================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended:  September 30, 2001

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

         For the transition period from ___________ to ___________


                         COMMISSION FILE NUMBER 1-11352
                               -------------------

                             ABLE LABORATORIES, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

              DELAWARE                                         04-3029787
              --------                                         ----------
   (State or other jurisdiction of                           (IRS Employer
   incorporation or organization)                          Identification No.)

                               200 Highland Avenue
                                    Suite 301
                                Needham, MA 02494
                                -----------------
                    (Address of principal executive offices)

                                 (781) 449-4926
                                 --------------
                           (Issuer's telephone number)

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 filed such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    X          No
     -----            -----

As of November 14, 2001, there were 143,007,640 outstanding shares of common
stock, $.01 par value per share.

================================================================================

<PAGE>

                             ABLE LABORATORIES, INC.

                                    FORM 10-Q

                                QUARTERLY REPORT

                               SEPTEMBER 30, 2001

                                TABLE OF CONTENTS

<TABLE><CAPTION>
<S>                                                                                                            <C>
Facing Page                                                                                                    1
Table of Contents                                                                                              2

PART I.  FINANCIAL INFORMATION (*)

Item 1.       Financial Statements:
              Condensed Consolidated Balance Sheets                                                            3
              Condensed Consolidated Statements of Loss                                                        5
              Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)                   7
              Condensed Consolidated Statements of Cash Flows                                                  8
              Notes to Unaudited Condensed Consolidated Financial Statements                                   9

Item 2.       Management's Discussion and Analysis of Financial Condition

              and Results of Operations                                                                       14

PART II. OTHER INFORMATION

Item 1.       Legal Proceedings                                                                               20
Item 2.       Changes in Securities                                                                           20
Item 6.       Exhibits and Reports on Form 8-K                                                                21

SIGNATURES                                                                                                    22
</TABLE>


(*)      The financial information at December 31, 2000 has been derived from
         the audited financial statements at that date and should be read in
         conjunction therewith. All other financial statements are unaudited.


                                      -2-
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             ABLE LABORATORIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                                   (Unaudited)

                                     ASSETS

<TABLE><CAPTION>
                                                                         SEPTEMBER 30,         DECEMBER 31,
                                                                             2001                 2000
                                                                          -----------          -----------
<S>                                                                       <C>                  <C>
CURRENT ASSETS:
Cash and equivalents                                                      $   213,229          $   373,832
Due on sale of subsidiary                                                        --                800,000
Accounts receivable, net of allowance of $4,993,728
 and $485,068                                                               4,114,202            3,508,794
Rebates receivable                                                               --                119,558
Inventory                                                                   2,985,558            5,889,235
Notes receivable                                                               55,000               55,000
Prepaid expenses and other current assets                                     684,885              492,601
                                                                          -----------          -----------
         Total current assets                                               8,052,874           11,239,020
                                                                          -----------          -----------
Property and equipment, net                                                 4,083,533            3,701,501
                                                                          -----------          -----------
OTHER ASSETS:
Investment securities                                                       3,720,000                 --
Customer lists, net of accumulated amortization                                  --              1,153,958
Debt financing costs, net of accumulated amortization                         227,041              402,784
Deposits and other assets                                                     668,788              416,359
                                                                          -----------          -----------
         Total other assets                                                 4,615,829            1,973,101
                                                                          -----------          -----------
                                                                          $16,752,236          $16,913,622
                                                                          ===========          ===========
</TABLE>





     See accompanying notes to unaudited consolidated financial statements.


                                      -3-
<PAGE>

                             ABLE LABORATORIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                                   (Unaudited)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE><CAPTION>

                                                                        SEPTEMBER 30,          DECEMBER 31,
                                                                            2001                   2000
                                                                        ------------           ------------
<S>                                                                          <C>                    <C>
CURRENT LIABILITIES:
Notes payable and current portion of long-term debt                     $  2,760,241           $  8,252,678
Accounts payable and accrued expenses                                      3,519,871              6,183,233
Warrant put liability                                                           --                1,076,472
Settlement obligation, current portion                                          --                   16,276
                                                                        ------------           ------------
         Total current liabilities                                         6,280,112             15,528,659
Deferred gain on sale of subsidiary                                        1,296,597                   --
Long-term debt, less current portion                                         539,000              2,248,875
Settlement obligation, less current portion                                     --                  451,313
                                                                        ------------           ------------
         Total liabilities                                                 8,115,709             18,228,847
                                                                        ------------           ------------

STOCKHOLDERS' EQUITY (DEFICIT):

Preferred stock, $.01 par value, 10,000,000 shares authorized,
   102,629 and 52,260 shares of Series B through Q
   outstanding (liquidation value $10,262,843 and $5,215,880)                  1,026                    522
Common stock, $.01 par value, 225,000,000 shares
   authorized, 138,682,977 and 98,002,026 shares issued and
   outstanding                                                             1,386,830                980,020
Additional paid-in capital                                                76,124,332             64,460,755
Accumulated deficit                                                      (68,875,661)           (66,756,522)
                                                                        ------------           ------------
         Total stockholders' equity                                        8,636,527             (1,315,225)
                                                                        ------------           ------------
                                                                        $ 16,752,236           $ 16,913,622
                                                                        ============           ============
</TABLE>






     See accompanying notes to unaudited consolidated financial statements.

                                      -4-
<PAGE>

                             ABLE LABORATORIES, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF LOSS
                                   (Unaudited)
<TABLE><CAPTION>
                                                          THREE MONTHS ENDED
                                                 -------------------------------------
                                                 SEPTEMBER 30,           SEPTEMBER 30,
                                                      2001                    2000
                                                 -------------           -------------
<S>                                              <C>                     <C>
Sales, net                                       $   5,070,600           $   8,590,907
Cost of sales                                        2,997,511               7,775,090
                                                 -------------           -------------
       Gross profit                                  2,073,089                 815,817
                                                 -------------           -------------
Operating expenses:
   Selling, general and administrative               1,351,523               2,088,545
   Research and development                            527,024                 446,323
                                                 -------------           -------------
         Total operating expenses                    1,878,547               2,534,868
                                                 -------------           -------------
         Operating income (loss)                       194,542              (1,719,051)
                                                 -------------           -------------
Other income (expense):
   Investment income, net                                8,487                   6,489
   Interest and financing expenses                    (141,447)               (577,120)
   Miscellaneous income                                418,017                  23,548
                                                 -------------           -------------
         Other income (expense), net                   285,057                (547,083)
                                                 -------------           -------------
         Net income (loss)                             479,599              (2,266,134)
Less returns to preferred stockholders:

   Beneficial conversion features                    6,552,244                 783,809
   Dividends paid and accrued                          170,068                  41,779
                                                 -------------           -------------
Net loss applicable to common stock              $  (6,242,713)          $  (3,091,722)
                                                 =============           =============
Net loss per share - basic                       $       (0.05)          $       (0.04)
                                                 =============           =============
Weighted average shares outstanding                131,275,545              78,832,607
                                                 =============           =============
</TABLE>



     See accompanying notes to unaudited consolidated financial statements.

                                      -5-
<PAGE>


                             ABLE LABORATORIES, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF LOSS

                                   (Unaudited)
<TABLE><CAPTION>
                                                          NINE MONTHS ENDED
                                                 -------------------------------------
                                                 SEPTEMBER 30,           SEPTEMBER 30,
                                                      2001                    2000
                                                 -------------           -------------
<S>                                              <C>                     <C>
Sales, net                                       $  12,527,632           $  24,691,916
Cost of sales                                        8,477,089              19,426,654
                                                 -------------           -------------
       Gross profit                                  4,050,543               5,265,262
                                                 -------------           -------------
Operating expenses:
   Selling, general and administrative               4,262,325               6,849,367
   Research and development                          1,536,270               1,513,912
                                                 -------------           -------------
         Total operating expenses                    5,798,595               8,363,279
                                                 -------------           -------------
         Operating loss                             (1,748,052)             (3,098,017)
                                                 -------------           -------------
Other income (expense):
   Investment income, net                               21,213                  18,068
   Interest and financing expenses                    (907,277)             (1,549,253)
   Loss on investment securities                       (50,000)                   --
   Miscellaneous income                                564,977                 784,646
                                                 -------------           -------------
         Other income (expense), net                  (371,087)               (746,539)
                                                 -------------           -------------
         Net loss                                   (2,119,139)             (3,844,556)
Less returns to preferred stockholders:
   Beneficial conversion features                    8,513,076               1,075,476
   Dividends paid and accrued                          326,848                 114,619
                                                 -------------           -------------
Net loss applicable to common stock              $ (10,959,063)          $  (5,034,651)
                                                 =============           =============

Net loss per share - basic                       $       (0.09)          $       (0.07)
                                                 =============           =============

Weighted average shares outstanding                120,702,974              72,799,689
                                                 =============           =============
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                       -6-
<PAGE>

                             ABLE LABORATORIES, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

                  Nine Months Ended September 30, 2001 and 2000

<TABLE><CAPTION>
                                         CONVERTIBLE PREFERRED
                                                 STOCK                  COMMON STOCK        ADDITIONAL
                                        ------------------------  -----------------------     PAID-IN     ACCUMULATED
DESCRIPTION                               SHARES        AMOUNT      SHARES       AMOUNT       CAPITAL       DEFICIT        TOTAL
                                        ----------- ------------  ---------- ------------  ------------  -------------  ------------
<S>                                    <C>         <C>           <C>        <C>           <C>           <C>            <C>
Balance at December 31, 1999                55,924  $       559   63,854,946 $   638,549   $58,341,326   $(58,304,871)  $   675,563

Stock, options and warrants exercised           --           --    2,440,641      24,406        20,144             --        44,550
Shares issued in private placement          30,600          306           --          --     2,419,694             --     2,420,000
Conversion of preferred stock              (28,674)        (287)  14,449,765     144,498      (144,211)            --            --
Conversion of debt                              --           --    4,364,909      43,649     1,687,679             --     1,731,328
Stock, options and warrants issued for
   services                                     --           --    1,151,000      11,510       765,264             --       776,774
Comprehensive income:  Net loss                 --           --           --          --            --     (3,844,556)   (3,844,556)
                                        ----------- ------------  ---------- ------------  ------------  -------------  ------------
Balance at September 30, 2000               57,850  $       578   86,261,261 $   862,612   $63,089,896   $(62,149,427)  $ 1,803,659
                                        =========== ============  ========== ============  ============  =============  ============

Balance at December 31, 2000                52,260  $       522   98,002,026 $   980,020   $64,460,755   $(66,756,522)  $(1,315,225)

Shares issued in exchange for investment
 in RxBazaar.com                            47,200          472           --          --     4,719,528             --     4,720,000
Conversion and redemption of preferred
 stock                                     (63,981)        (640)  36,545,751     365,458      (469,818)            --      (105,000)
Shares issued in private placement          67,150          672           --          --     6,314,583             --     6,315,255
Conversion of debt                              --           --      650,000       6,500       108,500             --       115,000
Stock, options and warrants issued for
   services                                     --           --    2,830,000      28,300       996,936             --     1,025,236
Stock options and warrants exercised            --           --      655,200       6,552        (6,152)            --           400
Comprehensive income:  Net loss                 --           --           --          --            --     (2,119,139)   (2,119,139)
                                        ----------- ------------  ---------- ------------  ------------  -------------  ------------
Balance at September 30, 2001              102,629    $   1,026  138,682,977 $ 1,386,830   $76,124,332   $(68,875,661)  $ 8,636,527
                                        =========== ============  ========== ============  ============  =============  ============
</TABLE>



     See accompanying notes to unaudited consolidated financial statements.

                                      -7-
<PAGE>


                             ABLE LABORATORIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE><CAPTION>
                                                                                             NINE MONTHS ENDED
                                                                                      ---------------------------------
                                                                                     SEPTEMBER 30,         SEPTEMBER 30,
                                                                                         2001                  2000
                                                                                      -----------           -----------
<S>                                                                                   <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                           $(2,119,139)          $(3,844,556)
Adjustments to reconcile net loss to net cash used for operating activities:
   Gain on settlement of warrant put liability                                            (26,472)                 --
   Loss on sale of investment securities                                                   50,000                  --
   Stock, stock options and warrants issued for services                                1,025,236               776,774
   Depreciation and amortization                                                          690,895             1,386,523
(Increase) decrease in operating assets:

   Accounts receivable                                                                 (4,178,138)             (484,520)
   Rebates receivable                                                                    (117,864)             (167,117)
   Inventory                                                                           (1,886,639)           (1,143,940)
   Prepaid expenses and other current assets                                             (223,017)             (101,579)
   Deposits and other assets                                                             (420,294)              (64,818)
Increase (decrease) in operating liabilities:

   Accounts payable and accrued expenses                                                1,948,292             1,286,642
                                                                                      -----------           -----------
   Net cash used for operating activities                                              (5,257,140)           (2,356,591)
                                                                                      -----------           -----------

Cash flows from investing activities:

   Purchase of property and equipment                                                    (960,681)             (335,957)
   Increase in notes receivable                                                              --                 (25,000)
   Proceeds from sale of subsidiaries                                                   4,800,000                  --
   Proceeds from sale of investment securities                                            950,000                  --
                                                                                      -----------           -----------
   Net cash provided by (used for) investing activities                                 4,789,319              (360,957)
                                                                                      -----------           -----------

Cash flows from financing activities:

   Net proceeds from stock warrants and options                                               400                44,550
   Net proceeds from equipment and other loans                                          1,645,000               190,000
   Net proceeds from private stock placements                                           5,540,255             2,420,000
   Redemption of preferred stock                                                         (105,000)                 --
   Payment of debt obligations                                                           (814,032)             (527,110)
   Net change in line of credit                                                        (5,959,405)              376,904
   Increase in bank overdraft                                                                --                 284,995
                                                                                      -----------           -----------
   Net cash provided by financing activities                                              307,218             2,789,339
                                                                                      -----------           -----------

Net change in cash and cash equivalents                                                  (160,603)               71,791
Cash and cash equivalents at beginning of period                                          373,832               310,549
                                                                                      -----------           -----------
Cash and cash equivalents at end of period                                            $   213,229           $   382,340
                                                                                      ===========           ===========
Supplemental cash flow information:
   Interest paid                                                                      $   666,352           $ 1,068,021
   Conversion of debt and accrued interest into common stock                              115,000             1,731,328
   Conversion of debt into preferred stock                                                775,000                  --
   Preferred stock issued for investment securities                                     4,720,000                  --
   Conversion of put liability to notes payable                                           750,000                  --
</TABLE>

Additional cash flow information is disclosed in Note 2.

     See accompanying notes to unaudited consolidated financial statements.

                                       -8-
<PAGE>

                             ABLE LABORATORIES, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of Able
Laboratories, Inc.(the "Company" or "Able"), which is engaged in the manufacture
of generic pharmaceuticals, and its wholly-owned subsidiary, Monroe Subsidiary,
Inc. (formerly Generic Distributors, Inc. or "GDI"), which was engaged in the
distribution of generic pharmaceuticals. On May 18, 2001, we merged our
wholly-owned subsidiary, Able Laboratories, Inc. into our parent company
DynaGen, Inc. and changed DynaGen's name to Able Laboratories, Inc. All
significant inter-company balances and transactions have been eliminated in
consolidation.

         On February 23, 2001, we completed the sale of our subsidiary, Superior
Pharmaceutical Company to RxBazaar.com, Inc. We received $4,000,000 in cash and
settled the intercompany accounts between Able and Superior. The results of
operations for the nine months ended September 30, 2001, include the operations
of Superior up to the date of sale. In December 2000, we completed the sale of
substantially all the assets of our GDI subsidiary to Louisiana Wholesale
Distributors ("LWD"). We agreed to sell accounts receivable, inventory and fixed
assets for cash consideration of $1,510,774. We retained approximately $442,000
of GDI's accounts payable and changed GDI's name to Monroe Subsidiary, Inc.
Monroe Subsidiary, Inc. ceased conducting operations after the sale.

         The results of operations for the periods reported are not necessarily
indicative of those that may be expected for a full year. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair statement of operating results for the interim
periods presented have been made.

         The financial information included in this report has been prepared in
conformance with the accounting policies reflected in the financial statements
included in the Company's Annual Report on From 10-KSB for the year ended
December 31, 2000 filed with the Securities and Exchange Commission.

USE OF ESTIMATES

         In preparing consolidated financial statements in conformity with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Material estimates that are particularly
susceptible to significant change in the near term relate to the carrying values
of receivables and the valuation of equity instruments issued by the company.
Actual results could differ from those estimates.

EARNINGS PER SHARE

         Basic earnings per share represents income available to common stock
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income that would result from the assumed issuance.

         For all periods presented, options, warrants, put warrants, convertible
debt and convertible preferred stock were anti-dilutive and excluded from the
diluted earnings per share computations.

                                      -9-
<PAGE>

         The loss applicable to common stockholders has been increased by the
stated dividends on the convertible preferred stock and the amortization of
discounts on convertible preferred stock due to beneficial conversion features.

2.       DISPOSITION OF SUBSIDIARIES

         On December 29, 2000, we sold substantially all the assets of GDI to
Louisiana Wholesale Distributors an unrelated party. At December 31, 2000 the
consolidated financial statements include $442,000 of accounts payable owed to
creditors of GDI that were not assumed by the buyer. In August 2001, the Company
settled these obligations with the creditors of GDI and recorded $300,000 of
forgiveness of debt.

         Selected historical operating information for GDI is as follows:

<TABLE><CAPTION>

                                                  THREE MONTHS ENDED    NINE MONTHS ENDED
                                                  SEPTEMBER 30, 2000    SEPTEMBER 30, 2000
<S>                                                   <C>                  <C>
Sales, net                                            $ 1,145,016          $ 3,616,779
Cost of sales                                             923,257            2,956,437
                                                      -----------          -----------
Gross profit                                              221,759              660,342
Selling, general and administrative expenses              215,789              778,244
                                                      -----------          -----------
     Operating income (loss)                                5,970             (117,902)
Miscellaneous income                                        2,055                5,126
                                                      -----------          -----------
Net income (loss)                                     $     8,025          $  (112,776)
                                                      ===========          ===========
</TABLE>

         On February 23, 2001, pursuant to an agreement between the Company,
RxBazaar.com, Inc. and Superior Pharmaceutical Company, a direct and
wholly-owned subsidiary of the Company, we sold Superior to RxBazaar in a cash
merger.

         As a result of the merger, the Company received a cash payment of
$4,000,000, RxBazaar paid the Company approximately $1,000,000 in respect of
existing intercompany advances and accounts payable that were eliminated as
intercompany accounts on the Company's consolidated financial statements, and
RxBazaar assumed the Company's existing 13.5% senior subordinated debt in the
amount of $2,248,875. The Company remains liable for the subordinated debt as a
guarantor and the Company issued contingent stock purchase warrants to the
senior subordinated debt holders. The warrants allow the holders to purchase
2,500,000 shares of Able's common stock at $.01 per share if the 13.5% senior
subordinated debt is still outstanding on June 17, 2002. In addition, the
holders of the subordinated debt may convert such debt, in whole or in part,
into common stock of the Company or RxBazaar, and the Company has agreed to
register for resale any shares of Company common stock issued upon conversion of
the subordinated debt. The purchase price and terms of the merger were
determined in arms-length negotiations between the parties. The Company deferred
the gain of $1,296,597 due to its continuing ownership interest in RxBazaar.

         In connection with the sale of Superior Pharmaceutical Company, the
Company sold accounts receivable of $3,572,730, inventory of $4,790,316,
property and equipment of $191,715 and miscellaneous assets totaling $391,387
net of accounts payable and accrued expenses of $4,596,654.

                                      -10-
<PAGE>

         Selected historical operating information for Superior is as follows:

<TABLE><CAPTION>
                                                                             NINE MONTHS ENDED
                                             THREE MONTHS                      SEPTEMBER 30,
                                                ENDED               -----------------------------------
                                          SEPTEMBER 30, 2000           2001(1)                 2000
                                             ------------           ------------           ------------
<S>                                          <C>                    <C>                    <C>
Sales, net                                   $  7,140,998           $  3,067,567           $ 20,251,080
Cost of sales                                   6,024,754              2,812,726             16,610,305
                                             ------------           ------------           ------------
Gross profit                                    1,116,244                254,841              3,640,775
Selling, general and administrative
 expenses                                         955,816                581,292              3,000,495
                                             ------------           ------------           ------------
     Operating income (loss)                      160,428               (326,451)               640,280
Miscellaneous income                                  600                    120                  1,180
Interest expense                                     (855)                  --                   (1,138)
                                             ------------           ------------           ------------
Net income (loss)                            $    160,173           $   (326,331)          $    640,322
                                             ============           ============           ============
</TABLE>
------------------------
(1)  Includes operations through February 23, 2001, the date on which the
     Company completed the sale of Superior to RxBazaar.

3.       INVENTORY

<TABLE><CAPTION>
                       SEPTEMBER 30, 2001   DECEMBER 31, 2000
                          ----------          ----------
<S>                       <C>                 <C>
Raw materials             $2,321,919          $  998,327
Work-in-progress             141,988              51,605
Finished goods               521,651           4,839,303
                          ----------          ----------
                          $2,985,558          $5,889,235
                          ==========          ==========
</TABLE>

4.       PROPERTY AND EQUIPMENT

<TABLE><CAPTION>
                                                     SEPTEMBER 30, 2001    DECEMBER 31, 2000
                                                        -----------           -----------
<S>                                                     <C>                   <C>
Machinery and equipment                                 $ 3,579,861           $ 2,877,595
Furniture, fixtures and computers                           440,909             1,206,933
Leasehold improvements                                    1,490,327             1,394,707
                                                        -----------           -----------
                                                          5,511,097             5,479,235
Less accumulated depreciation and amortization           (1,427,564)           (1,777,734)
                                                        -----------           -----------
                                                        $ 4,083,533           $ 3,701,501
                                                        ===========           ===========
</TABLE>

5.       DEBT

<TABLE><CAPTION>
                                          SEPTEMBER 30, 2001    DECEMBER 31, 2000
                                              -----------          -----------
<S>                                           <C>                  <C>
Bridge loans                                  $   210,000          $   236,000
Machinery and equipment financing                 150,000              150,000
NJEDA bonds                                     1,860,758            1,907,273
Working capital loan - Fleet Capital                 --              5,959,405
Senior subordinated debt                             --              2,248,875
Equipment loan                                    693,000                 --
Notes payable put liability                       385,483                 --
                                              -----------          -----------
         Total                                  3,299,241           10,501,553
Less current portion                            2,760,241            8,252,678
                                              -----------          -----------
Long-term debt                                $   539,000          $ 2,248,875
                                              ===========          ===========
</TABLE>

                                      -11-
<PAGE>

         On February 16, 2001, the Company entered into an equipment and
financing transaction pursuant to which it borrowed $770,000 in a sale and
leaseback arrangement. The borrowed amount is payable over a five-year term at
an interest rate of 15%.

         On February 23, 2001, the Company settled its warrant put liability
obligation by paying $300,000 and issuing $750,000 of 13.5% notes payable
maturing February 2002. The notes require 10 monthly equal installments of
principal and interest commencing May 2001.

         In July 2001, the company issued $775,000 in 8% convertible
subordinated secured notes to several investors as part of a bridge financing.
The notes will convert automatically into equity securities of the company upon
the closing of a subsequent equity financing, if one occurs, or instead will be
payable on July 31, 2002. Dhananjay G. Wadekar, a director and Able's president,
and C. Robert Cusick, Chairman of the Board of Directors, each advanced $250,000
to the company in this transaction. In August 2001, the notes were converted
into Series Q Preferred Stock.

6.       PREFERRED STOCK

         On February 15, 2001, the Company entered into an Exchange and Purchase
Agreement with equity investors of RxBazaar. The Exchange and Purchase Agreement
gave the RxBazaar investors the right to exchange shares of RxBazaar's Series A
Preferred Stock for shares of the Company's Series O Preferred Stock. RxBazaar
issued a total of $4,700,000 of Series A Preferred Stock to the equity
investors. On February 22, 2001, an investor converted $1,000,000 of Series A
Preferred Stock into Series O Preferred Stock of the Company. The Series A
Preferred Stock used to effect the exchange was immediately redeemed by
RxBazaar.com for $950,000. In March 2001, the investors exchanged the remaining
$3,700,000 of Series A Preferred Stock for Series O Preferred Stock. Able
continues to hold the remaining $3,700,000 of Series A Preferred stock. This
investment is carried at cost.

         The Series O Preferred Stock carries an 8% dividend and is convertible
to common stock at the lesser of $0.35 per share or 75% of the average of the
three lowest per share prices in the ten consecutive trading days prior to
conversion during the first 149 days and 70% on or after 150 days. The Company
registered the common stock issuable on conversion in September 2001. The
resultant beneficial conversion discount from this transaction will be in the
range of $1,573,333 to $2,022,857, depending on the date of conversion to the
Company's common stock.

         In May and June 2001, the Company received $350,000 from the sale of
3,500 shares of its Series P Preferred Stock. The Series P Preferred consists of
20,000 authorized shares priced at $100 each. Investors may convert their
position on or after six months from the date of the investment at 80% of the
average of the three-day closing bid price ending on the day prior to the
conversion notice. Conversions after nine months from the date of investment are
at 75% of the average of the two closing bid prices prior to conversion notice
and the conversions after twelve months shall occur at a 70% discount to the
closing bid price on the day prior to the conversion notice. Investors may not
convert more than 20% of the Preferred shares within any five consecutive
trading day period. The Series P Preferred stock does not carry any dividend.

         In June 2001, the Company received an additional $250,000 from the sale
of 2,500 shares of its Series O Preferred stock from an investor.

                                      -12-
<PAGE>

         In August 2001, the Company sold 61,150 shares of its Series Q
Preferred Stock at $100 per share for an aggregate consideration of $6,115,000
in cash and conversion of outstanding debt. Net proceeds were $5,718,255 after
placement costs of $396,745. The Company also issued a five year warrant to
purchase 200,000 shares of Common Stock at an exercise price of $0.25 per share
to the placement agent. The Company valued these warrants at $34,000. The Series
Q Preferred Stock carries an 8% dividend and is convertible to common stock as a
group into the number of shares equal to the product of (a) the quotient
obtained by dividing (i) the number of outstanding shares of Common Stock
(assuming conversion of all outstanding floating rate convertible securities
other than the Series Q Preferred) by (ii) 0.75, times (b) 0.25. As of August
16, 2001, it was estimated that each share of Series Q Preferred was convertible
into approximately 847.91 shares of Common Stock. The conversion ratio for the
Series Q Preferred is subject to fluctuation since the number of shares issuable
assumes conversion of all outstanding shares of the Series L, N, O, and P
convertible preferred stock and the number of shares issuable upon conversion of
such securities is based on a percentage of the average closing price of the
Common Stock for a specified period prior to the date of conversion. To the
extent that the closing price of the Common Stock fluctuates, the conversion
ratio of the Series Q Preferred will also fluctuate so long as any convertible
securities with floating conversion prices remain outstanding. After all of the
shares of Series L, N, O, and P preferred stock have been converted or redeemed,
the conversion ratio of the Series Q Preferred will be fixed. The Company
recorded a beneficial conversion feature discount of $6,115,000 in the
consolidated statement of loss on the sale of the series Q Preferred Stock.

         The Company has agreed to register the shares of common stock issuable
on conversion of the Series Q Preferred within 180 days. As long as at least 50%
of the shares of Series Q Preferred originally issued remain outstanding, during
any period in which one or more conditions described below shall exist, the
holders of Series Q Preferred are entitled to elect a majority of the directors
of the Company. The conditions include: (1) default on any material amount of
indebtedness, (2) failure to convert the Series Q Preferred in accordance with
its terms, and (3) failure of the Company to report positive operating profits
for any two fiscal quarters during any fiscal year beginning January 1, 2002.

7.       COMMON STOCK

         On May 9, 2001, the stockholders approved an amendment to our
certificate of incorporation to increase the number of shares of authorized
common stock from 125,000,000 to 225,000,000 shares.

8.       RELATED PARTY TRANSACTIONS

         Subsequent to the sale of Superior Pharmaceutical, Able has continued
to sell its products to Superior. Sales to Superior represented approximately
90% of net sales for the six months ended June 30, 2001. During the three and
nine months ended September 30, 2001, sales to Superior represented
approximately 41% and 67% of net sales, respectively.

9.       COMMITMENTS

         The Company entered into a three year operating lease for 21,980 square
feet of additional office and warehouse space in South Plainfield, New Jersey
commencing on October 1, 2001. The lease provides for rent of $9,158 per month
during the initial year, $9,891 per month during the second year and $10,624 per
month during the third year, plus real estate taxes and operating expenses. The
lease includes an option to extend the term for three additional years.

10.      SUBSEQUENT EVENTS

         From October 1, 2001 through November 14, 2001, the Company issued
2,924,663 shares of common stock on conversion of 6,000 shares of Series O
Preferred Stock and 1,400,000 shares of common stock on conversion of 3,500
shares of Series P Preferred Stock. As of November 14, 2001, the Company had
outstanding discounted floating rate convertible preferred stock consisting of
50 shares of Series N Preferred (liquidation value $5,000) and 25,168 shares of
Series O Preferred (liquidation value $2,516,843).


                                      -13-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

                                  INTRODUCTION

         The following information should be read in conjunction with the
consolidated financial statements and notes thereto in Part I, Item 1 of this
Quarterly Report and with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2000.

                 CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

         We do not provide forecasts of our future financial performance of the
Company. However, from time to time, information provided by us or statements
made by our employees may contain "forward-looking" information that involves
risks and uncertainties. In particular, statements contained in this Form 10-Q
which are not historical facts constitute forward-looking statements and are
made under the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. You can identify these statements by forward-looking words
such as "may", "will", "expect", "anticipate", "believe", "estimate",
"continue", and similar words. You should read statements that contain these
words carefully because they: (1) discuss our future expectations; (2) contain
projections of our future operating results or financial condition; or (3) state
other "forward-looking" information. Various factors listed below, as well as
any cautionary language in this report, provide examples of risks, uncertainties
and events that may cause our actual results to be materially worse than the
expectations we describe in our forward-looking statements.

         Each forward-looking statement should be read in conjunction with the
consolidated financial statements and notes thereto in Part I, Item 1, of this
Quarterly Report and with the information contained in Item 2, including, but
not limited to, the factors set forth below, together with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000, including, but not limited to, the section therein entitled
"Certain Factors That May Affect Future Results" as well as the factors
discussed in our Registration Statement on Form S-3, File No. 333-64734, filed
with the Securities and Exchange Commission on July 6, 2001 and amended
thereafter, under the heading "Risk Factors".

         In addition to the risks and uncertainties posed generally by the
generic drug industry, we face the following risks and uncertainties:

         o  our auditors have expressed doubt about our ability to continue as a
            going concern;

         o  if we cannot raise significant additional funds, then we will have
            to substantially curtail our operations and investors could lose
            their investment;

         o  if we continue to incur losses, then the value of our common stock
            will likely decline;

         o  we face intense competition from other manufacturers of generic
            drugs;

         o  if the Boston Stock Exchange were to delist our common stock, we
            will have greater difficulty raising the capital we need to continue
            operations;

         o  if our common stock becomes subject to penny stock rules, investors
            may have greater difficulty selling their shares; we are obligated
            to issue a large number of shares of common stock at prices lower
            than market value;

                                      -14-
<PAGE>

         o  the terms of our outstanding floating rate convertible preferred
            stock may discourage outside investment and could impair our ability
            to secure additional financing;

         o  we are obligated to issue a large number of shares of common stock
            at prices lower than market value;

         o  we may not have a sufficient number of shares of authorized common
            stock to convert all of our outstanding convertible securities;

         o  conversion of outstanding shares of convertible preferred stock may
            reduce the market price and dilute the relative voting power of our
            outstanding common stock;

         o  a decrease in the market price or our common stock would increase
            the number of shares of our common stock issuable upon conversion of
            the preferred stock and would compound the risks of dilution
            described in the preceding risk factor;

         o  holders of our preferred stock and others may have an incentive to
            sell common stock in the market before they convert their shares of
            preferred stock in expectation that the market price of our common
            stock will fall;

         o  the value of the common stock fluctuates widely and investors could
            lose money on their investment in our stock;

         o  we may face product liability for which we are not adequately
            insured; and

         o  intense regulation by government agencies may delay our efforts to
            commercialize our proposed drug products.

         Because of the foregoing and other factors, we may experience material
fluctuations in our future operating results on a quarterly or annual basis
which could materially adversely affect our business, financial condition,
operating results and stock price.

                                    OVERVIEW

         We develop, make and sell generic drugs. From our inception in 1988
until 1996, we focused primarily on developing new drugs and licensing the
resulting products and technologies to others. Beginning in 1996, we began
shifting our focus and through acquiring three separate companies became a
generic drug manufacturing and distribution business. In 1996 we acquired Able
Laboratories, Inc., our generic drug development and manufacturing business. In
1997 and 1998 we acquired Superior Pharmaceutical Company and Generic
Distributors, Incorporated, our distribution operations.

         Generic drug development, manufacturing and distribution is a highly
competitive business and there are several companies with substantially greater
resources that compete with us. Our distribution businesses sold mostly our
competitors' products and the combination of manufacturing and distribution
business did not create the strategic advantages we were seeking. On the
contrary, we found that we were divided both financially and managerially. As
our financial performance failed to meet the expectations of Fleet Capital, our
senior lender, Fleet restricted our borrowing ability and as a result we faced a
working capital shortage. After careful analysis, we decided to divest our
distribution operations and continue only as a generic drug development and
manufacturing company selling only our own products to customers. In November
2000, we sought and obtained the approval of our shareholders to sell the
Superior distribution business and we completed the sale on February 23, 2001.
We sold the assets of our

                                      -15-
<PAGE>

Generic Distributors, Incorporated subsidiary in a separate transaction on
December 29, 2000. On May 18, 2001, we merged our wholly-owned subsidiary, Able
Laboratories, Inc. into our parent company, DynaGen, Inc. and changed DynaGen's
name to Able Laboratories, Inc.

         The sale of the two distribution subsidiaries involved complex
financial transactions. The future outcome of our current strategy is still
unknown. In the section of this Report entitled "Certain Factors That May Affect
Future Results," we have described several risk factors which we believe are
significant. We consider each of these risks specific to us, although some are
industry or sector related issues which could also impact to some degree other
businesses in our market sector. You should give very careful consideration to
these risks and pay special attention to the recent developments when you
evaluate our company.

         We have financed our operating losses primarily through the proceeds
from public and private stock offerings and debt offerings. We anticipate that
revenues from product sales may not be sufficient to fund our current operations
and produce an operating profit in fiscal 2001. We have incurred losses since
inception and may incur additional losses in the future.

         Our history of operating losses raises substantial doubt about our
ability to continue operations. Our independent auditors issued an opinion on
our financial statements as of December 31, 2000 and for the year then ended
which included an explanatory paragraph expressing substantial doubt about our
ability to continue as a going concern.

RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2001

         Revenues for the three-month period ended September 30, 2001 were
$5,070,600 compared to $8,590,907 for the period ended September 30, 2000. There
were no sales from our former subsidiaries Superior and GDI in the three months
ended September 30, 2001 compared to sales in the prior period of $8,286,014.
Revenues for Able alone for the three months ended September 30, 2000 were
$304,893. The current period sales are generated from the marketing of our new
products reflecting a $4,765,707 improvement in sales of our generic products.
The proceeds from the sale of our Series Q Preferred stock in August 2001 were
used to acquire additional raw materials and as a result sales for the month of
September 2001 increased to $2,670,000. Subsequent to the sale of Superior
Pharmaceutical, Able has continued to sell its products to Superior for further
distribution. Sales to Superior were 41% of net sales for the three months ended
September 30, 2001. We expect that sales to Superior will decrease as a
percentage of sales in the next quarter as we continue to add additional
customers who buy products directly from us.

         Cost of sales was $2,997,511, or 59% of product sales for the
three-month period ended September 30, 2001, compared to $7,775,090, or 91% of
product sales for the period ended September 30, 2000. The margins of our new
products are much higher than the margins from our former distribution business.

         Research and development expenses for the three-month period ended
September 30, 2001 were $527,024 compared to $446,323 for the three-month period
ended September 30, 2000. All of these expenses relate to research which is
currently being conducted to develop generic drugs. Able currently has several
new products pending approval with the FDA and will be increasing its research
and development activities for a broad range of products over the next several
months.

         Selling, general and administrative expenses for the three-month period
ended September 30, 2001 were $1,351,523 compared to $2,088,545 for the
three-month period ended September 30, 2000. Expenses declined as a result of
the sale of GDI and Superior.

                                      -16-
<PAGE>

         Interest and financing expenses of $141,447 for the three-month period
ended September 30, 2001, compared to $577,120 for the three-month period ended
September 30, 2000, relate primarily to our equipment loans and a note payable
for the put liability. On February 23, 2001, we paid off the Fleet line of
credit and our senior subordinated debt was eliminated as a result of the sale
of Superior.

         We recorded net income of $479,599 for the three months ended September
30, 2001, compared to a net loss of $2,266,134 for the three months ended
September 30, 2000. After beneficial conversion features and dividends to
preferred stockholders, we recorded a net loss applicable to common stock of
$6,242,713 or $0.05 per share, for the three months ended September 30, 2001,
compared to a net loss applicable to common stock of $3,091,722 or $0.04 per
share for the three months ended September 30, 2000. Unamortized beneficial
conversion features at September 30, 2001 were $23,810. We have not fully
realized the expected benefits from the restructuring of our company and its
debt obligations. Four new products received approval in July 2001, three new
products received approval in August 2001 and one new product received approval
in September 2001. We should experience increased sales from these new products
in future months.

RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2001

         Revenues for the nine-month period ended September 30, 2001 were
$12,527,632 compared to $24,691,916 for the period ended September 30, 2000. In
the year 2000, $23,867,859 related to sales of GDI and Superior compared to
$3,067,567 of sales related to Superior included in the current period. The
sales generated by Able in the nine months of the current year of $9,460,065 is
a significant increase over the prior year sales. Subsequent to the sale of
Superior Pharmaceutical, Able has continued to sell its products to Superior for
further distribution. Sales to Superior represent approximately 67% of net sales
for the nine months ended September 30, 2001. We expect that sales to Superior
will decrease as a percentage of sales in the next quarter as we continue to add
additional customers who buy products directly from us.

         Cost of sales was $8,477,089 or 68% of sales for the nine months ended
September 30, 2001, compared to $19,426,654, or 79% of sales for the period
ended September 30, 2000. The margins of our new products are much higher than
the margins from our former distribution business.

         Research and development expenses were $1,536,270 for the nine months
ended September 30, 2001 compared to $1,513,912 for the nine months ended
September 30, 2000. In the first nine months of the current year, we received
twelve FDA approvals and continued to spend significant funds on research and
development.

         Selling, general and administrative expenses for the nine-month period
ended September 30, 2001 were $4,262,325 compared to $6,849,367 for the
nine-month period ended September 30, 2000, a decrease of $2,587,042. The
expenses relating to Superior and GDI for the prior period were $3,778,739
compared to $581,292 in the current year, a decrease of $3,197,449. This
decrease was partially offset by the cost of new personnel at our manufacturing
facility.

         Interest and miscellaneous income was $586,190 for the nine months
ended September 30, 2001, compared to $802,714 for the nine-month period ended
September 30, 2000. Interest and financing expenses of $907,277 for the
nine-month period ended September 30, 2001, compared to $1,549,253 for the
nine-month period ended September 30, 2000. Interest and miscellaneous income in
2001 consisted primarily of forgiveness of debt and a $125,000 licensing fee.
Interest and miscellaneous income in 2000 consisted primarily of forgiveness of
debt and termination of a trade agreement. The interest expense was lower in
2001 by $641,976 as the Fleet line was paid off and our senior subordinated debt
was eliminated as a result of the sale of Superior.

                                      -17-
<PAGE>

         The Company incurred a net loss of $2,119,139 for the nine months ended
September 30, 2001 compared to a net loss of $3,844,556 in the prior year. After
beneficial conversion features and dividends to preferred stockholders, we
recorded a net loss applicable to common stock of $10,959,063 or $0.09 per share
for the nine months ended September 30, 2001 compared to a net loss applicable
to common stock of $5,034,651 or $0.07 per share in the prior year. Unamortized
beneficial conversion features at September 30, 2001 were $23,810. We have
received twelve new product approvals from the FDA during 2001 of which eight
were received in the quarter ending September 30, 2001. We expect the
performance of the Company to improve in the upcoming months.

                         LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2001, we had working capital of $1,772,762 compared
to a working capital deficit of $4,289,639 at December 31, 2000. Cash was
$213,229 as of September 30, 2001, compared to $373,832 at December 31, 2000.
The $6,062,401 increase in our working capital is due to the August 2001 sale of
Series Q Preferred Stock. With the proceeds of this financing, we acquired raw
materials for production of our recently approved products and reduced our
outstanding accounts payable and accrued expenses by approximately $1,480,000
during the quarter ended September 30, 2001. Accounts receivable increased by
$3,584,000 to $4,114,000 at September 30, 2001 compared to $530,000 at June 30,
2001 and inventory increased by $334,000 to $2,986,000 at September 30, 2001
compared to $2,652,000 at June 30, 2001. The accounts receivable allowance at
September 30, 2001 includes allowances for customer chargebacks, rebates, other
pricing adjustments and doubtful accounts. Management expects accounts
receivable and inventory will continue to increase over the near term as sales
continue to increase. We expect our cash needs for the next 12 months to be
approximately $2,000,000. We are attempting to generate the needed cash through
additional financing activities. If we are not able to raise the needed
financing, our ability to maintain our current level of operations could be
adversely affected and we may be required to reduce certain expenditures,
including research and development activity with respect to certain proposed
products.

         On February 23, 2001, pursuant to an agreement between the Company,
RxBazaar.com, Inc. and Superior Pharmaceutical Company, RxBazaar acquired
Superior in a cash merger. As a result of the merger, we received a cash payment
of $4,000,000, RxBazaar paid us approximately $1,000,000 in respect of existing
intercompany advances and accounts payable that were eliminated as intercompany
accounts on our consolidated financial statements, and RxBazaar assumed our
existing 13.5% senior subordinated debt in the amount of $2,248,875. We remain
liable for the subordinated debt as a guarantor. In addition, the holders of the
subordinated debt may convert such debt, in whole or in part, into common stock
of Able or RxBazaar, and we have agreed to register for resale any shares of our
common stock issued upon such a conversion of the subordinated debt. The
purchase price and terms of the merger were determined in arms-length
negotiations between the parties.

         On February 23, 2001, we used the proceeds of the sale to pay off our
obligations under a working capital loan with Fleet Capital. In addition, we
settled our warrant put liability obligation by paying $300,000 and issuing
$750,000 of 13.5% notes payable maturing February 2002. The notes require 10
monthly installments of principal and interest commencing May 2001.

         In addition, in February 2001, we received $950,000 on the redemption
of $1,000,000 of RxBazaar.com series A Preferred Stock. In May and June 2001, we
received $350,000 from the sale of Series P Preferred stock and $250,000 from
the sale of Series O Preferred stock. In August 2001, we received aggregate
consideration of $6,115,000 from the sale of Series Q Preferred Stock. See Note
6 to the Financial Statements.

         To date we have met substantially all of our capital requirements
through the sale of securities and loans convertible into common stock. The
Company continues to pursue additional sources of capital

                                      -18-
<PAGE>

in order to fund the growth of our generic drug business and product development
efforts. If we are unable to obtain such additional financing, our ability to
maintain our current level of operations would be adversely affected and we may
be required to reduce certain expenditures, including research and development
activity with respect to certain proposed products. We cannot give any assurance
that we will raise the needed financing.

                        RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No.
141 requires that all business combinations initiated after June 30, 2001 be
accounted for under the purchase method and addresses the initial recognition
and measurement of goodwill and other intangible assets acquired in a business
combination. SFAS No. 142 addresses the initial recognition and measurement of
intangible assets acquired outside of a business combination and the accounting
for goodwill and other intangible assets subsequent to their acquisition. SFAS
No. 142 provides that intangible assets with finite useful lives be amortized
and that goodwill and intangible assets with indefinite lives will not be
amortized, but will rather be tested at least annually for impairment. We will
adopt SFAS No. 142 for our fiscal year beginning January 1, 2002. The adoption
of SFAS 142 is not expected to have any material impact on the Company's
financial statements.

         In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. This statement establishes standards for accounting for
obligations associated with the retirement of tangible long-lived assets. This
statement is effective for fiscal years beginning after June 15, 2002. We are
currently evaluating the impact, if any, the adoption of this statement will
have on our financial position and results of operations.

         In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. This statement addresses financial
accounting and reporting for the impairment and disposal of long-lived assets.
This statement is effective for fiscal years beginning after December 15, 2001.
We are currently evaluating the impact the adoption of this statement will have
on our financial position and results of operations.




                                      -19-
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On August 27, 2001, Novopharm USA, Inc. filed a complaint against Able
Laboratories, Inc. in the Superior Court of New Jersey (Middlesex County).
Novopharm's complaint alleges that we breached a joint commercialization
agreement for the development, production, marketing, and sale of generic
clorazepate dipotassium tablets. In its complaint, Novopharm seeks approximately
$2,000,000 claimed to be due for payments made by Novopharm to improve our
facilities and in respect of Novopharm's raw material purchase costs, and makes
claims for compensation for assistance rendered by Novopharm to us and for our
sales of clorazepate dipotassium tablets.

         As of November 13, 2001, Novopharm had not served us with its
complaint. We notified Novopharm that we intend to contest any claims vigorously
and also intend to assert various counterclaims against it. We are currently
discussing the possibility of resolving our differences through means other than
litigation.

         We also may be involved in certain other legal proceedings from time to
time incidental to our normal business activities. While the outcome of any such
proceedings cannot be accurately predicted, we do not believe the ultimate
resolution of any existing matters should have a material adverse effect on our
financial position or results of operations.

ITEM 2.  CHANGE IN SECURITIES

         a.       Not applicable

         b.       Not applicable

         c.       Sales of Unregistered Securities. In the three months ended
September 30, 2001, we sold the following securities in reliance on one or more
exemptions from registration under the Securities Act including the exemptions
under Section 4(2) thereof and Rule 506 promulgated thereunder:

         In August 2001, the Company sold 61,150 shares of its Series Q
Preferred Stock at $100 per share for an aggregate consideration of $6,115,000
in cash and conversion of outstanding debt. Net proceeds were $5,718,255 after
placement costs of $396,745. The Series Q Preferred Stock carries an 8% dividend
and is convertible to common stock as a group into the number of shares equal to
the product of (a) the quotient obtained by dividing (i) the number of
outstanding shares of Common Stock (assuming conversion of all outstanding
floating rate convertible securities other than the Series Q Preferred) by (ii)
0.75, times (b) 0.25. As of August 16, 2001, it was estimated that each share of
Series Q Preferred was convertible into approximately 847.91 shares of Common
Stock. The conversion ratio for the Series Q Preferred is subject to fluctuation
since the number of shares issuable assumes conversion of all outstanding shares
of the Series L, N, O, and P convertible preferred stock and the number of
shares issuable upon conversion of such securities is based on a percentage of
the average closing price of the Common Stock for a specified period prior to
the date of conversion. To the extent that the closing price of the Common Stock
fluctuates, the conversion ratio of the Series Q Preferred will also fluctuate
so long as any convertible securities with floating conversion prices remain
outstanding. After all of the shares of Series L, N, O, and P preferred stock
have been converted or redeemed, the conversion ratio of the Series Q Preferred
will be fixed. The Company has agreed to register the shares of common stock
issuable on conversion of the Series Q Preferred within 180 days. The Company
issued a five year warrant to purchase 200,000 shares of common stock at an
exercise price of $0.25 per share to the investment banking company in
consideration of services related to the sale of Series Q Preferred Stock.

         During the third quarter we granted two employees stock options to
purchase a total of 195,000 shares of common stock at an exercise price of $0.25
per share.

         During the quarter ending September 30, 2001, we issued 16,335,879
shares of common stock upon the exercise of options and warrants and conversion
of convertible debt and equity securities.

                                      -20-
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      List of Exhibits

         The following exhibits, required by Item 601 of Regulation S-K are
filed as part of this Quarterly Report on Form 10-Q. Exhibit numbers, where
applicable, in the left column correspond to those of Item 601 of Regulation
S-K.

Exhibit
No.               Item
----------------------

3.1         Restated Certificate of Incorporation (filed as Exhibit 3a to the
            Company's report on Form 10-Q for the quarter ended June 30, 1998,
            as amended on September 14, 1998, and incorporated herein by
            reference).

3.2         Certificate of Amendment of Certificate of Incorporation dated May
            1, 2000 (filed as Exhibit 3.2 to the Company's Report on Form 10-QSB
            for the Quarter ended June 30, 2000, and incorporated herein by
            reference).

3.3         Certificate of Amendment of Certificate of Incorporation dated May
            9, 2001 (filed as Exhibit 3.3 to the Company's Report on Form 10-Q
            for the quarter ended June 30, 2001, and incorporated herein by
            reference).

3.4         Certificate of Designations, Preferences, and Rights of Series I
            Preferred Stock (filed as Exhibit 4.7 to the Company's Registration
            Statement on Form S-3, File No. 333-82785, and incorporated herein
            by reference).

3.5         Certificate of Designations, Preferences, and Rights of Series J
            Preferred Stock (filed as Exhibit 3.4 to the Company's Report on
            Form 10-QSB for the quarter ended September 30, 1999, and
            incorporated herein by reference).

3.6         Certificate of Designations, Preferences, and Rights of Series K
            Preferred Stock (filed as Exhibit 3.3 to the Company's Report on
            Form 10-QSB for the quarter ended September 30, 1999, and
            incorporated herein by reference).

3.7         Certificate of Designations, Preferences, and Rights of Series L
            Preferred Stock (filed as Exhibit 3.5 to the Company's Report on
            Form 10-KSB for the year ended December 31, 1999, and incorporated
            herein by reference).

3.8         Certificate of Designations, Preferences and Rights of Series M
            Preferred Stock (filed as Exhibit 4.6 to the Company's Registration
            Statement on Form S-3, File No. 333-46116, and incorporated herein
            by reference).

3.9         Certificate of Designations, Preferences, and Rights of Series N
            Preferred Stock (filed as Exhibit 4.6 to the Company's Registration
            Statement on Form S-3, File No. 333-54804, and incorporated herein
            by reference).

3.10        Certificate of Designations, Preferences and Rights of Series O
            Preferred Stock (filed as Exhibit 4.5 to the Company's Current
            Report on Form 8-K filed on March 9, 2001, and incorporated herein
            by reference).

                                      -21-

<PAGE>


3.11        Certificate of Designations, Preferences and Rights of Series P
            Preferred Stock (filed as Exhibit 3.11 to the Company's Report on
            Form 10-Q for the quarter ended June 30, 2001, and incorporated
            herein by reference).

3.12        Certificate of Designations, Preferences and Rights of Series Q
            Convertible Preferred Stock (filed as Exhibit 4.1 to the Company's
            Current Report on Form 8-K filed on August 31, 2001, and
            incorporated herein by reference).

3.13        Amended and Restated By-laws dated as of May 26, 2000 (filed as
            Exhibit 3.3 to the Company's Report on Form 10-QSB for the quarter
            ended June 30, 2000 and incorporated herein by reference).

10.1        Stock Purchase Agreement for Series Q Convertible Preferred Stock
            (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K
            filed on August 31, 2001, and incorporated herein by reference).

10.2        Registration Rights Agreement for Series Q Convertible Preferred
            Stock (filed as Exhibit 4.3 to the Company's Current Report on Form
            8-K filed on August 31, 2001, and incorporated herein by reference).

10.3        Lease dated September 26, 2001, by and between Kennedy Montrose,
            L.L.C. and the Company for property located at 3601 Kennedy Road,
            South Plainfield, New Jersey 07080.

(b)      Reports on Form 8-K

         On August 31, 2001, the Company filed a Current Report on Form 8-K
relating to the sale of the Series Q Convertible Preferred Stock.

                                   SIGNATURES

         Pursuant to the requirements 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.

                                      DYNAGEN, INC.


                                      By:   /s/ Dhananjay G. Wadekar
                                         ---------------------------------------
                                      Dhananjay G. Wadekar

                                      Duly Authorized Officer and Principal
                                      Financial and Accounting Officer



                                      -22-
<PAGE>


                                  EXHIBIT INDEX

Exhibit
No.               Item
----------------------

3.1         Restated Certificate of Incorporation (filed as Exhibit 3a to the
            Company's report on Form 10-Q for the quarter ended June 30, 1998,
            as amended on September 14, 1998, and incorporated herein by
            reference).

3.2         Certificate of Amendment of Certificate of Incorporation dated May
            1, 2000 (filed as Exhibit 3.2 to the Company's Report on Form 10-QSB
            for the Quarter ended June 30, 2000, and incorporated herein by
            reference).

3.3         Certificate of Amendment of Certificate of Incorporation dated May
            9, 2001 (filed as Exhibit 3.3 to the Company's Report on Form 10-Q
            for the quarter ended June 30, 2001, and incorporated herein by
            reference).

3.4         Certificate of Designations, Preferences, and Rights of Series I
            Preferred Stock (filed as Exhibit 4.7 to the Company's Registration
            Statement on Form S-3, File No. 333-82785, and incorporated herein
            by reference).

3.5         Certificate of Designations, Preferences, and Rights of Series J
            Preferred Stock (filed as Exhibit 3.4 to the Company's Report on
            Form 10-QSB for the quarter ended September 30, 1999, and
            incorporated herein by reference).

3.6         Certificate of Designations, Preferences, and Rights of Series K
            Preferred Stock (filed as Exhibit 3.3 to the Company's Report on
            Form 10-QSB for the quarter ended September 30, 1999, and
            incorporated herein by reference).

3.7         Certificate of Designations, Preferences, and Rights of Series L
            Preferred Stock (filed as Exhibit 3.5 to the Company's Report on
            Form 10-KSB for the year ended December 31, 1999, and incorporated
            herein by reference).

3.8         Certificate of Designations, Preferences and Rights of Series M
            Preferred Stock (filed as Exhibit 4.6 to the Company's Registration
            Statement on Form S-3, File No. 333-46116, and incorporated herein
            by reference).

3.9         Certificate of Designations, Preferences, and Rights of Series N
            Preferred Stock (filed as Exhibit 4.6 to the Company's Registration
            Statement on Form S-3, File No. 333-54804, and incorporated herein
            by reference).

3.10        Certificate of Designations, Preferences and Rights of Series O
            Preferred Stock (filed as Exhibit 4.5 to the Company's Current
            Report on Form 8-K filed on March 9, 2001, and incorporated herein
            by reference).

3.11        Certificate of Designations, Preferences and Rights of Series P
            Preferred Stock (filed as Exhibit 3.11 to the Company's Report on
            Form 10-Q for the quarter ended June 30, 2001, and incorporated
            herein by reference).


                                      -23-

<PAGE>


3.12        Certificate of Designations, Preferences and Rights of Series Q
            Convertible Preferred Stock (filed as Exhibit 4.1 to the Company's
            Current Report on Form 8-K filed on August 31, 2001, and
            incorporated herein by reference).

3.13        Amended and Restated By-laws dated as of May 26, 2000 (filed as
            Exhibit 3.3 to the Company's Report on Form 10-QSB for the quarter
            ended June 30, 2000 and incorporated herein by reference).

10.1        Stock Purchase Agreement for Series Q Convertible Preferred Stock
            (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K
            filed on August 31, 2001, and incorporated herein by reference).

10.2        Registration Rights Agreement for Series Q Convertible Preferred
            Stock (filed as Exhibit 4.3 to the Company's Current Report on Form
            8-K filed on August 31, 2001, and incorporated herein by reference).

10.3        Lease dated September 26, 2001, by and between Kennedy Montrose,
            L.L.C. and the Company for property located at 3601 Kennedy Road,
            South Plainfield, New Jersey 07080.
















                                      -24-