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
---------------------                                ----------------------
 September 30, 2001                                          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)

   1010 Hercules, Houston, Texas                                   77058
---------------------------------------                          ----------
(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 November 12, 2001, issuer had 19,653,412 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 September 30, 2001 and December 31, 2000, and for
    the three months and nine months ended September 30, 2001 and 2000,
           and for the period from inception, December 12, 1996,
                           to September 30, 2001
                                (Unaudited)





                                    F-1


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

                                                                      Page
                                                                     ------

Unaudited Condensed Financial Statements:

  Unaudited Condensed Balance Sheet as of
    September 30, 2001 and December 31, 2000                            F-3

  Unaudited Condensed Statement of Operations
    for the three months and nine months ended
    September 30, 2001 and 2000, and for the
    period from inception, December 12, 1996,
    to September 30, 2001                                               F-4

  Unaudited Condensed Statement of Stockholders'
    Equity for the nine months ended September 30,
    2001                                                                F-5

  Unaudited Condensed Statement of Cash Flows
    for the nine months ended September 30, 2001
    and 2000, and for the period from inception,
    December 12, 1996, to September 30, 2001                            F-6

  Notes to Unaudited Condensed Financial Statements                     F-7
















                                    F-2

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                          CONDENSED BALANCE SHEET
                  September 30, 2001 and December 31, 2000
                                 __________

<Table>
<Caption>
                                                September 30,  December 31,
                                                     2001          2000
     ASSETS                                      (Unaudited)      (Note)
     ------                                     ------------- -------------
<S>                                            <C>           <C>
Current assets:
  Cash and cash equivalents                     $     12,142  $  1,142,083
                                                ------------- -------------

     Total current assets                             12,142     1,142,083

Deposits                                              18,687        14,985

Equipment under capital leases, net                  253,797       199,701
                                                ------------- -------------
     Total assets                               $    284,626  $  1,356,769
                                                ============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------

Current liabilities:
  Note payable to a bank                        $     60,000  $     30,000
  Note payable to a stockholder                      100,000             -
  Current portion of capital lease obligations        90,546        53,298
  Accounts payable and accrued liabilities            56,003       167,858
                                                ------------- -------------
     Total current liabilities                       306,549       251,156

Capital lease obligations, net of current
  portion                                            105,093        70,300
                                                ------------- -------------
      Total liabilities                              411,642       321,456
                                                ------------- -------------
Commitment and contingencies

Stockholders' equity (deficit):
  Common stock, $.001 par value, 100,000,000
    shares authorized, 19,653,412 shares issued
    and outstanding                                    19,653        19,653
  Additional paid-in capital                        4,381,634     4,381,634
  Losses accumulated during the development
    stage                                         (4,528,303)   (3,365,974)
                                                ------------- -------------
    Total stockholders' equity (deficit)            (127,016)     1,035,313
                                                ------------- -------------
      Total liabilities and stockholders'
        equity (deficit)                        $    284,626  $  1,356,769
                                                ============= =============
</Table>
Note:  The balance sheet at December 31, 2000 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.
                                             F-3
                                       GENE-CELL, INC.
                         (A CORPORATION IN THE DEVELOPMENT STAGE)
                         UNAUDITED CONDENSED STATEMENT OF OPERATIONS
for the three months and nine months ended September 30, 2001 and 2000 and
 for the period from inception, December 12, 1996, to September 30, 2001
                                        __________
<Table>
<Caption>
                              Three      Three        Nine       Nine
                             Months     Months       Months     Months     Inception
                              Ended      Ended       Ended      Ended         to
                           September  September    September  September    September
                            30, 2001   30, 2000     30, 2001   30, 2000     30, 2001
                           ---------- ----------   ---------- ----------  -----------
<S>                       <C>        <C>          <C>        <C>         <C>
Operating, general and
  administrative
  expenses                 $   76,130 $   56,610   $  326,990 $  130,762  $ 1,237,274
Research and development
  costs                       223,502    168,198      821,765    435,779    3,183,495
                           ---------- ----------   ---------- ----------  -----------
  Loss from operations      (299,632)  (224,808)  (1,148,755)  (566,541)  (4,420,769)

Interest income                   163        493       10,282      5,471       42,505
Interest expense              (8,635)    (4,963)     (23,856)   (11,184)    (150,039)
                           ---------- ----------   ---------- ----------  -----------
Net loss                   $(308,140) $(229,278) $(1,162,329) $(572,254) $(4,528,303)
                           ========== ==========   ========== ==========  ===========
Weighted average shares
  outstanding              19,653,412 17,778,412   19,653,412 17,778,412
                           ========== ==========   ========== ==========

Net loss per common
  share                    $   (0.02) $   (0.01)   $   (0.06) $   (0.03)
                           ========== ==========   ========== ==========

</Table>












                          See accompanying notes.
                                    F-4

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
      UNAUDITED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                for the nine months ended September 30, 2001
                                 __________

<Table>
<Caption>
                                                                   Losses
                                                              Accumulated
                                                 Additional    During the
                                       ---------------------     Paid-In  Development
                              Shares     Amount     Capital         Stage       Total
                           ---------- ----------  ---------- ------------  ----------
<S>                       <C>        <C>         <C>        <C>           <C>

Balance at
December 31, 2000          19,653,412 $   19,653  $4,381,634 $(3,365,974)  $1,035,313

Net loss                         -          -           -     (1,162,329) (1,162,329)
                           ---------- ----------  ---------- ------------  ----------

Balance at
September 30, 2001         19,653,412 $   19,653  $4,381,634 $(4,528,303) $ (127,016)
                           ========== ==========  ========== ============  ==========

</Table>






                          See accompanying notes.
                                    F-5

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
         for the nine months ended September 30, 2001 and 2000, and
  for the period from inception, December 12, 1996, to September 30, 2001
                                 __________

<Table>
<Caption>
                                            Nine Months Nine Months    Inception
                                               Ended       Ended          to
                                              September   September    September
                                              30, 2001    30, 2000    30, 2001
                                            ----------- -----------  -----------
<S>                                        <C>         <C>          <C>
Cash flows from operating activities:
  Net loss                                 $(1,162,329) $ %572,254) $(4,528,303)
  Adjustments to reconcile net loss
    to net cash used by operating
    activities                                 (51,161)      45,967    1,083,718
                                            ----------- -----------  -----------
      Net cash used by operating
        activities                          (1,213,490)   (526,287)  (3,444,585)
                                            ----------- -----------  -----------
Cash flows from financing activities:
  Proceeds from sale of common stock                  -           -    2,062,800
  Proceeds from collection of
    subscription receivable                           -     500,000    1,500,000
  Payment of stock offering costs                     -           -     (64,100)
  Proceeds from notes payable                   173,764      94,000      504,651
  Payments on notes payable                    (43,764)           -    (266,764)
  Payments on capital lease obligations        (46,451)    (68,631)    (279,860)
                                            ----------- -----------  -----------
      Net cash provided by financing
        activities                               83,549     525,369    3,456,727
                                            ----------- -----------  -----------
Net increase (decrease) in cash and
  cash equivalents                          (1,129,941)       (918)       12,142

Cash and cash equivalents at beginning
  of period                                   1,142,083      28,670          -
                                            ----------- -----------  -----------
Cash and cash equivalents at end of
  period                                    $    12,142 $    27,752  $    12,142

</Table>








                          See accompanying notes.
                                    F-6


                              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, 2001 and
2000 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, 2000 and 1999.  Accordingly, the Company's
audited financial statements should be read in connection with these
financial statements.













                                 Continued
                                    F-7
                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
        NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS, Continued
                                 __________

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.


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

     During the nine months ended September 30, 2001, the Company acquired
property and equipment under capital lease obligations of $118,492.













                                    F-8


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.

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

     The Company operates in the biotechnology sector of the pharmaceutical
industry sometimes referred to as the biopharmaceutical or life science
industry.  The mission of the Company is to become a global leader in non-
embryonic stem cell gene therapy by using the Company's non-viral
technologies to repair and/or compensate for mutations in defective genes.
A change in the DNA sequence or code of a gene is called a mutation.  Often
mutations are harmless; however, some mutations lead to serious disease.
There are about 4,000 diseases that have been traced to gene disorders or
mutations including Sickle Cell Disease and Muscular Dystrophy.

     The Company's approach differs from conventional medical treatment of
genetic diseases.  Rather than treating the symptoms, the gene therapy
proposed by the Company focuses on the cause of disease at the origin, the
DNA. To further the Company's efforts in gene therapy research it currently
employs a delivery technique called microinjection.  Microinjection
involves injecting cells with minute amounts of material using very small
glass needles.  To utilize this technique the Company developed new needles
because commercially available needles were too large and would cause
physical damage to the cell being injected. The Company has filed for a
patent on these unique microinjection needles.

     In addition to the development of a smaller needle, the system
developed by the Company requires that a cell be immobilized (attached to a
plastic dish or surface) to perform microinjection.  The Company has made
major advances in this area by developing a novel proprietary method for
immobilizing cells without losing cell function.   The development of this
immobilization technology was critical to the success of the Company and it
has filed for a patent on this technology.

     A unique aspect of the Company's non-viral process is that it is
performed on a patient's stem cells outside the body or ex vivo, thus the
patient does not need to be present for the gene modification.  Stem cells
are special cells in the body that are basic or building block cells.
These cells have the ability to continually create large numbers of more
specialized cells.  The Company is applying its technology to non-embryonic
stem cells.  These are special types of stem cells that can be found in
adult tissues such as bone marrow, as well as in blood derived from the
umbilical cord after birth.  The Company's technology allows for attaching
or immobilizing human stem cells.  These cells can then be microinjected
with properly encoded, healthy DNA.  Following this process, the DNA
treated stem cells can be reintroduced into the patient's body where they
can re-populate.  It is anticipated that these DNA treated and/or corrected
cells will produce millions of cell offspring transmitting the desired
effects. The Company has selected to initially focus on blood stem cells
for gene therapy.   Blood stem cells are referred to as "mother" blood
cells and are also found in bone marrow and umbilical cord blood.  These
"mother" blood cells have the capacity to give rise to all the cells that
make up the blood, including white and red blood cells.  Through
microinjection of blood stem cells, the probability of delivering DNA to
cells that will create cell offspring with the desired effect may be
enhanced.

     The Company employs the non-viral method of microinjection for
delivering DNA directly to the nucleus of individual target cells.
Depending upon the disease, this may involve correction of a single base or
small stretch of bases within a gene in the existing DNA of the cell (gene
repair) or, in more complicated disorders, introducing a functioning intact
gene to the cell (gene compensation). The Company is actively investigating
both of these gene modification strategies in blood stem cells.

     Gene Repair is a powerful technique that exploits the inherent repair
capabilities of the cell. The gene repair programs employed by the Company
take advantage of the cell's endogenous proteins that protect the integrity
of the genome.  Several copies of small molecules of DNA carrying the
correct sequence for the gene of interest are introduced into the cell via
microinjection.  These DNAs are highly similar to the region surrounding
the genetic mutation, except the introduced DNA contains the corrected DNA
sequence.  Naturally occurring cellular processes 'cut out' the defective
genomic sequence and 'paste in' the corrected sequence, incorporating the
corrected region into the genome. The cell's own proteins repair the
defect, maintaining the corrected DNA in a natural state and insuring
appropriate gene regulation and function.

     Gene repair is best suited to diseases arising from a known minor
change in the DNA sequence. Gene repair cannot be easily accomplished with
viruses, due to the specialized nature of both the DNA and the repair
process. The Company, together with its partners and collaborators is
initially targeting this strategy for the gene therapy of blood disorders.
The Company has obtained exclusive rights to specialized repair molecules,
which GCI is currently assessing for gene therapy of sickle cell disease.

     The Company has demonstrated significant levels of conversion of
normal or healthy b-globin sequence to sickle or unhealthy b-globin
sequence in normal blood stem/progenitor cells and their progeny using the
licensed DNA repair molecules.  The blood stem/progenitor cells were
microinjected with targeted gene repair molecules designed to introduce the
sickle mutation in the b-globin sequence.  This demonstration of the normal
to sickle conversion was an essential first step in the ultimate
utilization of gene repair technology as a genetic therapy.  The normal to
sickle conversion was attempted first due to the ready availability of
normal blood stem cells.  These findings in combination with the Company's
microinjection technologies may indicate a utility for targeted gene
modification.  The Company's findings have been reported at international
scientific conferences including the Annual American Society for Gene
Therapy Conference (Seattle, WA 2001) and Genome Medicine: Gene Therapy for
the Millennium Conference (Rome, Italy 2001).

     The Company's technology may also have applications in the functional
genomics field and the related field of transgenics.  A method of rapidly
and efficiently changing specific sequences of DNA could be employed to
produce cells or cell lines with specific, defined alterations in target
DNA sequences suspected of having a certain function; the modified cells
could be used to assess the function of specific mutations and genes.  This
application of the Company's technology would be beneficial to the
pharmaceutical industry for studying the function(s) of individual genes
and the possible contribution of these genes to various diseases.  Multiple
biopharmaceutical and genomics companies are interested in efficient and
effective technologies for the generation of functional genomic and target
gene validation products including gene modified cellular assays and
transgenic animals.  These animals could be used as models of human
disease.  The Company's technology platform, combining microinjection with
targeted gene modification, may provide the necessary tools for these
applications.

     In March of 2001, the Company entered an agreement with Technobotics,
Inc. ("TI"), a Texas robotics corporation, in which it will combine efforts
with TI to research and develop an Automated Microinjection Workstation
("AMW") that will enable rapid and efficient microinjection of cells for
clinical and commercial functional genomics applications.  The AMW platform
represents, to the knowledge of the Company, the best technology available
for genetic modification of human blood stem cells.  A Phase I prototype
has been completed and tested at the Company.  Significant progress has
been made on a Phase II prototype which is currently being tested at the
Company.  The Company will share both costs and benefits of such research
and development efforts.  TI brings expertise in automation and computer
vision processing that are vital to the successful development of an AMW.

     In summary, the Company's product is a biotechnology platform
consisting of five components: 1) unique microinjection needles; 2) cell
attachment/detachment technologies; 3) a robotics workstation that enables
rapid and efficient microinjection; 4) genetic material and various gene
repair and gene compensation technologies; and 5) somatic stem cell
isolation and expansion.  The Company has licensing rights to patents
granted relating to gene repair and gene compensation and has also filed
continuation-in-part patent applications during the first quarter of fiscal
2001 (component 4).  The Company also has patents pending on components 1
and 2, and plans to submit patents covering hardware and software contained
in component 3.

     The Company employs acceptable scientific methods of research, and
their technology has been verified through test results and review both at
the Company and at the University of Texas Medical Branch.  This work has
been presented in university lectures, at gene therapy conferences, and was
published in Blood (Blood 95: 437-444, 2000), the Journal of the American
Society of Hematology.

     The Board of Director's Compensation Committee, during the first and
second quarters of 2001, has deliberated and approved the specific issuance
of additional key employee and director stock options per the 1996 Stock
Option Plan.   This was to bring the Gene-Cell option award schedule into
alignment with normative standards within the biotechnology industry.  Most
of these options have been granted during the third quarter of this year.

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

     The Company believes it has sufficient funding to continue operations
through November of 2001.  The Company plans on opening a private offering
in November of 2001 to raise up to $1,000,000 in an attempt to secure
sufficient funding to continue operations through fiscal 2001. There can be
no assurance, however, that any or all of the private offering will be
subscribed for.  The Company is actively seeking bridge financing and other
funding sources.  It is customary for biotech companies at a certain stage
of research to actively pursue partnerships and/or licensing agreements
with large biopharmaceutical companies.  The Company continues to seek
similar relationships with two companies and has entered a collaborative
agreement with Athersys, a Delaware corporation.  The two relationships
referred to are in the early stages of development and there can be no
assurance that any relationship will ever fully develop with either

company.  Future partnership(s)/investment(s) with a pharmaceutical/large
biotechnology company may be centered on one particular disease or a group
of related diseases in which said company has clinical and financial
interests.  Such an arrangement would provide the Company with revenue to
further develop the technology required for a particular program,
additional scientific and legal expertise, and assistance and guidance
through the regulatory processes required prior to beginning clinical
trials.

     In addition, licensing agreements and/or partnerships with various
pharmaceutical firms relating to gene function studies would result in
revenues over the next few years.  When possible, royalties could be
generated from the sale of pharmaceuticals developed using information
gained from the Company's gene modified cells.

Results of Operations
---------------------

     During the period from inception, December 12, 1996, to June 30, 2001,
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.

     As of September 30, 2001, the Company had an accumulated deficit of
($4,528,303) funded by paid-in capital.  During the quarter ended September
30, 2001, the Company had losses from operations of ($308,140) compared to
losses in the same quarter of 2000 of ($229,278).  The increase is do to
increased research and development efforts. The Company does not expect to
make any major capital expenditures in the foreseeable future, but expects
that operating losses will continue until such time as product sales
generate sufficient revenues to fund its continuing operations, as to which
there can be no assurance.

     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.  In the third quarter of 2001,
the Company borrowed approximately $100,000 from a shareholder of the
Company in order to continue operations.  This loan incurs interest at a
rate of ten (10%) per annum and the loan balance is payable upon demand.

     The Company has currently minimized its research and development
activities in order to reduce expenditures and to conserve capital.  The
Company does not plan to hire additional personnel during fiscal year 2001
unless new collaborations with cash or additional investment requires and
allows for additional employees.   The Company will be required to raise
additional funding in the fourth quarter in order to continue operations.
There is no assurance that the Company will be successful in obtaining
additional funding on attractive terms or at all.

     The Company's capital requirements will depend on numerous factors,
including the progress of its research and development programs; the time
and cost involved in obtaining regulatory approvals; the cost of filing,
prosecuting, defending and enforcing any patent claims and other
intellectual property rights; the economic impact of competing
technologies; developments and changes arising from the Company's
continuing research; and the terms of any new collaborative, licensing and
other arrangements that the Company may establish.

     The Company's ability to achieve profitability will depend, in part,
on its ability to successfully develop clinical applications and obtain
regulatory approvals for its products and to develop the capacity to
manufacture and market such products on a wide scale.  There is no
assurance that the Company will be able to successfully make the transition
from research and development to manufacturing and selling commercial
microinjection therapy products on a broad basis.  While attempting to make
this transition, the Company will be subject to all risks inherent in a
growing venture, including the need to produce reliable and effective
products and to develop marketing expertise and an effective sales force.

     Further, the Company's success may depend, in part, on revenues
derived from the sale of the microinjection therapy products in the health
care market.  In the event a market for the products the Company intends to
produce does not develop as anticipated, the Company's business, financial
condition and results of operations will be adversely affected.
Additionally, cost containment measures instituted by health care providers
as a result of regulatory reform or otherwise could result in greater
selectivity in the allocation of capital funds, and such, selectivity could
have a material adverse effect on the Company's ability to sell its
microinjection therapy and services.

     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 may 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.

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


     Employee Stock Option Grants
     ----------------------------

     Each Employee Stock Option Grant listed below vest at 33.3% per year
after the grant date and become fully vested after three years from the
grant date.  All options listed below are exercisable, upon vesting, at a
price of $1.00 for a period of ten years beginning at the grant date.

     David Brown, an employee of the Company, received options to purchase
up to1,378 shares of common stock on April 1, 2001 and up to 919 shares of
common stock on June 1, 2001.

     Victor Carsrud, an employee of the Company, received options to
purchase up to 3,750 shares of common stock on April 1, 2001 and up to
3,750 shares of common stock on June 1,2001.

     Barbara Chow, an employee of the Company, received options to purchase
up to 3,750 shares of common stock on April 1, 2001 and up to 3,750 shares
of common stock on June 1,2001.

     Brian Davis, an employee of the Company, received options to purchase
up to 3,750 shares of common stock on April 1, 2001 and up to 3,750 shares
of common stock on June 1,2001.

     Nicole Prokopishyn, an employee of the Company, received options to
purchase up to 3,750 shares of common stock on April 1, 2001 and up to
3,750 shares of common stock on June 1,2001.

     Tamara Tsulaia, an employee of the Company, received options to
purchase up to 3,750 shares of common stock on April 1, 2001 and up to
2,813 shares of common stock on June 1,2001.

     Judith Yannariello Brown, an employee of the Company, received options
to purchase up to 3,750 shares of common stock on April 1, 2001 and up to
3,375 shares of common stock on June 1,2001.

     Aqing Yao, an employee of the Company, received options to purchase up
to 938 shares of common stock on April 1, 2001.

     Hong Liu, an employee of the Company, received options to purchase up
to 638 shares of common stock on April 1, 2001.

     Each Employee Stock Option Grant listed below vest at 25% upon the
grant date and then an additional 25% per year on the anniversary of the
grant date and become fully vested after three years from the date of
grant.  All options listed below are exercisable, upon vesting, at a price
of $0.35 per share for a period of ten years beginning at the grant date.

     Brian Davis, an officer and director of the Company, received options
to purchase up to 550,000 shares of common stock on August 25, 2001.

     Michael Davis, an officer of the Company, received options to purchase
up to 100,000 shares of common stock on August 25, 2001.

     David Brown, an officer of the Company, received options to purchase
up to 120,000 shares of common stock on August 25, 2001.

     Gunther Soraperra, a director of the Company, received options to
purchase up to 100,000 shares of common stock on August 25, 2001.

     Tom Kubota, a director of the Company, received options to purchase up
to 100,000 shares of common stock on August 25, 2001.

     Judith Yannariello-Brown, an employee of the Company, received options
to purchase up to 225,000 shares of common stock on August 25, 2001.

     Nicole L. Prokipishyn, an employee of the Company, received options to
purchase up to 225,000 shares of common stock on August 25, 2001.

     Barbara L. Chow, an employee of the Company, received options to
purchase up to 75,000 shares of common stock on August 25, 2001.

     N.D. Victor Carsrud, an employee of the Company, received options to
purchase up to 75,000 shares of common stock on August 25, 2001.

     Gina L. Barron, an employee of the Company, received options to
purchase up to 8,600 shares of common stock on August 25, 2001.


Item 3         Defaults Upon Senior Securities
          None.


Item 4         Submission of Matters to a Vote of Security Holders

          None.


Item 5         Other Information

           None.


Item 6         Exhibits and Reports on Form 8-k

     (a) Exhibits - None.

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









                                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: November 12, 2001            By: /s/ Brian R. Davis
                                   --------------------------
                                   President


Date: November 12, 2001            By: /s/ David Brown
                                   ----------------------------
                                   Secretary