<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549
                  ------------------------------------------
                                    FORM 10-Q

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
    For the quarterly period ended September 30, 2001.

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
    For the transition period from:  ______________ to ________________

                   ------------------------------------------
                        Commission file number 0 - 26476
                   ------------------------------------------

                               GLYCOGENESYS, INC.
             (Exact name of Registrant as specified in its charter.)

         NEVADA                                              33-0231238
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                           Identification no.)

                              Park Square Building
                         31 St. James Avenue, 8th Floor
                           Boston, Massachusetts 02116
         (Address of principal executive offices, including zip code.)

                                 (617) 422-0674
               Registrant's telephone number, including area code.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by the Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                        YES |X|             NO |_|

The number of shares outstanding of the Registrant's Common Stock, $.01 par
value per share, at November 14, 2001 was 29,209,459 shares.
<PAGE>

                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)


                                      INDEX

                                                                            Page
                                                                            ----

Part I - Financial Information

   Item 1.  Financial Statements

            Consolidated Balance Sheets as of September 30, 2001
              and December 31, 2000 (Unaudited) .......................     2

            Consolidated Statements of Operations
              for the Three and Nine Months Ended September 30, 2001
              and 2000 (Unaudited).....................................     3

            Consolidated Statements of Cash Flows
              for the Nine months ended September 30, 2001
              and 2000 (Unaudited).....................................     4

            Notes to Unaudited Consolidated Financial Statements ......  5-14

   Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations............ 15-31

Part II - Other Information

   Item 2.  Changes in Securities......................................    32

   Item 4.  Submission of Matters to a Vote of Securities Holders......    32

   Item 6.  Exhibits and Report on Form 8-K............................    33

Signatures.............................................................    34
<PAGE>

                                                                          Page 2
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                              ASSETS
                                              ------
                                                                          September 30,   December 31,
                                                                              2001            2000
                                                                          ------------    ------------
<S>                                                                       <C>             <C>
Current assets:
    Cash and cash equivalents                                             $  2,827,634    $  2,547,353
    Stock subscription receivable                                                   --       2,000,000
    Due from Elan International Services, Ltd.                                 280,887              --
    Prepaid expenses and other current assets                                  314,056         288,134
                                                                          ------------    ------------
      Total current assets                                                   3,422,577       4,835,487
                                                                          ------------    ------------

Property and equipment, at cost:
    Computer, office and laboratory equipment                                  463,693         455,994
    Furniture and fixtures                                                     284,748         281,274
    Motor vehicles                                                              25,026          25,026
                                                                          ------------    ------------
                                                                               773,467         762,294
       Less-accumulated depreciation and amortization                         (428,610)       (324,932)
                                                                          ------------    ------------
                                                                               344,857         437,362
                                                                          ------------    ------------

Other assets:
    Notes receivable - related parties                                              --         128,659
    Restricted cash                                                            108,128         108,128
    Deposits                                                                    79,831         269,481
                                                                          ------------    ------------

      Total other assets                                                       187,959         506,268
                                                                          ------------    ------------

      Total assets                                                        $  3,955,393    $  5,779,117
                                                                          ============    ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY
                               ------------------------------------
Current liabilities:
    Accounts payable                                                      $  1,113,641    $  1,360,615
    Accrued liabilities                                                        364,205         797,964
    Net liabilities of discontinued operations                                  76,209         908,571
                                                                          ------------    ------------
      Total current liabilities                                              1,554,055       3,067,150
                                                                          ------------    ------------

Other equity                                                                        --         866,216
                                                                          ------------    ------------

Commitments and contingencies (Note 5)

Stockholders' equity:
    Preferred stock, $.01 par value
     Authorized -5,000,000 shares
      Series A convertible, exchangeable preferred stock, 7,500
       authorized; 4,944.44 and no shares issued and outstanding as of
       September 30, 2001 and December 31, 2000, respectively
       (liquidation value $12,015,000 and $0, respectively)                         49              --
      Series B convertible preferred stock, 6,000 authorized;
       - 0- shares issued and outstanding as of September 30, 2001 and
       December 31, 2000, respectively (liquidation value $1,700 per
       share)                                                                       --              --
      Series C convertible preferred stock, 1,117 authorized;
       1,116.79 and -0- shares issued and outstanding as of September
       30, 2001 and December 31, 2000, respectively                                 11              --
    Common stock, $.01 par value
    Authorized -100,000,000 shares
    Issued and outstanding - 29,183,541 and 23,998,504
      shares at September 30, 2001 and December 31, 2000, respectively         291,835         239,985
    Additional paid-in capital                                              68,533,115      48,243,184
    Stock dividend to be distributed                                           188,948              --
    Note receivable from former officer -Issuance of common stock           (2,675,000)     (2,675,000)
    Accumulated deficit                                                    (63,937,620)    (43,962,418)
                                                                          ------------    ------------
      Total stockholders' equity                                             2,401,338       1,845,751
                                                                          ------------    ------------

      Total liabilities and stockholders' equity                          $  3,955,393    $  5,779,117
                                                                          ============    ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>

                                                                          Page 3
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                    Unaudited


<TABLE>
<CAPTION>
                                              Three Months Ended September 30,  Nine Months Ended September 30,
                                              --------------------------------  -------------------------------
                                                    2001            2000              2001            2000
                                                ------------    ------------      ------------    ------------
<S>                                             <C>             <C>               <C>             <C>
Operating expenses:
    Research and development                    $    438,441    $  1,976,539      $  3,165,073    $  3,816,815
    General and administrative                       787,783         942,390         3,170,826       3,068,958
    Restructuring charge (Note 3)                         --        (251,970)         (182,625)      1,478,957
                                                ------------    ------------      ------------    ------------
      Total operating expenses                     1,226,224       2,666,959         6,153,274       8,364,730
                                                ------------    ------------      ------------    ------------

Operating loss                                    (1,226,224)     (2,666,959)       (6,153,274)     (8,364,730)
                                                ------------    ------------      ------------    ------------

Other income (expense):
    Loss in equity of SafeScience Newco, Ltd.    (13,145,604)             --       (13,145,604)             --
    Other expense                                     (6,550)          3,418           (31,330)       (217,587)
    Interest income                                   20,310          53,154            50,247         181,615
                                                ------------    ------------      ------------    ------------
         Total other income (expense)            (13,131,844)         56,572       (13,126,687)        (35,972)
                                                ------------    ------------      ------------    ------------

Loss from continuing operations                  (14,358,068)     (2,610,387)      (19,279,961)     (8,400,702)

Loss from discontinued operations                         --      (1,464,272)         (244,229)     (4,008,554)
                                                ------------    ------------      ------------    ------------
Net loss before preferred stock dividend         (14,358,068)     (4,074,659)      (19,524,190)    (12,409,256)
Accretion of dividend on preferred stock            (188,948)             --          (188,948)             --
                                                ------------    ------------      ------------    ------------
Net loss applicable to common stock             $(14,547,016)   $ (4,074,659)     $(19,713,138)   $(12,409,256)
                                                ============    ============      ============    ============

Basic and diluted net loss per common share:
From continuing operations                      $      (0.50)   $      (0.15)     $      (0.72)   $      (0.48)
                                                ============    ============      ============    ============

From discontinued operations                    $         --    $      (0.08)     $      (0.01)   $      (0.23)
                                                ============    ============      ============    ============

Before preferred stock dividend                 $      (0.50)   $      (0.23)     $      (0.73)   $      (0.71)
Accretion of dividend on preferred stock               (0.01)             --             (0.01)             --
                                                ------------    ------------      ------------    ------------
Net loss applicable to common stock             $      (0.51)   $      (0.23)     $      (0.74)   $      (0.71)
                                                ============    ============      ============    ============

Weighted average number of common
    shares outstanding                            28,860,822      17,928,889        26,595,151      17,567,018
                                                ============    ============      ============    ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>

                                                                          Page 4
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                               ----------------------------
                                                                                   2001            2000
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
Cash flows from operating activities:
    Net loss  before preferred stock dividend                                  $(19,524,190)   $(12,409,256)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
      Operating expenses paid in common
        stock, options and warrants                                                 701,421         327,383
      Compensation charges related to loan forgiveness                                   --         155,343
      Non-cash compensation                                                         369,452              --
      Reclassification of other equity                                             (866,216)             --
      Equity adjustment in SafeScience Newco, Ltd.                               13,145,604              --
      Provision for loss on loans to related parties                                     --         325,000
      Depreciation and amortization                                                 103,678         144,013
      Changes in assets and liabilities:
           Accounts receivable                                                           --         (95,588)
           Inventory                                                                     --        (305,713)
           Due from Elan International Services, Ltd.                              (280,887)             --
           Prepaid expenses and other current assets                                (25,922)       (287,210)
           Accounts payable                                                        (246,974)      1,580,217
           Accrued liabilities                                                     (433,759)        492,339
           Net liabilities of discontinued operations                              (832,362)             --
                                                                               ------------    ------------
             Net cash used in operating and discontinued activities              (7,890,155)    (10,073,472)
                                                                               ------------    ------------

Cash flows from investing activities:
    Purchase of property and equipment                                              (11,173)       (137,848)
    Deposits                                                                        189,650              --
    Loans to related parties                                                        128,659          16,681
                                                                               ------------    ------------
             Net cash provided by (used in) investing activities                    307,136        (121,167)
                                                                               ------------    ------------

Cash flows from financing activities:
    Proceeds from sale of common stock, net of issuance costs                     7,863,300      10,496,045
                                                                               ------------    ------------
                Net cash provided by financing activities                         7,863,300      10,496,045
                                                                               ------------    ------------

Net increase in cash and cash equivalents                                           280,281         301,406

Cash and cash equivalents, beginning balance                                      2,547,353       3,377,067
                                                                               ------------    ------------

Cash and cash equivalents, ending balance                                      $  2,827,634    $  3,678,473
                                                                               ============    ============

Supplemental disclosure of non-cash investing and financing activities:
    Purchase of common and preferred stock of SafeScience Newco, Ltd.          $ 12,015,000    $         --
                                                                               ============    ============
    Series A preferred stock issued for investment in SafeScience Newco, Ltd   $ 12,015,000    $         --
                                                                               ============    ============
    Accretion of dividend on preferred stock                                   $    188,948    $         --
                                                                               ============    ============

Supplemental disclosure of cash flow information:
    Cash paid for interest                                                     $     20,099    $         --
                                                                               ============    ============
    Exchange of common stock for notes receivable                              $         --    $    272,000
                                                                               ============    ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>

                                                                          Page 5
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


(1) Organization and Summary of Significant Accounting Policies

(a) Organization

GlycoGenesys, Inc. (formerly known as SafeScience, Inc.), (the Company) is a
biotechnology company developing novel pharmaceutical products based on
carbohydrate compounds. The Company's lead drug candidate, GBC-590, a potential
treatment for multiple forms of cancer, is in Phase II clinical trials for
pancreatic cancer and recently completed Phase II clinical trials for colorectal
cancer. While the Company also develops agricultural products it continues to
seek strategic alternatives, including the sale of its agricultural products
business area. The Company's near term objective is to continue to proceed
through the various phases of United States Food and Drug Administration (FDA)
clinical trials for GBC-590 and build its therapeutics pipeline.

On July 10, 2001, the Company closed on a collaborative transaction with Elan
Corporation, plc, ("Elan") an Irish company, and its subsidiary, Elan
International Services, Ltd. ("EIS"). As part of the transaction, EIS and the
Company formed a Bermuda corporation, SafeScience Newco, Ltd., to develop
GBC-590 in the field of oncology. The Company owns all of the common stock and
60.2% of the non-voting preferred shares of SafeScience Newco, Ltd. and EIS owns
39.8% of the non-voting preferred shares of SafeScience Newco, Ltd. Of the
outstanding combined common and non-voting preferred shares of SafeScience
Newco, Ltd., the Company owns 80.1% and EIS owns 19.9%. As part of the
transaction, Elan and the Company entered into license agreements under which
the Company licensed to SafeScience Newco, Ltd. rights to the GBC-590 compound
and Elan licensed to SafeScience Newco, Ltd. proprietary drug delivery
technology.

As part of the transaction, EIS also purchased 2,700,000 shares of the Company's
common stock ("Common Stock"), 1,116.79 shares of the Company's Series C
non-voting convertible preferred stock ("Series C Preferred Stock") and a
five-year warrant to purchase 381,679 shares of Common Stock at an exercise
price of $2.43 per share for an aggregate purchase price of $5,000,000. Each
share of Series C Preferred Stock is convertible into one thousand shares of
Common Stock.

EIS also purchased 4,944.44 shares of the Company's Series A convertible
exchangeable non-voting preferred stock ("Series A Preferred Stock") at $2,430
per share, for a total of $12,015,000. Each share of Series A Preferred Stock is
convertible into one thousand shares of common stock. The Company contributed to
SafeScience Newco, Ltd. the proceeds from the issuance of the Series A Preferred
Stock to Elan in exchange for securities of SafeScience Newco, Ltd. EIS also
contributed $2,985,000 to SafeScience Newco, Ltd. for its shares of preferred
stock of SafeScience Newco, Ltd. In addition, Elan granted SafeScience Newco,
Ltd. a license to Elan's proprietary drug delivery technology for a license fee
of $15,000,000.
<PAGE>

                                                                          Page 6
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


The Series A Preferred Stock bears a mandatory stock dividend of 7%, compounded
annually. The Series A Preferred Stock is exchangeable at the option of EIS at
any time for all of the preferred stock of SafeScience Newco, Ltd. held by the
Company which, if exchanged, would give EIS 50% ownership of the initial amount
of combined common and preferred stock of SafeScience Newco, Ltd. After July 10,
2003, the Series A Preferred Stock is convertible by EIS into shares of the
Company's Common Stock at the rate of $2.43 per share. If the Series A Preferred
Stock is outstanding as of July 10, 2007, the Company will exchange the Series A
Preferred Stock and accrued dividends, at its option, for either cash or shares
of common stock of the Company having a then fair market value of the amount
due.

EIS and the Company intend to fund SafeScience Newco, Ltd. pro rata, based on
their respective percentage ownership of the combined outstanding common and
preferred stock of SafeScience Newco, Ltd. Subject to mutual agreement, EIS will
purchase up to $9,612,000 of Series B Preferred Stock to provide the Company
with funds for its pro rata share of development funding for SafeScience Newco,
Ltd.

For financial reporting purposes, the value initially recorded as the Company's
investment in SafeScience Newco, Ltd. is the same as the fair value of the
Series A Preferred Stock issued, which was $12,015,000. The technology obtained
by SafeScience Newco, Ltd. from Elan was expensed at inception because the
feasibility of using the contributed technology in conjunction with GBC-590 had
not been established and SafeScience Newco, Ltd. had no alternative future use
for the contributed technology.

While the Company owns 80.1% of the outstanding stock of SafeScience Newco,
Ltd., EIS has retained significant minority investor rights, including 50%
control of the management committee which oversees the GBC-590 program, that are
considered "participating rights" as defined in the Emerging Issues Task Force
Consensus No. 96-16. Accordingly, the Company does not consolidate the financial
statements of SafeScience Newco, Ltd., but instead accounts for its investment
in SafeScience Newco, Ltd. under the equity method of accounting. Net losses of
SafeScience Newco, Ltd. will be recognized by the Company at its 80.1% interest
to the extent of the Company's investments, advances and commitments to make
future investments in or advances to SafeScience Newco, Ltd. During both the
three months and nine months ended September 30, 2001, the Company's equity in
loss of SafeScience Newco, Ltd. was $13,145,604, which consisted of the
Company's 80.1% share of immediate write-off at inception of the contributed
technology by Elan to SafeScience Newco, Ltd. and SafeScience Newco's operating
expenses of approximately $1,411,491 for the nine months ended September 30,
2001. The difference of $280,887 is carried on the balance sheet as due from
EIS. SafeScience Newco, Ltd. is a development stage company with no revenue.

GlycoGenesys, Inc. was formed in 1992 and has two wholly-owned subsidiaries:
International Gene Group, Inc. and SafeScience Products, Inc. International Gene
Group, Inc. focuses on the development of carbohydrate-based pharmaceutical
products related to two major areas of
<PAGE>

                                                                          Page 7
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


disease: cancer and fungal infections. SafeScience Products, Inc. focuses on
developing agricultural products some of which are also based upon carbohydrate
chemistries. These products were either licensed from or jointly developed with
third parties (Note 5). GlycoGenesys, Inc., International Gene Group, Inc. and
SafeScience Products, Inc. maintain an office in Boston, Massachusetts.

As of September 30, 2001, the Company has an accumulated deficit of $63,938,000.
In the Annual Report on Form 10-K for December 31, 2000, the Company reported
that its financial statements were subject to issues about its ability to
continue as a going-concern. The Company's future is dependent upon its ability
to obtain financing to fund its operations. The Company expects to incur
substantial additional costs, including costs related to ongoing research and
development activities, preclinical studies and clinical trials. On July 10,
2001 the Company completed a business venture in a series of transactions with
Elan and EIS which included the purchase by EIS of $17,015,000 of the Company's
securities, of which $12,015,000 was used to license technology from Elan, and
provided future funding, subject to conditions, for the Company's portion of the
research and development costs of GBC-590 in the field of oncology in the amount
of $9,612,000. As a result of this event, the Company believes that funding from
EIS combined with its existing funds will be sufficient to fund its expenses and
capital requirements as currently planned into the second quarter of 2002.

Principal risks to the Company include the successful development and marketing
of human therapeutic products to obtain profitable operations, dependence on
collaborative partners, the need to obtain adequate financing to fund future
operations, United States Food and Drug Administration approval and other
regulatory agencies, clearance and regulation, dependence on key individuals and
competition from substitute products and larger companies. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Certain Factors That May Affect Future Results" for additional risks the Company
faces.

(b) Principles of Consolidation

The Company's consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. As previously noted, the Company's
80.1% interest in SafeScience Newco, Ltd. is accounted for under the equity
method. All material intercompany transactions and accounts have been eliminated
in the consolidated financial statements.

(c) Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission, and reflect all adjustments, consisting of only normal
recurring adjustments, which, in the opinion of management, are necessary for a
fair statement of the results of the interim periods presented. These financial
statements do not include disclosures associated with the annual financial
<PAGE>

                                                                          Page 8
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


statements and, accordingly, should be read in conjunction with the attached
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the financial statements and footnotes for the year ended
December 31, 2000, included in the Company's Annual Report on Form 10-K.

(d) Reclassifications

Certain prior period amounts have been reclassified to conform with current
period presentation.

(e) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles 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 operational expenses during the reporting period. Actual
results could differ from those estimates.

(f) Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents at September 30, 2001 were $2,827,634, including
$2,809,994 held by a single bank. Of that amount $2,409,729 was in an overnight
investment account, which reinvests daily in government securities funds and
money market funds. Restricted cash represents funds held under an irrevocable
standby letter of credit. The letter of credit serves as a security for the
Company's facility lease. The funds are being held in an investment account.

(g) Depreciation and Amortization

The Company provides for depreciation and amortization using straight-line and
accelerated declining balance methods to allocate the cost of property and
equipment over their estimated useful lives as follows:

          Asset Classification             Estimated Useful Life
          --------------------             ---------------------

Computer, office and laboratory equipment       3 - 5 years
Furniture and fixtures                              7 years
Motor vehicles                                      4 years

(h) Research and development

Research and development costs, which primarily consist of wages, expenses for
consultants, supplies and testing, are charged to operations as incurred.

(i) Net Loss Per Share
<PAGE>

                                                                          Page 9
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


The Company applies Statement of Financial Accounting Standards Statement (SFAS)
No. 128, Earnings per Share. Basic loss per share is computed using the
weighted-average number of common shares outstanding. The dilutive effect of the
potential common shares consisting of outstanding stock options and warrants is
determined using the treasury stock method in accordance with SFAS No. 128.
Diluted weighted average shares outstanding at September 30, 2001 and 2000
excluded the potential common shares from convertible preferred stock, warrants
and stock options because to do so would be antidulitive for the periods
presented. At September 30, 2001 and 2000, there are 5,676,508 and 302,754
warrants outstanding, respectively, with a weighted average exercise price of
$2.78 and $14.60, respectively, and 1,134,642 and 921,685 stock options
outstanding, respectively, with a weighted average exercise price of $5.60 and
$7.96, respectively, which were omitted from earnings per share calculations,
and 6,061,230 shares issuable upon conversion of outstanding preferred stock.

(j) Comprehensive Income (Loss)

Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in the financial statements.
Comprehensive income is defined as the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
nonowner sources. The comprehensive loss is the same as reported net loss for
all periods presented.

(k) Disclosures about Segments of an Enterprise

SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information, establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS No. 131 also establishes standards for related disclosures
about products and services and geographic areas. Operating segments are
identified as components of an enterprise about which separate discrete
financial information is available for evaluation by the chief operating
decision-maker, or decision-making group, in making decisions how to allocate
resources and assess performance. Due to the discontinuation of its consumer and
commercial products business, the Company operates in one segment.

(l) Concentrations of Risk

SFAS No. 105, Disclosure of Information About Financial Instruments with
Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit
Risk, requires disclosure of any significant off-balance-sheet risk and credit
risk concentrations. The Company has no significant off-balance-sheet risk or
credit risk concentrations. The Company maintains its cash and cash
<PAGE>

                                                                         Page 10
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


equivalents primarily with a single financial institution, which invests in
investment-grade securities.

(2) STOCKHOLDER'S EQUITY

(a) Private Placement Offerings

On August 27, 2001 and October 11, 2001, the Company sold an aggregate of
470,370 shares of its common stock and warrants to purchase 235,186 shares of
common stock resulting in proceeds to the Company of approximately $593,000, net
of approximately $42,000 of placement fees. The common stock was sold at a price
of $1.35 per share. The warrants have an exercise price of $1.90 per share and
have a term of 5 years.

On July 10, 2001, the Company closed a business venture with Elan and EIS. As
part of the transaction, EIS and the Company formed a Bermuda exempted limited
liability company, SafeScience Newco, Ltd., to further advance GBC-590. The
Company owns all of the common stock and 60.2% of the non-voting convertible
preferred shares of SafeScience Newco, Ltd. and EIS owns 39.8% of the non-voting
convertible preferred shares of SafeScience Newco, Ltd. Of the outstanding
combined common and non-voting convertible preferred shares of SafeScience
Newco, Ltd., the Company owns 80.1% and EIS owns 19.9%.

As part of the transaction, EIS also purchased 2,700,000 shares of Common Stock,
1,116.79 shares of Series C Preferred convertible into 1,116,790 shares of
Common Stock after two years, and a five-year warrant to purchase 381,679 shares
of Common Stock at an exercise price of $2.43 per share for an aggregate
purchase price of $5,000,000. EIS also purchased 4,944.44 shares of Series A
Preferred Stock for $12,015,000. The Series A Preferred Stock bears a 7%
mandatory stock dividend. The Series A Preferred Stock is exchangeable at the
option of EIS at any time for all of the preferred stock of SafeScience Newco,
Ltd. held by the Company which, if exchanged, would give EIS 50% ownership of
the fully-diluted equity interest in SafeScience Newco, Ltd. The Series A
Preferred Stock is redeemable by the Company, if still outstanding on July 10,
2007, at its option, for either cash or shares of Common Stock of the Company at
their fair market value at the time of redemption. The proceeds from the
issuance of the Series A Preferred Stock were used by the Company to purchase
its equity interest in SafeScience Newco, Ltd. Consequently, the value assigned
to the Company's investment in SafeScience Newco, Ltd. is the same as the value
of the Series A Preferred Stock issued, which was approximately $12,015,000. In
connection with this transaction the Company recorded $262,064 as a beneficial
conversion charge representing the current value of the pro rata portion of the
warrant to purchase 381,679 shares at $2.43 per share.

Upon mutual agreement, EIS and the Company will fund SafeScience Newco, Ltd.'s
research and development according to their respective equity holdings in
SafeScience Newco, Ltd. Subject to mutual agreement, EIS will purchase from the
Company up to $9.612 million of the
<PAGE>

                                                                         Page 11
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


Company's Series B convertible preferred stock ("Series B Preferred Stock"),
which bears a 7% dividend payable-in-kind and is convertible into Common Stock.
The Company will utilize the proceeds of the sale of Series B Preferred Stock to
fund its portion of SafeScience Newco, Ltd.'s research and development costs.

On July 19, 2001, the SEC Staff made an announcement, Topic No. D-98, which will
require that certain equity instruments that have liquidation features similar
to redemption features be reclassified as other equity. If the current terms of
the Series A Preferred stock remain in effect, this announcement is to be
applied retroactively in the Company's fourth quarter 2001, by restating the
financial statements of prior periods and reclassifying out of equity the
liquidation value of the Series A Preferred Stock.

(b) Stock Grants and Stock Option Plan

The Company has entered into agreements with various employees and consultants
for the grant of stock options and shares of common stock at prices determined
by the Company's Compensation Committee. During the nine months ended September
30, 2001 and 2000, the Company issued 197,248 and 560,391 shares of common
stock, respectively, and recorded charges to operations of $96,093 and $597,522
relating to those issuances of common stock. During the nine months ended
September 30, 2001, the Company granted options to purchase 425,629 shares of
common stock and recorded charges to operations of $296,952 relating to these
issuances.

The following table summarizes all stock option activity to employees and
consultants for services for the nine months ended September 30, 2001.

------------------------------------------------------------------------
                             Stock Options
------------------------------------------------------------------------
                                   Number of      Weighted Average
------------------------------------------------------------------------
                                   Shares         Price Per Share
------------------------------------------------------------------------
Balance December 31, 2000          1,147,056         $6.44
------------------------------------------------------------------------
Granted                              425,629          0.72
------------------------------------------------------------------------
Exercised                           (188,900)         0.01
------------------------------------------------------------------------
Cancelled                           (249,143)         5.34
                                   ---------      --------
------------------------------------------------------------------------
Balance September 30, 2001         1,134,642         $5.60
------------------------------------------------------------------------

(c) Warrants

The following table summarizes all warrant activity for the nine months ended
September 30, 2001.
<PAGE>

                                                                         Page 12
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


------------------------------------------------------------------------
                               Warrants
------------------------------------------------------------------------
                                  Number of       Weighted Average
------------------------------------------------------------------------
                                  Shares          Exercise
------------------------------------------------------------------------
                                                  Price Per Share
------------------------------------------------------------------------
Balance December 31, 2000         2,665,104          $4.02
------------------------------------------------------------------------
Granted                           3,740,849           1.37
------------------------------------------------------------------------
Exercised                          (729,445)          0.00
                                  ---------       --------
------------------------------------------------------------------------
Balance September 30, 2001        5,676,508          $2.78
                                  =========       ========
------------------------------------------------------------------------

(3) RESTRUCTURING CHARGE

During the second quarter of 2000, the Company implemented a restructuring plan
to reduce its size and realign its organization to conform with strategic
changes. The major component of the restructuring relates to the elimination of
approximately eight employees across the following functions: sales and
marketing (six), general and administrative (one) and research and development
(one). Components of the charge include severance and other related expenses.
The initial amount of the estimated restructuring was $1,731,000, which was
reduced by $252,000 and $182,625 during the quarters ended September 30, 2000
and March 31, 2001, respectively, by revisions to certain estimates based upon
actual costs incurred. At September 30, 2001, approximately $286,000 of accrued
restructuring charges remained, which are comprised of severance costs related
to an employment contract which expires in June 2002. Approximately $371,000 of
the expense has been paid by the issuance of common stock. The total cash impact
of the restructuring is expected to amount to approximately $925,000. The total
cash paid as of September 30, 2001, was approximately $639,000 and the remaining
amounts will be paid through June 2002.

(4) DISCONTINUED OPERATIONS

On November 15, 2000, the Company engaged a merchant bank to explore
alternatives including sale or other disposition of the Company's consumer,
commercial and agriculture business areas. The Company terminated operations of
its consumer and commercial product business areas on February 23, 2001, and
began the process of liquidating all assets and liabilities pertaining to those
operations. Accordingly, the Company has treated its consumer and commercial
products operations as a discontinued operation in accordance with Accounting
Principles Board Opinion No. 30 and has reclassified the 2000 financial
statements to reflect this treatment. For the year ended December 31, 2000, the
Company had recorded a reserve in the amount of $1,750,000 which included
approximately $983,000 to reduce the carrying value of assets to their estimated
liquidation value, and a liability of approximately $767,000 to accrue for the
cost of closing the operations. During the quarters ended March 31 and June 30,
2001, the Company recorded additional charges of $186,629 and $57,600,
respectively, to reflect additional consulting expenses and rental expense
related to surplus office space.
<PAGE>

                                                                         Page 13
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


(5) LICENSING AGREEMENTS

On January 26, 2001, SafeScience executed an agreement, which has been amended
on May 14 and November 7, 2001, with Wayne State University and the Barbara Ann
Karmanos Cancer Institute. This agreement grants an exclusive world-wide license
to SafeScience to patents and patent applications related to "GBC-590 Material"
issued to or applied for by Wayne State University and the Barbara Ann Karmanos
Cancer Institute. This agreement adds the rights to these issued patents and
patent applications to the Company's existing patent portfolio which
consolidates the rights to all of the parties' existing GBC-590 intellectual
property within SafeScience. Pursuant to this agreement, GlycoGenesys made an
initial payment of $300,000 upon signing the agreement and is required to make
up to an additional $1,635,000 in license payments at the rate of 6% of cash
raised through the sale of securities of the Company. If at least $16,510,000
has been raised, the Company becomes liable for the unearned balance of the
$1,635,000 and has six months to pay such balance. Additional payments of up to
$3,000,000 are contingent upon reaching future commercialization milestones. To
date the Company has raised $6,510,000 and paid license fees of $293,750 and
owes license fees of $96,850.

The Company granted Wayne State University and the Barbara Ann Karmanos Cancer
Institute warrants to jointly purchase 1,375,000 shares of common stock at $1.15
that vest in quarterly installments over two years. During the nine months ended
September 30, 2001, the Company recorded an expense of $651,273 related to
warrants which vested under this agreement and expense of $323,750 in payment of
the 6% amount due on sales of securities. On November 7, 2001, the Company also
granted Wayne State University and the Barbara Ann Karmanos Cancer Institute
warrants to jointly purchase 125,000 shares of common stock at $1.15 that vest
through January 26, 2003. The expenses associated with this issuance will be
recorded in the fourth quarter of 2001.

In order to maintain its rights under this agreement, the Company must comply
with certain milestones concerning the licensed products as well as raise at
least $16,510,000 cumulatively from January 26, 2001 through August 15, 2002.

In addition, the Company will pay a 2% royalty jointly to Wayne State University
and the Barbara Ann Karmanos Cancer Institute on net sales of GBC-590.

(6) RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Pursuant to SFAS No. 137,
Accounting for Derivative
<PAGE>

                                                                         Page 14
                               GLYCOGENESYS, INC.
                      (formerly known as SafeScience, Inc.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001


Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133, SFAS No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company believes that the adoption of
SFAS No. 133 has not had a material impact on its financial results or financial
position.


<PAGE>

                                                                         Page 15


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

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

The following contains certain 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, which are intended to be covered by
the safe harbors created thereby. All forward-looking statements involve risks
and uncertainty. Although the Company believes that the assumptions underlying
the forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this report will prove to be
accurate. The Company's actual results may differ materially from the results
anticipated in the forward-looking statements. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Certain Factors that
May Affect Future Results" included herein for a discussion of factors that
could contribute to such material differences. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved. The Company disclaims any obligation to update or revise the
information provided in this report to reflect future events.

Overview

GlycoGenesys, Inc. is a biotechnology company developing novel pharmaceutical
products based on carbohydrate compounds. The Company's lead drug candidate
GBC-590, a potential treatment for multiple forms of cancer, is in Phase II
clinical trials for pancreatic cancer and recently completed Phase II clinical
trials for colorectal cancer. In July 2001, the Company formed a joint venture
with Elan Corporation, plc ("Elan") to advance GBC-590 in the field of oncology.
While the Company also develops agricultural products, it continues to seek
strategic alternatives, including the sale, of its agricultural products
business area. The Company's near term objective is to continue to proceed
through the various phases of United States Food and Drug Administration (FDA)
clinical trials for GBC-590 and to continue to pursue Federal and state
registration of its agriculture products and seek alternatives, including sale,
for its agricultural products business area.

GlycoGenesys, Inc.

GlycoGenesys conducts its business through two wholly-owned subsidiaries:
International Gene Group, Inc. and SafeScience Products, Inc.

International Gene Group, Inc.

International Gene Group, Inc. ("IGG") develops human therapeutics. IGG has been
focused on developing GBC-590, a complex carbohydrate intended to fight
cancerous tumors and metastasis, which it exclusively licenses from Dr. David
Platt and Wayne State University and the Barbara Ann Karmanos Cancer Institute.

IGG has also developed a complex carbohydrate antifungal agent which is being
tested in animals to inhibit Candida infections.

Theoretical Background of GBC-590. Cells recognize one another through pairs of
complementary structures on their surface. A structure on one cell carries
encoded biological information that a structure on another cell can decipher.
While nucleic acids and proteins were previously recognized as the major classes
of biological materials involved in cell recognition, it has recently been
scientifically established that carbohydrates play a role as well. The majority
of a cell's surface components contain carbohydrate structures, which change
characteristics as the cell develops, differentiates and sickens.

It is contended that cell adhesion plays a role in cancer and cancer metastasis.
Metastasis is the process by which cancer cells spread throughout the body,
beginning at the primary tumor. The spread of the cancer cells throughout the
body is the main cause of death for cancer patients. These cells, once
circulating in the bloodstream after their detachment from the primary tumor,
must adhere to new cells in other parts of the body in order to proliferate to
form new tumor colonies. Malignant cells may thus recruit the very adhesion
molecules that are part of the body's natural defense mechanism to promote their
own metastasis. The Company believes that drugs, which inhibit this process of
adhesion, may inhibit metastasis although this theory has not been
scientifically established.

GBC-590 may offer a novel approach to controlling the progression of cancer, by
disrupting the cellular recognition process of roaming cancer cells and
preventing them from reattaching to each other and to normal tissue. The GBC-590
compound acts as a "molecular decoy" by recognizing Galectin-3, a "lectin", on
cancer cells, attaching itself to the Galectin-3 and
<PAGE>

                                                                         Page 16

preventing those cells from aggregating. By binding to Galectin-3, GBC-590 may
thus prevent metastasis. In addition, independent research has shown that
Galectin-3 is involved in regulating cell growth and apoptosis (cell death). By
binding to Galectin-3, GBC-590 may induce cancer cell death. Furthermore,
independent research has shown that Galectin-3 plays a role in angiogenesis.
Angiogenesis, identified in the 1980's, is the biological process by which
cancer cells form new blood vessels allowing them to obtain the nutrients
necessary for tumor growth. By binding to Galectin-3, GBC-590 may inhibit
angiogenesis.

The Company believes that GBC-590 has the potential for therapeutic effect on
multiple cancer types (i.e. colorectal, prostate, pancreatic, breast and liver)
because the target for GBC-590 on the cancer cells is Galectin-3 which is over
expressed on all these cancer types. GBC-590 is delivered intravenously.

Phase I clinical trials of GBC-590, at the MD Anderson Cancer Center in Houston,
Texas and at Pennsylvania Oncology and Hematology Associates, an affiliate of
the University of Pennsylvania - School of Medicine in Philadelphia,
Pennsylvania, were completed in 1999. Phase I is intended to assess toxicity;
GBC-590 showed no dose limiting toxicity in patients.

Institutional Review Board (IRB) approval was received at the following sites
prior to conducting the recently completed Phase II clinical trial for
colorectal cancer and/or the ongoing Phase II clinical trial for pancreatic
cancer:

 .     Beth Israel/Deaconess Hospital in Boston, Massachusetts;
 .     University of Chicago Pritzker School of Medicine;
 .     University of Rochester Cancer Center;
 .     Christiana Healthcare in Wilmington, Delaware;
 .     Ocala Oncology Center in Ocala, Florida;
 .     Hematology and Oncology Associates in Kansas City, Missouri; and
 .     Medical Oncology Associates in San Diego, California.

On March 23, 2001, the Company announced that GBC-590 demonstrated positive
clinical activity in colorectal cancer patients in the recently completed Phase
IIa clinical trial. Specifically, five of 23 patients showed tumor stabilization
for periods of two to six months before disease state progression was observed,
with one of the five patients showing a period of tumor shrinkage. On July 23,
2001, we announced the completion of patient enrollment for our Phase II
pancreatic cancer clinical trial. Based on this promising early data, and the
fact that higher doses of GBC-590 than administered in the Phase IIa colorectal
and pancreatic trials have already been tested in animals, with no dose limiting
toxicity observed, a Phase I dose escalation trial to include colorectal and
potentially other types of cancer patients is planned to begin in late 2001. In
addition, a Phase II dose escalation trial with GBC-590 in combination with a
standard cancer therapy is planned to begin in the first quarter of 2002 and
will enroll pancreatic cancer patients. These dose escalation trials may enroll
up to 75 cancer patients separated into multiple

<PAGE>

                                                                         Page 17

groups, each receiving a different dose level of GBC-590. Assuming the results
of these dose escalation trials support an expanded Phase II/III pivotal
clinical trial for pancreatic cancer, the Company intends to initiate such a
trial late in 2002 or early 2003. In connection with this trial the Company
intends to seek fast track designation from the FDA which would enable the
Company to seek accelerated approval for GBC-590 for the treatment of pancreatic
cancer. There can be no assurances at present that intravenous injection of
GBC-590 will prove effective in reducing or eliminating the spread of cancer in
humans, be safe at higher doses or that accelerated or other approval will be
granted by the FDA.

On September 19, 2001, we announced that we entered into a sponsored research
agreement with the Massachusetts Institute of Technology (MIT). The research
conducted by MIT will focus on an expanded analysis of GBC-590 and
identification of other compounds with promising biochemical and pharmaceutical
activity.

CAN-296. CAN-296 is an anti-fungal agent derived from a naturally occurring
complex carbohydrate, designed for treatment of Candida and Aspergillus
infections. Candida, a common fungal disease, can take on two forms: deep-seated
infections, which can be fatal and superficial infections such as athlete's
foot, skin infections and vaginitis.

CAN-296 has been tested in vitro and in animals against many Candida pathogenic
isolates including resistant strains and demonstrated positive activity. There
are no assurances that application of CAN-296 will prove effective in reducing
or eliminating Candida infection in humans, and there have been no clinical
studies or tests conducted to prove such an effect. Additional studies in
animals will be conducted, and based on those results, the Company will decide
whether to proceed to file an Investigational New Drug ("IND") application.

SafeScience Products, Inc.

Historically, SafeScience Products developed agriculture products and developed,
marketed and distributed chemically safe consumer and commercial products.

In the agricultural area, SafeScience Products has developed and/or licensed
products that include a Federal EPA-approved plant defense booster to treat
fungal pathogens. An additional insecticide product (Bb447) is being tested and
developed.

On February 15, 2001, the Company received notice of unconditional registration
from the United States Environmental Protection Agency's Office of Pesticide
Programs, Biopesticides and Pollution Prevention Division for its Elexa-4 Plant
Defense Booster. Elexa-4 is an effective non-toxic treatment against fungal
pathogens such as powdery mildew and boytrytis on grapes, and powdery mildew and
gray mold on strawberries, as well as, a variety of additional crops. Elexa-4
works by stimulating the plants own natural defense system to defend against
attack by
<PAGE>

                                                                         Page 18

diseases. On June 8, 2001 conditional registration by the State of California
was received for use as a fungicide for various diseases on grapes, strawberries
and greenhouse and nursery roses. We have received state registration in
California and other states and filed for registration in other states for
Elexa-4. Modest resources have been allocated to our agricultural products
business while the Company seeks alternatives, including its sale.

Discontinued Operations

On November 15, 2000, the Company engaged a merchant bank to explore
alternatives including sale or other disposition of the Company's consumer,
commercial and agriculture business areas. The Company terminated operations of
its consumer and commercial product business areas on February 23, 2001 and
began the process of liquidating all assets and liabilities pertaining to those
operations. Accordingly, the Company has treated its consumer and commercial
products operations as a discontinued operation in accordance with Accounting
Principles Board Opinion No. 30 and has reclassified the 1999 financial
statements to reflect this treatment. For the year ended December 31, 2000, the
Company has recorded a reserve in the amount of $1,750,000 which includes
approximately $983,000 to reduce the carrying value of assets to their estimated
liquidation value and a liability of approximately $767,000 to accrue for the
cost of closing the operations. The net losses of the discontinued operations
are included in the statements of operations under discontinued operations.
During the quarter ended June 30, 2001, the Company recorded an additional
charge of $57,600 to reflect additional rental expense related to surplus office
space.

Results of Operations: Three months ended September 30, 2001 versus September
30, 2000

      Research and development costs decreased from $1,976,539 for the three
months ended September 30, 2000, to $438,441 for the three months ended
September 30, 2001, a decrease of $1,538,098, or 77.8%. This decrease is
primarily attributable to the recording of GBC-590 related research and
development costs to SafeScience Newco, Ltd. in the amount of $1,354,790 under
the terms of the joint venture agreement, 80.1% of which is included in the
"Loss in equity of SafeScience Newco Ltd.", and a reduction in GBC-590
development expenditures partially offset by $475,249 expensed under the terms
of the licensing agreement with Wayne State University and the Barbara Ann
Karmanos Cancer Institute.

      General and administrative expenses decreased from $942,390 for the three
months ended September 30, 2000, to $787,783 for the three months ended
September 30, 2001, a decrease of $154,607, or 16.4%. This decrease is primarily
attributable to a reduction of expenditures for professional services and
expenses billed to SafeScience Newco, Ltd. in the amount of $56,700 under the
terms of the joint venture agreement, 80.1% of which is included in the "Loss in
equity of SafeScience Newco Ltd."
<PAGE>

                                                                         Page 19

      Interest income decreased from $53,154 for the three months ended
September 30, 2000, to $20,310 for the three months ended September 30, 2001, a
decrease of $32,844, or 61.8%. This decrease is attributable to a decrease in
cash available for temporary investment.

      The loss in equity of SafeScience Newco, Ltd. is attributable to the write
off of 80.1% of the license fee of $15,000,000 paid to Elan International
Services Ltd. and 80.1% of expenses of $1,411,491 billed to EIS during the
quarter ended September 30, 2001.

Results of Operations: Nine months ended September 30, 2001 versus September 30,
2000

      Research and development costs decreased from $3,816,815 for the nine
months ended September 30, 2000, to $3,165,073 for the nine months ended
September 30, 2001, a decrease of $651,742, or 17.1%. This decrease is primarily
attributable to the billing of costs to SafeScience Newco, Ltd. in the amount of
$1,354,790 under the terms of the joint venture agreement, 80.1% of which is
included in the "Loss in equity of SafeScience Newco Ltd.", and a reduction in
agriculture research and development expenses mostly offset by $1,275,025
expensed under the terms of the licensing agreement with Wayne State University
and the Barbara Ann Karmanos Cancer Institute.

      General and administrative expenses increased from $3,068,958 for the nine
months ended September 30, 2000, to $3,170,826 for the nine months ended
September 30, 2001, an increase of $101,868, or 3.3%. This increase is primarily
attributable to professional fees to third-parties and non-cash compensation
recorded in connection with the issuance of stock options partially offset by
office service expenses and expenses billed to SafeScience Newco, Ltd. in the
amount of $56,700 under the terms of the joint venture agreement, 80.1% of which
is included in the "Loss in equity of SafeScience Newco Ltd."

      Interest income decreased from $181,615 for the nine months ended
September 30, 2000, to $50,247 for the nine months ended September 30, 2001, a
decrease of $131,368, or 72.3%. This decrease is attributable to a decrease in
cash available for temporary investment.

      The loss in equity of SafeScience Newco, Ltd. is attributable to the write
off of 80.1% of the license fee of $15,000,000 paid to Elan International
Services Ltd. and 80.1% of expenses of $1,411,491 billed to EIS during the
quarter ended September 30, 2001.

Liquidity and Capital Resources

      For the nine months ended September 30, 2001, the Company's operations
utilized cash of approximately $7,890,000 primarily to fund its operating loss
and loss on discontinued
<PAGE>

                                                                         Page 20

operations. The Company also invested $12,015,000 in the preferred stock and
common stock of SafeScience Newco, Ltd and $11,173 in fixed asset purchases. The
uses of cash were partially offset by equity financings, which resulted in net
proceeds of approximately $7,863,300 to the Company during the nine months ended
September 30, 2001. We are pursuing additional funds through sales of our
securities and through potential partnering arrangements with pharmaceutical or
mature biotechnology companies.

      As of September 30, 2001, the Company's accumulated deficit was
approximately $63,938,000 and cash balances were $2,827,634.

      On July 10, 2001 the Company and Elan Corporation, plc, ("Elan"), and Elan
International Services, Ltd. ("EIS") completed a business venture in a series of
transactions which included the purchase by EIS of $17,015,000 of the Company's
securities, of which $12,015,000 was used to license technology from Elan, and
provided future funding, subject to conditions, for the Company's portion of the
research and development costs of GBC-590 in the field of oncology in the amount
of $9,612,000.

      The Company's future is dependent upon its ability to obtain financing to
fund its operations. The Company expects to incur substantial additional
operating costs, including costs related to ongoing research and development
activities, preclinical studies and clinical trials. The Company believes that
its existing funds will be sufficient to fund its operating expenses and capital
requirements as currently planned into the second quarter of 2002.

Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. As amended in June 1999, the statement is
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000. In June 2000, the FASB issued SFAS No. 138, which is a significant
amendment to SFAS No. 133. SFAS No. 133 and its amendments establish accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively, the derivatives) and for
hedging activities. The Emerging Issues Task Force (EITF) has also issued a
number of derivative-related tentative and final consensuses. We do not expect
the adoption of these statements to have a material impact on our consolidated
financial position or results of operations.

In September 2000, the Emerging Issues Task Force (EITF) issued 00-19
"Accounting for Derivative Financial Instruments Indexed to and Potentially
Settled in a Company's Own Stock", which requires freestanding contracts that
are settled in a company's own stock, including common stock warrants, to be
designated as an equity instrument, asset or a liability. Under the provisions
of EITF 00-19, a contract designated as an asset or a liability must be
<PAGE>

                                                                         Page 21

carried at fair value, with any changes in fair value recorded in the results of
operations. A contract designated as an equity instrument must be included
within equity and no fair value adjustments are required. In accordance with
EITF 00-19, the Company had determined that the outstanding adjustable warrant,
as of December 31, 2000, which required the issuance of 729,445 shares of the
Company's common stock should be designated as temporary equity. Under the
transition rules of EITF 00-19, the Company is required to record as temporary
equity as of December 31, 2000, the intrinsic value of the warrants outside of
stockholders' equity. As of December 31, 2000, the Company had reclassified the
intrinsic value of the warrants of $866,216 to temporary equity from additional
paid-in capital. As of December 31, 2000, these warrants had a fair value of
approximately $866,216. On February 5, 2001, the Company issued 729,445 shares
of common stock in satisfaction of the warrants and reclassified the temporary
equity to additional paid-in capital.

In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No.
142, "Goodwill and Other Intangible Assets". SFAS 141 supersedes Accounting
Principles Board Opinion No. 16, Business Combinations and is applicable for all
business combinations initiated after June 30, 2001. The most significant
provisions of SFAS 141 require (a) the application of the purchase method of
accounting for all business combinations; (b) the establishment of specific
criteria for the recognition of intangible assets separately from goodwill; and
(c) unallocated negative goodwill to be written off immediately as an
extraordinary gain. SFAS 142 supersedes APB No. 17, Intangible Assets and will
be effective for the Company's fourth quarter ending December 31, 2001. The most
significant provisions of SFAS 142 provide (a) goodwill and indefinite-lived
intangible assets will no longer be amortized; (b) goodwill and intangible
assets deemed to have an indefinite life will be tested at least annually for
impairment; and (c) the amortization period of intangible assets with finite
lives will no longer be limited to forty years. The Company believes that the
effects of adopting SFAS 142 will not have a material effect on the Company's
financial position or results of operations.

On July 19, 2001, the SEC Staff made an announcement, Topic No. D-98, which will
require that certain equity instruments that have liquidation features similar
to redemption features be reclassified as other equity. If the current terms of
the Series A Preferred Stock remain in effect, this announcement is to be
applied retroactively in the Company's fourth quarter 2001, by restating the
financial statements of prior periods and reclassifying out of equity the
liquidation value of the Series A Preferred Stock.

Market Risk

The Company is not exposed to significant market risk related to changes in
currency exchange rates as measured against the U.S. dollar. As of September 30,
2001, the Company has evaluated its risk and determined that any exposure to
currency exchange is not significant to the Company's overall consolidated
financial results. There can be no assurance that the Company's exposure will
remain at these levels, especially in the event of significant and sudden
<PAGE>

                                                                         Page 22

fluctuations in the value of local currencies. The Company does not use
derivative financial instruments for speculative or trading purposes.

Interest Rate Sensitivity

The Company is exposed to market risk related to changes in interest rates which
could positively or negatively affect results of operations. The Company
maintains short-term investments in an overnight money market account comprised
of U.S. treasury bills. If market interest rates were to increase immediately
and uniformly by 10% from levels that existed at September 30, 2001, the fair
value of the portfolio would decline by an immaterial amount.

Certain Factors That May Affect Future Results

THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES FACING
GLYCOGENESYS, INC. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE
COMPANY OR THAT IT CURRENTLY DEEMS IMMATERIAL MAY ALSO IMPAIR ITS BUSINESS
OPERATIONS.

IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THE COMPANY'S BUSINESS, FINANCIAL
CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED. IN
THOSE CASES, THE TRADING PRICE OF THE COMPANY'S COMMON STOCK COULD DECLINE.

We have experienced significant operating losses throughout our history, we
expect these losses to continue and we may not achieve profitability in the
future

We began operations more than eight years ago and began to generate revenue only
in the second quarter of 1999. Through December 31, 2000, we only generated
$2,723,000 from product sales. On February 23, 2001, we announced the
discontinuation of our consumer and commercial product business from which all
of our revenues to date have been generated. We do not expect to generate
product revenue for several years if at all. We have incurred approximately
$63.9 million of losses since our inception, including $17.3 million in the year
ended December 31, 2000, and $19.7 million for the nine months ended September
30, 2001. Extensive operating losses can be expected to continue for the
foreseeable future.

Our products are still in development, there are uncertainties associated with
research and development activities and we may be unable to bring these products
to market

Our proposed products require further research, development, laboratory testing,
regulatory approval and/or demonstration of commercial scale manufacturing
before they can be proven to be commercially viable. The products are in the
development stage and are subject to the risks
<PAGE>

                                                                         Page 23


inherent in the development of new products. Potential products that appear to
be promising at early stages of development may not reach the market for a
number of reasons. Such reasons include the possibilities that potential
products are found during testing to be ineffective, or unsafe, that they fail
to receive necessary regulatory approvals, are difficult or uneconomical to
manufacture on a large scale, fail to achieve market acceptance or are precluded
from commercialization by proprietary rights of third parties. We cannot predict
with any degree of certainty when, or if, the research, development, testing
and/or regulatory approval process for our proposed products will be completed.
Our product development efforts may be unsuccessful, required regulatory
approvals from U.S. or foreign authorities may not be obtained, and products, if
introduced, may not be capable of being produced in commercial quantities at
reasonable costs or be successfully marketed. The failure of our research and
development activities to result in any commercially viable products or
technologies would materially adversely affect our future prospects.

We may not generate revenues in the future because we have ceased operation of
our consumer and commercial product areas

We have generated substantially all our prior revenues from our consumer and
commercial products. We have discontinued operations for our consumer and
commercial product business areas and are exploring alternatives for our
agricultural product business. We will not generate revenues or other funds on
an ongoing basis unless we receive current payments with respect to the sale of
these areas, receive payments in connection with any potential licensing or
other partnering arrangement with other pharmaceutical or biotechnology
companies, or we are able to bring to market pharmaceutical or agricultural
products.

We may not be able to obtain additional funding when needed, which could reduce
our ability to fund or expand operations

We believe that our existing funds, together with additional capital we may
receive from EIS, are sufficient to fund our operating expenses and capital
requirements into the second quarter of 2002. We are pursuing additional funds
through sales of our securities and may seek funds in conjunction with the
in-licensing of additional bio-pharmaceutical products. Additional equity
financing may result in dilution to our shareholders. The resale of our common
stock by selling stockholders may negatively affect our ability to obtain
financing. If the market price of our common stock declines, some potential
investors may either refuse to offer us any financing or will offer financing at
unacceptable rates or unfavorable terms. If we are unable to obtain financing on
favorable terms, we may be unable to fund or expand our operations or we may
only be able to fund or expand our operations on terms that adversely affect our
financial condition. If we are unable to obtain financing necessary to fund our
operations, we may have to sell or liquidate GlycoGenesys.
<PAGE>

                                                                         Page 24


Our failure to protect our intellectual property or our infringement on the
property rights of others may impede our ability to operate freely

We rely significantly upon proprietary technology. To the extent that we
currently rely upon certain unpatented, proprietary technology, processes and
know-how and the protection of such intellectual property by confidentiality
agreements, others may independently develop similar technology and know-how or
confidentiality may be breached. Any claims against us or any purchaser or user
of our products or patents, including GBC-590, asserting that our products or
patents infringe or may infringe proprietary rights of third parties, if
determined adversely to us, could have a material adverse effect on our
business, financial condition or results of operations. Any claims, with or
without merit, could be time-consuming, result in costly litigation, divert the
efforts of our technical and management personnel, or require us to enter into
royalty or licensing agreements, any of which could have a material adverse
effect upon our operating results. Such royalty or licensing agreements, if
required, may not be available on terms acceptable to us, if at all. In the
event a claim against us is successful and we cannot obtain a license to the
relevant technology on acceptable terms, license a substitute technology or
redesign our products to avoid infringement, our business, financial condition
and results of operations would be materially adversely affected.

We depend on technology licensed to us by third parties and if we are unable to
continue licensing this technology we may be unable to generate revenues

We license our technology, including GBC-590, from third parties. We anticipate
that we will continue to license technology from third parties in the future.
The technology we license from third parties would be difficult to replace. The
loss of any of these technology licenses would result in delays in the
availability of our products until equivalent technology, if available, is
identified, licensed and integrated and could materially adversely affect our
future prospects. The use of replacement technology from other third parties
would require us to enter into license agreements with these third parties,
which could result in higher royalty payments and a loss of product
differentiation.

We expect to remain dependent on collaborations with third parties for the
development of new products.

Our current business strategy is to enter into agreements with third parties
both to license rights to our potential products and to develop and
commercialize new products. We may not be able to enter into or maintain these
agreements on terms favorable to us. If we are unable to maintain productive
relationships with our collaborative partners our ability to develop our
products will be harmed.

Our future prospects are heavily dependent on the results of GBC-590
<PAGE>

                                                                         Page 25


While we have more than one product in development, we do not have a wide array
of products which we are developing. Most of our attention and resources are
directed to the development of GBC-590. If GBC-590 is ultimately ineffective in
treating cancer, does not receive the necessary regulatory approvals or does not
obtain commercial acceptance, GlycoGenesys will be materially adversely
effected.

The development of GBC-590 is not in our exclusive control and is jointly
determined with Elan and EIS.

We are developing GBC-590 through collaboration with Elan and EIS. SafeScience
Newco, Ltd. is a company that we formed and jointly own with EIS to develop
GBC-590 in the field of oncology. We own 80.1% and EIS owns 19.9% of SafeScience
Newco, Ltd. Despite our majority ownership of SafeScience Newco, Ltd., we do not
fully control the development activities regarding GBC-590, because we need the
consent of EIS for material development decisions regarding GBC-590. As a
result, development of GBC-590 will depend on our ability to negotiate
development issues with EIS.

EIS has the right to exchange our Series A convertible exchangeable preferred
stock it owns for all of the preferred securities we own of SafeScience Newco,
Ltd. at any time until July 10, 2007, which would give EIS a 50% ownership
interest in SafeScience Newco, Ltd. If EIS exercises this right, our ownership
in SafeScience Newco, Ltd. will be substantially diluted, which would reduce the
return to which we would be entitled if GBC-590 is successful.

If our products are not accepted by medical and agricultural communities our
business will suffer

Our focus is primarily pharmaceuticals and to a lesser extent agricultural
products. Commercial sales of our proposed products in these areas will
substantially depend upon the products' efficacy and on their acceptance by the
medical and agricultural communities. Widespread acceptance of our products will
require educating the medical and agricultural communities as to the benefits
and reliability of the products. Our proposed products may not be accepted, and,
even if accepted, we are unable to estimate the length of time it would take to
gain such acceptance.

If the third parties we rely on for manufacturing our products are unable to
produce the necessary amounts of our products, do not meet our quality needs or
terminate their relationships with us, our business will suffer

We do not presently have our own manufacturing operations, nor do we intend to
establish any unless and until in the opinion of management, the size and scope
of our business so warrants. While we have established manufacturing
relationships with firms to provide us with GBC-590
<PAGE>

                                                                         Page 26


and Elexa that we believe will provide the capability to meet our anticipated
requirements for the foreseeable future, we have not entered into any long-term
arrangements for manufacturing and such arrangements may not be obtained on
desirable terms. Therefore, for the foreseeable future, we will be dependent
upon third parties to manufacture our products.

Our reliance on independent manufacturers involves a number of risks, including
the absence of adequate capacity, the unavailability of, or interruptions in,
access to necessary manufacturing processes and reduced control over delivery
schedules. If our manufacturers are unable or unwilling to continue
manufacturing our products in required volumes, we will have to identify
acceptable alternative manufacturers. The use of a new manufacturer may cause
significant interruptions in supply if the new manufacturer has difficulty
manufacturing products to our specifications. Further, the introduction of a new
manufacturer may increase the variation in the quality of our products.

We face intense competition and rapid technological changes in the markets in
which we compete, and our failure to successfully compete or adapt to changing
technology could make it difficult to acquire and retain customers

Many companies, including large pharmaceutical, biotechnology and agricultural
concerns, universities and other research institutions, with financial resources
and research and development staffs and facilities substantially greater than
ours, may develop or attempt to develop products that compete with our products.
These companies may have the ability to devote far greater resources to
researching, developing and marketing their products than we are able to do. In
addition, the biotechnology industry is one in which technological change is
extremely rapid. Our ability to anticipate changes in technology and industry
standards together with regulatory changes and to successfully develop and
introduce new and enhanced products on a timely basis will be significant
factors in our ability to grow and remain competitive. Any products which we do
develop may become technologically obsolete before we have had the ability to
realize significant revenues or profits.

Our businesses are subject to significant government regulation and failure to
achieve regulatory approval of our products would severely harm our business

The FDA regulates the manufacture, distribution and promotion of pharmaceutical
products in the United States pursuant to the Federal Food Drug and Cosmetic Act
and related regulations. We must receive premarket approval by the FDA for any
commercial sale of our pharmaceutical products. Before receiving such approval
we must provide proof in human clinical trials of the nontoxicity, safety and
efficacy of our pharmaceutical products, which trials can take several years.
Premarket approval is a lengthy and expensive process. We may not be able to
obtain FDA approval for any commercial sale of our product. By regulation, the
FDA has 180 days to review an application for approval to market a
pharmaceutical product; however, the FDA frequently exceeds the 180-day time
period. In addition, based on its review, the FDA may
<PAGE>

                                                                         Page 27


determine that additional clinical trials are required. Except for any potential
licensing arrangements with other pharmaceutical or biotechnology companies, we
will not generate any revenues in connection with our pharmaceutical products
unless and until we obtain FDA approval to sell our products in commercial
quantities for human application.

The investigation, manufacture and sale of agricultural products are subject to
regulation by the EPA, including the need for approval before marketing, and by
comparable foreign and state agencies. Our agricultural products will be able to
be commercially marketed for use either in the United States or other countries
only by first obtaining the necessary approvals. While we hope to obtain
regulatory approvals for our proposed products, we may not obtain these
approvals on a timely basis, if at all.

Reimbursement procedures and future healthcare reform measures are uncertain and
may adversely impact our ability to successfully sell any pharmaceutical product

Our ability to successfully sell any pharmaceutical product will depend in part
on the extent to which government health administration authorities, private
health insurers and other organizations will reimburse patients for the costs of
future pharmaceutical products and related treatments. In the United States,
government and other third-party payers have sought to contain healthcare costs
by limiting both coverage and the level of reimbursement for new pharmaceutical
products approved for marketing by the FDA. In some cases, these payers may
refuse to provide any coverage for uses of approved products to treat medical
conditions even though the FDA has granted marketing approval. Healthcare reform
may increase these cost containment efforts. We believe that managed care
organizations may seek to restrict the use of new products, delay authorization
to use new products or limit coverage and the level of reimbursement for new
products. Internationally, where national healthcare systems are prevalent,
little if any funding may be available for new products, and cost containment
and cost reduction efforts can be more pronounced than in the United States.

Issuances of our securities are subject to federal and state securities laws and
certain prior offerings of our securities may not have complied with applicable
securities laws

Issuances of securities are subject to federal and state securities laws.
Certain prior private placement offerings of our securities may not have
complied with requirements of applicable state securities laws. In such
situations a number of remedies may be available to regulatory authorities and
stockholders who purchased securities in such offerings, including, without
limitation, rescission rights.

Our growth may be limited if we are unable to retain and hire additional
qualified personnel as necessary

Our success will depend on our ability to retain key employees and our
continuing ability to
<PAGE>

                                                                         Page 28


attract and retain highly qualified scientific, technical and managerial
personnel. Competition for such personnel is intense and we may not be able to
retain existing personnel or attract qualified employees in the future. At
present, we employ approximately 11 full-time employees and one part time
worker. We depend upon the personal efforts and abilities of our officers and
directors, including Bradley J. Carver, our President, CEO and a director, John
W. Burns, our Senior Vice President and Chief Financial Officer and Brian G.R.
Hughes, Chairman of the Board, and would be materially adversely affected if
their services ceased to be available for any reason and comparable replacement
personnel were not employed.

The businesses in which we engage have a risk of product liability, and in the
event of a successful suit against us, our business could be severely harmed

The testing, marketing and sale of agricultural and pharmaceutical products
entails a risk of product liability claims by consumers and others. While we
currently maintain product liability insurance which we believe to be adequate,
such insurance may not continue to be available at a reasonable cost or may not
be sufficient to fully cover any potential claims. In the event of a successful
suit against us, the lack or insufficiency of insurance coverage could have a
material adverse effect on our business and financial condition.

We are contractually obligated to issue shares in the future, including the
conversion of outstanding preferred stock and warrants held by EIS which might
cause significant dilution to our existing shareholders.

As of November 8, 2001 there were outstanding options to purchase 1,134,642
shares of common stock, at a weighted average exercise price of $5.60 per share
and warrants to purchase 5,676,508 shares of common stock at a weighted average
price of $2.78 per share. Moreover, we may in the future issue additional shares
and warrants to raise capital, acquire other companies or technologies, to pay
for services, or for other corporate purposes. Any such issuances will have the
effect of further diluting the interest of current shareholders.

In July 2001, in connection with a business venture and financing transaction,
we sold to EIS 1,116.79 shares of our Series C convertible non-voting preferred
stock, 4,944.44 shares of our Series A convertible exchangeable non-voting
preferred stock and a warrant to purchase 381,679 shares of our common stock.
Each share of our Series A preferred stock and Series C preferred stock is
presently convertible after July 10, 2003 into 1,000 shares of our common stock.
The Series A preferred stock bears a 7% dividend payable in Series A preferred
stock, which compounds annually. Accordingly, a total of 6,442,909 shares of our
common stock could be issued to EIS, assuming the exercise of the warrants and
the conversion into common stock of all shares of Series A and Series C
preferred stock currently outstanding, but not including any dividends to be
issued on the Series A preferred stock. This amount of shares represents 22.5%
of our currently outstanding common stock. Pursuant to provisions in our
agreement with EIS, if the exercise or conversion of any of our securities held
by EIS would result in EIS owning more
<PAGE>

                                                                         Page 29

than 9.9% of our common stock at any time EIS may opt to receive non-voting
securities instead of common stock. In addition EIS may purchase up to
5,654.1176 shares of our Series B convertible non-voting preferred stock in the
future. The Series B preferred stock bears a 7% dividend payable in Series B
preferred stock which compounds annually. A total of 5,654,118 shares of common
stock could be issued to EIS assuming the purchase of all the Series B preferred
stock but not including any dividends to be issued on the Series B preferred
stock.

We must comply with the listing requirements of the Nasdaq SmallCap Market or
our common stock may decline and its liquidity would be adversely affected

Our common stock could be delisted from The Nasdaq Stock Market:

      o     if the bid price of our common stock falls below $1.00 per share for
            thirty (30) consecutive business days;

      o     If our market capitalization falls below $35 million and we have
            less than (A) $2,000,000 in net tangible assets (total assets less
            total liabilities and goodwill) or (B) $2,500,000 in equity; or

      o     if the value of our common stock held by our stockholders (other
            than our directors, executive officers and 10% stockholders) is less
            than $1,000,000.

The minimum bid price requirement and the requirement that common stock held by
non-affiliates have a minimum value of $1,000,000 have been suspended by Nasdaq
until January 2, 2002. On November 1, 2002, the $2,000,000 net tangible assets
test will no longer be a listing requirement and will be replaced by the
requirement to have no less than $2,500,000 in equity. There are other
quantitative and qualitative criteria of the Nasdaq SmallCap Market which if not
met could lead to delisting of our common stock.

On June 6, 2001 we received a letter from The Nasdaq Stock Market notifying us
that the staff had determined that we did not comply with the minimum standards
for continued listing. On July 13, 2001 we filed a Current Report on Form 8-K/A
containing our unaudited May 31, 2001 balance sheet on a pro-forma basis
reflecting the closing of the transaction with Elan and EIS. On July 16, 2001,
we were notified by Nasdaq that they deemed us to be in compliance with the net
tangible assets/market capitalization/net income requirement and all other
requirements necessary for continued listing on the Nasdaq SmallCap Market.
However, we may not be able to maintain our compliance with Nasdaq continued
listing requirements in the future.

If Nasdaq delisted our common stock, we would likely seek to list our common
stock for quotation on a regional stock exchange. However, if we were unable to
obtain listing or quotation on such market or exchange, trading of our common
stock would occur in the over-the-
<PAGE>

                                                                         Page 30


counter market on an electronic bulletin board for unlisted securities or in
what are commonly known as the "pink sheet." In addition, delisting from Nasdaq
and failure to obtain listing or quotation on such market or exchange would
subject our common stock to so-called "penny stock" rules. These rules impose
additional sales practice and market making requirements on broker-dealers who
sell and/or make a market in such securities. Consequently, broker-dealers may
be less willing or able to sell and/or make a market in our common stock.
Additionally, an investor would find it more difficult to dispose of, or to
obtain accurate quotations for the price of, our common stock. Finally, it may
become more difficult for us to raise funds through the sale of our securities.

If a significant number of shares become available for sale our stock price
could decline

Many shares of common stock presently issued and outstanding are "Restricted
Securities" as that term is defined in Rule 144 promulgated under the Act. In
general, under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a one year holding period may sell, within any three month period,
an amount which does not exceed the greater of 1% of the then outstanding shares
of common stock or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144 also permits the sale of shares, under
certain circumstances, without any quantity limitation, by persons who are not
affiliates of GlycoGenesys and who have beneficially owned the shares for a
minimum period of two years. The possible sale of these restricted shares may,
in the future, increase the number of free-trading shares and may have a
depressive effect on the price of our securities. Moreover, such sales, if
substantial, might also adversely affect our ability to raise additional equity
capital.

Because our current management controls a significant percentage of our common
stock, they have substantial control over us

The holders of the common stock do not have cumulative voting rights. Two of our
directors, one of whom is an executive officer of GlycoGenesys, own
approximately 12% collectively of the outstanding shares of common stock. These
stockholders can substantially influence all matters requiring stockholder
approval, including the election of directors and the approval of significant
corporate transactions. One of the conditions of the transactions between us,
Elan and EIS requires that we expand our board of directors to six members on
the next regularly scheduled stockholder's meeting at which time EIS will be
entitled to appoint one director. At such time members of the board of directors
and their affiliates shall own approximately 21% of the outstanding common
stock, assuming EIS has not converted or exercised any of our securities held by
it, and the same number of shares are outstanding at such time as are currently
outstanding. If EIS were to have converted or exercised all of our securities
held by it, the members of our board of directors and their affiliates would own
approximately 36% of the outstanding common stock, assuming the number of shares
outstanding at such time equals the number of shares currently outstanding plus
the number of shares issued on exercise or conversation of securities held by
EIS. This concentration of ownership could have the effect of
<PAGE>

                                                                         Page 31


delaying or preventing a change in control or otherwise discouraging a potential
acquirer from attempting to obtain control of us, which in turn could materially
adversely affect our stock price.

The price of our common stock has been volatile, which could result in
substantial losses by you

The market price of the common stock, which is traded on the National
Association of Securities Dealers Automated Quotation (NASDAQ - Small Cap) has
been, and may continue to be, highly volatile. Factors such as announcements of
technological innovations or new products, either by us or by our competitors or
third parties, as well as market conditions within the various industries in
which we compete, may have a significant impact on the market price of our
common stock.

In addition, the stock market has, from time to time, experienced extreme price
fluctuations, particularly in the biotechnology sector, which have often been
unrelated to the operating performance of particular companies. Current market
conditions are particularly unstable and there is a large degree of uncertainty
at this time. In general, biotechnology stocks tend to be volatile even during
periods of relative market stability because of the high rates of failure and
substantial funding requirements associated with biotechnology companies. Market
conditions and conditions of the biotechnology sector could negatively impact
the price of our common stock.

An investment in our stock is speculative and entails a high degree of risk

There is nothing at this time upon which to base an assumption that our plans
for our business will prove successful. If our plans prove unsuccessful, the
purchasers of our shares may lose all or a substantial part of their investment.
Our operations are subject to numerous risks associated with the development of
agricultural and pharmaceutical products, including the competitive and
regulatory environment in which we operate. In addition, we may encounter
unanticipated problems, including manufacturing, distributing and marketing
difficulties, some of which may be beyond our financial and technical abilities
to resolve. The failure adequately to address such difficulties could have a
material adverse effect on our prospects and our financial condition.

We have not paid and do not intend to pay any dividends

To date, we have not paid any cash dividends on our common stock. Our Board of
Directors does not intend to declare any cash dividends in the foreseeable
future, but instead intends to retain all earnings, if any, for use in our
business operations. Furthermore, as we may be required to obtain additional
financing, there may be restrictions on our ability to declare any cash
dividends on common stock in the future.
<PAGE>

                                                                         Page 32


Part II - Other Information

Item 2. Changes in Securities

(a)   At a special meeting of the Company's stockholders, an amendment to the
      Company's Articles of Incorporation was approved which enabled the Company
      to grant preemptive rights to holders of its capital stock. Prior to such
      amendment, the Company's Articles of Incorporation prohibited stockholders
      from possessing preemptive rights. This amendment allows the Company to
      grant to certain stockholders, in its discretion, the right to participate
      in securities offerings by the Company so that such stockholder maintains
      its pro rata equity interest in the Company.

(c)   Set forth below is information regarding the sale of unregistered shares
      of equity securities sold by the Company during the three months ended
      September 30, 2001.

      On July 10, 2001, the Company sold to an accredited investor (i) 2,700,000
      shares of common stock, (ii) 1,116.79 shares of convertible Series C
      preferred stock and (iii) a warrant exercisable for five years to purchase
      381,679 shares of common stock at an exercise price of $2.43 per share for
      aggregate consideration of $5,000,000. In addition, the Company also sold
      to that accredited investor 4,944.44 shares of convertible exchangeable
      Series A preferred stock for aggregate consideration of $12,015,000. These
      securities were sold in reliance upon the exemption from registration
      pursuant to Section 4(2) under the Securities Act of 1933, as amended.

      During August 2001, the Company sold to three accredited investors 444,444
      shares of common stock and warrants exercisable for five years to purchase
      222,223 shares of common stock at an exercise price of $1.90 per share for
      aggregate consideration of $600,000. These securities were sold in
      reliance upon the exemption from registration pursuant to Rule 506 of
      Regulation D under the Securities Act of 1933, as amended.

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

On October 31, 2001, the Company held a Special Meeting of Stockholders. Two
items were voted upon: (1) an amendment of the Articles of Incorporation to
change the name of the Company to GlycoGenesys, Inc. and (2) an amendment of the
Articles of Incorporation to remove the prohibition on the granting of
preemptive rights.

The proposed amendment of the Articles of Incorporation to change the name of
the Company to GlycoGenesys, Inc. was approved by a vote of 22,902,921 in favor,
3,084,555 against with 34,616 abstentions out of a total of 26,022,092 votes
cast.
<PAGE>

                                                                         Page 33


The proposed amendment of the Articles of Incorporation to remove the
prohibition on the granting of preemptive rights was approved by a vote of
16,433,801 in favor, 3,202,986 against with 61,568 abstentions out of a total of
19,698,355 votes cast.


Item 6. Exhibits and Report on Form 8-K.

(a) Exhibits

      4.1   Certificate of Amendment to the Articles of Incorporation of the
            Company filed on October 31, 2001.

      10.1  Amendment No. 2 dated November 7, 2001, to the License Agreement by
            and among the Company, Wayne State University and the Barbara Ann
            Karmanos Cancer Institute dated January 26, 2001.

(b) Reports on Form 8-K.

On July 12, 2001 the Company filed a Current Report on Form 8-K to report the
issuance of its unaudited pro forma balance sheet as of May 31, 2001 and
unaudited pro forma income statement of operations for the five months ended May
31, 2001 to reflect the transactions involved in the business venture completed
on July 10, 2001 with Elan Corporation, plc and Elan International Services,
Ltd., as if they had occurred on May 31, 2001.

On July 13, 2001 the Company filed a Current Report on Form 8-K/A to amend and
restate in its entirety item 7 of the unaudited balance sheet to reflect
corrections regarding the Company's Series C convertible preferred stock.

On September 21, 2001, the Company filed a Current Report on Form 8-K to report
the issuance of a press releases regarding the signing of a sponsored research
agreement with the Massachusetts Institute of Technology for expanded analysis
of GBC-590 and identification of other compounds with promising biochemical and
pharmaceutical activity.
<PAGE>

                                                                         Page 34


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated this 14th day of November 2001.


      GLYCOGENESYS, INC.
      (the "Registrant")



      BY: /s/ Bradley J. Carver
          -----------------------------------------------------
          Bradley J. Carver, CEO, President, Treasurer,
          and a member of the Board of Directors



      BY: /s/ John W. Burns
          -----------------------------------------------------
          John W. Burns, Senior Vice President, CFO & Secretary



      BY: /s/ Patrick J. Joyce
          -----------------------------------------------------
            Patrick J. Joyce, Controller, Principal
            Accounting Officer