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


                                   FORM 10-Q/A

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

                         For Quarter Ended July 31, 2001

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

                  FOR THE TRANSITION PERIOD FROM      TO
                                                 ----    ----

                         Commission File Number 0-22011

                                BIONUTRICS, INC.
             (Exact name of registrant as specified in its charter)

NEVADA                                             86-0760991
----------------------------                       -----------------------------
(State or other jurisdiction                       I.R.S. Employer incorporation
organization)                                      Identification Number

2425 E. CAMELBACK RD., SUITE 650  PHOENIX, ARIZONA               85016
--------------------------------  ----------------             ---------
(Address of principal executive offices)                       (Zip code)

                                  602-508-0112
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

YES   X     NO
    -----      -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, at the latest practical date.

<TABLE>
<CAPTION>
CLASS                                       OUTSTANDING AS OF SEPTEMBER 14, 2001
-----                                       ------------------------------------
<S>                                         <C>
COMMON PAR VALUE                            4,593,169
$.001 PER SHARE
</TABLE>
<PAGE>
                                EXPLANATORY NOTE:

This amendment on Form 10-Q/A amends the Registrant's Quarterly Report on Form
10-Q for the quarter ended July 31, 2001, as filed by the Registrant on
September 14, 2001, and is being filed to reflect the restatement of the
Registrant's unaudited condensed consolidated financial statements (see Note H
to the unaudited condensed consolidated financial statements).


                                BIONUTRICS, INC.
                            INDEX TO QUARTERLY REPORT
                                 ON FORM 10-Q/A



<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
PART I. FINANCIAL INFORMATION


      ITEM 1.    Condensed Consolidated Financial Statements (Unaudited):

                 Condensed Consolidated Balance Sheets                        3
                 Condensed Consolidated Statements of Operations              4
                 Condensed Consolidated Statements of Cash Flows              5
                 Notes to Condensed Consolidated Financial Statements         6

      ITEM 2.    Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         10


PART II. OTHER INFORMATION


      ITEM 2(c)  Changes in Securities                                       14

      ITEM 5.    Other Events                                                14

      ITEM 6.    Exhibits and Reports on Form 8-K                            14


      SIGNATURE                                                              15
</TABLE>
<PAGE>
BIONUTRICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                          JULY 31,         OCTOBER 31,
                                                                            2001              2000
                                                                        (AS RESTATED,
                                                                         SEE NOTE H)
<S>                                                                     <C>               <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                             $     10,915      $    711,563
  Trade receivables - net of allowance for bad debts of $304,677
    and $311,310, respectively                                                12,337            16,845
  Inventory                                                                   47,793           100,401
  Prepaids and other current assets                                           34,145            62,383
                                                                        ------------      ------------
           Total current assets                                              105,190           891,192
                                                                        ------------      ------------
PROPERTY - net of accumulated depreciation of $353,304
  and $342,573, respectively                                                   4,744            15,474
                                                                        ------------      ------------
OTHER ASSETS:
  Patent applications and other related costs - net of accumulated
    amortization of $198,077 and $177,328, respectively                      371,388           392,137
  Investment in InCon Processing, LLC                                      2,846,253         3,087,186
                                                                        ------------      ------------
           Total other assets                                              3,217,641         3,479,323
                                                                        ------------      ------------
TOTAL                                                                   $  3,327,575      $  4,385,989
                                                                        ============      ============


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                      $    884,699      $    664,375
  Accrued liabilities                                                        684,047           939,777
  Notes payable and capital leases                                           148,000           902,278
                                                                        ------------      ------------
           Total current liabilities                                       1,716,746         2,506,430
                                                                        ------------      ------------
STOCKHOLDERS' EQUITY
  Common stock- $.001 par value - authorized, 45,000,000 shares;
    4,593,169 and 4,294,252 issued, respectively                               4,593            21,468
  Preferred stock- $.001 par value - authorized 5,000,000 shares;
    591,850 and 0 issued and outstanding, respectively (liquidation
    preference of $798,998 and $0, respectively)                             798,998
  Additional paid-in capital                                              37,314,345        36,296,324
  Warrants                                                                   934,237           874,603
  Accumulated deficit                                                    (37,440,141)      (35,311,633)
  Common stock in treasury, 1,202,886 shares                                  (1,203)           (1,203)
                                                                        ------------      ------------
           Total stockholders' equity                                      1,610,829         1,879,559
                                                                        ------------      ------------
TOTAL                                                                   $  3,327,575      $  4,385,989
                                                                        ============      ============
</TABLE>

See notes to condensed consolidated financial statements.



                                      - 3 -
<PAGE>
BIONUTRICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                   THREE MONTHS                       NINE MONTHS
                                                                   ENDED JULY 3                      ENDED JULY 31
                                                           ---------------------------------------------------------------
                                                               2001             2000             2001             2000
                                                           ---------------------------------------------------------------
                                                           (AS RESTATED,    (AS RESTATED,    (AS RESTATED,    (AS RESTATED,
                                                            SEE NOTE H)      SEE NOTE H)      SEE NOTE H)      SEE NOTE H)
<S>                                                        <C>              <C>              <C>              <C>
REVENUES:
  Revenue from services                                                     $     46,374                      $    209,098
  Revenue from product sales                               $     25,125           21,569     $     82,461          122,296
                                                           ------------     ------------     ------------     ------------
           Total gross revenues                                  25,125           67,943           82,461          331,394

DISCOUNTS AND ALLOWANCES                                         12,237           36,748           38,932          116,669
                                                           ------------     ------------     ------------     ------------

           Net revenues                                          12,888           31,195           43,529          214,725

COST OF REVENUES                                                  8,486          120,443           56,376          158,125
                                                           ------------     ------------     ------------     ------------

  Gross profit (loss)                                             4,402          (89,248)         (12,847)          56,600
                                                           ------------     ------------     ------------     ------------

OPERATING EXPENSES:
  Selling, general and administrative                           538,785          527,421        1,819,562        2,055,336
  Research and development                                       12,350           32,403           57,875          115,108
                                                           ------------     ------------     ------------     ------------

           Total operating expenses                             551,135          559,824        1,877,437        2,170,444
                                                           ------------     ------------     ------------     ------------

OPERATING LOSS                                                 (546,733)        (649,072)      (1,890,284)      (2,113,844)
                                                           ------------     ------------     ------------     ------------

OTHER INCOME (EXPENSE)
  Equity in income (losses) of Incon Processing, L.L.C         (118,382)         112,913         (240,933)         (23,555)
  Other income (expense)                                         (7,216)         (12,413)           2,709          (15,040)
                                                           ------------     ------------     ------------     ------------

           Total other income (expense)                        (125,598)         100,500         (238,224)         (38,595)
                                                           ------------     ------------     ------------     ------------

NET LOSS                                                   $   (672,331)    $   (548,572)    $ (2,128,508)    $ (2,152,439)
                                                           ============     ============     ============     ============

Basic and diluted net loss per common share                $      (0.15)    $      (0.13)    $      (0.47)    $      (0.52)
                                                           ============     ============     ============     ============

Weighted average number of common shares outstanding          4,592,836        4,173,679        4,522,019        4,168,611
                                                           ============     ============     ============     ============
</TABLE>


See notes to condensed consolidated financial statements.



                                      - 4 -
<PAGE>
BIONUTRICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                     NINE MONTHS
                                                                                    ENDED JULY 31
                                                                            -----------------------------
                                                                                2001             2000
                                                                            -----------------------------
                                                                            (AS RESTATED,    (AS RESTATED,
                                                                             SEE NOTE H)      SEE NOTE H)
<S>                                                                         <C>              <C>
OPERATING ACTIVITIES:
Net Loss                                                                    $ (2,128,508)    $ (2,152,439)
Adjustments to reconcile net loss to cash used in operating activities:
  Depreciation and amortization                                                   31,479           90,236
  Equity in loss of joint venture                                                240,933           23,555
  Stock-based compensation expense                                                67,306
  Expenses satisfied with issuance of common stock                                43,474          414,814
  Changes in operating assets and liabilities:
    Trade receivables-net                                                          4,508          (50,370)
    Inventory                                                                     52,608          152,411
    Prepaids and other current assets                                             28,238             (328)
    Accounts payable                                                             220,324           28,421
    Accrued liabilities                                                           93,268           53,001
                                                                            ------------     ------------

           Net cash used in operating activities                              (1,346,370)      (1,440,699)
                                                                            ------------     ------------

INVESTING ACTIVITIES:
  Capital expenditures                                                                             (3,035)
                                                                            ------------     ------------

           Net cash used in investing activities                                                   (3,035)
                                                                            ------------     ------------

FINANCING ACTIVITIES:
Proceeds from issuance of stock and warrants                                     500,000
Proceeds from debt                                                               148,000          900,000
Repayments of debt & capital leases                                               (2,278)          (6,413)
                                                                            ------------     ------------

           Net cash provided by financing activities                             645,722          893,587
                                                                            ------------     ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                       (700,648)        (550,147)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   711,563          680,190
                                                                            ------------     ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $     10,915     $    130,043
                                                                            ============     ============

SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES:
    Settlement of accrued liabilities and debt through issuance
      of common and preferred stock                                         $  1,248,998
                                                                            ============
</TABLE>

See notes to condensed consolidated financial statements.



                                      - 5 -
<PAGE>
BIONUTRICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE A - The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with accounting principles generally
         accepted in the United States of America for interim financial
         information and the instructions to Form 10-Q. Accordingly, they do not
         include all the information and footnotes required by accounting
         principles generally accepted in the United States of America for
         complete financial statements. In the opinion of management, all
         adjustments (which include only normal recurring adjustments) necessary
         to present fairly the financial position, results of operations and
         cash flows for all periods presented have been made. The results of
         operations for the nine-month period ended July 31, 2001 are not
         necessarily indicative of the operating results that may be expected
         for the entire year ending October 31, 2001. These unaudited condensed
         consolidated financial statements should be read in conjunction with
         the Company's consolidated financial statements and accompanying notes
         thereto as of and for the year ended October 31, 2000. The accompanying
         consolidated financial statements have been prepared on a going concern
         basis, which contemplates the realization of assets and the
         satisfaction of liabilities in the normal course of business. The
         Company has incurred operating losses since inception through July 31,
         2001 of $37,440,141, which have been funded through the issuance of
         stock and debt. The losses incurred to date, the uncertainty regarding
         the ability to raise additional capital and the Company's inability to
         generate positive cash flows from operations raise substantial doubt
         about whether the Company will be able to continue as a going concern
         for a reasonable period of time. Management is continuing their efforts
         to reposition the Company as a product development company and as such
         is engaged in discussions with several potential marketing partners
         concerning new branded ingredients that the Company is developing,
         including dietary supplements and functional food products. The
         accompanying financial statements have been retroactively restated to
         reflect a one-for-five reverse stock split (Note E).

NOTE B - Basic and diluted net loss per share is computed by dividing net loss
         by the weighted average number of common shares outstanding during the
         presented periods. Options and warrants are excluded from the diluted
         net loss per share calculation as they are anti-dilutive.

NOTE C - In June 2001, the Company executed a multiple advance non-revolving
         note to borrow up to $500,000 from affiliates of the Company. The
         accreted interest is equal to $100,000 if the full $500,000 is advanced
         under the loan. The note is payable in full on the earlier of (i)
         January 1, 2002, (ii) the funding of any loan in cumulative amounts in
         excess of two million dollars, (iii) the issuance by the Company of any
         common stock or preferred stock in cumulative amounts in excess of one
         million dollars. The Company has borrowed $148,000 under this note as
         of July 31, 2001. This note is secured by 100 shares of common stock of
         InCon Technologies, Inc.

NOTE D - SFAS No. 133, "Accounting for Derivative Instruments and Hedging
         Activities," is effective for all fiscal years beginning after June 15,
         2000. SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138,
         establishes accounting and reporting standards for derivative
         instruments, including certain derivative instruments embedded in other
         contracts, and for hedging activities. The statement is effective for
         the Company's fiscal year beginning November 1, 2000. SFAS No. 133 is
         not expected to have a material impact on the Company's consolidated
         financial statements.



                                      - 6 -
<PAGE>
         In July 2001, the Financial Accounting Standards Board issued SFAS No.
         141 Business Combinations, and SFAS No. 142 Goodwill and Other
         Intangibles. SFAS No. 141 requires the purchase method of accounting
         for business combinations initiated after June 30, 2001 for which the
         date of acquisition is July 1, 2001 or later, eliminates the
         pooling-of-interests method, and identifies criteria for the
         establishment of identifiable intangible assets separate from goodwill
         resulting from a business combination. SFAS No. 142 requires companies
         to cease amortizing goodwill that existed at June 30, 2001. The
         amortization of existing goodwill will cease on August 31, 2001. SFAS
         No. 142 also establishes a new method of testing goodwill for
         impairment on an annual basis or on an interim basis if an event occurs
         or circumstances change that would reduce the fair value of a reporting
         unit below its carrying value. The adoption of SFAS No. 142 will result
         in the discontinuation of amortization of the Company's goodwill;
         however, the Company will be required to test its goodwill for
         impairment under the new standard for its fiscal year beginning
         September 1, 2002, which could have an adverse effect on the Company's
         future results of operations if an impairment occurs. The Company has
         not completed evaluating the impact of implementing the provisions of
         SFAS No. 141 and 142.

         In 1999, Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition
         in Financial Statements, was issued. The SAB provides guidance on the
         recognition, presentation and disclosure of revenue in the financial
         statements filed with the SEC. SAB No. 101, as amended by SAB 101B,
         becomes effective for the fourth fiscal quarter of fiscal quarters
         beginning after December 31, 1999. There was not a material effect on
         the Company's financial position or results of operations upon adoption
         of SAB 101.

NOTE E - At the close of business on May 29, 2001, the Company affected a
         one-for-five reverse stock split, as approved by a majority vote of the
         Company's stockholders. All share and per share data have been restated
         to give effect to the reverse stock split.

NOTE F - On July 18, 2001 the Company received notice from Nasdaq that its
         securities would be delisted from the Nasdaq SmallCap Market effective
         July 19, 2001. The Company has requested that the Nasdaq Listing and
         Hearing council review the July 18, 2001 decision. The Listing Council
         will likely issue its decision after its meeting in October. Currently,
         the Company's shares are traded on the OTC Bulletin Board.

NOTE G - Subsequent to the period ended July 31, 2001, the Company and
         Pharmaceutical Marketing Brands, Inc. ("PMB") executed a private
         placement stock purchase agreement for the purchase of 49% of the
         Company's issued and outstanding shares of capital stock, on a fully
         diluted basis, for $5,000,000. The agreement contemplates a close date
         on or before October 15, 2001. The Board of Directors of the Company
         will be reconstituted such that a majority of the Board of Directors as
         of the closing date will be designees of PMB.

         In connection with this agreement, PMB was granted 5,000,000 common
         stock options exercisable at $1.00 per share. These options have a term
         of ten years, are transferable, and fully vest on October 15, 2001

         The issuance of the shares and the options is subject to shareholder
         approval, the Company's receipt of a fairness opinion, and other
         closing contingencies as set forth in the stock purchase agreement,
         including, but not limited to the re-listing of Bionutrics' stock as
         well as satisfactory due diligence by PMB.


                                      - 7 -
<PAGE>
         The Company also executed a promissory note with PMB to borrow up to
         $400,000, advances to be made at PMB's discretion. The interest is
         equal to the greater of (i) 20% per annum computed on the basis of the
         actual number of days elapsed and a year of 365 days, or (ii) 20% of
         the principal amount borrowed, compounded annually. The note is payable
         in full on the earlier of (i) March 7, 2002, (ii) the purchase of the
         Company's stock by PMB pursuant to the aforementioned private placement
         stock purchase agreement, (iii) the receipt of any debt or equity
         financing in an amount of at least $1,000,000, (iv) the consummation of
         any corporate transaction including the sale of any assets. This note
         is secured by the assets of the Company.

NOTE H - Subsequent to the issuance of its consolidated financial statements for
         the three-month and nine-month period ended July 31, 2001, the Company
         determined that it had incorrectly accounted for certain transactions
         entered into during the period from October 31, 1997 to July 31, 2001,
         as discussed in the following paragraphs.

         ACQUISITION OF INCON TECHNOLOGIES, INC. - Originally, at the date of
         acquisition on October 31, 1997, the Company assigned $1 million of the
         purchase price to a receivable from a third party and recorded a
         $322,883 note payable to an affiliate of the seller. Collectibility of
         the receivable was contingent upon the occurrence of events that were
         outside the control of the Company, and payment of the note was
         contingent upon collection of the receivable. The events upon which
         collection of the third party receivable were predicated did not
         transpire, and during the year ended October 31, 2000, the Company
         offset the note payable against the receivable and reclassified the net
         amount as a reduction of stockholders' equity, because recovery of the
         amount due from the seller under the terms of the acquisition agreement
         was collateralized by shares of the Company's common stock that were
         issued in the acquisition. The Company has subsequently concluded that
         it did not have sufficient information about the collectibility of the
         receivable or the likelihood of repayment of the note payable to assign
         amounts to them in the allocation of the purchase price. Therefore, the
         net amount of $677,117 has been allocated to goodwill.

         TRANSFER OF ASSETS AND LIABILITIES TO INCON PROCESSING - Within its
         original accounting, at the time of the subsequent transfer of the
         assets and liabilities of InCon to InCon Processing, L.L.C. (InCon
         Processing) and sale of 50 percent of its interest to ACH in June 1999,
         the Company wrote off the unamortized balance of goodwill of $516,878
         related to the acquisition of InCon and recorded the calculated gain on
         the sale to ACH as a reduction of the carrying value of the investment
         in the joint venture. The Company has subsequently determined that the
         unamortized balance of goodwill should have been included as a part of
         the carrying value of the Company's investment in InCon Processing and
         in the determination of the loss on the sale to ACH, which totaled
         $265,515 in 1999. An additional $300,000 loss on the sale of assets to
         ACH was recognized in 2000 upon the settlement of a contingent
         liability arising from the asset sale.

         LONG-TERM RECEIVABLE - In 1998 and 1999, the Company had received
         payments against a certain receivable acquired in connection with the
         purchase of InCon Technologies, Inc. in October 1997, and the Company
         expected to collect the remainder in 2000. However, the Company
         received no payments in 2000, and because of the extended time the
         receivable had remained outstanding, an allowance for the full amount
         of the remaining receivable of $263,071 was recorded in the restated
         financial statements as of October 31, 2000.

         SHARE AGREEMENTS - During the year ended October 31, 2000, the Company
         entered into certain agreements to issue shares of the Company's stock
         in exchange for the


                                      - 8 -
<PAGE>
         extinguishment of certain debt obligations totaling $1,248,998 and
         recognized the issuance of shares related to these transactions in its
         financial statements. The Company has concluded that the issuance of
         these shares and the extinguishment of its debt should not have been
         recognized in its financial statements until the date on which the
         certificates for the underlying shares were actually issued, which
         occurred during the first quarter of fiscal year 2001.

         SIGNIFICANT EFFECTS OF RESTATEMENT - As a result, the accompanying
         consolidated financial statements as of July 31, 2001 and for the
         three-and nine-month periods ended July 31, 2001 and 2000 have been
         restated from previously reported amounts to correct the recording of
         these items. A summary of the significant effects of the restatement is
         as follows:

         As of July 31, 2001

<TABLE>
<CAPTION>
                                                        AS PREVIOUSLY
                                                           REPORTED        AS RESTATED
                                                        -------------     -------------
<S>                                                     <C>               <C>
         Long-term receivable                           $    263,071
         Investment in InCon Processing, L.L.C.            2,243,808      $  2,846,253
         Total other assets                                2,615,196         3,217,641
         Total assets                                      2,988,201         3,327,575
         Stockholders' equity:
         Accumulated deficit                             (37,102,398)      (37,440,141)
         Receivable collectible in cash or
           common stock                                     (677,117)
         Total stockholders' equity                        1,271,455         1,610,829
         Total liabilities and stockholders' equity        2,988,201         3,327,575
</TABLE>

         For the periods ending July 31:

<TABLE>
<CAPTION>
                                                              NINE MONTHS ENDED                NINE MONTHS ENDED
                                                                JULY 31, 2001                    JULY 31, 2000
                                                        ----------------------------------------------------------------
                                                        AS PREVIOUSLY                     AS PREVIOUSLY
                                                          REPORTED        AS RESTATED        REPORTED       AS RESTATED
<S>                                                     <C>              <C>              <C>              <C>
         Equity in income (loss) in InCon
           Processing, L.L.C.                           $   (300,686)    $   (240,933)    $     14,602     $    (23,555)
         Other income (expense)                             (297,977)        (238,224)            (438)         (38,595)
         Net loss                                         (2,188,261)      (2,128,508)      (2,114,282)      (2,152,439)
         Basic and diluted net loss per common share           (0.48)           (0.47)           (0.51)           (0.52)
</TABLE>

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED              THREE MONTHS ENDED
                                                                JULY 31, 2001                   JULY 31, 2000
                                                        ------------------------------------------------------------
                                                        AS PREVIOUSLY                   AS PREVIOUSLY
                                                          REPORTED       AS RESTATED      REPORTED       AS RESTATED
<S>                                                     <C>              <C>            <C>              <C>
         Equity in income (loss) in InCon
           Processing, L.L.C.                            $ (135,143)     $ (118,382)     $   27,277      $  112,913
         Other income (expense)                            (142,359)       (125,598)         14,864         100,500
         Net loss                                          (689,092)       (672,331)       (634,208)       (548,572)
         Basic and diluted net loss per common share          (0.15)          (0.15)          (0.15)          (0.13)
</TABLE>



                                      - 9 -
<PAGE>
                                BIONUTRICS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

As discussed in Note H to the unaudited condensed consolidated financial
statements, the Company has restated its consolidated financial statements to
correct certain errors in accounting for the acquisition of InCon Technologies,
Inc. in October 1997 and in the subsequent contribution of substantially all of
InCon's assets and liabilities to InCon Processing, L.L.C. in June 1999.

The following discussion of the Company's financial condition and results of
operations includes certain forward-looking statements. When used in this
report, the words "expects," "intends," "plans" and "anticipates" and similar
terms are intended to identify forward looking statements that relate to the
Company's future performance. Such statements involve risks and uncertainties.
The Company's actual results may differ materially from the results discussed
here. Factors that might cause such a difference include, but are not limited
to, those discussed under "Business-Special Considerations" in the Company's
Form 10-K/A.

RESULTS OF OPERATIONS

Three months ended July 31, 2001 compared with three months ended July 31, 2000.

Consolidated gross revenues for the quarter ended July 31, 2001 were $25,000
versus $68,000 for the same quarter in 2000, summarized by subsidiary as
follows:

<TABLE>
<CAPTION>
                                                             FOR THE QUARTER
                                                              ENDED JULY 31,
                                                         -----------------------
SUBSIDIARY                                                 2001            2000
<S>                                                      <C>             <C>

Bionutrics Health Products                               $25,000         $25,000
LipoGenics                                                                46,000
                                                         -------         -------

Total consolidated gross revenues                        $25,000         $68,000
                                                         =======         =======
</TABLE>

Bionutrics Health Products continues to sell through its remaining evolvE(R)
inventory. The Company does not expect evolvE will contribute significant
revenue to its operations in the future.

The Company is repositioning itself as a product development company and as such
is engaged in discussions with several potential marketing partners involving
future branded products including dietary supplements and functional food
products. New products will be based on new technology extending beyond a
tocotrienol platform. The Company has announced that it is launching two new
cardiovascular products under the brand names, "Vitenol E(R) 20/20 - For Heart &
Health" and CARDIO-CIN(TM) - For Heart and Health". Vitenol E is a rice bran
extract and is a more effective antioxidant than standard vitamin E. CARDIO-CIN
is based on Bionutrics's patented niacin and soluble fiber composition. These
products are targeted to the cholesterol dietary supplement market.

LipoGenics revenues for the three months ended July 31, 2001 are zero compared
to the same three months in 2000 of $46,000. The revenues reported in 2000 were
attributable to a Phase I Small Business Innovation Research (SBIR) grant from
the National Heart, Blood and Lung Institute. As this grant was completed during
fiscal year 2000, there are no revenues shown for the same period in 2001.



                                     - 10 -
<PAGE>
Cost of revenues for the three months ended July 31, 2001 was $8,000 versus
$120,000 for the same quarter in 2000. This reduction is primarily due to a
one-time adjustment to inventory of $108,000 recorded in the third quarter of
2000 to reflect market value.

Operating expenses for the three months ended July 31, 2001 were $551,000 versus
$560,000 for the same period in 2000.

Other expense for the three months ended July 31, 2001 was $126,000 versus other
income of $101,000 for the same quarter in 2000. This $227,000 decrease is
primarily due to the Company's recognition of its share of InCon Processing's
net loss for the 3 months ended July 31, 2001. The Company uses the equity
method to account for its investment in InCon Processing. Consequently, the
Company records its share of InCon Processing's loss for the quarter as a
decrease in its investment.

The Company accounts for this investment using the equity method. InCon
Processing has a fiscal year-end of August 31. The Company's equity in the joint
venture's operations for the three months ended May 31, 2000 and 1999 are
included in the Company's statement of operations as if they had the same fiscal
quarter. Results of Operations for InCon Processing for the 3 months ended May
31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                           3 MONTHS ENDED
                                                   -----------------------------
                                                   MAY 31, 2001     MAY 31, 2000
<S>                                                <C>              <C>

      Revenues                                     $   773,000      $ 1,768,000
      Expenses                                       1,010,000        1,542,000
                                                   -----------      -----------
      Net loss (income)                            $  (237,000)     $   226,000
                                                   ===========      ===========
</TABLE>

Net loss was $672,000 or $.15 per basic and diluted share for the three months
ended July 31, 2001 compared to $549,000 or $.13 per basic and diluted share for
the same period in 2000.

Nine months ended July 31, 2001 compared with nine months ended July 31, 2000.

RESULTS OF OPERATIONS

Trends and comments as noted for the third quarter apply also to the nine-month
year-to-date comparisons.

Consolidated gross revenues for the nine months ended July 31, 2001 were $82,000
versus $331,000 for the same period in 2000 and is summarized by subsidiary as
follows:

<TABLE>
<CAPTION>
                                                           FOR THE NINE MONTHS
                                                               ENDED JULY 31,
                                                          ----------------------
     SUBSIDIARIES                                           2001          2000

<S>                                                       <C>           <C>
     Bionutrics Health Products                           $ 82,000      $222,000
     LipoGenics                                                          109,000
                                                          --------      --------

     Total gross revenues                                 $ 82,000      $331,000
                                                          ========      ========
</TABLE>


                                     - 11 -
<PAGE>
Bionutrics Health Products Inc. continues to sell through its remaining
evolvE(R) inventory. The Company is repositioning itself as a product
development company. Revenues for the nine months ended July 31, 2000 include
$100,000 for services related to its development activities.

LipoGenics revenues for the nine months ended July 31, 2001 are zero compared to
the same nine months in 2000 of $109,000. The revenues reported in 2000 were
attributable to a Phase I Small Business Innovation Research (SBIR) grant from
the National Heart, Blood and Lung Institute. As this grant was completed during
fiscal year 2000, there are no revenues shown for the same period in 2001.

Cost of revenues for the nine months ended July 31, 2001 was $56,000 versus
$158,000 for the same period in 2000. This decrease is primarily attributable to
a one-time adjustment to inventory of $108,000 recorded in the third quarter of
2000 to reflect market value.

Operating expenses for the nine months ended July 31, 2001 of $1,877,000 were
$293,000 less than that recognized for the same period in 2000 of $2,170,000.
Operating expenses for the nine months ended July 31, 2000 included a $350,000
expense related to the issuance of common stock as consideration for consulting
services performed for the Company.

Other expense for the nine months ended July 31, 2001 was $238,000 versus
$38,000 for the same period in 2000. This increase is primarily due to the
Company's recognition of its share of InCon Processing's net loss for the nine
months ended July 31, 2001.

The Company accounts for this investment using the equity method. InCon
Processing has a fiscal year-end of August 31. The Company's equity in the joint
venture's operations for the nine months ended May 31, 2001 and 2000 are
included in the Company's statement of operations as if they had the same fiscal
period. Results of Operations for InCon Processing for the 9 months ended July
31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                       9 MONTHS ENDED MAY 31,
                                                     --------------------------
                                                         2001           2000

<S>                                                  <C>            <C>
      Revenues                                       $ 2,768,000    $ 3,918,000
      Expenses                                         3,251,000      3,965,000
                                                     -----------    -----------

      Net loss (income)                              $  (483,000)   $   (47,000)
                                                     ===========    ===========
</TABLE>

Net loss was $2,129,000 or $.47 per basic and diluted share for the nine months
ended July 31, 2001 compared to $2,152,000 or $.52 per basic and diluted share
for the same period in 2000.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities during the nine-month period ended July
31, 2001 was $1,346,000 as compared to $1,441,000 during the same period in
2000.

There was no investing activity for the nine months ended July 31, 2001 as
compared to net cash used of $3,000 during the same period in 2000.

Net cash provided by financing activities totaled $646,000 for the nine-month
period ended July 31, 2001 versus net cash provided of $894,000 for the same
period in 2000. This cash was provided by loans for both years as well as the
issuance of stock and warrants for fiscal year 2001.



                                     - 12 -
<PAGE>
The Company requires additional financing of at least $3,000,000 to support its
general working capital needs such as salaries and administrative expenses for
the next 12 months as well as to fund the research and development costs
necessary to complete the launch of its recently developed products. The Company
has executed a private placement stock purchase agreement with Pharmaceutical
Marketing Brands, Inc., ("PMB") for the purchase of 49% of the Company's issued
and outstanding shares of capital stock, on a fully diluted basis, for
$5,000,000. In connection with this agreement, PMB was granted 5,000,000 common
stock options exercisable at $1.00 per share. These options have a term of ten
years, are transferable, and fully vest on October 15, 2001. The agreement
contemplates a close date on or before October 15, 2001 and is subject to
shareholder approval, the Company's receipt of a fairness opinion, and other
closing contingencies as set forth in the stock purchase agreement. The Company
is also seeking additional capital through debt financing. There can be no
assurance that such additional financing will be attainable, or attainable on
terms acceptable to the Company. Access by the Company to additional capital
will depend substantially upon prevailing market conditions, and the financial
condition of and prospects for the Company at the time. On July 18, 2001 the
Company received notice from Nasdaq that its securities would be delisted from
the Nasdaq SmallCap Market effective July 19, 2001. The Company has requested
that the Nasdaq Listing and Hearing Review Council review the July 18, 2001
decision. The Listing Council will likely issue its decision after its meeting
in October. Currently, the Company's shares are traded on the OTC Bulletin
Board.

Management is continuing its efforts to reposition the Company as a product
development company and, as such, is engaged in discussions with several
potential marketing partners involving evolvE(R) and future branded products,
including dietary supplements and functional food ingredients.







                                     - 13 -
<PAGE>
                                BIONUTRICS, INC.

                           PART II - OTHER INFORMATION

ITEM 2(C)         Changes in Securities:

                  In May 2001, issued 2,782 shares of common stock at $3.85 per
                  share to Steve Friedman for consulting services.

                  The above issuance was made pursuant to Section 4(2) of the
                  Securities Act of 1933.

ITEM 4            Submission of Matters to a Vote of Security Holders

                  All share data presented in this Item 4 are presented on a
                  pre-split basis.

                  On May 21, 2001 the Company filed a Notice of Solicitation of
                  Written Consents to its shareholders of record as of May 18,
                  2001. The notice sought consent to effect a one-for-five
                  reverse stock split. The Company received consent from a
                  majority of the 22,951,727 common and 591,850 preferred shares
                  outstanding as of May 18, 2001. Consequently, the Company
                  implemented the reverse stock split at the close of business
                  on May 29, 2001.

ITEM 6            Exhibits and Reports on Form 8-K

                  (a)      Exhibits

                           Exhibit 10.50     Multiple Advance Non-Revolving Note
                                             (Incorporated by reference to
                                             Registrant's Third Quarter Form
                                             10-Q filed with the Commission on
                                             or about September 13, 2000)

                           Exhibit 10.51     Loan and Stock Pledge Agreement
                                             (Incorporated by reference to
                                             Registrant's Third Quarter Form
                                             10-Q filed with the Commission on
                                             or about September 13, 2000)


                  (b)      Reports on Form 8-K

                           Form 8-K filed July 20, 2001 regarding the Company's
                           delisting from the Nasdaq SmallCap Market.

                           Form 8-K filed August 28, 2001 regarding the Stock
                           Purchase Agreement between Pharmaceutical Marketing
                           Brands, Inc. and Bionutrics, Inc.






                                     - 14 -
<PAGE>
                                BIONUTRICS, INC.

                                   SIGNATURES



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

Bionutrics, Inc. (Registrant)


By:    /s/ Ronald H. Lane
       ----------------------------------------
       Ronald H. Lane


Title: Chairman of the Board, Chief Executive
       ----------------------------------------
       Officer and President
       ----------------------------------------


Date:  January 17, 2002
       ----------------------------------------



By:    /s/ Karen J. Harwell
       ----------------------------------------
       Karen J. Harwell


Title: Controller and Chief Accounting Officer
       ----------------------------------------


Date:  January 17, 2002
       ----------------------------------------




                                     - 15 -
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number         Description of Exhibit
--------------         ----------------------
<S>                    <C>
Exhibit 10.50          Multiple Advance Non-Revolving Note (Incorporated by
                       reference to Registrant's Third Quarter Form 10-Q filed
                       with the Commission on or about September 13, 2000)

Exhibit 10.51          Loan and Stock Pledge Agreement (Incorporated by
                       reference to Registrant's Third Quarter Form 10-Q filed
                       with the Commission on or about September 13, 2000)

</TABLE>











                                     - 16 -