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

FORM 10-KSB

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
COMMISSION FILE NUMBER 0-18515

NEUROGENESIS, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
76-0320137
(IRS. EMPLOYER IDENTIFICATION NO.)

120 Park Avenue League City, Texas
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
77573
(ZIP CODE)



ISSUER'S TELEPHONE NUMBER (281) 333-0177  SECURITIES TO BE
REGISTERED UNDER SECTION 12 (B) OF THE ACT:
NOT APPLICABLE SECURITIES TO BE REGISTERED UNDER SECTION 12 (G)
OF THE ACT: COMMON STOCK, $.025 PAR VALUE PREFERRED STOCK
$ .OO1 PAR VALUE

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

Yes  [X] No [ ]

The issuer's revenues for the year ended December 31, 2001 were
< $52,690 >.

As of December 31, 2001 there were 2,003,588 shares of ($0.025)
par value Common stock (the Company's only class of voting stock)
outstanding. The aggregate market value of the common shares of
the Company on December 31, 2001 (based upon the mean of the
closing bid and asked price) held by non-affiliates of the
Company was approximately $38,736.

DOCUMENTS INCORPORATED BY REFERENCE
None


FORM 10-KSB

NEUROGENESIS, INC.

TABLE OF CONTENTS

PART 1

Item 1.  Description of Business

Item 2.  Description of Property

Item 3.  Legal proceedings

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

Part II

Item 5.  Market for Common Equity and Related Stockholder Matters

Item 6.  Management's Discussion and Analysis of Plan or
         Operations

Item 7.  Financial Statements

Item 8.  Changes in and disagreements with Accountants on
         Accounting and Financial Disclosure.

PART III

Item 9.  Directors, Executive Officers, Promoters and Control
         Persons: Compliance with Section 16 (a) of the Exchange Act.

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Beneficial Owners and
         Management

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits and Reports on Form 8K


SIGNATURES


PART III
Item 1. Index to Exhibits

Item 2. Description of Exhibits

PART 1

ITEM 1. DESCRIPTION OF BUSINESS


THE COMPANY

NeuroGenesis, Inc. (The "Company") was incorporated in Utah on
August 6, 1984 as Cozmal Technology, Inc as an organization to
find and promote new technology. On January 27, 1989 the name
was changed to NeuroGenesis, Inc at the same time a definitive
reorganization agreement (The " Reorganization Agreement ") was
completed between the Company and Matrix Technologies, Inc.
("Matrix"), a Texas Corporation.

Matrix was incorporated November 13, 1984 to acquire the
patentable work of Dr. Kenneth E. Blum, Ph.D., relating to
nutritional supplementation and the efficient functioning of
the hypothalamus and the hippo campus of the human brain and to
promote that work.

On July 16, 1995 "Matrix" amended their Articles of
Incorporation changing the Authorized Shares from Ten Thousand
(10,000) to One Million Five Hundred Thousand(1,500,000) in
order that funding could be accomplished to promote the
completed Blum formulations. The initial funding was a Two
Hundred Fifty Thousand Dollar ($250.000) loan from Lloyd's
Bank. The loan was guaranteed by Albert H. Bieser, President of
"Matrix". In exchange for the loan guarantee Mr. Bieser
received one Common Share for each dollar of loan guarantee. In
accordance  with the conditions of the "Reorganization
Agreement" the Company  conveyed a total of Four Million Two
Hundred Thousand Shares of  it's Common Stock to the
shareholders of "Matrix" in exchange for  One Hundred Percent
(100%) of the issued and outstanding stock of  "Matrix". The
Company also agreed to honor certain stock purchase  options
that had been previously granted to certain persons by  "Matrix"
which in the aggregate entitled the holders thereof to  purchase
up to two Million Ninety Eight Thousand Shares of the  Company's
Common Stock at a price of One Dollar($1) per Share at  any time
prior to December 1. 1993. Following the reorganization
"Matrix" owned no assets and possessed no liabilities and was
kept as a wholly owned, inoperative subsidiary of the "Company".

The "Reorganization Agreement " also provided for the
resignation  of the Company's Board of Directors and the
appointment of a new  Board of Directors consisting of Albert H.
Bieser, Gary E. Bell,  Michael C. Trachtenberg, Ph.D., F. Lynn
Estep, Jr. and R. Bradford Perry to serve until the next annual
meeting of the  Shareholders and their successors be elected.

On April 19, 1989, the Company's ownership was merged from
NeuroGenesis Inc , a Utah Corporation to NeuroGenesis Inc. ,a
Delaware Corporation with an authorized capital of Fifteen
million (15,000,000) Shares at a par value of $0.001per share.

On October 17, 1990 the Board of directors replaced Albert H.
Bieser with Robert Baldwin, former president of Gulf Oil and
Refining Company Inc. A series of management changes then
occurred during which time sales decreased from approximately
One hundred thousand dollars ($100,000) per month to
approximately Ten  thousand dollars ($10,000) in September 1993.
On June 2, 1993 the Authorized capital had been increased to
Twenty five million (25,000,000) Shares at a par value of $0.001
per Share in an attempt to enable future financing. In September
1993 Lloyd's Bank had not received repayment of their 1985 loan
and had received only Thirty thousand dollars while the loan and
accrued interest now totaled Four hundred seventy five thousand
($475,000) and was in default. The bank agreed to defer payment
for eighteen months in exchange for Seventy five thousand
($75,000) immediately and regularly scheduled monthly payments
after the eighteen-month period.  Albert H. Bieser provided the
immediate cash payment of seventy Five Thousand dollars and to
guarantee the balance in exchange for the Company 's agreement
to award the intellectual rights  (patents, trademarks, etc.)
to Albert H. Bieser should the  company default on the loan.

By March 10, 1995 no payments on the loan had been made to
Lloyds Bank. The loan was called and Albert H. Bieser's assets
securing the loan were acquired by the Bank .On April 6, 1995
the  Company's Board of Directors ordered the transfer of the
intellectual properties to Albert H. Bieser who in turn gave
royalty free license to the Company as long as he remained CEO
or  President and Chairman of the Board. In the case
of his resigning this office, he or his heirs or assigns would
receive a royalty equivalent to one cent ($0.01) per  capsule.
At this time "Matrix" who had not paid franchise taxes since
1992 was dissolved.

On April 5, 1995 the Shareholders of the Company elected the
following Directors: Albert H. Bieser of Houston, Texas, Karen
Coady of Bacliff, Texas and David Bishop of DeLand, Florida.On
February 11, 1998 the Company acquired 100 % of the  outstanding
shares of Natural Neuro Nutrition, Inc. ,a Texas  Corporation
("Texas 3NI") , for Three Hundred Ninety Seven  Thousand Nine
Hundred Sixty(397,960) Shares of the Company's  Common Stock and
Neuro Health Products (a proprietorship, NHP)  for One Hundred
Two Thousand Forty (102,040) of the Company's  Common Shares.
3NI was an operating company selling similar products under
license from the company which had facilities, marketing,
management teams, customers, and product fulfillment capability.
NHP was a small network-marketing firm, which sold products
similar to those of the Company.


INDUSTRY OVERVIEWS

Addiction: An Overview  Until the mid 1930s, the medical
consensus held that alcoholics  and drug addicts were the
victims of a fatal weakness of  character which condemned its
victims to a life of misery and a  premature death. In general,
chronic alcoholics and drug addicts were believed to be both
untreatable and unworthy of treatment.  This view of alcoholism
and addiction prevailed until Alcoholics Anonymous proved that
it was possible for large numbers of  chronic alcoholics to
overcome their alcoholism and become  productive and useful
members of society. Therefore, in recent years much of the
social stigma associated with alcoholism and  drug addiction has
eroded. Alcoholism and drug addiction are no longer relegated to
the realm of fatal character weakness and the medical community
is coming to recognize that these maladies can  be safely and
effectively treated.

Collectively, alcoholism and drug addiction are believed by many
to be the greatest single health problem in the United States.
Alcoholism strikes one out of every ten American adults and the
vast majority of untreated alcoholics die of alcohol related
causes. It is estimated that untreated alcoholism alone costs
the national economy more than $117 billion per year in lost
productivity, unnecessary accidents and alcohol-related illness.
Similarly, cocaine addiction has become epidemic in certain
segments of the population. The " War on Drugs " has become a
major political issue at the federal, state and local level and
the amount of money devoted to drug education and treatment is
expected to increase substantially. In order to understand the
treatment of alcoholism and drug addiction, a prior
understanding  of the addictive process is essential.

First, and most importantly, it must be understood that large
segments of the population can and do use these substances on a
social basis with only a moderate risk of becoming addicts. For
many people, the moderate use of alcohol and cocaine is
perceived  as a pleasant, albeit temporary, release from the
trials and  cares of everyday existence. Alcohol and drugs are
glamorized in the same books, films, and music and television
programs that carry commercial warnings of the dangers of
alcohol and drugs. The final message is at best confusing.
Against this backdrop of contradictory messages one stark fact
remains:
IF A SUSCEPTIBLE PERSON USES ALCOHOL OR COCAINE, EVEN ON A
SOCIAL  BASIS, THE PROBABILITY OF ADDICTION APPROACHES THE
INEVITABLE.  Therefore, alcohol and cocaine truly are substances
where one man's pleasure is another man's poison. Substances
that are pleasant and are relatively harmless for one segment of
the  population are deadly poisons for another segment of the
population. The following sections present a brief discussion of
neurological biochemistry and the mechanics of alcoholism and
cocaine addiction.

BRAIN CHEMISTRY
The brain is the most complex organ system
within the human body.  It regulates every facet of human
existence from a simple heartbeat to highly complex motor
functions, but reduced to bare  e ssentials, all brain functions
involve the transmission of the  electrochemical message from
one brain cell to another. In the usual case a transmitter cell
will release a specific chemical compound (a neurotransmitter)
into a synapse. When this  neurotransmitter crosses the synapse
and makes contact with the  receptor cell on the other side an
electrochemical message is  delivered. After delivering a
message most neurotransmitters are  then recycled in the brain
through several different recycling  mechanisms. This constant
flow of trillions of neurotransmitters across trillions of
synapses and the constant recycling of  neurotransmitters is the
basic operating mechanism of the human  brain. Most
neurotransmitters are amino acids, aminated compounds or simple
peptides, short amino acid chains that the body  manufactures
from the available amino acids contained in foods.  The
neurotransmitters, which appear to have the greatest
significance in the addiction process are:
1. Endorphins and Enkephalins. - neurotransmitters which
suppress  electrochemical messages relating to pain, depressions
and  feelings of urgency.  2. Dopamine - a neurotransmitter that
carries electrochemical messages relating to reward and
pleasure.  3. Norepinephrine - a neurotransmitter that
suppresses electrochemical messages relating to depression and
feelings of  urgency.  4. Gamma-amino butyric acid (GABA ) - a
neurotransmitter that  carries electrochemical messages relating
to feelings of anxiety.
5. serotonin - a neurotransmitter that carries electrochemical
messages relating to sleep and feelings of well being.  These
natural messengers, which are synthesized by transmitting  cells
within the brain, seek out and attach to specific sites on
receptor cells within the brain in order to deliver their
electrochemical message. The receptor sites will only accept
molecules that have the right shape. The entire process is much
like slipping a key ( the neurotransmitter ) into a lock ( the
receptor ). If a sufficient number of receptors are " filled "
with the appropriate neurotransmitters at any given time, a
person feels a sense of comfort and well being. If an excessive
number of receptors are " empty " at any given time a person
feels a sense of urgency, irritation and depression. In general,
a human being will seek out those activities, which increase
natural neurotransmitter levels and avoid those activities,
which  decrease natural neurotransmitter levels. When a foreign
substance interferes with this natural process, however,
addiction often is the result.

MECHANISM
Over the last ten years alcoholism treatment
professionals have  focus on three principal factors which
appear to be of critical  importance in determining the
susceptibility of a human being to  alcoholism. These factors
are : (1) A genetic predisposition to  alcoholism such as that
experienced by children of alcoholics.  (2) Extended excessive
stress such as that experienced by certain combat veterans. (3)
Extended excessive exposure to heavy social  drinking.  At the
present time it is generally believed that a genetic
predisposition to alcoholism is by far the most common cause of
alcoholism. Biological children of alcoholics are much more
likely to become alcoholic than the general population and this
tendency remains even when the children are adopted into non-
drinking homes. Further studies have shown that children of
alcoholics have significantly different responses to alcohol in
laboratory test. Therefore it is generally agreed that a
majority of alcoholics do process alcohol differently than the
general  population.  Recent laboratory research has
demonstrated that certain natural by-products of alcohol
metabolism interfere with the normal neurotransmitter mechanisms
discussed in the preceding paragraph.  As alcohol is metabolized
by the body chemical compounds known as  tetrahydroisoquinolines
( TIQ's ) are produced. Since TIQs, which were first found in
poppy plants, are remarkably similar to in structure to certain
natural enkephalins and endorphins, they  have the ability,
along with most other opiates, to mimic the  action of
enkephalins and endorphins and create an artificial
neurotransmitter response in certain regions of the brain. This
artificial neurotransmitter response is the primary reason for
the increased sense of well being that most people feel when
they  take a drink of alcohol.  In a genetically predisposed
person, however, the physiological response to alcohol is
substantially different. Available research data demonstrate
that many children of alcoholics experience a marked increase in
natural enkephalin and endorphin  levels when they are exposed
to controlled amounts of alcohol in  a laboratory setting. In
these children of alcoholics, therefore, it appears that the
artificial neurotransmitter response created by the TIQs, when
coupled with the alcohol induced increase in  natural enkephalin
and endorphin levels, results in a response to  alcohol that is
greatly intensified. Therefore, it is believed that many
children of alcoholics experience a much stronger sense  of
pleasure and well being from the same amount of alcohol
consumption. This intensified effect, in turn, tends to produce
more drinking behavior. As the level of alcohol consumption
increases, however, the mimicking effect of the TIQ's begins to
have profound effects on the natural endorphin and enkephalin
mechanisms described above.

When a human brain is overloaded with alcohol induced TIQ's, the
natural feedback mechanisms of the brain instruct the
transmitter cells to produce fewer enkephalins and endophins in
an attempt to eliminate the overload. At the same time, in
response to increasing levels of TIQ's, the number of available
receptor sites in the brain increases. Finally, the brain begins
to  produce greater quantities of the enzymes that are used to
control neurotransmitter levels and aid in the neurotransmitter
recycling process. The end result of these three processes is an
increased need for neurotransmitters, a decreased ability to
produce the required neurotransmitters and a neurotransmitter
recycling system that has become abnormally efficient. In
substance, fewer neurotransmitters are produced, despite a
higher level of demand, and the bulk of the available
neurotransmitters  are recycled before performing their intended
functions. When this process has progressed to a certain point,
the artificial neurotransmitter responses caused by TIQ's will
effectively  replace the natural enkephalin and endorphin
responses of the  brain. After the alcohol induced TIQ's have
"shut down" the natural neurotransmitter production systems, the
unfilled neurotransmitter receptor sites create intense feelings
of  irritation, urgency and depression that can only be relieved
by  additional TIQ's. The person is now addicted to alcohol.

Once the cycle described above has taken hold, the damage caused
by alcohol consumption remains long after alcohol consumption
ceases. During extended periods of alcohol addiction, the human
brain loses much of its ability to produce enkephalins and
endorphins, develops an abnormal need for enkephalins and
endorphins and develops an abnormal ability to recycle any
enkephalins and endorphins that are in fact produced. Without an
adequate supply of enkephalins and endorphins, the body has no
natural ability to create feelings of well being and suppress
feelings of urgency, irritation and depression. Therefore, most
recovering alcoholics experience intense feelings of urgency,
irritation and depression for an extended period of time after
the cessation of drinking. These natural feelings of urgency,
irritation and depression, in turn, are generally believed to be
the primary contributing factor in the cycle of recovery and
relapse that is common in recovering alcoholics. In an unending
cycle, the substance that causes pain in the first place becomes
the only substance that can relieve the pain.

COCAINE ADDICTION
While the end result of cocaine addiction is
similar to the  alcohol response discussed above, the underlying
neurochemical  mechanism is significantly different. Instead of
providing an artificial substitute for the natural enkephalins
and endorphins, cocaine causes the brain to release abnormally
large amounts of  dopamine, norepinephrine and serotonin and
subsequently prevents  the natural recycling of these
neurotransmitters. The end result is a very high concentration
of neurotransmitters that are able to make multiple contacts
with the appropriate receptors. It is this high neurotransmitter
concentration coupled with multiple  neurotransmitter contacts
that gives rise to the extreme euphoria  experienced by cocaine
users. Since cocaine inhibits the natural recycling process,
however, the dopamine, norepinephrine and  serotonin created by
the brain are eventually broken down and  flushed out of the
body. This process eventually depletes both the neurotransmitters
and the amino acids that are necessary to synthesize new
neurotransmitters. With extended use, cocaine literally strips
the bulk of the natural dopamine, norepinephrine and serotonin
out of a user's limbic system, the brain region that controls
feeling of reward and pleasure. This stripping effect, over time,
results in severe neurotransmitter deficiencies and a craving
response that is quite similar to the craving suffered by
alcoholics. All cocaine users begin to feela reduced response
to an identical drug concentration at somepoint in the
progress of their addiction. This reduced response is a
natural result of the neurotransmitter stripping described
above. When the natural neurotransmitters are gone, the drug
simply stops working. At this point, most cocaine addicts
begin searching for another artificial means of creating
feelings of well being that they used to derive from cocaine.
Since the TIQs created by alcohol metabolism compensate for
the natural effects of the  neurotransmitters that have been
stripped by cocaine, alcohol is frequently used for this
purpose. Therefore, most cocaine users eventually end
up as polydrug abusers who switch back and forth between cocaine
and alcohol, or other drugs, in order to create or maintain
the feelings of well-being that cannot be generated by their
own damaged neurotransmitter systems.  Much like the recovering
alcoholic, the recovering cocaine addict must overcome the damage
caused by his extended misuse of cocaine and alcohol. The problem
is compounded, however, by the fact that a polydrug abuser has
damaged several neurotransmitter systems. The cocaine abuse has
stripped the neurotransmitters out of the  dopamine,
norepinephrine and serotonin systems, and the alcohol has
damaged the enkephalin and endorphin systems by curtailing
natural enkephalin and endorphin production and increasing the
recycling ability of the brain. It is this dual addiction that
makes cocaine addicts more difficult to treat than simple
alcoholics.

EXISTING PRODUCTS
As explained above, alcoholism and cocaine
addiction have a  devastating nutritional effect on a number of
different  neurotransmitter systems. Therefore, the Company
believes that an effective nutritional supplement for recovering
alcoholics and addicts must focus on substantially all of the
more common nutritional deficiencies. NEURECOVER-DA and
NEURECOVER-SA, the Company's principal products, have been
specifically formulated  to provide the raw materials that are
used by the body to repair damaged neurotransmitter systems. In
the opinion of the Company's principal scientists, this approach
allows the natural mechanisms of the body to select the specific
nutrients it needs, and  discard the nutrients that are not
needed.

NEURECOVER-DA and NEURECOVER-SA have been carefully formulated
to provide the specific amino acids that are essential to the
restoration of proper brain chemistry in recovering alcoholics
and 'cocaine addicts. These products help to restore optimal
brain chemistry by providing a ready supply of raw amino acids
that can he used by the brain to synthesize necessary
neurotransmitters. While the ingredients in NEURECOVER-DA and
NEURECOVER-SA have no direct physiological effect on a
recovering  alcoholic or addict, NEURECOVER-DA and NEURECOVER-SA
have the  ability to increase dietary levels of the specific
amino acids  that are used in the body's natural synthesis of
essential neurotransmitters.  The NEURECOVER-DA and NEURECOVER-
SA formulations will not alter  the base line ability of the
body to synthesize  neurotransmitters. They will, however,
ensure an adequate supply  of raw materials so that the brain's
own neurotransmitter  production systems are able to operate
efficiently.

NEURECOVER-DA SAAVE  The first product that was developed by
the Company was SAAVE  NEURECOVER-DA, a patented amino acid
formulation that is  presently being marketed to over 400
alcoholism and chemical  dependency treatment professionals and
their patients.  The active ingredients in SAAVE (improved and
renamed beCALM'dTM) are: DL-Phenylalanine a  naturally occurring
amino acid that is used by the body to  synthesize dopamine and
norepinephrine and inhibit the action of  the enzymes that break
down and recycle enkephalins and  endorphins; L-Tryptophan, a
naturally occurring amino acid that is used by the body to
synthesize serotonin; L-Glutamine, a  naturally occurring amino
acid that is used by the body to  synthesize Gamma-Amino Butyric
acid (GABA); and Vitamin B6, a  natural vitamin which aids the
absorption of the amino acids by  the digestive system and the
synthesis of amino acids in the  brain.

Inpatient alcohol treatment centers that currently use
NEURECOVER-DA (and its sister product, beCALM'd following the
first month of sobriety) on a regular basis report significant
reductions in  their AMA Drop out Rates. These reduced AMA
Dropout Rates, in turn, increase both the profitability and the
overall effectiveness of the treatment programs. Alcoholism
counselors who have used NEURECOVER-DA and beCALM'd with their
patients,  report reduced levels of anger, urgency, irritation
and  compulsion coupled with increased levels of cooperation
and earlier treatment response. In general, these products
have has been  well received by the alcohol treatment
professionals who have used the product with their patients
and it is steadily gaining  acceptance as a useful nutritional
adjunct to traditional alcohol treatment programs.

NEURECOVER-SA, the Company's second product, has achieved
similar results with persons who are recovering from cocaine and
other stimulant addictions.  Because of the unique problems of
these addicts, however, the formulation of NEURECOVER-SA is more
complex.  In addition to the amino acids in the beCALM'd and
NEURECOVER-DA formulations, NEURECOVER-SA includes L-Tyrosine,
an amino acid which is essential for the production of both
dopamine and norepinephrine. Further, the NEURECOVER-SA
formulation includes a number of vitamins and minerals that are
not present in either beCALM'd or NEURECOVER-DA.

In general, NEURECOVER-SA has been well received by the cocaine
treatment professionals who have used the product with their
patients. Like NEURECOVER-DA, NEURECOVER-SA is steadily gaining
acceptance as a useful nutritional adjunct to traditional
cocaine treatment programs.

beCALM'd has also been tested and proven in scientifically
supervised clinical  trials to greatly reduce the long and short
term dilatory effects  of stress and many of the symptoms of
Hyperactivity Disorders and  Attention Deficit Disorders.  The
American Medical Association estimates between 70% and 80% of
the cases they treat are stress related. This says that
potentially three fourths of the American population are
potentially a market for the product.

A variety of studies have shown over 20% of the American Public
suffers from one form or another of Attention Deficit
Hyperactivity Disorders (ADHD) Issuer's in house studies and
marketing reports indicate 62.5% of the cases now being treated
for ADHD are caused by nutritional deficiencies which can be
overcome by products falling under issuer's patent protection.

COMPETITION
The Company's products are patented and these
patents have been twice adjudicated successfully and the Company
feels confident  that further judicial testing will produce the
same results. Thus there is no direct competition. However,
there are indirect  competitors for all of the products:

1. NeuRecovery-DA has few current competitors. Several drugs
have been tried in the past but in general that were shown
to be addictive or ineffectual. A perennial drug called Anabuse
reemerges every three or four years. If a person has taken it
and then drinks alcohol, he or she becomes violently ill. In a
few cases patients have been known to have a stroke as a result.
Another, newer one is from Europe. It is called Acomprosate and
has been found useful for 30 days, in 30% of the cases, which
have  had 30 days of sobriety. By comparison, the Company's
products can be used from the first day of treatment and have
been successfully used over 20 years. It has also been used to
help patients recover from Methadone abuse.  Methadone is often
used to enable recovery from abuse of heroin, morphine, and
other opiate source drugs. (Methadone is considered a better or
more socially accepted addiction than the opiates).

2. NeuRecovery-SA has proved to be very useful as an adjunct to
therapy in recovery from the abuse of stimulants such a cocaine
and the amphetamines. A paper on its use is attached entitled:
The Healing Process and Cocaine Recovery. This paper also
describes the drugs commonly used in the treatment of such
addictions; Disipramine, Bromocriptine and Amantadine.

3. beCALM'd was originally formulated to diminish the dilatory
effects of stress. In this use its competition was generally
books on stress management. To date no other competition has
come  into general use, beCALM'd was later found to be very
helpful in  the treatment of attention deficit and hyperactivity
disorders.  Its principle competition is Ritalin and several
drugs of the  amphetamine type. The mechanism of action of these
drugs is unknown and their side effects are severe. Never the
less, the  world's second largest pharmaceutical company,
Novartis , the  makers of Ritalin, have stated that over 40% of
their revenues come  from the sale of Ritalin. Studies have
shown that beCALM'd, the  mechanism of action of which is well
known and accepted, is more  effective than Ritalin in 62.5% of
ADHD cases studied.

GOVERMENT REGULATION
U. S. FOOD AND DRUG ADMINISTRATION (FDA) MATTERS

In general the FDA "protects" and 2) any curative claims must be
approved by the FDA before  such claims are made. Both of these
"protections" are applied to products, regardless of form, that
are used for medicinal purposes. However, such products fall
into classes. (a) Those made from man made molecules and (b)
those formulated from  natural nutrients found on the FDA's GRAS
(Generally Regarded as  Safe) list. Thus anyone may sell
anything processed in a FDA  approved facility by an approved
method, provided there are no  curative claims made for the
product. However, if ANY curative claims are made the product
falls under regulation by the FDA.  The one exception to this is
curative benefitswhich the  "scientific community" generally
accepts as true. For example, Vitamin C or foods containing
Vitamin C are generally regarded as  helpful to persons having a
cold. In this case, the Vitamin C manufacturer may say it is
useful, but cannot claim it "cures" the cold. All of the
ingredients in the Company's products are made from items on the
GRAS list of vitamins, minerals, amino acids, etc. Curative
claims are not made for the products, only that they are useful
adjuncts to therapy, which had been accepted by the general
scientific community.

There is considerable scientific and anecdotal evidence that
indicates the issuer products do have "curative" properties. The
company is, therefore, working to acquire the funding to do what
is required to get Food for Drug Use, Approval from the FDA. At
such time as this can be accomplished, it is believed a great
deal of two of the country's problems, alcohol and drug abuse
and ADHD, can be greatly alleviated. Once the FDA approval has
been obtained, gaining the funding to sufficiently advertise the
products should be easily realizable.

ITEM 2. DESCRIPTION OF PROPERTY

Neurogenesis, Inc.'s principal office is located at 120 Park
Avenue, League City, Texas 77573 and currently occupies 5500
square feet of floor space. The space is leased from an
unaffiliated third party for a term that expires May 1, 2005
with a monthly rental of  Forty-five Hundred Dollar ($4,500) per
month. Rent includes all utilities except electricity.
Management ascertains that there is a very small likely-hood
that the Company would not be able to renew the lease at about
the same rate as there are numerous vacant offices in the
Houston area.

ITEM 3. LEGAL PROCEEDINGS

          None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          None



PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

NeuroGenesis' Common Stock is currently traded over-the-counter
on the Pink Sheets.Such over-the-counter market quotations
reflect inter-dealer prices without retail mark-up, markdown or
commissions, and may not necessarily represent actual
transactions.

The table below sets forth the high bid price of the Common
Stock for the Fiscal years 2001 and 2000

Fiscal Year Ending         2001                  2000

First Quarter             $0.45              $0.06125

Second Quarter            $0.35                 $0.01

Third Quarter             $0.12              $0.06125

Fourth Quarter            $0.10              $0.30125

As of December 31, 2001 the Company had 164 shareholders of
record. The Company has never paid any cash dividends and has no
plans to pay any cash dividends in the foreseeable future.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
AND LIQUIDITY

As of December 31, 2001 the Company had total liabilities of
$347,009 compared to $313,960 at December 31, 2000.For fiscal
2001 there was a working capital deficit of <$242,176> as
compared to <$176,562> for fiscal 2000. This decrease in
working capital is attributable to $22,500 in prepaid expenses
to two software companies that was written off due to
non-delivery and uncollectability, approximately $26,000 of old
accounts receivable were written off and approximately $12,000
in miscellaneous items were moved from capital to expense because
of new accounting rules.

The Company expects that cash  requirements for operations for
the fiscal year 2002 will be provided by an increase in sales.
However, there can be no assurance that theseactivities will, in fact,
provide capital for operations.

YEAR ENDED DECEMBER 31, 2001 COMPARED WITH FISCAL 2000

The Company had fiscal 2001 sales of $548,799 generating a gross
profit of $413,893 as compared to fiscal 2000 sales of $413,030
and a gross profit of $303,545. These figures represent a 33%
sales increase and a 36% gross profit increase over fiscal 2000.
Expenses were $467,983 for 2001 as compared to $349,008 for 2000.
This expense increase partially caused by a personnel increase in
anticipation of a sales increase in 2001.

The net loss for 2001 was <$42,592> as compared to a net loss of
<$54,856> for 2000. A loss of <$0.02> per share in 2001 and
<$0.03> in 2000.
The Company plans to maintain expenses at the lowest possible
amount until sales volume generates an acceptable level of net
profit. In addition the Company expects that future operations
will be funded by sales increases for the ensuing year.


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995

The information contained in the preceding paragraphs is forward
looking and involves risks and uncertainties that could
significantly impact expected results. While it is impossible to
itemize the many factors and specific events that would affect
the outlook of any company, the Company's outlook for fiscal
2002 is predominately bases on its interpretation of what it
considers key economic assumptions.





ITEM 7. FINANCIAL STATEMENTS


NEUROGENESIS, INC.

Comparative Financial Statements

December 31, 2001 and 2000























Clyde Bailey, P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230


CLYDE BAILEY P.C.
Certified Public Accountant
10924 Vance Jackson  #404
San Antonio, Texas 78230
(210) 699-1287(ofc.)
(888) 699-1287 (210) 691-2911 (fax)
Member:
American Institute of CPA's
Texas Society of CPA's

Board of Directors
NeuroGenesis,Inc.
Houston, Texas

REPORT OF INDEPENDENT PUBLIC ACCOUNTANT

We have audited the accompanying consolidated balance sheet of
NeuroGenesis Inc ("Company") as of December 31, 2001 and 2000
and the related consolidated statement of operations, changes in
stockholders' equity, and statement of cash flows for the years
ended December 31, 2001 and 2000. These financial statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial
statements based on our audit.

We conducted our audit in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of the Company and subsidiaries as of
December 31, 2001 and 2000, and the consolidated results of
their operations and their cash flows for the years ended 2001
and 2000 then ended in conformity with accounting principles
generally accepted in the United States.

Clyde Bailey
Certified Public Accountant

September 14, 2002


NeuroGenesis, Inc.
Balance Sheets
As of December 31, 2001 and 2000

A S S E T S
				2001		     2000
Current Assets:
Cash and cash equivalent     $54,995 	          $51,325
Accounts receivable,
net of allowance for
doubtful accounts	       6,543 		   17,059

Inventories		      33,055 		   29,173
Prepaid Expenses	      10,240 		   39,412
			   ___________         ___________
Total Current Assets         104,833 		  136,969

Fixed Assets:
Furniture and office
equipment,	              32,036 	  	    6,954
net of accumulated
depreciation of
$17,796 for 2001 and
$ 10,125 for 2000

Patents, net of
accumulated amortization      10,040     	   12,529
of $1,609 for 2001 and
$940 for 2000	             _______ 	        _________


Total Fixed Assets	      42,076 		   19,483

Total Assets	            $146,909 		 $156,452
			  ==========		==========


LIABILITIES and STOCKHOLDERS' EQUITY


				   2001		  2000
Current Liabilities
 Accounts Payable	          $66,513 	  $ 16,411
 Note Payable - Related Party     107,228 	   165,018
 Loans from directors		  173,268 	   132,531
				  _______  	   _______
    Total Current Liabilities     347,009 	   313,960


Stockholders' Equity
 Preferred Stock,
 par value $.025 per
 share authorized 500,000 shares,
 no shares outstanding
Common Stock,	     	           50,090 	     50,090
 par value $.025 per share,
 authorized 25,000,000 shares;
 2,003,588 shares issued and
 outstanding
Additional Paid-In Capital      2,167,767         2,167,767
Accumulated Deficit	       (2,417,957)       (2,375,365)
			        ____________     ___________
Total Stockholders' Equity       (200,100)	   (157,508)

 Total Liabilities and
 Stockholders' Equity            $146,909         $156,452
			         =========	  =========

NeuroGenesis, Inc.
Statement of Operations
For the Years Ended December 31, 2001 and 2000


				   2001	   	  2000

Sales, net of discounts	          $548,799      $413,030
Cost of Sales			   134,906       109,485
				   ________     _________
    Gross Profit	           413,893       303,545

Legal and Professional Fees              - 	       -
Selling, general and
administrative expenses	           467,983       349,008
			          ________	 ________
    Operating Income (Loss)        (54,090)      (45,463)

Other Income (Expense):
 Interest (expense)	            (8,002)       (9,393)
 Other Income (expense)		    19,500 	      -
			           ________       _______
    Other Income, net		    11,498        (9,393)

    Net Income (Loss)	          $(42,592)     $(54,856)
				   ========     =========
    Net Income (Loss)
    per share		            $(0.02)       $(0.03)
				   ========     =========
    Weighted average shares
    outstanding		          2,003,588      2,003,588
			          =========      =========




NeuroGenesis, Inc.
Statement of Changes in Stockholders' Equity
For the Years Ended December 31, 2001 and 2000


				Additional		Total
	      Common Stock	Paid-In	   Accumulated	Stock-
              Shares   Amount	Capital	   Deficit      holders'
	      	                                        Equity

Balance
December
31, 1999     1,750,750  43,769  1,780,938 (2,320,509) (495,802)

Stock
Issued         382,838   9,571    373,267         -    382,838

Stock
Cancelled     (140,000) (3,500)     3,500         -          -

Stock issued
for services    10,000     250     10,062         -     10,312

Net Loss,
December
31, 2000             -       - 	        -    (54,856)  (54,856)
	        _______ ________  ________  _________  ________
Balance
December
31, 2000     2,003,588  50,090  2,167,767 (2,375,365) (157,508)
	     _________ _______  _________ ___________ __________
Net Loss,
December
31, 2001             -     - 	       -     (42,592)  (42,592)
	     _________ _______  _________ ___________ __________
Balance
December
31, 2000     2,003,588  50,090  2,167,767  (2,417,957) (200,100)
             _________ _______  _________   __________ __________



NeuroGenesis, Inc.
Statement of Cash Flows
For the Years Ended December 31, 2001 and 2000


				      2001	2000
Cash Flows from Operating
Activities:

  Net Income (Loss)		 $(42,592)   $(54,856)

  Operating expenses not
  requiring use of cash:

     Amortization expense    	      669 	 548
     Depreciation expense	    7,671      3,281
     Shares issued for services	        -    393,150

  Net (increase) decrease in
  operating assets and
  liabilities                      85,908   (330,445)
				_________  __________
Net Cash Provided by Operating
Activities			   51,656     11,678

Cash Flows from Investing
Activities:

  Purchase of property and
  equipment	                  (32,774)    (3,607)
				 _________  _________
Net Cash Provided by
Investing Activities	          (32,774)    (3,607)

Cash Flows from Financing
Activities:
  Increase in notes payable	        -     12,023
  Payment of notes payable        (15,212)	   -
				  ________    _______
Net Cash Provided by Financing
Activities		          (15,212)    12,023

Net Increase (Decrease) in Cash	    3,670     20,094

Cash -Beginning of year		   51,325     31,231
				  ________    _______
Cash -End of year		  $54,995    $51,325
				   =======    =======

Supplementary Disclosure:
     Cash Paid for Interest         8,002      9,393
     Cash Paid for Taxes

Non-cash transactions:
(See Statement of Stockholders'
 Equity)
      Shares Issued for Services        -    392,838
      Shares Issued for Assets	        0	   0








NEUROGENESIS, INC.
Notes to Financial Statements

Note 1- ORGANIZATION

NeuroGenesis, Inc. (the "Company") is a Delaware Corporation and
is the successor to the business operations of Matrix
Technologies, Inc., a Texas Corporation, which was incorporated
in November 1984 for the purpose of completing the development
of a series of products to be used as adjuncts to therapy by the
substance-abuse treatment community. The company has a total of
25,000,000 authorized common shares with a par value of $.025
per share and with 2,003,588 common shares issued and
outstanding as of December 31, 2001. The Company has a total of
5,000,000 authorized shares of preferred stock with a par value
of $.025 and no shares are outstanding.

In November of 1989, one of the components of the main product,
1-tryptophan, was banned by the FDA.  This required destruction
of product inventory and resulted in a substantial decline in
sales in early 1990. Sales then recovered over the rest of the
year.  In October of 1990, one of the Company's original
Founders resigned and formed a new company, Natural Neuro
Nutrition, Inc. (3NI), to develop new research and pursue
similar goals of the original company.  By 1993, the Company's
sales had fallen to less than 20% of the 1990 levels.

In 1991, NeuroGenesis, Inc. unsuccessfully pursued legal action
against the new company, 3NI, which was settled in August  of
1993 and resulted in the Company giving 3NI a royalty free
license and reinstating the founder of 3NI on the Board of
Directors of NeuroGenesis, Inc.

During 1994 the majority of directors resigned and the Founder
began reorganization of NeuroGenesis, Inc. The Company was
unable to obtain necessary capital and from an operational point
of view, was basically inactive until February 1998. At that
time, the Company acquired 3NI and a network marketing company,
Nuero Health Products, in exchange for 500,000 shares of common
stock valued at approximately $125,062.

Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Inventory
Inventories are stated at the lower cost or market.  Cost is
determined using an average cost method.

Property and Equipment
Property, and  equipment are reported at a cost.  Repairs and
maintenance costs are charged to operations when incurred.

Depreciation
Depreciation is calculated using the straight-line method, based
on the estimated useful life of the respective asset, which
ranges between five years and ten years.  Depreciation expense
for 2001 and 2000 was $7,671 and $3,281 respectively.


7
NEUROGENESIS, INC.
Notes to Financial Statements
Stock Based Compensation
The Company accounts for all transactions under which employees,
officers and directors receive shares of stock or options in the
Company in accordance with the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," ("APB 25"), under which no compensation cost is
recognized. The Company adopted Statements of Financial
Accounting Standards No. 123 ("SFAS No. 123"), "Accounting for
Stock-Based Compensation," for disclosure purposes, and has
adopted the proforma disclosure requirements of SFAS 123.
Accordingly, no compensation has been recognized in the results
of operations for the employee, officers and directors stock
plan other than for options issued at an exercise price below
market price, to non- employees for consulting services or to
debt providers that had stock or options attached.

Fair Value of Financial Instruments
The Financial Accounting Standards Board ("FASB") Statement No.
107. "Disclosure About Fair Value of Financial Instruments" is a
part of a continuing process by the FASB to improve information
on financial statements. The carrying amounts reported in the
balance sheets for the Company's assets and liabilities
approximate their fair values as of December 31, 2001 and 2000.

Impairment of Long-Lived Assets

The Company follows SFAS No. 121, "Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of".
The Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events of changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable.

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 on contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

Accounting Method

The Company's financial statements are prepared using the
accrual method of accounting. Revenues are recognized when
earned and expenses when incurred. Fixed assets are stated at
cost. Depreciation and amortization using the straight-line
method for financial reporting purposes and accelerated methods
for income tax purposes.

Revenues are recognized in the period in which they occur.
Revenues are recognized from sales of products when they are
shipped. Revenue and expenses are accrued at the end of the
accounting periods for proper accounting in order to comply with
generally accepted accounting procedures.

8
NEUROGENESIS, INC.
Notes to Financial Statements

Summary of Recent Accounting Pronouncements

SFAS 131
SFAS 131, "Disclosure about Segments of a Business Enterprise",
establishes standards for the way that public enterprises report
information about operating segments in annual financial
statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers.
SFAS 131 defines operating segments as components of an
enterprise about which separate financial information is
available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in
assessing performance. This accounting pronouncement has had no
effect on the Company's financial statements for the periods
presented.

SFAS 141

In July 2001, the Financial Accounting Standards Board issued
Statements of Financial Standards ("SFAS") No. 141, "Business
Combinations" and No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 established accounting and reporting
standards for business combinations and eliminates the pooling-
of-interests method of accounting for combinations for those
combinations initiated after July 1, 2001. SFAS No, 141 also
includes new criteria to recognize intangible assets separately
from goodwill. SFAS No. 142 establishes the accounting and
reporting standards from goodwill and intangible lives. Goodwill
and intangibles with indefinite lives will no longer be
amortized, but, alternatively will be reviewed periodically for
indicators of impairment. Separate intangible assets that are
not deemed to have an indefinite life will continue to be
amortized over their useful lives. The Company does not
anticipate that the adoption of SFAS No. 141 and SFAS No. 142
will have a significant effect on its results of operations or
financial position.


9
NEUROGENESIS, INC.
Notes to Financial Statements

Summary of Recent Accounting Pronouncements (continued)

SFAS 132
Statement of Financial Accounting Standards (SFAS) 132,
"Employers' Disclosure about Pensions and Other Postretirement
Benefits," revises standards for disclosures regarding pensions
and other postretirement benefits. It also requires additional
information on changes in the benefit obligations and fair
values of plan assets that will facilitate financial analysis.
This statement does not change the measurement or recognition of
the pension and other postretirement plans. The financial
statements are unaffected by implementation of this new
standard.
SFAS 133
Statement of Financial Accounting Standards (SFAS) 133,
"Accounting for Derivative Instruments and Hedging Activities,"
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts, (collectively referred to as derivatives)
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. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to
changes in the fair value of a recognized asset or liability or
an unrecognized firm commitment, (b) a hedge of the exposure to
variable cash flows of a forecasted transaction, or (c) a hedge
of the foreign currency exposure of a net investment in a
foreign operation, an unrecognized firm commitment, an
available-for sale security, or a foreign-currency-denominated
forecasted transaction. Because the Company has no derivatives,
this accounting pronouncement has no effect on the Company's
financial statements.

Note 3 - PATENTS AND ROYALTIES

The Company has developed three patents since 1984.
Registration of the first two patents was assigned to a key
stockholder and officer of the Company in 1995 to partially
satisfy a debt obligation (See Note 6).  At the time of transfer
the patents were valued at $89,153.  A third patent was
developed in 1999 at a cost of $10,410.  The third patent was
split into two applications by the Patent and Trademark Office
(PTO).  The first of these was awarded in 1999 and the second is
pending.  It is anticipated that these two patents will be
assigned to the company by the two inventors (both officers of
the Company), if and when the award by the PTO is complete.



10
NEUROGENESIS, INC.
Notes to Financial Statements

Note 3 - PATENTS AND ROYALTIES (continued)

An agreement exists between NeuroGenesis, Inc. and the key
stockholder and officer, which allows the Company to use the
patents without paying royalties as long as the stockholder
remains an officer of the Company and receives re-numeration
according to the compensation agreement outlined in Note 8.  No
compensation was paid to this officer, under the compensation
agreement, during 2001 and 2000.

The patent assignment and royalty agreement requires the Company
to pay royalties of $.01 for each capsule manufactured by the
Company if the conditions stated above are not met.  No royalty
fees were paid to this officer or accrued under this agreement
during 2001 and 2000.

All legal fees associated with the development and protection of
the patents, have been paid by the Company and all proceeds of
the law suits have been given to the Company even though the
patents have been assigned to a key officer and shareholder of
the Company.

All royalty income has been given to the Company.  During 2001
and 2000, NeuroGenesis, Inc. received royalty income of $19,500
and $3,317 related to the patents assigned to the officer and
stockholder.

Note 4-  PATENT INFRIGEMENT LITIGATION

The Company has been involved in extensive litigation developing
and protecting the first two patents.  In September 1998 the
Company obtained a judgment against a former officer and
stockholder of NeuroGenesis, Inc., in the amount of $7.2 million
for patent, trademark and trade dress infringement,
misrepresentation, conversion breach of contract and breach of
fiduciary duty. Although the Company prevailed, the defendant
died prior to the settlement of the judgment. Settlement with
the estate of the defendant provided a $15,000 cash payment to
NeuroGenesis, Inc. and conveyance of product inventory and
accounts receivable valued at $19,976.  The $15,000 cash was
paid to legal counsel according to terms of the contingency
agreement and for accrued legal expenses (See Note 5).

In September 1999 the Company obtained a permanent injunction
and a $50,000 judgment against an ex-distributor of
NeuroGenesis, Inc., and his company for patent, trademark and
trade dress infringement, misrepresentation in commercial
advertisement, misappropriation of trade secret, business
defamation and product disparagement, libel and slander.

Legal counsel for NeuroGenesis, Inc. filed a suit against the
defendant in December, 1999 for refusal to abide by the
September 1999 settlement award and is vigorously pursuing this
case since the defendant and his company continues to violate
the court ordered injunction.  The Federal Circuit Court ruled
in the Company's favor and the defendant has subsequently gone
out of business.


11
NEUROGENESIS, INC.
Notes to Financial Statements


Note 5-  LEGAL REPRESENTATION AND STOCK OWNERSHIP

In March 1998, the Company entered into a contingency ownership
agreement with their legal counsel to perform legal services for
NeuroGenesis, Inc. in connection with all cases related to
patent infringement.  The contingency percentage is 40% of all
amounts recovered after filing suit and 45% upon filing an
appeal.  The contingency percentage increases to 50% for
defending a counterclaim filed by another party against the
Company, or for bankruptcy proceedings filed by a defendant
during representation, or for bankruptcy proceedings filed by
the Company during representation.

As additional compensation for representation, legal counsel is
entitled to an equity ownership interest in NeuroGenesis, Inc.
equal to 10% of the total issued and outstanding stock, on a
fully diluted basis, at the conclusion of representation, with
an option to increase the ownership interest to 20% within six
months after concluding representation.  In January 2000, the
Company issued 322,150 shares of common stock to legal counsel,
which represents 20% of all shares at December 31, 1999 (See
Note 9).

Note 6- NOTE PAYABLE
In March 1995 NeuroGenesis, Inc. had a $446,459 bank loan, which
was personally guaranteed by an officer and major stockholder.
The bank exercised the guarantee and collected the amount due
from the individual shareholder.  In consideration to the
shareholder for satisfying the debt, the Company issued shares
of common stock valued at $165,878 and the balance of $280,581
was issued as a demand note, which bears interest at a rate of
6.0% per annum.  In April 1995 the Company transferred ownership
of two patents, valued at $89,153 to the officer and stockholder
to reduce the balance due on the demand note.

During 1997 the Company applied $80,000 of royalty income
against this shareholders note balance and paid the shareholder
an additional $5,000 against the note (See Note 3).  The
remaining principal balance of $106,428 has been renewed
annually with accrued interest.  Total accrued interest payable
at December 31, 2001 and 2000 was $173,269 and $165,316.
Interest expense was $8,002 and $9,358 for 2001 and 2000
respectively.

In addition to this note the Company is indebted to the same
officer and stockholder for legal expenses paid in connection
with the lawsuit filed by NeuroGenesis, Inc. against 3NI,
Lloyd's Bank, and the Company officer, which was settled in
1993.  The amount owed is not evidenced by a note and is not
accruing interest.  The balance owed to the stockholder was
$107,228 at December 31, 2001 and $132,831 at December 31, 2000.
The note included $105,000 for the Company's legal fees and the
balance for working capital.

The Company also has a line of credit in the amount of $45,000
from Lloyds TSB Bank in London England. The note carries an
interest rate of 5.25% and will mature in August 2003.


12
NEUROGENESIS, INC.
Notes to Financial Statements

Note 7- INCOME TAXES
The Company has net operating loss carry forwards available to
offset future taxable income of $1,770,623 and $1,728,933 for
2001 and 2000, respectively.  Approximately $5,468 will expire
in 2001, $54,000 in 2002, and $50,000 will expire in 2003.
Approximately $400,000 will expire in 2005, $679,759 in 2006,
$119,923 in 2007, $3,663 in 2008, and the balance of $110,388 in
2009.  The Company's tax records for 1992-1994 are not available
as of the date of this report.  These records were not turned
over the current management when all other directors resigned in
1994 (See Note 1).  Management is in the process of obtaining
the tax records from the Internal Revenue Service.

Deferred tax benefits and liabilities are calculated using
enacted tax rates in effect for the year in which the
differences are expected to reverse.  The following is a
schedule of the composition of the provision for income taxes:

				   2001	   2000

Current				$   -0-	  $ -0-
Deferred			    -0-	    -0-
Total provisions                 _______  _______
for income taxes	        $   -0-   $ -0-
                                 =======  =======


Deferred federal income taxes consist of future tax benefits and
liabilities attributed to:

				     2001     	    2000

Net operating loss
Carry-forward		          $ 653,891	$  638,494
Valuation allowance		   (653,891)	  (638,494)
                                   _________     __________
Total provisions for
income taxes	                $       -0-	$       -0-
                                   =========     ==========

Note 8- EMPLOYMENT AGREEMENTS

The Company has an agreement to pay certain directors and
employees compensation based on net cash flow available, up to
specified limits.  The Boards of Directors must approve any
compensation above the limits.  During 2001 and 2000 no payments
were made under this agreement.  Only one director, who is
employed by the Company, was paid for services during 2001 and
2000.  The amount of compensation paid was employment related
and is not part of this compensation plan.

13
NEUROGENESIS, INC.
Notes to Financial Statements


Note 9 - OPERATING LEASES

The Company leases its corporate headquarters at 120 Park
Avenue League Texas 77573 for office and warehouse space.
Currently the Company occupies approxiametly 5,500 square
feet and the monthly rent is $ 4,621 per month. On
April 1, 2002 the Company entered into a thirty-six
36) month lease for approximately 5,877 square feet at a monthly
rate of $4,621 per month. At December 31, 2001, future minimum
lease payments under these operating lease are as follows:

                   2002	       5,202


Total rent expense for the fiscal year ended December 31, 2001
and 2000 were $20,808 per year.

Note 10 - Common Stock

In January 2000, the Company canceled 140,000 shares of common
stock held by previous officer and stockholder, in accordance
with the lawsuit, which was awarded in September 1998 by
judgement (See Note 4).

The Company also issued 322,150 or 20% of its outstanding stock
to legal counsel in accordance with their compensation agreement
(See Note 5).  The value of this transaction is $322,150.

An additional 60,688 shares of common stock were also issued in
January 2000 to two Company directors in lieu of compensation.
The value of this transaction is $60,688 based on the stock
price on the date of issuance.

The Company also issued 10,000 for service valued at $10,312.

Note 11- FOOD AND DRUG ADMINISTRATION REGULATIONS

The Company presently markets its products as nutritional
products,  rather than therapeutic products.  The potential
exists whereby the Company would be required to obtain approval
from the Food and Drug Administration (FDA) to market its
products.  In addition,  many states have statutory authority to
regulate drugs and other nutritional products.  Therefore,
there is risk that the Company's products may become subject to
state and federal regulations,  and there is no guarantee that
FDA approvals, if required would be granted.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS;
COMPLIANCE WIH SECTION 16(A) OF THE EXCHANGE ACT

(A)  IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

 The Company did not hold a shareholders meeting in 2001. At the
annual meeting of the Company's shareholders in 2000 the
shareholders elected the following officers and Directors
for the Company and they remained in office for 2001.

Name and Address                Age    Position

Albert H. Bieser               	69     President, Treasurer
15535 St. Cloud                        and Chairman
Houston, Texas 77062

Lary A. Dorrington              45     	Vice President,
P.O. Box 361                            Secretary and Director
Seabrook, Texas 77586

William R. Barrow               59      Director
P. O. Box 678
Seabrook, Texas 77586

Terry Neher                     62      Director, Advisory
25717 118th Place SE                    Board Chairman
Kent, Washington 98031

Albert H. Bieser is Board Chairman, President, Treasurer, a
principal stockholder and a founding member of the Company. He
holds Bachelor of Science Degrees in Business Administration
(1953 )and Electrical Engineering (1959)from the University of
Colorado. He also holds a Master of Science Degree in Electrical
Engineering from Southern Methodist University (1963). Prior to
1984, Mr. Bieser served as the President of B. E. Industries,
Inc., a successful private company that manufactured ship board
satellite antenna aiming systems, President of General Computer
Systems, Inc. a publicly held firm which manufactured a
proprietary "key-disk-tape" data entry subsystem and as Managing
Director of Recognition Equipment-Europe, a computer related
company.

Lary A. Dorrington is Vice President of Marketing, Secretary,
Director and a principal shareholder of the Company. He holds
a Bachelor of Science Degree in Biology and Chemistry (1979)
and a Master of Science Degree in Management(1989)from the
University of Houston.He served in retail corporate management
with Joske's of Houston(department stores) until 1981.
Mr. Dorrington has been a professional educator for the
past nineteen years. He is a Past President of the Clear Creek
Educators Association, a member of Phi Delta Kappa, the
Association for Supervision and Curriculum Development, the
Texas Science Teachers, the National Science Teachers
Association, the Texas Association of Secondary School
Principals and the National Association of Secondary School
Principals

William R. Barrow, Director, holds a Bachelor of Science Degree
in Chemical Engineering from the University of Texas. He has
twenty-five years experience as an independent oil operator
and has drilled and operated numerous shallow wells in South
Texas, as well as, deeper wells in Texas and Louisiana.
Currently Mr. Barrow is President of Seabrook Energy
Corporation.

Dr. Terry Neher, DDS, CCDS, CAC is a Director and Chairman of
the Company's Advisory Board. He received his DDS Degree from
Creighton University(1964) and his Substance Abuse
Certification from Spokane Fall College(1986). He recently
retired from the position of the Executive Director of the
Chemical Dependency Coalition and is a professor in the Spokane
Falls Substance Abuse Program. His research in substance abuse
field since 1970 has developed him as a recognized leader in the
Medical Model of Addiction. It is expected that he will join the
company on a full time basis in 2002.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT

Section 16(A) of the Securities Exchange Act of 1934 as amended,
(the "Exchange Act") requires the Company's officers and
Directors and persons who own ten percent or more of the
outstanding shares of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers,
Directors and ten percent or more owners are required by the
Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(A) forms they file.

Management believes that during the period from December 31,
2000 through January 1, 2003 all Section 16(A) filing
requirements applicable to its current officers, directors and
ten percent or greater beneficial shareholders were complied
with.


ITEM 10 EXECUTIVE COMPENSATION

The following table provides certain summary information
concerning the compensation for each of the officers and
directors during the current fiscal year:

Name Principal          Position           Annual Compensation

Albert H. Bieser        President, CEO,    Up to $65,000 per yr.
                        Director           None paid in 2001

Lary A. Dorrington      Vice President,    Up to $55,000 per yr.
                        Director           None paid in 2001


ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

The following table sets forth the stock ownership of each
person known by the Company to be the beneficial owner of
five percent (5%) or more of the Company's Common stock as
of December 31, 2001. Unless otherwise indicated, each person
has beneficial voting and investment power with respect to the
shares owned.

Name and Address         Number of Shares   Percent of Total

Albert H. Bieser         908,724             45.36%
15535 St. Cloud
Houston, Texas 77062

Lary A. Dorrington       102,041              5.09%
P. O. Box 361
Seabrook, Texas 77586

Dr. Terry Neher          101,039              5.04%
25717 118th Place  S. E.
Kent, Washington 98031

Allene S. Snow           102,041              5.09%
153 Baywood Street
LaPorte, Texas


The following table sets forth the common stock ownership of all
officers and directors of the Company as of December 31, 2001.

Name and Address      Title       Number of Shares  Percent
                                                    of Total

Albert H. Bieser      President         908,724       45.36%
15535 St. Cloud       Director
Houston, Texas 77062

Lary A. Dorrington    Vice President    102,041        5.09%
P. O. Box 361         Director
Seabrook, Texas 77586

Dr. Terry Neher       Chairman of       101,039        5.04%
25717 118th Place SE  Advisory Board
Kent, Washington      Director
98031


ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

		None


ITEM 13   EXHIBITS AND REPORTS ON FORM 8-K

               	 None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-KSB
to be signed on its behalf by the undersigned,thereunto duly
authorized, on this 18th day of January, 2003

NEUROGENESIS< INC.

By  /s/ Albert H. Bieser
   _________________________
   Albert H. Bieser, Chief Executive Officer