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


                                  FORM 10-QSB


                 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED September 30, 2002

                          COMMISSION FILE NO. 0-28413


                                HUMAN BIOSYSTEMS
       (Exact name of small business issuer as specified in its charter)


               CALIFORNIA                           77-0481056
    (State or other jurisdiction of     (I.R.S. Employer Identification No.)
     incorporation or organization)


                               1127 HARKER AVENUE
                           PALO ALTO, CALIFORNIA 94301
                    (Address of principal executive offices)

                                  650-323-0943
                           (Issuer's telephone number)

                               HYPERBARIC SYSTEMS
                   (Former name, if changed since last report)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No

 At November 11, 2002, the registrant had outstanding 22,254,691 shares of
 common stock, no par value.

     Transitional Small Business disclosure format:  Yes     No   X


                                HUMAN BIOSYSTEMS

                                TABLE OF CONTENTS


                                                                 PAGE
PART I - FINANCIAL INFORMATION

  ITEM 1.  FINANCIAL STATEMENTS                                    2

BALANCE SHEET (unaudited) - as of September 30, 2002               3

STATEMENTS OF OPERATIONS (unaudited) -- For the Three and          4
Nine Month Periods Ended September 30, 2002 and 2001 and the
period from February 26, 1998 (Inception) through September
30, 2002

STATEMENT OF STOCKHOLDERS' DEFICIT (unaudited)- For the Nine       5
Months Ended September 30, 2002

STATEMENTS OF CASH FLOWS (unaudited) -- For the Nine Month         6
Periods Ended September 30, 2002 and 2001 and the Period from
February 26, 1998 (Inception) through September 30, 2002.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)                          7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF          11
OPERATION

ITEM 3.  CONTROLS AND PROCEDURES                                  24

PART II - OTHER INFORMATION                                       24

ITEM 1.  LEGAL PROCEEDINGS                                        24
ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                24
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                          24
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      25
ITEM 5.  OTHER INFORMATION                                        25
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                         25

SIGNATURES                                                        26
CERTIFICATION                                                     27


PART I -- FINANCIAL INFORMATION

<PAGE>2

     ITEM 1.  FINANCIAL STATEMENTS.



                               HUMAN BIOSYSTEMS
                     (FORMERLY KNOWN AS HYPERBARIC SYSTEMS)
                                BALANCE SHEET
                               SEPTEMBER 30, 2002
                                 (Unaudited)

<table>
<caption>

                                                                         <c>

 ASSETS

Current assets
 Cash                                                                      $   170,500
 Prepaid expenses and other current assets                                      31,600
  Total current assets                                                         202,100

Fixed assets, net of accumulated depreciation of $5,800                          4,000

Total assets                                                               $   206,100

 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
 Accounts payable                                                          $    36,100
 Accrued liabilities                                                           103,900
 Stockholder payables                                                          100,500
 Stock subject to rescission                                                         -
  Total current liabilities                                                    240,500

Total liabilities                                                              240,500

Commitments and contingencies                                                        -

Stockholders' deficit
 Common stock; no par or stated value; 50,000,000 shares authorized,
    20,992,700 shares issued, and 20,227,100 shares outstanding              9,225,400
 Other receivables, net of allowance for doubtful balance of $104,000         (398,300)
 Accumulated deficit during development stage                               (8,861,500)
  Total stockholders' deficit                                                  (34,400)

Total liabilities and stockholders' deficit                                $   206,100


</table>

<PAGE>3



                                 HUMAN BIOSYSTEMS
                              STATEMENT OF OPERATIONS
                      (FORMERLY KNOWN AS HYPERBARIC SYSTEMS)
                      For the Three and  Nine Month Periods
                     Ended September 30, 2002 and 2001 and the
                     period from February 26, 1998 (Inception)
                          through September 30, 2002
                                  (Unaudited)

<table>
<caption>

                                     <c>                <c>                  <c>              <c>            <c>

                                                                                                               February 26, 1998
                                         Three Months Ended September 30    Nine Months Ended September 30    (Inception) Through
                                             2002             2001               2002           2001           September 30, 2002

Revenue
                                       $         --        $         --        $         --     $         --      $          --
Operating expenses
 General and administrative
  Stock based compensation                   30,000             656,300             391,600          826,300          3,067,600
  Other general and administrative           393,900             209,800           1,015,000          503,600          3,066,300
 Total general and administrative           423,900             866,100           1,406,600        1,329,900          6,133,900
 Research and development                   106,800              66,800             307,500          207,900          1,193,100
 Sales and marketing                         52,900              12,700             168,400           38,100            379,400

  Total operating expenses                  583,600             945,600           1,882,500        1,575,900          7,706,400

Loss from operations                       (583,600)           (945,600)         (1,882,500)      (1,575,900)        (7,706,400)

Other income (expense)
 Loan fees                                       --            (562,500)                 --         (656,200)          (750,000)
 Bad debt related to other receive               --                  --                  --               --           (104,000)
 Interest income                                100                  --                 100               --              2,600
 Interest expense                              (300)            (30,100)               (900)         (75,000)          (299,700)

Loss before provision for income           (583,800)         (1,538,200)         (1,883,300)      (2,307,100)        (8,857,500)

Provision for income taxes                       --                  --                 800               --              4,000

Net loss                               $   (583,800)       $ (1,538,200)       $ (1,884,100)    $ (2,307,100)     $  (8,861,500)

Basic and diluted loss per common      $      (0.03)       $      (0.12)       $      (0.11)    $      (0.19)     $       (1.20)

Basic and diluted weighted average
 common shares outstanding               19,110,900          12,627,700          17,088,100       12,206,600          7,374,000

</table>

<PAGE>4


                                 HUMAN BIOSYSTEMS
                        (FORMERLY KNOWN AS HYPERBARIC SYSTEMS)
                          STATEMENT OF STOCKHOLDERS' DEFICIT
                      For the Nine Months Ended September 30, 2002
                                  (Unaudited)

<table>
<caption>

                                                <c>             <c>            <c>             <c>                <c>



                                                                                                    Accumulated
                                                                                                   Deficit During        Total
                                                           Common Stock              Other          Development       Stockholders'
                                                      Shares          Amount       Receivables         Stage             Deficit


Balance December 31, 2001                       $   14,561,800    $  7,322,500     $ (398,300)     $ (6,977,400)    $    (53,200)

Issuance of common stock for cash
(net of offering costs of $127,400), $0.30           4,979,800       1,486,000             --                --        1,486,000

Stock options and warrants exercised,
 weighted average exercise price of $0.01              280,000           4,000             --                --            4,000

Issuance of common stock in satisfaction
 of promissory note issued as a result of
 rescission offering (including accrued in              72,100          54,300             --                --           54,300

Issuance of common stock for services,
 weighted average                                      385,700         294,000             --                --          294,000

Stock based compensation related to granting
 of warrant                                                 --          97,600             --                --           97,600

Issuance of common stock in satisfaction of
 accrued liabilities                                    54,100          17,000             --                --           17,000

Common shares due from stockholder                          --              --        (50,000)               --          (50,000)

Common shares received from stockholder
 and cancelled                                        (106,400)        (50,000)        50,000                --               --

Net loss                                                    --              --             --        (1,884,100)      (1,884,100)

Balance September 30, 2002 (Unaudited)          $   20,227,100    $  9,225,400     $ (398,300)     $ (8,861,500)    $    (34,400)

</table>

<PAGE>5



                                HUMAN BIOSYSTEMS
                     (FORMERLY KNOWN AS HYPERBARIC SYSTEMS)
                            STATEMENT OF CASH FLOWS
                          For the  Nine Month Periods
                   Ended September 30, 2002 and 2001 and the
                   period from February 26, 1998 (Inception)
                           through September 30, 2002
                                  (Unaudited)

<table>
<caption>

                                                              <c>                <c>              <c>

                                                                                                       February 26, 1998
                                                                    Nine Months Ended September 30    (Inception) Through
                                                                        2002            2001           September 30, 2002

Cash flows from operating activities:
 Net loss                                                         $ (1,884,100)      $ (2,307,100)        (8,861,500)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
  Stock based compensation                                             391,600            826,300          3,067,600
  Depreciation                                                           1,500              1,200              5,800
  Deemed interest expense                                                   --             55,700             92,800
  Interest expense paid in common stock                                     --                 --            117,300
  Amortization of discount and loan fees
   on notes payable                                                         --            656,200            774,800
   Bad debt related to other receivables                                    --                 --            104,000
 Changes in operating assets and liabilities:
  Change in prepaid expenses and other asset                             7,600            (21,300)           (31,600)
  Change in bank overdraft                                                  --               (500)                --
  Change in accounts payable                                           (23,400)           (23,900)            60,800
  Change in accrued liabilities                                         71,700            (16,100)           146,200
  Change in stockholder payables                                      (145,100)           150,500            343,800
   Net cash used by operating activities                            (1,580,200)          (679,000)        (4,180,000)

Cash flows from investing activities:
 Purchase of fixed assets                                                   --                 --             (9,800)
   Net cash used by investing activities                                    --                 --             (9,800)

Cash flows from financing activities:
 Proceeds from issuance of common stock                              1,490,000            925,100          4,226,100
 Proceeds from borrowing on notes payable                                   --             24,000            323,100
 Principal payments on notes payable                                        --            (68,900)           (97,400)
 Principal payments on stock subject to rescission                     (21,000)                --            (41,500)
 Change in other receivables                                           (50,000)                --            (50,000)
   Net cash used by financing activities                             1,419,000            880,200          4,360,300

Net increase (decrease) in cash                                       (161,200)           201,200            170,500

Cash, beginning of period                                              331,700                 --                 --

Cash, end of period                                               $    170,500       $    201,200       $    170,500

Supplemental disclosure of cash flow information:
 Cash paid for income taxes                                       $        800       $         --       $    332,500
 Cash paid for interest                                           $      2,100       $         --       $      2,100

Schedule of non-cash financing activities:
 Issuance of common stock in exchange for
  other receivable                                                $         --       $    104,000       $    104,000

 Issuance of common stock in satisfaction of
  accounts payable                                                $         --       $     24,800       $     24,800

 Satisfaction of accrued liabilities related to granting
  of warrants                                                     $         --       $     18,100       $     18,100

 Satisfaction of stockholder payables related to granting
  of warrants and options                                         $         --       $    274,000       $    274,000

 Issuance of common stock in satisfaction of convertible
  note payable - related party                                    $         --       $    190,000       $    190,000

 Issuance of common stock in satisfaction of
  promissory note issued as a result of rescission                $         --       $    178,200       $    178,200

 Issuance of common stock in satisfaction of
  promissory note issued as a result of rescission offering
  (including accrued interest of $7,200)                          $     54,300       $         --       $     54,300

 Issuance of common stock in satisfaction of accrued
  liabilities                                                     $     17,000       $         --       $     17,000

</table>

<PAGE>6


              NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1.   BASIS OF PRESENTATION

     The accompanying financial statements have been prepared in accordance with
Securities   and   Exchange  Commission  requirements  for   interim   financial
statements.  Therefore, they do not include all of the information and footnotes
required  by accounting principles generally accepted in the United  States  for
complete  financial  statements.  The financial statements  should  be  read  in
conjunction  with  the  Form  10-KSB for the year ended  December  31,  2001  of
HyperBaric Systems.

     The  interim financial statements present the balance sheet, statements  of
operations, stockholders' deficit and cash flows of Human BioSystems (formerly
known as  HyperBaric  Systems) (the "Company").  The financial  statements  have
been prepared  in  accordance with accounting principles generally  accepted  in
the United States.

     The  interim  financial  information  is  unaudited.   In  the  opinion  of
management,  all adjustments necessary to present fairly the financial  position
as  of September 30, 2002 and the results of operations and cash flows presented
herein have been included in the financial statements.  Interim results are  not
necessarily indicative of results of operations for the full year.

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

2.STOCKHOLDER PAYABLES

     During  the nine months ended September 30, 2002, the Company paid  accrued
wages to stockholders totaling $143,400.  Additionally, the Company paid $50,000
in  principal  on  a promissory note to a stockholder.  The Company  accrued  an
additional  $39,200 in accrued vacation and $9,100 in accrued wages  during  the
nine  months ended September 30, 2002.  As of September 30, 2002 the balance  in
stockholder payables, totaling $100,500 consists of the following:

    Wages payable to stockholder employees    $   9,100

    Accrued vacation for stockholder employees   91,400
                                                 ------
                                               $100,500

     As  discussed  in  Note 7, in November 2002 the Company paid  approximately
$46,000 to various stockholder employees for accrued vacation.

<PAGE>7

3.COMMON STOCK DUE FROM STOCKHOLDER

     In April 2002, a check received from a stockholder for stock issued in 2001
was  returned by the bank due to insufficient funds.  The stockholder agreed  to
return  approximately 106,400 shares of the Company's common stock.  The Company
recorded  a stock receivable totaling $50,000 as other receivables.   In  August
2002,  the  106,400  shares of common stock were returned  to  the  Company  and
cancelled.

4.STOCK BASED COMPENSATION RELATED TO GRANTING OF WARRANTS AND OPTIONS

Options

     Statutory  incentive stock options - In January 2002, the  Company  granted
statutory incentive stock options to various employees in relation to the  stock
option  plan adopted in August 2001, to purchase 395,000 shares of the Company's
common stock at $0.54 per share.  The Company estimated the value of the options
under  APB  25  "Accounting for Stock issued to Employees" which calculates  the
cost  using the difference between the estimated fair value of the stock on  the
date  of  grant  and  the  exercise  price.  Compensation  under  the  statutory
incentive stock options totaled $35,500 for the nine months ended September  30,
2002.

     Additionally, in August 2002, the Company granted statutory incentive stock
options  to  three  directors in relation to the stock option  plan  adopted  in
August  2001, to purchase 150,000 shares of the Company's common stock at  $0.34
per  share.   The  Company  estimated the value of  the  options  under  APB  25
"Accounting for Stock issued to Employees" which calculates the cost  using  the
difference  between the estimated fair value of the stock on the date  of  grant
and the exercise price.  No compensation was recorded as the grant price equaled
fair  market  value  of the stock on the date of the grant.  The  directors  may
exercise all their options upon grant.

     Non-statutory  incentive  stock options -  In  January  2002,  the  Company
granted non-statutory incentive stock options to various consultants in relation
to  the  stock option plan adopted in August 2001, to purchase 45,000 shares  at
$0.54  per  share.   The  Company  estimated the  fair  value  of  non-statutory
incentive stock options by using the Black-Scholes option pricing-model with the
following assumptions: no dividend yield; expected volatility of 232%; risk-free
interest  rates  of  2.23%; and expected lives of 1 year for all  plan  options.
Compensation under the non-statutory incentive stock options totaled $22,000 for
the nine months ended September 30, 2002.

     Employees  and  consultants may exercise their options  to  purchase  their
shares according to the following schedule:

          At inception   30%
          After 1st year 30%
          After 2nd year 40%

<PAGE>8

Warrants

     In   January  2002,  the  Company  entered  into  a  Consulting   Agreement
("Agreement")  with  an  entity whereby the entity would  provide  investor  and
financial  public relations in return for a monthly retainer  of  $5,000  and  a
warrant  to  purchase 80,000 shares of the Company's common stock at  $0.72  per
share.  The Company has estimated the fair value of the warrant using the Black-
Scholes  pricing-model  with  the  following  assumptions:  no  dividend  yield;
expected  volatility of 232%; risk free interest rates of 2.29%; and an expected
life  of  1  year.  Compensation under the grant totaled $40,100  for  the  nine
months ended September 30, 2002. 5.   COMMITMENTS AND CONTINGENCIES

     Leased  facilities - The Company operates from a leased  facility  under  a
noncancelable  operating lease.  The Agreement calls for  monthly  payments  of
$5,000 through December 2002.  As of September 30, 2002, total rent expense  for
the leased facility approximated $7,500.  Future minimum rental payments through
December 2002 total $15,000, of which $5,000 has been prepaid as of September
30, 2002.

     Legal  proceedings - On August 7, 2002, the United States Attorney for  the
Eastern  District  of  New  York  and  the Securities  and  Exchange  Commission
announced  they were bringing securities fraud charges against the  Company  and
Harry  Masuda,  the Company's Chief Executive Officer, for allegedly  paying  an
unregistered  broker  an  undisclosed commission in  a  1999  and  2000  private
placement.  The allegations generally charge the Company and Mr. Masuda with the
failure  to  adequately  disclose to investors in  these  private  placements  a
commission  agreement with Larry Bryant, an unlicensed broker-dealer.   Remedies
sought in these proceedings include criminal penalties and a bar from service as
an  officer or director of a publicly-traded company.  The Company believes  the
charges  are  unwarranted,  and that the issues involved  in  this  matter  were
resolved during 2000 to the full satisfaction of all investors.  There can be no
assurance  that  Mr.  Masuda will be able to continue  to  serve  as  our  Chief
Executive  Officer  in  the event that the Securities  and  Exchange  Commission
receives the remedies that it seeks.

<PAGE>9

6.   GOING CONCERN

     The accompanying financial statements have been prepared on a going concern
basis,  which  contemplates the realization of assets and  the  satisfaction  of
liabilities in the normal course of business.  The Company is in the development
stage,  has no operating revenue and incurred a net loss of $1,884,100  for  the
nine  months  ended  September 30, 2002.  The Company is in the  fifth  year  of
research and development, with an accumulated loss during the development  stage
of  $8,861,500.   As of September 30, 2002, management is uncertain  as  to  the
completion  date  or  if  any  of the Company's contemplated  products  will  be
completed at all.

     Management's  plan, in this regard, is to raise financing of  approximately
$2,500,000  through  a  combination of equity and  debt  financing.   Management
believes  this amount will be sufficient to finance the continuing research  for
the next twelve months.  However, there is no assurance that the Company will be
successful in raising such financing.

These  conditions give rise to substantial doubt about the Company's ability  to
continue  as  a  going  concern.   These financial  statements  do  not  include
adjustments relating to the recoverability and classification of reported  asset
amounts  or the amount and classification of liabilities that might be necessary
should  the  Company  be unable to continue as a going concern.   The  Company's
continuation  as  a  going  concern is dependent  upon  its  ability  to  obtain
additional  financing  or  sale  of its common stock  as  may  be  required  and
ultimately to attain profitability.

7.   SUBSEQUENT EVENTS

     In  October  2002, a certificate of amendment was filed with the California
Secretary  of State to change the name of the Company to Human BioSystems.   The
certificate  of  amendment also authorized the Company to issue two  classes  of
stock  including  50,000,000  shares of common stock  and  5,000,000  shares  of
preferred stock, neither with par or stated value.

     In  November  2002,  the  Company  paid approximately  $46,000  to  various
stockholder employees for accrued vacation.

<PAGE>10

     ITEM 2. MANAGEMENT'S PLAN OF OPERATION.

     THIS  REPORT  CONTAINS  FORWARD-LOOKING STATEMENTS WITHIN  THE  MEANING  OF
SECTION  27A  OF  THE SECURITIES ACT OF 1933 AND SECTION 21E OF  THE  SECURITIES
EXCHANGE  ACT  OF 1934, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING  OUR
EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES THAT ARE SIGNIFIED BY THE
WORDS  "EXPECTS",  "ANTICIPATES", "INTENDS", "BELIEVES",  OR  SIMILAR  LANGUAGE.
THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS, UNCERTAINTIES AND OTHER FACTORS.
ALL   FORWARD-LOOKING  STATEMENTS  INCLUDED  IN  THIS  DOCUMENT  ARE  BASED   ON
INFORMATION  AVAILABLE TO US ON THE DATE HEREOF AND SPEAK ONLY AS  OF  THE  DATE
HEREOF.  THE FACTORS DISCUSSED BELOW UNDER "RISK FACTORS" AND ELSEWHERE IN  THIS
QUARTERLY REPORT ON FORM 10-QSB ARE AMONG THOSE FACTORS THAT IN SOME CASES  HAVE
AFFECTED  OUR  RESULTS AND COULD CAUSE THE ACTUAL RESULTS TO  DIFFER  MATERIALLY
FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.

     The  following discussion should be read in conjunction with the  financial
statements and notes thereto.

Overview

     We  are  a  development  stage company, and have a very  limited  operating
history  and no revenue to date.  Our prospects must be considered in  light  of
the  risks  and  uncertainties encountered by companies in  an  early  stage  of
development  involving  new  technologies  and  overcoming  regulatory  approval
process requirements before any revenue is possible.

     We  have  experienced operating losses since our inception.   These  losses
have  resulted  from  the significant costs incurred in the development  of  our
technology  and  the  establishment of our research  and  development  facility.
Expenditures  will increase in all areas in order to execute our business  plan,
particularly in research and development and in gaining regulatory  approval  to
market our products in the U.S. and abroad.

<PAGE>11

     Our principal business objective is to develop and provide economical, non-
toxic  methods  of extending the shelf life and improving the quality  of  blood
platelets  and other biological material.  We have been successful in preserving
blood  platelets  for  ten  days  under  refrigeration  while  maintaining  cell
structure and morphology, which has never been done before to our knowledge.  We
are currently awaiting validation of our findings at an independent blood center
in  California  and  plan to submit them for government approval  in  the  first
quarter of 2003.

     We will continue efforts on prototype development and the generation of
pre- clinical  and  clinical  data in the months ahead.   We  originally
anticipated commencing  human studies by the summer of 2002, but due to the need
to  ensure adequate  sterilization and other study protocols necessary  prior to
infusion into   humans,  we  currently  anticipate  that  human  studies will
commence immediately  following preliminary in-vitro tests, which are now  in
progress. Based  on  the  current  progress of the studies, we estimate  that
the  human infusion  tests  will begin in the first quarter of 2003.   We  also
expect  to submit our first application for FDA approval and begin clinical
testing of  our first product for blood platelet storage shortly after the
successful completion of the human tests.  In April 2002, we began research on
kidney preservation and developing  solutions that will operate under
refrigerated conditions.   We  are performing kidney transplants on small
animals to test the effectiveness of  our solutions  when  stored  for  varying
numbers  of  days.   We  expect  to  have preliminary results of our study by
June of 2003.

      In  July  2002,  we  received  our first  patent  on  the  technology  and
methodology for preserving blood platelets.  This patent, U.S. 6,413,713, B1, is
titled   "Method  for  Preserving  Blood  Platelets".    We  anticipate   filing
additional patent applications relating to platelet preservation during the next
twelve months of operation, which should strengthen our competitive position  in
the  platelet  preservation  marketplace. We have also  begun  discussions  with
potential  strategic  alliance companies that have  the  capability  to  provide
technical and clinical expertise as well as financial and marketing expertise to
leverage our current expertise in these areas.

      We are looking for a larger research and development facility in Russia to
accommodate more equipment and personnel than the current location.   In  August
2002,  we opened scientific research offices in San Ramon, California  for   our
engineering,  scientific,  and  planning  personnel.  We  have  additional
space reserved  for  an  engineering and scientific laboratory as well  as
space  for additional personnel for future expansion.

<PAGE>12

Product Development

     We  have  engaged  Quintiles, Inc., an international regulatory  consulting
firm,  to  assist  with planning and managing the regulatory  approval  process.
This firm specializes in the design and implementation of regulatory strategies,
including  experiment design and monitoring.  We have used their  services  from
time to time, but thus far we have used Quintiles only on a limited basis, as we
have   not   yet   started  clinical  trials.   We  anticipate  that   Quintiles
participation  will  increase as we meet with the FDA to proceed  with  clinical
trials.

     As  an  overall  strategy, we intend to limit the  system  claims  for  our
Platelet  Preservation System and to progressively expand them as FDA and/or  EU
approval is granted for each succeeding claim.  We also plan to market our first
products  in  countries  that have relaxed regulatory requirements  for  product
sales.   We believe that this should provide a shorter time to market.

Research and Development Plan

      We  have developed a research and development strategy that considers  the
FDA  and international approval processes and their impact on bringing a product
to  market.   Based  on  these constraints, we have  developed  a  research  and
development plan that requires multiple developments being conducted at the same
time.

      We have developed a three-phase strategy, with estimated time requirements
for the research and development and market introduction of products.  The first
phase  starts with a platelet preservation product which stores platelets  under
refrigeration for seven to nine days using our proprietary solution  by  itself.
The  second phase is the market introduction of our Platelet Preservation System
utilizing  our  hyperbaric container if longer preservation times are  required.
Our  third  phase  is  to  find  a  viable  alternative  to  the  current  organ
preservation  methods  with  both solution under refrigeration  and  a  complete
system  at sub-zero temperatures.   We are currently in the first phase  of  our
strategy,  and are anticipating advancing through this phase for the foreseeable
future.

      Governmental approval for human testing will be required for each of these
three phases of development.  Our plan is to obtain the necessary approvals  for
each phase.

<PAGE>13

Platelet Preservation - Refrigeration

      Our platelet preservation plan starts with a platelet preservation product
using our solution by itself.  We have been able to successfully store platelets
for  ten  days at refrigerated temperatures, which is considered to be  a  major
milestone  in the cold storage of platelets.  Our technology has been  validated
by  an  independent  test  facility in the U.S., and  we  are  commencing  human
studies.  Currently the industry stores platelets at ambient temperature  for  a
maximum  of five days, an FDA-imposed limit due to historic bacterial  infection
of  the  platelets.    In  July 2002, we entered into a development  and  supply
contract  with  MMR  Technologies  of Mountain  View,  California,  to  build  a
computerized  blood platelet cooling instrument.  In October of 2002,  we  began
preliminary tests of a prototype of this device, which is designed to  cool  the
platelets prior to storage to help extend the shelf life of platelets for  blood
banks and hospitals.

Platelet Preservation - Sub-Zero Storage

      This  development  is  intended to result  in  longer  storage  times  for
platelets,  combining  the  use  of solutions,  sub-zero  temperature  and  high
pressure.   It  is our goal to develop a storage method that will  preserve  the
viability  of platelets with little or no bacterial growth for a period  greater
than 13 days.  This will provide the medical community with a new and economical
method  for  long-term platelet storage, thereby reducing the  current  loss  of
product.   The successful implementation of refrigerated platelets at nine  days
or  beyond  may eliminate the need for sub-zero stored platelets for most  blood
center needs.

Organ Preservation

      This effort will incorporate storage of organs involving experiments  with
animal  organs  to  demonstrate  our ability to harvest,  store  and  transplant
organs.  The  goal is to achieve a level of physical condition and viability  of
these organs that is equal to or superior to present storage methods and storage
times.  In addition, we plan to develop a process that will reduce the need  for
anti-rejection  drugs  after  transplantation.   The  development  process  will
include  the development of solutions, cooling methods and possibly the  use  of
chambers to protect organs from freezing at sub-zero storage temperatures.

Test Results

      Non-clinical  experiments  and tests of platelet  preservation  and  other
research  and  development  activities,  are  being  conducted  in  Russia   and
Vicksburg,  Michigan.    We are continuing to conduct experiments  to  find  the
optimal  conditions of storage at refrigerated temperatures.  We have been  able
to  achieve up to 24 hours of refrigerated storage of platelets with up  to  68%
retaining  their original disc shape.  Up to 13% of the platelets  remain  discs
after  five days of storage.  Subsequent tests indicated very little  disc  loss
after  the first 24 hours of storage, where disc percentage remained essentially
constant  for  72  hours,  which was the limit of these  particular  tests.   We
subsequently  demonstrated  that platelets stored  using  our  technology  under
refrigeration  for  ten days still remain functional, with a  platelet  survival
rate of up to 78% and 20% maintaining full functionality.

<PAGE>14

      Our  most recent test efforts have been directed toward the refinement  of
our  platelet  preservation technology before we commence human studies  and  an
application  for  approval from the FDA.  In September 2002, Puget  Sound  Blood
Center  agreed  to conduct human blood platelet research studies  utilizing  our
platelet  preservation technologies.  The preliminary studies leading  to  human
infusion  began  in  October of 2002. The preliminary studies  are  required  to
assure  all  steps in the process are compatible with human infusion,  including
sterility  and  safety.  We are also currently negotiating with a  second  blood
research  center to conduct human infusion studies for further verification  and
comparison.

Results of Operations

     Three and Nine Months Ended September 30, 2002 Compared With Three and Nine
Months Ended September 30, 2001

     Revenues.   We  did  not  generate any revenue in  the  nine  months  ended
September 30, 2002 and 2001, and have not generated revenues since our inception
in  February 1998, as our focus to date has been on the research and development
of  products.  We are a development stage company in the fifth year of  research
and  development  activities, and do not anticipate receiving revenue  until  we
complete product development and clinical testing.

     General  and Administrative Expenses.   General and administrative expenses
in  the  three  months ended September 30, 2002 were $423,900, a  decrease  from
$866,100  for  the  three months ended June 30, 2001.   Our  total  general  and
administrative  expenses  in the nine months ended September  30,  2002  equaled
$1,406,600, an increase from $1,329,900 for the comparable period in 2001.   The
decrease in the three-month period ended September 30, 2002 as compared  to  the
three-month  period ended September 30, 2001 was due primarily to a  substantial
decline  in  our  use of stock-based compensation: $30,000 in the  three  months
ended September 30, 2002 compared to $656,300 in the same period in 2001.   This
decline  was  offset  for  the nine-month period ended  September  30,  2002  by
increases in personnel and salaries.

     Research  and  Development.   Our research and  development  expenses  were
$106,800 for the three months ended September 30, 2002, an increase from $66,800
for  the  comparable  period  in 2001.  Research and development  expenses  also
increased to $307,500 for the nine months ended September 30, 2002 from $207,900
for  the  nine months ended September 30, 2001.   These increases were primarily
due  to  costs  incurred in connection with our establishment  of  research  and
development facilities in Vicksburg, Michigan and San Ramon, California, and the
employment  of  a  Chief Operating Officer, and research  and  development  work
conducted by a third party.

<APGE>15

     Sales  and  Marketing Expenses.  Our sales and marketing expenses  for  the
three  months ended September 30, 2002 equaled $52,900, an increase from $12,700
for the three months ended September 30, 2001.  Sales and marketing expenses for
the  nine  months  ended  September 30, 2002 reflected  a  similar  increase  to
$168,400 compared to $38,100 for the comparable period in 2001.  The increase in
both  the  three  and nine-month periods was due to our hiring  of  a  new  Vice
President  of  Marketing  and  the expansion of our company  promotion  efforts,
including  entering into contracts for new investor relations  programs  in  the
United  States  and  Europe.  Although we continue  to  develop  our  sales  and
marketing efforts, we intend to expand at a measured pace until our products are
ready for introduction into the market.

     Interest  Income and Expense.  We incurred interest expense of $300  during
the  three  months ended September 30, 2002, as compared to interest expense  of
$30,100 in the same period in 2001.  Interest expense equaled $900 for the  nine
months ended September 30, 2002, as compared to interest expense of $75,000  for
the  nine months ended September 30, 2001.  The decrease in both periods was due
primarily  to  interest on promissory notes issued in 2000, many of  which  were
converted to common stock in 2001.  We had interest income of $100 in the  three
months  ended September 30, 2002, as compared to no interest income in the  same
period  in  2001.   Interest  income equaled $100  for  the  nine  months  ended
September  30,  2002, as compared to no interest income in the  same  period  in
2001.   The  increase  in interest income in 2002 is due to  increased  cash  on
deposit.

     Net Loss.  As a result of the foregoing factors, our net loss decreased  to
$583,800  for  the three months ended September 30, 2002, from  a  net  loss  of
$1,538,200  for  the  three  months ended September  30,  2001.   Our  net  loss
decreased  to  $1,884,100  for the nine months ended  September  30,  2002  from
$2,307,100 for the nine months ended September 30, 2001.  Our net loss per share
decreased to $0.03 for the three months ended September 30, 2002, from $0.12 for
the  comparable period in 2001, and decreased to $0.11 for the nine months ended
September 30, 2002 from $0.19 for the nine months ended September 30, 2001.

<PAGE>16

Liquidity and Capital Resources

      Our operating plan for calendar year 2002 is focused on development of our
products.  It is our estimate that a cash requirement of $2,500,000 is  required
to  support this plan for the next twelve months.  We have received an aggregate
of $1,490,000 through September 30, 2002 and we are actively seeking additional
funding.   There  can be no assurance that such financing will be  available  at
terms favorable to us or at all.

     Since our inception, we have financed our operations through financing from
our  founders and private investors, a public offering under Regulation  D  Rule
504, and private placements under Regulation D Rule 505.

     We anticipate continued growth in our operations and a corresponding growth
in  our  operating expenses and capital expenditures.  We do not anticipate  any
revenue from operations for the next two or three years.  Therefore, our success
will  be dependent on funding from private placements of equity securities.   At
the  present time however, we have no agreements or other arrangements  for  any
such private placements.

      We  are in the fifth year of research and development, with an accumulated
loss  during the development stage of $8,861,500.  As of September 30, 2002,  we
are  uncertain as to the completion date of our research and development, or  if
products  will  ever be completed as a result of this research  and  development
activity.     We  anticipate  that the funds spent on research  and  development
activities   will  need  to  increase  prior  to  completion   of   a   product.
Additionally,  we may not be able to secure funding in the future  necessary  to
complete our intended research and development activities.

      These  conditions  give rise to substantial doubt  about  our  ability  to
continue as a going concern. Our financial statements do not include adjustments
relating  to the recoverability and classification of reported asset amounts  or
the  amount and classification of liabilities that might be necessary should  we
be  unable to continue as a going concern.  Our continuation as a going  concern
is  dependent upon our ability to obtain additional financing from the  sale  of
our common stock, as may be required, and ultimately to attain profitability.

     The report of our independent certified public accountants, included in our
most  recent  Annual Report on Form 10-KSB, contains a paragraph  regarding  our
ability to continue as a going concern.

<PAGE>17

Risk Factors

      Our business, financial condition or results of operations could be
materially and adversely affected by any of the following risks:

WE HAVE A HISTORY OF LOSSES, AND OUR ACCOUNTANTS HAVE RAISED DOUBTS ABOUT OUR
ABILITY TO CONTINUE AS A GOING CONCERN

     Since our inception in 1998, we have incurred substantial losses from
operations, resulting primarily from costs related to research and development
and building our infrastructure.  Because of our status as a development stage
company and the need to conduct additional research and development prior to
introducing products and services to the market, we expect to incur net losses
for the foreseeable future.  If our growth is slower than we anticipate or our
operating expenses exceed our expectations, our losses will be significantly
greater.  We may never achieve profitability.  Primarily as a result of these
recurring losses, our independent certified public accountants modified their
report on our December 31, 2001 financial statements to include an uncertainty
paragraph wherein they expressed substantial doubt about our ability to continue
as a going concern.

     We are in the fifth year of research and development, with an accumulated
loss during the development stage of $8,861,500.  We currently do not know when
our research and development will be completed, or if a product will ever result
from this research and development activity.    We anticipate that the funds
spent on research and development activities will need to increase significantly
prior to completion of research and development and commercialization of a
product.  Additionally, we may not be able to secure funding in the future
necessary to complete our intended research and development activities.

      These  conditions  give rise to substantial doubt  about  our  ability  to
continue as a going concern. Our financial statements do not include adjustments
relating  to the recoverability and classification of reported asset amounts  or
the  amount and classification of liabilities that might be necessary should  we
be  unable to continue as a going concern.  Our continuation as a going  concern
is  dependent upon our ability to obtain additional financing from the  sale  of
our common stock, as may be required, and ultimately to attain profitability.

<PAGE>18

WE REQUIRE IMMEDIATE ADDITIONAL CAPITAL.

       We  currently anticipate that based on our short-term forecast of raising
additional funds of $2.5 million, our available funds will be sufficient to meet
our  anticipated  needs for working capital, capital expenditures  and  business
operations  through  December 31, 2002.  However, we have raised  only
$1,490,000 through  September  30,  2002.  We therefore need to raise additional
capital. Obtaining  capital will be challenging in a difficult environment,  due
to  the economic  downturn  in  the  United  States  economy.   We  currently
have   no commitments  for  any  funding after December 31, 2002,  and  there
can  be  no assurance  that we will be able to obtain additional funding in the
future  from either  debt  or  equity financings, bank loans, collaborative
arrangements  or other  sources on terms acceptable to us, or at all.  If
adequate funds are  not available  or  are not available on acceptable terms
when required,  we  may  be required  to  significantly curtail our operations
or may not be  able  to  fund expansion, take advantage of unanticipated
acquisition opportunities, develop or enhance services or products or respond to
competitive pressures. Such inability could have a material adverse effect on
our business, results of operations  and financial  condition.  If additional
funds are raised through  the  issuance  of equity  or  convertible  debt
securities,  the  percentage  ownership  of   our stockholders  will  be
reduced, stockholders may experience additional  dilution and  such securities
may have rights, preferences and privileges senior to those
of our common stock.

OUR  CHIEF  EXECUTIVE  OFFICER  IS THE SUBJECT OF  SEC  AND  JUSTICE  DEPARTMENT
PROCEEDINGS FOR SECURITIES FRAUD.

       On August 7, 2002, the United States Attorney for the Eastern District of
New  York  and the Securities and Exchange Commission announced that  they  were
bringing  securities  fraud charges against Harry Masuda,  our  Chief  Executive
Officer,  for allegedly paying an unregistered broker an undisclosed  commission
in  a  1999  and 2000 private placement.  The allegations generally  charge  Mr.
Masuda  with  the  failure to adequately disclose to investors in  this  private
placement a commission agreement with Larry Bryant, an unlicensed broker-dealer.
Remedies  sought in these proceedings include criminal penalties and a bar  from
service  as  an officer or director of a publicly-traded company.   Although  we
believe  that the charges are unwarranted, and that the issues involved in  this
matter  were  resolved  over  two years ago to  the  full  satisfaction  of  all
investors, there can be no assurance that Mr. Masuda will be able to continue to
serve  as  our  Chief  Executive Officer in the event that  the  Securities  and
Exchange Commission receives the remedies that it seeks.

<PAGE>19

WE  ARE  A  DEVELOPMENT STAGE COMPANY, AND HAVE A LIMITED OPERATING  HISTORY  ON
WHICH TO EVALUATE OUR POTENTIAL FOR FUTURE SUCCESS.

       We  are a development stage company, and have yet to produce or sell  any
products  or services.  We have only a limited operating history upon which  you
can  evaluate  our  business and prospects, and have yet to  develop  sufficient
experience  regarding  actual  revenues to be received  from  our  products  and
services.   You must consider the risks and uncertainties frequently encountered
by  early  stage  companies  in new and rapidly evolving  markets.   If  we  are
unsuccessful in addressing these risks and uncertainties, our business,  results
of operations and financial condition will be materially and adversely affected.

ACTS OF TERRORISM, RESPONSES TO ACTS OF TERRORISM AND ACTS OF WAR MAY IMPACT OUR
BUSINESS AND OUR ABILITY TO RAISE CAPITAL.

      The September 11, 2001 terrorist attacks in the United States are
unprecedented acts of international terrorism.  We cannot predict the continued
effect of those acts on the economy of the United States or on the global
economy.  Future acts of war or terrorism, national or international responses
to such acts, and measures taken to prevent such acts may harm our ability to
raise capital or our ability to operate, especially to the extent we depend upon
activities conducted in foreign countries, such as Russia where we currently
perform research and development.  In addition, the threat of future terrorist
acts or acts of war may have effects on the general economy or on our business
that are difficult to predict.  We are not insured against damage or
interruption of our business caused by terrorist acts or acts of war.

OUR  FUTURE  REVENUES ARE UNPREDICTABLE AND OUR QUARTERLY OPERATING RESULTS  MAY
FLUCTUATE SIGNIFICANTLY.

      We have a very limited operating history, and have no revenue to date.  We
cannot  forecast  with any degree of certainty whether any of  our  products  or
services will ever generate revenue or the amount of revenue to be generated  by
any  of our products or services. In addition, we cannot predict the consistency
of  our  quarterly  operating results.  Factors which may  cause  our  operating
results to fluctuate significantly from quarter to quarter include:

  -  our ability to attract new and repeat customers;

  -  our ability to keep current  with  the evolving requirements of our target
     market;

  -  our ability to protect our proprietary technology;

  -  the  ability  of  our   competitors to offer new or enhanced  products  or
     services; and

  -  unanticipated   delays or cost  increases  with  respect to  research  and
     development.

       Because  of  these  and other factors, we believe that quarter-to-quarter
comparisons of our results of operations are not good indicators of  our  future
performance.  If our operating results fall below the expectations of securities
analysts and investors in some future periods, then our stock price may decline.

<PAGE>20

ESTABLISHING OUR REVENUES AND ACHIEVING PROFITABILITY WILL DEPEND ON OUR ABILITY
TO DEVELOP AND COMMERCIALIZE OUR PRODUCTS.

      Much of our ability to establish revenues and to achieve profitability and
positive  cash flows from operations will depend on the successful  introduction
of  our  products  in  development.  Products based  on  our  technologies  will
represent new methods of treatment and preservation.  Our prospective customers,
including  blood banks, hospitals and clinics, will not use our products  unless
they  determine  that the benefits provided by these products are  greater  than
those available from competing products.  Even if the advantage from our planned
products is clinically established, prospective customers may not elect  to  use
such products for a variety of reasons.

       We  may  be  required to undertake time-consuming and costly  development
activities  and  seek regulatory clearance or approval for  new  products.   The
completion of the development and commercialization of any of our products under
development   remains  subject  to  all  of  the  risks  associated   with   the
commercialization  of  new products based on innovative technologies,  including
unanticipated  technical or other problems, manufacturing difficulties  and  the
possible  insufficiency  of  the funds allocated  for  the  completion  of  such
development.

WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.

       As  a  development  stage company, we are entering a biological  material
preservation  market  that  is  presently  addressed  by  large  companies  with
extensive financial resources.  Those companies include DuPont and Baxter, among
others.  Additionally, smaller companies with which we may compete include
LifeCell Corporation for platelet preservation, Cerus for viral inactivation  of
platelets and other blood products and Cryo Life for preserving heart valves  by
cryo-preservation.  We  have limited funds with which to  develop  products  and
services, and many of our competitors have significantly more resources than  we
do.   These  companies  are  active in research and  development  of  biological
material  preservation,  and  we  do  not  know  the  current  status  of  their
development  efforts.  Most of the above competitors have significantly  greater
financial  resources,  technical expertise and managerial capabilities  than  we
currently possess.

WE MAY FAIL TO OBTAIN GOVERNMENT APPROVAL OF OUR PROCESSES

       The  United  States  Food  & Drug Administration  ("FDA")  regulates  the
commercial  distribution and marketability of medical solutions  and  equipment.
In  the  event  that we determine that these regulations apply to  our  proposed
products,  we  will  need  to obtain FDA approval for  such  distribution.   The
process  of  obtaining FDA approval may be expensive, lengthy and unpredictable.
We  have  not developed our products to the level where these approval processes
can  be  started.  We do not know if such approval could be obtained in a timely
fashion,  if  at  all.   In the event that we do not receive  any  required  FDA
approval for certain products, we would not be able to sell such products in the
United States.

PAGE>21

       The  regulation of our processes and products outside the  United  States
will  vary  by  country.   Noncompliance with foreign country  requirements  may
include  some  or  all  of  the  risks associated with  noncompliance  with  FDA
regulation as well as other risks.

WE MAY FAIL TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS.

       We  believe that the establishment of strategic partnerships will greatly
benefit  the  growth of our business, and we intend to seek out and  enter  into
strategic  alliances.   We  may  not  be able  to  enter  into  these  strategic
partnerships on commercially reasonable terms or at all.  Even if we enter  into
strategic  alliances,  our  partners  may not  attract  significant  numbers  of
customers  or  otherwise prove advantageous to our business.   Our inability  to
enter  into new distribution relationships or strategic alliances could  have  a
material and adverse effect on our business.

SHARES ELIGIBLE FOR FUTURE SALE BY OUR CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT
OUR STOCK PRICE.

       To  date, we have had a very limited trading volume in our common  stock.
As  long as this condition continues, the sale of a significant number of shares
of  common  stock at any particular time could be difficult to  achieve  at  the
market  prices  prevailing  immediately before  such  shares  are  offered.   In
addition, sales of substantial amounts of common stock, including shares  issued
upon  the  exercise  of outstanding options and warrants, under  Securities  and
Exchange  Commission Rule 144 or otherwise could adversely affect the prevailing
market  price of our common stock and could impair our ability to raise  capital
at that time through the sale of our securities.

OUR  COMMON  STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE; OUR  COMMON  STOCK  IS
"PENNY STOCK".

       The  market price of our common stock is likely to be highly volatile  as
the  stock  market  in  general,  and the market  for  technology  companies  in
particular,  has  been highly volatile.  The trading prices of  many  technology
companies' stocks have recently been highly volatile and have recorded lows well
below historical highs.

       Factors that could cause such volatility in our common stock may include,
among other things:

   -  actual  or  anticipated fluctuations in our quarterly operating results;

   -  announcements of  technological  innovations;

   -  changes  in  financial  estimates  by  securities  analysts;

   -  conditions  or  trends  in our industry;  and

   -  changes  in  the  market  valuations  of  other comparable companies.

<PAGE>22

       In  addition,  our stock is currently traded on the NASD  O-T-C  Bulletin
Board and it is uncertain that we will be able to successfully apply for listing
on  the  AMEX, the NASDAQ National Market, or the Nasdaq SmallCap Market in  the
foreseeable  future due to the trading price for our common stock,  our  working
capital and revenue history.  Failure to list our shares on the AMEX, the Nasdaq
National Market, or the Nasdaq SmallCap Market, will impair the liquidity of our
common stock.

       The  Securities  and  Exchange Commission has adopted  regulations  which
generally define a "penny stock" to be any security that 1) is priced under five
dollars, 2) is not traded on a national stock exchange or on NASDAQ, 3)  may  be
listed  in the "pink sheets" or the NASD OTC Bulletin Board, 4) is issued  by  a
company  that has less than $5 million in net tangible assets and  has  been  in
business less than three years, or by a company that has under $2 million in net
tangible  assets  and has been in business for at least three  years,  or  by  a
company that has revenues of less than $6 million for 3 years.

       Penny  stocks  can be very risky: penny stocks are low-priced  shares  of
small companies not traded on an exchange or quoted on NASDAQ.  Prices often are
not available.  Investors in penny stocks are often unable to sell stock back to
the  dealer  that  sold  them  the stock.  Thus an  investor  may  lose  his/her
investment.   Our common stock is a "penny stock" and thus is subject  to  rules
that  impose additional sales practice requirements on broker/dealers  who  sell
such  securities  to  persons other than established  customers  and  accredited
investors,  unless  the  common stock is listed on The Nasdaq  SmallCap  Market.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to  sell our securities, and may adversely affect the ability of holders of  our
common stock to resell their shares in the secondary market.

SOME OF THE INFORMATION IN THIS QUARTERLY REPORT CONTAINS FORWARD-LOOKING
STATEMENTS.

       Some  of the information in this Quarterly Report on Form 10-QSB contains
forward-looking statements that involve substantial risks and uncertainties. You
can  identify  these statements by forward-looking words such as "may",  "will",
"expect",  "intend",  "anticipate",  "believe",  "estimate"  and  "continue"  or
similar  words.   You should read statements that contain these words  carefully
because they:

  -  discuss our expectations about our future performance;

  -  contain  projections  of our future operating results  or  of  our  future
     financial condition; or

  -  state other "forward-looking" information.

<PAGE>23

       We  believe  it  is  important to communicate  our  expectations  to  our
stockholders.  There may be events in the future, however, that we are not  able
to predict accurately or over which we have no control.  The risk factors listed
in  this section, as well as any cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ  materially  from the expectations we describe in  our  forward-  looking
statements.  Before you invest in our common stock, you should be aware that the
occurrence of any of the events described in these risk factors and elsewhere in
this  prospectus  could  have a material and adverse  effect  on  our  business,
results  of  operations and financial condition and that upon the occurrence  of
any of these events, the trading price of our common stock could decline and you
could lose all or part of your investment.

ITEM 3.  CONTROLS AND PROCEDURES

      On November 11, 2002, management concluded its evaluation of the
effectiveness of our disclosure controls and procedures. As of that date, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company maintains effective disclosure controls and procedures that ensure
information required to be disclosed in the Company's reports under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms.  Specifically,
the disclosure controls and procedures assure that information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.  There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of management's evaluation.

PART II -- OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS.

     Not applicable.

     ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     Not applicable.

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     Not applicable.

<PAGE>24

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

     On October 18, 2002,we held our annual shareholders meeting  in San
Jose, California.  There were a total of 10,907,232 shares of voting common
stock present at the meeting in person and by proxy.  The following individuals
were elected at the annual shareholders meeting to serve as members of our Board
of Directors until the election of their respective successors:

Name              Votes For
--------------    ----------
Paul Okimoto      10,907,232
Harry Masuda      10,907,232
George Tsukuda    10,907,232

     Shareholders voted 10,670,197 shares in favor of a proposal to approve our
2001 Stock Option Plan, a copy of which was mailed to each shareholder of record
prior to the meeting.  237,035 shares abstained from voting on this proposal,
and no shares voted against it.

     Shareholders voted 10,819,223 shares in favor of a proposal to amend our
Articles of Incorporation to authorize the issuance of up to 5,000,000 shares of
blank check preferred stock.  88,009 shares abstained from voting on this
proposal, and no shares voted against it.

     Shareholders voted 10,907,232 shares in favor of a proposal to amend our
Articles of Incorporation to change the Company's name to "Human BioSystems." No
shares abstained from voting on this proposal, and no shares voted against it.

     Shareholders voted 10,670,197 shares in favor of a proposal to amend our
bylaws to permit our Board of Directors to determine the date of each annual
meeting of shareholders.  237,035 shares abstained from voting on this proposal,
and no shares voted against it.

     Shareholders voted 10,670,197 shares in favor of a proposal to ratify the
Board's engagement of L.L. Bradford & Company, LLC as our auditors.  237,035
shares abstained from voting on this proposal, and no shares voted against it.


<PAGE>25

     ITEM 5.  OTHER INFORMATION.

         Not applicable.

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits.

       Exhibit No.     Title of Exhibit
       ----------      -----------------
       99.01           Certification of Chief Executive Officer
                       and Chief Financial Officer


    (b)  Reports on Form 8-K
         ------------------------
        Report on Form 8-K dated November 13, 2002, reporting
        change of Company's name to Human BioSystems.


                                   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.


                                    HUMAN BIOSYSTEMS


Date: November 14, 2002     By: /s/ Harry Masuda
                                    ----------------------------
                                    Harry Masuda
                                    Chief Executive Officer


<PAGE>26
                                 CERTIFICATION

     I, Harry Masuda, certify that:

     1.   I have reviewed this quarterly report on Form 10-QSB of Human
     BioSystems;

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

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

     4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a - 14 and 15d - 14) for the registrant and we have:

          a.   designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

          b.   evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this quarterly report (the "Evaluation Date"); and

          c.   presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

          a.   All significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          b.   Any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

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

     Date: November 14, 2002

                      /s/ Harry Masuda
                     ---------------------------
                        Harry Masuda
                        Chief Executive Officer and
                        Chief Financial Officer