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
---------------------                                ----------------------
 March 31, 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 May 15, 2002, 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
             for the three months ended March 31, 2002 and 2001
           and for the period from inception, December 12, 1996,
                             to March 31, 2002


























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

                                                                      Page
                                                                      ------

Unaudited Condensed Financial Statements:

     Unaudited Condensed Balance Sheet as of March 31,
       2002 and December 31, 2001                                      2

     Unaudited Condensed Statement of Operations for the
       three months ended March 31, 2002 and 2001, and for
       the period from inception, December 12, 1996, to
       March 31, 2002                                                  3

     Unaudited Condensed Statement of Stockholders' Equity
       for the three months ended March 31, 2002 and 2001,
       and for the period from inception, December 12, 1996,
       to March 31, 2002                                               4

     Unaudited Condensed Statement of Cash Flows for the
       three months ended March 31, 2002 and 2001, and for
       the period from inception, December 12, 1996, to
       March 31, 2002                                                  5

     Notes to Unaudited Condensed Financial Statements                 6
































                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                     UNAUDITED CONDENSED BALANCE SHEET
                    March 31, 2002 and December 31, 2001
                                 __________
<Table>
<Caption>
                                                        March 31,   December 31,
                                                          2002          2001
     ASSETS                                            (Unaudited)     (Note)
     ------                                           ------------  ------------
<S>                                                  <C>           <C>
Current assets:
  Cash and cash equivalents                           $      2,059  $     -
                                                      ------------  ------------
    Total current assets                                     2,059        -

Laboratory equipment, net                                  250,010       307,931
Deposits                                                    -              9,605
                                                      ------------  ------------
      Total assets                                    $    252,069  $    317,536
                                                      ============  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
  Notes payable                                       $    124,000  $    124,000
  Notes payable to stockholders                            206,135       176,726
  Current portion of capital lease obligations             107,294       107,326
  Accounts payable and accrued liabilities                 313,151       240,582
                                                      ------------  ------------
    Total current liabilities                              750,580       648,634

Capital lease obligations,
net of current portion                                      52,472        74,827
                                                      ------------  ------------
      Total liabilities                                    803,052       723,461
                                                      ------------  ------------
Commitment and contingencies

Stockholders' deficit:
  Common stock, $.001 par value, 100,000,000 shares
    shares authorized, 19,653,412 shares issued and
    outstanding                                             19,653        19,653
  Additional paid-in capital                             4,419,134     4,419,134
  Losses accumulated during the development stage      (4,989,770)   (4,844,712)
                                                      ------------  ------------
    Total stockholders' deficit                          (550,983)     (405,925)
                                                      ------------  ------------
      Total liabilities and stockholders' deficit     $    252,069  $    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.
                                    -2-
                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                UNAUDITED CONDENSED STATEMENT OF OPERATIONS
           for the three months ended March 31, 2002 and 2001 and
    for the period from inception, December 12, 1996, to March 31, 2002
                                 __________
<Table>
<Caption>

                                             Three Months  Three Months
                                                 Ended         Ended     Inception to
                                               March 31,     March 31,     March 31,
                                                 2002          2001          2002
                                             ------------  ------------  ------------
<S>                                         <C>           <C>           <C>
Operating, general and administrative
  expenses                                     $   84,413    $  121,455   $ 1,372,450
Research and development costs                     79,339       286,508     3,510,793
                                             ------------  ------------  ------------
     Loss from operations                       (163,752)     (407,963)   (4,883,243)

Interest income                                         -         8,093        39,826
Interest expense                                  (9,326)       (5,281)     (174,373)
Gain on sale of assets                             28,020          -           28,020
                                             ------------  ------------  ------------
Net loss                                      $ (145,058)   $ (405,151)  $(4,989,770)
                                             ============  ============  ============

Weighted average shares outstanding            19,653,412    19,653,412
                                             ============  ============
Basic and diluted loss per common share       $    (0.01)   $    (0.02)
                                             ============  ============

</Table>






















                          See accompanying notes.
                                    -3-
                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
           UNAUDITED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                 for the three months ended March 31, 2002
                                 __________
<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)

Net loss                     -            -           -        (145,058)    (145,058)
                      -----------  ----------- -----------   -----------  -----------
Balance at March 31,
  2002                 19,653,412     $ 19,653  $4,419,134  $(4,989,770)  $ (550,983)
                      ===========  =========== ===========   ===========  ===========


</Table>






























                          See accompanying notes.
                                    -4-

                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
          for the three months ended March 31, 2002 and 2001, and
    for the period from inception, December 12, 1996, to March 31, 2002
                                 __________

<Table>
<Caption>
                                             Three Months  Three Months
                                                  Ended         Ended    Inception to
                                                March 31,     March 31,     March 31,
                                                 2002          2001          2002
                                             ------------  ------------  ------------
<S>                                         <C>           <C>           <C>
Cash flows from operating activities:
  Net loss                                    $ (145,058)   $ (405,151)  $(4,989,770)
  Adjustments to reconcile net loss to
    net cash used by operating activities          75,230      (60,801)     1,422,113
                                             ------------  ------------  ------------
      Net cash used by operating activities      (69,828)     (465,952)   (3,567,657)
                                             ------------  ------------  ------------
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                      24,974        13,764       592,587
  Payments on notes payable                             -      (43,231)     (253,000)
  Payments on capital lease obligations          (22,387)       (7,382)     (307,571)
                                             ------------  ------------  ------------
        Net cash provided (used) by
         financing activities                       2,587      (36,849)     3,530,416
                                             ------------  ------------  ------------
Net increase (decrease) in cash and cash
  equivalents                                       2,059     (502,801)         2,059

Cash and cash equivalents at beginning of
  period                                             -        1,142,083          -
                                             ------------  ------------  ------------
Cash and cash equivalents at end of period     $    2,059    $  639,282   $     2,059
                                             ============  ============  ============


</Table>




                          See accompanying notes.
                                    -5-


<PAGE>
                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                       NOTES TO 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 three month periods ended
     March 31, 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.

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.

                                 Continued
                                    F-6
                              GENE-CELL, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
     NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS, Continued
                                 __________

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.   Going Concern Consideration
     ---------------------------
     Since its inception, as a development stage enterprise, the Company
     has not generated any revenue and has been dependent on debt and
     equity raised from individual investors to sustain its operations.
     During the years ended December 31, 2001 and 2000, the Company
     incurred net losses of $(1,478,738) and $(1,050,306), respectively,
     and negative cash flows from operations of $(1,267,054) and
     $(829,440), respectively.  These factors raise substantial doubt about
     the Company's ability to continue as a going concern.

     In order to address its liquidity problem, during 2000 management
     issued 1,875,000 shares of its common stock to the Investors under a
     private placement agreement.  These funds received in that private
     placement sustained the Company until the third quarter of 2001.
     Since that time, the Company has relied upon loans from
     officers/stockholders and employees to sustain its operations.
     Payments on trade accounts payable have been delayed while the Company
     attempts to complete another private placement of its common stock.

     Management will seek to leverage the Company's comprehensive non-viral
     gene modification/repair platform in order to establish strategic
     alliances with leading biotechnology and pharmaceutical companies.
     Management eventually plans, as its research and development
     progresses, to seek a relationship with a major pharmaceutical company
     in order to take its technology through the required government
     regulatory process and FDA approval.  As described in Note 7, the
     Company has obtained assistance in payment of its monthly equipment
     lease expenses by the Fund for Inherited Disease Research.

     There can be no assurances that the Company's current cash reserves
     will be adequate to sustain its operations, that the Company can raise
     additional cash through private placement of its common stock, nor
     that the Company can establish a relationship with a major
     pharmaceutical company.  There can also be no assurances that the
     Company will ever obtain FDA approval of gene therapeutics based upon
     its DNA microinjection technology nor that it can attain
     profitability.  The Company's long-term viability as a going concern
     is dependent upon certain key factors, as follows:

     -    The Company's ability to obtain adequate sources of funding to
     continue the development of its proprietary DNA microinjection
     technology.  Sources of funding may not be available on terms that are
     acceptable to the Company and existing stockholders, or may include
     terms that will result in substantial dilution to existing
     stockholders.

     -    The ability of the Company to take its DNA microinjection
     technology through the required government regulatory process and
     ultimately obtain FDA approval.

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


6.   Going Concern Consideration, continued
     ----------------------------
     -    The ability of the Company to ultimately commercialize gene
     therapeutics based upon its proprietary DNA microinjection technology
     and achieve adequate profitability and positive cash flows to sustain
     its operations.

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.

     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, subject to
     availability of funds.  The monthly leases for lab equipment are
     currently being paid by the Fund for Inherited Disease Research, in
     exchange for the ability of the Fund for Inherited Disease Research to
     use the equipment as needed.


















                                    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.

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.

           The Company has borrowed approximately $206,135 from shareholders,
management, and key employees throughout fiscal 2001 and 2002, none of
which has been re-paid.  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).  In addition,
management and key employees have continued to work for the Company since
October 2001 without cash compensation.  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 by the end of the second quarter of 2002, it is unlikely
the Company will be able to continue any operations.

Results of Operations
---------------------
          During the period from inception, December 12, 1996, to March 31,
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.

          As of March 31, 2002, the Company had an accumulated deficit of
($4,989,770) funded by paid-in capital.  During the quarter ended March 31,
2002, the Company had losses from operations of ($145,058) compared to
losses in the same quarter of 2001 of ($405,151).  The decrease is do to an
effort to scale back research and development activities including a
reduction in workforce.
                                     9
          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 four Ph.D. trained scientists working as
part-time employees. The Company does not anticipate increasing  part-time
employees to a 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 four part-time employees.

          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 of
2002 PHMST decided not to participate with the Company mainly due to it's
inability to raise sufficient funding. As PHMST has made this decision, the
Company and PHMST are currently negotiating the number of options to be
granted pursuant to services already rendered.

          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.

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

               None.

Item 3         Defaults Upon Senior Securities

               None.

                                     10
Item 4         Submission of Matters to a Vote of Security Holders

               None.

Item 5         Other Information

          Tom Kubota, the Chairman of the Company's Board of Directors, resigned
during the second quarter of fiscal 2002.  The vacancy created by Mr.
Kubota's resignation will be filled in accordance with the Company's
Bylaws.


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.




                                     11


                                 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: May 20, 2002                      By: /s/ Brian R. Davis
                                             --------------------------
                                             President


Date: May 20, 2002                      By: /s/ David Brown
                                             ----------------------------
                                             Secretary











                                     12