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

                                FORM 10-QSB

                 Quarterly Report Under Section 13 or 15(d)
                 of the Securities and Exchange Act of 1934

For the Quarter Ended:                              Commission File Number:
   June 30, 2002                                              0-27727

                              GENE-CELL, INC.
                             _________________
               (Name of small business issuer in its chapter)

      Nevada                                                91-1766174
_______________________________                  __________________________
(State or other jurisdiction of                  (I.R.S. Employer I.D. No.)
 incorporation or organization)

   8606 Arranmore Lane, Houston, Texas                              77095
(Address of principal executive offices)                         (Zip Code)

     Issuer's telephone number, including area code:     (281) 461-7996
                                                    _______________________

Securities registered pursuant to section 12(b) of the Exchange Act: None

Check whether the Issuer (1) 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
report(s), and (2) has been subject to such filing requirements for the
past 90 days.  (1) Yes [X ]  No [  ]

State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date:

As of August 14, 2002, the issuer had 446,228 shares of its $.001 par value
common stock outstanding.








     This Form 10-QSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which
act contains a safe harbor for forward looking statements.  The Company
believes that investors would be benefitted by the cautionary language
included in this paragraph.  For this purpose any statements contained in
this Form 10-QSB that are not statements of historical fact may be deemed
to be forward-looking statements.  Without limiting the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "estimate," or
"continue" or comparable terminology are intended to identify forward-
looking statements.  These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending
on a variety of factors, many of which are not within the Company's
control.  These factors include but are not limited to economic conditions
generally and in the industries in which the Company may participate;
competition within the Company's chosen industry, including competition
from much larger competitors; technological advances and failure by the
Company to successfully develop business relationships.

PART  I   FINANCIAL INFORMATION

Item 1    Financial Statements


                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                                 __________


                  UNAUDITED CONDENSED FINANCIAL STATEMENTS
                 as of June 30, 2002 and December 31, 2001
   and for the three months and six months ended June 30, 2002 and 2001,
           and for the period from inception, December 12, 1996,
                              to June 30, 2002
                                (Unaudited)


                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                             TABLE OF CONTENTS
                                 __________

                                                                      Page
                                                                     ______
Unaudited Condensed Financial Statements:

  Unaudited Condensed Balance Sheet as of June 30, 2002
    and December 31, 2001. . . . . . . . . . . . . . . . . . . . . . . . .4

  Unaudited Condensed Statement of Operations for the. . . . . . . . . . .5
    three months and six months ended June 30, 2002 and
    2001, and for the period from inception, December 12,
    1996, to June 30, 2002 . . . . . . . . . . . . . . . . . . . . . . . .6

  Unaudited Condensed Statement of Stockholders' Deficit
    for the six months ended June 30, 2002 . . . . . . . . . . . . . . . .

  Unaudited Condensed Statement of Cash Flows for the six
    months ended June 30, 2002 and 2001, and for the period
    from inception, December 12, 1996, to June 30, 2002. . . . . . . . . .7

Notes to Unaudited Condensed Financial Statements. . . . . . . . . . . . .8


                                       GENE-CELL, INC.
                         (A CORPORATION IN THE DEVELOPMENT STAGE)
                                   CONDENSED BALANCE SHEET
                             June 30, 2002 and December 31, 2001
                                        __________
<Table>
<Caption>

                                                        June 30,    December 31,
                                                          2002          2001
                                                      ------------  ------------
<S>                                                  <C>           <C>
     ASSETS                                            (Unaudited)      (Note)
     ------
Current assets:
  Cash and cash equivalents                          $         338 $        -
                                                      ------------  ------------
    Total current assets                                       338          -
                                                      ------------  ------------
Laboratory equipment, net                                  233,369       307,931
Deposits                                                      -            9,605
                                                      ------------  ------------
      Total assets                                   $     233,707 $     317,536
                                                      ============  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:
  Notes payable                                      $     124,521 $     124,000
  Notes payable to stockholders                               -          176,726
  Current portion of capital lease obligations              84,872       107,326
  Accounts payable and accrued liabilities                 234,896       240,582
                                                      ------------  ------------
    Total current liabilities                              444,289       648,634

Capital lease obligations, net of current portion           24,490        74,827
                                                      ------------  ------------
      Total liabilities                                    468,779       723,461
                                                      ------------  ------------
Commitment and contingencies

Stockholders' deficit:
 Common stock, $.001 par value, 100,000,000 shares
  shares authorized, 28,998,812 and 19,653,412 shares
  issued and outstanding at June 30, 2002 and
  December 31, 2001, respectively                           28,999        19,653
  Additional paid-in capital                             5,623,726     4,419,134
  Losses accumulated during the development stage      (5,887,797)   (4,844,712)
                                                      ------------  ------------
    Total stockholders' deficit                          (235,072)     (405,925)
                                                      ------------  ------------
      Total liabilities and stockholders' deficit    $     233,707 $     317,536
                                                      ============ =============
</Table>

Note:  The balance sheet at December 31, 2001 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.

                          See accompanying notes.

                                     4

                                       GENE-CELL, INC.
                         (A CORPORATION IN THE DEVELOPMENT STAGE)
                         UNAUDITED CONDENSED STATEMENT OF OPERATIONS
           for the three months and six months ended June 30, 2002 and 2001 and
            for the period from inception, December 12, 1996, to June 30, 2002
                                        __________
<Table>
<Caption>
                            Three       Three         Six         Six
                           Months      Months       Months      Months      Inception
                            Ended       Ended       Ended        Ended         to
                          June 30,    June 30,     June 30,    June 30,     June 30,
                            2002        2001         2002        2001         2002
                        ----------- -----------  ----------- -----------  -----------
<S>                    <C>          <C>         <C>          <C>         <C>

Operating, general
 and Administrative
 expenses, except
 consulting expense    $     54,940 $   129,405 $    139,353 $   250,860   $1,427,390
Consulting expense          860,850        -         860,850        -         860,850
Research and
 development costs            -         311,755       79,339     598,263    3,510,793
                        ----------- -----------  ----------- -----------  -----------
  Loss from
   operations             (915,790)   (441,160)  (1,079,542)   (849,123)  (5,799,033)

Interest income               -           2,026        -          10,119       39,826
Interest expense           (18,368)     (9,940)     (27,694)    (15,221) (192,741)
Gain on sale of
 assets                       -           -           28,020       -           28,020
Rent income                  36,131       -           36,131       -           36,131
                        ----------- -----------  ----------- -----------  -----------
Net loss                 $(898,027)  $(449,074) $(1,043,085)  $(854,225) $(5,887,797)
                        =========== ===========  =========== ===========  ===========
Weighted
 average shares
  outstanding            26,636,788  19,653,412   23,164,391  19,653,412
                        =========== ===========  =========== ===========
Net loss per common
  share                $     (0.03) $    (0.02) $     (0.05) $     0.04)
                        =========== ===========  =========== ===========

</Table>
















                          See accompanying notes.

                                     5


                              GENE-CELL, INC.

                  (A CORPORATION IN THE DEVELOPMENT STAGE)

           UNAUDITED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

                   For the six months ended June 30, 2001
                                 __________
<Table>
<Caption>
                                                                 Losses
                                                              Accumulated
                                      Common Stock             Additional  During the
                                      --------------------       Paid-In   Development
                              Shares    Amount      Capital      Stage         Total
<S>                        <C>        <C>       <C>          <C>           <C>
                           ---------------------------------------------------------
Balance at
December 31, 2001          19,653,412 $  19,653 $  4,419,134 $(4,844,712)  $(405,925)

Notes payable converted
 to common stock            4,845,400     4,846      245,742       -          250,588

Common stock issued in
 exchange for consulting
 services                   4,500,000     4,500      430,500       -          435,000

Stock options issued in
 exchange for accrued
 compensation                   -          -         102,500        -         102,500

Stock options issued in
 exchange for consulting
 services                       -          -         425,850        -         425,850

Net loss                        -          -           -      (1,043,085)  (1,043,085)
                           ---------------------------------------------------------
Balance at June 30,
  2002                     28,998,812 $  28,999 $  5,623,726 $(5,887,797)  $(235,072)
                           =========================================================



</Table>


                          See accompanying notes.

                                     6



                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
            for the six months ended June 30, 2001 and 2000, and
     for the period from inception, December 12, 1996, to June 30, 2001
                                 __________
<Table>
<Caption>
                                              Six Months    Six Months   Inception
                                                 Ended         Ended         to
                                               June 30,      June 30,      June 30,
                                                 2002          2001          2002
                                             -------------              -------------       -------------
<S>                                          <C>          <C>           <C>
Cash flows from operating activities:
 Net loss                                    $(1,043,085) $   (854,225) $ (5,887,797)
 Adjustments to reconcile net loss to net
  cash used by operating activities               979,304      (84,815)     2,326,187
                                             -------------              -------------       -------------
   Net cash used by operating activities         (63,781)     (939,040)   (3,561,610)
                                             -------------              -------------       -------------
Cash flows from investing activities:
 Purchase of equipment                              -             -          (30,000)
 Proceeds from sale of equipment                   69,300         -            69,300
                                             -------------              -------------       -------------
   Net cash provided by investing
   activities                                      69,300         -            39,300
                                             -------------              -------------       -------------
Cash flows from financing activities:
 Proceeds from sale of common stock                 -             -         2,062,500
 Proceeds from collection of subscription
  receivable                                        -             -         1,500,000
 Payment of stock offering costs                    -             -          (64,100)
 Proceeds from notes payable                       67,610        13,764       635,223
 Payments on notes payable                          -          (43,764)     (253,000)
 Payments on capital lease obligations           (72,791)      (24,459)     (357,975)
                                             -------------              -------------       -------------
   Net cash provided (used) by financing
   activities                                     (5,181)      (54,459)     3,522,648
                                             -------------              -------------       -------------
Net increase (decrease) in cash and cash
  equivalents                                         338     (993,499)           338
                                             -------------              -------------       -------------
Cash and cash equivalents at beginning of
  period                                           -          1,142,083       -
                                             -------------              -------------       -------------
Cash and cash equivalents at end of period   $        338 $     148,584 $         338
                                             =============              =============       =============
</Table>



                                   See accompanying notes.

                                     7

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
             NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                 __________
1.   Organization
     ------------

     Gene-Cell, Inc. (the "Company") is a Nevada Corporation involved in
     biopharmaceutical research.  The Company's research is directed at
     developing gene-based therapies for treatment of a wide variety of
     genetic diseases and disorders using its proprietary technology for
     microinjecting DNA and proteins into living cells.  The Company was
     originally incorporated as Becniel and subsequently adopted name
     changes to Tzaar Corporation and, finally, to Gene-Cell, Inc.  The
     Company is considered a development stage enterprise because it has
     not yet generated revenue from sale of its products.  Since its
     inception, the Company has devoted substantially all of its efforts to
     research and development and the search for sources of capital to fund
     its efforts.

2.   Interim Financial Statements
     ----------------------------

     The accompanying unaudited consolidated financial statements have been
     prepared in accordance with generally accepted accounting principles
     for interim financial information and with the instructions to Form
     10-QSB and Article 10 of Regulation S-B.  Accordingly, they do not
     include all of the information and footnotes required by generally
     accepted accounting principles for complete financial statements.  In
     the opinion of management, all adjustments (consisting of normal
     recurring accruals) considered necessary for a fair presentation have
     been included.  Operating results for the six month and three month
     periods ended June 30, 2002 and 2001 are not necessarily indicative of
     the results that may be expected for the respective full years.

     A summary of the Company's significant accounting policies and other
     information necessary to understand these consolidated interim
     financial statements is presented in the Company's audited financial
     statements for the years ended December 31, 2001 and 2000.
     Accordingly, the Company's audited financial statements should be read
     in connection with these financial statements.

3.   Comprehensive Income
     --------------------

     The Company has adopted Statement of Financial Accounting Standards
     ("SFAS") No. 130, Reporting Comprehensive Income, which requires a
     company to display an amount representing comprehensive income as part
     of the Company's basic financial statements.  Comprehensive income
     includes such items as unrealized gains or losses on certain
     investment securities and certain foreign currency translation
     adjustments.  The Company's financial statements include none of the
     additional elements that affect comprehensive income.  Accordingly,
     comprehensive income and net income are identical.

                                 Continued

                                     8

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
        NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS, Continued
                                 __________
4.   Estimates
     ---------

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

5.   Income Tax
     ----------

     The difference between the Federal statutory income tax rate and the
     Company's effective income tax rate is primarily attributable to
     increases in valuation allowances for deferred tax assets relating to
     net operating losses.

6.   Stockholders' Equity
     --------------------

     During the six months ended June 30, 2002, the Company issued shares
     of its common stock and stock options to convert debt to equity, to
     acquire services and to compensate employees as follows:

     During the year ended December 31, 2001 and the quarter ended March
     31, 2002, the Company accrued, but was unable to pay, compensation to
     an officer/stockholder and to a company employee totaling $102,500.
     In April 2002 the Company reached an agreement to issue 2,050,000
     stock options exercisable at $0.05 per share for ten years in payment
     of the accrued compensation.

     In February 2002 the Company entered an agreement with the
     Princeton/Houston Management/Scientific Team ("PHMST") consisting of
     recognized scientific/medical/business development experts located in
     Princeton, New Jersey and Houston, Texas.  In exchange for services
     rendered and to be rendered by PHMST, the Company agreed to grant
     PHMST options to purchase 8,850,000 shares of common stock of the
     Company at a price of $0.20.  2,505,000 of these options were to vest
     immediately and the remaining 6,345,000 were to vest at certain
     milestones.  In March 2002 PHMST decided not to participate further
     with the Company.  As the milestones are no longer achievable, the
     Company has determined that the 2,505,000 options which vested
     immediately would be the only compensation awarded under the
     consulting agreement.  The 2,505,000 options granted to the
     consultants were valued at $425,850 using the Black-Scholes option
     pricing model.

                                 Continued

                                     9

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
        NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS, Continued
                                 __________

6.   Stockholders' Equity, continued
     ---------------------

     During the quarter ended March 31, 2002, the Company entered into an
     agreement with a consulting firm to assist the Company in fund raising
     and investor relations activities in exchange for 1,500,000 freely
     trading shares of the Company's common stock.  A major stockholder of
     the Company agreed to provide 2,000,000 freely trading shares in
     exchange for 4,500,000 shares, restricted under rule ______________.
     The 4,500,000 shares that the Company issued to the major stockholder
     were valued at $0.03 to $0.13 market price of the common stock on the
     date of various transactions involving the major stockholder that
     provided the freely trading shares.  The consulting firm's activities
     did not result in any financing for the Company within the first three
     months of the agreement, and management believes that the consulting
     firm did not perform in accordance with the term of their contract;
     however, the financial position of the Company has prevented the
     undertaking of legal actions.  During the quarter ended June 30, 2002,
     the Company recognized expense totaling $435,000 related to the
     issuance of these shares to consultants.

     During the quarter ended June 30, 2002, in order to improve the
     working capital position of the Company, certain stockholders agreed
     to convert $250,588 of notes payable and accrued interest to 4,845,000
     shares of the Company's common stock.  The conversion was based upon
     the quoted market price at the date the conversion agreement was
     reached.

     On June 14, 2002, the Company's board of directors approved a 1 for 65
     reverse stock split to be effective July 23, 2002.  This stock split
     has not been given effect in these financial statements.




                                 Continued

                                     10


                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
        NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS, Continued
                                 __________

7.   Gain on Sale of Assets
     ----------------------

     During the three months ended March 31, 2002, the Company sold certain
     laboratory equipment and supplies to the Malcom Hewitt Weiner
     Foundation ("MHWF").  The laboratory equipment and supplies, which had
     an original cost of approximately $257,000, were sold for $45,000 and
     the Company recognized a gain on the sale of $28,030; the MHWF also
     paid the Company $15,000 for the relocation of purchased equipment and
     equipment leased by the Company to Newtown, Pennsylvania.  The
     proceeds from the sale were used primarily to pay certain delinquent
     capital lease obligations.  In a separate transaction, the Company
     sold certain laboratory equipment for $9,300 and recognized no gain or
     loss on the transaction.

8.   Equipment Rental
     ----------------

     In March 2002, the Company relocated its laboratory equipment from
     Houston, Texas to Newton, Pennsylvania, where it will share facilities
     operated by the Fund for Inherited Disease Research (the "Fund"),
     subject to availability of funds.  The monthly leases for lab
     equipment are currently being paid by the Fund, in exchange for the
     ability of the Fund to use the equipment as needed.  The $36,131 of
     payments made by the Fund are presented in the accompanying statement
     of operations as equipment rental.

9.   Non-Cash Investing and Financing Activities
     -------------------------------------------

     During the six months ended June 30, 2001, the Company acquired
     property and equipment under capital lease obligations of $102,244.

Item 2    Plan of Operation

     For a complete understanding, this Plan of Operations should be read
in conjunction with Part I- Item 1. Financial Statements to this Form 10-
QSB.

     Gene-Cell, Inc.(the "Company"), is a Nevada corporation involved in
biopharmaceutical research. The Company is considered a development stage
enterprise because it has not yet generated revenue from sale of its
products.  Since its inception, the Company has devoted substantially all
of its efforts to research and development and the search for sources of
capital to fund its efforts.

Source of Funds
---------------

     Since the beginning of the fourth quarter of fiscal 2001, the Company
has not had sufficient funds to continue its ongoing research activities.
As a consequence, laboratory operations were suspended in the fourth
quarter of fiscal 2001.  During the first quarter of fiscal 2002, the
Company sold certain equipment it owned as well as laboratory
supplies/reagents in order to resolve delinquent payments to equipment
leasing companies.  The equipment and laboratory supplies were sold to the
Malcolm Hewitt Wiener Foundation for approximately $45,000.  No equipment
was sold during the second quarter of fiscal 2002.

                                     11
     The Company borrowed approximately $250,588 from shareholders,
management, and key employees throughout fiscal 2001 and through the second
fiscal quarter of 2002.  The borrowed funds have been used for ongoing
activities of the Company since October 2001(e.g., fund raising and
searching for collaborative partnership opportunities).  During the quarter
ended June 30, 2002, the Company issued 4,845,500 pre-split or 74,546 post-
split restricted common shares to resolve these outstanding debts.

     Similarly, in April 2002, the Company reached an agreement to issue
options to purchase up to 2,050,000 pre-split or 31,538 post-split
restricted common shares of Company stock to management and key employees
who had worked for the Company since October 2001 without cash
compensation.  These options were issued on July 29, 2002.  The exercise
price of the options is $.05 per share.  The options expire ten years from
the date they were granted.

     The Company's monthly lease expenses for its lab equipment is
currently being paid by the Fund for Inherited Disease Research.  In
exchange for paying these obligations for the Company, the Fund for
Inherited Disease Research uses the Company's equipment as needed.

     Although the Company is actively seeking bridge financing and
additional funding, it has been unsuccessful in securing such financing
and/or funding.  The Company is in immediate need of additional capital to
continue operations.  At the present time, there is no way to predict when,
or if, any contributions may be made.  There is no assurance that the
Company will be successful in obtaining additional funding on attractive
terms or at all.  If the Company is unsuccessful in obtaining significant
additional funding or engaging in a merger or acquisition transaction by
the end of the third quarter of 2002, it is unlikely the Company will be
able to continue any operations.

     Due to the Company's grave financial situation and the distinct
possibility that it may not be able to secure sufficient additional
financing and/or funding to complete research and development of its
technology, the Company has begun to investigate the possibility of
divesting itself of its rights and interest in the technology, along with
the associated liabilities.  The Company is also investigating possible
merger and/or acquisition candidates.  To that end, the Company has begun
negotiations to acquire Energy Resource Management, Inc., a newly formed
Nevada corporation, in exchange for restricted common shares of  the
Company.  It is anticipated that if an agreement is reached, Energy
Resource Management, Inc., will become a wholly-owned subsidiary of the
Company and a change in control of the Company will occur.  The Company
anticipates that a definitive agreement with Energy Resource Management,
Inc., may be reached during the third quarter of 2002.

     Energy Resource Management, Inc., is seeking to commence operations as
an energy marketing company providing energy related products and services
to commercial, industrial, manufacturing and agricultural clients, as well
as wholesale entities such as municipalities, rural electric coops and
local distribution companies.

Results of Operations
---------------------
     During the period from inception, December 12, 1996, to June 30, 2002,
the Company has not generated any revenue from sales of clinical products
and does not expect to generate any material revenue from sales of clinical
products for at least two to three years because, during such time period,
management will use substantially all Company resources for further
development of its technology, including microinjection tools.


                                     11

     As of June 30, 2002, the Company had an accumulated deficit of
($5,887,797) funded by paid-in capital.  During the quarter ended June 30,
2002, the Company had losses from operations of ($915,790) compared to
losses in the same quarter of 2001 of ($441,160).  The increase is due to
recognition of expenses relating to the consulting agreement and the
issuance of stock options to PHMST.

     The Company has financed its operations mainly through the sale of its
common stock and has been entirely dependent on outside sources of
financing for continuation of operations.  For the remainder of fiscal
2002, the Company expects to remain scaled back in an attempt to minimize
monthly expenditures while it continues to seek additional funding. As
stated previously, there is no assurance that the Company will be
successful in obtaining additional funding on attractive terms or at all.

     The Company currently has one Ph.D.-trained scientist working as a
part-time employee.  The Company does not anticipate increasing its part-
time employee to full-time status and/or hiring additional employees in
2002 unless the Company is successful in securing additional funding.
Since October 2001, the Company has had insufficient funds to pay salaries
or other cash compensation to its employees.  If the Company is unable to
raise significant additional funds it is unlikely they will  be able to
retain the services of its part-time employee.

     In February of 2002, the Company entered an agreement with the
Princeton/Houston Management/Scientific Team (PHMST) consisting of
recognized scientific/medical/business development experts located in
Princeton, New Jersey and Houston, Texas.  In exchange for services
rendered and to be rendered by PHMST, the Company agreed to grant PHMST
options to purchase 8,850,000 shares of common stock of the Company at a
price of $0.20.   2,505,000 of these options were to vest immediately and
the remaining 6,345,000 were to vest at certain milestones.  In March 2002,
PHMST decided not to participate with the Company mainly due to it's
inability to raise sufficient funding.  The Company has determined that the
2,505,000 options which immediately vested in PHMST shall be the only
compensation awarded.  The options were valued at $425,850 using the Black-
Scholes option pricing model.  Following the reverse-split of the Company's
common stock, the number of shares acquirable upon exercise of the options
was accordingly decreased to 38,538.

     The report from the Company's independent accountants includes an
explanatory paragraph that describes substantial doubt concerning the
ability of the Company to continue as a going concern, without continuing
additional contributions to capital.  The Company expects to incur losses
for the foreseeable future due to the significant costs associated with
research and development activities which will be necessary for further
development of applications for the Company's microinjection therapy.  See
"Financial Statements - Report of Independent Accountants".

PART II   OTHER INFORMATION

Item 1         Legal Proceedings

          None.

Item 2         Changes in Securities

Recent Sales of Unregistered Securities.

     No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified.

                                     12

     The following securities, which were not registered under the
Securities Act of 1933 were issued during the first quarter of fiscal year
2002:

     In April 2002, the Company reached an agreement to issue options to
purchase up to 2,050,000 pre-split or 31,538 post-split restricted common
shares of Company stock to management and key employees who had worked for
the Company since October 2001 without cash compensation.  These options
were issued on July 29, 2002.  The exercise price of the options is $.05
per share.  The options expire ten years from the date they were granted.
The Company made no public offers or sales of these securities.  The shares
were issued pursuant to an exemption from registration under Section 4(2)
of the Securities Act of 1933.

     On June 14, 2002, the Company issued 4,845,500 pre-split or 74,548
post-split restricted common shares as repayment of funds borrowed from
shareholders, management, and key employees throughout fiscal 2001 and
through the second fiscal quarter of 2002, in the amount of approximately
$250,588.  The Company made no public offers or sales of these securities.
The shares were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933.

     On June 14, 2002, the Company issued 4,500,00 pre-split or 69,231
post-split restricted common shares to a Company shareholder. During the
quarter ended March 31, 2002, the Company entered into an agreement with a
consulting firm to assist the Company in fund raising and investor
relations activities.  As compensation for these services, the Company
agreed to issue 4,500,000 restricted common shares to a Company shareholder
to induce that shareholder to deliver 1,500,000 freely trading shares to
the consulting firm.  The 4,500,000 shares were valued between $.03 and
$.13 based on the market price of the Company's common stock on the dates
the shares were delivered.  Based thereon, the value of the services for
which the shares were issued was $435,000.  The Company made no public
offers or sales of the 4,500,000 common shares.  The shares were issued
pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933.

Item 3         Defaults Upon Senior Securities

          None.

Item 4         Submission of Matters to a Vote of Security Holders

          None.

Item 5         Other Information

     The Company is currently negotiating to acquire Energy Resource
Management, Inc., a newly formed Nevada corporation, in exchange for
restricted common shares of  the Company.  It is anticipated that if an
agreement is reached, Energy Resource Management, Inc., will become a
wholly-owned subsidiary of the Company and a change in control of the
Company will occur.  The Company anticipates that a definitive agreement
with Energy Resource Management, Inc., may be reached during the third
quarter of 2002.

     Energy Resource Management, Inc., is seeking to commence operations as
an energy marketing company providing energy related products and services
to commercial, industrial, manufacturing and agricultural clients, as well
as wholesale entities such as municipalities, rural electric coops and
local distribution companies.

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     Reverse Stock Split
     -------------------

     On June 14, 2002, the board of directors of the Company declared the
advisability of a one-for-sixty five reverse stock split of the issued and
outstanding shares of the Company's Common Stock as described in the
Amendment.  On June 18, 2002, the reverse stock split, was adopted by the
written consent of holders of a majority of the voting rights represented
by the Company's outstanding shares of stock entitled to vote thereon in
accordance with Section 78.320(2) of the Nevada Revised Statutes ("NRS").

     The board of directors decided to obtain the written consent of the
holders of a majority of the voting rights represented by the Company's
outstanding shares of stock entitled to vote upon the reverse stock split
to reduce the costs and management time required to hold a special meeting
of stockholders and to implement the reverse stock split in a timely
manner.

     The reverse stock split was effected by filing an amendment to the
Corporation's Articles of Incorporation.  The reverse stock split became
effective on July 23, 2002.  Following the reverse stock split, the Company
had 446,228 common shares issued and outstanding.  The authorized common
stock of the Company remained unchanged.

Item 6         Exhibits and Reports on Form 8-k

     (a)  Exhibits - Exhibit 99.1  Certification Pursuant to Section 906 of
          the Sarbanes-Oxley Act of 2002.

     (b)  Reports on Form 8-k - No reports on Form 8-k were filed during
          the quarter.



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                                 SIGNATURES

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


                                     Gene-Cell, Inc.

Date: August 21, 2002                /S/ Brian R. Davis
                                     ----------------------------
                                     Brian R. Davis, President


Date: August 21, 2002                /S/ Michael R. Davis
                                     ----------------------------
                                     Michael R. Davis, Acting Secretary












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