SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549

                      REPORT ON FORM 10-KSB

     [X]  Annual Report pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934

     For the fiscal year ended April 30, 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 No. 0-27028
                   ---------
                      EMBRYO DEVELOPMENT CORPORATION
                    ---------------------------------
      (Exact name of registrant as specified in its charter)

       Delaware                                               13-3832099
     ---------------                                         ------------
(State of or other jurisdiction                             (IRS Employer
of incorporation or organization)                           Identification No.)

305 Madison Avenue Suite 4510
New York, New York                                              10165
-----------------------------                                ----------
 (Address of Principal                                      (Zip Code)
   Executive Officers)

Registrant's telephone number, including area code:   (212) 808-0607

Securities registered pursuant to Section 12(b) of the Act:  None.
                                                            -------
Securities registered pursuant to Section 12(g) of the Act:

          Common Stock, par value $.0001 per share
          ----------------------------------------
                          (Title of Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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
                                                -
     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of the Regulation S-B is not 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. [X]

     Issuer's revenues for its most recent fiscal year were $-0-.

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant, computed by reference to the closing price of such stock as
of August 9, 2002, was approximately $50,950.

     Number of shares outstanding of the issuers common stock, as of August 9,
2002, was 6,995,000.
           DOCUMENTS INCORPORATED BY REFERENCE:  None.
                                                 -----
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                             PART I
                            --------
Item 1.  BUSINESS.
         ---------

     Embryo Development Corporation, is a development stage Delaware corporation
(the "Company" or  "Embryo"), which was organized in March 1995 to develop,
acquire, manufacture and market various bio-medical devices.  The Company has
not derived any significant revenues since its inception.

     The Company was a licensee  to seven (7) license agreements (the "License
Agreements") and two (2) royalty sharing agreements (the "Royalty Sharing
Agreements") with Dr. Lloyd Marks which provided  for the exclusive license of
seven medical devices and the sharing of royalties of two (2) medical
devices, all of which had been developed by Dr. Marks ("Marks Medical
Devices").  The Marks Medical Devices included  a self-shielding needle,
adjustable blood pressure cuff, a multi-function fluid communication control
system and  stereoscopic fluoroscopy apparatus.  On August 21, 1998 the
Company  notified Dr. Marks that it was terminating the License  agreements
with respect to six (6) of the devices as it could not make the minimum
payments  required under the agreements; these devices included the
adjustable blood pressure cuff, a multi-function fluid communication control
system and  stereoscopic fluoroscopy apparatus.    The minimum payment
obligations with respect to the self-shielding needle were made in accordance
with the terms of the original agreement and that License Agreement was
retained and later amended as to the minimum payment obligations on
January 22, 1999.   In January, 2001, the license agreement for the seventh
device, the self-shielding needle, effectively terminated as the Company
could not obtain the necessary government approval within the required
twenty-four (24) month timeframe in the amended license agreement since the
Company had halted development of the device due to capital constraints.  The
Company also could not pay the licensor the required additional $250,000, under
the terms of the amended agreement, to extend the regulatory approval
requirement.

     The termination of  the above  license agreements follows a determination
by management to conserve capital and that the seven products licensed could not
profitably be developed and commercially marketed by the Company at this time.

     The Company holds patents to five (5) other  medical devices and was the
exclusive licensee of one (1) medical device in the areas of emergency medical
equipment and peritoneal dialysis warming devices.  Two (2) of the devices,
the Hot-Sack II(TM) and Hot-Sack II+(TM), are used in connection with the

                                        2
<Page>

warming of peritoneal dialysis solution.  Four (4) of the devices, Hot-Sack(R) ,
Res-Q-Air(R), Therm-O-Drug(TM) and an electronic stethoscope, are devices used
for emergency rescue operations and by other emergency medical technicians.
Three of the devices (Hot-Sack(R), Res-Q-Air(R) and Therm-O-Drug(TM) have
received all necessary regulatory approval under the "510(k) review" process
of the U.S. Food and Drug Administration (" FDA")  and the Company believes
that the additional two (2) products (Hot-Sack II(R) and Hot-Sack II+(TM) are
covered by the FDA's approval of Hot-Sack(R) or would independently qualify
for 510(k) approval.  The Company has received minimal sales revenues from
such product sales. In October, 1999, the Company ceased sales on these
medical products due to the relatively low level of sales, capital constraints
and price increases by the manufacturer.  Although the Company holds the patents
and rights to these products, management does not believe that these products
have any viable marketability at this time.

     The Company also holds a 10.3% minority voting investment interest in
Hydrogel Design Systems, Inc. ("HDS"), a privately held company engaged in the
manufacturing, marketing, selling and distribution of hydrogel materials.
HDS was partially financed through a long-term note and security agreement
between HDS and Becton Dickinson Transdermal Systems, a division of Becton
Dickinson and Company, a customer of HDS and a manufacturer and distributor
of medical devices and diagnostic systems.  See "Certain Transactions."

     The major focus of HDS,  is the manufacture of hydrogel materials, on an
original equipment manufacturer ("OEM") basis, for the manufacture of medical
devices, drug delivery products, wound care and cosmetics products. Hydrogel
is manufactured by introducing a polymer (solid) into water, creating a feed
mix. The feed mix is used to coat a web material (or scrim) and two outer
linings are applied creating sheets of hydrogel. These sheets are then
introduced to a high energy field, which is accomplished by using an electron
beam accelerator. The introduction of a high energy field causes the release
of hydrogen atoms which in turn causes carbon molecule covalent bonding. This
is commonly referred to as crosslinking. This creates longer chains of the
polymer in the gel which increases its molecular integrity, giving the gel
unique characteristics which make it useful in a variety of products. By
varying the percent of solids in the feed mix, the amount of crosslinking
(which is determined by the amount of energy introduced), the type of
polymer, scrim and lining used, a wide variety of gels with distinctly
different characteristics may be produced.

     The Company believes that HDS's proprietary mixing and beam operation
technology allow it to make superior quality products at competitive prices. HDS
currently provides product to several Fortune 500 companies, as well as
other, smaller companies. These customers are using  the HDS hydrogel for
wound dressings, transdermal drug delivery systems and electrodes.

      HDS has an electron beam and is operating in leased space  in Langhorne,
PA. The facility became operational in the fourth quarter of calendar year
1997.

                                      3

<Page>

     Hydrogel and other electron beam accelerator processed products are being
marketed both through internal contacts with a few world-wide health
distributors and through its own internal sales force.

          The Company is presently exploring several business opportunities,
inclusive of the possible acquisition of a new line of business, which may or
may not be related to the development of medical devices.

Sales and Marketing
--------------------
     The Company had marketed its medical devices  through independent
distributors worldwide. In October, 1999, the Company ceased sales on these
medical products due to the relatively low level of sales, capital constraints
and price increases by the manufacturer.

     Management will determine the appropriate marketing strategy for any
products which are developed in the future as these products come to market.


Manufacturing
-------------
     Management will determine the appropriate manufacturing strategy for any
products which are developed in the future.

     Management also believes, although there can be no assurance, that the
Company will be able to obtain satisfactory sources of manufacturing supply for
its products should manufacturing operations be restarted on any of its
existing products.

Competition
-------------
     Competition in the medical device industry is intense.  There are many
companies and academic institutions that are capable of developing products of
similar design, and that have developed and are capable of developing products
based on other technologies, that are or may be competitive with the Company's
future medical devices.  Many of those companies and academic institutions
are well-established, have substantially greater financial and other resources
than the Company, and have established reputations for success in the
development, sale and service of products.  These companies and academic
institutions may succeed in developing competing products that are more
effective than those of the Company or that receive FDA approval more
quickly than the Company's products.  The Company's ability to compete will
be dependent upon its ability to get any new products approved by regulatory
authorities and introduced to the market, including the arrangement of a
distribution network, and to provide products with advanced performance
features, none of which can be assured.

                                     4
<Page>

Government Regulation
----------------------
     The majority of the Company's medical  products, which are presently not
being manufactured,  are subject to regulation by, among other governmental
entities, the United States Food and Drug Administration ("FDA") and, to a
lesser extent, correspondent state agencies.  If a device is subject to FDA
regulation, compliance with its requirements usually constitutes compliance
with state regulation. In order to ensure that medical products distributed
for human use in the United States are safe and effective, the FDA regulates the
introduction, manufacture, advertising, labeling, packaging, marketing and
distribution of and record-keeping for such products.

     Development of medical products in the future may require the Company to
comply with FDA regulations and be subject to various other FDA record-keeping
requirements and  inspections by the FDA.  The Company believes that the
manufacturing and quality control procedures it will follow  will meet the
requirements of these regulations.  The FDA would have the authority, in
addition to less drastic remedies, to order the Company to cease production
of its products and to request that the Company recall products already sold by
the Company.  The FDA may conduct periodic inspections of the Company's
facilities in order to confirm regulatory compliance by the Company.  If the
FDA believes that its regulations and other guidelines have not been followed,
it may seek to implement extensive enforcement powers, which were recently
strengthened by the enactment of the Safe Medical Devices Act of 1990.  The
FDA's powers include the ability to ban products from the market, prohibit the
operation of manufacturing facilities and effect recalls of products from
customer locations and impose monetary civil penalties.

      Three (3) of the Company's  medical devices that have been approved by the
FDA for commercial sale  under a review process known as "510(k) review" and the
Company believes that an additional two (2) products (Hot-Sack II(TM) and
Hot-Sack II+(TM) are covered by the FDA's approval of Hot Sack(R) or would
qualify independently for 510(k) approval.  In the 510(k) review process, a
manufacturer is mandated to demonstrate that a proposed product is
"substantially equivalent" to another product that was in commercial
distribution in the United States before May 26, 1976, in which event the
review process can take anywhere from three months to more than one year
before FDA grants clearance of the 510(k) pre-market notification.  In cases
where there is no existing FDA-approved product "substantially equivalent" to
the new proposed product, the product is considered a "new" product.  The new
product requires a Pre-Market Application ("PMA") which is a lengthier and
more burdensome process and a process which will require FDA approval prior
to the product entering commercial distribution. On May 26, 1998 the Company
completed its 510(k) notification for its Self-Shielding Needle and submitted it
to the FDA. On June 22,1998 the Company received a request for additional
information from the FDA regarding the 510(k) submission.  On July 13, 1998
the Company responded to the FDA's request.  Subsequently, the

                                   5
<Page>

Company was notified by the FDA that its application was rejected due primarily
to deficiencies in clinical studies and bench test data.  The Company made
design changes to the Self-Shielding Needle and performed a new clinical
study.  A new 510(k) submission was completed on October 16, 1998.  On
October 26, 1998, the Company was notified by the FDA that the device is
considered a class III and requires a premarket approval application (PMA).  The
Company   halted plans to complete the development of the Self-Shielding
Needle due to capital constraints.  In January, 2001, the license agreement
for the  self-shielding needle, effectively terminated, as the Company could
not obtain the necessary government approval within the required twenty-four
(24) month timeframe in the  license agreement.  The Company also could not
pay the licensor the required additional $250,000, under the terms of the
amended agreement, to extend the regulatory approval requirement.

     After clearance is given, the FDA has the power to withdraw the clearance
or require the Company to change the device or its manufacturing process or
labeling, to supply additional proof of its safety and effectiveness or to
recall, repair, replace or refund the cost of the medical device if
it is shown to be hazardous or defective.  The process of obtaining clearance
to market products is costly and time consuming and can delay the marketing
and sale of any of  the Company's products which may be developed in the future.

     There is no required government regulation on hydrogel related products at
this time.


Health Care Industry
---------------------
     Legislation and regulations at both the federal and state levels may be
enacted which may change the methods by which health care providers, including
hospitals, physicians and home care dealers, are reimbursed for costs of
providing services to Medicare and Medicaid program beneficiaries.  Changes
may also be made by third-party payors in coverage policies for various
items.


Patents, Proprietary Rights and Trademarks
------------------------------------------
     The Company's policy is to file patent applications to protect technology,
inventions and improvements that are important to the development of its
business.  The Company also relies on trade secret protection for its
confidential and proprietary information.

     The Company  owns the patent for the Hot Sack which expires in 2008 and the
exclusive license to the Res-Q-Air, which has been issued a United States patent
which expires in 2006.  The Company did not renew the license to the Res-Q-Air
which expired in 2000. The Company is not presently manufacturing any of
these products.  There can be no assurance that future pending patent

                                       6
<Page>

applications will be approved or that any patents will provide competitive
advantages for the Company's products or will not be challenged or circumvented
by competitors.  The Company also relies on trade secrets and proprietary
know-how which it seeks to protect, in part, through confidentiality
agreements with employees, consultants and other parties.  There can be no
assurance that these agreements will not be breached, that the Company would
have adequate remedies for any breach, or that the Company's trade secrets
will not otherwise become known to or independently developed by competitors.

     The Company also holds a registered trademark on Hot-Sack(R) and on
SmartMed(TM) which was used on  products in  the past  and may be used on future
products.

     All other license agreements for the development of medical devices, in
which the Company held proprietary rights, have been terminated.

     There are no patents related to the hydrogel products.

Product Liability Insurance
---------------------------
     Companies in the health care market are subject to lawsuits alleging
negligence, product liability and other legal theories, many of which involve
large claims and significant defense costs. The Company could be subject to
claims alleging personal injuries resulting from the use of its products.
The Company has obtained product liability insurance since it has commenced
sales of its products.  However, there can be no assurance that such policies
will be sufficient to cover potential claims or the costs of any resulting
litigation or that a policy can be maintained in force at an acceptable cost
to the Company.  A successful claim against the Company in excess of the
Company's insurance coverage could have a material adverse effect upon the
Company's business and results of operations.  In addition, claims against
the Company, regardless of their merit or eventual outcome, also may have a
material adverse effect upon the Company's reputation.  The Company currently
has product liability coverage of $1,000,000 and a $9,000,000 excess liability
policy.


Employees
----------
     As of July 29, 2002, the Company employed two (2) full time persons,
including one (1) in sales marketing and product development, and one (1) in
general administration and finance.  The Company has never had a work
stoppage and its employees are not represented by a labor organization.  The
Company considers its employee relations to be good.

                                7
<Page>

Item 2.  PROPERTIES.
         -----------
     The Company's corporate headquarters are in New York City.   On February
10, 1999, the Company entered into a sixteen (16) month lease commencing March
1, 1999, for office space which was personally guaranteed by an officer of
the Company. Commencing July 1, 2000, the Company continued to rent the space on
a month to month basis.  The Company terminated the lease on August 31, 2001.

     On September 1, 2001, the Company entered into a sublease with HDS for
office space on a month to month basis.  The Company believes that these
facilities are adequate to meet its current needs and that suitable
additional or alternative space will be available as needed in the future on
commercially reasonable terms. See "Certain Transactions."

     In addition, in February 1997, the Company leased a 16,500 square foot
facility in Langhorne, PA.  The lease was for a term of seven years with an
annual rent of $116,000 which was to increase to $119,000 per annum over the
term of the lease. The entire facility was  subleased to HDS for the
full rental amount through April 30, 1999.  On May 1, 1999, the amount of the
sublease to HDS was reduced to approximately 82% pro-rata share as the Company
began to utilize a portion of the premises.  In October, 1999, the Company
ceased use of this space and increased the amount of the sublease to the full
rental amount.  In February, 2000, the annual rent was increased to $123,000 as
per the escalation clause in the lease.  On January 25, 2002, the Company
entered into an Assignment and Amended and Restated Lease Agreement with HDS,
the existing sub-tenant of the premises leased by the Company at 2150
Cabot Blvd. West, Langhorne, PA.  By such agreement, HDS accepted an
assignment of the Lease from the Company.  Also, on such date, the building in
which the leasehold premises are contained was purchased by 2150 Cabot, LLC, a
related party of the Company.  Subsequent to the lease assignment, the Landlord
of the premises and the Company conducted discussions respecting an outright
release of the Company from contingent or other obligations of the Company to
the Landlord including, but not limited to, the obligation of the Tenant to
restore the leasehold premises to its original condition upon expiration of the
Lease.  The Landlord granted a general  release to the Company from any and all
contingent or other obligations under the Lease in exchange for a release of
any claim for a return of its security deposit in the amount of $79,625.
This forfeiture of the deposit was charged to operations in the current year.
Management determined, based on estimates,  that the actual cost that would be
incurred to restore the premises to its condition as existed prior to the Lease
between the former Landlord and the Company would exceed the amount of the
deposit.

Item 3.  LEGAL PROCEEDINGS.
         ------------------
     The Company has been named as a defendant in a consolidated class action
pending before the U.S. District Court for the Eastern District of New York.  In
a consolidated complaint, plaintiffs assert claims against the Company and
others under the Securities Act of 1933, the Securities Exchange Act of 1934
and New York common and statutory law arising out of the November 1995

                                      8
<Page>

initial public offering of 1 million shares of the Company's common stock.
According to the complaint, the underwriter of the offering, Sterling Foster &
Co., Inc. ("Sterling Foster"), which is also a defendant, manipulated
secondary market trading in shares of the Company's common stock following
the offering and covered certain short positions it created through such
manipulation by purchasing shares of Company stock from persons who owned such
stock prior to the offering pursuant to an  arrangement with such persons that
was not disclosed in the registration statement and prospectus distributed in
connection with the offering.  The complaint seeks unspecified damages.

     In November 1998, it was announced that Michael Lulkin, a director and
Chairman of the Board of Directors of the Company at the time of the Company's
initial public offering, had plead guilty to, among other things, conspiracy to
commit securities fraud.  The charges to which Mr. Lulkin plead were premised
on allegations that Mr. Lulkin, Sterling Foster, and others had entered into
an undisclosed agreement pursuant to which, upon conclusion of the Company's
initial public offering, they would (a) cause Sterling Foster to release Mr.
Lulkin and others who owned Embryo stock prior to the offering from certain
"lock up" agreements restricting them from selling such stock; and (b) cause
Mr. Lulkin and such other persons to sell their Embryo stock to Sterling Foster
at prearranged prices to enable Sterling Foster to use such stock to cover
certain short positions it had created.

     In August 1999, an agreement of principle was entered into providing for
settlement of the consolidated class action against the Company, Mr. Lulkin and
Steven Wasserman, who was also a member of the Company's Board of Directors at
the time of the Company's initial public offering.  Under the agreement in
principle, all claims in the action against the Company, and against Mr.
Lulkin and Mr. Wasserman insofar as they were members of the Company's Board
of Directors, would be dismissed in exchange for a payment of $400,000, of
which $100,000 would need to be paid by the Company and $300,000 would be paid
by an insurance company under a directors and officers liability policy of
insurance.  In June 2001, definitive settlement documents were executed.
The settlement documents provide that  the Company would pay the foregoing
$100,000 by remitting to the class representatives $25,000 and a note in the
amount of $75,000 payable in June 2003 with interest thereon at 7% per year.
The Company has remitted the funds and note described above to the class
representatives to be held by them in accordance with the terms of the
settlement agreement and pending final court review of the settlement.  The
settlement is contingent upon, among other things, final approval by the
court.  There can be no assurance that the settlement will be concluded.

                                     9
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Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
         ----------------------------------------------------
     No matters were submitted to the Company's shareholders for vote during
the last quarter of its fiscal year.

PART II
--------
Item 5.  MARKET FOR REGISTRANT'S COMMON
         EQUITY AND RELATED STOCKHOLDER MATTERS.
         ----------------------------------------
     The Company's securities commenced trading in the over-the-counter market
on the effectiveness of the Company's Initial Public Offering on November 18,
1995 in the form of Common Stock.  The Common Stock was  regularly quoted and
traded on the NASDAQ system through October 1998.

     The Company was advised by The Nasdaq Stock Market that it failed to meet
the continued listing requirements of The Nasdaq SmallCap Market.  The Company
submitted an application for continued listing.  The Company was advised in
July, 1998 that the NASD had denied the Company's submission for continued
listing.  The Company filed an appeal to that decision.  A hearing on
continued listing was held on September 17, 1998 whereby the appeal was
denied.  Effective October 21, 1998,  the Company's common stock is now listed
on the OTC-Bulletin Board.

     The following table indicates the high and low bid prices for the Company's
Common Stock for the period up to June 30, 2002 based upon information supplied
by the NASDAQ and OTC-Bulletin Board system.  Prices represent quotations
between dealers without adjustments for retail markups, markdowns or
commissions, and may not represent actual transactions.

Common Stock
------------
                                        Quoted Bid Price
                                        High      Low
                                        ----      ----
          2000 Calendar Year
          ------------------
          First Quarter                  .42      .00
          Second Quarter                 .20      .09
          Third Quarter                  .09      .05
          Fourth Quarter                 .10      .00

          2001 Calendar Year
          ------------------
          First Quarter                  1/16     .00
          Second Quarter                 1/16     .05
          Third Quarter                   .05     .03
          Fourth Quarter                  .03     .02

          2002 Calendar Year
          ------------------
          First Quarter                   .02     .01
          Second Quarter                  .02     .00

                                10
<Page>

     On August  9, 2002, the closing price of the Common Stock as reported on
the OTC-Bullletin Board  was $.01  On August 9, 2002, there were 664 holders of
record of common stock.








                               11
<Page>




Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
         ----------------------------------------------
Liquidity and Capital Resources
-------------------------------
     The Company is in the development stage and the Company's ability to
continue in the normal course of business is dependent upon the success of
future operations.  The Company has had recurring losses from operations which
aggregate approximately  $(10,200,000)cumulative to April 30, 2002.  At April
30, 2002, the Company has a net working capital deficit  of approximately
$(244,000)  and a stockholders' deficit of approximately $(471,000) , which
raise substantial doubt about its ability to continue as a going concern.
Approximately $1,000 of current assets represents cash on hand.  The Company
remains in its development stage as it has not yet derived significant
revenues from the sale of its products.

     The Company's statement of cash flows for the year ended April 30, 2002
reflects cash used in operating activities of approximately $219,000. This use
of cash is primarily attributable to general and administrative expenses
consisting of salaries, rent, insurance and other general expenses. The
repayment of the HDS credit line of approximately $194,000 was primarily  used
to fund current operations.

     On February 14, 1997, the Company entered into a seven-year operating lease
for premises located at 2150 Cabot Blvd. West, Langhorne, PA. to be used for
offices and manufacturing.   Effective February 14, 1997, the Company entered
into a seven year sub-lease with HDS related to these premises.  On January
25, 2002, the Company entered into an Assignment and Amended and Restated
Lease Agreement with HDS, the existing sub-tenant of the premises leased by the
Company.  By such agreement, HDS accepted an assignment of the Lease from the
Company.  Also, on such date, the building in which the leasehold premises are
contained was purchased by 2150 Cabot, LLC, a related party of the Company.
Subsequent to the lease assignment, the Landlord of the premises and the
Company conducted discussions respecting an outright release of the Company
from contingent or other obligations of the Company to the Landlord
including, but not limited to, the obligation of the Tenant to restore the
leasehold premises to its original condition upon expiration of the Lease.
The Landlord granted a general  release to the Company from any and all
contingent or other obligations under the Lease in exchange for a release of
any claim for a return of its security deposit in the amount of $79,625.
This forfeiture of the deposit was charged to operations in the current year.
Management determined, based on estimates,  that the actual cost that would
be incurred to restore the premises to its condition as existed prior to the
Lease between the former Landlord and the Company would exceed the amount of the
deposit.

                                      12
<Page>



     The Company expects to incur additional expenditures over the next 6 to 12
months for general and administrative expenses and to evaluate its future
operations.  The Company's management no longer believes that the Company's cash
on hand will be sufficient to fund the Company's operations for the next
twelve (12) months. However, management continues to believe that the
outstanding amount due from HDS, which is due September 30, 2002, of
approximately $256,000 will be at least partially repaid during the next (6)
months.  During the year ended April 30, 2002,  HDS repaid approximately
$194,000 of the outstanding receivable balance to the Company and has
continued to make additional payments subsequent to April 30, 2002.  In
addition, the Company's management has set up a reserve of approximately
$128,000 or approximately 50% of the outstanding balance at April 30, 2002,
based upon anticipated probable collectibility of the balance. In the event
that no additional repayment or an insufficient repayment is made in the next
(6) months, the Company will seek alternative methods of raising additional
capital which may include the possible acquisition of a new line of business
which may or may not be related to the development of medical devices, or the
possible liquidation of its investment in HDS.  To the extent that the
Company will not be able to collect the balance of its investee receivable, its
ability to continue operating will be dependent upon its ability to successfully
sell its investment, raise additional capital through debt or equity markets, or
possibly make an acquisition.

     In addition, the Company has continued to significantly reduce operating
costs and general expenses.  Cash  utilitzed for operations decreased by
approximately $87,000 in the current year and should continue to decrease in
the next year.

Results of Operations
---------------------
     Since its inception, the Company's primary activities have consisted of
obtaining the exclusive license to seven (7) medical devices developed by Dr.
Lloyd Marks, developing a marketing strategy for the its other medical devices
and the start-up of HDS, a majority owned manufacturer of gel related
products.  HDS was a majority subsidiary in which the Company presently owns
a 10.3% voting share.

       At April 30, 2002, the Company no longer holds any of these (7)  licenses
it had purchased from Dr. Lloyd Marks.  The final license for the development of
the self-shielding needle terminated on January 22, 2001 as the Company could
not obtain the necessary government approval  since the Company had halted
development of the device due to capital constraints.  The Company also could
not pay the licensor the required additional $250,000, under the terms of the
amended agreement, to extend the regulatory approval requirement.  The
remaining unamortized cost of $69,048 for this license agreement was charged to
operations in the year ended April 30, 2001.

     In October 1999, the Company ceased sales on its other medical devices  due
to the relatively low level of sales, capital constraints and price increases by
the manufacturer.  The Company has evaluated the marketability of the
licensed technology relating to these products and has determined that these
products have no viable marketability at this time.   At April 30, 2000, the
unamortized amount of this technology approximated $155,000, of which the
Company has set-up a 100% reserve based upon anticipated marketability of these
assets.

                                   13
<Page>

     The Company has not derived significant revenues since its inception in
March 1995. The total revenue earned from inception through April 30, 2002 is
$1,394,149. This is a result of the sale of medical devices of approximately
$659,000 and HDS sales of hydrogel and apnea monitor products of
approximately $735,000 which are included in the statement of operations
through January 21, 1998.  As a result of the Company's start-up expenses and
acquisition of licenses and royalty rights for the products in the
development stage, the Company had an accumulated deficit of $10,200,226 as
of April 30, 2002.  The Company is attempting to reduce operating losses through
reductions in operating expenses until such time it can generate additional
capital for future operations.

          The net loss for the year ended April 30, 2002 was approximately
($184,000) as compared to a net loss of approximately ($390,000)   for the year
ended April 30, 2001.  There were no revenues in either of the two years.
The reduction in the loss of approximately  $206,000 for the current year is
primarily attributable a reduction in overhead costs.

Plan of Operation
------------------
      The Company has effectively terminated all of its license agreements as of
April 30, 2002. The Company had  temporarily halted plans to complete the
development of the Self-Shielding Needle, the last remaining license,  due to
capital constraints.  On January 22, 2001, the license agreement effectively
terminated as the Company could not obtain the necessary government approval
with the two (2) year term as required in the agreement.  The  Company also
determined that it could not pay the licensor an additional $250,000 to extend
the regulatory approval requirement.

     The Company  has retained a 10.3% investment, in its nonconsolidated
affiliate HDS, which is accounted for under the cost method commencing
January 31, 1999.  The manufacturing facility of HDS became fully operational
in late 1997.  The Company anticipates that the future operations of HDS
could allow HDS to repay its obligations to the Company in the future.

                                 14
<Page>

     No assurance can be made with respect to the viability of the Company in
the long term.   The Company no longer holds any  development licenses and has
determined that its current medical products have no viable marketability.
The Company is presently exploring several alternatives, inclusive of a
possible acquisition of a new line of business, which may or may not be related
to the development of medical devices.  Management anticipates that to meet
current operating costs would require raising additional funds from either the
debt or equity markets.  Alternatively,  the Company may need to consider
liquidating its investment in HDS to meet cash requirements.  No assurances
can be made as to the success of these working capital raising alternatives.


                                 15
<Page>




Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
         --------------------------------------------
         See financial statements following Item 13 of this Annual Report on
         Form 10-KSB.

Item 8.  CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE.
         ----------------------------------------------
         None

                                16
<Page>

                                PART III
                              ------------
Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT OF THE
         REGISTRANT.
         -----------------------------------------------------------------

          Directors and Executive Officers

          The names and ages of the directors, executive officers and
significant employees, and promoters of the Company are set forth below.
All of the directors are elected annually.

    Name                           Age        Position Held
---------------------             ----       ---------------

 Matthew L. Harriton               38        President, Chief Executive
                                             Officer, Chief Financial
                                             Officer  and Director

 Dr. Daniel Durchslag              57        Director


Background of Executive Officers and Directors
----------------------------------------------

    Matthew L. Harriton has served as the Chief Financial Officer of the Company
since January 1996.  In April 1997, Mr. Harriton became the Chief Executive
Officer and a Director of the Company, and assumed the position of President.
Mr. Harriton also serves as President and Chief executive Officer of Hydrogel
Design Systems, Inc., in which the Company has a 10.3% minority voting
interest, since October 1996. Prior to joining Embryo Development Corporation,
Mr. Harriton's professional experience included positions at CIBC Wood Gundy
Securities Corporation from June 1994 until December 1995, Coopers & Lybrand
from September 1990 until May 1994, and The First Boston Corporation from June
1986 until May 1988.  He is a graduate of Lehigh University and received his
M.B.A. from Duke University's Fuqua School of Business.

   Dr. Daniel Durchslag, DDS,, has been practicing General, Cosmetic and Sports
Dentistry in Beverly Hills, CA, since 1980.  From 1973 until 1979, he was an
Associate Professor and Director of Clinics at the University of Southern
California School of Dentistry.  He is a graduate of the University of
Wisconsin and Loyola University/Chicago College of Dental Surgery.


                                    17
<Page>




      Each director of the Company is entitled to receive reasonable expenses
incurred in attending meetings of the Board of Directors of the Company.  In
June, 1998 Messr. Durchslag was granted options, (which were subsequently
exercised),  to purchase 250,000 shares of the Company's common stock, and
Mr. Harriton, the President and Chief Executive Officer of the Company was
granted options, (which were subsequently exercised)  to purchase 750,000
shares of the Company's common stock, all  at an exercise price equal to the
market price on the date of the grant ($0.0938) exercisable for a period of
[four (4)] years. The Directors receive no other compensation for serving on
the Board of Directors.  The members of the Board of Directors intend to meet
at least quarterly during the Company's fiscal year, and at such other times
duly called.

    The directors will serve until their successors have been duly elected and
qualified.




                                     18
<Page>

Item 10.  EXECUTIVE COMPENSATION
          ----------------------
<TABLE>
<CAPTION>

                       SUMMARY COMPENSATION TABLE
                                                                                     Long Term Compensation
                                                                                    ____________________________
                                       Annual Compensation                        Awards                    Payouts
                          ______________________________________________        _________________         ----------
   (a)                        (b)     (c)            (d)         (e)          (f)          (g)      (h)     (i)
                                                                             Restricted                     All
                                                                Other         Stock                LTIP    Other
                                                               Annual         Awards     Options/  Payouts Compensation
Name and Principal Position   Year    Salary($)    Bonus($)  Compensation($)     ($)      SARs(#)    ($)        ($)
---------------------------   ----    ---------    --------  ---------------  ---------- --------- ------- ------------

                            <c>    <c>          <c>           <c>             <c>        <c>        <c>        <c>
Matthew L. Harriton, CEO       2002   $60,000      $   -0-       0               ---        0          0          0
                               2001   $60,000      $   -0-       0               ---        0          0          0
                               2000   $60,000      $   -0-       0               ---        0          0          0
____________________
</TABLE>

<TABLE>
<CAPTION>

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                      -------------------------------------
   (a)                         (b)            (c)                  (d)         (e)
                                        % of Total Options
                  Number of Securities  Options/SARs Granted   Exercise or
                  Underlying Option/    to Employees in        Base Price     Expiration
Name              SARs Granted (#)      Fiscal Year            (# Share)        Date
----------------  --------------------- --------------------   ----------     -----------

                       <c>                 <c>                <c>             <c>
Matthew Harriton          0                   0                  N/A             N/A

</TABLE>

<TABLE>
<CAPTION>

                       AGGREGATED OPTION/SARs EXERCISES IN
                           LAST FISCAL YEAR AND FY-END
                                OPTIONS/SAR VALUES
                       -------------------------------------
   (a)                         (b)       (c)                 (d)                      (e)
                                                      Number of              Value of
                                                      Securities Underlying  Unexercised
                                                      Unexercised Options/   In-the-Money
                                                      SARs at FY-End (#)     Options/SARs at
                    Shares Acquired      Value        Exercisable/           FY-End Exercisable
Name                on Exercise (#)      Realized ($) Unexercisable          Unexercisable
-----------------------------------     ------------- --------------------   -------------------

                        <c>              <c>            <c>                   <c>
Matthew Harriton           0                $ 0            -0-0-                 -0-/-0-

</TABLE>

                                         19
<Page>











Employment Agreements
---------------------
     On January 1, 1997 the Company entered into a two (2) year employment
agreement with Matthew L. Harriton which provides for a base salary of $90,000
for the first year and $100,000 for the second year, with provisions for a
discretionary bonus.  The agreement also provides for the issuance to Mr.
Harriton of options to purchase 100,000 shares of the Company's Common Stock
at ($.65) per share. In September 1997, the Company amended the January 1, 1997
employment agreement.  The agreement, as amended, provides for annual
compensation of $60,000 effective January 1, 1998.  Mr. Harriton was also
granted options to purchase an additional 400,000 shares of the Company's
common stock at an exercise price equal to the market price on the date of the
amendment ($0.59) exercisable for a period of four (4) years.   In June 1998,
the options to purchase the aggregate of 500,000 shares of the Company's common
stock were repriced to an exercise price equal to the market price in June of
1998 of $.0938. In January 1999, the Company renewed this employment agreement
for an additional two years.  The agreement provides for annual compensation
of $60,000 effective January 1, 1999.  Mr. Harriton was also granted rights
to purchase 200,000 shares of HDS common stock from the Company at a price
of $1.00 per share for a period of two (2) years.  In January 2001, this
agreement was extended for a one (1) year term under the same terms and
conditions of the original agreement.  On June 26, 2001, Mr. Harriton
purchased 25,000 shares of HDS common stock from the Company at a price
of $1.00 per share. In January 2002, this agreement was again extended for a
one (1) year term under the same terms and conditions of the original agreement.

Stock Option Plans and Agreements
----------------------------------
          Incentive Option and Stock Appreciation Rights Plan -- As of March,
1995, the Directors of the Company adopted and the stockholders of the Company
approved the adoption of the Company's 1995 Incentive Stock Option and Stock
Appreciation Rights Plan ("Incentive Option Plan"). The purpose of the
Incentive Option Plan is to enable the Company to encourage key employees and
Directors to contribute to the success of the Company by granting such employees
and Directors incentive stock options ("ISOs") as well as non-qualified options
and stock appreciation rights ("SARs").

     The Incentive Option Plan is administered by the Board of Directors or a
committee appointed by the Board of Directors (the "Committee") which will
determine, in its discretion, among other things, the recipients of grants,
whether a grant will consist of ISOs, non-qualified options or SARs or a
combination thereof, and the number of shares to be subject to such options
and SARs.

     The Incentive Option Plan provides for the granting of ISOs to purchase
Common Stock at an exercise price to be determined by the Board of Directors or
the Committee not less than the fair market value of the Common Stock on the
date the option is granted. Non-qualified options and freestanding SARs may
be granted with any exercise price. SARs granted in tandem with an option
have the same exercise price as the related option.

                                  20
<Page>

     The total number of shares with respect to which options and SARs may be
granted under the Incentive Option Plan is 2,000,000.  ISOs may not be granted
to an individual to the extent that in the calendar year in which such ISOs
first become exercisable the shares subject to such ISOs have a fair market
value on the date of grant in excess of $100,000. No option or SAR may be
granted under the Incentive Option Plan after March 15, 2005 and no option
or SAR may be outstanding for more than ten years after its grant. Additionally,
no option or SAR can be granted for more than five (5) years to a shareholder
owning 10% or more of the Company's outstanding Common Stock.

     Upon the exercise of an option, the holder must make payment of the full
xercise price. Such payment may be made in cash or in shares of Common Stock
(based on the fair market value of the Common Stock on the date prior to
exercise), or in a combination of both. The Company may lend to the holder of
an option funds sufficient to pay the exercise price, subject to certain
limitations, or in its discretion, accept payment by non-recourse promissory
note. SARs may be settled, in the Board of Directors' discretion, in cash,
Common Stock, or in a combination of cash and Common Stock. The exercise of
SARs cancels the corresponding number of shares subject to the related
option, if any, and the exercise of an option cancels any associated SARs.
Subject to certain exceptions, options and SARs may be exercised any time up to
three months after termination of the holder's employment.

     The Incentive Option Plan may be terminated or amended at any time by the
Board of Directors, except that, without stockholder approval, the Incentive
Option Plan may not be amended to increase the number of shares subject to the
Incentive Option Plan, change the class of persons eligible to receive
options or SARs under the Incentive Option Plan or materially increase the
benefits of participants.

     As of June, 2002 options to purchase 1,650,000 shares of common stock, and
no SARs have been granted and exercised under the Incentive Option Plan and
otherwise. No determinations have been made regarding the persons to whom
options or SARs will be granted in the future, the number of shares which
will be subject to such options or SARs or the exercise prices to be fixed with
respect to any option or SAR.

     Non-Qualified Option Plan -- As of March 1995, the Directors and
stockholders of the Company adopted the 1995 Non-Qualified Stock Option Plan
(the "Non-Qualified Option Plan"). The purpose of the Non-Qualified Option
Plan is to enable the Company to encourage key employees, Directors,
consultants, distributors, professionals and independent contractors to
contribute to the success of the Company by granting such employees, Directors,
consultants, distributors, professionals and independent contractors
non-qualified options. The Non-Qualified Option Plan will be administered by
the Board of Directors or the Committee in the same manner as the Incentive
Option Plan.

                                    21
<Page>

     The Non-Qualified Option Plan provides for the granting of non-qualified
options at such exercise price as may be determined by the Board of Directors,
in its discretion. The total number of shares with respect to which options may
be granted under the Non-Qualified Option Plan is 2,000,000.

     Upon the exercise of an option, the holder must make payment of the full
exercise price. Such payment may be made in cash or in shares of Common Stock
(based on the fair market value of the Common Stock on the date prior to
exercise), or in a combination of both. The Company may lend to the holder of
an option funds sufficient to pay the exercise price, subject to certain
limitations. Subject to certain exceptions, options may be exercised any time
up to three months after termination of the holder's employment or relationship
with the Company.

     The Non-Qualified Option Plan may be terminated or amended at any time by
the Board of Directors, except that, without stockholder approval, the
Non-Qualified Option Plan may not be amended to increase the number of shares
subject to the Non-Qualified Option Plan, change the class of persons
eligible to receive options under the Non-Qualified Option Plan or materially
increase the benefits of participants.





                                     22
<Page>

Item 11. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT.
         ---------------------------------
     The following table sets forth certain information, as of  July 29, 2002
with respect to the beneficial ownership of the outstanding Common Stock by (i)
any holder of more than five (5%) percent; (ii) each of the Company's officers
and directors; and (iii) the directors and officers of the Company as a group:

<TABLE>
<CAPTION>
                                          Percentage                      Percentage
                            Shares of      (%) of                         (%) of Total
Name and Address             Common        Common      Shares of          Comb ined
of Beneficial Owner        Stock Owned      Stock    Preferred Stock(2)     Vote(2)
-------------------        ------------  ----------  ------------------   ------------

                            <c>          <c>         <c>                  <c>
M.D. Funding, Inc.(1)          --           --          6,000,000            46.2
5 Old Woods Drive
Harrison, NY 10528


Daniel Durchslag             250,000       3.6            ---                 1.9
9400 Brighton Way
Suite 402
Beverly Hills, CA 90210

Matthew L. Harriton        1,250,000      17.9            ---                 9.6
305 Madison Avenue
New York, NY  10165

Karen Nazzareno              400,000       5.7            ---                 3.1
305 Madison Avenue
New York, NY  10165

All directors and officer  1,500,000      21.4            ---                11.5
as a group (2 persons)
</TABLE>

     (1)  M.D. Funding, Inc. is a corporation which is wholly-owned by Donna
Field, whose address is 5 Old Woods Drive, Harrison, NY 10528,  the beneficial
owner of such shares.  M.D. Funding, Inc. is not affiliated with any of the
officers or directors of the Company.

     (2)  Holders of preferred stock are entitled to vote on all matters of the
Company submitted to a vote of stockholders with one share of preferred stock
equalling the same voting rights as one share of common stock.


                                  23
<Page>



Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
          ------------------------------------------------

     In January 1997, the Company entered into a subscription agreement to
acquire 50.04% of the Common Stock and 15,000,000 shares of Preferred Stock for
a combined voting interest of 92.9% of Hydrogel Design Systems, Inc. (HDS). HDS
was formed in October 1996 to effect the asset acquisition described below. As
consideration for its interest, the Company paid $150,000 cash, 150,000
shares of its Common Stock and made available to HDS a $500,000 line of credit,
bearing interest at 8%, which was increased to $850,000 in August 1997.  The
credit line, which expired on January 31, 1999, was extended to January 31,
2001, in February 1999 due to the financial condition of HDS, with no further
cash advances allowed.  In February 2001, the credit line was again extended
through September 30, 2002, under the same terms as the prior extension.  At
April 30, 2002, the outstanding balance on the line of credit was approximately
$256,000.

     On February 6, 1997 HDS, acquired substantially all of the assets of two
(2) related companies, Novatech, Inc. and Alternative Design Systems R & D
Group. In consideration for the payment of $150,000, and the issuance of 150,000
shares of the Company's Common Stock (subject to certain adjustments), HDS
acquired certain rights and assets, including proprietary formulas and
methodology, necessary to manufacture, market, sell and distribute Hydrogel and
associated products. Hydrogel is a product used in the manufacture of a variety
of medical devices including, cardiac defibrillator pads and various types of
electrodes. HDS has also entered into a contract for the purchase of
manufacturing equipment for $600,000 which has been financed through a long-term
note and security agreement between HDS and Becton Dickinson, a customer of HDS
and a manufacturer and distributor of medical devices and diagnostic systems.

     On January 21, 1998, the Company's equity interest in HDS, which previously
represented a 50.04% majority common interest and 92.9% voting interest, was
reduced to 45.6% common ownership as a result of the Company surrendering all
15,000,000 shares of voting Preferred Stock in exchange for 21,500 shares of
Common Stock.  The exchange was done at the request of certain third party
investors of a Private Placement by HDS, under which HDS issued approximately
475,000 additional common shares.    In February and April, 1998, the Private
Placement was completed and an additional 1,027,000 shares of HDS stock were
issued, thereby reducing the Company's ownership to 33.3%.  As a result of
the Company's reduced ownership in HDS and surrender of the voting Preferred
Stock, the assets, liabilities and operations of HDS after January 21, 1998 are
not included on a consolidated basis in the financial statements of the Company.
In January 1998, as a result of subsequent litigation between HDS and the
former owners of the entitities HDS acquired, the terms of the original
purchase were modified and the Embryo shares were returned to HDS.

     Between November 20, 1998 and January 31, 1999, the Company sold an
aggregate of 710,000 shares of the common stock of HDS for $710,000 reducing its
investment to an aggregate of 562,500 shares or 14.4% common ownership of HDS.
As a result of this transaction, as of January 31, 1999, this investment is no
longer included as an equity investment in the financial statements of the
Company, but is reported at cost.  At April 30, 2002, the Company holds
approximately 11.4% ownership of the common stock of HDS and a 10.3% minority
voting interest in HDS.

                                  24
<Page>

     In February 1997, HDS entered into a seven-year sublease with the Company,
which provides for minimum monthly rental payments of $9,625 and expires in
2004.  In May, 1999, the minimum rental payment was reduced to $7,892 per month
due to a utilization of a portion of the premises by the Company.
In October, 1999, the Company ceased use of this space and increased the amount
of the sublease to the original monthly amount of $9,625.  In February 2000,
the monthly rent was increased to $10,214 as per the escalation provision in
the sublease. On January 25, 2002, the Company entered into an Assignment and
Amended and Restated Lease Agreement with HDS, the existing sub-tenant of the
premises leased by the Company at 2150 Cabot Blvd. West, Langhorne, PA.  By
such agreement, HDS accepted an assignment of the Lease from the Company.  Also,
on such date, the building in which the leasehold premises are contained was
purchased by 2150 Cabot, LLC, a related party of the Company. Subsequent to the
lease assignment, the Landlord of the premises and the Company conducted
discussions respecting an outright release of the Company from contingent or
other obligations of the Company to the Landlord including, but not limited to,
the obligation of the Tenant to restore the leasehold premises to its original
condition upon expiration of the Lease.  The Landlord granted a general  release
to the Company from any and all contingent or other obligations under the
Lease in exchange for a release of any claim for a return of its security
deposit in the amount of $79,625.  This forfeiture of the deposit was charged
to operations in the current year.  Management determined, based on estimates,
that the actual cost that would be incurred to restore the premises to its c
ondition as existed prior to the Lease between the former Landlord and the
Company would exceed the amount of the deposit.

     In August 1997, HDS entered into a one-year management agreement with the
Company subject to automatic renewal each year.  The management agreement
provides for an annual fee of the greater of $75,000 per annum or ten (10%)
percent of the gross sales generated by the Company's sales representatives
in consideration for Embryo providing HDS with administrative, marketing and
management services.  In May, 1998, HDS notified the Company that the
agreement will not be renewed in August 1998.

     In June, 1998 the Company granted options to purchase 750,000 shares of the
Company's common stock to Matthew Harriton, President of the Company, options to
purchase 250,000 shares of common stock to each of Andrew Frabrikant and Dr.
Daniel Durchslag, Directors of the Company, and options to purchase 400,000
shares of common stock to Karen Nazzareno, an employee of the Company.  All
such options were granted under the Company's Incentive Stock Option Plan and
at the then market price of $.0938 per share.  Also, options to purchase 500,000
shares which were previously granted to Matthew Harriton, under the terms of
his prior employment agreement with the Company, were amended to change the
exercise price thereof to $.0938 per share and to allow for payment upon
exercise, in the same manner as under the Incentive Stock Option Plan.

                                    25
<Page>

     The above options were exercised in June, 1998 and an aggregate of
2,150,000 shares of common stock of the Company were issued.  Payment to the
Company of an aggregate amount of $201,670 was made by delivery by all such
persons  to the Company of non-recourse promissory notes, which are due in
five (5) years, bear interest at 8% per annum and are secured by the common
stock purchased.

     While the exercise of the options resulted in the issuance of 2,150,000
shares of common stock, the Company does not believe there has been a change of
control since the Company's Articles of Incorporation provide that the shares of
common stock vote together as one class with the shares of the Company's
preferred stock.  As of June 29, 2002, the holders of the preferred stock
held 46.2% of the voting power.

     Although the persons exercising the options may be deemed to operate as a
group, they disclaim they are operating as a group.   While no immediate changes
in the direction of the Company are presently contemplated, depending upon
future circumstances, the persons exercising the options may in the future
attempt to influence the direction of the Company.

     On February 10, 1999, the Company entered into a sixteen (16) month lease
commencing March 1, 1999, for office space which was personally guaranteed by an
officer of the Company. Commencing July 1, 2000, the Company has continued to
rent the space on a month to month basis. The Company terminated the lease on
August 31, 2001.

     On September 1, 2001, the Company entered into a sublease with HDS for
office space on a month to month basis.  The Company believes that these
facilities are adequate to meet its current needs and that suitable
additional or alternative space will be available as needed in the future on
commercially reasonable terms.

     M.D. Funding, Inc. may be deemed a parent of the Company as a result of its
control of the Company voting stock.  M.D. Funding, Inc. is a corporation
which is wholly owned by Donna Field, the beneficial owner of such shares.
M.D. Funding, Inc. is not affiliated with any of the officers or directors of
the Company.  See "Principal Stockholders."



                                     26
<Page>

                                  PART IV
                                 ----------
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------
(a)(1)  Financial Statements.

     The following financial statements are included in Part II, Item 7:

Index to Financial Statements and Schedules

Report of Independent Certified Public Accountants                F-1

Balance sheet as of April 30, 2002                                F-2

Statements of operations for the years ended
  April 30, 2002 and 2001                                         F-3

Statements of stockholders' equity (deficit) for the years
  ended April 30, 2002 and 2001                                   F-4 - F-7

Statements of cash flows for the years ended
  April 30, 2002 and 2001                                         F-8 - F-9

Notes to financial statements                                     F-10 - F-24



                                  27
<Page>



(a)(3)  Exhibits.

1.01*               Form of Underwriting Agreement.

1.02*               Form of Selected Dealers Agreement.

3.01*               Certificate of Incorporation of the Company.

3.02*               By-Laws of the Company.

4.01*               Form of Warrant Agreement by and among the Company and
                    American Stock Transfer & Trust Company.

4.02 *              Form of Underwriter's Share Purchase Option.

10.01*         March 1995 Bridge Loan Agreements.

10.02*         Consulting Agreement by and between Dr. Lloyd Marks and the
                    Company dated as of March 31, 1995.

10.03*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: SmartMonitor dated of March 31,1995.

10.04*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Multi-Function Fluid Communication Control
                    System dated as of March 31, 1995.

10.05*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Adjustable Blood Pressure Cuff and Method of
                    Measuring Blood Pressure dated of March 31,1995.

10.06*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Stereoscopic Fluoroscopy Apparatus dated of
                    March 31,1995.

10.07*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Adjustable Blood Pressure Cuff and Method of
                    Using Same dated as of March 31,1995.

10.08*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Multiple Cuff Blood Pressure System dated of
                    March 31,1995.


                                          28
<Page>

10.09*         Licensing Agreement by and between Dr. Lloyd Marks and the
                    Company re: Safety Needle dated of March 31,1995.

10.10*         Royalty Sharing Agreement by Dr. Lloyd Marks and the Company re:
                    Computer Assisted Admittance Plethysmography dated as of
                    March 31, 1995.

10.11*         Royalty Sharing Agreement by Dr. Lloyd Marks and the Company re:
                    Method of and Apparatus of Detecting Cardiac Rhythm
                    Disturbance dated as of March 31, 1995.

10.12*         Employment Agreement by and between Donn Gordon and the Company
                    dated as of March 31, 1995.

10.13*         Asset Purchase Agreement by and between C.F. Electronics, Inc.
                    and the Company dated September 14, 1995.

10.14*         Supply Agreement by and between C.F. Electronics, Inc. and the
                    Company dated September 14, 1995.

10.15*         Supplier - Produced Finished Goods Purchase Agreement (the
                    Company has filed a request seeking confidential
                    treatment of this agreement).

10.16*         Consulting Agreement by and between the Company and David Meridor
                     dated August 29 1995.

10.17*         Sublicensing Agreement by and between the Company and Advanced
                     Technologies International, Ltd. dated July 1995.

10.18*         Distributorship Agreement by and between the Company and Medical
                     Marketplace, Inc. dated July 25, 1995.

10.19**        Consulting Agreement by and between the Company and Stanley
                     Krasnoff dated February 12, 1996.

10.20**        Consulting Agreement by and between the Company and Randolph K.
                     Pace dated February 12, 1996.

10.21+         Asset Purchase Agreement by and between Hydrogel Design Systems,
                     Inc. and Alternative Design Systems R & D Group dated
                     February 6, 1997.

                                        29
<Page>


10.22+         Asset Purchase Agreement by and between Hydrogel Design Systems,
                     Inc. and Novatech, Inc. dated February 6, 1997.

10.23+         Employment Agreement by John Essmyer and Hydrogel Design
                     Systems, Inc. dated February 6, 1997.

10.24+         Employment Agreement by Michael Periera and Hydrogel Design
                     Systems, Inc. dated February 6, 1997.

10.25***       Employment Agreement by Matthew Harriton and the Company dated
                     January 1, 1997.

10.26***       Equipment Financing Agreement by Becton Dickinson and Hydrogel
                     Design Systems, Inc. dated January 24, 1997.

10.27+         Real Property Lease by and between the Company and Circon
                     Corporation dated January 1997.

10.28++        Revolving Credit Agreement between Hydrogel Design Sytems, Inc.
                     and the Company dated January 1997.

10.29++        Amended Revolving Credit Agreement between Hydrogel Design
                     Systems, Inc. and the Company dated August 31,1 997.

10.30++        Management Agreement between Hydrogel Design Systems, Inc.
                     and the Company dated August 31, 1997.

10.31++        Amendment No. 1 to Licensing Agreement by and between Dr.
                     Lloyd Marks and the Company dated September 30, 1997.

10.32++        Loan Agreement and Promissory Note between Hydrogel Design
                     Systems, Inc. And BH Funding, LLC dated October 1, 1997.

10.33++        Amendment #1 to Employment Agreement by Matthew Harriton
                     and the Company dated September 16, 1997.

10.34++++      Stock Option Agreement between the Company and Andrew Frabrikant
                     dated June 17, 1998.

10.35++++      Stock Option Agreement between the Company and Dr. Daniel
                     Durchslag dated June 17, 1998.

10.36++++      Stock Option Agreement between the Company and Matthew Harriton
                     dated June 17, 1998.


                                      30

<Page>


10.37++++       Stock Option Agreement between the Company and Karen Nazzareno
                     dated June 17, 1998

10.38****      Amendment No. 1 to Licensing Agreement of Safety Needle by and
                     between Dr. Lloyd Marks and the Company dated January
                     22, 1999.

10.39#         Employment Agreement by Matthew Harriton and the Company dated
                     January 1, 1999.

10.40#         Amendment #2 to Revolving Credit Agreement between Hydrogel
                     Design Systems, Inc. and the Company dated February 1,
                     1999.

10.41####      Amendment #3 to Revolving Credit Agreement between Hydrogel
                     Design Systems, Inc. and the Company dated February 1,
                     2001.

10.42####      Promissory Note between  Sterling Foster Securities Litigation
                    Fund and the Company dated June 26, 2001.

16+++          Letter from Holtz Rubenstein & Co., LLP re Change in Certifying
                     Accountant dated May 7, 1998.

16.1##         Letter from Moore Stephens, P.C. re Change in Certifying
                     Accountant dated April 11, 2000.

99###          Letter from the Nadaq SmallCap Market dated March 16, 1998.


     *    Incorporated by reference to the Company's Registration Statement on
          Form SB-2 No. 33-92366.

     **   Incorporated by reference to the Company's Form S-8 dated March 8,
          1996.

     ***  Incorporated by reference to the Company's Form 10QSB dated January
          31, 1997.

     +    Incorporated by reference to the Company's Form 10KSB  dated April 30,
          1997.

     ++   Incorporated by reference to the Company's Form 10QSB dated October
          31, 1997.


                                    31

<Page>

     ###  Incorporated by reference to the Company's Form 8-K filed on April 16,
          1998.

    +++   Incorporated by reference to the Company's Form 8-K filed on May 8,
          1998.

    ++++  Incorporated by reference to the Company's Form 10KSB dated April 30,
          1998.

    ****  Incorporated by reference to the Company's Form 8-K filed on
          February 12, 1999.

    #     Incorporated by reference to the Company's Form 10KSB dated April 30,
          1999.

    ##    Incorporated by reference to the Company's Form 8-K filed on April 13,
          2000.

    ####  Incorporated by reference to the Company's Form 10KSB dated April 30,
          2001.

(B)  Reports on Form 8-K.

     None.






                                     32
<Page>


                            SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  New York, New York
        August 9, 2002

                         EMBRYO DEVELOPMENT CORPORATION


                         By:   /s/ Matthew L. Harriton
                               -----------------------
                              Matthew L. Harriton
                              Chief Executive Officer, Chief Financial Officer
                              Principal Accounting Officer and Director

     Pursuant to the requirements of the Securities Act of 1933, this
     Registration Statement or Amendments thereto has been signed below by the
     following persons in the capacities and on the dates indicated.

Signature                       Title                        Date
-----------------------         --------------------        ------------


/s/ Matthew L. Harriton         Chief Executive Officer,    August 9, 2002
-----------------------
Matthew L. Harriton             Chief Financial Officer,
                                Principal Accounting Officer
                                and Director


/s/ Daniel Durchslag            Director                    August 9, 2002
-----------------------
Daniel Durchslag








                                        33
<Page>



                 EMBRYO DEVELOPMENT CORPORATION
                 (A DEVELOPMENT STAGE COMPANY)
                       REPORT ON AUDIT OF
                      FINANCIAL STATEMENTS
                 ------------------------------------



 Independent auditors' report                                    F-1

 Balance sheet                                                   F-2

 Statements of operations                                        F-3

 Statements of stockholders' equity (deficit)                    F-4 -F-7

 Statements of cash flows                                        F-8 -F-9

 Notes to financial statements                                   F-10-F-24







                                    34
<Page>




                  REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Stockholders of
  Embryo Development Corporation
  New York, New York


       We have audited the accompanying balance sheet of Embryo Development
Corporation [a development stage company] as of April 30, 2002, and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the  years  ended April 30, 2002 and April 30, 2001.  These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

        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 financial
statements are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the 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 provides a
reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Embryo Development
Corporation [a development stage company] as of April 30, 2002, and the
results of its operations and its cash flows for the  years  ended April
30, 2002 and April 30, 2001, in conformity with accounting principles
generally accepted in the United States of America.  We express no opinion on
the cumulative period from inception [March 3, 1995] through April 30, 2002
as shown in the cumulative columns on the statements of operations and the
statements of cash flows, nor on the statements of stockholders' equity for the
period from inception [March 3, 1995] through April 30, 1999.

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 1, the
Company is in the development stage and the Company's ability to continue in the
normal course of business is dependent upon the success of future operations.
The Company has a working capital deficit and an accumulated deficit, which
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

                                         /s/ Rothstein, Kass & Company, P.C.
                                         -----------------------------------


Roseland, New Jersey
July 19, 2002





                                 F-1

<Page>







EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------
<TABLE>

BALANCE SHEET AS OF APRIL 30, 2002.
-----------------------------------
Assets:
Current Assets:
  
                                                           <c>
  Cash                                                          $      1,022
  Prepaid Expenses and Other Current Assets                            9,129
                                                                       ------
  Total Current Assets                                                10,151

Property and Equipment - At Cost -
 Net of Accumulated Depreciation of $34,405                            6,967

Investment in Unconsolidated Investee - At Cost                       39,026

Other Asset:
  Due from Unconsolidated Investee - Net of Reserve of $128,211      128,210


  Total Assets                                                 $     184,354
                                                               =============
Liabilities and Stockholders' Deficit:
Current Liabilities:
  Accounts Payable and Accrued Expenses                        $     197,135
  Royalty Payable - Current Portion                                   57,500
                                                                    --------
  Total Current Liabilities                                          254,635

Long-term Liabilities:
   Royalty Payable - Long-Term                                       321,500
   Note and Interest Payable - Long Term                              79,430
                                                                     -------
   Total Long-term Liabilities                                       400,930

Commitments and Contingencies

Stockholders' Deficit:
  Preferred Stock, $.0001 Par Value; Authorized 15,000,000
   Shares; 6,000,000 Issued and Outstanding,
   Liquidation Preference $600,000                                       600

  Common Stock, $.0001 Par Value, Authorized 30,000,000
   Shares; 6,995,000 Issued and Outstanding                              700

  Additional Paid-in-Capital                                       9,991,267

  Deficit Accumulated During the Development Stage               (10,200,226)

  Notes and Interest Receivable                                     (263,552)
                                                                  -----------
  Total Stockholders' Deficit                                       (471,211)
                                                                  -----------
  Total Liabilities and Stockholders' Deficit                   $    184,354
                                                               =============
</TABLE>

                                 F-2


See Accompanying Notes to Financial Statements.
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------

STATEMENTS OF OPERATIONS
-------------------------------
<TABLE>
                                                                         Cumulative
                                                                        From Inception
                                                     Years ended       March 3, 1995 to
                                                      April 30,           April 30,
                                                2 0 0 2     2 0 0 1        2 0 0 2
                                              ----------  ----------   -------------

                                           <c>         <c>          <c>
Revenues                                      $     --    $      870   $  1,394,149

Costs and Expenses:
  Cost of Sales                                                  612       1,222,647
  General, Selling and Administrative            251,280     504,903       6,740,797
  Royalties                                         --           --          583,593
  Research and Development                          --         1,350       1,091,377
  Amortization                                      --        10,357         898,810
  Loss on Write-off of Licensed Technology          --        69,048         711,190
  Loss on Write-off of Inventories                  --           --           10,755
  Interest Income - Related Party                (12,495)    (35,915)       (164,299)
  Interest and Other [Income] Expens             (13,708)     (9,985)        407,943
  Equity Loss of Operations of Unconsolidated
   Investee                                         --           --          665,374
  Provision for Litigation Settlement               --           --          100,000
  Adjustment for Collectibility of Amount Due
   from Unconsolidated Investee                 ( 97,212)   (149,335)        128,211
  Forfeiture of Security Deposit                  79,625         --           79,625
  Gain on Sale of Stock of
   Unconsolidated Investee                       (23,185)        --         (676,695)
                                                ----------  ----------    -----------
    Total Costs and Expenses                     184,305     391,035      11,799,328
                                                ----------  ----------    -----------

  Loss Before Minority Interest                 (184,305)  ( 390,165)    (10,405,179)

  Minority Interest in Net Loss of Subsidiary        --          --          204,953
                                                ---------  ----------    ------------
   Net Loss                                   $( 184,305) $( 390,165)   $(10,200,226)
                                              =========== ===========   =============


  Basic and Diluted Net Loss Per Common
   Share                                      $     (.03) $     (.06)   $      (1.77)
                                              =========== ===========   ==============

  Weighted Average Number of Common
   Shares Used in Computing Basic and
   Diluted Loss Per Common Share               6,995,000   6,995,000       5,763,830
                                               =========   =========     ============
</TABLE>





                                 F-3
         See Accompanying Notes to Financial Statements.

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
-----------------------------------------------
<TABLE>


                                                                           Additional
                                   Common Stock       Preferred Stock       Paid-in
                                  Shares  Amount     Shares     Amount      Capital
                                 ----------------   -------------------    -----------

                             <c>        <c>      <c>      <c>            <c>
Issuance of Stock for Cash at
 Inception March 3, 1995:
 Common                          2,400,000 $   240      --   $     --        $   108,936
 Preferred                            --        --  6,000,000    600              10,224
Issuance of Stock for Licensed
 Technology                        325,000      33      --         --            974,967
Issuance of Stock for Research
 and Development                   125,000      12      --         --            374,988
Issuance of Stock in Connection
 with Subscription Agreement       180,000      18      --         --            539,982
Net Loss                               --       --      --         --                --
                                 ----------- ------- --------- ---------     -------------
 Balance - April 30, 1995        3,030,000     303  6,000,000    600           2,009,097
Issuance of Stock in Connection
 with Initial Public Offering    1,150,000     115        --      --           4,337,093
Issuance of Stock in Connection
 with Consulting Agreements        510,000      51        --      --           2,039,949
Compensation Earned in
 Connection with Consulting
 Agreements                            --       --        --      --                 --
Net Loss                               --       --        --      --                 --
                                 ----------   ------ ----------   ------     -------------
 Balance - April 30, 1996 -
  Forward                        4,690,000  $  469  6,000,000  $  600      $   8,386,139


</TABLE>



See Accompanying Notes to Financial Statements.
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------
<TABLE>
                                                  Deficit
                                                Accumulated
                                                During the                  Total
                                     Unearned   Development     Notes      Stockholders'
                                   Compensation     Stage     Receivable     Equity
                                   -----------  ------------  ----------   -------------

                              <c>            <c>           <c>         <c>
Issuance of Stock for Cash at
 Inception March 3, 1995:
 Common                          $      --      $        --   $     --     $     109,176
 Preferred                              --               --         --            10,824
Issuance of Stock for Licensed
 Technology                             --               --         --           975,000
Issuance of Stock for Research
 and Development                        --               --         --           375,000
Issuance of Stock in Connection
 with Subscription Agreement            --               --         --           540,000
Net Loss                                --          (483,310)       --          (483,310)
                                 ------------   -------------- -----------  -------------
 Balance - April 30, 1995               --          (483,310)       --         1,526,690

Issuance of Stock in Connection
 with Initial Public Offering           --               --         --         4,337,208
Issuance of Stock in Connection
 with Consulting Agreements      (2,040,000)             --         --               --
Compensation Earned in
 Connection with Consulting
 Agreements                          97,500              --         --            97,500
Net Loss                                --        (1,139,761)       --        (1,139,761)
                                 ------------    ------------   -----------  ------------

 Balance - April 30, 1996 -
  Forward                       $(1,942,500)     $(1,623,071)  $     --       $4,821,637


</TABLE>


                                                F-4



See Accompanying Notes to Financial Statements.

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>


                                                                           Additional
                                   Common Stock       Preferred Stock       Paid-in
                                 Shares   Amount    Shares   Amount         Capital
                                ------------------  ------------------    --------------

                             <c>        <c>      <c>        <c>        <c>
 Balance - April 30, 1996 -
  Forwarded                     4,690,000  $  469   6,000,000  $ 600      $    8,386,139
Issuance of Stock for Services      5,000       1         --      --              17,499
Issuance of Stock in Connection
 with Investment in Subsidiary    150,000      15         --      --              74,985
Compensation Earned in
 Connection with Consulting
 Agreements                           --       --         --      --                 --
Issuance of Stock by Subsidiary
 to Minority Holders                  --       --         --      --             (37,350)
Amortization of Unearned
 Compensation of Minority
 Holders-Subsidiary                  --        --         --      --               2,502
Net Loss                             --        --         --      --                 --
                               -----------  ------  ----------- -------    ----------------
 Balance - April 30, 1997       4,845,000     485   6,000,000    600           8,443,775

Compensation Earned in
 Connection with Consulting
 Agreements                           --       --         --      --                  --
Issuance of Stock by Investee
 in Connection with
 Private Placement - April 1998       --       --         --       --          1,330,326
Net Loss                              --       --         --       --                --
                               ------------   -----  ---------   -------     -------------
 Balance - April 30, 1998 -
  Forward                        4,845,000  $  485   6,000,000  $ 600       $   9,774,101

</TABLE>


See Accompanying Notes to Financial Statements.
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
-------------------------------

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
--------------------------------------------
<TABLE>
                                                    Deficit
                                                  Accumulated
                                                   During the                   Total
                                      Unearned    Development      Notes    Stockholders'
                                     Compensation   Stage        Receivable     Equity
                                     ------------ -------------  ---------- -------------


                                 <c>           <c>           <c>         <c>
 Balance - April 30, 1996 -
  Forwarded                         $(1,942,500)  $ (1,623,071) $      --   $  4,821,637

Issuance of Stock for Services             --              --          --         17,500
Issuance of Stock in Connection
 with Investment in Subsidiary             --              --          --         75,000
Compensation Earned in
 Connection with Consulting
 Agreements                            495,000             --          --        495,000
Issuance of Stock by Subsidiary
 to Minority Holders                       --              --          --        (37,350)
Amortization of Unearned
 Compensation of Minority
 Holders-Subsidiary                        --              --          --          2,502
Net Loss                                   --       (1,907,403)        --     (1,907,403)
                                   -------------  -------------  ---------  --------------
 Balance - April 30, 1997           (1,447,500 )    (3,530,474)        --      3,466,886

Compensation Earned in
 Connection with Consulting
 Agreements                            495,000             --          --        495,000
Issuance of Stock by Investee
 in Connection with
 Private Placement - April 1998            --              --          --      1,330,326
Net Loss                                   --        (3,243,983)       --     (3,243,983)
                                  --------------   -------------  --------   -------------
 Balance - April 30, 1998 -
  Forward                         $   (952,500)    $ (6,774,457)  $    --   $  2,048,229

</TABLE>
                                                F-5

See Accompanying Notes to Financial Statements.

<Page>

 EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
---------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>


                                                                           Additional
                                Common Stock        Preferred Stock         Paid-in
                               Shares   Amount    Shares      Amount        Capital
                              ----------------    ------------------       ------------

                            <c>        <c>      <c>        <c>         <c>
 Balance - April 30, 1998 -
  Forwarded                    4,845,000  $ 485    6,000,000  $ 600       $   9,774,101

Exercise of Options July 1998
 with Notes Receivable         2,150,000    215          --      --             201,455
Compensation Earned in
 Connection with Consulting
 Agreements                          --      --          --      --                 --
Amortization of Unearned
 Compensation of Minority
 Holders - Investee                  --      --          --      --               3,437
Issuance of Stock by Investee
 in Connection with Exercise
 of Options - January 1999           --      --          --      --              12,274
Net Loss                             --      --          --      --                  --
                                ----------  ------  ---------  -------     ---------------
 Balance - April 30, 1999      6,995,000  $ 700     6,000,000  $  600     $   9,991,267

Compensation Earned in
 Connection with Consulting
 Agreements                          --      --           --       --               --
Net Loss                             --      --           --       --               --
                               ----------- -------  ---------- --------    --------------
Balance - April 30, 2000       6,995,000  $ 700     6,000,000  $  600      $  9,991,267

Compensation Earned in
 Connection with Consulting
 Agreements                          --      --           --       --               --
Net Loss                             --      --           --       --               --
                              ------------ -------- ----------- --------    -------------
Balance - April 30, 2001       6,995,000 $  700     6,000,000  $  600      $  9,991,267
 Forward

</TABLE>
See Accompanying Notes to Financial Statements.

<Page>

 EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
--------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>
                                              Deficit
                                             Accumulated
                                             During the                       Total
                                 Unearned    Development     Notes        Stockholders'
                               Compensation     Stage      Receivable         Equity
                               ------------  ------------  ----------     -------------

                           <c>            <c>            <c>          <c>
Balance - April 30, 1998 -
  Forwarded                   $  (952,500)   $ (6,774,457)  $     --      $    2,048,229

Exercise of Options July 1998
 with Notes Receivable                --              --      (201,670)              --
Compensation Earned in
 Connection with Consulting
 Agreements                       435,000             --          --             435,000
Amortization of Unearned
 Compensation of Minority
 Holders - Investee                   --              --          --               3,437
Issuance of Stock by Investee
 in Connection with Exercise
 of Options - January 1999            --              --          --              12,274
Net Loss                              --      (1,698,788)         --          (1,698,788)
                              ------------    -------------  ------------   -------------
 Balance - April 30, 1999        (517,500)    (8,473,245)     (201,670)          800,152

Compensation Earned in
 Connection with Consulting
 Agreements                       367,500            --            --            367,500
Net Loss                              --      (1,152,511)          --         (1,152,511)
                               -----------    -------------  ------------   -------------
Balance - April 30, 2000        $(150,000)   $(9,625,756)    $(201,670)    $      15,141

Compensation Earned in
 Connection with Consulting
 Agreements                       150,000            --            --            150,000
Net Loss                              --      (  390,165)          --           (390,165)
                               ------------  -------------   -------------  --------------
Balance - April 30, 2001       $      --     $(10,015,921)   $(201,670)      $  (225,024)
 Forward
</TABLE>


                                        F-6
See Accompanying Notes to Financial Statements.

<Page>

 EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
--------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------
<TABLE>


                                                                       Additional
                               Common Stock        Preferred Stock      Paid-in
                            Shares    Amount     Shares      Amount     Capital
                           -----------------    -------------------    ------------

                          <c>       <c>       <c>         <c>       <c>
Balance - April 30, 2001     6,995,000 $ 700     6,000,000   $ 600     $ 9,991,267
 Forwarded

Reclassification of Interest
 on Note Receivable                --     --            --      --             --
Net Loss                           --     --            --      --             --
                             --------- ------    -----------  ------    -----------
lance - April 30, 2002       6,995,000 $ 700     6,000,000   $  600    $ 9,991,267
                             ========= ======    =========== =======   ============
</TABLE>






See Accompanying Notes to Financial Statements.

<Page>

 EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
--------------------------------

STATEMENTS  OF STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>
                                                Deficit
                                              Accumulated
                                              During the                     Total
                                 Unearned     Development   Notes        Stockholders'
                                Compensation     Stage     Receivable        Equity
                                -----------   -----------  -----------   -------------

                           <c>            <c>           <c>          <c>
Balance - April 30, 2001      $         --   $(10,015,921) $(201,670)   $  (225,024)
 Forward

Reclassification of Interest on
 Note Receivable                        --            --     (61,882)       (61,882)

Net Loss                                --    (  184,305)        --        (184,305)
                               ------------   ------------- ----------  ------------
Balance - April 30, 2002      $         --  $(10,200,226)  $(263,552)   $  (471,211)
                              ============= ============== ============ =============
</TABLE>








                                                F-7
See Accompanying Notes to Financial Statements.

<Page>

 EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
--------------------------------

STATEMENTS OF CASH FLOWS
-------------------------------
<TABLE>

                                                                              Cumulative
                                                                            From Inception
                                                      Years ended           March 3, 1995 to
                                                       April 30,               April 30,
                                                  2 0 0 2      2 0 0 1         2 0 0 2
                                               ------------  ------------   ----------------

                                              <c>           <c>           <c>
Operating Activities:
   Net Loss                                      $( 184,305)   $( 390,165)   $(10,200,226)

  Adjustments to Reconcile Net Loss to Net
   Cash Used in Operating Activities:
   Depreciation and Amortization                      3,110        14,748       1,567,228
   Write-Off and Reserve of Licensed Technology         --         69,048         711,190
   Write-Off of Inventories                             --            --           10,755
   Gain on Sale of Stock of Unconsolidated Investee (23,185)          --         (676,695)
   Adjustment for Collectibility of Amount Due from
    Unconsolidated Investee                         (97,212)     (149,335)        128,211
   Minority Interest in Loss of Subsidiary              --            --          204,953)
   Equity Loss in Operations of Unconsolidated
    Investee                                            --            --          665,374
   Provision for Litigation Settlement                  --            --          100,000
   Non-Cash Consideration - Other                       --        150,000       2,096,233
   Non-Cash Consideration - Research and
    Development                                         --            --          440,000

  Changes in Assets and Liabilities:
   [Increase] Decrease:
    Accounts Receivable                                 --         7,628         ( 79,697)
    Interest Receivable                             (16,133)     (16,134)         (33,700)
    Inventories                                         --           --           (55,791)
    Prepaid Expenses and Other Current Assets        10,682       (3,759)         (19,629)
    Other Assets                                     95,176          705         (148,042)

   Increase [Decrease]:
   Accounts Payable and Accrued Expenses            ( 5,009)      41,042          866,514
   Royalty Payable                                  ( 2,500)     (30,000)         379,000
                                                  -----------   ---------       -----------
   Net Cash - Operating Activities - Forward       (219,376)    (306,222)      (4,454,228)
                                                  -----------   ---------      ------------

Investing Activities:
  Proceeds from Sale of Stock of
    Unconsolidated Investee                          25,000          --           735,000
  Purchase of Short-Term Investments                    --           --          (847,000)
  Proceeds from Sale of Short-Term Investments          --           --           847,000
  Purchase of Investments in Available-for-Sale
   Securities                                           --           --        (6,129,521)
  Proceeds from Sale of Investments in Available-
   for-Sale Securities                                  --           --         6,129,521
   Repayment of Loans from Unconsolidated Investee  194,424      298,670          751,915
  Net Cash Paid for Asset Acquisition                   --           --          (200,588)
  Purchase of Licensed Technology                       --           --          (450,000)
  Purchase of Property and Equipment                    --         ( 368)      (1,036,741)
  Divestiture of Cash of Subsidiary                     --            --          (77,794)
                                                   ----------  ----------    --------------
   Net Cash - Investing Activities - Forward   $    219,424  $   298,302     $   (278,208)
                                               -------------- -----------    --------------
</TABLE>

                                 F-8
See Accompanying Notes to Financial Statements.

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
---------------------------------

STATEMENTS OF CASH FLOWS (Continued)
------------------------------------
<TABLE>
                                                                           Cumulative
                                                                          From Inception
                                                     Years ended         March 3, 1995 to
                                                      April 30,             April 30,
                                                 2 0 0 2      2 0 0 1        2 0 0 2
                                               ----------    ---------   -----------------
 
                                           <c>            <c>         <c>
  Net Cash - Operating Activities - Forwarded  $ (219,376)    $(306,222)  $ (4,454,228)
                                               ----------     ----------- -------------

  Net Cash - Investing Activities - Forwarded     219,424       298,302      ( 278,208)
                                               ----------     ----------- -------------
  Financing Activities:
  Proceeds from Issuance of Debt                      --           --          650,000
  Proceeds from Issuance of Stock                     --           --          120,000
  Proceeds from Issuance of Subsidiary Stock to
   Minority Shareholder                               --           --          150,000
  Repayment of Debt                                   --           --         (550,000)
  Proceeds of Stock Offering, Net of Deferred Costs   --           --        4,337,208
  Due from Unconsolidated Investee                    --           --           26,250
                                                ----------     -----------  -----------
    Net Cash - Financing Activities                   --           --        4,733,458
                                                ----------     -----------  -----------
Net Increase [Decrease] in Cash and Cash
   Equivalents                                         48      ( 7,920)          1,022

Cash and Cash Equivalents - Beginning of Period       974        8,894             --
                                                ----------     -----------  -----------
Cash and Cash Equivalents - End of Period          $1,022        $ 974          $1,022
                                                ==========     ===========  ===========

</TABLE>




                                 F-9

See Accompanying Notes to Financial Statements.

<Page>



EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS
-------------------------------

[1] Organization and Nature of Operations

Embryo Development Corporation [the "Company"] is a Delaware Corporation which
was formed to develop, acquire, manufacture and market various bio-medical
devices throughout the United States.

In January 1997, the Company acquired a majority interest in Hydrogel Design
Systems, Inc. ["HDS"] which was a consolidated subsidiary of the Company until
January 21, 1998.  On that date, the Company's ownership of HDS dropped to
45.6%, and the investment was accounted for under the equity method.  In
January 1999, the Company's share of HDS dropped to 14.4% and is being
presented on the cost basis from then onward.  HDS is engaged in the
manufacture, marketing, selling and distribution of hydrogel, an aqueous
polymer-based radiation ionized medical/consumer product.  The Company
presently holds 11.4% of the Common Stock of HDS and 10.3% of total voting
shares.

The Company is in the development stage, as defined in Statement of Financial
Accounting Standard No. 7, "Accounting and Reporting by Development Stage
Enterprises."  To date, the Company has generated minimal sales and devoted
its efforts primarily to various organizational activities, including
negotiating of license agreements inclusive of the Self-Shielding Needle,
developing its business strategy, hiring management personnel, raising capital
through an initial public offering which was completed in November 1995
[See Note 6], and undertaking preliminary activities for the commencement of
operations.   In September 1995, the Company purchased certain assets and the
on-going business of a medical products division of an existing business
[See Note 8].  The Company has not generated any significant revenue to date.
All of the license agreements for the development of various medical devices,
inclusive of the Self-Sheilding Needle, have effectively been terminated
and the  Company has determined that the remaining assets it had purchased
relating to medical products have no viable marketability.

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern.  The Company has
incurred cumulative losses of approximately $10,200,000, has a working
capital deficit of approximately $244,000,  and utilized cash of approximately
$219,000 for operating activities for the year ended April 30, 2002.  In
addition, the Company has not generated any revenue in the last two fiscal
years ending April 30, 2002 and April 30, 2001.  Management recognizes that
the Company must generate  revenue to achieve profitable operations and to meet
current operating costs.  Management anticipates that to meet these needs will
require raising additional funds from either the debt or equity markets.  The
Company is presently exploring several alternatives, inclusive of the
possible acquisition of a new line of business, which may or may not be
related to the development of medical devices.

The Company expects to incur additional expenditures over the next 6 to 12
months for general and administrative expenses and to evaluate its future
operations.  The Company's management no longer believes that the Company's
cash on hand will be sufficient to fund the Company's operations for the
next twelve (12) months. However, management continues to believe that the
outstanding amount due from HDS, which is due September 30, 2002, of
approximately $256,000 will be at least partially repaid during the next (6)
months.  During the year ended April 30, 2002,  HDS repaid approximately
$194,000 of the outstanding receivable balance to the Company and has
continued to make additional payments subsequent to April 30, 2002.  In
addition, the Company's management has set up a reserve of approximately
$128,000 or approximately 50% of the outstanding balance at April 30, 2002,
based upon anticipated probable collectibility of the balance. In the event that
no additional repayment or an insufficient repayment is made in the next (6)
months, the Company will seek alternative methods of raising additional
capital which may include the possible acquisition of a new line of business
which may or may not be related to the development of medical devices, or the
possible liquidation of its investment in HDS.  To the extent that the
Company will not be able to collect the balance of its investee receivable,
its ability to continue operating will be dependent upon its ability to
successfully sell its investment, raise additional capital through debt or
equity markets, or possibly make an acquisition.

                                F-10

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #2
---------------------------------------


[1] Organization and Nature of Operations [Continued]

In an effort to strengthen the Company's position until a meaningful revenue
stream and positive cash flow can be achieved, management has undertaken a
significant cost reduction program.

 No assurance can be made as to the success of these capital raising
alternatives or as to the success of the Company's future course of operations
which are undetermined at this time.  The accompanying financial statements
do not include any adjustments that might be necessary if the Company is unable
to continue as a going concern.

[2] Summary of Significant Accounting Policies

Principles of Consolidation - The accompanying financial statements include the
accounts of the Company and its subsidiary, Hydrogel Design Systems, Inc.
["HDS"] through January 21, 1998.  The assets, liabilities and operations of HDS
after January 21, 1998 are not included on a consolidated basis in the
financial statements of the Company as a result of a reduction in ownership,
voting interest and the lack of management control.  This investment was
accounted for using the equity method of accounting from January 21, 1998
through January 31, 1999 and accounted for using the cost method subsequent
to January 31, 1999.

Upon consolidation, all significant intercompany accounts and transactions were
eliminated.

Depreciation and Amortization - Depreciation is computed principally by the
straight-line method over the estimated useful lives of the related assets.
Amortization of licensed technology is computed using the straight-line
method over the estimated useful life of the related technology [7 years].

The Company provides for depreciation for office equipment and fixtures over 3-7
years, the estimated useful lives.

Depreciation expense for the years ended April 30, 2002 and 2001 and the
cumulative period from inception [March 3, 1995] through April 30, 2002 amounted
to $3,110, $4,391 and $126,787, respectively.

Concentrations of Credit Risk - Financial instruments which potentially subject
the Company to concentrations of credit risk are cash and receivables from
related parties.  The Company routinely assesses the financial strength of
its customers and third party payors and believes that its accounts
receivable credit risk exposure is limited.  The Company places its cash  with
high credit quality financial institutions.  The amount on deposit in any one
institution that exceeds federally insured limits is subject to credit risk.  As
of April 30, 2002, the Company had no funds with a financial institution
subject to credit risk beyond the insured amount.  The Company does not require
collateral or other security to support financial instruments subject to credit
risk.




                                F-11
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #3
---------------------------------------


[2] Summary of Significant Accounting Policies [Continued]

Income Taxes - Deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities, and are measured using the enacted tax rates and laws that will
be in effect when the differences are expected to reverse. Valuation allowances
are established, when necessary, to reduce the deferred income tax assets to
the amount expected to be realized.

Research and Development Costs - Research and development costs are expensed as
incurred.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted 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.

Advertising - The Company charges advertising costs to expense as incurred.
Advertising costs approximated $-0-, $-0-, and $78,000 for the years ended April
30, 2002 and 2001, and the cumulative period from inception [March 3, 1995]
through April 30, 2002, respectively.

Impairment - Certain long-term assets of the Company are reviewed at least
quarterly to determine whether there are indications the carrying value has
become impaired, pursuant to guidance established in Statement of Financial
Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of."  Management
considers assets to be impaired if the carrying value exceeds the future
projected cash flows from related operations [undiscounted and without
interest charges].  If impairment is deemed to exist, the assets will be
written down to fair value.  Management also reevaluates the periods of
amortization to determine whether subsequent events and circumstances warrant
revised estimates of useful lives.

Earnings Per Share - The Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards ["SFAS"] No. 128, "Earnings per
Share," which  requires a dual presentation of basic and diluted earnings per
share on the face of the statement of operations for all companies with
complex capital structures.  Diluted earnings per share reflects the amount
of earnings for the period available to each share of common stock
outstanding during the reporting period, while giving effect to all dilutive
potential common shares that were outstanding during the period, such as
common shares that could result from the potential exercise or conversion of
securities into common stock.





                                F-12
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #4
----------------------------------------

[2] Summary of Significant Accounting Policies [Continued]

Earnings Per Share [Continued] - The computation of diluted earnings per share
does not assume conversion, exercise, or contingent issuance of securities
that would have an antidilutive effect on earnings per share (i.e.,
increasing earnings per share or reducing loss per share).  The dilutive effect
of outstanding options and warrants and their equivalents are reflected in
dilutive earnings per share by the application of the treasury stock method
which recognizes the use of proceeds that could be obtained upon exercise of
options and warrants in computing diluted earnings per share.  It assumes
that any proceeds would be used to purchase common stock at the average
market price during the period. Diluted loss per common share is the same as
basic loss per common share for all periods presented.  Options and warrants
will have a dilutive effect only when the average market price of the
common stock during the period exceeds the exercise price of the options or
warrants.

Stock Options and Similar Equity Instruments - On May 1, 1997, the Company
adopted the disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation," for stock options and similar equity instruments [collectively
"Options"] issued to employees and directors, however, the Company will
continue to apply the intrinsic value based method of accounting for options
issued to employees prescribed by Accounting Principles Board ["APB"] Opinion
No. 25, "Accounting for Stock Issued to Employees" rather than the fair value
based method of accounting prescribed by SFAS No. 123.  SFAS No. 123 also
applies to transactions in which an entity issues its equity instruments to
acquire goods and services from non-employees.  Those transactions must be
accounted for based on the fair value of the consideration received or the
fair value of the equity instruments issued, whichever is more reliably
measurable.

[3] Investment in HDS

In January 1997, the Company entered into a subscription agreement to acquire
1,251,000 shares of HDS common stock and 15,000,000 shares of HDS Series A
preferred stock.  HDS was formed to effect the asset acquisition described in
Note 8B.  As consideration for its interest, the Company contributed $150,000 in
cash, 150,000 shares of its common stock, and the commitment to make
available to HDS a $500,000, 8% revolving line of credit.

At April 30, 1997, the Company's ownership of HDS represented 50.04% of the
common stock and 92.9% of total voting shares.

On January 21, 1998, the Company's equity interest in HDS, was reduced to 45.6%
common ownership as a result of the Company surrendering all 15,000,000 shares
of voting preferred stock in exchange for 21,500 shares of common stock.  The
exchange was done at the request of certain third party investors of a Private
Placement by HDS, under which HDS issued approximately 475,000 additional
common shares.  In February and April 1998, the Private Placement was fully
subscribed, and the Company's ownership decreased to approximately 33.3% of
common interest.

As a result of the surrender of the voting preferred stock and the issuance of
additional common stock, the Company's ownership in HDS was reduced to below
50% interest and therefore, the assets, liabilities and operations of HDS after
January 21, 1998 were not included on a consolidated basis in the financial
statements of the Company subsequent to January 21, 1998.

Approximately $287,000 of the loss applicable to minority interest for the
period May 1, 1997 through January 21, 1998 was in excess of minority interest
in capital, and accordingly has been charged to the Company's operations.


                                F-13
<Page>


EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #5
----------------------------------------


[3] Investment in HDS [Continued]

Between November 20, 1998 and January 31, 1999, the Company sold an aggregate of
710,000 shares of the common stock of HDS for $710,000.  The Company previously
held a total investment of 1,272,500 shares of HDS which represented 33.3%
common ownership.  As a result of this transaction, the Company held 562,500
shares or 14.4% common ownership of HDS.  On January 31, 1999, as a result of
this transaction, the ownership decreased below 20% and the Company changed
the accounting for this investment from the equity method to the cost method.

Summarized financial information for HDS, which prior to January 21, 1998 was
consolidated, commencing January 21, 1998 through January 31, 1999 was accounted
for using the equity method, and subsequent to January 31, 1999 is being
accounted for on the cost method, is no longer presented due to the reduction
of the investment, which is currently reported at cost.  As of April 30, 2002,
the Company holds approximately 11.4% ownership of the common stock of HDS and
10.3% of total voting shares.

In January 1997, the Company entered into a commitment to make available to HDS
a $500,000, 8% revolving line of credit as part of its investment interest.  In
August 1997, the Company increased the amount of the revolving line of credit to
$850,000.  At April 30, 2002, borrowings under the revolver approximated
$256,000 including accrued interest.

In February 1997, HDS entered into a seven-year sublease with the Company, which
provided for minimum monthly rental payments of $9,625 and was to expire in 2004
[See Note 7D].  In May 1999, these payments were reduced to $7,892 per month
due to utilization of a portion of the premises by the Company.  In October,
1999, the Company ceased use of this space and increased the amount of the
sublease to the original monthly amount of $9,625.  On February 1, 2000, the
monthly rent was increased to $10,214 as per the escalation provision in the
sublease.  On January 25, 2002, the Company entered into an Assignment and
Amended and Restated Lease Agreement with HDS, the existing sub-tenant of the
premises leased by the Company at 2150 Cabot Boulevard West, Langhorne, PA.
By such agreement, HDS accepted an assignment from the lease from the Company.
Also, on such date, the building in which the leasehold premises are contained
was sold to 2150 Cabot, LLC, a related party.

In August 1997, HDS entered into a one-year management agreement with the
Company subject to automatic renewal each year.  The management agreement
provided for an annual fee of the greater of $75,000 per annum or ten (10%)
percent of the gross sales generated by the Company's sales representatives
in consideration for the Company providing HDS with administrative, marketing
and management services.  General and administrative expenses have been reduced
by $-0-, $-0- and $43,750 for the years ended April 30, 2002 and 2001 and for
the cumulative period from inception [March 3, 1995] through April 30, 2002,
respectively.  On May 4, 1998, HDS notified the Company that the agreement
would not be renewed effective August 1998.

On January 31, 1999, all amounts under the revolver became due.  The Company
requested payment from HDS for an aggregate of $667,000 which represented all
monies due inclusive of interest under the revolver and all monies due under
the terms of the management agreement.  HDS was unable to make the required
payment due to its current financial condition.  The original line of credit
which expired on January 31, 1999 was extended to January 31, 2001.  The terms
of the extension prohibited any future cash advances on the credit line and
provided  for repayment of an amount equal to 50% of any cash flow from
operations in excess of $500,000 annually to be paid within 45 days of the
fiscal year end of HDS, with any remaining outstanding balance due on January
31, 2001.




                               F-14

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #6
-----------------------------------------

[3] Investment in HDS [Continued]

On January 31, 2001, the credit line extension expired.  The Company requested
payment from HDS for an aggregate of $516,000, the outstanding balance.  HDS was
unable to make the required payment due to its current financial condition.  On
February 1, 2001, the Company agreed to extend the maturity date by twenty
(20) months to September  30, 2002 under the same terms and conditions as the
prior extension granted on January 31, 1999.  The Company's management has set
up a reserve of approximately $128,000 or approximately 50% of the
outstanding balance at April 30, 2002 of approximately $256,000, based upon
anticipated probable collectibility.   Approximately $194,000 and $299,000 of
the original obligation  was collected during the years ended April 30, 2002 and
April 30, 2001, respectively.  HDS has continued to make additional payments
subsequent to April 30, 2002.

[4] License Agreements

In March 1995, the Company entered into seven license agreements for the rights
to manufacture and market seven medical devices.  Each of the seven
agreements also provide for minimum payment obligations commencing 2 1/2
years after the date of the agreements.  On September 30, 1997, the
agreements for six (6) of the devices were amended to extend the date for the
first minimum payment obligation to March 31, 1998.  In consideration for the
extension, the aggregate first minimum payment obligation increased from
$150,000 to $165,000.

The Company did not make the minimum payments required under the License
Agreements with respect to six (6) of the devices including the adjustable
blood pressure cuff, a multi-function fluid communication control system and
stereoscopic fluoroscopy apparatus.  The minimum payment obligations with
respect to the self-shielding needle were made in accordance with the terms of
the original agreement through March 31, 1998.  On August 21, 1998, the Company
notified the licensor that it was terminating the agreements with respect to
these six (6) devices.  The remaining unamortized cost of $486,785 for these
agreements was charged to operations in the year ended April 30, 1998.

On January 22, 1999, the Company amended the License Agreement dated March 31,
1995 pertaining to the seventh device, for the manufacture and marketing of the
self-shielding needle.  The amendment eliminated the "Minimum Payment
Obligation" as defined in the original agreement.  The last such payment
which was due on September 30, 1998 in the amount of $50,000 was paid on
January 26, 1999 upon execution of the amendment.

In consideration for eliminating all future and any prior minimum payment
obligations on this invention and any other products or inventions currently or
previously licensed by the Company from the licensor, the Company agreed to
(a) increase the royalty on future sales from 8% to 10%, and (b) pay the
licensor a maximum royalty of $450,000.  Such payments shall be payable at a
minimum rate of $2,500 per month through February 2014 plus 10% of the
proceeds received by the Company from any capital raised which exceeds
$600,000, and 10% of annual pre-tax income.  The aggregate royalty of $450,000
was charged to operations in the year ended April 30, 1999.  At April 30, 2002,
the remaining unpaid balance of $379,000 is included in current and long-term
liabilities.  During the year ended April 30, 2002, the Company has paid an
aggregate of $2,500 and is in arrears in the amount of $27,500 to the
licensor as a result of cash constraints.

In addition, if the Licensor terminates the agreement for any reason, the
maximum royalty shall be reduced by $125,000 and all information with respect to
the invention [the "Know-How"] shall be returned to the licensor free and
clear of any liens.  If the Company terminates the agreement, the licensor
may acquire the Know-How for a reduction in the remaining balance due equal
to the lesser amount of $125,000 or the remaining balance due.
If the Company does not obtain the necessary government approval to market
the self-shielding needle withing two (2) years, the agreement shall terminate
unless the Company pays the licensor an additional $250,000, which will extend
the regulatory approval requirement by two (2) additional years.

                               F-15

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #7
----------------------------------------

[4] License Agreements [Continued]

On January 22, 2001, the agreement effectively terminated as the Company could
not obtain the necessary government approval since the Company had halted
development of the device due to capital constraints.  The Company also
determined that it could not pay the licensor an additional $250,000 to
extend the regulatory approval requirement.  The remaining unamortized cost of
$69,048 for this license agreement was charged to operations in the year
ended April 30, 2001.

In March 1995, the Company also entered into royalty sharing agreements under
which it is entitled to 50% of the royalties received by the licensor under
license agreements for two medical devices.  Consideration under these
agreements consisted of the issuance of $20,000 in notes and 50,000 shares
of the Company's common stock.  The royalty sharing agreements are in effect
over the lives of the underlying agreements.  In addition, the Company has
the right to license the patents for the products in the event the underlying
licenses are terminated.

The common stock issued under these agreements was valued at $3 per share.

The medical devices underlying five of these license and royalty sharing
agreements were deemed to be in the development stage, and accordingly, the
consideration paid ($440,000) was charged to operations [research and
development] in the period ended April 30, 1995.  The consideration for the
remaining four agreements ($1,160,000) was recorded as licensed technology.  At
April 30, 1998, the unamortized cost of $486,785 for three of these
agreements was charged to operations as the minimum royalty payments were not
made and the agreements were effectively terminated on August 21, 1998.

[5] Note Payable

In conjunction with the litigation settlement as described in Note 7A , the
Company recorded a long-term note payable in the amount of $75,000 which is due
on June 26, 2003 and bears interest at 7% per year.

[6] Stockholders' Deficit

[A] Capitalization - The Company's authorized capitalization consists of
30,000,000 shares of common stock and 15,000,000 shares of preferred stock.
All stock has a $.0001 par value.  Each share of common and preferred has one
vote in all matters.  In the event of any liquidation, holders of the issued and
outstanding shares of preferred stock will be entitled to receive, prior to any
distribution to the holders of common stock, the sum of $.10 per share.

[B] Initial Capitalization - In March 1995, the Company issued 2,400,000 shares
of common stock and 6,000,000 shares of preferred stock ["Founders' Stock"] for
an aggregate amount of $120,000.

[C] Subscription Agreements - In March 1995, the Company entered into
subscription agreements in connection with a bridge loan in the aggregate amount
of $300,000, [the "Bridge Loan"].  In connection with the Bridge Loan, the
Company issued the aggregate amount of 180,000 Bridge Units, each Bridge
Unit consisting of one share of common stock and one Class B Warrant.  Each
Class B Warrant entitles the holder to acquire one share of common stock at an
exercise price of $10 per share. The warrants expired in November, 1999.  The
promissory notes issued in connection with the Bridge Loan were repaid with
interest at 8% on November 22, 1995, with the proceeds from the public offering.
The 180,000 shares of the Company's common stock represented a financing cost of
$540,000 [$3 per share] which was amortized in full upon the successful
completion of the public offering.



                               F-16
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #8
---------------------------------------

[6] Stockholders' Deficit [Continued]

[D] Public Offering - In November 1995, the Company completed a public offering
of 1,000,000 shares of common stock at $5.00 per share for an aggregate of
$5,000,000.  An additional 150,000 shares were sold for gross proceeds of
$750,000 to the underwriter to cover over-allotments.  In addition, the
underwriter received an option, for a nominal fee, to acquire 100,000 shares
of common stock at an exercise price of $6.75 per share.  The option, which was
to expire in November 2001, has been cancelled as the underwriter ceased
operations in 1997.

Effective with the closing of the offering, the Company entered into a
consulting agreement with the underwriter.  The underwriter ceased operations in
1997, and the unamortized balance of the consulting fee ($91,667) was charged to
operations in the year ended April 30, 1997.

[E] Issuance of Securities - In July 1996, the Company issued 5,000 shares of
common stock to its medical advisory board of services.  The value of the
common stock granted ($17,500) was charged to operations.

In May 1996, the Company issued a five-year warrant, exercisable at any time,
for the purchase of 100,000 shares of common stock of the Company at $6 per
share.  The warrant was issued in connection with the termination of a
sublicensing agreement.

On June 17, 1998, the Company issued options, to three (3) directors and an
employee, to purchase 1,650,000 shares of the Company's common stock at an
exercise price equal to the market price on the date of the grant ($.0938)
under the Incentive Stock Option Plan (See [G] below).  In addition, an
aggregate of 500,000 options which were granted to an officer under the terms
of a prior employment agreement were amended to have an exercise price of
($.0938), the market price on the date of the amendment.  These options were
exercised in June 1998 for an aggregate of 2,150,000 shares.

The Company received promissory notes dated July 1, 1998 to the three (3)
directors and an employee in the aggregate of $201,670 for payment of the
shares.  The notes mature in five (5) years, bear interest at 8%, and are
secured by the related securities.

[F] Consulting Agreements - In February 1996, the Company entered into two
separate multi-year consulting agreements.  As consideration for these services,
the Company issued 225,000 shares of common stock to each of the parties.
The value of the common stock granted ($1,800,000) was charged to operations
ratably over the lives of the consulting agreements which ranged between four
and five years.

In August 1995, the Company entered into a three-year consulting agreement for
services related to the development of strategic sales and marketing plans in
the United States, and internationally.  The agreement, which initially provided
for a monthly consulting fee of $5,000, was amended in March 1996, at which
time the Company issued 60,000 shares of common stock in lieu of the monthly
consulting fee.  The value of the common stock granted ($240,000) was charged to
operations ratably over the remaining life of the consulting agreement which was
thirty-two months.

[G] Stock Option Plans  - The Company has adopted a Non-Qualified Option Plan
[the "Plan"] covering 2,000,000 shares of common stock of the Company.  Options
under the Plan are granted at terms set by the Board of Directors at the time of
issuance.

The Company has also adopted an Incentive Option and Stock Appreciation Rights
Plan [the "Incentive Option Plan"] covering 2,000,000 shares of the Company's
common stock.  Incentive stock options under the Incentive Option Plan are
granted at an exercise price [not less than the fair market value] at the date
of grant.  Non-qualified options and freestanding stock appreciation rights
may also be granted with any exercise price.

                               F-17
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #9
---------------------------------------

[6] Stockholders' Deficit [Continued]

[H] Net Loss Per Share - Net loss per share was computed by dividing net loss by
the weighted number of shares outstanding.  Common stock equivalents have been
excluded as their effect would be anti-dilutive.

[I] Reserved Shares - Common shares reserved at April 30, 2002 are as follows:

Incentive Stock Option Plan                         350,000
Non-Qualified Stock Option Plan                   2,000,000
                                                 ----------
Total                                             2,350,000
                                                 ==========

[7] Commitments and Contingencies

[A] Litigation - The Company has been named as a defendant in a consolidated
class action pending before the U.S. District Court for the Eastern District of
New York.  In a consolidated complaint, plaintiffs assert claims against the
Company and others under the Securities Act of 1933, the Securities
Exchange Act of 1934 and New York common and statutory law arising out of the
November 1995 initial public offering of 1 million shares of the Company's
common stock.  According to the complaint, the underwriter of the offering,
Sterling Foster & Co., Inc. ("Sterling Foster"), which is also a defendant,
manipulated secondary market trading in shares of the Company's common stock
following the offering and covered certain short positions it created through
such manipulation by purchasing shares of Company stock from persons who
owned such stock prior to the offering pursuant to an  arrangement
with such persons that was not disclosed in the registration statement and
prospectus distributed in connection with the offering.  The complaint seeks
unspecified damages.

In November 1998, it was announced that Michael Lulkin, a director and Chairman
of the Board of Directors of the Company at the time of the Company's initial
public offering, had plead guilty to, among other things, conspiracy to
commit securities fraud.  The charges to which Mr. Lulkin plead were
premised on allegations that Mr. Lulkin, Sterling Foster, and others had
entered into an undisclosed agreement pursuant to which, upon conclusion of the
Company's initial public offering, they would (a) cause Sterling Foster to
release Mr. Lulkin and others who owned the Company stock prior to the
offering from certain "lock up" agreements restricting them from selling such
stock; and (b) cause Mr. Lulkin and such other persons to sell the Company
stock to Sterling Foster at prearranged prices to enable Sterling Foster to
use such stock to cover certain short positions it had created.

In August 1999, an agreement in principle was entered into providing for
settlement of the consolidated class action against the Company, Mr. Lulkin
and Steven Wasserman, who was also a member of the Company's Board of
Directors at the time of the Company's initial public offering.  Under the
agreement in principle, all claims in the action against the Company, and
against Mr. Lulkin and Mr. Wasserman insofar as they were members of the
Company's Board of Directors, would be dismissed in exchange for
a payment of $400,000, of which $100,000 would need to be paid by the Company
and $300,000 would be paid by an insurance company under a directors and
officers liability policy of insurance.

 In June 2001, definitive settlement documents were executed  The settlement
documents  provide that the Company would pay the foregoing $100,000 by
remitting to the class representatives $25,000 and a note in the amount of
$75,000 payable in June 2003 with interest thereon at 7% per year.  The
Company has remitted the funds and note described above to the class
representatives to be held by them in accordance with the terms of the
settlement agreement and pending final court review of the settlement. The
settlement is contingent upon, among other things, final approval by the court.
There can be no assurance that the settlement will be concluded.  In the year
ended April 30, 2000, the Company  recorded a reserve of $100,000 for this
obligation.


                                F-18
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #10
------------------------------------------

[7] Commitments and Contingencies [Continued]

B] Employment Agreements - In January 1999, the Company renewed an employment
agreement with an officer.  The two-year agreement provides for annual
compensation of $60,000 effective January 1, 1999.  The officer was also
granted rights to purchase 200,000 shares of HDS common stock from the
Company at a price of $1.00 per share for a period of two (2) years.  On June
26, 2001, the officer exercised this right and purchased 25,000 shares of HDS
common stock from the Company at a price of $1.00 per share.  In January,
2001, this agreement was extended for a one (1) year term under the same
terms and conditions of the original agreement.  In January, 2002, this
agreement was again  extended for a one (1) year term under the same terms
and conditions of the original agreement.

In 1995, the Company granted a former officer an option to purchase 100,000
shares of the Company's common stock  exercisable commencing March 1997, at an
exercise price equal to the fair market value at March 31, 1997 ($.5625).
These options were exercisable over a four-year period and expired in March
2001.

[C] Consulting Agreement - In 1995, the Company entered into a four-year
consulting agreement with the licensor of the medical devices discussed in
Note 4.  The agreement provided for an annual consulting fee of $75,000.  In
addition, the consultant was issued warrants to purchase 600,000 shares of the
Company's common stock at an exercise price of $3 per share.  On June 22, 1998,
notice was given to the licensor to terminate the agreement effective
July 22, 1998.  The warrants expired in November 1999.

[D] Operating Leases - On February 14, 1997, the Company entered into a
seven-year operating lease for premises to be used for offices and
manufacturing.  The lease provided for monthly minimum lease
payments of $9,625.  The lease contained a five-year renewal option and
provided that the Company shall pay for insurance, taxes and maintenance.  In
addition, the lease contained an escalation clause based upon increases in
the consumer price index for years four through seven.  In February, 2000, the
fourth year of the lease,  the monthly minimum lease payment was increased to
$10,214. Effective February 14, 1997, the Company entered into a seven year
sub-lease with HDS which provided  for minimum monthly rental payments of
$9,625 to be received, and was to expire in 2004.  On May 1, 1999, the minimum
rental payment on the sub-lease with HDS was reduced to $7,892 due to
utilization of a portion of the premises by the Company. In October 1999, the
Company ceased use of this space and increased the amount of the sublease to
the original monthly amount of $9,625.  In February 2000, the monthly rent
was increased to $10,214 as per the escalation provision in the sublease.
On January 25, 2002, the Company entered into an Assignment and Amended and
Restated Lease Agreement with HDS, the existing sub-tenant of the premises
leased by the Company at 2150 Cabot Blvd. West, Langhorne, PA. By such
agreement, HDS accepted an assignment of the Lease from the Company.  Also, on
such date, the building in which the leasehold premises are contained was
purchased by 2150 Cabot, LLC, a related party of the Company. Subsequent to
the lease assignment, the Landlord of the premises and the Company conducted
discussions respecting an outright release of the Company from contingent or
other obligations of the Company to the Landlord including, but not limited to,
the obligation of the Tenant to restore the leasehold premises to its original
condition upon expiration of the Lease.  The Landlord granted a general
release to the Company from any and all contingent or other obligations under
the Lease in exchange for a release of any claim for a return of its security
deposit in the amount of $79,625. This forfeiture of the deposit was charged to
operations in the current year.  Management determined, based on estimates,
that the actual cost that would be incurred to restore the premises to its
condition as existed prior to the Lease between the former Landlord and the
Company would exceed the amount of the deposit.

In April 1998, the Company along with other co-tenants entered into a fourteen
month lease for office space with an entity controlled by the former Chairman of
the Company.  The Company's portion of the monthly lease payment amounted to
$3,600.  At April 30, 1998, the total lease payments of $50,400 were held in
escrow by the landlord's attorney.  The Company vacated the premises March 1,
1999 and the total lease payments of $50,400 are included in operations in the
year ended April 30, 1999.

                                F-19

<Page>
EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #11
----------------------------------------
[7] Commitments and Contingencies [Continued]

[D] Operating Leases (Cont'd)- On February 10, 1999, the Company entered into a
sixteen (16) month lease for office space  commencing March 1, 1999.  The lease
provides for minimum monthly lease payments of $5,085 and is personally
guaranteed by an officer of the Company.  In June 2000, the lease was
extended on a month to month basis under the same terms and conditions.  The
Company terminated the lease on August 31, 2001.

On September 1, 2001, the Company entered into a sublease with HDS for office
space on a month to month basis, which provides for a monthly lease payment of
$2,000.

Aggregate rent expense was $122,265, $185,356 and $1,007,518 for the years ended
April 30, 2002 and 2001, and the cumulative period from inception [March 3,
1995] through April 30, 2002, respectively. Rental income from the sub-lease
amounted to $91,923, $124,330, and $467,466 for the years ended April 30,
2002 and 2001, and the cumulative period from inception [March 3, 1995] through
April 30, 2002, respectively.

[E] Product Liability Insurance - The Company has obtained product liability
insurance since it has commenced sales of its products.  However, there can be
no assurance that such policies will be sufficient to cover potential claims
or the costs of any resulting litigation or that a policy can be maintained in
force at an acceptable cost to the Company.  A successful claim against the
Company in excess of the Company's insurance coverage could have a material
adverse effect upon the Company's business and results of operations. In
addition, claims against the Company, regardless of their merit or eventual
outcome, also may have a material adverse effect upon the Company's reputation.

[8] Business Combinations

[A] In September 1995, the Company entered into an agreement to purchase certain
assets and the ongoing business of the Medical Division of C.F. Electronics,
Inc. ["CF"].  Under the agreement, the Company acquired the rights to CF's
medical products for consideration of $450,000 which was capitalized as
licensed technology, of which $45,000 was paid upon closing and the balance
($405,000) was paid on December 12, 1995 from the proceeds from the public
offering.  The Company also purchased CF's finished goods inventory and
demonstration equipment.

In addition, the Company entered into a five year "Supply Agreement" with CF,
which provides for CF to supply the Company with certain products at a price
equal to CF's cost [as defined] plus 10%.  The Agreement provides for minimum
payments to CF during its first two years.

In October, 1999, the Company ceased sales of  these medical products due to the
relatively low level of sales, capital constraints and price increases by CF.
At April 30, 2001, the unamortized amount of the technology approximated
$155,000, of which the Company has recorded a 100% reserve against. The
Company's management has determined that these products have no viable
marketability.

[B] On February 6, 1997, HDS acquired certain assets from a group of entities
for an aggregate purchase price of $150,000 in cash and 150,000 shares of the
Company common stock [valued at $75,000].  Assets acquired include property
rights and technical data, machinery and equipment, and inventory.  The
Company shares vest on the second anniversary date of the agreement only if HDS
has earned $500,000 in cumulative gross revenue derived from the sale of certain
products during the two (2) year period.  If, on the vesting date, the fair
market value of the shares is less than $900,000, the parties may demand that
HDS purchase all of the shares at an aggregate purchase price of $900,000 in
either cash and/or marketable securities.  Expenses of approximately $51,000
were incurred in connection with this acquisition.  This acquisition has been
accounted for by the purchase method.

In January 1998, as a result of subsequent litigation between HDS and the former
owners, the terms of the original purchase were modified.  The Company shares
were returned to HDS for a cash payment of $450,000 and a long-term
promissory note in the amount of $950,000.
                                F-20

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #12
-----------------------------------------

[9] Income Taxes

Income taxes have been recorded under SFAS No. 109, "Accounting for Income
Taxes."  Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and
(b) operating loss carryforwards.  The tax effects of significant items
comprising the Company's net deferred tax asset as of April 30, 2002 are as
follows:


Deferred Tax Assets:
  Net Operating Loss Carryforward                                 $2,714,000
  Tax Basis of Intangible Assets in Excess of Book Basis             111,000
                                                                  ----------
  Total                                                           $2,825,000
                                                                  ==========

Deferred Tax Asset                                                2,825,000
Valuation Allowance                                              (2,825,000)
                                                                 ------------
  Net Deferred Tax Asset                                         $       --
                                                                 ============
The valuation allowance of $2,825,000 represents  an increase of $156,000
over the preceding year.  Net operating loss carryforwards of approximately
$6,700,000 expire between 2011 and 2017.


A reconciliation between the statutory federal income tax rate and the effective
rate of income tax expense for the year ended April 30, 2002 and 2001 follows:

                                               2 0 0 2            2 0 0 1
                                             ----------       ------------
Statutory Federal Income Tax Rate                 (34) %         (34) %
State Income Taxes, net of Federal Effect         ( 6) %         ( 6) %
Valuation Allowance and Other                      40  %          40  %
                                               ---------       ----------

Effective Income Tax Rate                          --             --
                                               ==========     ============


[10] Fair Value of Financial Instruments

In assessing the fair value of these financial instruments, the Company has used
a variety of methods and assumptions, which were based on estimates of market
conditions and risks existing at that time.  For certain instruments,
including cash and due from unconsolidated investee it was estimated that
the carrying amount approximated fair value for the majority of these
instruments because of their short maturities.


                               F-21
<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #13
----------------------------------------

[11] Supplementary Information - Statements of Cash Flows

Cash paid during the periods for:
                                                              Cumulative
                                                                 from
                                                               Inception
                                                                March 3,
                                                Years ended     1995 to
                                                April 30,      April 30,
                                           2 0 0 2    2 0 0 1    2 0 0 1
                                         ---------   ---------  ---------
Interest - Net of Capitalized Interest  $   1,498    $ 3,125   $  14,664
                                        ==========   ========= ==========
Income Taxes                            $     --     $   --    $  14,276
                                        ==========   ========= =========
HDS financed the acquisition of $600,000 of manufacturing equipment with a
note payable.  Additionally, $12,500 of interest expense was capitalized during
the year ended April 30, 1997.

In June 1998, the Company issued an aggregate of 2,150,000 shares of common
stock in exchange for an aggregate of $201,670 in promissory notes as payment
for the shares.  Interest accrued on these notes is approximately $62,000 as
of April 30, 2002.






                                F-22
<Page>


EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #14
-----------------------------------------

[12] Stock Options and Warrants


A summary of common stock options and warrants is as follows:

                                                             Weighted Average
                                                      Common   Exercise Price
                                                      Shares    Per Share
                                                     ------- ----------------
Options and Warrants Outstanding at March 31, 1995      --        $     --
  Granted                                            780,000          4.62
  Exercised                                             --              --
  Canceled                                              --              --
                                                     ------- ----------------
Options and Warrants Outstanding at April 30, 1995   780,000          4.62
  Granted                                            300,000          4.10
  Exercised                                             --              --
  Canceled                                              --              --
                                                     ------- ----------------
Options and Warrants Outstanding at April 30, 1996 1,080,000          4.47
  Granted                                            200,000          3.33
  Exercised                                             --              --
  Canceled                                          (100,000)         6.75
                                                   ----------  -------------
Options and Warrants Outstanding at April 30, 1997 1,180,000          4.09
  Granted                                            450,000           .55
  Exercised                                             --              --
  Canceled                                              --              --
                                                   ----------  -------------
Options and Warrants Outstanding at April 30, 1998 1,630,000          3.11
  Granted                                          1,650,000         .0938
  Exercised                                       (2,150,000)        .0938
  Canceled                                              --              --
                                                  -----------   ------------
Options and Warrants Outstanding at April 30, 1999 1,130,000          4.22
  Granted                                               --              --
  Exercised                                             --              --
  Canceled                                          (930,000)         4.42
                                                  -----------   ------------
Options and Warrants Outstanding at April 30, 2000   200,000          3.28
  Granted                                               --              --
  Exercised                                             --              --
  Canceled                                          (100,000)          .56
                                                   ----------   ------------
Options and Warrants Outstanding at April 30, 2001   100,000          6.00
  Granted                                               --              --
  Exercised                                             --              --
  Canceled                                          (100,000)         6.00
                                                   -----------  ------------
Options and Warrants Outstanding at April 30, 2002     ---      $      .00
                                                   ===========  ============


                               F-23

<Page>

EMBRYO DEVELOPMENT CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO FINANCIAL STATEMENTS, Sheet #15
----------------------------------------

[12] Stock Options and Warrants [Continued]


No compensation expense was recorded for the years ended April 30, 2002 and
2001.

Had compensation cost been determined on the basis of fair value pursuant to
SFAS No. 123, the net loss and the net loss per common share for the years ended
April 30, 2002 and 2001 and cumulative from inception March 3, 1995 to April
30, 2002 would have been as follows:

                                                                 Cumulative
                                                               from Inception
                                                              March 3, 1995 to
                                        April 30,                 April 30,
                                   2 0 0 2   2 0 0 1               2 0 0 2
                                  --------- -----------     -----------------
Net Loss:
  As Reported                 $(   184,305) $ ( 390,165)        $(10,200,226)
  Pro Forma                   $(   184,305) $ ( 390,165)        $(10,441,586)

Net Loss Per Common Share:
  As Reported                 $       (.03) $      (.06)        $      (1.77)
  Pro Forma                   $       (.03) $      (.06)        $      (1.81)


Generally, stock options and warrants are exercisable upon granting and expire
four years from the date of the grant.

The fair value of each option granted is estimated on the grant date using an
option pricing model which took into account as of the grant date, the exercise
price and the expected life of the option, the current price of the
underlying stock and its expected volatility, expected dividends on the stock
and the risk-free interest rate for the expected term of the option.






                               F-24


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