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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.

For the Quarterly Period Ended June 30, 2002

Commission File Number 0-18044

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PROCYTE CORPORATION(Exact name of the registrant as specified in its charter)

|Washington                                          |  | 91-1307460                          
|--------------------------------------------------- |  | ------------------------------------
|(State of incorporation)                            |  | (I.R.S. Employer Identification No.)
|8511 154th Avenue N.E., Redmond, WA                 |  | 98052                               
|(Address of principal executive offices)            |  | (Zip code)                          
|Registrant's telephone number, including area code: |  | (425) 869-1239                      

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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
ý No o

As
of August 8, 2002, there were issued and outstanding 15,720,720 shares of common stock, par value $.01 per share.

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ProCyte Corporation        Index

|Part IFinancial Information |                                                                                           | 3                                                                         
|---------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------------------------------
|                             | Item 1. Condensed Financial Statements (unaudited)                                        |                                                                           
|                             |                                                                                           | Balance Sheetsas of June 30, 2002 and December 31, 2001                  
|                             |                                                                                           | Statements of OperationsThree & Six Months Ended June 30, 2002 and 2001  
|                             |                                                                                           | Statements of Cash FlowsSix Months Ended June 30, 2002 and 2001          
|                             |                                                                                           | Statements of Stockholders' EquitySix Months Ended June 30, 2002 and 2001
|                             |                                                                                           | Notes to Condensed Financial Statements                                   
|                             | Item 2. Management's Discussion & Analysis of Financial Condition & Results of Operations |                                                                           
|                             | Item 3. Quantitative and Qualitative Disclosures about Market Risk                        |                                                                           
|Part IIOther Information    |                                                                                           | 21                                                                        
|                             | Item 1. Legal Proceedings                                                                 |                                                                           
|                             | Item 2. Changes in Securities and Use of Proceeds                                         |                                                                           
|                             | Item 3. Defaults Upon Senior Securities                                                   |                                                                           
|                             | Item 4. Submission of Matters to a Vote of Security Holders                               |                                                                           
|                             | Item 5. Other Information                                                                 |                                                                           
|                             | Item 6. Exhibits and Reports on Form 8-K                                                  |                                                                           
|Signatures                   |                                                                                           | 22                                                                        
|Exhibit Index                |                                                                                           | 23                                                                        

2

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Part IFinancial Information

Item 1. Condensed Financial Statements (unaudited)

Balance Sheetsas of June 30, 2002 and December 31, 2001

|                                     |                                                             | June 30, 2002 |   | December 31, 2001 |  
|------------------------------------ | ----------------------------------------------------------- | ------------- | - | ----------------- | -
|ASSETS                               |                                                             |               |   |                   |  
|                                     | Cash and cash equivalents                                   |               | $ | 3,859,712         |  
|                                     | Accounts receivable, net of allowance for doubtful accounts |               |   | 1,844,139         |  
|                                     | Inventory                                                   |               |   | 1,800,369         |  
|                                     | Other current assets                                        |               |   | 227,149           |  
|                                     |                                                             |               |   |                   |  
|                                     | Total current assets                                        |               |   | 7,731,369         |  
|                                     | Property and equipment, net                                 |               |   | 1,415,214         |  
|                                     | Intangible assets, net                                      |               |   | 2,911,000         |  
|                                     | Note due from sale of manufacturing                         |               |   | 1,810,200         |  
|                                     | Other assets                                                |               |   | 140,680           |  
|                                     |                                                             |               |   |                   |  
|                                     | Total Assets                                                |               | $ | 14,008,463        |  
|                                     |                                                             |               |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY |                                                             |               |   |                   |  
|                                     | Accounts payable and other accrued liabilities              |               | $ | 796,438           |  
|                                     | Deferred revenue                                            |               |   | 623,000           |  
|                                     |                                                             |               |   |                   |  
|                                     | Total current liabilities                                   |               |   | 1,419,438         |  
|                                     | Other liabilities                                           |               |   | 89,081            |  
|                                     | Deferred proceeds on sale of manufacturing                  |               |   | 1,360,305         |  
|                                     |                                                             |               |   |                   |  
|                                     | Total Liabilities                                           |               |   | 2,868,824         |  
|                                     | Common stock and additional paid-in-capital                 |               |   | 85,267,431        |  
|                                     | Accumulated deficit                                         |               |   | (74,127,792       | )
|                                     |                                                             |               |   |                   |  
|                                     | Stockholders' Equity                                        |               |   | 11,139,639        |  
|                                     |                                                             |               |   |                   |  
|                                     | Total Liabilities and Stockholders' Equity                  |               | $ | 14,008,463        |  
|                                     |                                                             |               |   |                   |  

See notes to condensed financial statements

3

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Statements of OperationsThree & Six Months Ended June 30, 2002 and 2001

|                   |                                                    | Three months ended June 30, |   | Six months ended June 30, |       
|------------------ | -------------------------------------------------- | --------------------------- | - | ------------------------- | ------
|
|Revenues           |                                                    |                             |   |                           |       
|                   | Product sales.                                     |                             | $ | 2,915,245                 |       
|                   | Licenses and royalties                             |                             |   | 347,949                   |       
|                   | Contract manufacturing                             |                             |   |                          |       
|                   |                                                    |                             |   |                           |       
|                   | Total revenue                                      |                             |   | 3,263,194                 |       
|                   | Cost of product sales                              |                             |   | 1,096,502                 |       
|                   |                                                    |                             |   |                           |       
|                   | Gross profit                                       |                             |   | 2,166,692                 |       
|Operating Expenses |                                                    |                             |   |                           |       
|                   | Marketing and selling.                             |                             |   | 704,571                   |       
|                   | General and administrative                         |                             |   | 973,617                   |       
|                   | Provision for loss on sale of manufacturing assets |                             |   |                          |       
|                   |                                                    |                             |   |                           |       
|                   | Total operating expenses                           |                             |   | 1,678,188                 |       
|                   |                                                    |                             |   |                           |       
|                   | Operating income (loss)                            |                             |   | 488,504                   |       
|                   |                                                    | Interest and other income   |   |                           | 46,166
|                   |                                                    |                             |   |                           |       
|                   | Net income (loss)                                  |                             | $ | 534,670                   |       
|                   |                                                    |                             |   |                           |       
|                   | Net earnings (loss) per share                      |                             |   |                           |       
|                   | Basic                                              |                             | $ | 0.03                      |       
|                   | Diluted                                            |                             | $ | 0.03                      |       
|                   | Shares used in per share computation               |                             |   |                           |       
|                   | Basic                                              |                             |   | 15,704,841                |       
|                   | Diluted                                            |                             |   | 16,061,406                |       

See notes to condensed financial statements

4

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Statements of Cash FlowsSix Months Ended June 30, 2002 and 2001

|                                                                                                   |                                                       | Six months ended June 30, |  
|-------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------- | -
|
|Operating Activities                                                                               |                                                       |                           |  
|                                                                                                   | Net income (loss)                                     |                           | $
|Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities: |                                                       |                           |  
|                                                                                                   | Depreciation and amortization                         |                           |  
|                                                                                                   | Provision for disposition of manufacturing operations |                           |  
|                                                                                                   | Amortization of promissory note discount              |                           |  
|                                                                                                   | Amortization of deferred gain                         |                           |  
|                                                                                                   | Amortization of deferred compensation                 |                           |  
|                                                                                                   | Stock issued in payment of expenses                   |                           |  
|                                                                                                   | Change in operating assets and liabilities:           |                           |  
|                                                                                                   | Accounts receivable                                   |                           |  
|                                                                                                   | Inventory                                             |                           |  
|                                                                                                   | Other current assets                                  |                           |  
|                                                                                                   | Other non-current assets                              |                           |  
|                                                                                                   | Accounts payable and other accrued liabilities        |                           |  
|                                                                                                   | Deferred revenue                                      |                           |  
|                                                                                                   | Other liabilities                                     |                           |  
|                                                                                                   |                                                       |                           |  
|                                                                                                   | Net cash provided by (used in) operating activities   |                           |  
|Financing Activities                                                                               |                                                       |                           |  
|                                                                                                   | Proceeds from issuance of common stock                |                           |  
|Investing Activities                                                                               |                                                       |                           |  
|                                                                                                   | Purchase of property and equipment                    |                           |  
|                                                                                                   | Decrease in security deposit                          |                           |  
|                                                                                                   |                                                       |                           |  
|                                                                                                   | Net cash provided by investing activities             |                           |  
|                                                                                                   |                                                       |                           |  
|                                                                                                   | Net increase (decrease) in cash and cash equivalents  |                           |  
|Cash and Cash Equivalents                                                                          |                                                       |                           |  
|                                                                                                   | At beginning of period                                |                           |  
|                                                                                                   |                                                       |                           |  
|                                                                                                   | At end of period                                      |                           | $
|                                                                                                   |                                                       |                           |  

See notes to condensed financial statements

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Statements of Stockholders' EquitySix Months Ended June 30, 2002 and 2001

|                                                                                               |  | Common Stock |  |   |         |  |   |            |   |   |            
|---------------------------------------------------------------------------------------------- |  | ------------ |  | - | ------- |  | - | ---------- | - | - | -----------
|
|
|BalanceJanuary 1, 2001                                                                        |  | 15,514,700   |  | $ | 155,147 |  | $ | 84,950,018 |   | $ | (74,244,144
|Shares issued under non-employee director stock plan                                           |  | 29,816       |  |   | 298     |  |   | 23,702     |   |   |           
|Shares issued upon exercise of options                                                         |  | 11,335       |  |   | 113     |  |   | 9,925      |   |   |           
|Net loss for six months ended June 30, 2001                                                    |  |             |  |   |        |  |   |           |   |   | (866,306   
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            
|BalanceJune 30, 2001                                                                          |  | 15,555,851   |  | $ | 155,558 |  | $ | 84,983,645 |   | $ | (75,110,450
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            
|BalanceJanuary 1, 2002                                                                        |  | 15,653,542   |  | $ | 156,535 |  | $ | 85,062,476 |   | $ | (75,151,338
|Shares issued under non-employee director stock plan                                           |  | 15,740       |  |   | 157     |  |   | 23,843     |   |   |           
|Shares issued at $0.6875 under a stock warrant issued on May 26, 1999 in exchange for services |  | 18,549       |  |   | 185     |  |   | (185       | ) |   |           
|Shares issued upon exercise of options                                                         |  | 24,503       |  |   | 245     |  |   | 21,912     |   |   |           
|Compensatory stock option grants February 21, 2002                                             |  |              |  |   |         |  |   | 17,453     |   |   |            
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            
|Amortization of deferred compensation                                                          |  |              |  |   |         |  |   |            |   |   |            
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            
|Net income for six months ended June 30, 2002                                                  |  |             |  |   |        |  |   |           |   |   | 1,023,546  
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            
|BalanceJune 30, 2002                                                                          |  | 15,712,334   |  | $ | 157,122 |  | $ | 85,125,499 |   | $ | (74,127,792
|                                                                                               |  |              |  |   |         |  |   |            |   |   |            

See notes to condensed financial statements

6

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ProCyte Corporation  Notes to Condensed Financial Statements

1.    Basis of Presentation

The
accompanying unaudited condensed financial statements of ProCyte Corporation ("ProCyte" or the "Company") for the three-month and six-month periods ended June 30, 2002 and 2001
have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Pursuant to such rules and regulations, the condensed financial statements do not include all of the
information and footnotes required by accounting principles generally accepted in the United States of America for audited financial statements. Accordingly, this financial information should be read
in conjunction with the complete audited financial statements, including the notes thereto, which are included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001. In the opinion of management, all material adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial statements have
been included. Interim results are not necessarily indicative of the results that may be expected for the year.

In
April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. This Statement rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt, and an amendment of that statement, SFAS No. 64, Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements. SFAS No. 145 also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor Carriers. SFAS No. 145 amends SFAS
No. 13, Accounting for Leases, to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings, or describe their applicability under changed conditions. Certain provisions of SFAS No. 145 will be adopted by the Company on January 1, 2003.
The Company does not anticipate that adoption of these provisions will have a material effect on its financial position or results of operations. The Company has adopted the provisions of SFAS
No. 145 that are effective for financial statements
issued after May 15, 2002. There was no impact on the Company's financial position or results of operations as a result of the adoption of these provisions.

In
July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This standard requires companies to recognize costs associated with exit or
disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain
employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity. SFAS No. 146 is to be applied prospectively to exit
or disposal activities initiated after December 31, 2002.

2.    Accounts Receivable

The
Company shipped several large orders to its licensing partners at the end of June, which increased its accounts receivable balance at June 30, 2002 significantly as compared to the balance
at December 31, 2001. Two Customers represented 36.5% and 13.7% of the outstanding accounts receivable balance at June 30, 2002.

During
the six months ended June 30, 2002, the Company wrote-off uncollectable balances related to certain terminated licensing agreements. The Company has provided a reserve for
uncollectable receivables in the amount of $83,312 at June 30, 2002 and $243,213 at December 31, 2001. The bad debt expense, net of recoveries, was ($12,039) and $2,760 for the quarters
ended June 30, 2002 and

7

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2001, respectively, and ($6,910) and $10,210 for the six months ended in June 30, 2002 and 2001, respectively.

3.    Inventory

Inventory
after consideration for excess and obsolete items consisted of the following:

June 30, 2002

December 31, 2001Finished Goods

$
1,018,587

$
925,422Work in process


233,922


350,969Raw materials


547,860


942,165Total

$
1,800,369

$
2,218,556


4.    Property and Equipment

Property
and equipment consisted of the following:

June 30, 2002

December 31, 2001Equipment

$
320,088

$
310,082Leasehold improvements


4,028,807


4,028,807Less accumulated depreciation & amortization


(2,933,681
)

(2,784,502
)Property and equipment, net

$
1,415,214

$
1,554,387


5.    Intangible Assets

At
June 30, 2002 and December 31, 2001, intangible assets are shown net of accumulated amortization of $1,055,442 and $1,047,438, respectively. On January 1, 2002, the Company
implemented the guidance of Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" in recognizing certain intangibles as goodwill and assessing
potential future impairments of goodwill. The Company performed an annual test on the value of its goodwill under the guidance of SFAS 142 on March 31, 2002, and did not identify the
need to recognize any impairment of value at that time. There were no events in the second quarter, which would cause the Company to change its valuation as of June 30, 2002. This analysis was
based on one reportable unit. All of Goodwill is deemed to be associated with ProCyte's overall business operations. The Company's amortization expense for goodwill was $61,250 and $122,500 in the
quarter and six months ended June 30, 2001, respectively. The net loss for the quarter and the six months then ended would have been $303,391 and $743,806, or ($0.02) and ($0.05) net loss per
share, if goodwill had not been amortized.

6.    Federal Income Taxes

The
provision for income taxes consisted of the following components:

Three months ended June 30,

Six months ended June 30,2002

2001

2002

2001Current







Deferred
















8

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The
provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before taxes as follows:

Three months ended June 30,

Six months ended June 30,2002

2001

2002

2001Income tax (provision)/benefit at federal statutory rate of 35%

$
(187,135
)
$
127,624

$
(358,241
)
$
303,207Permanent tax/book differences


(5,514
)

(10,960
)

(9,295
)

(13,829
)Tax (provision) before net operating loss carry forward


(192,649
)

116,664


(367,536
)

289,378Net operating loss and general business credit carry forward benefit


192,649


(116,664
)

367,536


(289,378
)Net tax (provision)/benefit














The
tax effect of temporary differences and net operating loss carry forward that give rise to the Company's deferred tax assets and liabilities are as follows:

June 30, 2002

December 31, 2001Deferred Tax Assets:CurrentVacation accrual

$
15,798

$
5,997Bad debt reserve


29,159


85,125Non-CurrentNet operating loss carry-forward less current year usage


24,111,023


24,449,894Tax credit carry-forward


1,622,344


1,622,344Asset impairment write-down


519,765


519,765Amortization of goodwill


30,655


30,655Depreciation


403,720


386,220Total gross deferred tax assets


26,732,464


27,100,000Deferred tax liabilities





Net deferred tax asset


26,732,464


27,100,000Valuation allowance


26,732,464


27,100,000Net Deferred Tax Asset Balance








At
June 30, 2002 and December 31, 2001, the Company provided full valuation allowance for its net deferred tax assets. The Company believes sufficient uncertainty exists regarding the
realizability of the deferred tax assets. The net change in the valuation allowance during the six months ended June 30, 2002 and year ended December 31, 2001, were ($367,536) and
$600,000, respectively.

As
of June 30, 2002, the Company's U.S. federal net operating loss and general business credit carry forward for income tax purposes were approximately $25,733,367. If not utilized, the federal
net
operating loss carry forward and tax credits carry forward will expire between 2002 and 2021. Changes in ownership, as defined by Section 382 of the IRC, may limit the amount of net operating
loss carry forward used in any one year.

9

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7.    Stockholders' Equity

Information
relating to stock options granted, exercised, canceled and currently exercisable is as follows:

Shares Subject to Option

Weighted Average
Exercise PriceBalanceJanuary 1, 2001

2,081,861

$
1.63Granted

38,000

$
1.11Exercised

(11,335
)
$
0.89Canceled

(140,116
)
$
1.36BalanceJune 30, 2001

1,968,410

$
1.64


Shares Subject to Option

Weighted Average
Exercise PriceBalanceJanuary 1, 2002

2,087,002

$
1.57Granted

286,000

$
1.78Exercised

(24,503
)
$
0.90Canceled

(294,498
)
$
1.90BalanceJune 30, 2002

2,054,001

$
1.56Currently Exercisable

1,209,513

$
1.74


At
June 30, 2002, the Company's 1996 Stock Option Plan had 628,162 shares of the Company's common stock available, which included the 750,000 shares approved for the plan at the Company' annual
shareholders meeting on May 21, 2002.

The
Company issued 7,052 shares on July 1, 2002, in payment of the Board of Director retainers for the second quarter. As of August 8, 2002, the Company's 1998 Non-employee
Director Stock Plan had 155,475 shares of the Company's common stock available.

The
Company granted 10,000 stock options on February 21, 2002 and 10,000 stock options on May 20, 2002 in exchange for advisory services from two non-employee consultants.
The February and May grants, respectively, oblige the Company to issue 10,000 common stock shares at $1.33 and $1.83, the market price on the dates of grant. Both grants become fully vested one year
after their date of issuance. The fair value of the February and May grants was determined to be $6,448 and $11,005, respectively, using the Black-Scholes option pricing model. The assumptions used in
the model for the February and May grants, respectively, were a risk-free interest rate of 3.84% and 3.92%, 67% and 61% stock price volatility, and no dividends over the two year expected
lives. The fair values are reported as deferred compensation in Stockholders' Equity, and are being amortized as an operating expense over the expected lives.

The
Company issued three common stock warrants for 100,000 shares on May 26, 1999 in exchange for services. The three warrants oblige the Company to issue 33,334 shares at $0.6875 per share,
the market price on the grant date, 33,333 shares at $1.6875 and 33,333 shares at $2.6875. Each of the warrants has a five-year life and is fully vested. The fair value of these warrants
was determined to be $90,117 using the Black-Scholes option-pricing model and was expensed in 1999. The assumptions used in the model were a risk-free interest rate of 4.08%, an expected
life of five years, 98% stock price volatility and no dividends over the expected life. On January 2, 2002, the first warrant for 33,334 shares was exercised.

10

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8.    Related Party Disclosure

The
Company owns a promissory note in the principle amount of $2,000,000 from Emerald Pharmaceutical L.P., which it received as partial consideration for the sale of its contract manufacturing
operation in 2001. The note is secured by the manufacturing assets sold and bears interest equal to the effective yield on the 10 Year US Treasury Note, which is adjusted quarterly. The average yield
for the quarter and six months ended June 30, 2002 was 5.39% and 5.21%, respectively. Emerald will begin making annual principal payments of $285,714 in July 2005. The Company also
received a minority limited partnership interest in Emerald as part of consideration received in the sale. As part of the agreement, ProCyte leases a portion of its current 32,750 square foot leased
facility, including existing leasehold improvements, to Emerald. Also included in the proceeds is $1,627,906, which is being recognized over the term of the lease for Emerald's use of the leasehold
improvements. ProCyte engages Emerald Pharmaceutical L.P. to do certain manufacturing and other quality and analytical services. Emerald billed ProCyte a total of $61,040 and $193,701 for the services
during the quarter and six months ended June 30, 2002, respectively.

One
of the Company's Directors serves as Chairman and Chief Executive Officer of one of ProCyte's customers. The customer purchased $186,755 and $308,544 in product during the quarter and six months
ended June 30, 2002, respectively. On June 30, 2002 the customer owed ProCyte $253,237.

At
June 30, 2002 and December 31, 2001, respectively, an Officer owed the Company $103,898 and $117,904, respectively, including accrued interest at 4.28% under the terms of a promissory
note dated December 16, 1998. In the second quarter of 2002, the Compensation Committee of the Board of Directors agreed to extend the note's due date an additional two years to June 30,
2004.

11

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Item 2. Management's Discussion & Analysis of Financial Condition & Results of Operations

This
Form 10-Q, contains forward-looking statements. In some cases you can identify forward- looking statements by terminology such as "believe," "expect," "intend," "anticipate,"
"estimate," "predict," "potential," "propose" or "continue," variations of such words and similar expressions identifying forward looking statements. These statements are only predictions. Actual
events or results may differ materially. In evaluating these statements, you should specifically consider various factors described below in the section entitled "Important Factors That May Affect
Results."

Although
we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. This report should be read in conjunction with the Company's Annual Report on
Form 10-K filed with the U.S. Securities and Exchange Commission (SEC). The Company undertakes no obligation to update publicly any forward-looking statements to reflect new
information, events or circumstances after the date of this report, or to reflect the occurrence of unanticipated events.

Critical Accounting Policies and Estimates

The
"Management's Discussion and Analysis of Financial Condition and Results of Operations", as well as disclosures included elsewhere in this Form 10-Q, are based upon our
financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. On an ongoing basis, we evaluate the estimates
used, including those related to impairment and useful lives of intangible assets, allowances for accounts receivable and for excess and obsolete inventory. We base our estimates on historical
experience, current conditions and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources, as well as identifying and assessing our accounting treatment with
respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies involve the
more significant judgments and estimates used in the preparation of the consolidated financial statements.

Product
revenues are recognized when products are shipped, license fees are recognized over the term of the license agreement, and royalties are recognized when earned. On occasion, the Company will
receive advance deposits with customer purchase orders. These deposits are reported as a deferred revenue liability, until the product is shipped to the customer.

Approximately
21% of ProCyte's assets as of June 30, 2002 consist of intangible assets, most of which were acquired in business combinations and were recorded based on the fair value of the
common stock we issued to effect those business combinations. Under the guidance of SFAS 142 "Goodwill and Other Intangible Assets" we analyze whether the fair value of recorded goodwill is
impaired on an annual basis. Our analysis of whether the fair value of recorded goodwill is impaired involved a substantial amount of judgment, as does establishing and monitoring estimated lives of
amortizable intangible assets. Future charges related to intangible assets could be material depending on future developments and changes in technology and our business.

We
maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of our customers to make required payments. We believe such allowances are adequate as of
June 30, 2002; however, if the financial condition of our customers or other debtors were to deteriorate, resulting in an impairment of their ability to make payments to us, additional
allowances may be required.

12

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In
valuating inventory, we consider excess and obsolete inventory. Some of our products carry a shelf life date. Products can potentially lose their saleable value if they are not sold several months
before this shelf life date. However, there can be no guarantee that ProCyte can continue to sell products at its current rate. The value of ProCyte's inventory may decrease in the event that sales
were to decrease.

Corporate Overview

ProCyte
continues to follow its mission of expanding the use and consumer acceptance of GHK and AHK Copper Peptide technologies. During 2001, several new products were introduced in the
Neova®Therapy line, including Neova®Antioxidant Therapy. The sunscreen product
line was expanded with the
introduction of Ti-Silc®Untinted Sunscreen and an improved formulation of Z-Silc Sunscreen. There were
select additions and discontinuations in the regular product line to improve the product portfolio.

During
2001, ProCyte continued to develop and market its skin health and hair care products, and continued to work with its licensees to promote sales of Copper Peptide products. As the Company's
product line has expanded, it has continued to focus its direct sales efforts on specialty skin health and wound care sectors, marketing its products primarily to dermatologists, plastic surgeons and
cosmetic surgeons.

The
GraftCyte®line of Copper Peptide containing wound care products are used following hair restoration surgery. ProCyte is the only company
to provide a comprehensive line of products that address the importance of wound repair in the hair transplant procedure. The Company's
GraftCyte®products are promoted through its own sales force and specialty distributors.

The
Company has also continued to emphasize its Complex Cu3®Intensive Repair Creme, Lotion, Cleanser and Hydrating Gel products
to treat patients following chemical peels, microdermabrasion and laser treatments. The Complex Cu3®System allows the Company to
differentiate its line of skin care products on the basis of its proprietary Copper Peptide technology.

The
Company markets its Tricomin®line of Triamino Copper Complex containing hair care products primarily to physicians and
directly to consumers through its web site at www.tricomin.com. Tricomin®shampoos, conditioners, and follicle therapy solution are
positioned to participate in the rapidly growing $1.5 billion worldwide hair care market as a program for the maintenance of thinning hair for both men and women. Hair follicles require high
concentrations of biological copper, and the Tricomin®products deliver copper along with amino acids for nourishing and stimulating the hair
and scalp for improved health, strength and appearance.

In
2001, substantial efforts were made with our various partners in gaining registrations and supplying the Copper Peptide technology. During the first quarter of 2001, the Company shipped significant
quantities of Copper Peptide to Neutrogena for their launch in April 2001. Neutrogena has continued to expand its product offerings in 2002 and recently launched its first products in Europe.
Additionally, the Company signed new consumer license agreements with American Crew, Creative Nail and Atelier Esthetique in 2001. The AHK Copper Peptide compound was licensed to American Crew for
hair care in the salon market. The GHK Copper Peptide compound was licensed to Creative Nail Design for nail and hand care in the salon and spa market. All of these companies have launched products
into their respective markets during the first half of 2002. ProCyte supplies finished skin care products to Atelier Esthetique for the U.S. salon and spa market. Merck experienced difficulties in
selling the Iamin®Gel in Brazil. Its management in Latin America changed during 2001, and the new management has indicated a desire to
discontinue sales of the Iamin®Gel. The Merck agreement was terminated on March 25, 2002.

13

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Amuchina,
our partner in Europe, was acquired by Angelini ACRAF SpA Pharmaceutical. The change caused a significant slowdown in the registration process and product launch plans. They expect to
initiate sales in late 2002.

Net Income (Losses)

ProCyte
has reported net income for the second quarter of 2002 and for the first six months of the year. Net income for the quarter was $534,670 as compared to a net loss of $364,641 in the same
quarter in 2001. Through the first six months of 2002, the Company reported net income of $1,023,546 as compared to a net loss of $866,306 reported for the same period last year. From ProCyte's
inception through December 31, 2001, the Company's revenues were exceeded by the costs associated with researching and developing its proprietary technology and selling and marketing its
products. Last year marked significant milestones in product sales growth, launching of strategic licensing agreements and eliminating the loss-generating contract manufacturing operation.
At June 30, 2002, the Company's accumulated deficit was approximately $74.1 million.

Revenues

The
Company's overall revenues for the quarter increased 35% to $3.3 million from $2.4 million reported in the year-earlier period. Revenues for the first six months were up
27% to $6.3 million as compared to $5.0 million reported for the same period in 2001. In July of 2001, the Company sold its contract manufacturing operations to Emerald Pharmaceutical
L.P. Revenues, excluding contract manufacturing, were up 41% and 32% for the quarter and six month periods ended June 30, 2002, as compared to the same periods in the prior year.

For
the second quarter, product sales were up 39% to $2,915,245, an $817,502 increase over $2,097,743 reported for the same quarter in 2001. Product sales of $5,668,645, reported for the first six
months, were $1,254,341 or 28% higher than $4,414,304 reported in the year-earlier period. Sales to physicians and distributors were up 29% and 28% for the three months and six months
periods as compared to the same periods in 2001. GHK and AHK Copper Peptide sales to ProCyte's licensing partners were also up 83% in the second quarter and 30% for six months. In the first six months
of 2002, the Company launched a new line of products under the NextDerm brand name. These products are available to selected consumer markets through physicians. In the second quarter
2002, the Company continues to ship initial orders to Atelier Esthetique for its launch of Simple Solutions products into the salon and spa market. During 2002, the Company also shipped
AHK Copper Peptide to American Crew for its Revitalize products, which were launched in the first quarter of this year. During the first
six months of 2002, we continued to supply GHK Copper Peptide to Neutrogena for its Visibly Firm Active Copper products, which were initially launched in the first half of
2001.

ProCyte's
second quarter royalty revenue increased 64% to $347,949, an increase of $135,603 over $212,346 reported for the same period in 2001. Royalties for the six months were up 84% to $636,949, a
$290,438 increase as compared to the same prior-year period. The Company earns royalties on products sold by Neutrogena, American Crew and Creative Nail, which contain its patented copper
peptide compounds.

Interest
income for the second quarter increased to $46,166 as compared to $20,082 earned in the second quarter of 2001. For the six months, interest and other income increased to $92,963 as compared
to $57,997 reported for the same period in 2001. Interest earnings for the second quarter and for the six months include $26,891 and $51,647, respectively, which was paid by Emerald Pharmaceutical
L.P. on a $2,000,000 promissory note. During the first six months of 2002, the Company experienced lower market yields on its cash reserves as compared to the first six months in 2001.

14

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Expenses

In
the second quarter of 2002, gross profit increased 32% to $2,166,692 (66% gross profit margin) as compared to $1,647,420 (68%) reported for the same quarter in 2001. Gross profit for the six months
was also up 42% to $4,283,011 (68%) as compared to $3,009,609 (61%) reported for the year-earlier period. Gross profit margins will fluctuate from quarter to quarter based on product mix
and licensee purchases of Copper Peptide for their products.

Total
operating expenses were down 17% in the second quarter of 2002 to $1,678,188 from $2,032,143 reported for the second quarter in 2001. For the six months ended June 30, 2002 expenses were
down 15% to $3,352,428 as compared to $3,933,912 reported for the same period in 2001. Marketing and selling expenses were down 14% for the second quarter of 2002 and 13% for the first six months of
2002 as the Company launched fewer new products as compared to the same period in 2001. General and administrative expenses also decreased 12% in both the second quarter and the first six months of
2002 as compared to the same periods in the prior year, due to the elimination of the contract manufacturing operations.

Liquidity and Capital Resources

The
Company has relied primarily on equity financing, product sales, royalties and license fees, interest income and corporate partnerships to fund its operations and capital expenditures. At
June 30, 2002, the Company had approximately $3.9 million in cash and cash equivalents, compared to $3.0 million at December 31, 2001. The net change in cash and cash
equivalents during the six months ended June 30, 2002 reflects a net cash flow of $799,981 from operating activities. We expect to see fluctuations in accounts receivable, inventory, accounts
payable and deferred revenues over the next several quarters as our strategic partners continue to initiate product introductions.

ProCyte
did not own any derivative financial instruments as of June 30, 2002. The Company is debt-free and is exposed to interest rate risk only to the extent that it has invested
idle cash balances. At June 30, 2002, such balances were invested in a United States Treasury money market fund. ProCyte employs established policies and procedures to manage its exposure to
changes in the market risk of its investments. The Company believes that the market risk arising from holdings of its investment is not material. We hold a $2 million promissory note as a
result of the sale of our contract manufacturing operation to Emerald Pharmaceutical LP. The note is guaranteed only by a security agreement, which gives ProCyte a first lien position on the assets
sold to Emerald.

The
Company believes that its existing cash and cash equivalents and interest thereon, will be sufficient to meet its working capital requirements for at least the next twelve months. However, there
can be no assurance that the underlying assumed levels of revenue and expense will prove accurate. The Company will depend on product revenues, royalties and license fees, asset redeployment, interest
income, equity financing, and funding from corporate partnerships to meet its future capital needs. See "Additional Factors That May Affect ResultsNeed for Additional Capital".

Additional Factors That May Affect Results

In
addition to the other information contained in this report and our other reports filed with the SEC, the following factors could affect the Company's actual results and could cause our actual
results to differ materially from those achieved in the past or expressed in our forwarding-looking statements.

History of Operating Losses; Accumulated Deficit; Fluctuations in Future Earnings

The
Company has been launching products based on its proprietary Copper Peptide technology since mid-1996. It expects to continue to launch new Copper Peptide based products in the future.
To date, the Company has generated increasing revenues from sales of products based on its proprietary

15

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technology and licensing agreements, but there can be no assurance that the Company can continue to generate sufficient revenues to sustain a profitable level of operations. As of June 30,
2002, the Company's accumulated deficit was approximately $74.1 million. In addition to sales of products based on its proprietary Copper Peptide technology, the Company's revenues have
historically included sales of non-proprietary products, license fees and royalties, revenue from contract services and interest income. We sold our contract manufacturing operation in
July 2001. There can be no assurance that the Company can sustain a consistent and profitable level of operations. Sustained profitability is dependent a wide variety of factors, including the
Company's ability to successfully manufacture and market its products, enter into agreements with corporate partners for commercialization of the Company's products, and license the Company's products
and technology. Payments under corporate partnerships and licensing arrangements, if any, may be subject to fluctuations in both timing and amounts. Moreover, the Company's level of profitability, if
any, cannot be predicted and may vary significantly from quarter to quarter.

Need for Additional Capital

In
the first half of 2002, the Company, for the first time since its inception, has generated net income from operations. The Company may require additional funds to sustain, expand or enhance its
sales and marketing activities, continue product development, acquire a product line or company, or fund an infomercial. The Company's future capital requirements will depend on numerous factors,
including: its efforts, and the efforts of its collaborative partners, to commercialize its products; the continued progress in the Company's research and development programs; the relationships with
existing and future corporate collaborators, if any; the competing technological and market developments; the costs involved in filing, prosecuting and enforcing patent claims; the time and costs of
commercialization activities. As of June 30, 2002, the Company had cash and cash equivalents of $3.9 million. The Company estimates that, at its planned rate of spending, its existing
cash and cash equivalents and the interest income thereon will be sufficient to meet its capital requirements for at least the next twelve months. There can be no assurance that the underlying assumed
levels of revenue and expense will prove accurate. Whether or not these assumptions prove to be accurate, the Company may need to raise additional capital. The Company may be required to seek
additional funding through public or private financing, including equity financing, or through collaborative arrangements. Adequate funds for these purposes, whether obtained through financial markets
or from collaborative or other arrangements with corporate partners or other sources, may not be available when needed or may not be available on terms favorable to the Company. If issuing equity
securities raises additional funds,
dilution to existing shareholders will result. In addition, in the event that additional funds are obtained through arrangements with collaborative partners, such arrangements may require the Company
to relinquish its rights to certain technologies or potential products that it would otherwise seek to develop or commercialize on its own. If funding is insufficient at any time in the future, the
Company may be required to: delay, scale back or eliminate some or all of its marketing and research and development programs; sell assets; or license to third parties the rights to commercialize
products or technologies that the Company would otherwise seek to develop on its own. Furthermore, the terms of any such license agreements or asset sales might be less favorable than if the Company
were negotiating from a stronger position.

16

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Uncertainties Related to Product Commercialization and Development

From
its inception in 1986, until it launched its first commercial product in 1996, the Company has dedicated substantially all of its resources to the research and development of wound healing, hair
growth and other therapeutic pharmaceutical applications of its Copper Peptide compounds. To date, the Company has generated increasing revenue from the sales of products based on its proprietary
Copper Peptide technology. There can be no assurance that the Company's current products or future products, will be successfully commercialized and accepted for use by physicians, healthcare
providers and consumers on a long-term basis.

Dependence on and Management of Existing and Future Corporate Alliances

The
successful commercialization of the Company's existing and future products in the consumer markets and wound care markets will depend upon ProCyte's ability to enter into and effectively manage
corporate partnerships. There can be no assurance that the Company will be successful in establishing corporate alliances in the future, or that it will be successful in maintaining existing or any
future corporate alliances. Moreover, there can be no assurance that the interests and motivations of any corporate partner, distributor or licensee would be or remain consistent with those of the
Company, or that such partners, distributors or licensees would successfully perform the necessary technology transfer, clinical development, regulatory compliance, manufacturing, marketing or other
obligations. There can be no assurance that any of the Company's existing or future collaborators will perform their obligations under their agreements with the Company or that the Company's products
or the products of others that incorporate the Company's products or technology will be successfully commercialized. Any of these factors could have a material adverse effect on the Company's
business, financial condition and results of operations.

Uncertainty of Patent Position and Proprietary Rights

The
patent positions of biotechnology, medical device and healthcare products companies are often uncertain and involve complex legal and factual questions, and the breadth of claims allowed in such
patents cannot be predicted. In addition, there is a substantial backlog of patents at the US Patent and Trademark Office that may delay the review and the potential issuance of patents. The Company's
success will depend significantly on its ability to obtain patents and licenses to patent rights, to maintain trade secrets, and to operate without infringing on the proprietary rights of others, both
in the United States and in other countries. The failure of the Company or its licensors to obtain and maintain patent protection for the Company's technology could have a material adverse effect on
the Company.

ProCyte's
success depends, in part, upon its ability to protect its products and technology under intellectual property laws in the United States and abroad. As of June 30, 2002, the Company
had 21 issued US patents expiring between 2005 and 2017 and numerous issued foreign patents and patent registrations. The patents relate to use of the Company's copper-based technology for a variety
of healthcare applications, and to the composition of certain biologically active, synthesized compounds. The Company's strategy has been to apply for patent protection for certain compounds and their
discovered uses that are believed to have potential commercial value in countries that offer significant market potential. There can be no assurance that patent applications relating to the technology
used by the Company will result in patents being issued. There can be no assurance that any patent issued to the Company will not be subjected to further proceedings limiting the scope of the rights
under the patent or that such patent will provide a competitive advantage, will afford protection against competitors with similar technology, or will not be successfully challenged, invalidated or
circumvented by competitors.

17

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The
Company's processes and potential products may conflict with patents that have been or may be granted to competitors and others. As the biotechnology, medical device and healthcare industries
expand and more patents are issued, the risk increases that the Company's processes and potential products may give rise to claims that they infringe the patents of others. Such other persons could
bring legal actions against the Company claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected product or use of the affected process. Litigation may be
necessary to enforce patents issued to the Company, to protect trade secrets or know-how owned by the Company or to determine the enforceability, scope and validity of proprietary rights
of others. If the Company becomes involved in such litigation, it could result in substantial expense to the Company and significant diversion of effort by the Company's technical and management
personnel. In addition to any potential liability for significant damages, the Company could be required to obtain a license to continue to manufacture or market the affected product or use the
affected process. Costs associated with any licensing arrangement may be substantial and could include ongoing royalties. There can be no assurance that any license required under any such patent
would be made available to the Company on acceptable terms, if at all. If such licenses could not be obtained on acceptable terms, the Company
could be prevented from manufacturing and marketing existing or potential products. Accordingly, an adverse determination in such litigation could have a material adverse effect on the Company's
business, financial condition and results of operations.

The
Company also relies on non-patented proprietary technology. There can be no assurance that the Company can meaningfully protect its rights to such non-patented technology,
that any obligation to maintain the confidentiality of such proprietary technology will not be breached by employees, consultants, collaborators or others or that others will not independently develop
or acquire substantially equivalent technology. To the extent that corporate partners or consultants apply Company technological information independently developed by them or by others to Company
projects or apply Company technology or know-how to other projects, disputes may arise as to the ownership of proprietary rights to such information.    Any failure to protect
non-patented proprietary technology or any breach of obligations designed to protect such technology or development of equivalent technology may have a material adverse effect on the
Company's business, financial condition and results of operations.

Uncertainty of Government Regulatory Requirements

The
manufacturing and marketing of ProCyte's products are subject to extensive regulation in the United States by the federal government, principally by the FDA, and in other countries by similar
health and regulatory authorities. The Federal Food, Drug and Cosmetic Act, and the regulations promulgated thereunder, and other federal and state statutes govern, among other things, the testing,
manufacture, safety, labeling, storage, record-keeping, advertising and promotion of cosmetic products and medical devices. Product development and approval or clearance within the regulatory
framework requires a number of years and involves the expenditure of substantial resources.

The
Company's products and product candidates may be regulated by any of a number of divisions of the FDA. The process of obtaining and maintaining regulatory approvals for the manufacturing or
marketing of the Company's existing and potential products is costly and time-consuming and is subject to unanticipated delays. Regulatory requirements ultimately imposed could also
adversely affect the ability of the Company to clinically test, manufacture or market products.

In
the United States, products that do not seek to make effectiveness claims based on human clinical evaluation may be subject to review and regulation under the FDA's cosmetic or 510(k) medical
device guidelines. Similar guidelines exist for such products in other countries. Such products, which include wound care dressings and certain ointments and gels, must show safety and substantial
equivalency with predicate products already cleared by the FDA to be marketed. There can be no assurance that such product applications submitted to the FDA or similar agencies in other countries will
receive clearance

18

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to be marketed, or that the labeling claims sought will be approved, or that, if cleared, such products will be commercially successful or free from third party claims relating to the effectiveness
or safety of such products.

In
addition to obtaining approval or clearance from the FDA or foreign regulatory bodies to market a product, the prospective manufacturer's quality control and manufacturing procedures must conform
to current good manufacturing practices ("cGMP") guidelines, or ISO 9000 standards, when appropriate. In complying with these regulations, which are subject to change at any time without notice to the
Company, ProCyte must continue to expend time, effort and financial resources in production and quality control. In addition, ProCyte's contract manufacturers may be subject to the regulations of and
inspections by other foreign, federal, state or local agencies. There can be no assurance that the Company's contract manufacturers' facilities or operations will meet or continue to meet all
appropriate guidelines or to pass inspections by any government agency.

The
Company also is or may become subject to various other federal, state, local and foreign laws, regulations and policies relating to, among other things, safe working conditions, good laboratory
practices, and the use and disposal of hazardous or potentially hazardous substances used in connection with its research and development.

The
Company's failure to comply with applicable regulatory requirements, including obtaining required regulatory approvals and consents, could have a material adverse effect on the Company's business,
financial condition and results of operations.

Intense Competition

Competition
in the wound care, skin health and hair care markets is intense. The Company's competitors include well-established pharmaceutical, cosmetic and healthcare companies such as
Obagi, Senetek, Allergan and Nioxin. These competitors may have more financial and other resources, larger research and development staffs, and more experience and capabilities in researching,
developing and testing products in clinical trials, in obtaining FDA and other regulatory approvals and in manufacturing, marketing and distribution than the Company. In addition, a number of smaller
companies are developing or marketing competitive products. The Company's competitors may develop and commercialize products or obtain patent protection or other regulatory approvals for products more
rapidly than the Company. In addition, competitive products may be manufactured and marketed more successfully than the Company's potential products. Such developments could render the Company's
existing or potential products less competitive or obsolete and could have a material adverse effect on the Company's business, financial condition and results of operations.

Potential Volatility of Stock Price; Bulletin Board Listing

The
market prices for securities of healthcare, medical dressings, pharmaceutical and biotechnology companies are subject to volatility, and the market has from time to time experienced significant
fluctuations that are unrelated to the operations of the Company. ProCyte's market price has fluctuated over a wide range since the Company's initial public offering in 1989, and since
March 25, 1999, the Company's common stock has traded on the NASD OTC bulletin board. Because real-time price information may not be easily available for bulletin board securities,
an investor is likely to find it more difficult to dispose of, or to obtain accurate quotations on the market value of, the Company's securities than if they were listed on a national exchange. In
addition, purchases and sales of the Company's securities may become subject to Rule 15g-9 of the Exchange Act, which imposes various sales practice requirements on broker-dealers,
or to the "penny stock" rules, either of which would likely reduce the level of trading activity in the secondary market for the Company's securities and make selling the securities more difficult for
an investor.

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Announcements
concerning the Company or its competitors, including fluctuations in operating results, research and development program direction, results of clinical trials, addition or termination of
corporate alliances, technology licenses, clearance or approval to market products, announcements of technological innovations or new products by the Company or its competitors, changes in government
regulations, healthcare reform, developments in patent or other proprietary rights of the Company or its competitors, litigation concerning business operations or intellectual property, or public
concern as to safety of products, as well as changes in general market conditions and mergers and acquisitions, may have a significant effect on the market price of ProCyte's common stock.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

ProCyte
did not own any derivative financial instruments as of June 30, 2002. The Company is debt-free and is exposed to interest rate risk only to the extent that it has invested
idle cash balances. At June 30, 2002, such balances were invested in a United States Treasury money market fund. ProCyte employs established policies and procedures to manage its exposure to
changes in the market risk of its investments. The Company believes that the market risk arising from holdings of its financial instruments is not material. The Company holds a $2 million
promissory note as a result of the sale of its contract manufacturing operation, which is secured by the manufacturing assets sold, and there is no guaranty.

20

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Part IIOther Information

Item 1. Legal Proceedings

Not
applicable.

Item 2. Changes in Securities and Use of Proceeds

Not
applicable.

Item 3. Defaults Upon Senior Securities

Not
applicable.

Item 4. Submission of Matters to a Vote of Security Holders

The
annual meeting of the shareholders of the Company was held on May 21, 2002. Two matters were submitted to the shareholders for a vote: the election of directors and a proposal to increase
the number of shares reserved for issuance under the Company's 1996 employee stock option plan. As of April 4, 2002, the record date, there were 15,695,833 shares eligible to vote at the
meeting, of which, 90.66% or 14,229,819 were represented at the meeting, constituting a quorum.

The
five nominees for election as directors were elected to serve until 2003 annual meeting of the shareholders, and until the election and qualification of their respective successors. The vote for
each director follows:

Directors

For

WithheldJohn F. Clifford

14,034,523

195,296Matt L. Leavitt

14,068,347

161,472Glenn A. Oclassen

14,034,697

195,122Robert E. Patterson

14,084,347

145,472John M. Hammer

14,084,223

145,596


The
other proposal was approved by the shareholders. The vote was as follows:

Proposal

For

Withheld

AbstainIncreased the number of share authorized for the 1996 stock option plan from 1,000,000 to 1,750,000

13,064,878

1,109,326

55,615


Item 5. Other Information

Not
applicable.

Item 6. Exhibits and Reports on Form 8-K

See
Exhibit Index on page 23.

None.

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Signatures

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.

|                     |  | ProCyte Corporation (Registrant)
|-------------------- |  | --------------------------------
|Date: August 8, 2002 |  | By:                             
|Date: August 8, 2002 |  | By:                             

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Exhibit Index

|Exhibit |  | Description                                                                                                                       |  | Note
|------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|3.1     |  | Restated Articles of Incorporation of the Registrant                                                                              |  | A   
|3.2     |  | Restated Bylaws of the Registrant                                                                                                 |  | A   
|4.1     |  | Rights Agreement between the Registrant and American Securities Transfer and Trust as of December 7, 1994                         |  | G   
|10.1*   |  | 1987 Stock Benefit Plan of ProCyte Corporation                                                                                    |  | A   
|10.2*   |  | ProCyte Corporation 1989 Restated Stock Option Plan                                                                               |  | B   
|10.3*   |  | ProCyte Corporation 1991 Restated Stock Option Plan for Non-employee Directors and amendments thereto                             |  | D   
|10.4   |  | Teachers Insurance & Annuity Association Lease dated as of October 1, 1993 and second amendment thereto dated February 28, 1997   |  | D   
|10.5*   |  | 1996 Stock Option Plan                                                                                                            |  | D   
|10.6*   |  | ProCyte Corporation 1998 Non-employee Director Stock Plan                                                                         |  | F   
|10.7*   |  | Change of Control Agreement for Ms. Robin Carmichael                                                                              |  | F   
|10.8*   |  | Change of Control Agreement for Mr. John Clifford                                                                                 |  | D   
|10.13*  |  | Form of Indemnity Agreement dated February 23, 1995 between the Registrant and each of Dr. Blake, Mr. Patterson and Mr. Clifford. |  | C   
|10.14*  |  | Form of Indemnity Agreement between ProCyte Corporation and each of various of its Officers and Directors                         |  | F   
|10.15*  |  | Form of Severance Agreement for Mr. John Clifford                                                                                 |  | D   
|10.16*  |  | Form of Promissory Note between ProCyte Corporation and Mr. John Clifford                                                         |  | H   
|10.17  |  | License Agreement dated April 19, 2000 between ProCyte Corporation and Neutrogena Corporation                                     |  |     
|99.1    |  | Certification of Periodic Report by Mr. John F. Clifford                                                                          |  | J   
|99.2    |  | Certification of Periodic Report by Mr. Mark E. Landis                                                                            |  | J   

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