SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                  FORM 10-KSB/A


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
1934, for the fiscal year ended May 31, 2002

                          Commission File No. 000-26089
                                              ---------

                       L.O.M. MEDICAL INTERNATIONAL, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)

DELAWARE                                                              98-0178784
--------------------------------------------------------------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

#3-1482 Springfield Road, Kelowna, British Columbia, Canada              V1Y 5V3
--------------------------------------------------------------------------------
(Address of registrant's principal executive offices)                 (Zip Code)

                                  250.762.7552
                                  ------------
              (Registrant's Telephone Number, Including Area Code)


Check whether the registrant (1) has filed all reports required by 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 [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year: $0.00.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act). As of May 31, 2002, approximately $3,470,338

The number of shares  outstanding  of the issuer's  only class of Common  Stock,
$.001 par value, was 6,178,446 on May 31, 2002.

Documents  incorporated  by reference.  There are no annual  reports to security
holders, proxy information statements,  or any prospectus filed pursuant to Rule
424 of the Securities Act of 1933 incorporated herein by reference.

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

<PAGE>



PART I.

Item 1.   Description of Business.
----------------------------------

Development of the Company.
---------------------------

L.O.M. Medical International Inc., a Delaware corporation  ("Company" or "LOM"),
was  incorporated  in the State of Delaware  on March 17,  1997.  Our  executive
offices are located at #3-1482  Springfield Road, Kelowna, B. C. Canada V1Y 5V3.
The Company's telephone number is 250.762.7552.

For  purposes  of  clarification,  anytime  the symbol  "US" is used within this
Annual  Report of Form 10-KSB,  it refers to the currency of the United  States.
Anytime the symbol "CDN" is used, it refers to the currency of Canada.

Business of the Company.
------------------------

The  Company was  incorporated  for the purpose of  researching  and  developing
health  care  products.  The goal is to become an  innovator  and  provider of a
retractable  syringe  ("Syringe") and related  products and  technologies to the
health care market. We also hope to successfully market and distribute a line of
eye care products.  We plan to develop new and improved products and provide the
health care industry with better, safer products throughout the world.

The Retractable Syringe.
------------------------

We believe the Syringe will change standard  disposal methods for used syringes.
We have  developed a product  designed  to  function,  as a standard  hypodermic
syringe  that we believe is safer to the  caregiver  or health care  worker.  We
believe that the  Syringe's  unique  design will allow health care  providers to
avoid direct contact with used needles.  The Syringe is covered by United States
Patent No. 5,868,713 dated February 9, 1999, and international patents have been
filed in 84 different countries.

Once the needle is injected, the user simply has to press the plunger top gently
with his or her thumb to  automatically  retract  the needle into its own sealed
chamber. The needle is now hidden where it remains locked in place and cannot be
used again.  The Syringe does not require a health care worker to use both hands
to retract the needle after it has been used and withdrawn from the patient. The
Syringe  will  be  produced  in  standard  industry  sizes  from  1CC  to 20 CC,
inclusive.

We intend to promote  the Syringe as a safer and less  risk-oriented  instrument
for hospital  staff and health care  workers.  We are  optimistic  that doctors,
nurses,  and health care workers alike will  recognize and appreciate the safety
features of the Syringe because of its ease of "use-and-disposal" and its unique
"contaminate-prevention"   characteristics.   However,   we  currently  have  no
contracts  to sell the Syringe and there are no  guarantees  as to the timing of
any such contracts in the future.

It is  anticipated  that the products and  technologies  developed by us will be
offered to distributors on a worldwide basis, with an initial emphasis in Canada
and the United States. It is hoped that new product and technology ideas will be
generated  through  active  dialogues  among our  potential  customers,  and our
network of  scientific  advisors.  We also hope to  participate  in national and
international  conferences,  and to  generate  reviews  in  selected  scientific
literature.

Management  interacts with a network of scientific advisors within the industry,
including members of academic institutions,  as well as potential customers.  We
anticipate  that these  interactions  will enable us to identify the specialized
needs of those potential  customers and to provide  innovative and  commercially
acceptable  products  and  technologies.  At this time,  our  relationship  with
scientific  advisors  and  academic  institutions  is  limited  to  an  advisory
relationship.  We anticipate  testing the Syringe in  conjunction  with teaching
universities in Canada, Britain, and other constituents of the United Kingdom.



                                        2
<PAGE>



Our engineering  personnel continue to perform design refinements  regarding the
Syringe,  and,  as a result,  we have been able to reduce  parts and enhance the
Syringe's gas cell.  This, in turn,  simplifies  the  manufacturing  and reduces
production  costs.  Patent  refinements  on the  Syringe  and  that gas cell are
constantly being updated.

B.C.  Tech has  completed  100 % of its contract to complete  production  of the
prototype Syringe,  as well as test units. We have received numerous  prototypes
from B.C. Tech for review and testing. This testing has resulted in enhancements
to the Syringe and more design changes.

The LOM research and development team has finalized the production design of the
3cc syringe, which has been reduced in size from the proto-type.  The production
molds will be modified  for these size  changes.  The designs of the .5cc,  1cc,
1.5cc,  5cc and the 10cc are ready for prototyping.  The extensive  designing of
the syringe  components  have utilized the shared parts between all sizes,  thus
minimizing  overall cost of total parts. The syringe assembly,  packaging system
and costing are nearing completion.

During  the  next  12  months  we  anticipate   increasing   our  staff  as  the
pre-production  of the  Syringe  moves  forward.  Dr.  Simon  Wood has agreed to
supervise our research and development department.  Currently, he bills us on an
hourly basis for work completed.  There is no written  contract with him at this
time. We have  contracted  with Kevin Conway,  a mid-level  engineer for certain
services.  Mr.  Conway  performs  subcontract  work on an  hourly  basis.  He is
assisting with CAD-CAM requirements relating to the development of the Syringe.

To satisfy our  financial  obligations  pursuant to agreements to which we are a
party during the next few months we require additional cash resources.  From our
inception  on March 17,  1997,  to May 31,  2002,  we have  incurred  $1,288,814
related  to the  development  of the  Syringe,  including  the proof of  concept
prototype and molds for the test syringes.

Over the next 12 months, we plan to focus our efforts in the following areas:

o Selection of raw materials for production;

o Contact the Food and Drug  Administration  ("FDA") in  anticipation  of a 510K
  submission;

o Sterilization selection (E beam and Y beam);

o Material compatibility; and

o Mould maker selection.

We are not currently  producing  commercial  quantities of products or currently
supplying any services to any third parties.

No assurance can be given that we will,  on a timely basis,  be able to make the
transition from  manufacturing  testing  quantities of the Syringe to commercial
production   quantities   successfully  or  be  able  to  arrange  for  contract
manufacturing.

We anticipate  contracting  out the first two years of commercial  production of
the Syringe. At the end of the second year of production, we anticipate engaging
in significant  discussions  regarding the potential for the construction of our
own  production  facility.  We recognize that the  construction  of a production
facility  will be  contingent  upon us  having  reached  our  sales  and  profit
projections. We anticipate this issue will be presented for vote by the Board of
Directors and  shareholders.  Negotiations  to set up a  manufacturing  plant in
Ireland have begun but have not progressed  beyond the  preliminary  discussions
discussed in our previous filings.



                                        3
<PAGE>



The Eye Care System.
--------------------

We have  invented  and  developed an  insertion  and storage  device for contact
lenses  (the "Eye Care  System"),  which is a method of handling  and  inserting
contact lenses.

We have produced 33,000 units of our eye care inserters,  which will be used for
demonstrations.  As such, we have not inventoried the units but we have expensed
them in the past financial statements as net realizable value (anticipated to be
nil). We currently  have the ability to  subcontract  out for the  production of
commercial  quantities of our eye care products.  We currently have dies with an
output  capacity of 150,000  units.  There is a second set of dies designed that
will have a 300,000 unit capacity which would allow the production of a total of
450,000 units of eye care products per month.

We have FDA  approval  to market  our line of eye care  products  in the  United
States and have the necessary  Canadian  approval to market eye-care products in
Canada.  We are reviewing various contracts with third parties to market the Eye
Care System in Canada as well as the United States.

We plan to focus our  activities  over the next twelve months on the  production
and introduction of the Syringe.  When that is finalized,  we will implement our
marketing plan for the Eye Care System products.

Skin Care Products.
-------------------

At this time we are reorganizing our approach to the skin care line. We will not
be pursuing this area  aggressively  until we have our Syringe  production under
way.

Genetic Patents.
----------------

We are currently in the first phase of licensing  agreements  with the owners of
various patents on genetic  vectors.  As of May 31, 2002 we had advanced $54,680
to pay for patents  characterized  in our  financial  statements as advances and
deposits.  Given the uncertainty  regarding the future  recoverability  of these
advances we have written theses advances off during the year.

Business of the Company's Subsidiary.
-------------------------------------

There has been no activity in the subsidiary  this quarter.  For the foreseeable
future the subsidiary will be inactive.

Government Regulation.
----------------------

United  States  Governmental  Regulation.  Virtually  all of our  products  will
----------------------------------------
require regulatory approval by governmental agencies prior to commercialization.
We expect to research and develop products and technologies  requiring  rigorous
pre-clinical and clinical  testing and other approval  procedures by the FDA and
similar health  authorities in foreign  countries.  Various federal statutes and
regulations  also  govern or  influence  the  manufacturing,  safety,  labeling,
storage, record keeping and marketing of such products. The process of obtaining
these  approvals and the  subsequent  compliance  with  appropriate  federal and
foreign  statutes  and  regulations  requires  the  expenditure  of  substantial
resources.  The  effect  of  government  regulations  may  be  to  delay  for  a
considerable period of time or even prevent the marketing of any product that we
may develop and/or to impose costly procedures on our activities. Non-compliance
with  applicable   requirements  can  result  in,  among  other  things,  fines,
injunctions,  seizures  of  products,  total or  partial  suspension  of product
marketing,  failure of government to grant  pre-market  approval,  withdrawal of
marketing approvals, product recall and criminal prosecution.

On November 28, 1990, the Safe Medical Devices Act ("SMDA") became law. The SMDA
amended the Food,  Drug and Cosmetic Act and has several  provisions that affect
the medical device industry.  Several  provisions of the SMDA are self-enacting.
Both distributors and importers of medical devices are affected by the SMDA.


                                        4
<PAGE>



Beginning on November 28, 1990,  medical  facilities  are now required to report
patient deaths  attributed to devices to the manufacturers and the Food and Drug
Administration  ("FDA").  Medical  facilities  are also now  required  to report
serious injuries and serious illnesses  contributed or caused by medical devices
to the manufacturers.  Because the SMDA user facility  reporting  requirement is
self-implementing and contains limited procedures for reporting,  the FDA issued
interim  guidance  for user  facilities  in order to comply  with the SMDA.  The
guidance  includes a test  reporting  form that the facilities may use to report
incidences  to  manufacturers.  SMDA  Section  519(d)  or 21  U.S.C.  360(i)(d),
requires that manufacturers,  importers and distributors annually certify to the
FDA the  number of MDR  reports  they have  submitted  in a year or that no such
reports  were  submitted.  Moreover,  distributors  will be  required  to report
incidents to manufacturers  and to the FDA under Section  519(a)(6) or 21 U.S.C.
360(i)(a)(6). They will also be required to register with the FDA.

There  are also two  provisions  in the SMDA that  affect  product  removal  and
correction.  The first section is Section 519(f) or 21 U.S.C. 360(i)(f). In this
section,  a firm is  required to report to the FDA when it removes or corrects a
distributed  product  when those  actions are  intended to reduce risk to public
health posed by a device or to remedy a violation of the SMDA that may present a
risk to public health.  If a product removal or correction is reported under the
MDR with an  incident  report,  it does not have to be reported a second time to
the FDA.  The second  provision  is  Section  303(j) or 21 U.S.C.  333(j).  This
provision became  effective  November 28, 1990. The agency now has the authority
under certain  conditions to order  manufacturers,  importers,  distributors  or
retailers of devices to immediately cease distribution of a volatile product. It
can also order  notification to health care professionals and user facilities to
cease use of a product  when  there is a  reasonable  probability  that it would
cause serious adverse health  consequences  or death.  The person subject to the
order has the opportunity for an informal  hearing within 10 days after the date
of the  issuance  on the  actions  required  by the order and whether the device
should be recalled.

Manufacturers  of devices  that are  reasonably  likely to have  adverse  health
consequences  and are permanent  implants or life  sustaining or life supporting
and are used outside of a device user  facility  are required to develop  device
tracking system. This language appears in Section 519(e) or 21 U.S.C. 360(i)(e).

Canadian Governmental Regulation.  In Canada, all products that require approval
--------------------------------
for  marketing  and sales  must be  submitted  to the Health  Production  Branch
Tunney's Pasture Ottawa ("Branch Tunney's"). Testing by Branch Tunney's includes
the testing of:

     o    a product's design function;
     o    a product's materials;
     o    method of product sterilization;
     o    sample of the product's packaging;
     o    a product's labeling;
     o    indications of lot numbers;
     o    size;
     o    manufacturers names and/or place of production; and
     o    projected run date.

Trial runs of the Syringe will be carried out through  hospitals,  where product
performance  will be evaluated.  For the market and distribution of the Syringe,
we  are  in  the  process  of  obtaining   Health   Canada  and  Food  and  Drug
Administration  Approval  Numbers.  We will also need to acquire DIN numbers and
UPC codes. Finally, we will have to obtain national drug codes.

We are  also  subject  to the  provisions  of the  Canadian  Food  and  Drug Act
("CFDA"). Chapter F-27 of the CFDA regulates the advertisement and sale of food,
drugs, cosmetics and medical device products.  Specifically, this section of the
CFDA  restricts  the  labeling,  packaging,  and  treatment  process and sale or
advertisement  of any medical  device in a manner that is false,  misleading  or
deceptive or is likely to create an erroneous  impression  regarding its design,
construction,   performance,   intended   use,   quantity,   character,   value,
composition,  merit or safety.  Moreover,  the regulation  provides that where a
standard has been prescribed for a device, no person shall label,  package, sell
or advertise  any article in any manner that is likely to be mistaken for such a
device unless the article complies with the prescribed standard.  Part II of the
Chapter F-27 of the CFDA also explains the administration and enforcement powers

                                        5
<PAGE>



of inspectors  working under the CFDA.  Specifically,  the CFDA gives inspectors
the right to,  at any  reasonable  time,  enter  any place  where on  reasonable
grounds the inspector believes any article is manufactured,  prepared, packaged,
preserved  or stored,  and  examine any such  article  and make or take  samples
thereof and anything  the  inspector  reasonably  believes is used or capable of
being  used  for  such  manufacture,  preparation,  preservation,  packaging  or
storing.  The  inspector  will also have the  power  and  authority  to open and
examine any  receptacle  or package that on  reasonable  grounds he believes any
article to which the CFDA or the regulations apply. Finally, the inspector shall
have the  power to seize  and  obtain  for such time  reasonably  necessary  any
article by means of or in relation to which he reasonably believes any provision
of the CFDA or regulations have been violated.

We are also subject to the  provisions  of Chapter 871 of the CFDA  specifically
relating to the medical  device  regulations.  Specifically,  Chapter 871 of the
CFDA addresses the labeling of medical devices.

Part I of Chapter 871 provides that labeling on medical devices must contain:

     o    the name of the device;
     o    name and address of the  manufacturer,  distributor or importer of the
          device;
     o    a lot number or serial number of the device;
     o    the model designation of the device;
     o    the precise  nature of the benefits  claimed to be obtainable  through
          the use of the device;
     o    directions for use of the device;
     o    information as to whether a device is sterile;
     o    the expiration date of the device if applicable; and
     o    a list of the contents of the package and the number of complete units
          contained therein.

Part  I of  Chapter  871  of the  CFDA  also  contains  extensive  and  involved
regulations  concerning  the  specific  nature and  quality of any  labeling  on
medical devices, including but not limited to, warnings,  language,  position of
label and any required symbols. This same section also addresses product testing
before sale.  Specifically,  the CFDA provides that no manufacturers of a device
or person who has  imported  into Canada a device for sale shall sell the device
unless tests have been  conducted  with respect  thereof and the tests  indicate
that the nature of the benefits claimed to be obtainable  through the use of the
device and the performance  characteristics  claimed by the device are justified
as shown by the evidence  available in Canada to the  manufacturer or the person
importing the device.

Employees.  We currently have three employees and several  consultants on staff.
----------
We also  use  consultants  for  business,  accounting,  engineering,  and  legal
services  as  required.   Our   management  has  experience  and  background  in
manufacturing medical products and obtaining patents internationally, as well as
obtaining medical approvals worldwide.

Our three employees are Maria  Klippenstein,  John  Klippenstein  and Tia Isaak.
Mrs.  Klippenstein is the Secretary and Treasurer of our Company. Her day-to-day
duties include  monitoring  accounts  payable and  receivable,  reporting to our
stock  transfer  agent,  shareholder  relations  and  reporting to our corporate
securities  attorney.  Mr.  Klippenstein  is our President  and Chief  Executive
Officer.  He performs all the duties of that office.  Ms. Isaak  handles  office
administration and secretarial duties.

We have also hired Peter McFadden,  Chartered Accountant as a consultant.  Peter
McFadden  performs the duties of Chief  Financial  Officer of our  Company.  Mr.
McFadden's   day-to-day  duties  include  corporate  finances,   accounting  and
communications  with our auditors,  corporate  reporting and annual tax filings,
financial  reporting to our Board of Directors,  corporate  financial  advising,
organization  and reporting on annual  shareholder  meetings,  and corporate tax
planning. Tanya Sedlacek also provides, as a subcontractor,  accounting services
to us.  Finally,  Kevin  Conway  provides  us  with  engineering  services  on a
subcontract basis.

LOM has also entered  into a contract  with Dr.  Jeffrey  Berg;  Sr. Dr.  Berg's
duties   include   product   analysis  and  strategic   alliances  with  medical
publications,  product evaluation and reports,  negotiating  strategic alliances
and brokerage liaisons.

                                        6
<PAGE>



Competition.  Competition  in the  medical  products  industry is intense and we
------------
expect  the  competition  to  increase.  We will  compete  directly  with  other
companies  and  businesses  that  have  developed  and  are  in the  process  of
developing technologies and products which will be competitive with the products
developed and offered by us. There can be no assurance  that other  technologies
or products which are functionally equivalent or similar to our technologies and
products have not been developed or are not in development. We expect that there
are  companies or businesses  which may have  developed or are  developing  such
technologies  and products as well as other companies and businesses  which have
the expertise which would encourage them to develop and market products directly
competitive  with those developed and marketed by us. Many of these  competitors
have greater financial and other resources,  and more experience in research and
development  than us.  To the  extent  that  customers  exhibit  loyalty  to the
supplier that first supplies them with a particular  product or technology,  our
competitors  may  have an  advantage  over  us  with  respect  to  products  and
technologies first developed by such competitors.  As a result of their size and
breadth of their product  offerings,  certain of these competitors have been and
will be able to establish  managed  accounts by which,  through a combination of
direct computer links and volume discounts, they seek to gain a disproportionate
share of orders for health  care  products  and  technologies  from  prospective
customers. Such managed accounts present significant competitive barriers to us.
It is anticipated that we will benefit from our  participation in niche research
markets which, as they expand, may attract the attention of our competitors.

There can be no  assurance  that  competitors  have not or will not  succeed  in
developing technologies and products that are more effective than any which have
been or are being  developed by us or which would  render our products  obsolete
and  noncompetitive.   Many  of  our  competitors  have  substantially   greater
experience,  financial and technical  resources  and  production,  marketing and
development  capabilities  than  us.  If we  commence  commercial  sales  of our
products, we will also be competing with respect to manufacturing efficiency and
sales and marketing capabilities.

Our strategy for growth is  substantially  dependent  upon our ability to market
and distribute  products  successfully.  Other  companies,  including those with
substantially greater financial, marketing and sales resources, compete with us,
and have the advantage of marketing  existing products with existing  production
and distribution  facilities.  There can be no assurance that we will be able to
market and distribute  products on acceptable  terms,  or at all. Our failure to
market our products  successfully  could have a material  adverse  effect on our
business, financial condition or results of operations.

Specifically,  when we applied for our United  States  patents in 1997, a United
States  Patent  search  revealed 7 separate  patents  which related to different
safety  syringes.  We also caused the  preparation  of a market report issued by
Frost  &  Sullivan  entitled  "U.S.  Disposable  Needle,  Syringe,  and  Related
Products,  Markets"  Publication  No. 5341-54.  The market report  described the
market, pricing and the specific competition. We believe that there is virtually
no competition other than one syringe manufacturer,  presently located in Texas.
The company which manufacturers this syringe is called Retractable  Technologies
Inc. ("RTI"). The syringe  manufactured by RTI works on a pre-tension  stainless
spring which  releases  once the medicine  chamber is emptied.  The plunger will
trigger  the  retraction  by  applying  additional  pressure.  The price of this
syringe is US$0.52  per 3CC  syringe,  whereas  standard  3CC  syringes  sell at
US$0.26.  The  syringe  manufactured  by  RTI  is  currently  marketed  only  in
California  because  RTI is not able to produce  enough  product to satisfy  the
demand because the RTI design is labor intensive and does not allow on-line high
speed production.  We believe that the Syringe has the distinct design advantage
in that the Syringe was designed and  engineered  for high speed  production and
its cost and is much  more  cost  effective  and not as labor  intensive  as the
syringe produced by RTI.










                                        7
<PAGE>



Item 2.   Description of Property.
----------------------------------

Property held by the Company. The Company holds no property at this time.
-----------------------------

The Company's  Facilities.  We lease office space located at 3-1482  Springfield
--------------------------
Road, Kelowna, Canada from Tech-Nacan Consultants ("Tech-Nacan").  Tech-Nacan is
a company owned by John Klippenstein,  the Company's President,  Chief Executive
Officer and a director,  and Maria Klippenstein,  Secretary and the Treasurer of
the Company.  We also lease office  space at 885 Dunsmuir  Street in  Vancouver,
Canada from an unrelated  third  party.  In addition we lease  storage  space in
Great Plains Industrial Park in Saskatchewan for the assembly and storage of the
Lens-O-Matic  product, from an unrelated third party. For the year ended May 31,
2001,  we paid a total  of  US$45,227  toward  the  rental  of our  Kelowna  and
Vancouver offices. For the year ended May 31, 2002, we paid US$38,404 toward the
rental of our Kelowna and  Vancouver  offices.  With regard to the Great  Plains
storage we pay $155 CDN per month.  The lease is from  month  -to-month.  We are
obligated to make future lease payments as follows:


          Year                                      Payment
          ----                                      -------
          2002                                      US$40,178
          2003                                      US$40,178
          2004                                      US$35,699
          2005                                      US$27,785


Item 3.   Legal Proceedings
---------------------------

British Columbia Securities Commission.
---------------------------------------

During the year ended May 31 2002, the Company engaged in discussions with staff
of the British  Columbia  Securities  Commission  (the  "BCSC")  concerning  the
distribution  of the  Company's  common  stock to certain  residents  of British
Columbia.  Staff of the BCSC took the position that the  distribution of certain
shares may not have, in all  circumstances,  satisfied the prospectus  exemption
requirements  under the Securities Act (British  Columbia).  In order to resolve
the  concerns  of staff of the  BCSC,  the  Company  agreed  to make an offer of
rescission (the  "Rescission  Offer") to purchasers of its common stock residing
in British  Columbia.  Stockholders  who acquired  99,933 common shares from the
Company for aggregate  proceeds of $263,573 exercised their right of rescission.
As of May 31,  2002,  the  Company  has  repaid  $46,226  of the  $263,573.  The
remaining  $217,347 is included in accounts  payable and accrued  liabilities on
the  consolidated  balance  sheet.  The Company  intends to repay this amount by
August 15, 2002. As of May 31, 2002,  18,702 of the 99,933 shares  returned upon
rescission  were cancelled and the remaining  81,231 shares are held as treasury
stock.

During 2002, two  shareholders,  not entitled to the rescission  offer,  holding
1,000 and 2,205  common  shares  with a cost of $1,000 and $6,851  respectively,
requested  that the  Company  accept the  return of their  shares.  The  Company
accepted the return of the shares and repaid the original  subscription price of
$1,000 to one  shareholder  and has  recorded a  liability  of $6,851,  which is
included in accounts payable and accrued  liabilities for the other shareholder.
All of these shares are held as treasury stock as at May 31, 2002.

There are no other security issues pending against the Company nor are any other
such actions contemplated.


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

Within the last fiscal year, we did not submit any matters to a vote of security
holders.





                                        8
<PAGE>



PART II.

Item 5.   Market for Common Equity and Related Stockholder Matters
------------------------------------------------------------------

Reports to Security  Holders.  We are a reporting  company with the Security and
-----------------------------
Exchange  Commission  ("Commission")  and thus  required  to file those  reports
required by the Commission,  including,  but not limited to, an annual report to
our security holders,  which will include audited financial statements,  as well
as quarterly reports which will include management  prepared,  auditor reviewed,
financial statements.  The public may read and copy any materials filed with the
Commission,  including  our  Registration  Statement  on  Form  10-KSB,  and all
exhibits, schedules and amendments thereto, at the Commission's Public Reference
Room at 450 Fifth Street N.W., Washington, D.C. 20549. Copies of all or any part
thereof may be obtained from such office after payment of fees prescribed by the
Commission.  The public may also  obtain  information  on the  operation  of the
Public  Reference  Room  by  calling  the  Commission  at  1-800-SEC-0330.   The
Commission  maintains  an  Internet  site  that  contains  reports,   proxy  and
information  statements,  and  other  information  regarding  issuers  that file
electronically   with   the   Commission.   The   address   of   that   site  is
http://www.sec.gov.

We are authorized to issue 50,000,000 shares of common stock,  $0.001 par value,
each share of common stock having equal rights and preferences, including voting
privileges.  We are also authorized to issue 5,000,000 shares of preferred stock
with a par value of $0.001. As of May 31, 2002 6,178,446 shares of the Company's
common  stock were  issued and  outstanding.  As of May 31,  2002,  4,000 of our
subsidiaries redeemable preferred stock were issued and outstanding.

The shares of $0.001 par value  common  stock of the Company  constitute  equity
interests in the Company  entitling each shareholder to a pro rata share of cash
distributions made to shareholders,  including dividend payments. The holders of
the Company's  common stock are entitled to one vote for each share of record on
all matters to be voted on by shareholders.  There is no cumulative  voting with
respect to the election of directors  of the Company or any other  matter,  with
the  result  that the  holders  of more  than 50% of the  shares  voted  for the
election of those  directors can elect all of the directors.  The holders of the
Company's  common  stock are  entitled  to  receive  dividends  when,  as and if
declared  by our Board of  Directors  from funds  legally  available  therefore;
provided,  however,  that cash dividends are at the sole discretion of our Board
of  Directors.  In the event of  liquidation,  dissolution  or winding up of the
Company, the holders of common stock are entitled to share ratably in all assets
remaining available for distribution to them after payment of liabilities of the
Company  and  after  provision  has been made for each  class of stock,  if any,
having  preference  in relation to the Company's  common  stock.  Holders of the
shares of the  Company's  common stock have no  conversion,  preemptive or other
subscription  rights, and there are no redemption  provisions  applicable to the
Company's  common stock.  All of the outstanding  shares of the Company's common
stock are duly authorized, validly issued, fully paid and non-assessable.

Dividend  Policy.  Any  payment of  dividends  will be at the sole and  absolute
-----------------
discretion  of our Board of Directors and will depend upon  earnings,  financial
condition,   capital   requirements,   amount   of   indebtedness,   contractual
restrictions with respect to payment of dividends,  and other factors.  Any such
dividends  may be paid in cash,  property  or  shares of the  Company's  capital
stock. We have not paid any dividends since the Company's  formation,  and it is
not probable that any  dividends on the Company's  common stock will be declared
at any time in the foreseeable  future.  Any future dividends will be subject to
the  discretion  of our Board of  Directors,  and will depend upon,  among other
things,  the  operating and  financial  condition of the Company,  the Company's
capital requirements and general business conditions. Therefore, there can be no
assurance  that any dividends on the Company's  common stock will be paid in the
future.

Sale of Securities.  During the fiscal year ended May 31, 2002, the Company sold
-------------------
121,470 shares of common stock pursuant to Regulation D and Rule 506 promulgated
there under.  During the fiscal year ended May 31, 2002,  the Company  rescinded
99,933 shares of common stock,  of which 18,702 were cancelled and the remaining
were held as treasury  stock.  The common  stock was sold for $2.41 to $3.25 per
share.  The lower priced stock  related to the stock that was rescinded and sold
at the average rescission price.  During the fiscal year ended May 31, 2002, the
Company  purchased  3,205  shares  of its  common  stock.  The  Company  sold to
"accredited  investors"  only  as  that  term  is  defined  in  Rule  501 of the
Securities Exchange Act of 1934.

                                        9
<PAGE>



Stock  Options.  Our Board of Directors  has adopted a stock option plan ("Stock
---------------
Option  Plan").  The Stock  Option  Plan is  designed  to retain  qualified  and
competent  officers,  employees  and  directors  of the  Company.  Our  Board of
Directors, or a committee thereof, shall administer the Stock Option Plan and is
authorized,  in its sole  and  absolute  discretion,  to  grant  options  to all
eligible employees of the Company,  including officers and directors (whether or
not  employees)  of the Company.  During the year ended May 31,  2002,  no stock
options were granted  under the Stock Option Plan (for further  details,  please
refer  to Note 5 of the  consolidated  financial  statements  attached  hereto).
Options granted pursuant to the Stock Option Plan will be exercisable within the
period specified in the stock option agreement.  Options granted under the Stock
Option Plan will not be exercisable  after the expiration of ten (10) years from
the date of grant for  shareholders  with less than 10%  ownership  and five (5)
years for shareholders  with 10% or more share ownership.  The Stock Option Plan
will also  authorize  us to make loans to  optionees  to enable them to exercise
their options.

Warrants.  We have  offered to all  shareholders  of record on May 31,  2001 one
---------
warrant for every two shares held by each shareholder. Each warrant entitles the
holder of such  warrant to purchase  one share of our common stock for $5.00 per
share.  Each  warrant  expires  by its own  terms  ninety  days  after the first
transaction  in the  Company's  shares occurs on the  Over-the-Counter  Bulletin
Board.

As of May 31, 2002,  there were 3,076,405  warrants  outstanding.  Each of these
warrants  expire  by  their  own  terms 90 days  after  the  first  trade of the
Company's stock on the Over-the-Counter  Bulletin Board. Each warrant grants the
holder the right to purchase one share of the Company's common stock for US$5.00
per  share.  Each  warrant  was  issued  pursuant  to Rule 506 of  Regulation  D
promulgated by the Securities and Exchange Commission.


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

THIS  ANNUAL  REPORT  SPECIFIES  FORWARD-LOOKING  STATEMENTS  OF OUR  MANAGEMENT
("FORWARD-LOOKING  STATEMENTS") INCLUDING,  WITHOUT LIMITATION,  FORWARD-LOOKING
STATEMENTS   REGARDING  OUR   EXPECTATIONS,   BELIEFS,   INTENTIONS  AND  FUTURE
STRATEGIES.   FORWARD-LOOKING   STATEMENTS  ARE  STATEMENTS  THAT  ESTIMATE  THE
HAPPENING   OF  FUTURE   EVENTS   AND  ARE  NOT  BASED  ON   HISTORICAL   FACTS.
FORWARD-LOOKING  STATEMENTS  MAY BE  IDENTIFIED  BY THE  USE OF  FORWARD-LOOKING
TERMINOLOGY,  SUCH AS "COULD",  "MAY", "WILL",  "EXPECT",  "SHALL",  "ESTIMATE",
"ANTICIPATE",  "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", "INTEND" OR SIMILAR
TERMS,   VARIATIONS  OF  THOSE  TERMS  OR  THE  NEGATIVE  OF  THOSE  TERMS.  THE
FORWARD-LOOKING  STATEMENTS  SPECIFIED IN THIS ANNUAL  REPORT ON FOR 10-KSB HAVE
BEEN COMPILED BY US ON THE BASIS OF ASSUMPTIONS  MADE BY US AND CONSIDERED BY US
TO BE  REASONABLE.  OUR FUTURE  OPERATING  RESULTS,  HOWEVER,  ARE IMPOSSIBLE TO
PREDICT AND NO  REPRESENTATION,  GUARANTY,  OR  WARRANTY IS TO BE INFERRED  FROM
THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE  FORWARD-LOOKING  STATEMENTS  REPRESENT
ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES
IN ECONOMIC,  LEGISLATIVE,  INDUSTRY, AND OTHER CIRCUMSTANCES.  AS A RESULT, THE
IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN
DEVELOPING  AND SELECTING  ASSUMPTIONS  FROM AND AMONG  REASONABLE  ALTERNATIVES
REQUIRE THE EXERCISE OF JUDGMENT.  TO THE EXTENT THAT THE ASSUMED  EVENTS DO NOT
OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS,
AND,  ACCORDINGLY,  NO  OPINION  IS  EXPRESSED  ON THE  ACHIEVABILITY  OF  THOSE
FORWARD-LOOKING   STATEMENTS.  NO  ASSURANCE  CAN  BE  GIVEN  THAT  ANY  OF  THE
ASSUMPTIONS RELATING TO THE FORWARD-LOOKING  STATEMENTS SPECIFIED IN THIS REPORT
ARE ACCURATE,  AND WE ASSUME NO  OBLIGATION  TO UPDATE ANY SUCH  FORWARD-LOOKING
STATEMENTS.




                                       10
<PAGE>



General.
--------

We are not currently producing commercial  quantities of our products nor are we
currently supplying any services to any third parties. No assurance can be given
that  we  will,  in a  timely  fashion,  be able to  make  the  transition  from
manufacturing  testing  quantities  of  the  Syringe  to  commercial  production
quantities successfully or be able to arrange for contract manufacturing.

We have produced 33,000 units of our eye care products.  Our current  production
capacity does allow for the production of commercial  quantities of our eye care
products.  We believe that we can increase our output to 150,000 units.  We have
designed a second set of dies that we believe will have a 300,000-unit  capacity
which would  allow the  production  of a total of 450,000  units of our eye care
products per month.

We are  concentrating  the  majority  of our efforts on the  development  of the
Syringe.

We anticipate that we will contract out the first two years of production of the
Syringe.  At the end of the second year of  production,  we  anticipate  we will
engage in significant  discussions  regarding the potential for the construction
of our own production  facility.  We recognize that the  construction of our own
production  facility  will be  contingent  upon us having  reached our sales and
profit  projections.  We anticipate  that we will present this issue for vote by
our Board of Directors and  shareholders.  In this regard, we anticipate that we
will locate our production facilities in North America,  specifically, the state
of Washington,  due to its strategic  location for  penetration  into the United
States and Canadian markets.

Our plans to construct our own production  facility are merely  preliminary.  As
such, we have not reached an estimation  of the capital  resources  necessary to
fund such a project nor have we determined how long such a project would take to
complete.  We  anticipate  that at the end of the projected  two-year  period of
production,  we will  have a  sufficient  revenue  stream to  finance,  at least
partially,  the  construction of the proposed  production  facilities.  However,
there can be no assurance  that we will have the  necessary  funds at the end of
the two-year period to construct our proposed production  facilities.  Should we
not have the necessary  funds,  we anticipate that we will continue to cause our
products to be produced on a contract basis.

Future Capital Requirements.
----------------------------

We still require additional cash to implement our business strategies, including
cash  for  (i)  payment  of  increased   operating  expenses  and  (ii)  further
implementation of our business strategies.

No assurance can be given that we will have access to the capital markets in the
future,  or that financing will be available on acceptable  terms to satisfy our
cash requirements necessary to implement the business strategies.  The inability
to access  the  capital  markets  or obtain  acceptable  financing  could have a
material adverse effect on our results of operations and financial condition.

Our forecast of the period of time through which the financial resources will be
adequate to support the operations is a forward-looking  statement that involves
risks and  uncertainties,  and actual results could vary as a result of a number
of factors.

We will have to raise  additional  capital over the next several months in order
to  develop,  promote,  produce  and  distribute  our  proposed  products.  Such
additional   capital  may  be  raised  through   additional  public  or  private
financings,  as well as  borrowings  and other  resources.  To the  extent  that
additional  capital  is raised  through  the sale of  equity  or  equity-related
securities,  the  issuance of such  securities  could  result in dilution of the
stockholders.

If adequate  funds are not available,  we may be required to curtail  operations
significantly  or to  obtain  funds  through  entering  into  arrangements  with
collaborative  partners or others that may  require us to  relinquish  rights to
certain of our products. We believe we have raised enough capital to allow us to
meet our  financial  obligations  for a period of at least three (3) months from
May 31, 2002.  However,  our  forecast for the period of time through  which our
financial   resources   will  be  adequate  to  support  our   operations  is  a
forward-looking  statement  that involves  risks and  uncertainties,  and actual
results could fail as a result of a number of factors.


                                       11
<PAGE>



Our  auditors'  report on our May 31,  2002  consolidated  financial  statements
includes a paragraph  explaining  that we have  generated  no  revenues,  have a
working  capital  deficiency  and  accumulated  a  deficit  since  inception  of
$3,934,228 which are factors,  among others,  that raise substantial doubt about
our ability to continue as a going  concern.  The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

Business Risks.
---------------

Because of the nature of our business,  the Company will be exposed to a variety
of business  risks,  some of which are  inherent to all  competitive  commercial
enterprises and others that are specific to the medical  products  industry.  We
will  attempt  to limit  all  specific  risk  factors  through  our  disciplined
management of our operations and our financial strategies.

Financial Risks.
----------------

We believe that our business  plans are  aggressive  in nature.  Rapid  business
expansion and the results of our British  Columbia  rescission offer may consume
valuable  working  capital  and result in  significant  demand on cash flow from
operations over the next few quarters.  Management expects that existing capital
resources  will not be  sufficient  to fund the  business  plans as  represented
without assembling additional funds from external sources.

Business Cycles and Risks of Cost Overruns.
-------------------------------------------

The successful sale and  implementation of our products will require  reasonable
market  penetration.  Failure to secure reasonable market penetration could have
adverse  effects  on our  business,  results  of  operations  and our  financial
condition.

Fluctuations in Financial Results.
----------------------------------

Our operating  results will  fluctuate,  depending on factors such as the demand
for products,  the size and timing of contracts,  new products and enhancements,
price  competition,  changes in  operating  expenses and  personnel  and general
economic factors.  Therefore,  actual financial  results may vary  significantly
from those projected by us.

Third-Party Claims for Infringement.
------------------------------------

We are not aware that any of our products infringe on the proprietary  rights of
third parties.  There can be no assurance,  however, that third parties will not
claim  such  infringements  by the  Company  with  respect  to current or future
products.  Any such  claims,  with or without  merit,  could be time  consuming,
result in costly  litigation,  or cause product or shipment  delays.  Any of the
foregoing could have adverse  effects on our business,  results of operations or
financial condition.

Dependence of Single Product Line.
----------------------------------

Concentration  of sales in a single product line for the medical health industry
represents a substantial risk should market conditions deteriorate.

Foreign Currency.
-----------------

Our  business  plan  primarily  focuses on product  penetration  into  worldwide
markets,  therefore,  we  will  be  subject  to the  risk  of  foreign  currency
fluctuations.

Dependence on Large Distributors.
---------------------------------

We  anticipate  that  we  will  rely  in  part  on  business  partners  for  the
distribution of our products. This could include a few large distributors in the
United  States.  We may be  impacted  by  negative  business  cycles  or  events
experienced  by  these  distributors.  This  may  lead to a short  or long  term
reduction in revenue.




                                       12
<PAGE>



Human Resource Risks and Growth.
--------------------------------

Our  success is  largely  dependent  on the  performance  of our key  employees.
Failure to attract and retain key employees with necessary  skills could have an
adverse  impact upon our growth and  profitability.  Our business is expected to
grow over the next three years. If this expansion  occurs, it will likely result
in substantial growth in the number of employees, the scope of our operating and
financial systems and the geographic area of our operations.  This will increase
the responsibilities for both existing and new management personnel, if any. Our
ability to support such  growth,  if it occurs,  will be  dependent  upon having
highly  trained  personnel  in place to conduct  pre-sales  activities,  product
implementation  and other customer support  services.  Future operating  results
will  depend on the ability of our key  managers  and  employees  to continue to
implement and improve our operations,  customer  support and financial  systems.
There can be no  assurance  that we will be able to manage any future  expansion
successfully, and if we cannot manage such growth, our results of operations and
financial health could be adversely affected.

Changes in Number of Employees.
-------------------------------

During the next 12 months,  depending on the success of our  marketing  plan, we
may be  required  to hire  additional  employees;  however,  we are not  able to
provide a reasonable estimate of the number of such additional employees,  which
may be required at this time.

Production and Quality Control.
-------------------------------

The manufacturing of products involves a number of steps and requires compliance
with  stringent  quality  control   specifications  imposed  on  us  by  various
regulators.  We may not be able to quickly arrange for replacement manufacturing
if our  manufacturers  are  unable to use their  manufacturing  facilities  as a
result of a fire, natural disaster (including earthquake),  equipment failure or
other  difficulty,  or if such  facilities are deemed not in compliance with the
various  regulators'  requirements and the  non-compliance  could not be rapidly
rectified. The inability or reduced capacity to manufacture or have manufactured
any of our  products  would have a material  adverse  effect on the business and
results of operations.

Product Liability Risk
----------------------

Our  business  will  expose us to  potential  product  liability  risks that are
inherent in the testing,  manufacturing and marketing of medical products. We do
not currently have product  liability  insurance,  and there can be no assurance
that we will be able to obtain or maintain such  insurance on  acceptable  terms
or, if obtained,  that such insurance  will provide  adequate  coverage  against
potential liabilities.

We face an inherent  business  risk of exposure to product  liability  and other
claims in the event that the development or use of our technology or products is
alleged to have resulted in adverse effects.  Such risk exists even with respect
to those products that are manufactured in licensed and regulated  facilities or
that otherwise possess regulatory  approval for commercial sale. There can be no
assurance that we will avoid significant product liability  exposure.  There can
be no  assurance  that  insurance  coverage  will be  available in the future on
commercially  reasonable  terms,  or at all,  or  that  such  insurance  will be
adequate to cover potential product liability claims or that a loss of insurance
coverage  or the  assertion  of a product  liability  claim or claims  would not
materially  adversely  affect our business,  financial  condition and results of
operations.

While we have taken,  and will continue to take, what we believe are appropriate
precautions,  there can be no assurance that we will avoid significant liability
exposure.  An inability to obtain product liability insurance at acceptable cost
or to otherwise protect against potential product liability claims could prevent
or inhibit the  commercialization  of the products.  A product  liability  claim
could have a material  adverse effect on the business,  financial  condition and
results of operations.




                                       13
<PAGE>



Marketing and Channels of Distribution.
---------------------------------------

The Syringe.  We anticipate  that we will obtain the  necessary  plastic for the
-----------
injection  molds used to  manufacture  the Syringe  from  various  domestic  and
international  suppliers.  The  engineering  for the  molds  and  dyes  are near
completion. We believe we will be able to readily obtain the necessary packaging
for the  Syringe.  We do not believe that our sales will be affected by seasonal
factors.  Subject to appropriate  capitalization,  we believe that prototypes of
the Syringe will be ready for testing  within the next year.  Shortly  after the
prototypes are ready for testing, we believe we will be able to complete testing
in Canada  and gain the  necessary  regulatory  approvals.  We  believe  we will
complete  the  necessary  United  States  testing as well as secure the required
United States regulatory approval within the next year.

Once testing of the Syringe is completed, and assuming FDA approval is received,
we hope to manufacture, or cause to be manufactured, a specified number of units
of the  Syringe,  which will be  provided,  at no charge,  to a target  group of
physicians for testing.  We plan to provide units to various individuals who are
to form part of the testing group.  These  individuals  will be asked to try the
Syringe and report their findings.  We will then utilize  professionals  such as
doctors and related health care professionals who approve, recommend and endorse
our products,  including the Syringe. Thereafter, we anticipate that the Syringe
will be supplied to large national distributors within specific regions all over
the world.  We  anticipate  that the  distributors  will  thereafter  market the
Syringe to pharmacy and medical supply companies.  Our overall operating plan is
to act as a manufacturer,  selling  directly and only to distributors and retail
chains.  We hope that the product will gain acceptance in the medical  community
and that our skill in positioning and  merchandising our products and technology
will enable us to acquire a commercially reasonable portion of the market.

We plan to focus our initial  marketing efforts in Canada and the United States.
We hope to eventually expand our product marketing and sales into Europe,  South
America,  Central  America,  Mexico and Asia.  We plan to market our products by
advertising in catalogs and medical  journals,  by distributing  brochures (both
written and video), by direct mail and by posters.  Follow-up calls will be made
to promising  prospects.  This approach will be our primary marketing method. It
is  expected  that our  personnel  will attend  various  trade shows and medical
conventions  in  order  to  introduce  the  Syringe  with  the  hope of  gaining
endorsements  and  approvals.  There can be no assurance that we will be able to
successfully  establish  other  methods of  marketing  and sales of our products
should it become necessary or desirable in the future. A significant  portion of
our sales may be made  through  independent  distributors  over which we have no
control and who also will represent  products of other  companies.  We recognize
that in order to increase  market  awareness and the marketing  potential of our
products, we must hire adequate personnel and institute effective advertising in
the most cost effective way.

Liquidity and Capital Resources.
--------------------------------

We  believe we have  raised  enough  capital  to allow us to meet our  financial
obligations  for a period of at least 3 months from May 31, 2002,  not including
our  current  obligations,  aggregating  $217,347  under  the  British  Columbia
Security Commission  rescission offer.  However,  this three-month forecast is a
forward-looking statement that involves risks and uncertainties.  Actual results
could differ  significantly  as a result of these  uncertainties as the forecast
assumes  on-going  support from creditors,  including the obligations  under the
rescission offer, and shareholders.

Management's plans include  generating future profitable  operations from future
sales of the retractable syringe as well as additional funding from stockholders
in the form of additional share subscriptions.  There can be no assurance that a
market  will  develop  for the  retractable  syringe  or that  additional  share
financings will be available.  Failure to obtain  adequate  financing will cause
the Company to curtail operations.

We had cash  resources of $142,114 at May 31, 2002. At May 31, 2001, we had cash
resources of $741,152.  On May 31, 2002,  total current  assets of were $169,282
and total current  liabilities  were  $319,537.  At May 31, 2002,  total current
liabilities  exceeded total current assets by $150,255.  At May 31, 2001,  total
current assets were $790,713 and total current liabilities were $112,083. At May
31, 2001,  total current assets exceeded total current  liabilities by $678,630.
Cash and  equivalents  constitute  our current  internal  sources of  liquidity.
Because we are not  generating  any  revenues  from the sale or licensing of our
products,  our only  external  source of  liquidity  is the sale of our  capital
stock.


                                       14
<PAGE>



Critical Accounting Policies
----------------------------

The Company's  discussion and analysis of its financial condition and results of
operations,  including the  discussion on liquidity and capital  resources,  are
based upon the  Company's  financial  statements,  which have been  prepared  in
accordance with accounting  principles  generally accepted in the United States.
The  preparation  of these  financial  statements  requires  the Company to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,   and  related  disclosure  of  contingent  assets  and
liabilities.  On an ongoing  basis,  management  re-evaluates  its estimates and
judgments.  Actual results could differ from the estimates. The Company believes
the following critical accounting policy requires more significant  judgment and
estimates used in the preparation of the consolidated financial statements.

The  consolidated  financial  statements have been prepared on the going concern
basis, which assumes the realization of assets and liquidation of liabilities in
the normal course of operations.  If the Company were not to continue as a going
concern,  it  would  likely  not be able to  realize  on its  assets  at  values
comparable to the carrying  value or the fair value  estimates  reflected in the
balances set out in the preparation of the consolidated financial statements. As
described  elsewhere  in  this  report,  at May  31,  2002,  there  are  certain
conditions that currently exist which raise substantial doubt about the validity
of this assumption.  While the Company  anticipates  raising  additional funding
through  future  profitable  operations and the sale of share  subscriptions  to
remove the  substantial  doubt,  these funds are not  assured.  Failure to raise
additional  funds may result in the  Company  curtailing  operations  or writing
assets and liabilities down to liquidation values, or both.

Operations Review.
------------------

May 31, 2002 and 2000
---------------------

We have  included  audited  financial  statements as at May 31, 2002 and May 31,
2001 in this Annual Report on Form 10-KSB.  The balance sheet as at May 31, 2002
shows a cash balance of $142,114 compared to a $741,152 cash balance at the same
time in the  previous  year.  Amounts  receivable  at May 31, 2002 were  $18,933
compared to a $48,106  balance at the same time in the previous  year.  Advances
and deposits at May 31, 2002 were $9,803  compared to a $161,415  balance at the
same time in the previous  year.  During the year ended May 31, 2002 the Company
wrote  off  advances   totaling   $168,680  due  to  the  uncertainty  of  their
recoverability.  Patent  costs as at May 31,  2002 were  valued  at $4,168  down
slightly from the $8,336 reported in the previous year due to amortization.

During 2002,  through the sale of our capital stock, we increased our additional
paid in capital from $3,408,434 to $3,464,159.  The  accumulated  deficit during
that period  increased from  $2,882,529 to $3,934,228.  The majority of the loss
was related to ongoing business expenses, including, but not limited to:

     o    General and  administration  expenses were $641,919 down from $927,601
          in the previous  year.  Included in last year's  figures was the value
          assigned to stock options and shares issued to various  consultants in
          the amount of $295,269 for services ($17,600 in 2002);
     o    Research and development expenses were $418,086,  up from $341,275 the
          previous  year.  Most  of  these  funds  have  been  expensed  on  the
          development  of the  Syringe  to the point of proof of  concept.  This
          increase is due to the additional  work done on the syringe  prototype
          during the year.
     o    Interest  income was $8,306 down from  $52,748 in the  previous  year.
          This decrease is due to the reduction in our cash and cash equivalents
          held during the year.

During  the  year  ended  2002 the  Company  incurred  a net loss of  $1,051,699
compared  to a net loss of  $1,216,128  for the  year-ended  May 31,  2001.  The
decrease  in the  loss  can,  at  least  partially,  be  attributed  to a higher
compensation cost for stock options in the previous year.




                                       15
<PAGE>



Our Plan of Operation For Next 12 Months.
-----------------------------------------

During the next 12 months, with the appropriate  financing,  we plan to continue
moving forward with the pre-production and production version of the Syringe. We
hope that our efforts will allow us to develop  markets in other  jurisdictions.
We cannot  guarantee,  however,  that we will be able to acquire  the  necessary
regulatory  approval to market the Syringe in additional  markets. We anticipate
developing  relationships with certain  distributors who we hope will facilitate
the  distribution of our products in various  markets.  We will also continue to
research ways to improve the attractiveness of the product and the appeal to the
medical community. We will also pursue other opportunities as they arise.

















































                                       16
<PAGE>



Item 7.   Financial Statements
------------------------------














                              Consolidated Financial Statements of


                              L.O.M. MEDICAL INTERNATIONAL INC.
                              ---------------------------------

                              (A Development Stage Enterprise)

                              Years ended May 31, 2002 and 2001





































                                       17
<PAGE>








INDEPENDENT AUDITORS' REPORT TO THE STOCKHOLDERS


We have audited the consolidated balance sheets of L.O.M. Medical  International
Inc.  (A  Development  Stage  Enterprise)  as of May 31,  2002  and 2001 and the
consolidated  statements of loss and cash flows for the years then ended and for
the cumulative  period from  inception  (March 17, 1997) to May 31, 2002 and the
consolidated statements of stockholders' equity and comprehensive income for the
period from  inception  on March 17, 1997 to May 31,  2002.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of L.O.M.  Medical
International  Inc. (A Development Stage Enterprise) as of May 31, 2002 and 2001
and the  results of its  operations  and its cash flows for the years then ended
and for the cumulative  period from inception  (March 17, 1997) to May 31, 2002,
in conformity with accounting principles generally accepted in the United States
of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue as a going  concern.  As  discussed  in note 1(a) to the
consolidated financial statements,  the Company has generated no revenues, has a
working  capital  deficiency,  and has  accumulated a deficit since inception of
$3,934,228 that raise  substantial doubt about the Company's ability to continue
as a going  concern.  Management's  plans in  regard to these  matters  are also
described in note 1a). The consolidated  financial statements do not include any
adjustments that might result from the outcome of these uncertainties.



signed "KPMG LLP"

Chartered Accountants


Kelowna, Canada

July 4, 2002














                                       18
<PAGE>


<TABLE>
<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated Balance Sheets
$ United States

May 31, 2002 and 2001

==============================================================================================================
                                                                                  2002              2001
--------------------------------------------------------------------------------------------------------------

Assets
------

<S>                                                                         <C>               <C>
Current assets:
     Cash and cash equivalents                                              $      142,114    $      741,152
     Amounts receivable                                                             18,933            48,106
     Prepaid expenses                                                                8,235             1,455
     ---------------------------------------------------------------------------------------------------------
                                                                                   169,282           790,713

Advances and deposits (note 2)                                                       9,803           161,415

Fixed assets (note 3)                                                               28,564            40,809

Patent costs                                                                         4,168             8,336

--------------------------------------------------------------------------------------------------------------
                                                                            $      211,817    $    1,001,273
==============================================================================================================

Liabilities and Stockholders' Equity (Deficiency)
-------------------------------------------------

Current liabilities:
     Accounts payable and accrued liabilities                               $      319,537    $      112,083

Minority interest (note 4)                                                         288,491           301,727

Share subscriptions (note 5(a))                                                     34,375            22,100

Stockholders' equity (deficiency):
     Capital stock  (notes 5 and 9)
           5,000,000 preferred shares with a par value of $0.001
                       per share authorized, nil issued
           50,000,000  common shares with a par value of $0.001
                       per share authorized, 6,178,446 issued
                       (May 31, 2001 - 6,152,811 issued), net of treasury
                       shares of 84,436 (May 31, 2001 - Nil)                         6,179             6,154
     Additional paid-in capital                                                  3,464,159         3,408,434
     Deficit accumulated during the development stage                           (3,934,228)       (2,882,529)
     Accumulated other comprehensive income                                         33,304            33,304
--------------------------------------------------------------------------------------------------------------
                                                                                  (430,586)          565,363
Going concern (note 1(a))
Contingent liability (note 9)
--------------------------------------------------------------------------------------------------------------
                                                                            $      211,817    $    1,001,273
==============================================================================================================
</TABLE>

See accompanying notes to financial statements


On behalf of the board:
/s/ John Klippenstein         Director
---------------------------









                                       19
<PAGE>


<TABLE>
<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated Statements of Loss
$ United States

For the years ended May 31, 2002 and 2001 and cumulative from inception (March
17, 1997) to May 31, 2002

========================================================================================================
                                                 From inception
                                                (March 17, 1997)
                                                 to May 31, 2002          2002                2001
--------------------------------------------------------------------------------------------------------

<S>                                             <C>                 <C>                 <C>
Expenses:
     General and administration                 $    2,762,968      $      641,919      $      927,601
     Research and development                        1,293,506             418,086             341,275
     ---------------------------------------------------------------------------------------------------
                                                     4,056,474           1,060,005           1,268,876

--------------------------------------------------------------------------------------------------------
Loss, before interest income                        (4,056,474)         (1,060,005)         (1,268,876)

Interest income                                        122,246               8,306              52,748

--------------------------------------------------------------------------------------------------------
Loss                                            $   (3,934,228)     $   (1,051,699)     $   (1,216,128)
========================================================================================================


Loss per common share, basic and diluted        $        (0.79)     $        (0.17)     $        (0.20)

Weighted average number of common shares,
   basic and diluted                                 5,005,210           6,158,450           6,047,271
========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements






























                                       20
<PAGE>


<TABLE>
<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated Statements of Cash Flows
$ United States

For the years ended May 31, 2002 and 2001 and cumulative  from inception (March
17, 1997) to May 31, 2002

==========================================================================================================================
                                                                    From inception
                                                                  (March 17, 1997)
                                                                   to May 31, 2001          2002                2001
--------------------------------------------------------------------------------------------------------------------------

<S>                                                               <C>                 <C>                 <C>
Cash flows from operating activities:
   Loss for the period                                            $   (3,934,228)     $   (1,051,699)     $   (1,216,128)

   Items not involving cash
     Amortization                                                         85,245              18,691              19,994
     Gain on sale of fixed assets                                         (2,659)                  -                   -
     Write down of product rights and patent costs                       374,128                   -                   -
     Common shares issued for consulting services                         17,600              17,600                   -
     Compensation cost of stock options issued
       for services                                                      295,269                   -             295,269
     Foreign exchange gain on redeemable preferred shares                (13,236)            (13,236)                  -
     Write-down of advances and deposits                                 168,680             168,680                   -

   Changes in non-cash working capital
     Amounts receivable                                                  (18,933)             29,173             (27,036)
     Prepaid expenses                                                     (8,235)             (6,780)              5,365
     Accounts payable and accrued liabilities                             95,339             (16,744)             84,292
     ---------------------------------------------------------------------------------------------------------------------
                                                                      (2,941,030)           (854,315)           (838,244)
Cash flows from financing activities:
     Issuance of capital stock                                         2,553,549             287,474             726,904
     Common shares rescinded or repurchased                              (47,226)            (47,226)                  -
     Proceeds from subscriptions for shares                              909,719              34,375              22,100
     ---------------------------------------------------------------------------------------------------------------------
                                                                       3,416,042             274,623             749,004
Cash flows from investing activities:
     Advances and deposits                                              (178,483)            (17,068)           (119,415)
     Proceeds on disposition of fixed assets                               6,189                   -                   -
     Acquisition of fixed assets                                        (103,508)             (2,278)             (9,511)
     Acquisition of product rights                                       (90,577)                  -                   -
     ---------------------------------------------------------------------------------------------------------------------
                                                                        (366,379)            (19,346)           (128,926)

Effect of change in exchange rates on cash and cash equivalents           33,481                   -                   -
--------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                         142,114            (599,038)           (218,166)

Cash and cash equivalents, beginning of period                                 -             741,152             959,318
--------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                          $      142,114      $      142,114      $      741,152
==========================================================================================================================

Supplementary information:
   Interest paid                                                  $            -      $            -      $            -
   Income taxes paid                                                           -                   -                   -
Non-cash financing and investing activities:
   Issuance of redeemable preferred shares for product rights            309,677                   -                   -
   Common shares issued for conversion of share subscriptions            875,344              22,100             185,513
   Common shares issued for consulting services                           17,600              17,600                   -
   Common shares rescinded and cancelled                                  46,226              46,226                   -
   Compensation cost of stock options issued for services                295,269                   -             295,269
   Unpaid amount related to rescinded shares (note 9)                    217,347             217,347                   -
   Unpaid amount related to returned shares (note 9)                       6,851               6,851                   -
==========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements




                                       21
<PAGE>


<TABLE>
<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated  Statements of Stockholders'  Equity (Deficiency) and Comprehensive
Income
$ United States

For the period from inception on March 17, 1997 to May 31, 2002

=============================================================================================================================
                                              Capital Stock                         Deficit
                                         ----------------------                 Accumulated     Accumulated
                                             Number                Additional    During the           Other          Total
                                          of Common                   Paid in   Development   Comprehensive  Stockholders'
                                             Shares      Amount       Capital         Stage          Income         Equity
-----------------------------------------------------------------------------------------------------------------------------

<S>                                       <C>        <C>         <C>           <C>           <C>             <C>
Common shares issued on incorporation             3  $        1  $        -    $        -    $          -    $           1

Comprehensive income (loss):
  Loss                                          -           -             -        (138,272)            -         (138,272)
  Foreign currency translation                  -           -             -             -            13,582         13,582
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                                (124,690)
-----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 1997                             3           1           -        (138,272)         13,582       (124,689)

Common shares issued to founders
  and others at $0.001                    4,210,090       4,210           -             -               -            4,210

Common shares issued at $1.00
  net of share issue costs                  668,154         668       469,887           -               -          470,555

Common shares issued at $1.00 on
  conversion of share subscriptions         605,000         605       604,395           -               -          605,000

Comprehensive income (loss):
  Loss                                          -           -             -        (293,239)            -         (293,239)
  Foreign currency translation                  -           -             -             -            (7,294)        (7,294)
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                                (300,533)
-----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 1998                     5,483,247       5,484     1,074,282      (431,511)          6,288        654,543

Common shares issued on
  November 30, 1998 at $3.25
  net of share issue costs                   36,300          36        96,726           -               -           96,762

Comprehensive income (loss):
  Loss                                          -           -             -        (726,055)            -         (726,055)
  Foreign currency translation                  -           -             -             -            17,038         17,038
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                                (709,017)
-----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 1999                     5,519,547       5,520     1,171,008    (1,157,566)         23,326         42,288

Common shares issued on
  April 17, 2000 at $3.25
  net of share issue costs                  307,610         308       967,335           -               -          967,643

Common shares issued on
  May 10, 2000 at $3.25 on
  conversion of share
  subscriptions                              19,302          19        62,712           -               -           62,731

Comprehensive income (loss):
  Loss                                          -           -             -        (508,835)            -         (508,835)
  Foreign currency translation                  -           -             -             -             9,978          9,978
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                                (498,857)
-----------------------------------------------------------------------------------------------------------------------------

Balance, May 31, 2000                     5,846,459  $    5,847  $  2,201,055  $ (1,666,401) $       33,304  $     573,805
=============================================================================================================================






                                       22
<PAGE>


<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated  Statements of Stockholders'  Equity (Deficiency) and Comprehensive
Income (continued)
$ United States

For the period from inception on March 17, 1997 to May 31, 2002

=============================================================================================================================
                                              Capital Stock                         Deficit
                                         ----------------------                 Accumulated     Accumulated
                                             Number                Additional    During the           Other          Total
                                          of Common                   Paid in   Development   Comprehensive  Stockholders'
                                             Shares      Amount       Capital         Stage          Income         Equity
-----------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>        <C>         <C>           <C>           <C>             <C>
Balance, May 31, 2000,
  carried forward                         5,846,459  $    5,847  $  2,201,055  $ (1,666,401) $       33,304  $     573,805

Common shares issued on
  September 22, 2000 for
  cash at $3.25 net of share
  issue costs                               249,271         250       726,654           -               -          726,904

Common shares issued on
  December 19, 2000 at $3.25
  on conversion of share
  subscriptions                              57,081          57       185,456           -               -          185,513

Compensation costs for
  stock options issued for
  services (note 5(b))                          -           -         295,269           -               -          295,269

Comprehensive income (loss):
  Loss                                          -           -             -      (1,216,128)            -       (1,216,128)
  Foreign currency translation                  -           -             -             -               -              -
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                                                              (1,216,128)
-----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 2001                     6,152,811  $    6,154  $  3,408,434  $ (2,882,529) $       33,304  $     565,363

Common shares issued on
  August 31, 2001 at $3.25
  on conversion of share
  subscriptions                               6,800           7        22,093           -               -           22,100

Common shares issued for cash
  on October 11, 2001 at $3.25, net
  of share issue costs                       38,211          38       110,245           -               -          110,283

Common shares issued for cash
  on January 10, 2002 at $3.25                5,020           5        16,310           -               -           16,315

Common shares issued for cash
  on January 10, 2002 at $2.41               47,697          47       114,903           -               -          114,950

Common shares issued for consulting
  services rendered on January 10, 2002
  at $2.41                                    7,303           7        17,593           -               -           17,600

Shares rescinded and cancelled
  on February 22, 2002                      (18,702)        (19)      (46,207)          -               -          (46,226)

Common shares issued for cash
  on April 2, 2002 at $3.25                   2,880           3         9,357           -               -            9,360

Common shares issued for cash
  on April 2, 2002 at $2.41                  10,400          10        25,054           -               -           25,064



                                       23
<PAGE>


<CAPTION>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Consolidated   Statements  of  Stockholders'  Equity  and  Comprehensive  Income
(continued)
$ United States

Period from inception (March 17, 1997) to May 31, 2002

=============================================================================================================================
                                              Capital Stock                         Deficit
                                         ----------------------                 Accumulated     Accumulated
                                             Number                Additional    During the           Other          Total
                                          of Common                   Paid in   Development   Comprehensive  Stockholders'
                                             Shares      Amount       Capital         Stage          Income         Equity
-----------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>        <C>         <C>           <C>           <C>             <C>
Common shares issued for cash
  on April 2, 2002 at $1.00                  10,000          10         9,990           -               -           10,000

Common shares issued for cash
  on April 24, 2002 at $3.25                    462           1         1,501           -               -            1,502

Comprehensive loss:
  Loss                                          -           -             -      (1,051,699)            -       (1,051,699)
-----------------------------------------------------------------------------------------------------------------------------
                                          6,262,882       6,263     3,689,273    (3,934,228)         33,304       (205,388)

Shares rescinded and retained
  as treasury stock (note 9)                (81,231)        (81)     (217,266)          -               -         (217,347)

Shares repurchased and retained
  as treasury stock (note 9)                 (3,205)         (3)       (7,848)          -               -           (7,851)

-----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 2002                     6,178,446  $    6,179  $  3,464,159  $ (3,934,228) $       33,304  $    (430,586)
=============================================================================================================================
</TABLE>
































                                       24
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 1
($ United States)

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

L.O.M.  Medical  International Inc. was incorporated on March 17, 1997 under the
General  Corporation Laws of Delaware.  It conducts  research and development on
new products in the medical field including a retractable syringe.

1.   Significant accounting policies:
-------------------------------------

     a)   Going concern

          These  financial  statements  have been  prepared on the going concern
          basis in accordance with accounting  principles  generally accepted in
          the United States of America,  which assumes the realization of assets
          and liquidation of liabilities and commitments in the normal course of
          business. As shown in the consolidated financial statements,  to date,
          the  Company  has  generated  no  revenues,   has  a  working  capital
          deficiency   and  has   accumulated  a  deficit  since   inception  of
          $3,934,228. These factors, among others, raise substantial doubt about
          the Company's  ability to continue as a going  concern.  The Company's
          ability to continue as a going  concern is dependent on its ability to
          generate future profitable  operations and receive continued financial
          support from its stockholders and other investors.  These consolidated
          financial  statements do not include any adjustments that might result
          from the outcome of this uncertainty.

          Management's  plans include  generating future  profitable  operations
          from  future  sales of the  retractable  syringe  as well as  securing
          additional  funding from  stockholders in the form of additional share
          subscriptions.  There can be no  assurance  that a market will develop
          for the retractable  syringe or that additional  share financings will
          be  available.  Failure to obtain  adequate  financing  will cause the
          Company to curtail operations and the Company's ability to continue as
          a going concern will be impaired.  The outcome of these  uncertainties
          cannot be determined at this time.

     b)   Basis of presentation and consolidation

          The  consolidated  financial  statements  include the  accounts of the
          Company and its 96% owned  subsidiary.  All significant  inter-company
          balances and  transactions  have been  eliminated.

     c)   Translation of financial statements

          The  Company's  functional  currency  is  the  United  States  dollar.
          Subsequent  to  May  31,  2000,  the  Company's   subsidiary,   L.O.M.
          Laboratories Inc., has a United States dollar functional currency.  To
          May 31,  2000,  the  functional  currency  of the  subsidiary  was the
          Canadian  dollar.  Accordingly,  the net  adjustment  to May 31,  2000
          arising from the translation was recorded as a translation  adjustment
          which is included  in  accumulated  other  comprehensive  income.  The
          change  in  the   subsidiary's   functional   currency   resulted   as
          transactions  it now  enters  into are  denominated  in United  States
          dollars.

          Where the functional  currency is the United States dollar, the method
          of  translation  of Canadian  dollar  balances  into the United States
          dollar is as follows:

          i)   Monetary  assets and  liabilities  are  translated at the rate of
               exchange in effect at the balance sheet date,  being US $1.00 per
               Cdn $1.5275 (2001 - $1.5699).

          ii)  Non-monetary assets and liabilities are translated at the rate of
               exchange in effect at the date the transaction occurred.

          iii) Revenues  and  expenses are  translated  at the exchange  rate in
               effect at the transaction date.

          iv)  The net  adjustment  arising from the  translation is included in
               the consolidated statement of loss.




                                       25
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 2
$ United States

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

1.   Significant accounting policies (continued):
-------------------------------------------------

     d)   Cash and cash equivalents

          The Company  considers  all highly  liquid  securities  with a term to
          maturity of three months or less when acquired to be cash equivalents.

     e)   Fixed assets

          Fixed assets are recorded at cost. The carrying values of fixed assets
          are  reviewed  on a  regular  basis  for the  existence  of facts  and
          circumstances,  both  internally  and  externally,  that  may  suggest
          impairment.  Amortization is provided using the following  methods and
          annual  rates which are  intended  to amortize  the cost of the assets
          over their estimated useful life:

          ======================================================================
          Asset                                              Method     Rate
          ----------------------------------------------------------------------

          Leasehold improvements                      Straight-line      20%
          Computer software                       Declining balance      50%
          Equipment                               Declining balance      30%
          Furniture and fixtures                  Declining balance      20%
          ----------------------------------------------------------------------

     f)   Patent costs

          Patent  costs  relate to amounts paid to acquire the rights to produce
          and distribute  products as well as the costs  associated  with patent
          applications. These costs are being amortized on a straight-line basis
          over five years.

     g)   Research and development

          Research and development costs are expensed as incurred.

     h)   Income taxes

          The  Company  accounts  for  income  taxes by the asset and  liability
          method. Under the asset and liability method,  deferred tax assets and
          liabilities   are   recognized   for  the  future   tax   consequences
          attributable to differences  between the financial  statement carrying
          amounts of existing assets and  liabilities  and their  respective tax
          bases and operating  loss and tax credit  carryforwards.  Deferred tax
          assets and  liabilities  are measured using enacted tax rates expected
          to apply to  taxable  income  in the  years in which  those  temporary
          differences  are expected to be  recovered  or settled.  The effect on
          deferred  tax  assets  and  liabilities  of a change  in tax  rates is
          recognized in income in the period that  includes the enactment  date.
          To the extent  that it is not  considered  to be more  likely than not
          that a deferred tax asset will be realized,  a valuation  allowance is
          provided.











                                       26
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 3
($ United States)

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

1.   Significant accounting policies (continued):
-------------------------------------------------

     i)   Management estimates

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

     j)   Financial instruments

          The fair values of the Company's  cash and cash  equivalents,  amounts
          receivable and accounts  payable and accrued  liabilities  approximate
          their carrying values due to the relatively  short periods to maturity
          of the  instruments.  It is not possible to arrive at a fair value for
          redeemable preferred shares as a public market for this stock does not
          exist.  The maximum  credit risk exposure for all financial  assets is
          the carrying amount of those assets.

     k)   Loss per share

          Basic loss per share has been  calculated  using the weighted  average
          number of common shares  outstanding during the period. In calculating
          diluted loss per share,  the Company  considers the dilutive effect of
          assuming the full  exercise of stock  options (note 5(b)) and warrants
          (note  5(c)).  However,  as  the  Company  has a loss  in all  periods
          presented,  all such securities are  anti-dilutive and therefore basic
          and diluted loss per share are the same.

     l)   Stock option plan

          During the year ended May 31, 2001, the Company adopted a stock option
          plan  whereby  employees of the Company,  directors,  consultants  and
          other persons could be granted  options to subscribe for common shares
          of the Company.  The  aggregate  number of common  shares which may be
          issued upon  exercise  of all  options  pursuant to the Plan shall not
          exceed  3,000,000.  Options  granted  pursuant  to this  plan  vest on
          issuance and have exercise periods of not more than ten years from the
          date of grant. The exercise price of the options is as follows:

          i)   For incentive  stock  options  granted to an employee who, at the
               time the option is granted,  owns shares and possessing less than
               10% of the total combined voting power of all classes of stock of
               the Company,  the  exercise  price shall not be less than 100% of
               the fair market value of the Company's  common shares at the date
               of grant.

          ii)  For incentive  stock  options  granted to an employee who, at the
               time the option is granted,  owns shares and possessing more than
               10% of the total combined voting power of all classes of stock of
               the Company,  the  exercise  price shall not be less than 110% of
               the fair market value of the Company's  common shares at the date
               of grant,  and such  options  shall  expire no later than 5 years
               from the grant date.

          iii) For all other stock options, the exercise price shall not be less
               than 85% of the fair market value of the Company's  common shares
               at the date of grant.




                                       27
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 4
$ United States

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

1.   Significant accounting policies (continued):
-------------------------------------------------

     (l)  Stock option plan (continued):

          The Company applies APB Opinion No. 25 in accounting for stock options
          granted to employees whereby compensation cost is recorded only to the
          extent that the market price exceeds the exercise price at the date of
          grant.  Options  granted to  non-employees  are accounted for at their
          fair  value  as the  related  services  are  provided  and the  equity
          instruments are earned.

2.   Advances and deposits:
---------------------------

     The  balance  at May 31,  2002 of $9,803  (May 31,  2001 -  $161,415)  is a
     non-interest bearing refundable deposit. During the year ended May 31, 2002
     the Company wrote off advances  totaling $168,680 due to the uncertainty of
     their recoverability.

3.   Fixed assets:
------------------

     ===========================================================================
                                                                         2002
     ---------------------------------------------------------------------------
                                                    Accumulated      Net book
                                          Cost     amortization         value
     ---------------------------------------------------------------------------
     Leasehold improvements          $  27,919     $     22,335     $   5,584
     Computer software                   9,930            6,886         3,044
     Equipment                          31,285           22,107         9,178
     Furniture and fixtures             23,975           13,216        10,759

     ---------------------------------------------------------------------------
                                     $  93,109     $     64,545     $  28,564
     ===========================================================================

     ===========================================================================
                                                                         2001
     ---------------------------------------------------------------------------
                                                    Accumulated      Net book
                                          Cost     amortization         value
     ---------------------------------------------------------------------------
     Leasehold improvements          $  27,919     $     16,751     $  11,168
     Computer software                   9,093            4,262         4,831
     Equipment                          29,844           18,482        11,362
     Furniture and fixtures             23,975           10,527        13,448

     ---------------------------------------------------------------------------
                                     $  90,831     $     50,022     $  40,809
     ===========================================================================

4.   Minority interest:
-----------------------

     The Company's  subsidiary has redeemable  preferred  shares  outstanding as
     follows:

<TABLE>
<CAPTION>
     =========================================================================================================
                                                                                         2002        2001
     ---------------------------------------------------------------------------------------------------------

     Issued:
<S>                                                                                   <C>         <C>
          4,000 Class C preferred shares with a par value of $100 Cdn redeemable
          at $110.16  Cdn per share at the option of the  holder.  Each share is
          entitled  to a fixed  non-cumulative  dividend  at the  rate of 9% per
          annum payable as determined by the Directors of the Company.                288,491     301,727
     =========================================================================================================
</TABLE>


                                       28
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 5
$ United States

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

5.   Capital stock:
-------------------

     a) Share subscriptions:

          Subsequent to May 31, 2002,  the Company  issued 10,693 (2001 - 6,800)
          common  shares at $3.25 per share,  net of share issue costs,  for net
          proceeds of $34,375 (2001 - $22,100), which were received prior to May
          31, 2002.

     b)   Stock options:

          The Company has the following stock options outstanding:

<TABLE>
<CAPTION>
          =========================================================================================
                                                              2002                         2001
                                                  Weighted average             Weighted average
                                          Shares    exercise price    Shares     exercise price
          -----------------------------------------------------------------------------------------
<S>                                      <C>                 <C>     <C>                  <C>
          Balance, beginning of year     340,417             $3.36       -                  -
          Issued                             -                 -     340,417              $3.36
          Exercised                          -                 -         -                  -
          Expired or cancelled               -                 -         -                  -
          -----------------------------------------------------------------------------------------
          Balance, end of year           340,417             $3.36   340,417              $3.36
          =========================================================================================
</TABLE>

          At May 31,  2002,  all  options  were  vested.  The  weighted  average
          remaining  contractual  life of the outstanding  options was 6.8 years
          (2001 - 7.8 years).

          The Company  applies APB  Opinion No. 25 in  accounting  for its stock
          options  issued to directors and employees and,  accordingly,  because
          options granted to these  individuals  have been granted at the market
          price of its common shares on the grant date, no compensation cost has
          been  recognized for its stock options in the  consolidated  financial
          statements. Had the Company determined compensation costs based on the
          fair value of its stock options at the grant date under the fair value
          method  prescribed  by SFAS No. 123, the  Company's  loss and loss per
          share  for the  years  ended  May 31,  2002 and 2001  would  have been
          increased to the pro forma amounts below:

          ======================================================================
                                                          2002           2001
          ----------------------------------------------------------------------

          Loss
            As reported                           $  1,051,699    $ 1,216,128
            Pro forma                                1,051,699      1,493,186
          Loss per share, basic and diluted
            As reported                                $(0.17)          $0.20
            Pro forma                                  $(0.17)          $0.25
          ======================================================================

          During the year ended May 31,  2001,  206,667  options  were issued to
          directors  and  employees.  The  fair  value of the  options  has been
          determined  under the Black Scholes  Method using the expected life of
          the options,  volatility factor of 50%, risk-free rate of 5.39% and no
          expected dividend yield.

          During the year ended May 31, 2001, the Company granted 133,750 common
          share   options  with  an  exercise   price  of  $3.25  per  share  to
          non-employees for services rendered. The fair value of the options and
          stock  rights,  calculated as $295,629,  has been  recorded  using the
          Black  Scholes   Method  using  the  expected  life  of  the  options,
          volatility  factor of 50%, a  risk-free  rate of 5.39% and no expected
          dividend yield.



                                       29
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
$ United States

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

5.   Capital stock (continued):
-------------------------------

     c)   Warrants:

          3,076,405   warrants  were  issued  during  fiscal  2001  to  existing
          shareholders representing 1/2 warrant for each common share held. Each
          warrant  entitles  the holder of such  warrant to purchase  one common
          share for $5.00 per share.  Each warrant expires ninety days after the
          first   transaction   in   the   Company's   shares   occurs   on  the
          Over-the-Counter Bulletin Board.

6.   Related party transactions:
--------------------------------

     The Company entered into the following transactions with related parties:

<TABLE>
<CAPTION>
     ==========================================================================================================
                                                                                           2002        2001
     ----------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>          <C>
     Accounting fees paid to the chief financial officer (2001 - director)           $   55,170   $  26,059
     Counseling fees paid to a director                                                  18,000      36,035
     Management fees paid to president                                                  114,142     138,564
     Office and administration fees paid to president's spouse                           30,005      35,713
     Office and administration fees paid to an individual related to the president       11,852      19,109
     Management fees paid to a company controlled by the president                       13,342      20,000
     Rent paid to a company controlled by the president                                  25,115      29,489
     ==========================================================================================================
</TABLE>

     These  transactions are in the normal course of operations and are measured
     at the exchange  amount of  consideration  established and agreed to by the
     related parties.

7.   Commitments:
-----------------

     The Company is  obligated  to make the  following  payments  for  operating
     premises and vehicle leases:

         2002                                              $    40,178
         2003                                              $    40,178
         2004                                              $    35,699
         2005                                              $    27,785

8.   Income taxes:
------------------

     At May 31, 2002,  the Company had a net  operating  loss  carryforward  for
     United  States  income tax purposes of  approximately  $3,800,000.  The net
     operating loss expires in increments  beginning in 2008. No amount has been
     reflected on the balance  sheet for  deferred  income taxes as any deferred
     income  tax  asset has been  fully  offset by a  valuation  allowance.  The
     Company has no other deferred tax assets or liabilities.

9.   Contingent liability:
--------------------------

     During the year ended May 31 2002, the Company engaged in discussions  with
     staff of the British Columbia Securities Commission (the "BCSC") concerning
     the  distribution  of the  Company's  common stock to certain  residents of
     British Columbia. Staff of the BCSC took the position that the distribution
     of  certain  shares  may not  have,  in all  circumstances,  satisfied  the
     prospectus  exemption   requirements  under  the  Securities  Act  (British
     Columbia).







                                       30
<PAGE>


L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 7
$ United States

Years ended May 31, 2002 and 2001 and cumulative from inception (March 17, 1997)
to May 31, 2002

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

9.   Contingent liability (continued):
--------------------------------------

     In order to resolve the concerns of staff of the BCSC,  the Company  agreed
     to make an offer of rescission  (the  "Rescission  Offer") to purchasers of
     its common stock residing in British  Columbia.  Stockholders  who acquired
     99,933 common  shares from the Company for  aggregate  proceeds of $263,573
     exercised  their right of  rescission.  As of May 31, 2002, the Company has
     repaid  $46,226 of the  $263,573.  The  remaining  $217,347  is included in
     accounts payable and accrued liabilities on the consolidated balance sheet.
     The Company  intends to repay this amount by August 15, 2002. As of May 31,
     2002,  18,702 of the 99,933 shares  returned upon rescission were cancelled
     and the remaining  81,231 shares are held as treasury  stock.  During 2002,
     two shareholders,  not entitled to the rescission offer,  holding 1,000 and
     2,205  common  shares  with a  cost  of  $1,000  and  $6,851  respectively,
     requested that the Company  accept the return of their shares.  The Company
     accepted  the return of the shares  and  repaid the  original  subscription
     price of $1,000 to one  shareholder  and has recorded a liability of $6,851
     which is included in accounts payable and accrued liabilities for the other
     shareholder.  All of these shares are held as treasury  stock as at May 31,
     2002.

10.  Subsequent event:
----------------------

     Subsequent to May 31, 2002, the Company  received cash proceeds of $44,609,
     net of share  issue  costs,  for the  issuance of share  subscriptions  for
     20,165 common shares.































                                       31
<PAGE>



Item 8.   Changes In  and  Disagreements  With  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure.
---------------------

There have been no changes in or  disagreements  with our accountants  since the
formation  of the  Company  required  to be  disclosed  pursuant  to Item 304 of
Regulation S-B except for the following:

Item 9.   Directors, Executive Officers, Promoters and  Control Persons; Compli-
--------------------------------------------------------------------------------
ance with Section 16(a) of the Exchange Act.
--------------------------------------------

Our directors and principal executive officers are as specified on the following
table:

<TABLE>
<CAPTION>
=====================================================================================================================
Name                   Age     Position                                           Term as Director
------------------    -----    ------------------------------------------------   -----------------------------------

<S>                     <C>    <C>                                                <C>
John Klippenstein       62     President, Chief Executive Officer and Director    From inception to present

Peter McFadden          45     Vice President, Chief Financial Officer and Past   From October 27, 1997 to
                               Director                                           December 31, 2000

Maria Klippenstein      60     Secretary and Treasurer                            From inception to present

David A. Gramlich       60     Director                                           From inception to present

Colin Lee               63     Director                                           From inception to present

Dr. Harold Punnett      44     Director                                           From March 2, 2001 to May 27, 2002.

Dr. Jeffrey Berg        58     Past Director                                      From February 28, 2000 to present.
=====================================================================================================================
</TABLE>

John Klippenstein is our President,  Chief Executive Officer and a member of our
-----------------
Board of  Directors.  He  received  his  education  in Winnipeg  and  received a
Certified  Engineering  Technician  degree  in 1964 from Red  River  College  in
Winnipeg,  Manitoba.  From  1980 to  present,  Mr.  Klippenstein  has  been  the
President  and owner of  Tech-Nacan  Consultants.  >From  1994 to  present,  Mr.
Klippenstein has been the President of our subsidiary, L.O.M. Laboratories, Inc.
Mr.  Klippenstein is currently a director of Highland  Security  Corporation and
has  been  since  1996.  Mr.  Klippenstein  has also  worked  for  several  land
development  companies until 1969 when he started his personal land  development
and  construction  management  company,  which  still has  holdings  in Kelowna,
British Columbia. As owner of Tech-Nacan  Consultants Inc., Mr. Klippenstein has
developed and built many large  commercial  and  industrial  projects  including
health  care  facilities,  clinics,  schools,  institutional  buildings,  senior
citizen housing, high rise apartment complexes, recreational complexes, and food
processing facilities in Manitoba, Saskatchewan and Alberta.

Peter  McFadden is a consultant  and acts as our Chief  Financial  Officer.  Mr.
---------------
McFadden  began his  university  education in 1979.  He received his Bachelor of
Science  degree  at  McMaster  University,  and a  Masters  Degree  in  Business
Administration from the University of Windsor in 1982. From 1994 to present, Mr.
McFadden  has operated  his own public  accounting  firm under the name of Peter
McFadden Inc.  Chartered  Accountants.  Prior to establishing his own accounting
practice,  Mr. McFadden spent 12 years as a Senior Manager for a national public
accounting firm. Mr. McFadden is also a lecturer at Okanagan University.

Maria  Klippenstein  is our  Secretary  and  Treasurer.  Mrs.  Klippenstein  has
-------------------
completed   university   level  studies  in  industrial   accounting   including
bookkeeping, accounts receivable and accounts payable, and banking. From 1980 to
present,  Mrs.  Klippenstein  has been the Secretary and Treasurer of Tech-Nacan
Consultants.  From 1994 to present, Mrs. Klippenstein has been the Secretary and
Treasurer of L.O.M. Laboratories, Inc., our subsidiary. Mrs. Klippenstein has 20
years of  experience  in  accounting  and is  proficient  in  AccPac  accounting
software and cost accounting.  Mrs.  Klippenstein is also an accomplished artist
and photographer.


                                       32
<PAGE>



David A. Gramlich is a member of our Board of Directors.  Mr. Gramlich began his
-----------------
business  career in 1968 in the  field of real  estate.  From  1968 to 1979,  he
worked as a  manager  of  several  real  estate  firms.  From 1979 to 1998,  Mr.
Gramlich  was a  self-employed  businessman  specializing  in  real  estate  and
development.  Mr.  Gramlich  also  owned  Video  Max,  a company  that owned and
operated four video stores in the City of Langley, British Columbia. Since 1998,
Mr.  Gramlich  has been  employed by Canadian  R.V.  Centre as a sales and lease
consultant.  Mr.  Gramlich  has  participated  in  industrial,   commercial  and
institutional transactions.

Colin Lee, M. D., is a member of our Board of Directors.  Dr. Lee came to Canada
----------------
in 1968 after having  received his medical  degree from Cape Town  University in
South  Africa in 1966.  Since his  arrival in Canada,  Dr. Lee has worked in the
specialty  of  radiology.  Dr.  Lee owns and  operates  5  radiology  clinics in
Vancouver Island and Victoria,  British Columbia, in partnership with Dr. Sidney
Joss. Dr. Lee not only brings his medical knowledge to the Company, but also his
investment experience.

Jeffrey Berg, Ph.D., is a member of our Board of Directors. Dr. Berg is a senior
-------------------
research  analyst as well as a prime  consultant  to medical  companies  located
within the United States,  including,  but not limited to, Johnson & Johnson and
Bausch & Lomb. Dr. Berg  typically  associates  himself with companies  offering
pharmaceutical, biotechnological and medical-device and diagnostic products. Dr.
Berg has also been published in medical publications.  Dr. Berg is the owner and
President of Health Care  Insights.  Health Care Insights has offices in Edison,
New Jersey.

Dr. Harold Punnett,  is a member of our Board of Directors.  Dr. Punnett has had
------------------
his own dental practice in the Vancouver area since 1984. For the past ten years
he has been an active  participant  in the investment  community.  Presently Dr.
Punnett is part of a private  venture  capital  group based in Europe as well as
serving  as a member on the  Board of  Directors  of Red  Emerald  Resources,  a
company listed on the CDNX exchange under the symbol "RED".

John  Klippenstein  and Maria  Klippenstein are husband and wife. Other than the
persons listed above, there are no significant  employees expected by us to make
a  significant  contribution  to our business.  All of our directors  will serve
until the next  annual  meeting of  stockholders.  Our  executive  officers  are
appointed by our Board of Directors and serve at the  discretion of the Board of
Directors.

There  are no  orders,  judgments,  or  decrees  of any  governmental  agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license,  permit or other  authority  to engage in the  securities
business or in the sale of a particular  security or  temporarily or permanently
restraining Mr. Klippenstein, Mr. McFadden, Mr. Gramlich, Dr. Lee, Dr. Berg, Dr.
Punnett  or Mrs.  Klippenstein  from  engaging  in or  continuing  any  conduct,
practice or employment in connection with the purchase or sale of securities, or
convicting such person of any felony or misdemeanor involving a security, or any
aspect of the  securities  business  or of theft or of any  felony,  nor are Mr.
Klippenstein,  Mr. McFadden,  Mr. Gramlich,  Dr. Lee, Dr. Berg, Dr. Punnett,  or
Mrs.  Klippenstein  the officers or directors  of any  corporation  or entity so
enjoined.
















                                       33
<PAGE>



Section 16(a) Beneficial Ownership Reporting Compliance.  We believe that all of
-------------------------------------------------------
our  officers,  directors  and  principal  shareholders  have filed all  reports
required  to be  filed  by  those  persons  on,  respectively,  Form 3  (Initial
Statement of Beneficial  Ownership of Securities),  Form 4 (Statement of Changes
                                                            --------------------
of  Beneficial  Ownership  of  Securities),  or  Form  5  (Annual  Statement  of
-----------------------------------------                  ---------------------
Beneficial Ownership of Securities).
----------------------------------

Executive Compensation.
-----------------------

Item 10. Executive Compensation.
--------------------------------

Any compensation received by our officers,  directors,  and management personnel
will be determined  from time to time by our Board of  Directors.  Our officers,
directors,  and management  personnel  will be reimbursed for any  out-of-pocket
expenses  incurred on our behalf.  Compensation  to our officers is specified on
the chart below.

The table set forth below  summarizes the annual and long-term  compensation for
services in all capacities to the Company payable to our President and our other
executive  officers  whose total annual  salary and bonus to exceeded  US$50,000
during the year ending May 31, 2002.

<TABLE>
<CAPTION>
====================================================================================================
Name of Individual or Identity of    Capacities in which Remuneration         Aggregate Remuneration
Group                                was received
---------------------------------    -------------------------------------    ----------------------
<S>                                  <C>                                      <C>
John Klippenstein                    President and Chief Executive Officer    US$127,484
====================================================================================================
</TABLE>

Shares Issued as Compensation for Services. During the fiscal year ended May 31,
-------------------------------------------
2002,  we did not issue any  shares  of our  $.001  par  value  common  stock as
compensation for consulting and other services.

Compensation of Directors.  Our directors who are also our employees  receive no
--------------------------
extra  compensation  for their  service on our Board of  Directors.  Each of our
directors  receives  reimbursement for actual and necessary expenses incurred in
attending meetings of the Board of Directors.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------

The following  tables set forth  certain  information  regarding the  beneficial
ownership of the Company's common stock as of May 31, 2002, by:

     o    each person or entity known by us to be the  beneficial  owner of more
          than 5% of the outstanding shares of common stock;
     o    each of the Company's directors and named executive officers; and
     o    all directors and executive officers of the Company as a group.

As of May 31, 2002,  there were 6,178,446  shares of the Company's  common stock
issued  and  outstanding.  As of  May  31,  2002,  there  were  340,417  options
outstanding.

(a) Security  Ownership of Certain  Beneficial  Owners.  Other than officers and
-------------------------------------------------------
directors, there are no other persons who are beneficial owners of 5% or more of
our issued and outstanding common stock.

(b) Security  Ownership of  Management.  Our directors  and principal  executive
---------------------------------------
officers directly or beneficially own, in the aggregate, 3,733,739 shares of our
common stock and 307,000 stock options,  or approximately 62 % of the issued and
outstanding  common stock, as set forth on the following table  (percentages are
rounded off to the nearest one-tenth of one percent):

                                       34
<PAGE>



<TABLE>
<CAPTION>
Title of          Name of Beneficial Owner               Amount        Options       Percent of Issued Shares And
--------          ------------------------               ------        -------       ----------------------------
  Class                                                                                         Options
  -----                                                                                         -------
<S>        <C>                                        <C>              <C>                       <C>
 Common           David E. Gramlich, Director            40,000         18,000                     .9%
  Stock            122 - 5360 - 201st Street
                        Langley, B.C.
                           V3A 1T7

 Common             Dr. Colin Lee, Director              55,000         18,000                    1.2%
  Stock                2749 McCall Place
                       Victoria, B.C.
                           V8N 5Y8

 Common       Peter McFadden, Vice President, and         4,100        118,000(3)                 1.9%
  Stock            Chief Financial Officer
                      418 Oakview Road
                        Kelowna, B.C.
                           V1W 4K2

 Common      John Klippenstein, President, Chief      3,629,779 (1)    138,000(1)                57.8%
  Stock         Executive Officer and Director
                     494 Casa Rio Drive
                        Kelowna, B.C.
                           V1Z 3L6

 Common    Maria Klippenstein, Secretary, Treasurer   3,629,779 (2)    138,000(2)                57.8%
  Stock               494 Casa Rio Drive
                        Kelowna, B.C.
                           V1Z 3L6

 Common           Dr. Jeffrey Berg, Director               Nil          15,000                     .2%
  Stock                3 Fairhill Road
                     Edison NJ USA 08817

 Common       Dr. Harold Punnett, Past Director           4,860          Nil                      .01%
  Stock                9066 Gay Street
                     Fort Langley, B. C.
                           V1M 2S5


(1) Includes  1,814,884  shares of our common stock and 20,000  options owned by
Mr. Klippenstein's wife, Maria Klippenstein.

(2) Includes  1,814,895  shares of our common stock and 118,000 options owned by
Mrs. Klippenstein's husband, John Klippenstein.

(3) Peter McFadden provides services to the company through a corporation and is
therefore  considered  to  be  an  independent  contractor.   Accordingly,   for
accounting purposes, he is considered to be a non-employee.
</TABLE>

Changes in  Control.  We are not aware of any  arrangements  which may result in
--------------------
"changes in control" as that term is defined by the provisions of Item 403(c) of
Regulation S-B.


                                       35
<PAGE>



Item 12.  Certain Relationships and Related Transactions.
---------------------------------------------------------

Related Party Transactions.  Related Party Transactions.  On or about January 1,
---------------------------
1998, prior to becoming our subsidiary, L.O.M. Laboratories Inc., purchased from
John  Klippenstein all product rights to the Lens-O-Matic.  L.O.M.  Laboratories
Inc. paid a purchase price of CDN$542,000 allocated as follows:

     o    L.O.M.   Laboratories  Inc.  forgave  John   Klippenstein's   debt  of
          CDN$101,329; and
     o    L.O.M.  Laboratories  Inc. issued, to John  Klippenstein,  4000 of the
          Company's Class "C" Preferred Shares valued at CDN$440,671.

At the time of the transaction,  John Klippenstein was serving as our President,
Chief  Executive  Officer and a director as well as serving as  President  and a
director of L.O.M.  Laboratories Inc. John Klippenstein  signed the Purchase and
Sale  Agreement  in his  individual  capacity  as seller  and as the  authorized
officer  of  L.O.M.  Laboratories  Inc.  At the  time  of the  transaction,  Mr.
Klippenstein's wife, Maria Klippenstein, was our Secretary and Treasurer as well
as  Secretary  and  Treasurer  of  L.O.M.  Laboratories  Inc.  The  value of the
investment will ultimately be determined by the acceptance of the product in the
market place, which is uncertain at this time. For financial  statement purposes
this investment has been written down to nil.

On or about June 1, 1997,  the  Company  agreed to  purchase  4,800 of the 5,000
total  issued and  outstanding  shares of L.O.M.  Laboratories  Inc.'s Class "A"
common  shares;  however,  the  effective  date of such  purchase  was not until
January 13, 1998, when the  shareholders  and directors of L.O.M.  Laboratories,
Inc.,  approved the sale.  We agreed to pay US$1.00 per share.  The 4,800 shares
represent a 96%  interest in L.O.M.  Laboratories  Inc. The other 200 issued and
outstanding common shares are owned by John and Maria Klippenstein.  At the time
of the  transaction,  John  Klippenstein  was  serving as our  President,  Chief
Executive  Officer  and was a member  of our Board of  Directors  as well as the
President  and a  director  of  L.O.M.  Laboratories  Inc.  At the  time  of the
transaction, Mr. Klippenstein's wife, Maria Klippenstein,  was the Secretary and
the Treasurer of L.O.M. Laboratories Inc., and our Secretary Treasurer.

We  lease  office  space  from  494040  B.C.  Ltd.  ("Tech-Nacan  Consultants").
Tech-Nacan  Consultants,  a  British  Columbia  corporation,  is a  real  estate
development company owned by John Klippenstein,  our President,  Chief Executive
Officer  and a member of our Board of  Directors,  and Maria  Klippenstein,  our
Secretary and Treasurer.  For the year ended May 31, 2002, we paid US$25,115 for
that office space.

On or about October 27, 1997, with the Board of Director's approval, the Company
and John  Klippenstein  executed  a  five-year  employment  contract.  Under the
agreement, John Klippenstein is to provide us with management services for which
we agreed to pay Mr. Klippenstein US$120,000 for the first year with a US$10,000
increase  every year  thereafter,  resulting  in a final  fifth  year  salary of
US$160,000.  John  Klippenstein is our President,  Chief Executive Officer and a
member of our Board of  Directors.  During the year ended May 31, 2002,  we paid
US$127,484 to Mr. Klippenstein.

During  the year  ended  May 31,  2002,  we paid  Peter  McFadden  Inc,  fees of
US$55,170 for  accounting  services.  Peter McFadden is a Vice President and our
Chief Financial Officer.

During the year ended May 31, 2002,  we paid Maria  Klippenstein,  our Secretary
and Treasurer, US$30,005 in office and administrative fees.

During the year ended May 31, 2002, we paid Pam Klippenstein,  relative of Maria
and John  Klippenstein,  fees of US$11,852  for office  management  fees for the
management of our subsidiaries' office.

The persons serving as our officers and directors have existing responsibilities
and, in the future, may have additional responsibilities,  to provide management
and  services  to other  entities  in  addition  to the  Company.  As a  result,
conflicts  of interest  between the  Company and the other  activities  of those
persons  may occur  from  time to time.  We will  attempt  to  resolve  any such
conflicts of interest in favor of the Company.  Our officers and  directors  are
accountable to the Company and its  shareholders as fiduciaries,  which requires


                                       36
<PAGE>



that such officers and  directors  exercise good faith and integrity in handling
our affairs.  A shareholder  may be able to institute  legal action on behalf of
the Company or on behalf of that  shareholder and all other  similarly  situated
shareholders,  to recover damages or for other relief in cases of the resolution
of conflicts in any manner prejudicial to the Company.

Item 13.  Exhibits and Reports on Form 8-K
------------------------------------------

     (a)  Exhibits

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

3.1            Certificate of Incorporation
               (Charter Document)*

3.2            Amendment to Certificate of Incorporation
               (Charter Document)*

3.3            Amendment to Certificate of Incorporation
               (Charter Document)*

3.4            Bylaws*

4.             Instruments Defining the Rights of Holders (Not Applicable)

11.            Statement Re: Computation of Per Share Earnings (Loss)**

16.            Letter on change in certifying accountant (Not Applicable)

18.            Letter on Change in Accounting Principles (Not Applicable)

21.            Subsidiaries of the Registrant**

22.            Published Report Regarding Matters Submitted to Vote (Not
               Applicable)

23.1           Consent of Auditors (Not Applicable)

23.2           Consent of Counsel (Not Applicable)

24.            Power of Attorney (Not Applicable)

99.            Additional Exhibits (Not Applicable)

*Previously  filed as Exhibits to  Registration  Statement on Form 10-SB and all
amendments thereto filed with the Commission.

**Included in consolidated financial statements filed herewith.

     (b)  Reports on Form 8-K

          None.




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<PAGE>



                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the  undersigned in the City of
Kelowna, British Columbia, Canada, on August 30, 2002.

                                             L.O.M. Medical International, Inc.,
                                             a Delaware corporation

                                             By:  /s/ John Klippenstein
                                                --------------------------------
                                                    John Klippenstein
                                             Its:   President
















































                                       38
<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of L.O.M. Medical International,  Inc. (the
"Company"),  on form 10-KSB for the year ending May 31, 2002,  as filed with the
Securities and Exchange  Commission on the date hereof (the  "Report"),  I, John
Klippenstein,  Chief Executive Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

1. The Report fully complies with the  requirements  of Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, and

2. The  information  contained in the Report  fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.


August 30, 2002                              By: /s/ John Klippenstein
                                                 -------------------------
                                                   John Klippenstein
                                             Its:  Chief Executive Officer































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