  expand  our  issued   and
outstanding stock as of December 31,2002 by approximately 500%
and could  adversely  affect  the  market  price of our common
stock.

We  do  not anticipate paying dividends on common stock in the
foreseeable future.

     We  do  not  anticipate  paying any cash dividends in the
foreseeable  future.  In  addition,  unless  full   cumulative
dividends  have  been paid on the outstanding preferred stock,
we  will not be entitled to pay dividends on the common stock.


Your  investment  may  have  limited  liquidity  if  an active
trading  market does not develop and continue and the price of
our common stock may fall.

     The trading market for,and liquidity of, our common stock
is  limited.  The  average daily trading volume for the common
stock  during the period from January 1, 2002 through December
31,  2002  was  approximately  21,281  shares. This represents
approximately  0.02%  of  our presently issued and outstanding
common stock.

     Your purchase of our common  stock  may  not  be a liquid
investment  because our securities trade over the counter with
quotes on the bulletin board.  You  should  consider carefully
the limited liquidity of your investment before purchasing any
shares  of our common stock.  We have no obligation and do not
plan  to apply for quotation of our common stock on the NASDAQ
Stock  Market  or  for  listing  of  our  common  stock on any
national  securities exchange. An active and liquid market for
our common  stock  may  not  develop  or  if  it does develop,
continue, and investors in our common stock may not be able to
resell their shares as a result of:

     --     our limited earnings history,
     --     our large debt burden,
     --     the absence of reasonable expectations of
            dividends in the near future, or
     --     the fact that our common stock will not be listed.

     In addition, the free transferability of the common stock
will  depend  on  the securities laws of the various states in
which  it is proposed that a sale of the common stock be made.

Volatility  in  our  stock  price  may  adversely  affect  our
business.

     Fluctuations  in  the  market  price  of  our  stock  may
adversely affect our ability to complete any acquisitions, our
access to capital and financing and our ability to attract and
retain qualified personnel. Our common stock price and trading
volume  has fluctuated widely, with a closing price range over
the past  52  weeks of $.08 to $.007, as of February 24, 2003.
The price  of  our common stock may decline in future quarters
if:

     --   we fail to meet market expectations of our quarterly
          or annual revenues, net income or earnings per share,
     --   we fail to obtain additional financing,
     --   we fail to service our debt,
     --   we lose significant customers,
     --   we or our competitors announce new products or
          technological innovations, or
     --   our products do not gain market acceptance.

<PAGE>
     In  addition,  technology  stocks such as ours experience
significant  price  and  volume  fluctuations  that  are often
unrelated to operating performance.

We rely on one product for 100% of our revenues.

     Our success is dependent upon the successful  development
and  sale  of  AstaXin(R),  a  yeast  product  used  as a feed
supplement in aquaculture,  and  which  may  also be used as a
human  nutritional  supplement.  We believe AstaXin(R) will be
profitable  based  on  material  costs,  manufacturing  costs,
selling  price  and  estimated  global  demand.   However,  no
assurance can  be   given  that   sufficient   quantities   of
AstaXin(R) will be available  to  meet  demand  or  that  such
demand will materialize. To  date,  we  have  sold  commercial
quantities of AstaXin(R) as a feed  supplement  in aquaculture
in the amount of  $10,410,397,  through   December  31,  2002.
We have not produced or sold significant commercial quantities
of any other products. Expenses associated  with  research and
product development and manufacturing and marketing activities
will continue to impact profitability in the near future.

We are dependent on others to manufacture our primary product.

     We have no manufacturing facilities other than our  pilot
plant  facility  in  Columbia,  Maryland. Thus, to manufacture
commercial  quantities  of  our  product, we have entered into
production  arrangements  with  a  third-party   manufacturer.

     The  manufacture  of  our  product  by  a single contract
manufacturer,  in a single location outside the United States,
subjects us to certain risks. For example, it is possible that
this  contract  manufacturer may become unable or unwilling to
fulfill  its  production  obligations  for  reasons beyond our
control.This production facility is located outside the United
States,  in  Mexico City, Mexico, and it is also possible that
political,  legal, environmental, weather or other factors may
cause us to be unable to continue production arrangements with
this  manufacturer.  However, we have not thus far experienced
any  of  the  preceding  problems and have no information that
would  lead  us  to believe  that the manufacturing operations
will be  disrupted.  We  do  not  plan,  in  the near-term, to
construct our  own  manufacturing  facilities,  however we are
engaging in  discussions  with  other sources of manufacturing
capacity.

Technological change may profoundly affect our business.

     We expect technological developments in the biotechnology
field  to  continue  at  a  rapid pace and that our commercial
success will depend upon our ability to be at the leading edge
of  specialized  biotechnologies  and  to attain a competitive
technological   position   in   specialized   product   areas.

We  face intense competition with greater resources than ours.

     Competitors  in  the  biotechnology  field in the United
States and elsewhere are numerous and include major chemical,
pharmaceutical  and  food  companies,  as well as specialized
biotechnology  companies.  Competition  can  be  expected  to
increase  as  small  biotechnology  companies  continue to be
purchased by  major multinational corporations with resources
much greater  than  ours.  Competition  is  also  expected to
increase with  the  introduction  of  more  diverse  products
developed   by   biotechnology  firms,  increasing   research
cooperation   among   academic   institutions    and    large
corporations,and continued government funding of research and
development activities in the biotechnology field,both in the
United  States  and  overseas.   Unlike   the   majority   of
biotechnology  companies,  which  are   developing   products
principally for the pharmaceutical industry,  we have focused
our own activities on the development of proprietary products
for use in food, fermentation  and  agricultural  industries.
In the future, however, competitors may offer products, which
by reason of price or efficacy or more adequate resources for
technology advances, may be  superior  to  our   existing  or
future products.

    A single large pharmaceutical company presently dominates
the  market  for  feed  supplements  used for pigmentation in
aquaculture.   The market into which our product, AstaXin(R),
will  be  sold  is  highly  competitive worldwide and several
other  companies  are  presently  known  to be developing and
marketing competitive products.

<PAGE>
We rely upon patents and proprietary information.

     It is our policy to protect  our  intellectual  property
rights by  a variety of means, including applying for patents
and  trademarks  in  the  United  States and other countries.
We also  rely upon trade secrets and improvements, unpatented
proprietary  know-how and continuing technological innovation
to develop and maintain  our  competitive  position.  In this
regard, we place  restrictions  on  our agreements with third
parties with respect  to the use and disclosure of any of our
proprietary technology.  We  also have internal nondisclosure
safeguards,   including   confidentiality   agreements   with
employees and consultants. All  patents  and  trademarks  are
carefully reviewed and those with no  foreseeable  commercial
value are abandoned to eliminate costly  maintenance fees. We
maintain  patents  (and applications)  and/or  trademarks  on
technology with potential commercial value,  for  AstaXin(R).
U.S.  and  foreign  patents   for   AstaXin(R)  and   related
technology  have  already  been  obtained,   and   additional
applications  for  patents  and trademarks for AstaXin(R) and
related  technology  have  been submitted and are in process.

We may face stringent government regulation.

     The manufacturing and marketing of the products we have
developed  or  intend  to  develop will likely be subject to
regulation  by  various  governmental agencies in the United
States,  including  the  Food  and  Drug Administration, the
Department  of  Agriculture,  the  Environmental  Protection
Agency,  and  comparable  agencies   in   other   countries.
AstaXin(R)  has  to date been approved by the FDA and by its
Canadian       counterpart         agency        as        a
color    additive  in  aquaculture  feeds.   AstaXin(R)  has
also  obtained  market  clearance  from  the  FDA as a human
nutritional supplement.  Our product must conform to current
Good Manufacturing Practices  (as  defined under the Federal
Food,  Drug  and  Cosmetic Act and the rules and regulations
thereunder),  and  we believe our product so conforms. There
can he no  assurance,  however,  that  such  assertions  and
affirmations will  not  be  reversed by the FDA, the USDA or
the EPA and that we will  not  then  be  required  to obtain
costly and time-consuming  approvals  from these agencies or
comparable agencies in foreign  countries. The extent of any
adverse governmental regulation that might arise from future
administrative or legislative action,including current rules
and regulations, cannot be predicted.

We  must  attract and retain key personnel to be successful.

     Our  ability  to  develop  marketable  products and to
maintain  a  competitive position in light of technological
developments will depend,in part, on our ability to attract
and retain  highly  qualified  scientific,  technical   and
management personnel.  Intense present competition for such
personnel is expected to  continue  into  the   future.  We
believe that we have been  successful in attracting skilled
and experienced personnel.    Retention  of  such personnel
will depend on our ability to  provide  such personnel with
competitive compensation arrangements, equity participation
and other benefits.

Litigation  with  Archer  Daniels  Midland  may  affect our
business.

    Archer Daniels Midland,Inc. has sued us,alleging patent
infringement and requesting injunctive relief as well as an
unspecified amount of damages. We have filed a $300,450,000
counterclaim concerning the alleged theft of trade secrets.
The court denied ADM's request for  preliminary  injunctive
relief.  Mediation efforts during 1999 did not resolve this
dispute,which has been returned to the court for a judicial
disposition.  Presently, a stay on all discovery remains in
effect  while  a  court-appointed expert analyzes the yeast
products of both parties.We believe that it is not probable
that  this dispute will result in an unfavorable outcome to
Igene.  Nonetheless, should ADM prevail, we could be liable
for  damages,  and  we  could  also lose the right to use a
particular  strain  of yeast.  However, we expect that this
will not affect  our  ability to make and sell our product,
AstaXin(R).

Trading  in  our  common  stock  is  subject  to additional
regulation because of its low trading price.

     Trading in our common stock is subject to a Commission
rule that imposes additional sales practice requirements on
broker-dealers  who  sell  such securities to persons other
than established customers and accredited investors. "Penny
Stock" is  defined  as a  stock  that  trades  below $5 per
share. For  transactions  covered by this rule, the broker-
dealer must make a special  suitability  determination  for
the purchaser and have  received  the  purchaser's  written
consent to the transaction prior to sale. The rules require
the delivery, prior to any  transaction  involving  a penny
stock, of a disclosure schedule  prepared by the Commission
explaining important concepts  involving  the

<PAGE>
penny  stock
market, the nature of such market,  terms  used   in   such
market, broker-dealer's duties to the customer, a toll-free
telephone number for inquiries  about  the  broker-dealer's
disciplinary history and the customer's rights and remedies
in case of fraud or abuse in the sale. Disclosure must also
be made about commissions payable to both the broker-dealer
and the registered representative, and  current  quotations
for the securities. Finally,monthly statements must be sent
disclosing recent price information for penny stock held in
the  account and information on the limited market in penny
stocks.

ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements appear after Part III
of this Report and are incorporated herein by reference.

<PAGE>

                        PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL
        PERSONS, AND KEY EMPLOYEES

     Igene's  directors  are  elected  annually   by   the
stockholders of  Igene.  The directors, executive officers
and key employees  of Igene as of December 31, 2002 are as
follows:
<TABLE>
<CAPTION>

Name                     Age     Position with Igene
_____________________    ______  _____________________________
<S>                      <C>     <C>
Michael G. Kimelman      64      Chairman of the Board of
                                 Directors,
                                 member of audit committee

Thomas L. Kempner        75      Vice Chairman of the
                                 Board of Directors,
                                 member of finance committee

Stephen F. Hiu           46      Director, President,
                                 Treasurer,
                                 Chief Technical Officer,
                                 and Director of Research and
                                 Development

Patrick F. Monahan       52      Director, Vice-President,
                                 Secretary, and
                                 Director of Manufacturing

Sidney R. Knafel         72      Director, member of finance
                                 committee

Stein G. Ulve            36      Chief Executive Officer

Edward J. Weisberger     38      Chief Financial Officer

Per A. Benjaminsen       34      Chief Marketing Officer

</TABLE>

Each of our directors was elected for a  one-year  term  at  our
most recent annual meeting, held on July 16, 2002.  Our officers
serve at the pleasure of the Board of Directors and until  their
respective successors are elected and qualified. As a result  of
the  ProBio  disposition,  Stein  G.  Ulve  resigned  as   Chief
Executive  Officer and Director, and Per A. Benjaminsen resigned
as  Chief  Marketing Officer, becoming an independent consultant
for Igene.

MICHAEL G. KIMELMAN  has  served  as  a Director of Igene since
February  1991  and as Chairman of the Board of Directors since
March  1991.   He  has  also  served as the Managing Partner of
Kimelman & Baird, LLC.  Mr. Kimelman is currently a Director of
the  Harness Horse Breeders of New York State and serves on the
Board of the Hambletonian Society.

THOMAS L. KEMPNER is Vice Chairman of the Board   of  Directors
and has been a Director of Igene since its inception in October
1981.   He is and has been Chairman and Chief Executive Officer
of Loeb Partners Corporation, investment bankers, New York, and
its  predecessors  since  February  1978.   He  is  currently a
Director of Alcide Corporation, CCC Information Services Group,
Inc., Dyax, Fuel Cell Energy, Inc., Insight Communications Co.,
Inc.,  and  Intermagnetics  General  Corp.   He  is  a Director
Emeritus of Northwest Airlines, Inc.

STEPHEN F.  HIU was appointed Chief Technical Officer in 2002,
and has served as President and Treasurer since March 1991,and
elected  a  Director  in August 1990.  He has been Director of
Research and Development since January 1989 and,prior thereto,
was Senior Scientist since December 1985,when he joined Igene.
He  was  a  post-doctoral  Research  Associate at the Virginia
Polytechnic  Institute  and  State   University,   Blacksburg,
Virginia,from January 1984 until December 1985.  Dr. Hiu holds
a Ph.D. degree in microbiology from  Oregon  State  University
and  a  B.S. degree in biological sciences from the University
of California, Irvine.
<PAGE>

PATRICK F. MONAHAN has served as  Vice-President  since  2002,
and  as  Director  of Manufacturing and as a Director of Igene
since  April 1991.  He has served as Secretary since September
1998.  He  has  managed Igene's fermentation pilot plant since
1982.  Prior  thereto,  he  was  a technical specialist in the
fermentation  pilot  plant  of W.R. Grace and Co. from 1975 to
1982. He received  an Associate of Arts degree in biology from
Allegheny Community College and a B.S. degree  in biology with
a minor in Chemistry  from Frostburg State College, Frostburg,
Maryland.

SIDNEY R. KNAFEL, has served as a Director of Igene since 1982,
has  also  been  Managing Partner of SRK Management Company, a
private investment concern located in New York City,since 1981.
He  has  also  served  Chairman of Insight Communications, Inc.
since  1985,  and of BioReliance Corporation since 1982.  He is
also  currently  a  Director  of  General  American  I nvestors
Company, Inc. as well as a number of private companies.

STEIN G. ULVE  served  as  Chief  Executive  Officer  and as a
Director of Igene from December 2001 through December 2002. He
has a master's degree in international finance from the London
School  of  Economics.   He  also  has  experience in managing
companies  in the seafood processing and aquaculture industry,
as well as within the feed and food ingredients area.

EDWARD J. WEISBERGER  was appointed Chief Financial Officer of
Igene  in  December  2001.  He is a CPA with multiple years of
financial  experience  in  the public and private sectors with
both smaller and fortune 100 companies.

PER A. BENJAMINSEN served as Chief Marketing Officer of  Igene
from  December  2001  through  December 2002.  He received his
degree in fisheries  science  at  the  University  of  Tromso,
Norway.  He  was  the  founder and entrepreneur of a specialty
refining company of essential fatty acids in Norway.


Section 16(a) Beneficial Ownership Reporting Compliance

     Igene believes that during 2002 and through March of 2003
all  of  its  officers  and  directors of more than 10% of its
common  stock,  have  filed all past due reports and come into
compliance  with  Section  16(a)  reporting  requirements with
respect  to   acquisitions   and   dispositions   of   Igene's
securities.

     Igene believes that,  during  2001,  all of its officers,
directors  and  holders  of  more than 10% of its common stock
complied  with  all filing requirements under Section 16(a) of
the Securities  Exchange  Act  of  1934, as amended, except as
follows: In  1997  and  2001  certain  directors of Igene made
various loans  to  Igene.   The  loans  are evidenced by notes
convertible into common stock,and in 2001 received warrants in
conjunction with  the  loan agreement.  Certain directors also
received warrants to  purchase  shares of common stock in 1997
and 1998 in conjunction  with  the  1997 notes and with a 1998
rights offering. During 1999 and 2000,  certain  directors and
other accredited investors also purchased original issue stock
from Igene and received warrants  in  conjunction  with  these
purchases.   Igene  believes   that  none   of  the  foregoing
securities have been reported by Messrs.   Kimelman,   Abeles,
Cenerazzo or  Knafel  on  Forms  3, 4 or Forms 5  pursuant  to
Section 16(a) of the Exchange Act.  In making this disclosure,
Igene  has  relied  solely  on  written representations of its
directors, officers and more than 10%   holders  and on copies
furnished to Igene of reports that have been  filed  with  the
Securities and Exchange Commission.

ITEM 10.     EXECUTIVE COMPENSATION

     The  following  tables  show (a) the compensation paid or
accrued  by  Igene to the Chief Executive Officer, and each of
the  four most highly compensated officers other than the CEO.
During  2002, no Directors were compensated for their Board or
Committee  activities.  Other than the 1986 and 1997, and 2001
Stock  Incentive Plan and the Simple Retirement Plan described
below,  Igene  has no profit sharing or incentive compensation
plans.

<PAGE>
<TABLE>
               SUMMARY COMPENSATION TABLE
<CAPTION>
Name and Principal Position      Year    Salary Compensation
                                                 ($)
___________________________      ____    ___________________
<S>                              <C>         <C>
Stein Ulve.................      2002        $100,000
Chief executive officer

Stephen Hiu................      2002        $114,200
President

Patrick Monahan............      2002        $106,840
Director

Per Bejaminsen.............      2002        $100,000
Chief Marketing officer

Edward Weisberger..........      2002        $103,340
Chief Financial officer

</TABLE>

     Through December 2001, no executive officer's annual cash
compensation exceeded $100,000.   Prior to December, 2001, the
functions  of  chief  executive officer have been performed by
Igene's Board of Directors (see Item 9),  acting  as  a group.
During  2000, no Directors were compensated for their Board or
Committee activities.

Simple Retirement Plan
______________________

     Effective  February  1,  1997  Igene  adopted  a   Simple
Retirement Plan  under  Internal  Revenue Code Section 408(p).
The plan is a  defined  contribution plan, which covers all of
Igene's U.S.  employees  who  receive  at  least   $5,000   of
compensation for the preceding year. The plan permits elective
employee contributions. For the years ended December 31,  2002
and 2001,  Igene  made  an elective contribution of 2% of each
eligible  employee's  compensation for  each  year.  Effective
January 1,  2003, Igene made an elective contribution of 3% of
each eligible  employee's compensation for each year.  Igene's
contributions to  the  plan  for 2002  were  $11,201, which is
expensed  in  the  2002  statement  of  operations.    Igene's
contributions to the plan  for  2001  were  $7,997  which   is
expensed in the 2001 statement of operations.

Stock Option Plans
__________________

     Igene  currently  maintains  two  stock incentive plans.
Igene's 2001 Stock Incentive Plan (the "2001 Plan"),which was
approved by Igene's stockholders on June 12, 2001, authorized
55,000,000  options  and  shares  of  restricted  stock   for
issuance  under  that  plan.   Igene's 1997 Stock Option Plan
(the "1997 Plan"), which was approved by Igene's stockholders
on November 17, 1997,  authorized   20,000,000   options  for
issuance under that  plan.  A  committee  of  the  Board   of
Directors administers the Plans.

     The  purpose  of  the Plans  is to further the long term
stability  and  financial  success of Igene by attracting and
retaining employees and consultants through the use of stock-
based  incentives, and to provide non-employee members of the
Board  of  Directors  with an additional incentive to promote
the success of Igene.  It is believed that ownership of Igene
common  stock  will stimulate the efforts of those employees,
consultants  and  non-employee  directors upon whose judgment
and interests  Igene is and will be largely dependent for the
successful conduct of its business.  It is also believed that
incentive  awards granted to employees under these plans will
strengthen  their  desire  to  remain employed with Igene and
will further the  identification of employees' interests with
those of Igene.

    Options are exercisable at such rates and times as may be
fixed  by  the committee.  Options also become exercisable in
full  upon  (i)  the holder's retirement on or after his 65th
birthday,  (ii)  the  disability   or death of the holder, or
(iii) under  other  circumstances  as   determined   by   the
Committee.  Options generally terminate on the tenth business
day following cessation of  service as an employee, director,
consultant or independent contractor.


    Options may be exercised by payment in full of the option
price in cash or check, or by  delivery  of  previously-owned
shares  of  common  stock having a total fair market value on
the  date  of  exercise equal to the option price, or by such
other methods as permitted by the Committee.

<PAGE>

     The  Plans contain anti-dilution provisions in the event
of certain corporate transactions.

     The Board of Directors may at any time withdraw from, or
amend,  the  Plans  and  any  options not heretofore granted.
Stockholder approval is required to (i)  increase  the number
of  shares issuable under the Plans, (ii) increase the number
of  options  which  may be granted to any individual during a
year,(iii) or change the class of persons to whom options may
be  granted.  No options shall be granted under the 2001 Plan
after  April 30, 2011 and under the 1997 Plan after September
19, 2007.   Igene previously maintained its 1986 Stock Option
Plan, but  additional  options may no longer be granted under
that plan.

    Options to acquire 35,983,750 shares of common stock have
been  granted  under  the  three  Stock  Option   Plans   and
35,588,250   options are still outstanding under the Plans as
of December 31,  2002.  8,045,000 options were granted during
2001, and 18,200,000 options were granted during 2002.

<TABLE>
         Option/SAR Grants In Last Fiscal Year
<CAPTION>
                                      Individual Grants(a)
<CAPTION>
                                                   Percent of
                                    Number of    Total Options
                                   Securities    SARs Granted
                                   Underlying         To
                                  Options/SARs     Employees     Exercise or
                     Date of         Granted        in Fiscal    Base Price
Name                  Grant            (#)            Year          ($/Sh)     Expiration Date
___________________  ________     ____________   _____________   ____________  _______________
<S>                  <C>          <C>            <C>               <C>           <C>
Michael G. Kimelman  8/13/02       7,000,000       38.89%          $.025         8/13/12
Stephen F. Hiu       8/13/02       5,000,000       27.47%          $.025         8/13/12
Patrick F. Monahan   8/13/02       3,000,000       16.48%          $.025         8/13/12
All Employees
 as a Group            (b)        18,200,000      100.00%            (b)           (b)

</TABLE>

(a)  Options granted under the ESOP to the Company's executive
     officers named in the Summary Compensation Table are first
     exercisable on the date of grant. The Company did not issue
     any stock repricing during 2002.
(b)  Options granted under the ESOP throughout 2002 with
     immediate vesting that expire in 2012. The exercise price
     of all options granted to employees in 2002 is $.025.


Compensation of Directors
_________________________

     During 2000, Directors were not  compensated  for  their
Board or Committee activities.  During  2001 and 2002 Michael
G. Kimelman  was  granted  5,500,000  and  7,000,000  options
respectively,  as  part  of  the  stock   option   plan,   as
compensation  for  his  services  as  Igene's Chairman of the
Board of Directors.

<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS

    The following table sets forth information as of February
24, 2003  with  respect  to beneficial ownership of shares of
Igene's  outstanding  common stock and preferred stock by (i)
each  person  known  to Igene to own or beneficially own more
than five percent of its common stock or preferred stock,(ii)
each  Director,  and  (iii) each officer named in the Summary
Compensation Table provided in Part  II  Item 10  above,  and
(iv) all Directors and such officers  as a group.

<TABLE>
<CAPTION>
                                 Common Stock             Preferred Stock
                            __________________________   _____________________
                            Number of                    Number of
Name and Address             Shares         Percent *     Shares     Percent
______________________      ___________     _________   _________    _________
<S>                         <C>               <C>         <C>         <C>
Directors and officers
______________________

Joseph C. Abeles             15,012,789<F1>   15.19       7,375        27.93
  220 E. 42nd Street
  New York, NY  10017

John A. Cenerazzo             1,912,456<F2>    2.18        ---          ---
  PO Box 4067
  Reading, PA  19606

Stephen F. Hiu               10,865,300<F3>    11.32       ---          ---
  9110 Red Branch Road
  Columbia, MD  21045

Thomas L. Kempner           141,679,138<F4>    67.62       ---          ---
  61 Broadway
  New York, NY  10006

Michael G. Kimelman          22,321,950<F5>    20.86       ---          ---
  100 Park Avenue
  New York, NY  10017

Sidney R. Knafel            140,087,578<F6>    67.40       ---          ---
  810 Seventh Avenue
  New York, NY  10019

Patrick F. Monahan            6,864,200<F7>     7.47       ---          ---
  9110 Red Branch Road
  Columbia, MD  21045

Stein G. Ulve                 3,833,333<F8>     4.29       ---          ---
  9110 Red Branch Road
  Columbia, MD 21045

Per A. Benjaminsen            3,833,333<F9>     4.29       ---          ---
  9110 Red Branch Road
  Columbia, MD 21045

Edward J. Weisberger          2,570,000<F10>    2.91       ---          ---
  9110 Red Branch Road
  Columbia, MD 21045

All Directors and Officers  348,910,076<F11>   88.97       7,375       27.93
  as a Group (10 persons)

<PAGE>
Others
______

Fraydun Manocherian           7,905,135<F12>    8.76       ---          ---
  3 New York Plaza
  New York, NY  10004


Fermic                        8,303,265         9.66       ---          ---

*  Under the rules of the Securities and Exchange Commission,
the calculation of the percentage assumes for each person that
only that person's rights, warrants, options or convertible
notes or preferred stock are exercised or converted, and that no
other person exercises or converts outstanding rights, warrants,
options or convertible notes or preferred stock.

<FN>
<F1>  Includes the following: 2,113,544 shares held directly or
  indirectly by Mr. Abeles, 14,750 shares issuable upon the
  conversion of 7,375 shares of preferred stock, 3,782,083
  shares issuable upon the conversion of $311,663 of long-term
  notes issued by Igene, and 9,102,412 shares issuable upon
  exercise of warrants held by Mr. Abeles.

<F2>  Includes the following: 283,458 shares held directly or
  indirectly by Mr. Cenarazzo, 32,750 shares issuable upon
  exercise of options currently exercisable, 492,321 shares
  issuable upon the conversion of $40,622 of long-term notes
  issued by Igene and 1,103,513 warrants held by Mr. Cenerazzo.
  Also includes 414 shares held by Mr. Cenerazzo's wife.

<F3>  Includes the following: 865,300 shares held directly or
  indirectly by Mr. Hiu and 10,000,000 shares issuable pursuant
  to options held by Dr. Hiu that are currently exercisable.

<F4>  Includes 386,972 shares and 536,920 shares issuable upon
  exercise of warrants held by Mr. Kempner that are currently
  exercisable.  Also includes 8,661,245 shares held directly by
  Mr. Kempner, 18,222,978 shares issuable upon conversion of
  notes issued by Igene and held by Mr. Kempner, and 58,485,630
  shares issuable upon exercise of warrants held by a trust
  under which Mr. Kempner is one of two trustees and the sole
  beneficiary, which are currently exercisable.  Also includes
  8,621,247 shares held directly by Mr. Kempner, 18,222,980
  shares issuable upon the conversion of notes issued by Igene
  and held by Mr. Kempner and 58,442,423 shares issuable upon
  exercise of warrants held a trust under which Mr. Kempner is
  one of two trustees and one of his brothers is the sole
  beneficiary, which are currently exercisable.    Also includes
  1,147,667 shares issuable upon the conversion of $79,200 of
  notes issued by Igene and held by Mr. Kempner and 2,079,411
  shares issuable upon exercise of warrants held by trusts under
  which Mr. Kempner is one of two trustees and is a one-third
  beneficiary that are currently exercisable.  Also includes
  243, 360 shares and 131,414 shares issuable upon exercise of
  warrants held by trusts under which Mr. Kempner is executer
  and is a one-third beneficiary that are currently exercisable.
  Also includes 182,526 shares and 98,565 warrants held by Mr.
  Kempner's wife.

<F5>  Includes 1,264,360 shares held directly or indirectly by Mr.
  Kimelman, 14,000,000 shares issuable upon exercise of options
  currently exercisable, 804,568 shares issuable upon the
  conversion of $63,070 of notes issued by Igene and held by Mr.
  Kimelman, and 6,253,022 shares issuable upon exercise of
  warrants held directly or indirectly by Mr. Kimelman.

<F6>  Includes 18,190,551 shares, 36,929,532 shares issuable upon
  the conversion of notes issued by Igene and held by Mr. Knafel
  and 84,967,495 shares issuable upon the exercise of warrants
  owned or beneficially owned by Mr. Knafel that are currently
  exercisable.

<F7>  Includes 864,200 shares held directly or indirectly by Mr.
  Monahan and 6,000,000 shares issuable upon the exercise of
  options held by Mr. Monahan that are currently exercisable.

<F8>  Includes 500,000 shares of common stock and 3,333,333 shares
  issuable upon exercise of options  held by Mr. Ulve that are
  currently exercisable.

<PAGE>
<F9>  Includes 500,000 shares of common stock and 3,333,333 shares
  issuable upon exercise of options  held by Mr. Benjaminsen
  that are currently exercisable.


<F10>  Includes 70,000 shares held directly by Mr. Weisberger and
  2,500,000 shares issuable upon exercise of options that are
  currently exercisable.

<F11>  Includes 42,677,177 shares of common stock, 14,750 shares
  issuable upon the conversion of 7,375 shares of preferred stock;
  39,199,416 shares issuable upon exercise of options that are
  currently exercisable, 79,602,129 shares issuable upon the
  conversion of notes issued by Igene and 187,416,604 shares
  issuable upon the exercise of warrants that are currently
  exercisable.

<F12>  Includes 3,625,935 shares of common stock owned directly or
  indirectly by Mr. Manocherian and 4,279,200 shares issuable upon
  the exercise of warrants owned directly or indirectly by Mr.
  Manocherian that are currently exercisable.

</FN>
</TABLE>

<TABLE>
            Equity Compensation Plan Information as of December 31, 2002
<CAPTION>
                                                            Number of Securities
                                                            remaining available for
                Number of Securities                        future issuance under
                issued or to            Weighted Average    equity compensation
                be issued upon exercise exercise price of   plans (excluding
                of outstanding options, outstanding options securities reflected in
Plan category   warrants and rights     warrants and rights column)
_____________   _______________________ ___________________ _______________________
<S>             <C>                     <C>                 <C>
Equity          18.2 million<F1>        $0.025<F2>          39.016 million<F3>
compensation
plans approved
by security
holders

Equity           3.26 million<F5>       $0.03<F5>           11.697 million<F6>
compensation
plans not
approved by
security
holders(4)

Total            21.46 million          $0.0257              50.713 million

<FN>
<F1> Total shares issued under employee stock option plan.
<F2> Exercise price of outstanding options under compensation
  plans.
<F3> All shares remaining issuable under employee option plan.
<F4> Shares represent those issued under the Fermic
  Manufacturing Agreement.
<F5> Total shares earned by Fermic in 2002 and the average
  price at which they were earned
<F6> All Shares remaining earnable under the Fermic
  manufacturing agreement.

</FN>
</TABLE>

Fermic, Igene's manufacturing agent, earns shares, respectively,
of common stock as part of the manufacturing agreement.   Fermic
earns  2,250  shares  of  common  stock  for  each kilogram pure
astaxanthin produced and delivered as part of the agreement. The
average  price is based on the market value of the shares at the
time  the  product  was  produced.     Fermic  can  earn  up  to
20,000,000 shares  in  total  under the contract.  The 3,260,246
shares  were  earned  at  an average price of $.03 per share for
2002,  and  5,043,019  shares were earned at an average price of
$.06 per share over the period and issued at the end of 2001.

<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     On February 22nd 2002, Igene issued and sold $1,000,000 in
aggregate principal amount of 8% convertible debentures, to Mr.
Kempner, a director of Igene,and to Mr. Knafel, also a director
of Igene,  in equal amounts of $500,000 each.  These debentures
are convertible into shares of Igene's common stock at $.04 per
share  based  on the market price of Igene's shares at the time
the purchase of the debentures was agreed to.  In consideration
of the commitment to purchase the 8% convertible debenture,each
of  these  directors  also  received  12,500,000   warrants  to
purchase  common stock at $.04 per share.  These debentures, if
not converted earlier, become due on February 22nd 2012.

     On July 17th 2002,  Igene  issued  and  sold  $300,000  in
aggregate principal amount of 8% convertible debentures, to Mr.
Kempner, a director of Igene,and to Mr. Knafel, also a director
of Igene,  in equal amounts of $150,000 each.  These debentures
are convertible into shares of Igene's common stock at $.03 per
share  based  on the market price of Igene's shares at the time
the purchase of the debentures was agreed to.  In consideration
of the commitment to purchase the 8% convertible debenture,each
of these directors also received 5,000,000 warrants to purchase
common  stock  at  $.03  per  share.   These debentures, if not
converted earlier, become due on July 17th 2012.

     In August 2002, Igene issued 7,000,000 warrants to purchase
Igene  common  stock  at  $.025 per share to its Chairman of the
Board,  Mr.  Kimelman  as  part  of  the  stock  option plan, as
compensation for his services as Chairman of the Board.

     On December 21st 2002,   Igene  issued and sold $250,000 in
aggregate  principal  amount  of  8%  demand  notes  to  certain
directors  of Igene.  Should Igene be unable to pay them as they
are  called  these notes would become convertible into shares of
Igene's common stock based on the market price of Igene's shares
at the time they are called.

     In  March  2001,  Igene issued $1,014,211 of 8% convertible
debentures  to  Mr. Kempner and Mr. Knafel,  directors of Igene,
in  exchange  for  the  cancellation of $800,000 of demand notes
payable  (including accrued interest of $14,212) and $200,000 in
cash. $600,000 of these demand notes were issued during 2000 and
$200,000  were  issued  subsequently.   These  debentures    are
convertible  into  10,142,110  shares of Igene's common stock at
$.08  per  share.   Messrs.  Kempner  and  Knafel  also received
10,142,110  warrants to purchase common stock at $.08 per share.
In  these  transactions,  $507,105 of convertible debentures and
5,071,055  warrants  were  issued  to  Mr.  Kempner  or entities
controlled  by  him,  and $507,105 of convertible debentures and
5,071,055  warrants  were  issued  to  Mr.  Knafel  or  entities
controlled by him.

     In March 2001, Igene issued 5,500,000 warrants to  purchase
Igene   common   stock  at $.08 per share to its Chairman of the
Board,   Mr.  Kimelman  as   part   of the stock option plan, as
compensation for his services as Chairman of the Board.

     In  March  2001,  Messrs. Kempner and Knafel, directors  of
Igene, committed to provide additional funding in the form of 8%
convertible  debentures  in  the  aggregate amount of $1,500,000
over the next nine months.  In consideration of this commitment,
these  directors  also  received 18,750,000 warrants to purchase
common  stock  at  $.08   per  share.   These   debentures   are
convertible  into  18,750,000  shares of Igene's common stock at
$.08 per share.  In these transactions,  $750,000 of convertible
debentures  and 9,375,000 warrants were issued to Mr. Kempner or
entities  controlled  by  him  and   $750,000   of   convertible
debentures  and  9,375,000 warrants were issued to Mr. Knafel or
entities controlled by him.

     In  connection  with  the  acquisition  of  ProBio,   Igene
acquired  all  10,000   issued and outstanding shares of capital
stock  of  ProBio from thirteen individual and corporate sellers
in  exchange  for  $1.8  million  in  aggregate   consideration,
consisting  of  $1  million  in  debentures convertible into our
common  stock  at  $.10 per share (reflecting the price at which
our  common  stock  was trading on the over-the-counter bulletin
board  when  we  agreed  as to price in June of 2001), 8,000,000
shares  of  our  common  stock,  valued  for the purposes of the
acquisition  in December 2001 at $.05 per share, and $400,000 in
cash.   The  cash used to acquire ProBio constituted proceeds of
private  placements of our common stock received during 2001 and
revenues  from operations. Following the acquisition,

<PAGE>
Stein Ulve
and  Per  Benjaminsen,  the  managing  director  and director of
marketing  and  sales,  respectively, of ProBio became our chief
executive  officer  and  chief  marketing officer, respectively,
pursuant  to  written employment agreements.   Prior to the sale
of ProBio to Igene both Stein Ulve and Per Benjaminsen were both
owners of in excess of 10% of ProBio.

     As reported on Form 8-K filed February 20, 2003, Igene, in
an  effort  to  focus  on  and grow its core business, sold all
10,000 of the issued and outstanding shares of capital stock of
ProBio as  of  February  4,  2003 to Fermtech AS, a joint stock
company incorporated in the Kingdom of Norway and owned equally
by  our  former chief executive officer, Stein Ulve, and by Per
Benjaminsen, our Chief Marketing Officer.  Mr. Ulve resigned as
CEO  and  director of Igene and Mr. Benjaminsen resigned as our
chief  marketing  officer,  effective  December  31,  2002. Mr.
Benjaminsen  has  agreed  to  continue  to  provide  sales  and
marketing services to Igene as an independent contractor.

     Igene sold ProBio to Fermtech AS in exchange for aggregate
consideration  valued  at approximately $343,000, a portion  of
the consideration received by Igene  consisted   of   7,000,000
shares of common stock of Igene that Fermtech owned as a result
of Igene's purchase of  ProBio  in  January   2001,  (including
2,000,000 shares  which have been placed into escrow and may be
returned to  Fermtech  as  described  below),  valued  for  the
purposes of the acquisition  at $.03 per share,plus forgiveness
of approximately $168,000 of debt  that  Igene  owed  to ProBio
at the time of purchase in  2001.   Provided  Mr.   Benjaminsen
remains employed by   Igene   through  2003,  1,000,000  of the
escrowed shares of common stock  will be delivered to Fermtech.
If Mr. Benjaminsen remains employed  by  Igene through 2004,the
remaining 1,000,000 escrowed shares   will   be  released  from
escrow and delivered to Fermtech.    The  remaining   5,000,000
shares of Igene common stock were retired on February  5, 2003.

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS
         ON FORM 8-K

(a)(1)   The following financial statements relating to 2002 and
         2001 are filed as a part of this Report:

         Independent Auditors' Report.

         Consolidated Balance Sheet as of December 31, 2002.

         Consolidated Statements of Operations for the years ended
         December 31, 2002 and December 31, 2001.

         Consolidated Statements of Stockholders' Deficit for the
         years ended December 31, 2002 and December 31, 2001.

         Consolidated Statements of Cash Flows for the years ended
         December 31, 2002 and December 31, 2001.

         Notes to Consolidated Financial Statements.

(a)(2)   Exhibits filed herewith or incorporated by reference
         herein are set forth in the following table prepared in
         accordance with Item 601 of Regulations S-K.

         3.1  Articles of Incorporation of the Registrant as amended
              to date, constituting Exhibit 3.1 to Registration
              Statement No. 333-41581 on Form SB-1 are hereby
              incorporated herein by reference.

         3.2  By-Laws, constituting Exhibit 3.2 to the Registrant's
              Registration Statement No. 33-5441 on Form S-1, are
              hereby incorporated herein by reference.

         4.1  Form of Variable Rate Convertible Subordinated Debenture
              Due 2002 (Class A), constituting Exhibit 4.4 to
              Registration Statement No. 33-5441 on Form S-1, is
              hereby incorporated herein by reference.

         10.1 Form of Conversion and Exchange Agreement used in May
              1988 in connection with the conversion and exchange by
              certain holders of shares of preferred stock for common
              stock and Warrants, constituting Exhibit 10.19 to
              Registration Statement No. 33-5441 on Form S-1, is
              hereby incorporated herein by reference.

<PAGE>
         10.2 Exchange Agreement made as of July 1, 1988 between the
              Registrant and now Dow Chemical Company, Inc. (f.k.a.
              Essex Industrial Chemicals, Inc.),. with respect to the
              exchange of 187,500 shares of preferred stock for a
              Debenture, constituting Exhibit 10.21 to Registration
              Statement No. 33-5441 on Form S-1, is hereby
              incorporated herein by reference.

         10.3 Preferred Stockholders' Waiver Agreement dated May 5,
              1988, incorporated by reference to the identically
              numbered exhibit in Form S-1 Registration Statement No.
              33-23266.

         10.4 Form of Agreement between the Registrant and Certain
              Investors in Preferred Stock dated September 30, 1987,
              incorporated by reference to the identically numbered
              exhibit in Amendment No. 1 to Form S-1 Registration
              Statement No. 33-23266.

         10.5 Letter Agreement executed May 11, 1995 between Archer
              Daniels Midland, Inc. and IGENE Biotechnology, Inc.,
              along with November 11, 1995 Amendment, constituting
              Exhibit 10.11 to the Registrant's Report on Form 10-KSB
              for the year ended December 31, 1995 is incorporated
              herein by reference.

         10.6 Agreement of Lease effected December 15, 1995 between
              Columbia Warehouse Limited Partnership and IGENE
              Biotechnology, Inc. constituting Exhibit 10.13 to the
              registrant's report on Form 10-KSB for the year ended
              December 31, 1995 is incorporated herein by reference.

         10.7 Toll manufacturing agreement effective as of May 20,
              2000 between Igene Biotechnology, Inc. and Fermic S.A.
              de C.V. constituting exhibit 10.7 to Igene's annual
              report on Form 10-KSB filed on April 2, 2001, is
              incorporated herein by reference. Portions of this
              exhibit have been omitted pursuant to a request for
              confidential treatment.

          10.8 First amendment to lease made September 13, 2000 between
               Igene Biotechnology, Inc. and Red Branch Center, LLC
               constituting Exhibit 10.8 to Igene's annual report on
               Form 10-KSB filed on April 2, 2001,  is incorporated
               herein by reference.

          10.9 Consulting Agreement between Igene and Martin L. Gerson
               filed herewith.

         10.10 Stock Purchase and Severance Agreement dated as of
               the 4th day of February 2003 among Igene, Fermtech AS,
               Stein Ulve and Per Benjaminsen, constituting Exhibit
               10.10 to Igene's annual report on Form 10-KSB filed on
               March 28, 2003,  is incorporated herein by reference
               filed herewith.

         21.   Subsidiaries

               Igene Chile Comercial, Ltda.
               Igene Norway AS (divested pursuant to Stock Purchase
               and Severance Agreement dated February 4, 2003 attached
               hereto as Exhibit 10.10)

         23.a. Consent of Stegman & Company

(b)     On February 5, 2003, Igene filed an 8-K disclosing the
        disposition of its subsidiary ProBio Nutraceuticals.

Item 14. Controls and Procedures

     Based  on  their  most recent review, which  was  completed
within 90 days of the filing of this report, Igene's   principal
executive officer and principal financial officer have concluded
that Igene's disclosure controls and procedures are effective to
ensure that information required to be disclosed by Igene in the
reports  that  it files or submits under the Securities Exchange
Act  of  1934,  as  amended,  is accumulated and communicated to
Igene's  management,  including  its principal executive officer
and  principal financial officer, as appropriate to allow timely
decisions  regarding  required  disclosure  and are effective to
ensure  that such information is recorded, processed, summarized
and  reported  within  the  time  periods specified in the SEC's
rules  and  forms.  There were no significant changes in Igene's
internal  controls  or in other factors that could significantly
affect  those    controls    subsequent  to  the  date  of their
evaluation.


<PAGE>

                  INDEPENDENT AUDITORS' REPORT





To the Stockholders and Board of Directors
IGENE Biotechnology, Inc.

We have audited the accompanying consolidated balance sheet of
IGENE Biotechnology, Inc. and subsidiaries as of December 31,
2002, and the related consolidated statements of operations,
stockholders' deficit and cash flows for each of the two year in
the period ended December 31, 2002.  These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We did not audit the balance sheet of ProBio, Inc., a wholly
owned subsidiary, which reflects total assets of $628,326 as of
December 31, 2002.  This statement was audited by other auditors
whose report has been furnished to us, and our opinion, insofar
as it relates to the amounts included for ProBio, Inc. is based
solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements.  An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audit and the report of other
auditors, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of IGENE Biotechnology, Inc. and subsidiaries as of
December 31, 2002, and the results of their operations and their
cash flows for each of the two year in the period ended December
31, 2002, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.  As
discussed in Note 16 to the consolidated financial statements,
the Company's recurring losses, production limitations and
limited capitalization raise substantial doubt about its ability
to continue as a going concern.  Management's plans regarding
those matters also are described in Note 16.  The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.


                                      Stegman & Company
                                      _________________
                                      Stegman & Company

Baltimore, Maryland
February 26, 2003

<PAGE>

<TABLE>
             IGENE Biotechnology, Inc. and Subsidiary
                  Consolidated Balance Sheet
                      December 31, 2002

<CAPTION>
ASSETS
______
<S>
CURRENT ASSETS                                      <C>
  Cash and cash equivalents                         $     497,711
  Accounts receivable, net of allowances of $24,000       528,065
  Inventory                                               374,709
  Prepaid expenses and other current assets               192,993
  Deferred costs, current portion                          74,160
                                                     ____________

    TOTAL CURRENT ASSETS                                1,667,638

OTHER ASSETS
  Property and equipment, net                             196,258
  Deferred costs, net of current portion                  187,753
  Equipment deposits                                      199,685
  Loan receivable from manufacturing agent                324,405
  Assets to be disposed of                                628,326
  Other assets                                              5,188
                                                     ____________

      TOTAL ASSETS                                   $  3,209,253
                                                     ============

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
_________________________________________________________________
CURRENT LIABILITIES
  Accounts payable and accrued expenses              $    595,646
  Notes payable - directors                               250,000
  Equipment lease payable - current portion                 3,590
                                                     ____________
     TOTAL CURRENT LIABILITIES                            849,236

LONG-TERM DEBT
  Notes payable                                         6,043,659
  Convertible Debentures                                4,814,212
  Equipment lease payable, net of current portion           1,205
  Liabilities to be disposed of                           655,763
  Accrued interest                                      2,700,865
                                                      ___________
     TOTAL LIABILITIES                                 15,064,940

COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock,
  8% cumulative, convertible, voting, series A,
  $.01 par value per share.  Stated value $17.12
  per share.   Authorized 1,312,500 shares;   issued
  and outstanding 26,155 shares. Redemption amount
  $447,774.                                               447,774
                                                      ___________

  Carrying amount of redeemable preferred stock,
  8% cumulative,   convertible, voting, series B,
  $.01 par value per share.  Stated value $8.00
  per share.   Authorized, issued and outstanding
  187,000 shares. Redemption amount $1,500,000.         1,500,000
                                                      ___________

STOCKHOLDERS' DEFICIT
  Common stock -- $.01 par value per share.
    Authorized 750,000,000 shares; issued and
    outstanding  92,943,746 shares                        929,437
  Additional paid-in capital                           22,387,604
   Deficit                                            (37,120,502)
                                                      ____________
     TOTAL STOCKHOLDERS' DEFICIT                      (13,803,461)
                                                      ____________

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT     $   3,209,253
                                                     =============

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
                  IGENE Biotechnology, Inc. and Subsidiary
                    Consolidated Statements of Operations
<CAPTION>
                                              Years ended December 31,
                                                 2002            2001
                                            ______________   ______________
<S>                                         <C>              <C>
REVENUE
_______

     Sales                                  $   3,491,765    $   4,181,037
     Cost of sales                              3,167,634        3,517,428
                                            ______________   ______________

     GROSS PROFIT                                 324,131          663,609

OPERATING EXPENSES
__________________

     Marketing and selling5                        54,224        1,088,173
     Research, development and pilot plant        609,781          536,638
     General and administrative                   963,907          611,620
     Litigation expenses                           47,159           65,258
                                            ______________   ______________

     TOTAL OPERATING EXPENSES                   2,175,071        2,301,689
                                            ______________   ______________

     OPERATING LOSS                            (1,850,940)      (1,638,080)

OTHER INCOME (EXPENSES)
______________________

     Miscellaneous income                             ---            6,000
     Gain on disposal of equipment                    ---            3,720
     Contract termination expense                     ---       (1,231,176)
     Interest expense (net of interest income of
      $1,373 and $10,349 respectively,
      in 2002 and 2001)                          (901,989)        (813,423)
                                            ______________   ______________

          TOTAL OTHER INCOME (EXPENSE)           (901,989)      (2,034,879)
                                            ______________   ______________

     NET LOSS FROM CONTINUING OPERATIONS
       BEFORE INCOME TAX BENEFIT               (2,752,929)      (3,672,959)

     INCOME TAX BENEFIT                               ---              ---
                                            ______________   ______________


     NET LOSS FROM CONTINUING OPERATIONS       (2,752,929)      (3,672,959)

     NET LOSS FROM DISCONTINUED OPERATIONS       (437,051)             ---
                                            ______________   ______________


     NET LOSS                               $  (3,189,980)   $  (3,672,959)
                                            ==============   ==============
    BASIC AND DILUTED NET LOSS PER COMMON
    SHARE FROM CONTINUING OPERATIONS        $       (0.03)   $       (0.06)

    BASIC AND DILUTED NET LOSS PER COMMON
    SHARE FROM DISCONTINUED OPERATIONS              (0.01)             ---
                                            ______________   ______________

    BASIC AND DILUTED NET LOSS PER COMMON
    SHARE                                   $       (0.04)   $       (0.06)
                                            ==============   ==============


The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>
<PAGE>

<TABLE>
                 IGENE Biotechnology, Inc. and Subsidiary
              Consolidated Statements of Stockholders' Deficit

<CAPTION>
                                                              Additional                  Total
                                         Common Stock         Paid-in                     Stockholders'
                                      # Shares 	   Amount     Capital        Deficit      Deficit
                                      ___________  __________ ____________  ____________  _____________
<S>                                   <C>          <C>        <C>           <C>           <C>
BALANCE AT JANUARY 1, 2001             62,249,005  $  622,490 $ 21,411,645  $(30,257,563) $ (8,223,428)

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture                   80,000         800      179,200           ---       180,000

Cumulative undeclared dividends
  on redeemable preferred stock               ---         ---      (16,900)          ---       (16,900)

Exercise of employee stock options        305,666       3,057       12,227           ---        15,284

Exercise of warrants                      170,910       1,709       15,382           ---        17,091

Shares issued for purchase of ProBio    8,000,000      80,000      320,000           ---       400,000

Shares issued for manufacturing
  agreement                             5,043,019      50,430      267,283           ---       317,713

Net loss for 2001                             ---         ---         ---     (3,672,959)   (3,672,959)
                                       ___________  __________ ____________  ____________  ____________

BALANCE AT DECEMBER 31, 2001            75,848,600 $  758,486  $ 22,188,837  $(33,930,522) $(10,983,199)

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture                    40,000         400       89,600           ---        90,000

Cumulative undeclared dividends
  on redeemable preferred stock                ---         ---      (16,900)          ---       (16,900)

Conversion of redeemable
  preferred stock into common stock            500           5        4,275           ---         4,280

Exercise of warrants                       194,400       1,944       12,356           ---        14,300

Shares issued to S. Hiu and P. Monahan
  In lieu of compensation                1,600,000      16,000       24,000           ---        40,000

Shares issued to M. Gerson  for
  Consulting agreement                  12,000,000     120,000        5,000           ---       125,000

Shares issued for manufacturing
  agreement                              3,260,246      32,602       80,436           ---        13,038

Net loss for 2002                              ---         ---          ---    (3,189,980)   (3,189,980)
                                       ___________  __________ ____________  ____________   ____________

BALANCE AT DECEMBER 31, 2002            92,943,746  $ 929,437  $ 22,387,604  $(37,120,502)  $(13,803,461)
                                       ===========  ========== ============  =============  =============

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
                          IGENE Biotechnology, Inc. and Subsidiary
                            Consolidated Statements of Cash Flows
<CAPTION>
                                                                Years ended December 31,
                                                                2002              2001
                                                              _______________   ______________
<S>                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
____________________________________
  Net loss                                                    $   (3,189,980)   $  (3,672,959)
  Adjustments to reconcile net loss to net
   Cash used by operating activities:
   Depreciation                                                       60,914           16,979
   Amortization of deferred costs                                    116,514          116,514
   Loss on disposal of assets                                            ---            3,720
   Compensation paid in shares of common stock  	              40,000              ---
   Consulting cost paid in shares of common stock                    125,000              ---
   Manufacturing cost paid in shares of common stock                 113,037          317,713
   ProBio contract termination costs paid in common stock                ---           22,538
   Interest on debenture paid in shares of common stock               90,000          180,000
   Decrease (increase) in:
     Accounts receivable       	                                     (30,917)         (21,117)
     Inventory                                                       352,367          (49,714)
     Prepaid expenses and other assets                                44,620         (273,574)
   Increase in:
     Accounts payable and other accrued expenses                     965,565        1,020,383
                                                               ______________   ______________

                 NET CASH USED IN OPERATING ACTIVITIES            (1,312,880)      (2,139,517)
                                                               ______________   ______________

CASH FLOWS FROM INVESTING ACTIVITIES
____________________________________

      Capital expenditures                                          (100,159)         (69,470)
      Deposits on manufacturing equipment                           (113,025)        (211,380)
      Cash retained from asset held for disposition                   76,226              ---
      Purchase of ProBio - less cash received                            ---         (255,964)
                                                               ______________   ______________

                 NET CASH USED IN INVESTING ACTIVITIES              (136,958)        (536,814)
                                                               ______________   ______________

CASH FLOWS FROM FINANCING ACTIVITIES
____________________________________

      Proceeds from issuance of convertible debentures             1,300,000        1,900,000
      Proceeds from ProBio issuance of convertible debentures            ---        1,000,000
      Net borrowing of equipment lease payable                         3,062              ---
      Proceeds from exercise of employee stock options                   ---           13,034
      Proceeds from exercise of warrants                                 ---           14,212
      Proceeds from issuance of note payable                         250,000              ---
                                                               ______________   ______________

                NET CASH PROVIDED BY FINANCING ACTIVITIES          1,553,062        2,927,246
                                                               ______________   ______________

NET INCREASE IN CASH AND CASH EQUIVALENTS                            103,224          250,915

CASH AND CASH EQUIVALENTS-BEGINNING OF THE YEAR                      394,487          143,572
                                                               ______________   ______________

CASH AND CASH EQUIVALENTS-END OF THE YEAR                      $     497,711    $     394,487
                                                               ==============   ==============

SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
__________________________________________________

  Cash paid during the year for interest                        $     42,409     $      1,511
  Cash paid during the year for income taxes                             ---              ---

See Note 2 for non-cash investing and financing activities.

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>

               IGENE Biotechnology, Inc. and Subsidiary
              Notes to Consolidated Financial Statements
                         (continued)

(1)  Summary of Significant Accounting Policies
     __________________________________________

     Nature of Operations
     ____________________

     Igene Biotechnology, Inc. ("Igene") was incorporated under
     the laws of the State of Maryland on October 27, 1981 as
     "Industrial Genetics, Inc."  Igene changed its name to "IGI
     Biotechnology, Inc." on August 17, 1983 and to "Igene
     Biotechnology, Inc." on April 14, 1986.  Igene is located in
     Columbia, Maryland and is engaged in the business of
     industrial microbiology and related biotechnologies.  As a
     result of the stock purchase, ProBio became our wholly-owned
     subsidiary.  Igene has operational subsidiaries in Norway
     and Chile.

     Principles of Consolidation
     ___________________________

     In December 2001 Igene purchased it's sales agent ProBio
     Nutraceuticals, AS, A Norwegian corporation ("ProBio").
     During 2002 Igene had developed a formal plan to dispose of
     ProBio, on February 5th 2003, Igene executed a formal
     agreement to dispose of this subsidiary.  For these
     consolidated financial statements, assets and liabilities of
     this subsidiary are treated as assets and liabilities to be
     disposed of.  The earnings and losses have been treated as
     loss from discontinued operations.   The accounts of our
     other wholly-owned subsidiary, Igene Chile are included for
     the consolidation of these financial statements.  All
     significant intercompany accounts and transactions have been
     eliminated in consolidation.

     Cash and cash equivalents
     _________________________

     Igene considers cash equivalents to be short-term, highly
     liquid investments that have maturities of less than 90
     days.  These include interest bearing money market accounts.

     Accounts Receivable
     ___________________

     Accounts receivable are stated at the amount management
     expects to collect from the outstanding balances.
     Management provides for probable uncollectible amounts
     through a charge to earnings and a credit to a valuation
     allowance based upon its assessment of the current
     collection status of individual accounts.  Delinquent
     amounts that are outstanding after management has conducted
     reasonable collection efforts, are written off through a
     charge to the valuation allowance and a credit to accounts
     receivable.  The valuation allowance did not change in the
     current period.

     Inventories
     ___________

     Inventory, stated at lower of cost, on a first-in first-out
     basis, or market value, work in process, and finished goods
     represents product manufactured and held for sale, is as
     follows:

          Raw materials                   $       ---
          Work-in-process - AstaXin(R)         11,308
          Finished goods - AstaXin(R)         363,401
                                          ___________

          Total inventory                 $   374,709

                                          ===========
<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                         (continued)

(1)   Summary of Significant Accounting Policies (continued)
      ______________________________________________________

      Research and development costs
      ______________________________

      For financial reporting purposes, research, development and
      pilot plant scale-up costs are charged to expense when
      incurred.


      Property and Equipment
      ______________________

      Property and equipment are stated at cost less accumulated
      depreciation and amortization computed using the straight-
      line method.  Premises and equipment are depreciated over
      the useful lives of the assets, which generally range from
      three to ten years for furniture, fixtures and equipment,
      three to five years for computer software and hardware, and
      ten to forty years for building and building improvements.
      Leasehold improvements are amortized over the terms of the
      respective leases or the estimated useful lives of the
      improvements, whichever is shorter.  The cost of major
      renewals and betterments are capitalized, while the costs of
      ordinary maintenance and repairs are expensed as incurred.

      Estimates
      _________

      The preparation of financial statements in conformity with
      accounting principles generally acceptable in the United
      States of America requires management to make estimates and
      assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the
      reported amounts of revenues and expenses during the
      reporting period.  Actual results could differ from those
      estimates.

      Deferred Costs
      ______________

      Deferred manufacturing costs are being amortized on the
      straight line method over their estimated lives, which are
      between 5 and 6 years.

      Foreign Currency Translation and Transactions
      _____________________________________________

      Since the day-to-day operations of Igene's foreign
      subsidiary in Chile are dependent on the economic
      environment of the parent's currency, the financial position
      and results of operations of Igene's foreign subsidiary are
      determined using Igene's reporting currency (US dollars) as
      the functional currency.  All exchange gains and losses from
      remeasurement of monetary assets and liabilities that are
      not denominated in US dollars are recognized currently in
      income.  These losses were approximately US $165,000 in
      amount during the year ended December 31, 2001, due to large
      fluctuations in the Chilean Peso during the second half of
      the year.  A gain of $1,000 was reported for the year ended
      December 31, 2002.

      Fair value of financial instruments
      ___________________________________

      The carrying amounts of cash and cash equivalents, accounts
      receivable, accounts payable, and short-term debt
      approximate fair value because of the relatively short
      maturity of these instruments.  Management believes the
      carrying amount of long-term debt approximates fair value
      because of similar current rates at which Igene could borrow
      funds with consistent remaining maturities.

<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                         (continued)

(1)   Summary of Significant Accounting Policies (continued)
      ______________________________________________________

      Sales Returns
      _____________

      Igene records sales returns in the period in which the
      product is returned, rather than estimating future returns
      of current sales, since they are expected to be immaterial
      in amount.

      Interest on Variable Rate Subordinated Debenture
      ________________________________________________

      Igene recorded interest on its variable rate subordinated
      debenture (see also note 7) at a level rate of 8% through
      October 1, 1996 and at 12% thereafter; rather than at the
      fair-market value of shares which have been issued in lieu
      of cash payments of interest.  This is an estimated average
      rate based on Igene's plan to continue (as it has since
      October 1, 1989) to pay interest on the debenture by issuing
      shares of common stock at the higher of $2.25 per share or
      the current market value of Igene's shares, as allowed under
      the terms of the debenture.  As the market value of Igene's
      stock remained below $2.25 per share (during the period from
      October 1989 through December 1999 its highest price was
      $1.25), Igene continued to issue stock in lieu of cash
      payments at $2.25 per share.

      Accounting for stock based compensation
      _______________________________________

      The Company has adopted the disclosure-only provisions of
      Statement of Financial Accounting Standards No. 123,
      "Accounting for Stock-Based Compensation" (SFAS No. 123),
      and SFAS No. 148, "Accounting for Stock-Based Compensation-
      Transition and Disclosure", but applies Accounting
      Principals Board Opinion No. 25 and related interpretations
      in accounting for its stock option plans.  No compensation
      expense related to the Company's stock option plans were
      recorded during two years ended December 31, 2002.

      New accounting pronouncements
      _____________________________

      In August 2001, the Financial Accounting Standards Board
      issued SFAS No. 144, "Accounting for the Impairment or
      Disposal of Long-Lived Assets", which supersedes both SFAS
      No. 121, "Accounting for the Impairment of Long-Lived Assets
      to Be Disposed Of" and the accounting and reporting
      provisions of APB Opinion No. 30, "Reporting the Results of
      Operations-Reporting the Effects of Disposal of a Segment of
      a Business, and Extraordinary, Unusual and Infrequently
      Occurring Events and Transactions", for the disposal of a
      segment of a business (as previously defined in that
      Opinion).  SFAS No. 144 retains the fundamental provisions
      in SFAS No. 121 for recognizing and measuring impairment
      losses in long-lived assets held for use and long-lived
      assets to be disposed of by sale, while also resolving
      significant implementation issues associated with SFAS No.
      121.  The provisions of SFAS No. 144 are effective for years
      beginning after December 15, 2001, and its adoption did not
      have any effect on the financial position or results of
      operations of the Company.

      In December 2002, The Financial Accounting Standards Board
      issued SFAS No. 148, "Accounting for Stock-Based
      Compensation-Transition and Disclosure" .  SFAS No. 148
      provides alternative methods for stock-based employee
      compensation.  In addition, SFAS No 148 amends the
      disclosure requirements of SFAS No. 123 to require
      additional and more frequent disclosure in financial
      statements about the effects of stock based compensation.
      Adoption of SFAS No. 148 had no effect on the financial
      position or results of operations of the Company.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(2)   Non-cash investing and financing activities:
      ____________________________________________

      During 2002 and 2001, Igene issued 40,000 and 80,000 shares
      of common stock, respectively, in payment of interest on a
      variable rate subordinated debenture.  If paid in cash, the
      interest would have been payable at 12%, or $90,000 and
      $180,000, respectively. Shares may be issued in lieu of cash
      under the debenture agreement at the higher of $2.25 per
      share or market price per share.  The stock was issued and
      related interest was paid in 2000 and 1999 at $2.25 per
      share, or $180,000, in each year.  (see also note 7) .

      In addition, Igene exercised it's right to satisfy this debt
      on the variable rate subordinate debenture on October 1,
      2002.  Igene gave notice to the holder of  the $1,500,000
      variable rate subordinated debenture, that pursuant to the
      debenture agreement, "Payment of Principal upon Maturity",
      Igene is exercising our right to discharge the principal due
      by converting the Debenture into 187,500 Shares of
      Cumulative Convertible Preferred stock at $8.00 per share.
      (see also note 7) .

      On February 22nd 2002, Igene issued and sold $1,000,000 in
      aggregate principal amount of 8% convertible debentures, 50%
      to certain directors of Igene.  These debentures are
      convertible into shares of Igene's common stock at $.04 per
      share based on the market price of Igene's shares at the
      time the debentures were agreed to.  In consideration of the
      commitment to purchase the 8% convertible debenture, these
      directors also received an aggregate of 25,000,000 warrants
      to purchase common stock at $.04 per share.  These
      debentures, if not converted earlier, become due on February
      22nd 2012.  Igene believes that the issuance and sale of the
      convertible debenture is exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended,
      based on, among other things, the fact that the purchasers
      of the securities were directors of the company at the time
      of purchase.

      On July 17th 2002, Igene issued and sold $300,000 in
      aggregate principal amount of 8% convertible debentures, 50%
      to certain directors of Igene.  These debentures are
      convertible into shares of Igene's common stock at $.03 per
      share based on the market price of Igene's shares at the
      time the debentures were agreed to.  In consideration of the
      commitment to purchase the 8% convertible debenture, these
      directors also received an aggregate of 10,000,000 warrants
      to purchase common stock at $.03 per share.  These
      debentures, if not converted earlier, become due on July 17th
      2012.  Igene believes that the issuance and sale of the
      convertible debenture is exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended,
      based on, among other things, the fact that the purchasers
      of the securities were directors of the company at the time
      of purchase.

      On August 13, 2002, the Board of Directors, in further
      attempts to ascertain a manufacturing partner, authorized
      retention of the services of Mr. Martin Gerson.  His
      responsibility would be to locate and  negotiate a deal with
      a manufacturing partner and act as liason for the expected
      term of the service, two (2) years.  In compensation for
      this service, Mr. Gerson was awarded 12,000,000 shares of
      Igene common stock.  The 12,000,000 shares was issued on
      September 3, 2002 and expensed in the third quarter at fair
      value of approximately, $.01 per share, or $125,000 as
      compensation at the time of the award.  The value of  the
      services to be performed by Mr. Gerson was  $125,000,  as
      determined by the Board of Directors.  In determining the
      number of shares issued for the services to be performed,
      consideration was given to such factors as blockage discounts
      and that the shares of common stock are restricted.   The
      total was expensed immediately as there is no service
      requirement for Mr. Gerson.

      During 2002 and 2001, the Company capitalized leased
      equipment by recording lease obligations payable of $6,537
      and $20,500, respectively, under capital lease.

<PAGE>
      During 2001, the Company satisfied its obligations under
      demand notes payable of $1,000,000 and related accrued
      interest of $14,211 by issuing new 8% convertible debentures
      in the aggregate principal amount of $1,014,211.


            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(2)   Non-cash investing and financing activities (continued):
      ________________________________________________________

      During 2001, employees exercised 55,666 stock options using
      $2,250 of 8% notes payable plus accrued interest of $533.30
      in a cashless exercise.  55,666 new shares of common stock
      were issued pursuant to these exercises of options and
      $2,250 of 8% notes were cancelled.

      During the year ended December 31, 2002, 194,400 warrants
      were exercised using $14,300 of 8% notes payable in a
      cashless exercise.  194,400 new shares of common stock were
      issued pursuant to these exercises of options and $14,300 of
      8% notes were cancelled.

      During 2001, 170,910 warrants were exercised using $17,091
      of 8% notes payable in a cashless exercise.  170,910 new
      shares of common stock were issued pursuant to these
      exercises of options and $17,091 of 8% notes were cancelled.

      During 2002 and 2001, Igene recorded dividends in arrears on
      8% redeemable preferred stock at $.64 per share aggregating
      $16,900 in each year, which has been removed from paid-in
      capital and included in the carrying value of the redeemable
      preferred stock. (see also note 10)

(3)   Concentration of Credit Risk
      ____________________________

      Igene is potentially subject to the effects of a
      concentration of credit risk in accounts receivable.
      Accounts receivable is substantially composed of receivables
      from customers in Chile, which is an important market for
      Igene's product, AstaXin(R).  Chile has from time to time
      experienced political unrest and currency instability.
      Because of the volume of business transacted by Igene in
      Chile, recurrence of such unrest or instability could
      adversely affect the businesses of its customers in Chile or
      Igene's ability to collect its receivables from these
      customers.  In order to minimize risk, Igene strictly
      evaluates the companies to which it extends credit and all
      prices are denominated in US dollars as to minimize currency
      fluctuation risk.  Losses due to credit risks in accounts
      receivable are expected to be immaterial.

(4)   Property and Equipment
      ______________________

      Property and equipment are stated at cost and are summarized
      as follows:

      Laboratory equipment and fixtures          $  181,043
      Pilot plant equipment and fixtures             91,503
      Idle equipment                                 56,150
      Office furniture and fixtures                  68,308
                                                 __________

                                                    397,004
      Less accumulated depreciation                (200,746)
                                                 __________

                                                 $  196,258
                                                 ==========

<PAGE>
      Idle equipment represents manufacturing equipment, which is
      not presently needed for production of AstaXin(R). Igene plans
      to retain the equipment for use when needed due to increased
      production volume or failure of presently used equipment.
      This equipment is not currently being depreciated and its
      net carrying amount approximates its fair value.



            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(5)   Deferred Costs
      ______________

      Deferred costs include deferred manufacturing costs of
      $444,995, which represents the value of a note receivable
      and accrued interest of $218,984 and manufacturing equipment
      with a net book value of $226,011.  These assets have been
      cancelled and sold, respectively, in consideration for a
      reduction in manufacturing fees over the six year term of a
      new manufacturing contract, which became effective in May
      2000. These deferred manufacturing costs are being amortized
      over the term of the contract, and as such have accumulated
      amortization, in the amount of $193,668 and $119,496 for the
      years ended December 31, 2002 and 2001, respectively.
      Expenses are included in cost of sales and inventory.
      Deferred costs also includes debt issue costs relating to
      long-term notes payable.  Costs amounting to $211,713 were
      capitalized and are being amortized over the term of the
      debt, which is 5 years, on the straight-line method.

      Deferred costs as of December 31, 2002 are detailed as
      follows:

<TABLE>
<CAPTION>

                                       Manufacturing       Debt Issue
                                         Costs               Costs           Total
                                       _____________     ______________   _____________
<S>                                    <C>               <C>              <C>
Original amount                        $    444,995      $     211,713    $    656,708
Accumulated amortization                   (193,668)          (201,127)       (394,795)
                                       _____________     ______________   _____________

Deferred costs, net                         251,327             10,586         261,913
Less: current portion                       (74,160)               ---         (74,160)
                                       _____________     ______________   _____________

Non-current portion                    $    177,167      $      10,586    $    187,753
                                       =============     ==============   =============
</TABLE>

(6)   Accounts Payable and Accrued Expenses
      _____________________________________

      Accounts payable and accrued expenses consist of the
      following:

      Accounts payable, trade             $   565,841
      Other accrued expenses                   29,805
                                          ___________

                                          $   595,646
                                          ===========

(7)   Variable Rate Subordinated Debenture
      ____________________________________

      Igene exercised its right to satisfy the variable rate
      subordinate debenture on October 1, 2002 by converting the
      principal due under the variable rate subordinated debenture
      into 187,500 Shares of 8% Cumulative Convertible Preferred
      stock, Series B at $8.00 per share.

<PAGE>
      The debenture bore interest at a rate of 8% per annum
      through September 30, 1996 and thereafter at a rate of 12%
      per annum.  Interest was payable in cash through October 1,
      1989.  Thereafter, the debenture agreement provided that at
      the option and at the discretion of Igene, interest may be
      paid in shares of Igene's common stock at the greater of
      $2.25 per share or the average market value per share.
      During 2002 and 2001 Igene issued 40,000 and 80,000 shares,
      respectively, of its common stock as payment of interest on
      the debenture. The debenture was convertible into common
      stock of Igene at any time at the option of the holder at an
      initial rate of $4 per share of common stock.  The debenture
      was redeemable at the option of Igene at any interest
      payment date at par value plus accrued interest.


            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(8)   Convertible Debentures
      ______________________

      On July 17th 2002, Igene issued and sold $300,000 in
      aggregate principal amount of 8% convertible debentures, 50%
      to certain directors of Igene.  These debentures are
      convertible into shares of Igene's common stock at $.03 per
      share based on the market price of Igene's shares at the
      time the debentures were agreed to.  In consideration of the
      commitment to purchase the 8% convertible debenture, these
      directors also received an aggregate of 10,000,000 warrants
      to purchase common stock at $.03 per share.  These
      debentures, if not converted earlier, become due on July 17th
      2012.  Igene believes that the issuance and sale of the
      convertible debenture is exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended,
      based on, among other things, the fact that the purchasers
      of the securities were directors of the company at the time
      of purchase.

      On February 22nd 2002, Igene issued and sold $1,000,000 in
      aggregate principal amount of 8% convertible debentures, 50%
      to certain directors of Igene.  These debentures are
      convertible into shares of Igene's common stock at $.04 per
      share based on the market price of Igene's shares at the
      time the debentures were agreed to.  In consideration of the
      commitment to purchase the 8% convertible debenture, these
      directors also received an aggregate of 25,000,000 warrants
      to purchase common stock at $.04 per share.  These
      debentures, if not converted earlier, become due on February
      22nd 2012.  Igene believes that the issuance and sale of the
      convertible debenture is exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended,
      based on, among other things, the fact that the purchasers
      of the securities were directors of the company at the time
      of purchase.

      On December 21st 2002, Igene issued and sold $250,000 in
      aggregate principal amount of 8% demand notes to certain
      directors of Igene.  Should Igene be unable to pay them as
      they are called these notes would become convertible into
      shares of Igene's common stock based on the market price of
      Igene's shares at the time they are called.

      During 2000, Igene issued $600,000 in 8% demand notes to
      certain directors of Igene.  As of December 31, 2000, Igene
      has accrued $4,500 of interest payable on these notes, which
      are payable on demand. During 2001, the Company satisfied
      its obligations under demand notes payable and related
      accrued interest by issuing new 8%, 10-year, convertible
      debentures.

      In March 2001, Igene issued $1,014,211 of 8%, 10-year,
      convertible debentures to certain directors of Igene in
      exchange for the cancellation of $800,000 of demand notes
      payable (including accrued interest of $14,212) and $200,000
      in cash. $600,000 of these demand notes were issued during
      2000 and $200,000 were issued subsequently.  These
      debentures are convertible into 10,142,110 shares of Igene's
      common stock at $.08 per share.  These directors also
      received 10,142,110 warrants to purchase common stock at
      $.08 per share.  Interest is payable at maturity.

      In March 2001, certain directors of Igene also committed to
      provide additional funding in the form of 8%, 10-year,
      convertible debentures in the amount of $1,500,000.  In
      consideration of this commitment, these directors also
      received 18,750,000 warrants to purchase common stock at
      $.08 per share.  These debentures are convertible into
      18,750,000 shares of Igene's common stock at $.08 per share.
      Interest is payable at maturity.

<PAGE>
      In December 2001, Igene issued $1,000,000 of 6%, 3-year
      convertible debentures in connection with the purchase of
      ProBio, now known as Igene Norway AS.  These convertible
      debentures are convertible into the Company's stock at a
      price of $.10 per share, 10,000,000 shares in total.
      Accrued interest on this note is due every six months.


            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(8)   Convertible Debentures (continued)
      __________________________________

      Convertible debentures are summarized as follows as of
      December 31, 2002:

<TABLE>
<CAPTION>
                                                                          Accrued
                                                         Principal        Interest
                                                        ___________     ___________
<S>                                                     <C>             <C>
8%, 10-year, convertible debenture issued 7/17/02       $  300,000      $   10,352
8%, 10-year, convertible debenture issued 2/22/02        1,000,000          67,481
8%, 10-year, convertible debenture issued 3/1/01         1,014,212         148,174
8%, 10-year, convertible debenture issued 3/27/01        1,500,000         173,688
6%, 3-year, convertible debenture issued 11/30/01        1,000,000          40,000
                                                        ___________     ___________

                                                        $4,814,212       $ 439,695
                                                        ===========     ===========

</TABLE>

(9)   Notes Payable
      _____________

      Beginning November 16, 1995 and continuing through May 8,
      1997, Igene issued promissory notes to certain directors for
      aggregate consideration of $1,082,500.  These notes specify
      that at any time prior to repayment the holder has the right
      to convert the notes to common stock of Igene at prices
      ranging from $0.05 per share to $0.135 per share, based on
      the market price of common shares at the respective issue
      dates.  The notes are convertible in total to 13,174,478
      shares of common stock.  Concurrently, with each of the
      $1,082,500 of promissory notes, the holders also received
      13,174,478 warrants for an equivalent number of shares at
      the equivalent price per share. The warrants expire ten
      years from the issue of the notes.  These notes were
      modified in conjunction with the 1998 rights offering and
      are now due on March 31, 2003.  The notes bear interest at
      the prime rate.

      In conjunction with the rights offering in March 1998, Igene
      issued $5,000,000 of 8% Notes due March 31, 2003 and
      50,000,000 warrants to purchase one share of common stock at
      an exercise price of $0.10 per share expiring March 31,
      2008.

<PAGE>

      Notes Payable (continued)
      _________________________

      Notes Payable are summarized as follows as of December 31,
      2002:
<TABLE>
<CAPTION>
                                                                      Accrued
                                                      Principal       Interest
                                                     ____________   ____________
<S>                                                  <C>            <C>
8%, notes due to directors issued 12/21/02           $   250,000    $       ---
Long-term notes payable, bearing interest
      at prime, scheduled to maturing
      March 31, 2003, extended to March 31,
      2006, convertible into common stock              1,082,500        411,350
Long-term notes payable, bearing interest
      at 8%, scheduled to maturing
      March 31, 2003, extended to March 31,
      2006                                             4,961,159      1,849,820
                                                     ____________    ___________

                                                     $ 6,293,659     $ 2,261,170
                                                     ============    ===========
</TABLE>


     Combined aggregate amounts of maturities for all convertible
     debentures and notes payable are as follows:

                Year                  Amount
                ____                ___________

                2003                $ 6,293,659
                2004                  1,000,000
                2005                        ---
                2006                        ---
                2007                        ---
                Thereafter          $ 3,814,212

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(10) Redeemable Preferred Stock
     __________________________

     Each share of redeemable preferred stock is entitled to vote
     on all matters requiring shareholder approval as one class
     with holders of common stock, except that each share of
     redeemable preferred stock is entitled to two votes and each
     share of common stock is entitled to one vote.

     Redeemable preferred stock is convertible at the option of
     the holder at any time, unless previously redeemed, into
     shares of Igene's common stock at the rate of two shares of
     common stock for each share of preferred stock (equivalent
     to a conversion price of $4.00 per common share), subject to
     adjustment under certain conditions.

     Shares of redeemable preferred stock are redeemable for cash
     in whole or in part at the option of Igene at any time at
     the stated value plus accrued and unpaid dividends to the
     redemption date.  Dividends are cumulative and payable
     quarterly on January 1, April 1, July 1 and October 1, since
     January 1, 1988  (See note 7 relating to the exchange of
     certain redeemable preferred stock for a debenture).

     Igene exercised it's right to satisfy the $1,500,000
     principal amount of debt outstanding on its variable rate
     subordinate debenture on October 1, 2002. Igene discharged
     the principal due by converting the debenture into 187,500
     Shares of 8% Cumulative Convertible Preferred stock, Series
     B at a rate of $8.00 per share (See note 7 relating to the
     exchange of certain redeemable preferred stock for a
     debenture).

<PAGE>
(10) Redeemable Preferred Stock (continued)
     ______________________________________

     Mandatory redemption of Preferred stock Series A was by
     agreement due by Igene in October 2002.  As Igene is
     operating at a negative cash flow and negative earnings,
     Maryland law does not allow for the redemption of these
     shares.  As such they will remain outstanding and continue
     to accrue interest until such time as Igene is able to
     undertake redemption, though there can be no assurance this
     will develop.

     In December 1988, as part of an overall effort to contain
     costs and conserve working capital, Igene suspended payment
     of the quarterly dividend on its preferred stock.
     Resumption of the dividend will require significant
     improvements in cash flow.  Unpaid dividends cumulate for
     future payment or addition to the liquidation preference or
     redemption value of the preferred stock.  As of December 31,
     2002, total dividends in arrears on Igene's preferred stock
     total $238,534 ($9.12 per share) and are included in the
     carrying value of the redeemable preferred stock.

(11) Stockholders' Equity
     ____________________

     Options
     _______

     In June of 2001, the stockholders approved the 2001 Stock
     Option Plan (the "2001 Plan"), which succeeds the 1997 Stock
     Option Plan (the "1997 Plan"), which succeeded Igene's 1986
     Stock Option Plan (the "1986 Plan"), as amended.  All
     outstanding, unexercised options granted under the 1997 and
     1986 Plans remain outstanding with unchanged terms.  The
     number of shares authorized for issuance under the 2001 Plan
     is 55,000,000.  This is in addition to the 20,000,000 shares
     authorized for issuance under the 1997 Plan, and the
     2,000,000 shares authorized for issuance under the 1986
     Plan.

     The following is a summary of options granted and
     outstanding under the plans as of December 31, 2002 and
     2001:


(11) Stockholders' Equity
      ____________________

     Options
     _______

<TABLE>
<CAPTION>
                                                2002                                  2001
                                 ___________________________________    ________________________________
                                                       Weighted                              Weighted
                                                       Average                               Average
                                                       Exercise                              Exercise
                                    Number             Price               Number            Price
                                 _____________    __________________    _____________    _______________
<S>                              <C>              <C>                   <C>              <C>
Options outstanding
   and exercisable,
   beginning of year              19,037,584       $      .064          11,298,250   	 $    .059

Options granted                   18,200,000       $      .025           8,045,000       $    .071

Options exercised                        ---               ---            (305,666)      $    .050

Options forfeited,
   or withdrawn with
   consent of holders             (1,649,334)      $      .038                 ---             ---

Options expired                          ---               ---                 ---             ---
                                  _____________    _________________    ______________    ______________

Options outstanding
   and exercisable,
   end of year                     35,588,250      $      .039          19,037,584        $   .064
                                  =============    =================    ==============    ==============

</TABLE>
<PAGE>

                 IGENE Biotechnology, Inc. and Subsidiary
                 Notes to Consolidated Financial Statments
                             (continued)

(11)  Stockholders' Equity (continued)
      ________________________________

      Options
      _______

<TABLE>
                      Option Outstanding
<CAPTION>
                                     Weighted Average
    Exercise Price     Shares        Remaining Life (Years)
    ______________     ____________  ______________________
    <S>                <C>           <C>
    $  .025            17,200,000    9.6
    $  .050             9,342,666    6.9
    $  .053                97,719    4.0
    $  .060               162,865    4.0
    $  .065                45,000    6.5
    $  .080             5,500,000    8.8
    $  .100             3,240,000    5.3
                       ____________

    $  .039            35,588,250
                       ============

</TABLE>

     In addition to the options listed above, the following
     additional unregistered options were issued outside of the
     2001, 1997 and 1986 plans.  Per Benjaminsen and Stein Ulve,
     were each granted 10,000,000 options, as part of their Igene
     employment agreement signed concurrently with the ProBio
     purchase.  The options vest over a three year period.  Mr.
     Ulve had vested in the first third of his options and with
     his resignation from Igene forfeited the balance, he has
     until December 31, 2003 to exercise the options that had
     vested.  Mr. Benjaminsen has vested in the first third of
     his options and will vest in the remaining portion evenly on
     December 31, 2003 and December 31, 2004, these options
     expire October 9, 2011.  All 20,000,000 options are
     exercisable at $0.08 per share.

     The fair value of each option grant is estimated on the date
     of grant using the Black-Scholes option-pricing model with
     the following weighted average assumptions used for grants
     during the two years ended December 31:

<TABLE>
<CAPTION>
                                            2002              2001
                                       ______________    ______________
     <S>                                     <C>               <C>
     Dividend yield                             ---               ---
       Expected volatility                   437.67%           147.77%
       Risk-free interest rate                 4.47%             4.91%
       Expected lives in years                   10                10
       Fair value of options granted          $0.04             $0.06

</TABLE>

     The Company accounts for those plans under the recognition
     and measurement principles of APB Opinion No. 25,
     "Accounting for Stock Issued to Employees", and related
     interpretations.  No stock option based employee
     compensation cost is reflected in net income, as all
     options granted under the plan had an exercise price equal
     to the market value of the underlying common stock on the
     date of grant.  The following table illustrates the effect
     on net income and earnings per share if the Company had
     applied the fair value recognition provisions of SFAS No.
     123, "Accounting for Stock-Based Compensation" and
     disclosure provisions of SFAS No. 148 "Accounting for
     Stock-Based Compensation-Transition and Disclosure", to
     stock-based employee compensation for the two years ended
     December 31:


<PAGE>


                  IGENE Biotechnology, Inc. and Subsidiary
                 Notes to Consolidated Financial Statments
                             (continued)

(11)  Stockholders' Equity (continued)
      ________________________________

      Options
      _______

<TABLE>
<CAPTION>
                                                                 2002                2001
                                                           _________________    _________________
         <S>                                               <C>                  <C>
         Net loss, as reported$                            $    (3,364,980)     $    (3,672,959)

         Less pro forma stock-based employee compensation
          expense determined under fair value based method
          net of related tax effects                              (685,001)            (674,959)
                                                           _________________    _________________

         Pro forma net loss                                $    (4,049,981)     $    (4,347,918)
                                                           =================    =================
         Net loss per Share:
          Basic-as reported                                $        (.0.04)     $         (0.06)
          Basic-pro forma                                  $        (.0.05)     $         (0.07)

          Diluted-as reported                              $        (.0.04)     $         (0.06)
          Diluted-pro forma                                $        (.0.05)     $         (0.07)

</TABLE>

     Warrants
     ________

     On February 22nd 2002, Igene issued and sold $1,000,000 in
     aggregate principal amount of 8% convertible debentures, 50%
     to certain directors of Igene.  These debentures are
     convertible into shares of Igene's common stock at $.04 per
     share based on the market price of Igene's shares at the
     time the debentures were agreed to.  In consideration of the
     commitment to purchase the 8% convertible debenture, these
     directors also received an aggregate of 25,000,000 warrants
     to purchase common stock at $.04 per share.  These
     debentures, if not converted earlier, become due on February
     22nd 2012.  Igene believes that the issuance and sale of the
     convertible debenture is exempt from registration under
     Section 4(2) of the Securities Act of 1933, as amended,
     based on, among other things, the fact that the purchasers
     of the securities were directors of the company at the time
     of purchase.

     On July 17th 2002, Igene issued and sold $300,000 in
     aggregate principal amount of 8% convertible debentures, 50%
     to certain directors of Igene.  These debentures are
     convertible into shares of Igene's common stock at $.03 per
     share based on the market price of Igene's shares at the
     time the debentures were agreed to.  In consideration of the
     commitment to purchase the 8% convertible debenture, these
     directors also received an aggregate of 10,000,000 warrants
     to purchase common stock at $.03 per share.  These
     debentures, if not converted earlier, become due on July 17th
     2012.  Igene believes that the issuance and sale of the
     convertible debenture is exempt from registration under
     Section 4(2) of the Securities Act of 1933, as amended,
     based on, among other things, the fact that the purchasers
     of the securities were directors of the company at the time
     of purchase.

     During 2000, Igene issued 10,000,000 warrants, expiring in
     ten years, to certain directors who purchased 10,000,000 new
     shares of common stock through direct purchases for a total
     price of $1,000,000.  The shares of stock and warrants were
     issued at $.10 per share, based on the market value of
     Igene's stock at the time of the commitment to purchase the
     stock.

<PAGE>

          IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(11) Stockholders' Equity (continued)
     ________________________________

     Warrants
     ________

     In March 2001, Igene issued $1,014,211 of 8% convertible
     debentures to certain directors of Igene in exchange for the
     cancellation of $800,000 of demand notes payable (including
     accrued interest of $14,212) and $200,000 in cash. $600,000
     of these demand notes were issued during 2000 and $200,000
     were issued subsequently.  These debentures are convertible
     into 10,142,110 shares of Igene's common stock at $.08 per
     share.  These directors also received 10,142,110 warrants to
     purchase common stock at $.08 per share

     In March 2001, certain directors of Igene also committed to
     provide additional funding in the form of 8% convertible
     debentures in the amount of $1,500,000.  In consideration of
     this commitment, these directors also received 18,750,000
     warrants to purchase common stock at $.08 per share.  These
     debentures are convertible into 18,750,000 shares of Igene's
     common stock at $.08 per share.

    The following table summarizes warrants issued, outstanding
    and exercisable:

<TABLE>
<CAPTION>
                                     As of December 31,
                           ______________________________
                               2002               2001
                           ____________       ____________
     <S>                   <C>                <C>
     Issued                198,016,073        163,016,075
     Outstanding           198,016,073        163,016,075
     Exercisable           198,016,073        163,016,075

</TABLE>

     Common Stock
     ____________

     At December 31, 2002, 198,016,073 shares of authorized but
     unissued common stock were reserved for exercise of
     outstanding warrants, 35,588,250 shares of authorized but
     unissued common stock were reserved for exercise pursuant to
     the 1986, 1997 and 2001 Stock Option Plans, 52,310 shares of
     authorized but unissued common stock were reserved for
     issuance upon conversion of Igene's outstanding preferred
     stock, 375,000 shares of authorized but unissued common
     stock were reserved for issuance upon conversion of the
     Preferred Stock series B issued in conversion of  the
     variable rate subordinated debenture, 11,696,731 shares were
     reserved for issue in accordance with Igene's manufacturing
     agreement with Fermic (see note 13) and 79,602,129 shares of
     authorized but unissued stock were reserved for issuance
     upon conversion of outstanding convertible notes.


     Preferred Stock
     _______________

     Igene exercised its right to satisfy the variable rate
     subordinate debenture on October 1, 2002 by converting the
     principal due under the variable rate subordinated debenture
     into 187,500 Shares of 8% Cumulative Convertible Preferred
     stock, Series B at $8.00 per share.

     The debenture bore interest at a rate of 8% per annum
     through September 30, 1996 and thereafter at a rate of 12%
     per annum.  Interest was payable in cash through October 1,
     1989.  Thereafter, the debenture agreement provided that at
     the option and at the discretion of Igene, interest may be
     paid in shares of Igene's common stock at the greater of
     $2.25 per share or the average market value per share.
     During 2002 and 2001 Igene issued 40,000 and 80,000 shares,
     respectively, of its common stock as payment of interest on
     the debenture. The debenture was convertible into common
     stock of Igene at any time at the option of the holder at an
     initial rate of $4 per share of common stock.  The debenture
     was redeemable at the option of Igene at any interest
     payment date at par value plus accrued interest.  (See note
     7 relating to the exchange of certain redeemable preferred
     stock for a debenture).
<PAGE>

          IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(11) Stockholders' Equity (continued)
     ________________________________

     Preferred Stock
     _______________


     At December 31, 2002, cumulative dividends in arrears
     totaled $238,534 ($9.12 per share) and were included in the
     aggregate involuntary liquidation value of the preferred
     stock.

(12) Net Loss Per Common Share
     _________________________

     Net loss per common share for 2002 and 2001 is based on
     81,544,079 and 62,657,779 weighted average shares,
     respectively.  For purposes of computing net loss per common
     share, the amount of net loss has been increased by
     dividends declared and cumulative undeclared dividends in
     arrears on preferred stock.

     Common stock equivalents, including: options, warrants,
     convertible debt, convertible preferred stock, and
     exercisable rights have not been included in the computation
     of earnings per share in 2002 and 2001 because to do so
     would have been anti-dilutive.  However, these common stock
     equivalents could have potentially dilutive effects in the
     future (see also notes 7, 8, 10 and 11).

(13) Commitments
     ___________

     Igene is obligated for office and laboratory facilities and
     other rentals under operating lease agreements, which expire
     in 2004. The basic annual rentals are expected to be
     approximately $93,600 under such leases. Annual rent expense
     relating to the leases for the years ended December 31, 2002
     and 2001 approximated $90,000 and $86,500, respectively.

     Future minimum rental payments, in the aggregate and for
     each of the next five years are as follows:
<TABLE>
<CAPTION>
            Year            Amount
           ______          ________
           <S>             <C>
           2003            93,600
           2004	              ---
           2005	              ---
           2006	              ---
           2007	              ---
           2008	              ---
</TABLE>


     Effective May 20, 2000, Igene signed an exclusive
     manufacturing agreement with Fermic, S.A. de C.V.
     ("Fermic"), of Mexico City, Mexico, for the production of
     AstaXin(R).  The Fermic contract provides that the
     manufacturer has a limited exclusive right to produce
     AstaXin(R) and is paid a monthly fee in cash, which is based
     on manufacturing capacity, plus shares of Igene common
     stock based on production quantities.  Fermic provides
     equipment and facilities necessary to manufacture and store
     the product and is responsible for purchasing raw
     materials.  Igene is responsible for sales efforts and for
     ensuring the quality of the pigment.  Igene also has a role
     in ensuring that the manufacturing process works
     effectively.  The term of the contract is 6 years.

<PAGE>


            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)

(13) Commitments (continued)
     _______________________

     Based on production of AstaXin(R), Igene has committed to
     issue to Fermic up to a maximum of 20,000,000 shares of
     Igene common stock during a six year period expiring May
     20, 2006 in accordance with the new manufacturing
     agreement.  Based on quantities of AstaXin(R) produced
     8,303,269 shares of Igene common stock has been issued to
     Fermic.  This stock has been recorded as a manufacturing
     expense and also as increase in common stock and additional
     paid in capital of $430,751.  This amount has been computed
     based on the fair value of the stock as of the period in
     which the shares were earned.

     Igene has agreed to a capital investment agreement with its
     manufacturing partner Fermic.  The agreement commits Igene
     to purchase up to $500,000 of equipment on Fermic's behalf.
     To date Igene has purchased $324,405 worth of equipment,
     which is reported on the balance sheet as other assets.  It
     is presumed that no additional funds will be disbursed
     regarding this agreement.  The investment will be credited
     back to Igene against manufacturing fees incurred over the
     remainder of the May 20, 2000 manufacturing agreement.

(14) Contingencies
     _____________

     Archer Daniels Midland, Inc. ("ADM") has sued Igene,
     alleging patent infringement and requesting injunctive
     relief as well as an unspecified amount of damages (filed
     July 21, 1997, U.S. District Court, Baltimore, MD). Igene
     has filed a $300,450,000 counterclaim concerning the theft
     of trade secrets (filed August 4, 1997).  The court denied
     ADM's request for preliminary injunctive relief.
     Mediation efforts during 1999 did not resolve this dispute,
     which has been returned to the court for a judicial
     disposition. Presently, a stay on all discovery remains in
     effect while a court-appointed expert analyzes the yeast
     products of both parties.  Management believes that it is
     not probable that this dispute will result in an
     unfavorable outcome to Igene.  Accordingly, no liability
     has been reflected in the December 31, 2002 and 2001
     balance sheets. Nonetheless, should ADM prevail, Igene
     could be liable for damages, and Igene could also lose the
     right to use a particular strain of yeast. However,
     Management expects that this will not affect Igene's
     ability to make and sell its product, AstaXin(R).  Igene had
     expenses of   $47,159 and $65,258, respectively in 2002 and
     2001 associated with this on-going litigation.

(15) Income Taxes
     ____________

     No income tax benefit or deferred tax asset is reflected in
     the financial statements.  Deferred tax assets are
     recognized for future deductible temporary difference and
     tax loss carry forwards if their realization is "more
     likely than not".

     At December 31, 2002, Igene has federal and state net
     operating loss carry-forwards of approximately
     $24,032,000 that expire at various dates from 2002 through
     2022.  The recorded deferred tax asset, representing the
     expected benefit from the future realization of the net
     operating losses, net of the valuation allowance,  was
     $-0- for 2002 and 2001.


     The sources of the deferred tax asset are approximately as
     follows:

       Net operating loss carry-forward benefit  $   9,281,000
       Valuation allowance                          (9,281,000)
                                                 ______________
       Deferred tax asset, net                   $         ---
                                                 ==============
<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                        (continued)


(16) Uncertainty
     ___________

     Igene has incurred net losses in each year of its existence,
     aggregating approximately $37,000,000 from inception to
     December 31, 2002 and its liabilities and redeemable
     preferred stock exceeded its assets by approximately
     $13,803,461 at that date.  These factors indicate that Igene
     will not be able to continue in existence unless it is able
     to raise additional capital and attain profitable
     operations.

     The continuing successful marketing of Igene's product,
     AstaXin(R), may permit Igene to attract additional capital and
     enable it to continue.

     Igene began manufacturing and selling AstaXin(R) during 1998
     and has continued to do so to date, attempting to  increase
     sales and manufacturing levels.  Igene believes this
     technology to be highly marketable.  Igene hopes to continue
     increasing sales of AstaXin(R), eventually achieving gross
     profits and, subsequently, profitable operations.  Though
     the achievement of these can not be assured.

     During 2002 and 2001, Igene continued to fund its operations
     through the issuance of warrants and convertible debentures
     through direct purchases and loans by directors and other
     accredited investors.  This provided additional capital of
     $1,550,000 and $2,514,212, respectively.

(17) Nature of Risks and Concentrations
     __________________________________

     Igene derived revenue during 2002 and 2001 from sales of the
     product, AstaXin(R).  Substantially all of Igene's 2002 and
     2001 sales were to fish producers in the aquaculture
     industry in Chile.  During 2002, three customers, who are
     located in Chile, represented over 10% of sales each, for a
     total of 83% in the aggregate, accordingly, all of Igene
     Chile's receivables are located in Chile.   All of Igene's
     manufacturing operations for AstaXin(R) are conducted in a
     single manufacturing facility in Mexico City, Mexico.

     All of the preceding concentrations subject Igene to certain
     risks. For example, it is considered at least reasonably
     possible that any particular customer, distributor, product
     line, or provider of services or facilities could be lost in
     the near term.  It is also considered at least reasonably
     possible that operations located outside the United States
     could be disrupted in the near term.  However, Igene has at
     present no information that would lead it to believe that it
     will lose its principal product, principal customers, or its
     contracted manufacturer; or that its operations in Mexico
     City or Chile will be disrupted, though this belief can not
     be assured.

     Following is a schedule of the approximate carrying value of
     assets located in foreign countries by geographic area:

           Chile                                      $   850,000
           Mexico                                         350,000
           Norway                                         650,000
                                                      ___________

           Total assets located in foreign countries  $ 1,850,000
                                                      ===========

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                         (continued)

(18) Simple Retirement Plan
     ______________________

     Effective January 1, 1997, Igene adopted a Simple Retirement
     Plan under Internal Revenue Code Section 408(p). The Plan is
     a defined contribution plan, which covers all of Igene's U.S.
     employees who receive at least $5,000 of compensation for the
     preceding year. The Plan permits elective employee
     contributions.  Igene made nonelective contributions of 2% of
     each eligible employee's compensation for each year for the
     period January 1, 1997 through until December 31, 2001.  On
     January 1, 2002 Igene began making nonelective contributions
     of 3% of each eligible employee's compensation. Igene's
     contributions to the Plan for 2002 and 2001 were $10,749 and
     $7,997, respectively, which are expensed in the 2002 and 2001
     statements of operations.

(19) Subsequent Event
     ________________

     On February 5, 2003, Igene Biotechnology Inc., in an effort
     to focus on and grow its core business, disposed of all
     10,000 of the issued and outstanding shares of capital stock
     of its subsidiary, ProBio Nutraceuticals, AS, a Norwegian
     corporation.  Fermtech AS, a joint stock company incorporated
     in the Kingdom of Norway and owned equally by Igene's then
     chief executive officer, Stein Ulve and then-chief marketing
     officer, Per Benjaminsen, purchased the shares of ProBio.
     Mr. Ulve has resigned as CEO while Mr. Benjaminsen continues
     to serve the Company as in independent consultant, effective
     as of December 31, 2002.

     Igene sold ProBio to Fermtech AS in exchange for aggregate
     consideration valued at approximately $343,000.  A portion of
     the consideration received by Igene consisted of 7,000,000
     shares of common stock of Igene that Fermtech owned as a
     result of Igene's purchase of ProBio in January 2002
     (including 2,000,000 shares that were placed into escrow and
     may be returned to Fermtech as described below), valued for
     the purposes of the acquisition at $.03 per share, plus
     forgiveness of approximately $168,000 of debt that Igene owed
     to ProBio at the time of purchase in 2001. Provided Mr.
     Benjaminsen remains employed by Igene through 2003, 1,000,000
     of the escrowed shares of common stock will be delivered to
     Fermtech. If Mr. Benjaminsen remains employed by Igene
     through 2004, the remaining 1,000,000 escrowed shares will be
     released from escrow and delivered to Fermtech.  The
     remaining 5,000,000 shares of Igene common stock were retired
     on February 5, 2002.

     The amount of consideration paid for ProBio was determined
     through arms-length negotiations between Igene Biotechnology,
     Inc. management, on behalf of Igene, and Mr. Ulve, on behalf
     of Fermtech.  The principles followed in determining the
     amount paid for the Pro Bio shares involved a consideration
     of ProBio's cash flow, cash position, revenue and revenue
     prospects.

     The equipment and other physical property disposed of
     belonging to ProBio includes inventory, personal computers, a
     web site and trademark, other office equipment and furniture,
     and accounts receivables and accounts payables related to
     nutraceuticals.  The 2002 net operating loss of the division
     being sold as ProBio was $437,051 on sales of $2,306,193 and
     is reflected in the 2002 consolidated statements of
     operations as loss from discontinued operations.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                         (continued)

                         SIGNATURES


     In accordance with Section 13 or 15(d) of the Securities
     Exchange Act, the registrant caused this report to be signed on
     its behalf by the undersigned, thereunto duly authorized, in
     Columbia, Howard County, State of Maryland on March 26, 2003.


                                IGENE Biotechnology, Inc.
                                ______________________________
                                (Registrant)

                                By:  Stephen F. Hiu, President
                                     _________________________
                                     Stephen F. Hiu

                                Date March 26, 2003
                                     _________________________

                                By:  Edward J. Weisberger
                                     _________________________
                                     Edward J. Weisberger

                                Date March 26, 2003
                                     _________________________



     In accordance with the Exchange Act, this report is to be signed
     below by the following persons on behalf of the registrant and
     in the capacities indicated.


     Signature               Title                      Date
     _____________________   ________________________   ______________


     Stephen F. Hiu          Director, President,       March 26, 2003
     _____________________   Chief Technical Officer,
     Stephen F. Hiu          Treasurer

     Thomas L. Kempner       Vice Chairman of Board     March 26, 2003
     _____________________   of Directors
     Thomas L. Kempner

     Michael G. Kimelman     Chairman of the Board      March 26, 2003
     _____________________   of Directors
     Michael G. Kimelman

     Sidney R. Knafel        Director                   March 26, 2003
     _____________________   Sidney R. Knafel

     Patrick F. Monahan      Director, Vice President   March 26, 2003
     _____________________   Secretary and
    Patrick F. Monahan       Director of Manufacturing

<PAGE>

I, Stephen F. Hiu, certify that:

1.     I have reviewed this Annual report on Form 10-KSB of Igene
       Biotechnology, Inc.;

2.     Based on my knowledge, annual report does not contain any
       untrue statement of a material fact or omit to state a
       material fact necessary to make the statements made, in
       light of the circumstances under which such statements were
       made, not misleading with respect to the period covered by
       this quarterly report;

3.     Based on my knowledge, the financial statements, and other
       financial information included in this annual report,
       fairly present in all material respects the financial
       condition, results of operations and cash flows of the
       registrant as of, and for, the periods presented in this
       annual report;

4.     The registrant's other certifying officers and I are
       responsible for establishing and maintaining disclosure
       controls and procedures (as defined in Exchange Act Rules
       13a-14 and 15d-14) for the registrant and we have: a)
       designed such disclosure controls and procedures to ensure
       that material information relating to the registrant,
       including its consolidated subsidiaries, is made known to
       us by others within those entities, particularly during the
       period in which this annual report is being prepared; b)
       evaluated the effectiveness of the registrant's disclosure
       controls and procedures as of a date within 90 days prior
       to the filing date of this annual report (the "Evaluation
       Date"); and c) presented in this annual report our
       conclusions about the effectiveness of the disclosure
       controls and procedures based on our evaluation as of the
       Evaluation Date;

5.     The registrant's other certifying officers and I have
       disclosed, based on our most recent evaluation, to the
       registrant's auditors and the audit committee of
       registrant's board of directors (or persons performing the
       equivalent function): a) all significant deficiencies in
       the design or operation of internal controls which could
       adversely affect the registrant's ability to record,
       process, summarize and report financial data and have
       identified for the registrant's auditors any material
       weaknesses in internal controls; and b) any fraud, whether
       or not material, that involves management or other
       employees who have a significant role in the registrant's
       internal controls; and

6.     The registrant's other certifying officers and I have
       indicated in this annual report whether or not there were
       significant changes in internal controls or in other
       factors that could significantly affect internal controls
       subsequent to the date of our most recent evaluation,
       including any corrective actions with regard to significant
       deficiencies and material weaknesses.

Date: March 26, 2003

/s/ STEPHEN F. HIU
______________________
    STEPHEN F. HIU
    President

<PAGE>

I, Edward J. Weisberger, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Igene
       Biotechnology, Inc.;

2.     Based on my knowledge, this annual report does not contain
       any untrue statement of a material fact or omit to state a
       material fact necessary to make the statements made, in
       light of the circumstances under which such statements were
       made, not misleading with respect to the period covered by
       this annual report;

3.     Based on my knowledge, the financial statements, and other
       financial information included in this annual report,
       fairly present in all material respects the financial
       condition, results of operations and cash flows of the
       registrant as of, and for, the periods presented in this
       annual report;

4.     The registrant's other certifying officers and I are
       responsible for establishing and maintaining disclosure
       controls and procedures (as defined in Exchange Act Rules
       13a-14 and 15d-14) for the registrant and we have: a)
       designed such disclosure controls and procedures to ensure
       that material information relating to the registrant,
       including its consolidated subsidiaries, is made known to
       us by others within those entities, particularly during the
       period in which this annual report is being prepared; b)
       evaluated the effectiveness of the registrant's disclosure
       controls and procedures as of a date within 90 days prior
       to the filing date of this annual report (the "Evaluation
       Date"); and c) presented in this annual report our
       conclusions about the effectiveness of the disclosure
       controls and procedures based on our evaluation as of the
       Evaluation Date;

5.     The registrant's other certifying officers and I have
       disclosed, based on our most recent evaluation, to the
       registrant's auditors and the audit committee of
       registrant's board of directors (or persons performing the
       equivalent function): a) all significant deficiencies in
       the design or operation of internal controls which could
       adversely affect the registrant's ability to record,
       process, summarize and report financial data and have
       identified for the registrant's auditors any material
       weaknesses in internal controls; and b) any fraud, whether
       or not material, that involves management or other
       employees who have a significant role in the registrant's
       internal controls; and

6.     The registrant's other certifying officers and I have
       indicated in this annual report whether or not there were
       significant changes in internal controls or in other
       factors that could significantly affect internal controls
       subsequent to the date of our most recent evaluation,
       including any corrective actions with regard to significant
       deficiencies and material weaknesses.

Date: March 26, 2003

/s/  EDWARD J. WEISBERGER
_________________________
     EDWARD J. WEISBERGER
     Chief Financial Officer