<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  FORM 10-K SB

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934.

       For the fiscal Year ending  OCTOBER 31,  2001
                                   -----------------

[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1943.

       For the Transition period from _________________ to ____________________


                       COMMISSION FILE NUMBER 33-24566-A

                           BIO-LOK INTERNATIONAL INC.
                      (Name of registrant in its charter)


     DELAWARE                                                  65-0317138
--------------------------------                          -------------------
(State or other jurisdiction of                           (IRS  Employer
incorporation or organization)                            Identification No.)


312 S. MILITARY TRAIL, DEERFIELD BEACH, FLORIDA                        33442
------------------------------------------------                     ----------
    (Address of principal executive offices)                         (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 698-9998

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

     Securities registered pursuant to Section 12 (b) of the Exchange Act:

TITLE OF EACH CLASS                   NAME OF EACH EXCHANGE ON WHICH REGISTERED
-------------------                   -----------------------------------------
Common Stock, $.01 par value          NASD OTC Bulletin Board


Securities registered pursuant to Section 12(g) of the Act: None

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

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B not contained herein, 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-K SB or any amendment to
this Form 10-K SB. [X]

State issuer's revenues for its most recent fiscal year:      $ 2,760,656
                                                            -------------

Aggregate market value of the Registrant's voting stock held by non-affiliates,
based upon the closing price of said stock per the NASDAQ Bulletin Board on
October 31, 2001, was $ 818,762.

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court (1997). YES [X]   NO [ ]

As of October 31, 2001, the Registrant had 6,085,348 Common Stock shares
outstanding, at a par value $.01 per share.


DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Minutes of Shareholders Meeting of Annual Meeting dated March 7,
2001, are incorporated by reference into Part I of this Report.

Portions of the Audited Financial Statement Report for fiscal year ended October
31, 2001, are incorporated by reference into Part II, III, and IV of this
Report.


<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>     <C>                                                                       <C>

                            PART I

Item 1.  Description  of Business..............................................     1
Item 2.  Description of Property...............................................     4
Item 3.  Legal Proceedings.....................................................     5
Item 4.  Submission of Matter to a Vote of Security Holders....................     5

                            PART II

Item 5.  Market for Common Equity and Related Stockholder Matters..............     5
Item 6.  Management's Discussion and Analysis of Plan of Operation.............     7
Item 7.  Financial Statements..................................................     7
Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Matters.....................................................     8

                           PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons..........     8
Item 10. Executive Compensation................................................     8
Item 11. Security Ownership of Certain Beneficial Owners and Management........     8
Item 12. Certain Relationships and Related Transactions........................     9
Item 13. Exhibits, List and Reports on Form 8-K................................    10


</TABLE>

                                       i
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a)  GENERAL DEVELOPMENT OF BUSINESS

Bio-Lok International Inc. was organized on October 6, 1987 under the name of
Colfax, Inc., a Delaware corporation. The corporation was established for the
purpose of acquiring companies with long-term growth potential. In 1988 Colfax
Inc. via a reverse merger was acquired by Minimatic, Inc., a Florida
corporation. Minimatic, Inc. began doing business in February 1987, was
incorporated June 9, 1987, was established to manufacture dental implant parts
and other products as a subcontractor, and began the development of its own
proprietary dental implant line in 1989. Colfax, Inc. changed its name in 1988
to Minimatic Implant Technology, Inc.; in 1995, to American BioDental
Corporation; and, finally in August 1996 to Bio-Lok International Inc.
Additionally, Minimatic, Inc.'s name in 1995 was changed to Minimatic Implant
Technology, Inc. and merged into Bio-Lok International Inc. on March 1, 1997.



                                       1
<PAGE>


From 1987 to 1991 the Company via its subsidiary developed its dental implant
product line while still acting as a subcontractor for numerous entities
manufacturing dental implants and blade implant products, industrial parts, etc.
Since 1991 the dominant portion of Bio-Lok's business was directed towards its
own proprietary product line and specifically the development, improvement,
marketing and distribution of a dental implant system with all related and
associated parts.

On April 2, 1996, the Board of Directors voted and directed its officers to
place the company under the protection of a Chapter XI Bankruptcy -
Reorganization. Prior to this date Bio-Lok (parent company) had directed and
placed its wholly owned subsidiary Minimatic Implant Technology, Inc. effective
January 10, 1996 under the protection of a Chapter XI Bankruptcy. A Plan of
Reorganization was approved by the Court on February 12, 1997, and was closed
and discharged on January 23, 1998.

On November 1, 1999, Bio-Lok International, Inc. activated MicroLok Mexico S.A.
DE C.V. The corporation represents a wholly owned entity of the Company and was
set up to develop the Mexico dental market.

On March 15, 2000, Bio-Lok International, Inc. acquired Orthogen Corporation
with stock. The company is a research and development entity with two employees
and a consultant who is a member of the faculty at UMD New Jersey Medical &
Dental School. Additionally, with the acquisition, Bio-Lok obtained two (2)
patents and two (2) pending patents. The patents brought a new technology to
Bio-Lok, which will be incorporated, into its dental implant product line. The
technology is being incorporated into the "Laser-Lok" implant style, which
should be marketed by late 2001.

In November 2000 the Company activated Micro-Lok Chile S.A., which had been
incorporated October 20, 1998. The company was set-up as a sales organization to
market the Micro-Lok Precision Dental Implant System in Chile.

In May 2001 Bio-Lok International Inc. established Bio-Lok International Pty.
Inc. The company was established and activated for the purpose of developing the
Australian dental market.

(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

No segmentation of business activity is completed on a financial reporting
basis. The company markets one product line the "Micro-Lok Precision Dental
Implant System" both domestically and internationally.

(c) NARRATIVE DESCRIPTION OF BUSINESS

Bio-Lok is a manufacturer and distributor of precision dental implants, related
prosthetics and devices, associated tools, and irrigation drills for the dental
market and the product line is marketed as the "Micro-Lok Precision Dental
Implant System.". Bio-Lok via predecessor entities and management has been
involved in the design, development and manufacture of dental products for over
21 years. The Company manufactures its own product line and has received 510(k)
registrations from the FDA for required products.

The Company has completed and obtained its ISO 9001 / EN 46001 and Annex II (CE
mark) and has been re-certified as of June 10, 2001. ISO certification permits
the Company to import and market its product within the EEC.

Domestically the company markets the Micro-Lok Precision Dental Implant System
direct to the end market - clinicians, dental specialists and institutions. As
of 2002 the company is actively engaged in the hire of a national sales force.
To this extent, it has been looking for and soliciting for a Director of
Domestic Sales & Marketing, anticipates having an individual on-board by the end
of January and expects to have up to ten (10) sales persons in place by
year-end. The development of the domestic market is expected to grow the company
considerably and result in the domestic business representing over 40% of total
sales.

Internationally Bio-Lok sells and markets its products via Distributors, wholly
owned subsidiaries and/or joint ventures. As of 10/31/01 the company has
contracts outstanding with 12 Distributors, has set up three (3) wholly owned
subsidiaries and is continually engaged in soliciting and establishing added
international relationships.



                                       2
<PAGE>


                           BIO-LOK INTERNATIONAL INC.

PRINCIPAL PRODUCTS, MARKETS AND DISTRIBUTION

Bio-Lok's principal product consists of a line of dental implants, their
prosthetic components, tools, devices, irrigated spade drills, and membranes and
bone augmentation materials for use around implants. The dental implants are the
foundation upon which natural looking teeth are placed via a sound and lasting
prosthesis. Dental implants are small anchor (root form) shaped like screws or
cylinders which when placed become an artificial replacement of the natural
roots, are made out of bio-compatible titanium, and are placed into the maxilla
and mandible of a patient. Many of the implants have various coatings or
treatments (Hydroxylapatite, Titanium Plasma Sprayed, or are treated via a
remedial blasted material - "Osseo-Lok", etc.), which are bonded to the implant
to enhance the bonding and bone growth process -improve osseointegration.

Dental implant systems are placed by trained dentists, oral surgeons,
periodontists, implantologists, etc.. Implants can have a high success rate if
placed properly and expertly, and with proper oral care and regular dental
visits have lasted as long as 20 years and may last a lifetime.

The dental products Bio-Lok manufactures and markets are as follows:

         -  3.45mm Platform   - Micro-Lok Screw Implant 3.45mm body to head;
                              - Micro-Lok Cylinder Implant 3.45mm body to
                                4.00mm head;
                              - Silhouette Screw Implant with a tapered body
                                from 4.0mm to 2.5mm;

         -  4.00 mm Platform  - Micro-Lok Screw Implant 3.75mm body to
                                4.00mm head;
                              - Micro-Lok Screw Implant 4.00mm body to
                                4.00mm head;
                              - Micro-Lok Cylinder Implant 3.3mm body to
                                4.00mm head;
                              - Micro-Lok Cylinder Implant 4.0mm body to
                                4.00mm head;
                              - Silhouette Screw Implant with a tapered body
                                from 4.5mm to 2.5mm

         -  5.00 mm Platform  - Micro-Lok Screw Implant 4.75mm body to 5.0mm
                                head then cuff back to 4.0mm;
                              - Micro-Lok Screw Implant 4.75mm body to 5.0mm
                                head;
                              - Micro-Lok Cylinder Implant 5.0mm body to 5.0mm
                                head;
                              - Silhouette Screw Implant with a tapered body
                                from 5.5mm to 3.3mm

         -  6.50 mm Platform  - Silhouette Screw Implant with a tapered body
                                from 7.0mm to 4.0mm



         -  an extensive line of prosthetic abutments providing a practitioner
            ease of identifying options available for completion of any
            prosthesis;

         -  all necessary tooling and devices for both placement of the implants
            and for completion of a prosthesis;

         -  a large selection of four(4) fluted (longitudinal cutting surfaces)
            spade drills, pilot drills, fissure bur, countersinks and
            counterbores;

         -  and, a select number of products utilized in implantology and
            purchased for re-sale.

As of November 2001 the Company has selected a "Collagen Resorbable Membrane" to
market along with its dental implant system. The membrane will be offered in
three sizes and is sold in boxes of five to the end-market domestically and via
its distributors and wholly owned subsidiary internationally.

By the end of the first quarter 2002 the company anticipates to have added and
be actively marketing a bone augmentation material as an add-on to its product
line. The product is readily utilized in the placement of implants, hence
providing a very synergistic product for the marketing of the implant system.

RAW MATERIALS

The material used in manufacturing the dental products is titanium alloy
(ASTMB348 Grade 5 [Ti 6AL4V]), gold alloy and stainless steel. Titanium is inert
to body tissue and bone, and is an alloy which has the unique ability to form a
permanent biological bond with living tissue after being placed. Research in the
use of ceramic and other materials are underway, particularly for ceramic for
use as an abutment. Select ceramic abutments are already being marketed but as
of today have not yet received brought acceptance.



                                       3
<PAGE>


EMPLOYEES.

At fiscal year ended October 31, 2001, the Registrant employed 25 individuals.
None of the employees are affiliated with unions and the Registrant considers
its relations with its employees to be good.

COMPETITION

The corporation's competition consists of a number of entities - approximately
10 primary competitors. The major competitors are Nobel Biocare, Sulzer Dental,
BioMed Inc.- Implant Innovations Inc. (3I), Friedent - Frialit, Astra, Lifecore
Biomedical, Sterngold, Straumann - ITI, etc. To compete and overcome the
competitor(s) advantages in the marketplace Bio-Lok offers to the market a
product line designed and manufactured in-house; a product line which represents
"State of the Art" based on today's technology by having incorporated into the
system unique and patented designs consisting of journals, thread design, seals
and etc. which provide strength and fit to the product line. Due to these
factors Bio-Lok anticipates to be able to penetrate the existing dental implant
marketplace and gain market share as it completes the development and
implementation of its marketing objectives.

                   OTHER INFORMATION RELATING TO THE BUSINESS

RESEARCH AND DEVELOPMENT.

Product research is being completed continually on the existing product line,
new ideas and concepts relating to dental implantology and the development of
new implant, prosthetic and tooling designs. New products will be and are being
brought to market as clinical evaluations, studies and testing are completed.

An internal connection implant system will be introduced in March 2002 at the AO
meeting (Academy of Osseo integration).

Product currently under final evaluation, trials and testing is the laser-etched
implant - "Laser-Lok". The new implants are expected to be brought to market by
late 2002. The implant collars have been redesigned and laser-etched to promote
and improve bone and tissue adhesion. The improved implant should reduce bone
loss and lessen periodontal problems.

ENVIRONMENTAL LAWS.

Environmental laws do not impact the company except for waste products/materials
created and/or generated by manufacturing processes. These waste products are
being recycled according to and in compliance with federal, state, and local
environmental protection laws.

Compliance by the Registrant with federal, state and local environmental
protection laws has not in the past and is not expected in the future to have an
effect on capital expenditures, liquidity, earnings or its competitive position.

ITEM 2. DESCRIPTION OF PROPERTY

Registrant's principal executive and manufacturing facility is located in
Deerfield Beach, Florida. The facility is considered to be in good condition,
fully utilized, and consists of 7,690 sq. ft. of leased plant and offices. The
company expected to increase its current pace by leasing added space from its
current landlord effective 2/1/02 totaling approximately 2,400 sq. ft. No added
space is presently expected to be required in 2002.

The Company's manufacturing facility consists of numerous automated CNC Swiss
and manual lathe machines. During 2001 Bio-Lok experienced a machine fire, which
resulted in all machines being replaced. The company carried replacement
insurance on all equipment and business interruption insurance for any loss of
income resulting from the fire. As of November 2001 all equipment had been
replaced, other items are still under discussion and the income loss has as yet
not been documented.

TRADEMARKS AND PATENTS.

The Company has filed trademarks on the company name and logo, and its dental
implant product line name and logo.




                                       4
<PAGE>

The Company owns a number of patents. These patents were obtained or have been
transferred and assigned to the Company. The Company has been granted a total of
fourteen (14) patents, has ten (10 patent pending and has two (2) patents
pending final documentation for filing.

ITEM 3. LEGAL PROCEEDINGS

(1)   On February 12, 1997, the Plan of Reorganization for the Company was
      approved by its creditors and accepted by the Court. Under the settlement
      all law suits and counter law suits where closed and included in the final
      Plan of Reorganization structure. On January 23, 1998 the filing was
      closed.

(2)   No other legal proceedings exist.


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

Only matters put to a vote of Security Holders for 2001 was the election of
Directors and the re-appointment of the independent Auditor. Details of the
Annual Stockholder's Meeting are contained in the minutes of the Annual Meeting
held on March 7, 2001.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Registered Common Stock is traded on the NASDAQ Bulletin Board and is traded
under the symbol "BLLI". Stock and company information may also be obtained via
the Internet. Stock market trading values at quarter ending for 2001 have been
as follows:

          DATE            HIGH           LOW        CLOSE
          ----            ----           ---        -----
          10/31/00         1.03          .75         1.03
          11/30/00          .91          .75          .75
          12/29/00          .56          .56          .56
           1/31/01         1.03         ..88          .88
           2/28/01         1.25         1.19         1.25
           3/30/01         1.03          .91          .91
           4/30/01         1.00          .95         1.00
           5/31/01          .85          .75          .85
           6/27/01          .60          .42          .42
           7/31/01          .42          .42          .42
           8/31/01          .37          .37          .37
           9/26/01          .37          .37          .37
          10/31/01          .30          .23          .25


As of October 31, 2001, there were approximately 565 shareholders of record of
the Bio-Lok International, Inc.'s Common Stock. A number of these shares are
held in "street" name and may, therefore, be held by several beneficial owners.
As of October 31, 2001, there where 15,000,000 shares of Common Stock authorized
and 6,085,348 shares of Common Stock issued and outstanding along with 500,000
shares of Preferred Stock authorized and none outstanding.

The Company has not paid any cash dividend on its Common Stock since current
management joined the company. The Company does not anticipate the payment of
any dividends in the near future. The Board of Directors follow a policy of
retaining earnings for growth and continued development of the company.



                                       5
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

Management's discussion, analysis of financial condition and results of
operation are reported herewith and will also be detailed in the Annual Report
for fiscal year ending October 31, 2001, detailed in the section titled
"Management's Discussion and Analysis of the Financial Results of Operations and
Condition" to be filed.

SALES AND PROFITS. [2001 VS. 2000] Net revenues for 2001 totaled $2,761,000,
which represented a 13% increase over prior year results. The increase was due
to gains in the international markets, particularly from the markets entered in
Mexico and Chile, and market penetration achieved in the US. The increase in
market share is expected to continue for the domestic market due to the
resumption of staffing the domestic sales force, which had been temporarily
discontinued due the machine fire in July and the potential lack of product
availability. 2002 domestic sales objectives should exceed 300%.

Gross profit for the year totaled $2,028,000, representing a 3% decline from
prior years result. The decrease was due to continued product development
(laser-lok, etc.), added costs incurred from the machine fire and machines
purchased to maintain required production capacity due to market penetration.

Selling expenses for the year increased by $264,339 or 89% from prior year
results. The increased costs incurred are attributed to payroll increases
required to maintain market parity, the hire of added sales personnel and
general increases incurred due to market development efforts to increase market
share. These costs are expected to continue to increase as management continues
to develop the domestic market and expand its international presence. During
2002 a domestic market staff is being hired to cover all fifty states to insure
a participation in all markets. Internationally, added Distributors are
anticipated to be brought on-line in Europe, South and Central America, and
Asia.

General and Administrative expenses increased by $299,951 or 33% from prior
year. The increased costs incurred are a direct result of market growth and
development. Specific increases where due to bonus awards issued, increased
staff and payroll costs, increased costs incurred for professional services,
conversion to a new system both hardware and software, and an increase in the
provision for losses on international accounts due to political and economic
risk assessments. Expenses are anticipated to continue to increase as the
business grows and reaches breakeven relationships, which are not expected to be
achieved until revenues exceed six million dollars.

Income from Operations totaled $246,000 and were 59% below results for prior
year. These results from continued operations decreased due to management's
decision to allocate funds to the continued development of the domestic and
international markets, an objective that will be followed over the ensuing
years. Management is actively attempting to penetrate the dental implant market
to achieve 10% of total market.

Other income reflected the results of the machine fire, which resulted in a
non-taxable gain of over $1million. The machine fire of July 2001 resulted in
the replacement of all machinery and tooling due to the corrosive impact on
steel. The company had replacement value insurance; hence all equipment affected
was replaced. Adjusting for the non-recurring fire damage gain other income
results are would be negligible. Adjusting for the gain results other income
would have totaled $122,534, a 22% increase in expenses. The increase in costs
is solely attributable to increased interest expense incurred on debt(s) assumed
- increase in revolving line, machinery and system purchase.

Net income for the period totaled $1,131,000, an increase of 123%. Adjusting for
the non-recurring gain net income would have totaled only $123,801, a decrease
of 75% from prior year. The decrease is in-line with expected results achieved
by management. The lower results realized are directly attributable to the
planned market development and it having to be put on hold for six months due to
the fire.

OUTLOOK FOR FISCAL YEAR 2002. The development of the market was resumed in
November 2001 after management was satisfied that machine capacity and product
availability. Due to the hire of staff and market growth anticipated in 2002 net
income objectives will be at break-even or a loss, should be at break-even in
2003 and generate a profit by 2004. Timing, quality of hire and the addition of
equity capital will dictate how quickly the company moves back into a profitable
position.



                                       6
<PAGE>

Additionally, Bio-Lok International Inc. will be bringing to market new products
through out the year. These new products are expected to provide enhanced and
state-of-the-art implants to the market, which are expected to be highly
acceptable due to there improved performance.


ITEM 7. FINANCIAL STATEMENTS

The information is provided under the attached document (Item 13. (a) Exhibit
13) titled "Annual Report" for the year ended October 31, 2001, attached hereto
and as incorporated by reference into this Report. Summary financial results
where as follows:

                           BIO-LOK INTERNATIONAL INC.

                                                          OCTOBER 31,
                                                              2001
                                                          -----------

      BALANCE SHEET:

               Current assets...........................  $2,483,528
               Non-current assets ......................   1,444,451
               Total Assets ............................   3,927,979
               Current liabilities .....................   1,297,697
               Non-current liabilities .................     224,975
               Stockholders' Equity ....................   2,405,307



                                                YEAR ENDED
                                        ----------------------------
                                        OCT. 31,            OCT. 31,
                                          2001                2000
                                        --------            --------
      INCOME STATEMENT:

               Net Sales ............ $ 2,760,656         $ 2,441,997
               Gross Profit .........   2,028,002           1,823,916
               Sales Expense ........     561,873             297,534
               General & Admin. Exp .   1,219,793             919,842
               Income from Operations     246,335             606,540
               Other Inc./(Exp) .....     884,423            (100,164)
               Net income ...........   1,130,758             506,376



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

        -  NONE -




                                       7
<PAGE>


                                    PART III

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

The information as to the Directors of the Registrant set forth under the
sub-caption "Board of Directors" appearing under the caption "Election of
Directors" on page 1 through 3 of the Proxy Statement relating to the Annual
Meeting of Shareholders held on March 7, 2001, is incorporated by reference into
this Report.

BOARD OF DIRECTORS.

Directors of Bio-Lok International, Inc. hold offices for either one (1) or two
(2) year terms. Terms are set on and details per Proxy Statements relating to
the Annual Meeting of Shareholders last held on March 7, 2001.

Compensation of Directors has been limited to issuing individuals common stock
shares of Bio-Lok International, Inc. for services and support of the company.

EXECUTIVE OFFICERS.

Following is a list of the names and ages of all the Executive Officers of the
Registrant, indicating all positions and offices with the Registrant held by
each such person, and each such person's principal occupations or employment's
during the past five years. Each such person has been elected to serve until the
next annual election of officers of the Registrant scheduled for March 27, 2002.

 POSITIONS AND OFFICES HELD AND PRINCIPAL     OCCUPATIONS OR EMPLOYMENT DURING
           NAME AND AGE                               PAST FIVE YEARS
 ----------------------------------------      --------------------------------

 Bruce L. Hollander (63)                      Chairman of the Board, CEO and
                                              President; with the company since
                                              December 1995; present term as
                                              Director expires 2003;

 Ingo K. Kozak (60)                           Director, CFO and VP-Finance &
                                              Administration; with the company
                                              since February 1994; present term
                                              as Director expires 2003;

 Harold Alexander, PhD.  (62)                 Director; present term expires
                                              2002; President of Orthogen
                                              Corporation (wholly owned
                                              subsidiary); Editor of the Journal
                                              of Biomedical Materials Research.



ITEM 10. EXECUTIVE COMPENSATION

The information relating to executive officer's compensation, is incorporated by
reference, is set forth under the caption "Compensation of Directors" and
"Summary Compensation Table" on page 4 of the Proxy Statement relating to the
Annual Meeting of Shareholders held on March 7, 2001, and in the footnotes of
the Annual Report attached hereto as an Exhibit.

Bio-Lok does not have any formal pension and profit sharing plans in place, but
does offer a 401(k) plan to its employees. Under the plan the Company, at its
option, may participate up to 50% of 10% of plan participants contributions.
Additionally, the Board of Directors of the Company may, from time to time,
grant Common Stock or Purchase Options to officers, directors and key employees.
Directors of the Company may be reimbursed for expenses incurred.

The Board of Directors of the Company in 1993 approved the establishment of a
Stock Option Plan for the purchase of common stock based on performance for
officers and employees. To date no Plan has been formally established but awards
have been granted to officers and employees as merited by the Board.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information relating to directors and executive officers' security ownership
is incorporated by reference, and is set forth under the caption "Secured
Ownership of Certain Management" and reflected on page 3 of the Proxy Statement
relating to the Annual Meeting of Shareholders held on March 7, 2001.



                                       8
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                               CONSULTING SERVICES

Bio-Lok has and continually is negotiating with a number of clinicians and
individuals to provide continued consulting, collaboration, clinical services,
marketing, promotional and sales support to the Company.

                                    CONTRACTS

The Company continually enters into distribution agreements with select domestic
and international entities for the sale of its product line.

The Company has employment agreements outstanding since 1997 with its President,
Vice President and a Marketing Executive. These contracts are automatically
renewed annually on October 31 for five, four and two years respectively.

The Company at the time of the acquisition of Orthogen Corporation entered into
a employment agreement with its elected President and a consulting agreement
with a Doctor and Associate Professor. These contracts have a term of five (5)
years.

No other contracts had been entered into and where outstanding as of October 31,
2001.

                RE-ORGANIZATION, RE-STRUCTURING AND RELATIONSHIPS

On January 10, 1996 the Board of Directors voted and placed its wholly owned
subsidiary (then known as Minimatic, Inc., today merged into its parent) under
protection of Chapter XI Bankruptcy Re-organization to protect the Company from
creditors and attempt to settle lawsuits outstanding. On April 2, 1996 the Board
of Directs voted and placed American BioDental Corporation (today known as
Bio-Lok International Inc.) also under the protection of a Chapter XI Bankruptcy
Re-organization. The filing was completed to protect the entity from its
creditors and the lawsuits outstanding. On February 12, 1997, the Plan of
Reorganization for both companies was approved by creditors and accepted by the
Court. The Files were subsequently closed on January 23, 1998. On March 1, 1997,
the two companies (Bio-Lok International Inc. and Minimatic Implant Technology,
Inc.) were merged and the surviving entity was Bio-Lok International Inc.

MicroLok Mexico S.A. de C.V, Micro-Lok Chile S.A., Bio-Lok International Pty.,
Inc. and Orthogen Corporation are being accounted as individual corporations,
wholly owned by Bio-Lok International, Inc. and financial results are included
in the consolidated reports of the parent Bio-Lok International, Inc.



                                       9
<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

         EXHIBIT NO.       DESCRIPTION
         -----------       ----------

         3.1               Articles of Incorporation *

         3.2               By-Laws*
                           Amendment to By-Laws*

         13                Independent Auditor's Report for the Registrant for
                           the year ended October 31, 2001. Except for those
                           portions of such Report expressly incorporated by
                           reference into this Report, such Auditor's Report is
                           furnished solely for the information of the
                           Securities and Exchange Commission, shall not be
                           deemed a "filed" document and will be incorporated
                           and reissued as a part of the corporations Annual
                           Report for the Year Ended October 31, 2001.

         16                Letter on change in certifying accountants*


         ---------------
         *  Filed previously


(b) REPORTS ON FORM 8-K - dated August 16, 2001, Item 5. Other Events.



                                       10
<PAGE>


                                   SIGNATURES

IN ACCORDANCE WITH SECTION 13 OR 15(D) OF THE EXCHANGE ACT, THE REGISTRANT
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.

                                             BIO-LOK INTERNATIONAL INC.
                                            (Registrant)


                                       By:  /s/ Bruce L. Hollander
Date:  February 8, 2002                   --------------------------------------
                                                Bruce L. Hollander, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated per the final audit report issued by
accountants.
<TABLE>
<CAPTION>

       SIGNATURE                     TITLE
       ---------                     -----
<S>                        <C>                                         <C>
/s/ Bruce L. Hollander     President, CEO and Director                 Date:  February 8, 2002
------------------------
    Bruce L Hollander


/s/ Ingo K. Kozak          VP - Finance & Admin., CFO and Director     Date:  February 8, 2002
 -----------------------
    Ingo K. Kozak
</TABLE>


Attachment: Independent Auditor's Report for the Year 2001




                                       11
<PAGE>


                           BIO-LOK INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                    CONTENTS

PAGE     13         INDEPENDENT AUDITORS' REPORT

PAGE     14         CONSOLIDATED BALANCE SHEET AS OF OCTOBER 31, 2001

PAGE     15         CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
                    OCTOBER 31, 2001 AND 2000

PAGE     16         CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                    FOR THE YEARS ENDED OCTOBER 31, 2001 AND 2000

PAGE     17         CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
                    OCTOBER 31, 2001 AND 2000

PAGES  18 - 32      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
                    OCTOBER 31, 2001




                                       12
<PAGE>




                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of:
  Bio-Lok International, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Bio-Lok
International, Inc. and Subsidiaries as of October 31, 2001 and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the years ended October 31, 2001 and 2000. These 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
audit.

We conducted our audit 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 misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the financial position of Bio-Lok
International, Inc. and Subsidiaries as of October 31, 2001, and the results of
their operations and their cash flows for the years ended October 31, 2001 and
2000, in conformity with accounting principles generally accepted in the United
States of America.

WEINBERG & COMPANY, P.A.

/s/ Weinberg & Company, P.A.

Boca Raton, Florida
January 18, 2002



                                       13
<PAGE>


                  BIO-LOK INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

                             AS OF OCTOBER 31, 2001



                                     ASSETS

CURRENT ASSETS

 Cash and cash equivalents .................................      $   55,326
 Accounts receivable, net ..................................         833,320
 Insurance claims receivable ...............................         338,442
 Inventory .................................................       1,161,650
 Prepaid expenses ..........................................          94,790
                                                                  ----------
     Total Current Assets ..................................       2,483,528
                                                                  ----------

PROPERTY AND EQUIPMENT - NET ...............................       1,264,679
                                                                  ----------

OTHER ASSETS

 Deposits ..................................................          12,878
 Inventory, long-term ......................................         163,283
 Other assets ..............................................           3,611
                                                                  ----------
     Total Other Assets ....................................         179,772
                                                                  ----------

TOTAL ASSETS ...............................................      $3,927,979
                                                                  ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

 Revolving loans payable ...................................      $  523,878
 Accounts payable - trade and accrued expenses .............         180,161
 Accounts payable - other ..................................         197,978
 Notes and loans payable - current portion .................         295,479
 Liabilities under capital leases - current portion ........          59,892
 Due to stockholders .......................................          40,309
                                                                  ----------
     Total Current Liabilities .............................       1,297,697
                                                                  ----------

LONG-TERM LIABILITIES

 Notes and loans payable - non-current .....................          49,739
 Liabilities under capital leases - non-current ............         175,236
                                                                  ----------
     Total Long-Term Liabilities ...........................         224,975
                                                                  ----------

STOCKHOLDERS' EQUITY

 Preferred stock, $.75 par value, 500,000 shares authorized,
  none issued and outstanding ..............................              --
 Common stock, $.01 par value, 15,000,000 shares authorized,
  6,085,358 shares issued and outstanding ..................          60,854
 Additional paid in capital ................................       2,221,586
 Retained Earnings .........................................         122,867
                                                                  ----------
     Total Stockholders' Equity ............................       2,405,307
                                                                  ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................      $3,927,979
                                                                  ==========

          See accompanying notes to consolidated financial statements.


                                       14
<PAGE>


                  BIO-LOK INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  FOR THE YEARS ENDED OCTOBER 31, 2001 AND 2000


<TABLE>
<CAPTION>

                                                                          2001              2000
                                                                      -----------       -----------
<S>                                                                   <C>               <C>
SALES - NET ....................................................      $ 2,760,656       $ 2,441,997

COST OF SALES ..................................................          732,654           618,081
                                                                      -----------       -----------

GROSS PROFIT ...................................................        2,028,002         1,823,916
                                                                      -----------       -----------

OPERATING EXPENSES

 Selling expenses ..............................................          561,873           297,534
 General and administrative expenses ...........................        1,219,794           919,842
                                                                      -----------       -----------
       Total Operating Expenses ................................        1,781,667         1,217,376
                                                                      -----------       -----------

INCOME FROM OPERATIONS .........................................          246,335           606,540
                                                                      -----------       -----------

OTHER INCOME (EXPENSE)

 Other income ..................................................            1,168            11,843
 Interest expense ..............................................         (123,702)         (113,177)
 Other expense .................................................               --            (5,430)
 Gain on sale of property ......................................               --             6,600
 Gain from involuntary conversion of fixed assets ..............        1,006,957                --
                                                                      -----------       -----------
       Total Other Income (Expense) ............................          884,423          (100,164)
                                                                      -----------       -----------

NET INCOME .....................................................      $ 1,130,758       $   506,376
                                                                      ===========       ===========

NET INCOME PER COMMON SHARE AND EQUIVALENTS:

 BASIC .........................................................      $       .19       $       .08
                                                                      ===========       ===========
 DILUTED .......................................................      $       .16       $       .08
                                                                      ===========       ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING THE PERIOD:

 BASIC .........................................................        6,085,358         6,057,659
                                                                      ===========       ===========
 DILUTED .......................................................        6,906,358         6,412,659
                                                                      ===========       ===========

</TABLE>



          See accompanying notes to consolidated financial statements.



                                       15
<PAGE>


                  BIO-LOK INTERNATIONAL, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                  FOR THE YEARS ENDED OCTOBER 31, 2001 AND 2000

<TABLE>
<CAPTION>

                                                                                                     RETAINED
                                  PREFERRED STOCK           COMMON STOCK             ADDITIONAL      EARNINGS
                                -------------------    --------------------------      PAID-IN    (ACCUMULATED
                                  STOCK     AMOUNT        STOCK         AMOUNT        CAPITAL        DEFICIT)          TOTAL
                                 -------    -------    -----------    -----------    -----------    -----------     -----------
<S>                                         <C>          <C>          <C>            <C>            <C>             <C>
Balance October 31, 1999 .......      --    $    --      6,055,358    $    60,554    $ 2,218,136    $(1,514,267)    $   764,423

Issuance of common stock
  for services..................      --         --         30,000            300          3,450             --           3,750

Net income, 2000 ...............      --         --             --             --             --        506,376         506,376
                                 -------    -------    -----------    -----------    -----------    -----------     -----------

Balance, October 31, 2000 ......      --         --      6,085,358         60,854      2,221,586     (1,007,891)      1,274,549

Net income, 2001 ...............      --         --             --             --             --      1,130,758       1,130,758
                                 -------    -------    -----------    -----------    -----------    -----------     -----------

BALANCE, OCTOBER 31, 2001 ......      --    $    --      6,085,358    $    60,854    $ 2,221,586    $   122,867     $ 2,405,307
                                 =======    =======    ===========    ===========    ===========    ===========     ===========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       16
<PAGE>


                  BIO-LOK INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  FOR THE YEARS ENDED OCTOBER 31, 2001 AND 2000

<TABLE>
<CAPTION>

                                                                                          2001          2000
                                                                                      -----------     ---------
<S>                                                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income ......................................................................    $ 1,130,758     $ 506,376
 Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation ...................................................................        107,166        76,142
  Provision for doubtful accounts - net of recoveries ............................        (51,433)       (1,178)
  Issuance of common stock for services ..........................................             --         3,750
  Gain from involuntary conversion ...............................................     (1,006,957)           --
 Changes in operating assets and liabilities:
  Accounts receivable ............................................................       (132,147)     (229,920)
  Inventories ....................................................................        (23,668)      (46,072)
  Prepaid expenses and other assets ..............................................        (52,145)       (8,528)
  Deposits .......................................................................         (4,316)        2,185
 Decrease in:
  Accounts payable and accrued expenses ..........................................        308,175       (94,990)
                                                                                      -----------     ---------
        Net Cash Provided By Operating Activities ................................        275,433       207,765
                                                                                      -----------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Cash received from insurance settlement .........................................        977,628            --
 Purchases of property and equipment .............................................     (1,202,061)      (27,911)
 Increase in other assets ........................................................          4,733        (6,344)
                                                                                      -----------     ---------
        Net Cash Used In Investing Activities ....................................       (219,700)      (34,255)
                                                                                      -----------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Payment of capital lease obligation .............................................        (52,541)      (39,998)
 Payment of notes and loans payable ..............................................       (160,465)     (119,486)
 Proceeds from stockholder loans .................................................         28,934       (12,176)
 Proceeds from notes and loans payable ...........................................         72,743            --
 Proceeds - net from revolving note payable ......................................         47,898        38,570
                                                                                      -----------     ---------
        Net Cash Used In Financing Activities ....................................        (63,431)     (133,090)
                                                                                      -----------     ---------

NET INCREASE (DECREASE) IN CASH ..................................................         (7,698)       40,420

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ....................................         63,024        22,604
                                                                                      -----------     ---------
CASH AND CASH EQUIVALENTS - END OF YEAR ..........................................    $    55,326     $  63,024
                                                                                      ===========     =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest ...........................................    $   123,701     $ 112,680
                                                                                      ===========     =========

NON CASH INVESTING AND FINANCING ACTIVITIES
Equipment acquired by capital lease ..............................................    $    99,220     $      --
                                                                                      ===========     =========
</TABLE>

Funds of $338,442 are due from an insurance company for assets destroyed in a
fire. This receivable was included in the calculation of the gain on involuntary
conversion of assets destroyed (See Note 12).

          See accompanying notes to consolidated financial statements.


                                       17
<PAGE>


                  BIO-LOK INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             AS OF OCTOBER 31, 2001


NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a) ORGANIZATION AND DESCRIPTION OF BUSINESS

         Bio-Lok International, Inc. (Bio-Lok) (the "Company") was incorporated
         in the State of Delaware in October 1987 under the name of Colfax, Inc.
         The Company changed its name to Minimatic Implant Technology, Inc. in
         June 1988, to American BioDental Corporation in April 1995 and to
         Bio-Lok International, Inc., its current name, in August 1996. In April
         1997, the Company merged with its wholly owned subsidiary, Minimatic
         Implant Technology, Inc., incorporated in the State of Florida, and the
         latter Company was dissolved.

         The Company manufactures and distributes the "Micro-Lok Precision
         Implant System." The Company holds several patents and its products are
         primarily sold to international distributors. The Company's products
         are subject to various United States and international regulatory laws
         that restrict their sale to licensed medical practitioners in the
         United States and authorized importers of products to the European
         Economic Community, respectively. The Company guarantees and warrants
         its products, subject to certain restrictions and requirements. As a
         result of minimal returns, the Company does not maintain any reserve
         for product warranties. The Company manufactures its products in a
         Federal Drug Administration registered facility. The products are ISO
         9001 Certified. The Company has determined that it operates in one
         reportable segment and it is impractical to report information by
         select parts of a product line and geographic area. The Company sells
         only one product line which consist of over 600 items and part numbers.

         The Company and its former subsidiary filed petitions under Chapter XI
         of the Bankruptcy laws in January 1996. On February 12, 1997, the
         Company's Amended Plan of Reorganization was approved by its creditors
         and accepted by the Court. Liabilities were restructured to 30% of the
         original debts, except priority claims. The restructured debts were
         scheduled to be repaid over a 12 to 72 month period. The unsecured
         liabilities were discounted at a market rate of 9% in accordance with
         generally accepted accounting principles. Creditors also received
         shares of common stock in the Company at one share per dollar for all
         debt not repaid (subsequent to the reverse split at a rate of 1 share
         for 10) (See Note 9). The Company was discharged from bankruptcy in
         January 1998 (See Note 6).

         During fiscal 1999, the Company incorporated Micro-Lok Mexico S.A. DE
         C.V., a Mexican corporation. In November 1999, the Company began
         selling directly through this subsidiary its products that were
         previously being sold through a distributor.

         In March 2000, the Company acquired all the capital stock of Orthogen
         Corporation, which was incorporated in New Jersey in June 1996. The
         acquisition was accounted for using the pooling of interest method. The
         Company issued 400,000 shares of its common stock to accomplish the



                                       18
<PAGE>

         acquisition. Orthogen is primarily engaged in research and development
         and it also owns patents on certain technology, which the Company
         anticipates bringing to market.

         During fiscal 2000, the Company incorporated Micro-Lok Chile S.A., a
         Chilean corporation. In December 2000, the Company began actively
         selling its products through this wholly-owned subsidiary.

         During fiscal 2001, the Company incorporated Biolok International PTY,
         Inc., an Australian corporation. In May 2001, the Company began selling
         directly through this subsidiary its products that were previously
         being sold through a distributor.

         (b) PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
         Company and its wholly owned subsidiaries. All significant intercompany
         balances and transactions have been eliminated in consolidation.

         (c) USE OF ESTIMATES

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

         (d) CASH AND CASH EQUIVALENTS

         For purposes of the cash flow statements, the Company considers all
         highly liquid investments with original maturities of three months or
         less at the time of purchase to be cash equivalents.

         (e) INVENTORIES

         Inventory is stated at the lower of cost or market. Inventory, which is
         not expected to be sold in one year, is classified as long term.

         (f) PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost, less accumulated
         depreciation. Expenditures for maintenance and repairs are charged to
         expense as incurred. Depreciation is provided using the straight-line
         method over the estimated useful lives of the assets from five to
         twelve years. In July 2001, much of the Company's manufacturing
         equipment was destroyed in a fire for which the Company was insured.
         The insurance coverage in force was "replacement value" (See Note 12).




                                       19
<PAGE>

         (g) INCOME TAXES

         The Company accounts for income taxes under the Financial Accounting
         Standards Board Statement of Financial Accounting Standards No. 109,
         "Accounting for Income Taxes", ("SFAS 109"). Under SFAS 109, 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 basis. 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. Under SFAS 109, 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.

         (h) STOCK OPTIONS

         In accordance with Statement of Financial Accounting Standards No. 123,
         "Accounting for Stock-Based Compensation", ("SFAS 123"), the Company
         has elected to account for stock options issued to employees under
         Accounting Principles Board Opinion No. 25, ("APB 25"), and related
         interpretations.

         (i) REVENUE RECOGNITION

         The Company recognizes revenues when goods are shipped.

         (j) PER SHARE DATA

         Basic net income per common share is computed based on the weighted
         average common shares outstanding during the year as defined by
         Statement of Financial Accounting Standards No. 128, "Earnings Per
         Share", ("SFAS 128"). Diluted net income per common share is computed
         based on the weighted average common shares and common stock
         equivalents outstanding during the year as defined by SFAS 128.

         The following represents a reconciliation from basic to diluted
         earnings per share:
<TABLE>
<CAPTION>

                                                                   2001          2000
                                                               ----------    ----------
<S>                                                            <C>           <C>
         Income to common shareholders ....................    $1,130,758    $  506,376
                                                               ----------    ----------
         Weighted average common shares outstanding .......     6,085,358     6,057,659
         Assumed exercise of stock options ................       666,000       200,000
         Assumed exercise of stock warrants ...............       155,000       155,000
                                                               ----------    ----------
         Diluted weighted average common shares outstanding     6,906,358     6,412,659
                                                               ----------    ----------

         Basic earnings per common share ..................    $      .19    $      .08
                                                               ==========    ==========
         Diluted earnings per common share ................    $      .16    $      .08
                                                               ==========    ==========

</TABLE>

                                       20
<PAGE>


         (k) FAIR VALUE OF FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107, "Disclosures about
         Fair Value of Financial Instruments", ("SFAS 107"), requires
         disclosures of information about the fair value of certain financial
         instruments for which it is practicable to estimate that value. For
         purposes of this disclosure, the fair value of a financial instrument
         is the amount at which the instrument could be exchanged in a current
         transaction between willing parties other than in a forced sale or
         liquidation.

         The carrying amounts of the Company's financial instruments, including
         accounts and claims receivable, accounts payable, accrued liabilities,
         and notes and loans payable approximates fair value due to the
         relatively short period to maturity for these instruments.

         (l) RECENT ACCOUNTING PRONOUNCEMENTS

         The Financial Accounting Standards Board has recently issued several
         new Statements of Financial Accounting Standards. Statement of
         Financial Accounting Standards No. 141, "Business Combinations", ("SFAS
         141"), supersedes APB Opinion 16 and various related pronouncements.
         Pursuant to the new guidance in SFAS 141, all business combinations
         must be accounted for under the purchase method of accounting; the
         pooling-of-interests method is no longer permitted. SFAS 141 also
         establishes new rules concerning the recognition of goodwill and other
         intangible assets arising in a purchase business combination and
         requires disclosure of more information concerning a business
         combination in the period in which it is completed. This statement is
         generally effective for business combinations initiated on or after
         July 1, 2001.

         Statement of Financial Accounting Standards No. 142, "Goodwill and
         Other Intangible Assets", ("SFAS 142"), supercedes APB Opinion 17 and
         related interpretations. SFAS 142 establishes new rules on accounting
         for the acquisition of intangible assets not acquired in a business
         combination and the manner in which goodwill and all other intangibles
         should be accounted for subsequent to their initial recognition in a
         business combination accounted for under SFAS 141. Under SFAS 142,
         intangible assets should be recorded at fair value. Intangible assets
         with finite useful lives should be amortized over such period and those
         with indefinite lives should not be amortized. All intangible assets
         being amortized as well as those that are not are both subject to
         review for potential impairment under Statement of Financial Accounting
         Standards No. 121, "Accounting for the Impairment of Long-Lived Assets
         and for Long-Lived Assets to be Disposed of", ("SFAS 121"). SFAS 142
         also requires that goodwill arising in a business combination should
         not be amortized but is subject to impairment testing at the reporting
         unit level to which the goodwill was assigned to at the date of the
         business combination.



                                       21
<PAGE>

         SFAS 142 is effective for fiscal years beginning after December 15,
         2001, and must be applied as of the beginning of such year to all
         goodwill and other intangible assets that have already been recorded in
         the balance sheet as of the first day in which SFAS 142 is initially
         applied, regardless of when such assets were acquired. Goodwill
         acquired in a business combination whose acquisition date is on or
         after July 1, 2001, should not be amortized, but should be reviewed for
         impairment pursuant to SFAS 121, even though SFAS 142 has not yet been
         adopted. However, previously acquired goodwill should continue to be
         amortized until SFAS 142 is first adopted.

         Statement of Financial Accounting Standards No. 143, "Accounting for
         Asset Retirement Obligations", ("SFAS 143"), establishes standards for
         the initial measurement and subsequent accounting for obligations
         associated with the sale, abandonment, or other type of disposal of
         long-lived tangible assets arising from the acquisition, construction,
         or development and/or normal operation of such assets. SFAS 143 is
         effective for fiscal years beginning after June 15, 2002, with earlier
         application encouraged.

         The adoption of these pronouncements will not have a material effect on
         the Company's financial position or results of operations.

NOTE 2   ACCOUNTS RECEIVABLE

         Accounts receivable were as follows at October 31, 2001:

         Accounts receivable ...............................    $ 895,965
         Allowance for doubtful accounts ...................      (62,645)
                                                                ---------
                                                                $ 833,320
                                                                =========

         The Company maintains an allowance for doubtful accounts based on
         management's analysis of historical customer collections and risk (See
         Note 11).

NOTE 3   INVENTORY

         Inventory consisted of the following at October 31, 2001:

         Raw materials ..................................    $   23,459
         Work in process ................................       345,760
         Finished goods .................................       955,714
                                                             ----------
         Total current and long-term inventory ..........    $1,324,933
                                                             ==========

         Inventory is stated at the lower of cost (first in, first out) or
         market. Finished goods inventory consists of a wide variety of products
         for sale to satisfy a market that requires specific types and sizes of
         products for specialized surgical applications and immediate order
         fulfillment. All inventory that is not expected to be sold within one
         year is classified as non-current. As of October 31, 2001, the
         non-current amount included in work in process and finished goods
         inventory aggregated $163,283.




                                       22
<PAGE>

NOTE 4   PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following at October 31, 2001:

         Office equipment ..................................   $   90,301
         Machinery and equipment ...........................    1,142,046
         Computer equipment ................................      138,248
         Leasehold improvements ............................       59,239
                                                               ----------
                                                                1,429,834

         Less accumulated depreciation .....................      165,155
                                                               ----------
                                                               $1,264,679
                                                               ==========

         Depreciation expense for the years ended October 31, 2001 and 2000 was
         $107,166 and $76,142, respectively.

NOTE 5   REVOLVING LOANS PAYABLE

         On April 25, 1997, the Company executed a revolving
         loan agreement with Capital Business Credit, a
         subsidiary of Capital Bank, for a maximum loan
         amount of $500,000. Capital Bank was subsequently
         acquired by Union Planters Bank. Temple-Inland
         Financial Services Company then acquired the
         Company's loan arrangement from Union Planters
         Bank. Subsequently, Temple-Inland changed its name
         to Guaranty Business Credit. The Company pledged
         all of its assets as collateral to secure the loan
         arrangement. The interest rate is the prime rate in
         effect plus 3.5%. At October 31, 2001, the
         effective rate was 11.0%. The loan has an annual
         renewal option on April 14 of each year and can be
         cancelled by either party on the anniversary date
         by giving 120 days notice. The loan prohibits the
         Company from paying cash dividends. This loan has
         been replaced by a new loan payable and a new
         promissory note (See Note 13(B) and (C))..................  $ 503,878

         On July 15, 1999, Orthogen Corporation entered into
         a $35,000 line of credit agreement with Sovereign
         Bank. The agreement calls for an interest rate
         based on the bank's prime rate plus 1.49%. At the
         time of such agreement, the bank's prime rate was
         8.0%. The loan is a demand loan and calls for
         annual reviews............................................     20,000
                                                                    -----------
                                                                    $  523,878
                                                                    ===========

                             23
<PAGE>

NOTE 6   NOTES AND LOANS PAYABLE

         The following schedule reflects notes and loans payable at October 31,
2001:

         Note payable in monthly installments of $2,245,
         including interest at 9.5%, secured by
         manufacturing equipment....................................  $ 42,526


         Note payable in 24 monthly installments of $3,357,
         including interest at 10.0%, secured by computer
         software...................................................    46,869

         Chapter XI bankruptcy settlement obligations under
         the Amended Plan of Reorganization dated February
         12, 1997, with aggregate monthly payments due to
         the creditors as determined by the payment
         schedules incorporated into the agreement,
         including interest at 9%. The Company is in arrears
         on some payments due to general unsecured creditors
         under the plan of reorganization primarily because
         of the Company's inability to locate and forward
         payments to those creditors. These payments are
         included in the current portion of notes and loans
         payable. As of the date of this report, no actions
         have been presented to the Company relating to
         non-payment of the creditors under the plan of
         reorganization.............................................  255,823
                                                                     ---------
                                                                      345,218
         Less: Current portion...................................... (295,479)
                                                                     ----------
                                                                     $ 49,739
                                                                     ==========

         Required payments of principal on notes and loan payable, including
         current maturities, are as follows at October 31, 2001:

                             YEAR                 AMOUNT
                             ----                --------
                             2002..............  $295,479
                             2003..............    49,739
                                                 --------
                                                 $345,218
                                                 ========

         Interest expense for the years ended October 31, 2001 and 2000 was
         $123,701 and $112,680, respectively.

NOTE 7   INCOME TAXES

         For the year ended October 31, 2001, taxable net income has been
         adjusted to remove the gain from involuntary conversion of fixed assets
         due to a fire loss that is not recognized for tax purposes.



                                       24
<PAGE>

         Income tax expense (benefit) for the years ended October 31, 2001 and
         2000 is summarized as follows:

                                              2001          2000
                                            --------     ---------
         Deferred:
           Federal .....................    $ 46,528     $ 271,590
           State .......................       7,965        46,491
           Change in valuation allowance     (54,493)     (318,081)
                                            --------     ---------
         Income tax expense (benefit) ..    $     --     $      --
                                            ========     =========

         The Company's tax expense differs from the "expected" tax expense for
         the years ended October 31, 2001 and 2000 (computed by applying the
         Federal Corporate tax rate of 34 percent to income before taxes) as
         follows:

                                                            2001         2000
                                                          --------    ---------
         Computed "expected" tax expense .............    $ 48,314    $ 172,168
         State income tax - net of federal tax benefit       7,979       20,325
         Effect of net operating loss carryforwards ..     (56,293)    (192,493)
                                                          --------    ---------
                                                          $     --    $      --
                                                          ========    =========

         The tax effects of temporary differences that give rise to significant
         portions of deferred tax assets and liabilities are as follows at
         October 31:

                                                 2001          2000
                                               ---------     ---------
         Deferred tax liabilities:
           Depreciation: ..................    $      --     $ (68,745)
                                               ---------     ---------
         Total deferred tax liabilities ...           --       (68,745)
                                               ---------     ---------

         Deferred tax assets:
           Depreciation ...................       38,050            --
           Net operating loss carryforward       116,217       167,244
           Stock based compensation .......           --         1,275
                                               ---------     ---------
         Total gross deferred tax assets ..      154,267       168,519

         Less valuation allowance .........     (154,267)      (99,774)
                                               ---------     ---------
         Net deferred tax assets ..........           --        68,745
                                               ---------     ---------
         Net deferred tax asset (liability)    $      --     $      --
                                               =========     =========

         At October 31, 2001, the Company had net operating loss carryforwards
         of $341,815 for income tax purposes, available to offset future taxable
         income expiring on various dates through 2021.

         The valuation allowance at November 1, 2000, was $99,774. The net
         change in the valuation allowance during the year ended October 31,
         2001, was an increase of $54,493.




                                       25
<PAGE>

NOTE 8   COMMITMENTS AND CONTINGENCIES

         (a) CONSULTING AGREEMENTS

         On August 28, 2000, the Company entered into a consulting agreement
         with a former stockholder of Orthogen Corporation. The agreement is for
         a five-year period and is renewable. Compensation is stated at $26,000
         per year plus expenses, but is subject to review annually by the Board
         of Directors. The agreement also grants the consultant an option for
         300,000 shares of common stock. The options are to be issued upon the
         reaching of certain milestones by the Company. The first milestone
         requires Orthogen to successfully provide a laser machined dental
         implant that is ready for use in humans. The second and third
         milestones are contingent on reaching certain sales levels of this new
         product. The last milestone is based upon the next Orthogen developed
         technology reaching financial break even. To date, no milestones have
         been met.

         (b) EMPLOYMENT AGREEMENTS

         On November 1, 1997 (the "Effective Date"), the Company entered into
         three employment agreements (the "Agreements") with executives (the
         "Employees") of the Company. The Employees were engaged as the
         President and Chief Executive Officer ("CEO"), as the Vice President -
         Finance and Chief Financial Officer ("CFO") and as the Director of
         International Sales & Marketing ("Director") of the Company. The
         Agreements were established for terms of five years, four years, and
         two years, respectively, from the Effective Date for the CEO, CFO and
         Director, respectively. The Agreements automatically renew annually on
         October 31 for a term of five years, four years, and two years,
         respectively. The Agreements contain a confidentiality clause and a
         non-competition clause. As consideration for the Employees'
         performances, the Company agreed to pay as of the original contract
         date an annual base salary of $150,000 to the CEO, $95,000 to the CFO,
         and $65,000 to the Director. In addition, the Company agreed to award
         the Employees an annual bonus of not less than 10% of their respective
         base salaries. At the discretion of the Employees, the portion of the
         Employees' salaries and bonuses that are not taken during a given
         employment year will be paid in shares of the Company's common stock at
         a value equal to the Company's net worth divided by the number of
         shares issued and outstanding.

         Pursuant to the merger with Orthogen Corporation, the Company entered
         into an employment agreement with an officer of Orthogen Corporation.
         The agreement specifies an annual base salary of $60,000 with a 10%
         bonus, both of which are reviewed annually by the Board of Directors.
         The agreement also granted an option for 300,000 shares of common
         stock. The options are to be issued upon the reaching of certain
         milestones by the Company (See Note 8(A)).



                                       26
<PAGE>

         (c) INTERNATIONAL DISTRIBUTOR AGREEMENTS

         The Company enters into distributor agreements (the "Agreements") with
         all its foreign distributors (the "Distributors"). The Agreements are
         established for a term of three to five years and renew automatically
         after the initial term, unless canceled in writing by either party at
         least 120 days prior to expiration. The Agreements may be terminated
         earlier by the Distributors with or without cause upon ninety days
         written notice and by the Company upon sixty days notice in case the
         Distributors did not meet the specific requirements stipulated in the
         Agreements. Under the terms of the Agreements, the Company grants to
         the Distributors the exclusive right to sell to customers the Company's
         product line in a specific territory. As of December 31, 1999, all
         domestic distributor agreements have been cancelled.

         (d) CAPITAL LEASE AGREEMENTS

         The Company leases computer and operating equipment under
         non-cancelable capital lease agreements. Future minimum lease payments
         under the capital leases are as follows at October 31, 2001:

         YEAR                                           AMOUNT
         ----                                          ---------
         2002........................................   $ 59,892
         2003........................................     61,636
         2004........................................     66,430
         2005........................................     42,769
         2006........................................      4,401
                                                        --------
                                                         235,128

         Less: current portion.......................     59,892
                                                        --------
         Obligations under capital lease - long term    $175,236
                                                        ========

         (e) OPERATING LEASE AGREEMENTS

         The Company leases corporate office space and office equipment under
         operating leases. The leases expire at various dates through November
         2006. Future minimum lease payments for the operating leases are as
         follows at October 31, 2001:

               YEAR                          AMOUNT
               ----                        ---------
               2002.......................  $ 79,372
               2003.......................    69,827
               2004.......................    17,250
               2005.......................    17,400
               2006.......................    17,400
            Thereafter....................     1,450
                                            --------
                                            $202,699
                                            ========

         Rent expense under operating leases for the years ended October 31,
         2001 and 2000 aggregated $87,232 and $79,232, respectively.



                                       27
<PAGE>

         (f) ROYALTY AGREEMENT

         Pursuant to a settlement agreement incorporated by reference in the
         Company's Amended Plan of Reorganization (See Note 1(A)), the Company
         is obligated to make royalty payments to a general creditor, in
         addition to payments on his general unsecured claim, for the Company's
         continued sale of certain dental implant products. These payments are
         to continue for a period of ten years following confirmation of the
         Company's Amended Plan of Reorganization dated February 12, 1997.
         Payments will be made based upon a schedule as stipulated in the
         settlement agreement up to a maximum of 2% of the total net sales of
         certain products as defined in the settlement agreement. The Company
         expensed $45,594 and $46,987 for royalties under this agreement for the
         years ended October 31, 2001 and 2000, respectively.

         (g) GAIN CONTINGENCY

         In July 2001, a fire occurred at the Company's manufacturing facilities
         that destroyed a significant amount of machines, equipment and
         inventory. The Company had insurance for the "replacement value" of the
         destroyed equipment as well as business interruption ("BI") insurance.
         While much of the equipment has been replaced as of the date of these
         financial statements, some items are still being negotiated with the
         insurance company including the BI insurance. Depending on the final
         outcome, the Company could incur additional gains related to the fire.
         Currently, the amount of this potential gain is indeterminable (See
         Note 12).

NOTE 9   STOCKHOLDERS' EQUITY

         AUTHORIZED COMMON AND PREFERRED STOCK

         On July 20, 1998, the Company effected a one for ten reverse stock
         split, cancelled and eliminated all classes of preferred stock and
         amended its certificate of incorporation to 7,000,000 authorized shares
         of $.01 par value common stock. On May 11, 2000, the Company amended
         its certificate of incorporation to 10,000,000 authorized shares of
         $.01 par value common stock. On December 15, 2000, the Company amended
         its certificate of incorporation to 15,000,000 authorized shares of
         $.01 par value common stock and 500,000 authorized shares of $.75 par
         value convertible preferred stock. All share and per share information
         in the financial statements herein give effect to these capital stock
         transactions.



                                       28
<PAGE>

NOTE 10  STOCK OPTIONS AND WARRANTS

         (a) STOCK OPTIONS GRANTED UNDER EMPLOYMENT AND CONSULTING AGREEMENTS

         During 2001 and prior years, the Company granted stock options to
         certain employees and a consultant. The options issued to a consultant
         consist of the option to purchase 300,000 shares based on the Company
         achieving certain milestones (See Note 8(A) and (*) below). In
         accordance with SFAS 123, the Company applies APB 25 and related
         interpretations in accounting for stock options issued to employees.
         Accordingly, no compensation cost has been recognized for options
         issued as of October 31, 2001. Had compensation cost been determined
         based on the fair market value at the grant date, consistent with SFAS
         123, the Company's net income (loss) for the year ended October 31,
         2001, would have changed to the pro forma amount indicated below.

         Net income (loss)                     As reported        $1,130,758
                                               Pro forma          $ (424,522)

         Net income (loss) per share           As reported        $     0.19
                                               Pro forma          $    (0.07)

         Note that the fair market value of each stock option granted was
         estimated on the date of grant using the Black-Scholes Option-Pricing
         Model in accordance with SFAS 123 assuming (1) a risk-free interest
         rate of 5.82% to 6.0%, (2) expected life of five to nine years, (3)
         expected volatility of 101% to 141% and (4) no expected dividends.

         A summary of the stock options issued under the employment and
         consulting agreements is presented below as of October 31, 2001:
<TABLE>
<CAPTION>

                                                                             NUMBER OF        WEIGHTED AVERAGE
                                                                              OPTIONS          EXERCISE PRICE
                                                                             -----------    ------------------
<S>                                                                           <C>                   <C>
         Stock Options
           Balance at beginning of period ................................    1,621,000             $.35
           Granted .......................................................    1,656,000              .10
           Exercised .....................................................           --               --
           Forfeited .....................................................           --               --
           Expired .......................................................           --               --
                                                                              ---------             ----
           Balance at end of period ......................................    3,277,000             $.23
                                                                              =========             ====
         Options exercisable at end of period ............................      666,000             $.64
                                                                              =========             ====
         Weighted average fair value of options having an exercise price
          less than market value granted during the period ...............                          $.94
                                                                                                    ====
</TABLE>

                                       29
<PAGE>



         The following table summarizes information about stock options at
         October 31, 2001:

<TABLE>
<CAPTION>
                                   OPTIONS OUTSTANDING                              OPTIONS EXERCISABLE
            ----------------------------------------------------------------    -----------------------------
                                                WEIGHTED                            NUMBER           WEIGHTED
                               NUMBER            AVERAGE          WEIGHTED        EXERCISABLE        WEIGHTED
                          OUTSTANDING AT        REMAINING         AVERAGE             AT              AVERAGE
            EXERCISE        OCTOBER 31,         CONTRACTUAL        EXERCISE        OCTOBER 31,        EXERCISE
              PRICES           2001               LIFE             PRICE             2001              PRICE
            ----------    ---------------     -------------    -------------    --------------    -----------

<S>         <C>               <C>                     <C>      <C>                   <C>          <C>
            $    .10          1,682,000               8.46     $       .10           426,000      $     .10
            $    .25            795,000               5.39     $       .25            40,000      $     .25
            $    .75            100,000               3.29     $       .75           100,000      $     .75
            $   3.00            100,000               3.29     $      3.00           100,000      $    3.00
            $    (*)            600,000               5.50     $        --                --      $      --
            ----------    ---------------     -------------    -------------    --------------    -----------
            $ 0-3.00          3,277,000               6.86     $       .23           666,000      $     .64
            ==========    ===============     =============    =============    ==============    ===========
</TABLE>


         (*) Performanced based options consisting of 300,000 shares to an
         employee and 300,000 shares to a consultant (See Note 8(A) and (B)).

         (b) STOCK WARRANTS

         (i)   In connection with the revolving loan obtained from Capital
               Business Credit in April 1997 (See Note 5), the Company issued
               warrants to Capital Business Credit to purchase 135,000 shares of
               the Company's common stock. The warrants (now the property of
               Guaranty Business Credit) are exercisable between April 29, 1999
               and April 28, 2002 at an exercise price of $0.50 per share. As of
               October 31, 2001, none of the warrants were exercised.

         (ii)  During 1998, the Company issued to two consultants warrants to
               purchase an aggregate of 20,000 shares of the Company's common
               stock. The warrants are exercisable between October 25, 1998 and
               September 30, 2003 at an exercise price of $0.10 per share. As of
               October 31, 2001, none of the warrants were exercised.

NOTE 11  CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

         During fiscal 2001 and 2000, 49% and 73%, respectively, of the
         Company's total revenues were derived from sales to three customers.
         The Company's international sales represent 90% and 91% of the total
         sales for 2001 and 2000, respectively. At October 31, 2001, 64% of
         accounts receivable were due from four customers (See Note 2).
         Financial instruments, which potentially subject the Company to
         concentrations of credit risk, consist of accounts receivable. The
         Company's allowance for doubtful accounts is based upon management's
         estimates and historical experience. The Company performs ongoing
         credit evaluations of its customers.



                                       30
<PAGE>

         To insure against extraordinary losses on the major account
         concentration, the Company maintains a receivable credit insurance on
         its major international accounts. The policy is prepaid for $1,500,000
         of sales and covers $450,000 of accounts receivable outstanding. Credit
         is individually evaluated and assigned by Euler American Credit
         Indemnity. Additionally, credit and country risk is continually
         evaluated to assess risk and additional collateral and guaranties are
         requested and/or obtained accordingly.

         During 2001, the Company had sales to Europe, South America and the
         North America of approximately 49%, 32%, and 15%, respectively, of net
         sales.

NOTE 12  GAIN ON INVOLUNTARY CONVERSION

         In July 2001, a fire occurred at the Company's manufacturing facilities
         that destroyed a significant amount of machines, equipment and
         inventory. The Company had insurance for the "replacement value" of the
         destroyed equipment and inventory as well as business interruption
         ("BI") insurance. The table below shows the amount of insurance claims,
         the net book value of the assets destroyed, the resulting gain from
         involuntary conversion and the receivable due from the insurance
         company as of October 31, 2001:

<TABLE>
<CAPTION>
                                                            NET BOOK
              ASSET DESTROYED         INSURANCE CLAIM         VALUE             GAIN
         -------------------------    ----------------    -------------    ---------------
<S>                                      <C>                <C>                <C>
         Manufacturing equipment         $1,316,070         $  343,088         $  972,982
         Inventory .............            161,617            127,642             33,975
         BI ....................                  *                  *                  *
                                         ----------         ----------         ----------
                                          1,477,687         $  470,730         $1,006,957
                                                            ==========         ==========

         Less: total proceeds
          received through
          October 31, 2001......          1,139,245 (A)
                                         -------------

         Insurance receivable
           at October 31, 2001..         $  338,442
                                         =============

</TABLE>

         The Company was also reimbursed (or the insurance company paid funds
         directly) for costs expended for cleaning of the facility, air
         conditioner repair, restoration services and other incidental costs
         related to the fire.

         (A)   Of this amount, $161,617 was received for destroyed inventory and
               $977,628 for destroyed fixed assets.

         * See Note 8(G)




                                       31
<PAGE>

NOTE 13  SUBSEQUENT EVENTS

         (a) DISTRIBUTION AGREEMENTS

         The Company is continually in the process of negotiating potential
         distribution agreements with international entities. Additionally, the
         Company is negotiating a royalty agreement with an individual in Spain
         for a new design of healing and final abutment.

         (b) REVOLVING LOAN PAYABLE

         Effective November 26, 2001, the Company refinanced its existing
         revolving loan payable (See Note 5) with Commercebank, N.A. for a
         maximum revolving loan amount of $1,500,000. The interest rate is the
         prime rate in effect plus 1%. The note is a demand obligation requiring
         30 days notice to terminate. The agreement expires on May 31, 2002.

         (c) PROMISSORY NOTE

         Effective November 26, 2001, the Company also signed a term promissory
         note with Commercebank, N.A. in the amount of $300,000 at an interest
         rate of 7%. Monthly payments of accrued interest only shall be made to
         the bank through November 20, 2002. Commencing December 20, 2002, the
         Company shall begin making payments consisting of all then accrued but
         unpaid interest plus a principal installment equal to the outstanding
         principal balance on December 20, 2002 divided by 48. On November 20,
         2006, the Company shall pay all principal and accrued interest due. Any
         principal amounts repaid on the term loan may not be reborrowed.



                                       32