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

                                   FORM 1O-QSB

(Mark One)

[X]      Quarterly Report under Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the quarterly period ended September 30, 2001

[  ]     Transition Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the transition period from _____________ to ______________

                         Commission File Number: 0-27627

                             WORLD DIAGNOSTICS INC.
            --------------------------------------------------------
        (Exact name of Small Business Issuer as Specified in its Charter)

              Delaware                                  65-0742342
    -----------------------------               ---------------------------
    (State or other jurisdiction                (IRS Identification Number)
          of incorporation)


               16250 N.W. 59th Avenue, Miami Lakes, Florida 33014
 ------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (305) 827-3304
 ------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)



 ------------------------------------------------------------------------------
      (Former Name, Former Address and Former Fiscal Year, if Changed Since
                                  Last Report)



<PAGE>


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) or the Securities Exchange 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 [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as the latest practicable date:

As of November 13, 2001, 9,248,476 shares of the Registrant's common stock, par
value $.001 per share, were outstanding.

 -------------------------------------------------------------------------------


<PAGE>


                             WORLD DIAGNOSTICS INC.

                                      INDEX



PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Balance Sheets ...................................................  4

          Statements of Operations .........................................  5

          Statement of Cash Flows ..........................................  6

          Notes to Financial Statements ....................................  7

Item 2.   Management's Discussion and Analysis or Plan of Operation ........ 13

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings ................................................ 17

Item 2.   Changes in Securities and Use of Proceeds ........................ 17

Item 3.   Defaults Upon Senior Securities .................................. 17

Item 4.   Submission of Matters to a Vote of Security Holders .............. 17

Item 5.   Other Information ................................................ 17

Item 6.   Exhibits and Reports on Form 8-K ................................. 17

SIGNATURES ................................................................. 18


<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

WORLD DIAGNOSTICS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
AT SEPTEMBER 30, 2001
(UNAUDITED)

<TABLE>
<CAPTION>
ASSETS

<S>                                                                   <C>
CURRENT ASSETS
   Cash and cash equivalents                                               $   186,824
   Accounts Receivable, net of an allowance of $147,401                        790,012
   Inventory, net                                                              445,613
   Other current assets                                                        199,700
                                                                      -----------------
       Total current assets                                                  1,622,149
Fixed assets, net of accumulated depreciation                                  457,661
Other assets, includes $99,251 of web site development costs                   174,962
                                                                      -----------------
      Total assets                                                         $ 2,254,772
                                                                      =================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable and accrued expenses                                   $ 1,482,946
   Current portion of deferred rent                                             15,000
   Secured Bridge Loan                                                         500,000
   Current portion of obligation under capital leases                           31,530
                                                                      -----------------
     Total current liabilities                                               2,029,476
Deferred rent , net of current portion                                         126,250
Obligations under capital leases, net of current portion                        59,952
                                                                      -----------------
      Total Liabilities                                                      2,215,678

Shareholders' Equity
   Common stock; $0.001 par value; 25,000,000 shares authorized
     9,248,476 shares issued and outstanding                                     9,248
   Additional paid in capital                                                5,816,115
   Accumulated deficit                                                      (5,786,269)
                                                                      -----------------
     Total Shareholders' equity                                                 39,094
                                                                      -----------------
       Total Liabilities and Shareholders' Equity                          $ 2,254,772
                                                                      =================
</TABLE>


Read notes to consolidated financial statements.



                                       4


<PAGE>
WORLD DIAGNOSTICS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>

                                                     Three Months Ended September 30      Six Months Ended September 30
                                                       2001             2000                 2001             2000
                                                    ------------   ----------------      ------------   ----------------

<S>                                                 <C>                <C>             <C>                <C>
Revenues                                              $ 757,436          $ 531,784       $ 1,502,512        $ 1,134,296

Cost of goods sold                                      632,375            385,274         1,222,187            860,748
                                                    ------------   ----------------      ------------   ----------------

Gross profit                                            125,061            146,510           280,325            273,548

Selling, general and administrative expenses            490,109            726,492         1,225,514          1,088,404
                                                    ------------   ----------------      ------------   ----------------

Loss from operations before other expenses             (365,048)          (579,982)         (945,189)          (814,856)

 Interest expense                                      (224,497)            (7,823)         (226,129)           (19,333)
                                                    ------------   ----------------      ------------   ----------------

Loss before extraordinary item                         (589,545)          (587,805)       (1,171,318)          (834,189)

Extraordinary loss on extinguishment of debt                  -                  -                 -            (89,415)
                                                    ------------   ----------------      ------------   ----------------
Net Loss                                             $ (589,545)        $ (587,805)      $(1,171,318)        $ (923,604)
                                                    ============   ================      ============   ================

Basic and diluted loss per common share:
   Loss from operations before extraordinary item         (0.06)             (0.13)            (0.14)             (0.19)
   Extraordinary item                                         -                  -                 -              (0.02)
                                                    ------------   ----------------      ------------   ----------------
   Basic and diluted loss per common share:               (0.06)             (0.13)            (0.14)             (0.21)
                                                    ------------   ----------------      ------------   ----------------

Weighted average number of common shares
   outstanding                                        9,110,433          4,639,896         8,194,913          4,469,544

</TABLE>


Read notes to consolidated financial statements.

                                       5

<PAGE>

WORLD DIAGNOSTICS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                     2001               2000
                                                                ---------------    ---------------

<S>                                                            <C>                  <C>
Cash flows from operating activities
 Net Loss                                                         $ (1,171,318)      $   (923,604)
 Adjustment to reconcile net loss to net cash used
 in operating activities:
   Extraordinary loss on extinguishment of debt                              -             89,415
   Common stock issued for compensation                                    656             47,160
   Common stock issued for services                                    241,848                  -
   Common stock issued for interest                                    118,481                  -
   Options issued for interest                                          94,211                  -
   Options issued for services                                          68,162                  -
   Depreciation                                                         39,745             19,103
   Gain on disposal of property and equipment                              (36)                 -
   Bad Debt expense                                                     48,296             91,251
Changes in operating assets and liabilities:
    Accounts receivable                                               (243,223)          (190,006)
    Inventory                                                          (87,028)          (208,828)
    Other current assets                                               (39,337)            12,704
    Other assets                                                       (43,656)           (19,274)
    Accounts payable and accrued expenses                              524,415            420,574
    Deferred rent                                                       (7,500)                 -
                                                                ---------------    ---------------
         Net cash (used) in operating activities                      (456,284)          (661,505)
                                                                ---------------    ---------------

Investing activities
                                                                ---------------    ---------------
   Purchase of fixed assets                                            (24,315)           (25,550)
                                                                ---------------    ---------------

Financing activities
  Net proceeds from secured bridge loan                                394,226                  -
  Net proceeds from issuance of common stock                                 -            601,897
  Proceeds from interim bridge loan                                    200,000                  -
  Repayment of interim bridge loan                                    (200,000)                 -
  Payments under capital lease obligations                             (10,232)            (6,773)
  Proceeds from notes payable                                                -             20,000
                                                                ---------------    ---------------
        Net cash provided by financing activities                      383,994            615,124
                                                                ---------------    ---------------

Net (decrease) in cash and cash equivalents                            (96,605)           (71,931)
Cash and cash equivalents, beginning of period                         283,429             80,817
                                                                ---------------    ---------------
Cash and cash equivalents, end of period                          $    186,824       $      8,886
                                                                ===============    ===============


Supplemental disclosures of cash flow information:

   Cash paid during the year for interest                         $      1,632       $          -

Supplemental disclosures of non-cash investing and
   financing activities:

   Property and equipment acquired through capital
     lease agreements   $ 75,439                $ -

   Issuance of common stock for the extinguishment of debt        $          -       $    475,000

   Issuance of common stock for other current assets              $     81,519       $          -
</TABLE>


Read notes to consolidated financial statements.

                                       6

<PAGE>


The accompanying notes are an integral part of these financial statements.

World Diagnostics Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(unaudited)

1.       BASIS OF PRESENTATION

The consolidated financial statements include the accounts of World Diagnostics
Inc. and its wholly-owned subsidiary, GLOBALeMED.com, Inc.

The accompanying unaudited consolidated interim financial statements of World
Diagnostics Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial reporting and the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements include all
normal and recurring adjustments considered necessary to present a fair
statement of results of operations and cash flows for the interim periods ended
September 30, 2001 and 2000 and the financial position as of September 30, 2001.
The financial statements should be read in conjunction with more complete
disclosures contained in the Company's annual report on Form 10-KSB for the year
ended March 31, 2001. The results of operations for interim periods are not
necessarily indicative of the results of operations for the entire year.



2.       SIGNIFICANT ACCOUNTING POLICIES

Principle of Consolidation. The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary. All significant
inter-company balances have been eliminated in consolidation.

Cash and Cash Equivalents. The Company considers highly liquid investments with
original maturities of three months or less from the dates of purchase to be
cash equivalents.

Inventory. Inventory is stated at the lower of cost or market using the specific
cost method, which closely approximates average cost. As of September 30, 2001,
substantially all inventories represent finished goods held for sale. The
Company recorded a provision of approximately $48,000 at September 30, 2001, to
reduce the carrying amount of the inventory to its net realizable value.


                                       7
<PAGE>

Property and Equipment. Property and equipment are stated at cost and
depreciated using the straight-line method over the estimated useful lives of
the assets. Expenditures for repairs and maintenance are generally charged to
expense as incurred. Retirements, sales and disposals of assets are recorded by
removing the cost and accumulated depreciation from the asset and accumulated
depreciation accounts with any resulting gain or loss reflected in income.

Long-Lived Assets. The Company reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In performing the review for recoverability the Company
estimates the future cash flows expected to result from the use of the asset and
its eventual disposition. If the sum of the expected future cash flows is less
than the carrying amount of the assets, an impairment loss is recognized.
Management believes that there is no impairment as of September 30, 2001.

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

Fair Value of Financial Instruments. The carrying amount of accounts receivable,
accounts payable and accrued expenses approximate fair value because of their
short duration. The carrying amount of debt approximates fair value because the
interest rates are similar to the interest rates currently available to the
Company.

Income Taxes. The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". Under SFAS
109, deferred income tax assets and liabilities are determined based upon
differences between financial reporting and tax bases of assets and liabilities
and are measured using currently enacted tax rates. SFAS 109 requires a
valuation allowance to reduce the deferred tax assets reported if, based on the
weight of the evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized.

Revenue Recognition. Revenue is recognized when the product is shipped. Sales
returns and sales discounts are deducted from gross sales.

Loss Per Share. Basic loss per share is computed by dividing loss available to
common shareholders by the weighted-average number of common shares for the
period. The computation of diluted loss per share is similar to basic loss per
share, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potentially
dilutive common shares, such as options, had been issued. Diluted loss per share
are not presented because the effects would be anti-dilutive.

Stock Based Compensation. Statement of Financial Accounting Standard No. 123,
"Accounting for Stock Based Compensation", requires that all transactions with
non-employees in which goods or services are the consideration received for the



                                       8
<PAGE>

issuance of equity instruments be accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable.

Web-site Technology and Content. Technology and content costs consist
principally of payroll and related costs for development, editorial systems,
consultants and costs of acquired content for the Company's website. Technology
and content costs related to planning, development and acquisition of content
and operations of the Company's website are expensed as incurred and included in
selling, general and administrative expenses. Costs to acquire or develop both
hardware and software, needed to operate the site are capitalized and
depreciated over estimated useful lives.

3.       GOING CONCERN - UNCERTAINTY

As shown in the accompanying consolidated financial statements, the Company has
incurred recurring operating losses and negative cash flows from operating
activities. These conditions raise substantial doubt about the Company's ability
to continue as a going concern.

The Company has initiated several actions to generate working capita and improve
operating performances, including equity and debt financing and has instituted
cost reduction measures.

There can be no assurance that the Company will be able to successfully
implement its plans, or if such plans are successfully implemented, that the
Company will achieve its goals.

Furthermore, if the Company is unable to raise additional funds, the Company may
be required to reduce its work force, reduce compensation levels, reduce
dependency on outside consultants, modify its growth and operating plans, and
even be forced to terminate operations completely.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern and do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
might result from the outcome of this uncertainty.

4.       COMMON STOCK

In June 2001, options to acquire 155,000 shares at $0.25 per share were issued
to directors for services. The options expire on June 30, 2006. The fair value
of the options on the grant date was $25,458 calculated using the Black-Scholes
Option Pricing Model.

In June 2001, options to acquire 260,000 shares at $0.25 per share were issued
to outside consultants of the Company for services. The options expire on June
30, 2006. The fair value of the options on the grant date was $42,704 calculated
using the Black-Scholes Option Pricing Model.

                                       9
<PAGE>

In June 2001, the Company issued 50,000 shares of common stock to directors for
services rendered. Pursuant to the application of SFAS No. 123 in accounting for
the issuance of stock to employee and non-employee consultants, the Company
recorded expense based on the fair market value of the shares issued since the
fair value of the shares is more reliably measurable. The restricted common
stock cannot be sold for a 12-month period from the date of issuance and after
that can only be sold in accordance with Rule 144 or other applicable exemption.
Due to these restrictions, the Company discounted the fair value of the
Company's common stock at the date of issuance by 25%. Due to the issuance of
the shares, the Company recorded $9,375 in selling, general and administrative
expenses in the statement of operations.

In June 2001, the Company issued 1,239,856 shares of common stock to outside
consultants for services rendered. Pursuant to the application of SFAS No. 123
in accounting for the issuance of stock to employee and non-employee
consultants, the Company recorded expense based on the fair market value of the
shares issued since the fair value of the shares is more reliably measurable.
The restricted common stock cannot be sold for a 12-month period from the date
of issuance and after that can only be sold in accordance with Rule 144 or other
applicable exemption. Due to these restrictions, the Company discounted the fair
value of the Company's common stock at the date of issuance by 25%. Due to the
issuance of the shares, the Company recorded $232,473 in selling, general and
administrative expenses in the statement of operations.

In June 2001, the Company issued 3,500 shares of common stock to an employee for
services rendered. Pursuant to the application of SFAS No. 123 in accounting for
the issuance of stock to employee and non-employee consultants, the Company
recorded expense based on the fair market value of the shares issued since the
fair value of the shares is more reliably measurable. The restricted common
stock cannot be sold for a 12-month period from the date of issuance and after
that can only be sold in accordance with Rule 144 or other applicable exemption.
Due to these restrictions, the Company discounted the fair value of the
Company's common stock at the date of issuance by 25%. Due to the issuance of
the shares, the Company recorded $656 in selling, general and administrative
expenses in the statement of operations.

In July 2001, the Company issued 200,000 shares of common stock and granted
options to purchase 400,000 shares of common stock, at an exercise price of
$0.25 per share, to eight investors in connection with a loan to the Company of
$200,000. The Company repaid the loan in July 2001. The options expire on July
2, 2004. The fair value of the options on the grant date was $94,211 calculated
using the Black-Scholes Option Pricing Model.

In July 2001, the Company issued 500,000 shares of Common Stock, 500,000
callable "C" warrants to purchase 500,000 shares of Common Stock at $1.375 and
500,000 non-callable "D" warrants to purchase 500,000 shares of Common Stock to
investors in connection with a secured bridge loan. The fair market value of the
500,000 shares of common stock is being amortized over the term of the loan as a
debt discount.


                                       10
<PAGE>

5.       STOCK BASED COMPENSATION

In October 2000, the Company issued options to acquire 296,000 shares of common
stock to employees of the Company. These options are exercisable at $1.22 per
share and vest over a three-year period commencing October 2001. The options
expire in October 2005. The fair value of the options on the grant date was
$255,554 calculated using the Black-Scholes Option Pricing Model.

In June 2001, the Company issued options to acquire 198,500 shares of common
stock to employees of the Company. These options are exercisable at $0.25 per
share, the market price on the date of grant and vest 50% upon grant and 50% on
December 31, 2001. The options expire in June 2006. The fair value of the
options on the grant date was $43,279 calculated using the Black-Scholes Option
Pricing Model.

In August 2001, the Company issued options to acquire 110,000 shares of common
stock to employees of the Company. These options are exercisable at $0.25 per
share, the market price on the date of grant and vest 100% upon grant. The
options expire in August 2004. The fair value of the options on the grant date
was $21,180 calculated using the Black-Scholes Option Pricing Model.

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," in accounting for stock-based employee compensation
arrangements whereby no compensation cost related to stock options is deducted
in determining net loss. Had compensation cost for stock option grants to the
Company's employees been determined pursuant to SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company's net loss would have increased for the
six months ended September 30, 2001 as presented in the table below.

Using the Black-Scholes option pricing model, the Company's pro forma net loss
and pro forma net loss per share, with related assumptions, are as follows:



                                                 For the Six Months
                                              Ended September 30, 2001
                                              ------------------------
         Pro forma Net Loss                           ($1,267,543)
         Pro forma Loss Per Share                          ($0.15)
         Risk Free interest rate                       5.37%-6.11%
         Expected lives                                  3-5 years
         Expected volatility                        85.47%-132.28%




                                       11
<PAGE>

For purposes of these pro forma disclosures, the estimated fair value of the
options granted is amortized to expense over the options' vesting period.


6.       SECURED BRIDGE-LOAN

The bridge-loan is secured by assets of the Company and bears interest at 10%
per annum. The loan is convertible to common stock at the option of the Company
or is to be repaid from the proceeds of financing on or before December 31,
2001. Terms of the loan required the Company to file a Registration Statement in
August 2001 with the Securities and Exchange Commission to register the
securities.


7.       SUBSEQUENT EVENTS

In October 2001, the Company issued 25,000 shares to an officer of the Company
and granted 270,000 options to officers of the Company at a grant price $0.25
that will expire in October 2004. These options vest at various dates over a
one-year period ending October 2002.



                                       12
<PAGE>


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

FORWARD LOOKING STATEMENTS

The statements contained in this Quarterly Report on Form 10-QSB that are not
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company intends that all forward-looking
statements be subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements in
which words such as "expect," "anticipate," "intend," "plan, "believe,"
"estimate," "consider," or similar expressions are used. These forward-looking
statements reflect the Company's views as of the date they are made with respect
to future events and financial performance. Forward-looking statements are not
guarantees of future performance. They involve many risks, uncertainties and
assumptions which could cause the actual results of the Company to differ
materially from any future results expressed or implied by such forward-looking
statements. Examples of such risks and uncertainties include, but are not
limited to: obtaining sufficient financing to maintain the Company's planned
operation, the Company's ability to sustain and increase revenue, the continued
acceptance and growth of the internet, the changing of market conditions and the
other risks detailed in "Management's Discussion and Analysis or Plan of
Operation" in this Quarterly Report on Form 10-QSB and elsewhere herein. The
Company does not have any intention or obligation to up-date these
forward-looking statements.

COMPANY BACKGROUND

World Diagnostics Inc. (the Company or "WDI"), based in Miami Lakes, FL, is an
early stage business that began operations in February 1997 for the purpose of
servicing the international market for medical diagnostic tests and allied
laboratory products.

The Company is a single source supplier and exporter of approximately 1,000
Company branded medical diagnostic test kits and allied laboratory products, of
which approximately 110 of these products produce approximately 85% of the
Company's revenues. The Company sells its medical diagnostic test kits and
allied laboratory products through a network of 88 distributors covering 80
countries as well as the Company's website, www.GLOBALeMED.com.

The Company continues implementation of its GLOBALeMED system on a
country-by-county basis. While the growth and further development of the
GLOBALeMED system remains an important focus, the sales and marketing effort has
been concentrated on and is still dependent upon traditional distributors.
Further enhancements have been made to the GLOBALeMED system, to improve
functionality, navigability and ease of use. Although currently less than 1% of
our sales are derived from direct purchases over the Internet, the GLOBALeMED
system serves as a significant lead generator for new business, recruitment of
new distributors and existing distributor sales. It is particularly important in
providing online technical support and as a marketing tool to facilitate
efficiency in product selection, product evaluation and pricing.



                                       13
<PAGE>

RESULTS OF OPERATIONS

Revenues. Revenues were $757,436 and $1,502,512 for the three months ended
September 30, 2001 and the six months ended September 30, 2001, an increase of
42.4% and 32.5% compared to the three and six month periods ended September 30,
2000. The increase in revenues was attributable to an increase in the number of
distributors as well as an increase in the level of sales to existing
distributors. The following table details the sales breakdown by geographic
region:

<TABLE>
<CAPTION>
                            for the three months ended                           for the six months ended
(000's)                     September 30, 2001        September 30, 2000         September 30, 2001       September 30, 2000
                            -----------------------   ------------------------   ----------------------   -------------------------
<S>                         <C>                       <C>                         <C>                     <C>
South America               $         375             $         228               $         789           $         493
Caribbean                             164                       128                         292                     266
Eastern Europe                         32                        70                         103                     135
Domestic                               41                        21                          90                      69
Middle East and Africa                 49                        29                          76                      58
Western Europe                         34                        20                          56                      39
Pacific Rim                            30                        36                          50                      43
Central America                        32                         -                          47                      31

                            -----------------------   ------------------------   ----------------------   -------------------------
Total Revenue               $         757             $         532               $       1,503           $       1,134
                            =======================   ========================   ======================   =========================

</TABLE>

South America, the Caribbean and Eastern Europe are the strongest markets for
the Company and in combination accounted for 75% of total revenue for the three
months ended September 30, 2001, and 79% for the six months ended September 30,
2001 compared to 80% and 79% for the same periods in the prior year.

Sales returns have historically, and continue to be insignificant. The return
rate as a percentage of sales is anticipated to remain at a low percentage.

Gross Profit. The Company's gross profit on product sales decreased to $125,061
for the three months ended September 30, 2001 from $146,510 for the three months
ended September 30, 2000 and increased to $280,325 from $273,548 for the six
months ended September 30, 2001 and 2000. Gross profit as a percentage of sales
decreased to 16.5% for the three months ended September 30, 2001 from 27.6% in
the comparable quarter of 2000 and to 18.7% from 24.1% for the six months ended
September 30, 2001 and 2000.


                                       14
<PAGE>


The margin for the quarter and the six month period was negatively impacted as a
result of management's continuing efforts to move certain categories of
inventory that are considered as non-core inventory. While these inventory items
will continue to be offered to customers, management has taken the position that
these will be special order items and will not be held in inventory. The lower
margins also reflect the increasingly difficult market conditions that we need
to contend with as a result of the strength of the United States dollar and less
favorable market conditions in many of the foreign markets that we sell to. The
lower gross margins are not expected to improve until the first fiscal quarter
of 2003.

Selling, General and Administrative Expense. Selling, general and administrative
expense decreased to $490,109 for the three months ended September 30, 2001 from
$726,492 for the three months ended September 30, 2000 and increased to
$1,225,514 from $1,088,404 for the six months ended September 30, 2001 and 2000.
A non-cash charge related to the issuance of stock and options in connection
with services of $310,010 was included in the six months ended September 30,
2001. These services are associated with the Company's need to achieve an
improvement in its capital structure and position the Company for a strategic
merger, minority interest or alliance that would enable the Company to achieve
its business plan. Excluding the effect of this non-cash charge, selling,
general and administrative expense was $915,504 for the six months ended
September 30, 2001, representing a reduction of 15.9% in this expense category
when compared to the same period in the prior year. This category of expense
should continue to decrease as a percentage of revenue going forward as: (1)
cost cutting measures already implemented minimize the increase in overhead (2)
revenue growth outpaces the growth in overhead.

An interest charge of $221,692 was recorded in the three months ended September
30, 2001 in connection with the issuance of options and common stock (see note 4
to the financials) pursuant to a short-term bridge loan that raised proceeds for
the Company of $200,000 and a secured bridge loan of $500,000 repayable on
December 31, 2001. The short-term bridge loan of $200,000 was repaid before
September 30, 2001. Unamortized debt discount of $81,519 relating to the
$500,000 loan will be amortized to interest expense in the quarter ended
December 31, 2001.

Net Loss. The Company incurred a net loss of $589,545 or $(0.06) per share for
the three months ended September 30, 2001 and reported a net loss of $587,805 or
$(0.13) per share for the comparable period in 2000 and a net loss of $1,171,318
or $(0.14) per share and a loss of $923,604 or $(0.21) per share for the six
months ended September 30, 2001 and 2000 respectively. An extraordinary charge
of $89,415 was included in the six months ended September 30, 2000. Excluding
the effect of the extraordinary item, the operating loss for the six months
ended September 2000 was $834,189 or $(0.19) per share.




                                       15
<PAGE>



Financial Condition

At September 30, 2001, the Company had cash and cash equivalents of $186,824
compared to $283,429 at March 31, 2001. The Company had negative working capital
of $407,327 and positive working capital of $318,727 at September 30, 2001 and
March 31, 2001, respectively. The Company had current assets of $1,622,149 and
shareholders equity of $39,094 at September 30, 2001. This compares to current
assets of $1,314,984 and stockholders equity of $710,734 at March 31, 2001.

Liquidity and Capital Resources

Since beginning operations in February 1997, the Company has continued to
sustain operating losses that have resulted in the use of its cash reserves. The
Company anticipates that it will continue to incur net losses for the
foreseeable future until it is able to generate sufficient revenues from product
sales to sustain its operations and fund expenditure related to future growth.
The Company has also undertaken a review of all expense items and initiated
cutbacks in various areas.

There is no assurance that the Company will generate significant revenue or
achieve profitability, or that the Company will not require additional working
capital or other funds at a later date for the maintenance and expansion of
operations. There is no assurance the Company will be successful in obtaining
additional financing or that such financing will be available, nor if such
financing becomes available that it would be upon acceptable terms to the
Company.

The report of the Company's independent certified public accountants in
connection with its audited financial statements as of March 31, 2001 and March
31, 2000 and for each of the two years then ended contains an explanatory
paragraph indicating factors which create substantial doubt about the Company's
ability to continue as a going concern. These factors include recurring net
losses since inception and uncertainty surrounding future equity financing
through anticipated offerings.

Furthermore, if we are unable to raise additional funds, we may be required to
reduce our work force, reduce compensation levels, reduce dependency on outside
consultants, modify our growth and operating plans, and even be forced to
terminate operations completely.





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<PAGE>





                                     PART II
                                OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

The Company is not involved in any pending litigation, nor is the Company aware
of any pending or contemplated proceedings against the Company. Management knows
of no legal proceedings, pending or threatened, or judgments entered against any
of the directors or officers in their capacity as such.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

         None.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         Not applicable.

ITEM 5.     OTHER INFORMATION.

Effective as of November 1, 2001, the Company appointed Walter Usinowicz as
Chief Operating Officer of the Company and Mark Smith as Vice President of
Business Development of the Company. In connection with these appointments, in
October 2001, the Company issued 25,000 shares to one of such Officers of the
Company and granted 270,000 options to the officers of the Company at a grant
price $0.25 that will expire in October 2004. These options vest at various
dates over a one-year period ending October 2002.

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

(a)      Exhibits.

         None.

(b)      Reports on form 8-K.

         None.


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<PAGE>




                                   SIGNATURES

         In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                                WORLD DIAGNOSTICS INC.


Date: November 15, 2001                         By:  /s/Ken Peters
                                                ----------------------
                                                Ken Peters, President and CEO
                                                (Principal Executive Officer)


Date: November 15, 2001                         By:/s/Paul R. Kamps
                                                ----------------------
                                                Paul R. Kamps, Vice President-
                                                Finance and Administration
                                                (Principal Financial Officer)


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