UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                   FORM 10-QSB

(Mark  One)
[X]  QUARTERLY  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF  1934

          For the quarterly period ended: March 31, 2002

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

          For the transition period from _________________ to _________________

Commission File Number:  000-29645

                               AMNIS SYSTEMS INC.
        (Exact name of small business issuer as specified in its charter)

                       Delaware                                 94-3402831
    (State or other jurisdiction of incorporation or         (I.R.S. Employer
                  organization)                             Identification No.)

                3450 Hillview Avenue, Palo Alto, California 94304
          (Address of principal executive offices, including zip code)

         Issuer's telephone number, including area code:  (650) 855-0200

                                 Not applicable
    (Former name, former address and former fiscal year, if changed since last
                                     report)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check  whether  the  registrant  filed  all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities  under  a  plan  confirmed  by  a  court.   Yes  [ ]   No  [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The  number  of  shares  outstanding  of  each of the issuer's classes of common
equity  as  of  May  3,  2002:  18,464,237 shares of Common Stock.

Transitional Small Business Disclosure Format (check one):  [ ] Yes   [X]  No


                                        1
<PAGE>
                          INDEX TO FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Balance Sheet as of March 31, 2002 and December
     31, 2001

Unaudited  Condensed  Consolidated  Statement  of Operations for the three-month
     periods ended March 31, 2002 and March 31, 2001

Unaudited  Condensed  Consolidated  Statement  of Cash Flows for the three-month
     periods ended March 31, 2002 and March 31, 2001

Notes  to  Unaudited  Consolidated  Financial  Statements


<PAGE>
<TABLE>
<CAPTION>
                                                                                                                AMNIS SYSTEMS INC.

                                                                                                        CONSOLIDATED BALANCE SHEET
                                                                                                                       (UNAUDITED)
==================================================================================================================================

                                                                                                   March 31, 2002    Dec 31, 2001
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C>               <C>
ASSETS

CURRENT ASSETS:
  Cash                                                                                            $       608,890   $      48,467
  Accounts receivable, net of allowance for doubtful accounts
  of $236,000 for 2002 and 2001, respectively                                                              38,879         371,517
  Note Receivable                                                                                               0         500,000
  Inventories                                                                                             656,232         624,056
  Prepaid expenses and other                                                                              308,130          82,734
----------------------------------------------------------------------------------------------------------------------------------

          Total current assets                                                                          1,612,131       1,626,774
----------------------------------------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT
  Machinery and equipment                                                                               1,894,221       1,919,634
  Demonstration equipment                                                                                 456,648         452,188
  Furniture and fixtures                                                                                  494,700         498,796
  Leasehold improvements                                                                                  351,111         351,111
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                        3,196,680       3,221,729

  Less:  Accumulated depreciation and amortization                                                     (3,052,388)     (3,069,937)
----------------------------------------------------------------------------------------------------------------------------------

          Property and equipment, net                                                                     144,292         151,792
----------------------------------------------------------------------------------------------------------------------------------

OTHER ASSETS                                                                                               84,890          84,890
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                  $     1,841,313   $   1,863,456
==================================================================================================================================

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES:
  Financing obligations collateralized by accounts receivable                                     $       576,832   $   1,029,283
  Accounts payable - moratorium                                                                         1,461,500       1,561,500
  Accounts payable - other                                                                                347,091         932,866
  Accrued Salaries                                                                                        112,220         766,286
  Accrued Vacation                                                                                        200,427         274,833
  Accrued Interest Payable                                                                                 87,364         381,104
  Notes Payable                                                                                                 0         250,000
  Stockholders' notes payable                                                                             105,000       3,309,375
  Convertible notes payable                                                                             3,547,917               0
  Discount on convertible note payable                                                                 (1,862,657)              0
  Deferred rent                                                                                            80,486         108,892
  Deferred revenue                                                                                         39,163          59,095
  Other Accrued Expenses                                                                                  256,990         302,237
----------------------------------------------------------------------------------------------------------------------------------

          Total current liabilities                                                                     4,952,332       8,975,471

LONG-TERM LIABILITIES:
  Sublease deposits                                                                                        72,800          72,800
  Convertible note payable                                                                                500,000         500,000
  Discount on convertible note payable                                                                   (267,045)       (305,195)
----------------------------------------------------------------------------------------------------------------------------------

          Total Liabilities                                                                             5,258,087       9,243,076
----------------------------------------------------------------------------------------------------------------------------------

STOCKHOLDERS' (DEFICIT):
  Preferred stock, 20,000,000 authorized; none outstanding in March, 2002 and December, 2001
  Common stock, $0.0001 par value:
     Authorized - 100,000,000 shares in Mar. 2002 and Dec. 2001, respectively
     Issued and outstanding - 17,960,414 and 12,947,082 for Mar 2002 and Dec 2001, respectively             1,796           1,295
  Additional Paid-in Capital                                                                           18,329,715      12,259,729
  Accumulated deficit                                                                                 (21,748,287)    (19,640,644)
----------------------------------------------------------------------------------------------------------------------------------

          Total stockholders' deficit                                                                  (3,416,775)     (7,379,620)
----------------------------------------------------------------------------------------------------------------------------------

          Total liabilities and stockholder's deficit                                             $     1,841,313   $   1,863,456
==================================================================================================================================
</TABLE>


                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                               AMNIS SYSTEMS  INC.

                              CONSOLIDATED STATEMENT OF OPERATIONS

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

For the First Quarter Ended March 31,       2002          2001
------------------------------------------------------------------
<S>                                     <C>           <C>
SALES                                   $   246,071   $ 1,333,858

COST OF GOODS SOLD                          287,496       803,192
------------------------------------------------------------------

    Gross margin                            (41,425)      530,666

OPERATING EXPENSES
  Research and development                  175,359       666,017
  Sales and marketing                       440,572       742,565
  General and administrative                721,313       526,428
------------------------------------------------------------------

                                          1,337,244     1,935,010
------------------------------------------------------------------

      Loss from operations               (1,378,669)   (1,404,344)

OTHER INCOME (EXPENSE)
  Interest expense, net                    (769,457)     (183,058)
  Other, net                                 42,083        42,489
------------------------------------------------------------------

      Total other (expense)                (727,374)     (140,569)
------------------------------------------------------------------

  Income Tax                                 (1,600)

NET LOSS                                $(2,107,643)  $(1,544,913)
==================================================================

BASIC AND DILUTIVE LOSS PER SHARE       $     (0.14)  $     (0.23)
==================================================================
</TABLE>


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                                                                     AMNIS SYSTEMS INC.

                                                                   CONSOLIDATED STATEMENT OF CASH FLOWS

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

For the Quarter Ended March 31,                                                  2002          2001
-------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                   $(2,107,643)  $(1,544,913)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
    Stock options for services                                                   277,751             0
    Interest expense exchanged for stock                                          25,890
    Interest expense exchanged for debt                                          343,542
    Employee salaries exchanged for stock                                        325,429
    Depreciation and amortization                                                 14,599       113,597
    Amortization of discount on note payable                                     659,036
    Loss on disposal of property and equipment                                     1,627             0
    Provision for doubtful accounts                                                    0        37,650
    Provision for excess and obsolete inventories                                 12,254       282,620
  Decrease (increase) in accounts receivable                                     332,638      (410,319)
  Increase in inventories                                                        (44,430)     (189,872)
  Decrease (increase) in prepaid expenses and other assets                      (225,396)       30,039
  Decrease in debt issue costs                                                         0       140,000
  Decrease in accounts payable moratorium                                       (100,000)      (14,173)
  Decrease in accounts payable                                                  (585,775)     (439,920)
  Increase (decrease) in accrued salaries                                                        9,841
  Decrease in accrued vacation                                                   (74,406)      (27,994)
  Increase (decrease) in accrued interest                                       (293,740)      241,725
  Increase in reserve for sales adjustment                                             0       250,471
  Decrease in deferred rent                                                      (28,406)            0
  Decrease in deferred revenue                                                   (19,932)       22,823
  Decrease in other accrued liabilities                                          (45,247)      260,560
-------------------------------------------------------------------------------------------------------

     Net cash used in operating activities                                    (1,532,209)   (1,237,865)
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                             (8,726)      (26,687)
-------------------------------------------------------------------------------------------------------

     Net cash used in investing activities                                        (8,726)      (26,687)
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings from stockholders                                                         0       888,027
  Proceeds from financing obligations collateralized by accounts receivable      763,280       465,167
  Payments on financing obligations collateralized by accounts receivable     (1,215,731)     (465,122)
  Proceeds from issuance of common stock                                       2,236,265         7,047
  Costs incurred to secure capital                                              (182,456)
  Proceeds from note receivable                                                  500,000             0
  Proceeds from notes payable                                                          0       250,000
  Payment on notes payable                                                             0       (83,042)
  Payment on capital lease obligation                                                  0          (571)
-------------------------------------------------------------------------------------------------------

     Net cash provided by (used in) financing activities                       2,101,358     1,061,506
-------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                                                  560,423      (203,046)

CASH AND CASH EQUIVALENTS, beginning of year                                      48,467       214,766
-------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of period                                     $   608,890   $    11,720
=======================================================================================================

NON CASH INVESTING AND FINANCING ACTIVITIES:
  Stock options issued for services                                              277,751             0
  Accrued salaries exchanged for common stock                                    979,495             0
  Debt and accrued interest exchanged for common stock                           275,890             0
  Convertible note payable and interest in exchange for note payable           3,547,917             0
  Discount on convertible note payable                                         2,483,542             0
=======================================================================================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for income taxes                                                 $     2,400   $         0
  Cash paid for interest                                                     $   101,147   $    53,018
=======================================================================================================
</TABLE>


                                      F-3
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

                                   The  accompanying  unaudited  interim
                                   consolidated financial statements reflect all
                                   adjustments  that  are,  in  the  opinion  of
                                   management,  necessary  to present fairly the
                                   financial  position,  results  of operations,
                                   and cash flows of the Company for the periods
                                   indicated.  All  adjustments  for  the  first
                                   quarter  ended  March  31,  2002  were  of  a
                                   recurring  nature. The accompanying unaudited
                                   interim  consolidated  financial  statements
                                   have  been  prepared  in  accordance with the
                                   instructions  for Form 10-QSB and, therefore,
                                   do  not include all information and footnotes
                                   necessary  for a complete presentation of the
                                   financial  position,  results  of operations,
                                   and cash flows for the Company, in conformity
                                   with accounting principles generally accepted
                                   in  the United States of America. The Company
                                   has  filed  audited financial statements that
                                   include  all  information  and  footnotes
                                   necessary  for  such  a  presentation  of the
                                   financial position, results of operations and
                                   cash  flows  for  the  fiscal  years  ended
                                   December  31,  2001  and  2000,  with  the
                                   Securities and Exchange Commission.

                                   It  is  suggested  that  the  accompanying
                                   unaudited  interim  consolidated  financial
                                   statements  be  read  in conjunction with the
                                   aforementioned audited consolidated financial
                                   statements.  The  unaudited  interim
                                   consolidated financial statements contain all
                                   normal  and recurring entries. The results of
                                   operations for the interim period ended March
                                   31,  2002  are  not necessarily indicative of
                                   the results to be expected for the full year.

NOTE 1  DESCRIPTION OF COMPANY     Amnis  Systems  Inc., a Delaware consolidated
                                   corporation,  makes  hardware  and  software
                                   products  for  the  creation,  management and
                                   transmission  of  compressed  high-quality
                                   digital  video  over  broadband  computer
                                   networks.  Our  products  are  distributed
                                   worldwide  through  a  network of value added
                                   resellers,  or  VARs,  system integrators and
                                   original equipment manufactures, or OEMs. Our
                                   products  are  used  in  diverse applications
                                   such  as  interactive  distance  learning,
                                   corporate  training,  video  content
                                   distribution,  video  surveillance  and
                                   telemedicine.

NOTE 2  GOING CONCERN              We  are subject to a number of business risks
                                   affecting  companies at a  similar  stage  of
                                   development,  including  competition  from
                                   companies  with  greater  resources  and
                                   alternative  technologies,  the  ability to
                                   obtain  financing to fund future operations,
                                   dependence on  new product introductions in a
                                   rapidly  changing  technological environment,
                                   dependence on a limited number of  customers,
                                   dependence  on  key  employees  and  the
                                   ability  to  attract  and  retain  additional
                                   qualified  personnel.


                                      F-4
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                     (CONTINUED)
================================================================================

NOTE 2  GOING CONCERN              The  accompanying  financial  statements have
        (CONTINUED)                been  prepared assuming that the Company will
                                   continue  as  a  going  concern.  The
                                   stockholders'  equity  of  the Company, after
                                   the  April  16,  2001 merger with Optivision,
                                   Inc.  (Optivision),  has  resulted  in  a
                                   substantial deficit that is compounded by its
                                   working  capital  deficit  of  $3,340,202  at
                                   March  31,  2002 and negative  cash flow from
                                   operations.  These factors raise  substantial
                                   doubt about the Company's ability to continue
                                   as  a  going  concern.  There is no assurance
                                   that  the  Company  will  be  able to achieve
                                   successful  operations,  obtain  sufficient
                                   financing  or  obtain  a line of credit.  The
                                   accompanying  financial  statements  do  not
                                   include  any  adjustments  that  might result
                                   from  the  outcome  of  these  uncertainties.

NOTE 3  SUMMARY OF SIGNIFICANT     PRINCIPLES OF CONSOLIDATION
        ACCOUNTING  POLICIES
                                   The financial statements include the accounts
                                   of  Amnis  Systems  Inc. and its wholly-owned
                                   subsidiary  Optivision,  Inc. All significant
                                   intercompany  accounts  and transactions have
                                   been  eliminated  in  consolidation.

                                   RISKS  DUE  TO  CONCENTRATION  OF SIGNIFICANT
                                   CUSTOMERS

                                   Historically,  a  substantial  portion of our
                                   revenues  has  come from large purchases by a
                                   small  number of customers. If we lose one or
                                   more  of  our  key  customers or experience a
                                   delay  or cancellation of a significant order
                                   or  a decrease in the level of purchases from
                                   any  of  our  key customers, our net revenues
                                   could  decline  and our operating results and
                                   business  could  be  harmed. In addition, our
                                   net  revenues could decline and our operating
                                   results  and  business  could be harmed if we
                                   experience  any  difficulty  in  collecting
                                   amounts  due  from  one  or  more  of our key
                                   customers. During 2001 and 2000, our top four
                                   customers  accounted  for  52% and 44% of our
                                   net  revenues, respectively. Additionally, as
                                   of  December 31, 2001 and 2000, approximately
                                   44%  and  45%,  respectively, of our accounts
                                   receivable  were  concentrated  with  five
                                   customers.  During  the  three  months  ended
                                   March  31,  2002,  Optivision's  top  five
                                   customers  accounted  for  58%  of  our  net
                                   revenues  and  during  the  three months that
                                   ended  March  31,  2001,  three  customers
                                   accounted  for  78%  of  net  revenues. As of
                                   March  31,  2002,  approximately  71%  of our
                                   accounts  receivable  were  concentrated with
                                   seven  of  our  customers.

                                   INVENTORIES

                                   Inventories  are  stated at the lower of cost
                                   (first-in,  first-out)  or  market. Provision
                                   has  been made to reduce obsolete inventories
                                   to  their  net  realizable value. Inventories
                                   contain  components  and assemblies in excess
                                   of  the  Company's  current  estimated
                                   requirements  and  these  are reserved for at
                                   March 31, 2002. Due to competitive and market
                                   pressures,  it  is  reasonably  possible that
                                   estimates  could  change  in  the  future.
                                   Inventories  consist  of  the  following:


                                      F-5
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                     (CONTINUED)
================================================================================

NOTE 3 SUMMARY OF SIGNIFICANT      INVENTORIES (CONTINUED)
       ACCOUNTING  POLICIES
       (CONTINUED)                 Raw Materials                   $    262,067
                                   Work-in-process                      499,339
                                   Demonstration Inventory              118,905
                                   ---------------------------------------------

                                                                        880,311
                                   Reserve for inventory obsolescence
                                     and demonstration inventory
                                     refurbishing costs                (224,079)
                                   ---------------------------------------------

                                                                   $     656,232
                                   =============================================

                                   Certain  of  the  Company's  products contain
                                   components  that  are  supplied  by a limited
                                   number  of  third  parties. While the Company
                                   has  an  inventory  of  these components, any
                                   significant  prolonged  shortage  of  these
                                   components, or the failure of these suppliers
                                   to maintain or enhance these components could
                                   materially  adversely  affect  the  Company's
                                   results  of  operations.

NOTE 4  ACCOUNTS  PAYABLE-         On  January  30,  2002,  we  successfully
        MORATORIUM                 negotiated a work-out agreement plan with the
                                   creditors of Optivision Inc., under which the
                                   Company  will pay the creditors of Optivision
                                   Inc.  $0.35  for  every  $1.00  owed  on debt
                                   listed  on  the  balance  sheet  as  Accounts
                                   Payable-moratorium.  As of the  date of  this
                                   report,  the  Company  was  current  with all
                                   payments  under  the  agreement.  Per  the
                                   agreement,  the  debt  is  to  be  settled in
                                   monthly  payments  by  June  30,  2002.


NOTE 5  CONVERTIBLE  NOTES         On  January  14,  2002, the  Company  issued
        PAYABLE                    a convertible note in the principal amount of
                                   $  3,547,917  to Mr. Michael A. Liccardo, our
                                   president,  chief  executive  officer, and
                                   chairman  of  the  board  of  directors,  in
                                   exchange  for  the  cancellation  of  certain
                                   loans  (including  accrued interests thereon)
                                   that Mr. Liccardo had made to Optivision Inc.
                                   to  meet  current  operating expenses. At any
                                   time,  Mr.  Liccardo may elect to convert the
                                   note to Common stock of the Company at $ 0.35
                                   per  share,  subject  to  adjustment.

                                   Since  there  are  multiple components of the
                                   debenture,  value was added to each component
                                   (Conversion  feature  and Debenture) based on
                                   their  respective  values.  A discount on the
                                   debenture  was  calculated  by the difference
                                   between  the purchase price of the conversion
                                   and  the  current trading price of the stock.
                                   The total discount is $ 2,483,542 and will be
                                   amortized over the maturity of the debenture.
                                   The  carrying  value  of  this  debenture
                                   approximates  its  fair  value.


                                      F-6
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                     (CONTINUED)
================================================================================

NOTE 6  LOSS PER SHARE             The basic loss per share was calculated based
                                   on  a  weighted  average  number  of  shares
                                   outstanding  of  15,400,188  and 6,782,719 at
                                   March  31, 2002 and 2001, respectively. Since
                                   we have a loss for all periods presented, net
                                   loss  per  share  on  a  diluted  basis  is
                                   equivalent  to  basic  net  loss  per  share
                                   because  the  effect  of  converting  stock
                                   options,  warrrants,  convertible  debt  and
                                   other  common  stock  equivalents  would  be
                                   anti-dilutive.

NOTE 7  FINANCING                  In February 2002, we issued and sold to three
                                   qualified investors a total of 225,000 units,
                                   each  unit  consisting  of  ten shares of our
                                   common  stock, subject to adjustment, and one
                                   warrant  to  purchase  three  shares  of  our
                                   common  stock  at an exercise price of $ 0.90
                                   per share, subject to adjustment, for a total
                                   of  $  1,800,000.

                                   In  February 2002, we issued 10,000 shares of
                                   our  common  stock  to  a  corporate  service
                                   provider  for  the  engagement of the service
                                   provider  for certain services to be rendered
                                   to  us  over  a  three  month  period.

                                   In  March  2002,  we  issued  and  sold  to a
                                   corporate  investor  275,890  shares  of  our
                                   common  stock at $ 1.00 per share in exchange
                                   for  the  cancellation  of certain loans that
                                   the  investor  had  made to us (including all
                                   accrued  interest  thereon).


                                      F-7
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL  STATEMENTS

     This information is contained on pages F-1 through F-7 of this report and
is incorporated into this Item 1 by reference.

     In our management's opinion, all adjustments necessary for a fair
presentation of the statements of the results for the interim period have been
included.

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

     The following discussion and analysis should be read in conjunction with
our financial statements and the related notes included elsewhere in this
report.

     This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, with respect to future events, the
outcome of which is subject to certain risks, including the risk factors set
forth below in addition to the other information set forth herein.

     The inclusion of forward-looking statements should not be regarded as a
representation by us, or any other person, that such forward-looking statements
will be achieved. We undertake no duty to update any of the forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of the foregoing, readers are cautioned not to place undue reliance on
the forward-looking statements contained in this report.

RESULTS OF OPERATIONS

     Our revenues for the three months ended March 31, 2002 decreased to
$246,071 from $1,333,858 for the three months ended March 31, 2001, due to
delayed decision-making late in our sales cycle that postponed several large
deals beyond our first quarter of 2002.

     As a result of converting certain notes payable to convertible debenture
our net loss of $2,107,643 for the three months ended March 31, 2002 increased
by 36 % over the prior year first quarter loss of $1,544,913.

     Although cost of goods sold decreased from $803,192 for the three months
ended March 31, 2001 compared to $287,496 for the three months ended March 31,
2002, we experienced a negative gross margin since revenues were not sufficient
to cover our manufacturing overhead.


                                        2
<PAGE>
     Research and development expenses were $175,359 for the three months ended
March 31, 2002 as compared to $666,017 for the three months ended March 31,
2001, a decrease of 280%.  This decrease is in line with cost reductions
necessary as a result of the economic slowdown and our revenue slowdown. We do
expect modest increases in future quarters to support development of the new
network digital video products.

     Sales and marketing expenses for the three months ended March 31, 2002 were
$440,572 as compared to $742,565 for the three months ended March 31, 2001, a
decrease of 68.5%. Again, this decrease is consistent with cost reductions
necessary as a result of the economic slowdown and our revenue slowdown. We do
however expect quarterly expenses to increase in light of our stronger emphasis
on trade show activity and increases in our sales organization.

     General and administrative costs were $721,313 for the three months ended
March 31, 2002 as compared to $526,428 for the three months ended March 31,
2001, an increase of $194,885 due to a non-cash charge of $196,800 for
consulting contracts services.

     Interest and other expense, net was $727,374 for the three months ended
March 31, 2002 as compared to $140,569 for the three months ended March 31,
2001. Higher non cash interest expense amounting to $659,036 resulted from the
convertible notes issued by Optivision, Inc. being converted by the terms of the
notes into equity on the effectiveness of the merger between Optivision and us
on April 16, 2001.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At March 31, 2002, we had cash and cash equivalents of $608,890. We
currently have no material commitments other than those under our operating
lease arrangements.

     Our negative working capital position improved by more than $4 million in
the first quarter of 2002. This was due to approximately $1.8 million in new
financing which was received during this quarter. Working capital also improved
due to the cancellation of $938,424 in cash compensation owed to our employees
in exchange for the issuance of options to purchase shares of our common stock
and converting $ 3,204,375 of shareholder loans plus accrued interests of $
343,542 to convertible debenture. In addition, we cancelled a note for $250,000
and all accrued interest thereon in exchange for shares of our common stock,
which also strengthened our balance sheet. We also continue to reduce our debt
to our moratorium creditors in accordance with a workout agreement plan under
which we will pay the creditors of Optivision $0.35 for every $1.00 owed by June
30, 2002.

     We will require additional funding to maintain operations and finance
growth to achieve our strategic objectives over the next 12 months. Our
management is actively pursuing increases to cash flows and additional sources
of financing and believes that such increases and additional financing will
generate sufficient cash flow to fund operations.


                                        3
<PAGE>
     Subject to certain terms and conditions, we will receive an additional
investment of $500,000 in the form of a 12% secured convertible debenture upon
the declaration of effectiveness of the registration statement on Form SB-2 that
we filed with the Securities and Exchange Commission on March 22, 2002 and may
receive up to an additional $1.4 million from investment options and warrants
for the purchase of our common stock.

RISK  FACTORS

     As stated above, we need additional cash to support our investment in our
business. If we do not raise additional sufficient funds, we also may not be
able to fund expansion, take advantage of future opportunities, meet our
existing debt obligations or respond to competitive pressures or unanticipated
requirements. Financing transactions may include the issuance of equity or debt
securities, obtaining credit facilities, or other financing mechanisms. However,
the trading price of our common stock and the downturn in the U.S. stock and
debt markets could make it more difficult for us to obtain financing through the
issuance of equity or debt securities. Even if we are able to raise the funds
required, it is possible that we could incur unexpected costs and expenses, fail
to collect significant amounts owed to us, or experience unexpected cash
requirements that would force us to seek alternative financing. Further, if we
issue additional equity or debt securities, stockholders may experience
additional dilution or the new equity securities may have rights, preferences or
privileges senior to those of existing holders of our common stock.

     The risk factors described above are not the only ones facing our company
and they should be read in conjunction with all other risk factors disclosed in
our previous reports filed with the Securities and Exchange Commission.
Additional risks not presently known to us, or that we currently deem
immaterial, may also impair our business operations.


                           PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

     The company is not a party to any pending legal proceedings nor is its
property subject to any pending legal proceedings.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS.

     On January 14, 2002, we issued a convertible note in the principal amount
of $3,547,916.62 to Michael A. Liccardo, our president, chief executive officer
and chairman of the board of directors, in exchange for the cancellation of
certain loans (including all accrued interest thereon) that Mr. Liccardo had
made to us to meet current operating expenses. The note bears interest at 10%
per annum and matures on January 14, 2003. At any time, Mr. Liccardo may elect
to convert the note into a number of shares of our common stock determined by
dividing the outstanding principal and interest on the note by $0.35. The $0.35
conversion price is subject to adjustment to a lower conversion price through
January 14, 2003, and is also subject to customary adjustment in the event of
stock splits, dividends, recapitalizations and the like.


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     In February 2002, we issued and sold to three qualified investors a total
of 225,000 units, each unit consisting of ten shares of our common stock,
subject to adjustment, and a warrant to purchase three shares of our common
stock at an exercise price of $0.90 per share, subject to adjustment, for a
total of $1,800,000.

     In February 2002, we issued 10,000 shares of our common stock to a
corporate service provider for the engagement of the service provider for
certain services to be rendered to us over a three month period.

     In March 2002, we issued and sold to a corporate investor 275,890 shares of
our common stock at $1.00 per share in exchange for the cancellation of certain
loans that the investor had made to us (including all accrued interest thereon).


ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

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

     None.

ITEM  5.  OTHER  INFORMATION.

     None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits

     4.01*     Form of Convertible Note dated as of January 14, 2002 issued by
the Issuer to Michael A. Liccardo.

*Filed as an exhibit to the report on Form 8-K filed with the Securities and
Exchange  Commission on January 14, 2002.

     (b)  Reports on Form 8-K

     On  January 14, 2002, we filed a report on Form 8-K announcing the issuance
of  a  convertible  debenture  in  the  principal amount of $500,000, investment
options  for  the  purchase  up  to  $500,000  of our common stock, and warrants
exercisable  for  up  to  1,000,000  shares  of  our  common  stock in a private
financing  arranged  by  Bristol  DLP,  LLC.


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     On  March 4, 2002, we filed a report on Form 8-K announcing the issuance of
$1,800,000  in  designated units of common stock and warrants to three investors
in  a  private  placement  transaction.


                                   SIGNATURES


     In  accordance  with  the  requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date:  May 15, 2002                  AMNIS SYSTEMS INC.

                                     By:  /s/  Lawrence L. Bartlett
                                        -----------------------------------
                                        Lawrence L. Bartlett
                                        Vice President, Secretary and
                                        Chief Financial Officer


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