United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB
                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                      For the Year Ended December 31, 2002

                          Commission File No. 333-71752

                                 Biocoral, Inc.
        (Exact name of small business issuer as specified in its charter)

           Delaware                                     33-0601504
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

 38 rue Anatole France, 92594 Levallois        011-3314-757-9843         N/A
         Perret Cedex France                  (Issuer's telephone     (Zip Code)
(Address of Issuer's principal executive       number, including
               offices)                           area code)

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

                          Common Stock, $.001 par value
                                (Title of Class)

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 reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

The issuer's revenues for the year ended December 31, 2002 were $350,300.

The aggregate market value of the registrant's voting common equity held by
non-affiliates as of April 4, 2003 was $169,463,610.

The number of outstanding shares of the registrant's common stock as of April
15, 2003 was 11,297,574.

Transitional Small Business Disclosure Format. Yes |_| No |X|

Documents Incorporated by Reference: None.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I                                                                           Page
<S>                                                                           <C>
Item 1.  Description of Business..............................................1
Item 2.  Description of Property..............................................5
Item 3.  Legal Proceedings....................................................5
Item 4.  Submission of Matters to a Vote of Security Holders..................5

PART II
Item 5.  Market for Common Equity and Related Stockholder Matters.............5
Item 6.  Management's Discussion and Analysis or Plan of Operations...........7
Item 7.  Financial Statements.................................................F-1 - F-18
Item 8.  Changes In and Disagreements With Accountants on Accounting
         and Financial Disclosure.............................................11

PART III
Item 9.  Directors, Executive Officers, Promoters and Control Persons.........12
Item 10. Executive Compensation...............................................13
Item 11. Security Ownership of Certain Beneficial Owners and Management.......14
Item 12. Certain Relationships and Related Transactions.......................15
Item 13  Exhibits and Reports on Form 8-K.....................................15
Item 14. Controls and Procedures .............................................16
</TABLE>

<PAGE>

                                     PART I

Item 1. Description of Business

Background

Biocoral, Inc., a Delaware corporation (the "Company") is an international
biotechnology company specializing in research, development and
commercialization of patented high biotech technologies and biomaterials in the
health care area. Through its subsidiaries, the Company researches, develops,
manufactures and markets bone graft substitute and other high tech patented
biomaterials in a number of countries outside the United States. The Company,
through its subsidiaries, owns various patents on its technologies which have
been issued in the United States, Canada, Australia, Japan, and various European
countries. The Company has developed what management believes is the world's
first fully autologous fibrin glue. In 1993, the Company's scientists began
working on the development of an autologous fibrin glue that utilizes the
patient's own blood, thereby eliminating the risk of viral transmission.
Following the successful result of the phase III human clinical trail for
specific indications, the product file has been approved by appropriate French
authorities (AFSSPS) Agence Francaise de Securite Sanitaires des produits de
Sante "Health Care Products French Sanitary Safety Agency", the French
functional equivalent of the Food and Drug Administration. On September 14,
2000, AFFSSAPS granted to a blood bank the authorization to prepare, use and
distribute the new autologous fibrin glue that was developed by the Company. The
Company also obtained the EC certification for its innovative medical device on
June 8, 2000, which is valid until June 7, 2005 and is renewable and allows the
Company to market the product in the European Community. Before the Company can
commence commercialization of the autologous fibrin glue, AFFSSAPS requires that
the French blood bank known as Etablissement Francaise du Sang ("EFS"), the
exclusive operator of blood transfusions in France, prepare a report following
up on the progress of the first fifty (50) patients treated with the autologous
fibrin glue. The Company is currently assisting EFS in the preparation of this
report and anticipates completing the report during 2003.

In 2000, the Company begun Phase III multi-center clinical trials of
Biocoral(R), its product for the treatment of bone fractures due to
osteoporosis. In January 2002, the period for inclusion of patients in the Phase
III multi-center clinical trials ended. The Company is now following up on the
patients included in the trials and this follow up will continue through
December 2003. In the third quarter of 2002, the preliminary report of the
follow up study was completed. The preliminary report confirmed the advantage of
using the Company's product in stabilization of fractures due to Osteoporosis.
The Company was expecting the definitive report to be completed during the first
quarter 2003, but due to the disparate locations of the fourteen hospitals
participating in the trial, it was difficult for the monitors to visit the
hospitals. The study is monitored by an independent organization in France
called Biomatech located in city of Lyon which has been chosen directly by the
French government agency "Agency National for Valorization of Research"
(l'ANVAR). We expect the definitive report to be complete in the third quarter
of 2003. We believe that this study will demonstrate that our product in this
application will stabilize the fracture and will permit better recovery for
patients, allowing them faster mobility and return to a healthy state with a
very low risk of refracture. The Company is also working on the prevention of
osteoporosis and believes that for the first time, patients who are susceptible
to osteoporosis and have already had fractures will be able to be treated. The
Company product in this application is intended to permit the regeneration of
newly formed bone in the area which is susceptible to osteoporosis and has a low
bone mass. Initial human clinical study has demonstrated and confirmed the
result of regeneration of new formed bone in the bone mass area. The Company,
through its subsidiaries, owns the US patents in this application which has been
granted and issued.

Using proprietary manufacturing processes, our chief product, Biocoral(R), is
derived from natural ocean-generated coral, has certain characteristics
(including chemical composition, porosity, mineral content and bioactive
properties) that permits its safe, contamination-free use. Its similarity to
human bone facilitates its replacement by newly-formed bone. Prior to 1995, the
Company derived substantially all its revenue from other unrelated businesses.
Through the end of 2002, the Company had not yet realized significant revenues
from the sale of its products. The Company has not yet begun to seek FDA
approval for sale of its products in the United States. An accredited scientific
team in the US has conducted human clinical studies with a 5 year follow up to
confirm bone reconstruction in oral application. This study confirmed the
stability of the successful result and management believes that this study will
facilitate FDA approval for our product used in this indication when we file for
FDA approval. Canadian approval of certain products has been obtained and the
Company's products are already commercialized in the European community and
Asia.

The Company entered the biomaterials field in 1995 by agreeing to acquire
Inoteb, SA, a French corporation ("Inoteb") from 10 individuals "the founders",
all French nationals. The shares and bonds of Inoteb acquired in 1995
represented, at such time, 51.5% of the capital share of Inoteb. The Company
increased its ownership percentage through additional purchases of Inoteb common
stock to 67% in 1997. Accordingly, since December 1998, the Company has owned
100% of the capital stock of Inoteb.

The executive offices of the Company are located at 38 rue Anatole France,
Levallois Perret Cedex, France consisting of approximately 2000 square feet of
office space.


                                       1
<PAGE>

Biocoral

Biocoral(R) is a biomaterial produced from natural coral. Certain chemical,
physical and structural characteristics of coral are very similar to that of
human bone tissue. Biocoral(R) is derived from three particular species of coral
naturally present in abundance. Biocoral(R) is primarily (more than 97%)
comprised of calcium carbonate. Porous and resorbable, Biocoral(R) is prepared
in microgranules as well as in engineered shapes according to specific
indication. Due to its similarity to bone tissue, Biocoral(R) is compatible,
resorbed by the body as new bone growth invades the Biocoral and is replaced by
neoformed invasion. It is highly porous with numerous interconnected channels
which allow a total migration to the center of the implant free of contamination
risk. Because Biocoral(R) is resorbed, it can be combined with antimicrobials,
anticancer agents or other pharmaceuticals for slow release into bone tissue,
resulting in an advantage over autologous bone grafts. The principal current
alternative to Biocoral(R) is the utilization of autologous (from the patient's
own body) bone grafts. The use of autologous bone grafts requires the patient to
undergo one or more additional surgeries to harvest the bone graft material.
This is not always feasible due to the condition of the patient or other
contraindications, and must be shaped in a separate procedure to fit the graft
area.

According to Inoteb, the Company's French subsidiary, Biocoral(R) has been used
in approximately more than 300,000 patients, principally in Western Europe and
Korea. Biocoral(R) was originally patented in France in 1979, in the United
States in 1982, and in Japan in 1989. Inoteb acquired the patent rights to
Biocoral(R) from ANVAR/CNRS, the French National Center for Scientific Research,
a French governmental agency. The Company, through its subsidiaries, has
developed an additional ten titles of patents for various applications and uses
of its products, such as osteoporosis remediation, autologous glue, combination
with growth factor, among others. Through these ten titles patent applications
in various countries in Europe, Canada, the United States, Japan, Australia, and
Switzerland, the Company owns more than 165 patent applications around the world
and approximately 105 of which have thus far been granted by various countries
by their official government patent office, including most European Community
countries, Canada, Australia, Japan and in the United States by the US
Department of Commerce Patent and Trademark office.

Clinical Applications

Biocoral(R) has been used in various clinical applications. Current uses include
the following: (a) orthopedic surgery uses include spinal surgery, tibial
(shinbone) osteotomies, hip fractures, trephine (skull) hole replacement,
fracture repair and filling of bone cavities particularly in bone fractures due
to osteoporosis; (b) maxillocraniofacial surgery and plastic surgery uses
include reconstructive and cosmetic surgery; (c) oral surgery uses include
filling of bone defects due to loss of teeth or periodontal disease.

The Company is preparing new clinical human trials for autologous fibrin glue in
different indications which is expected to be started during 2004. We believe
that the results of these clinical trials will allow us to extend the market of
innovative Company products for use in other indications. However, there can be
no assurance that the Company will be able to extend the market for our
products.

Osteoporosis

Osteoporosis is a progressive bone disorder in which bone density decreases,
combined with increased bone brittleness and porosity, which primarily affects
post-menopausal women. The number of women suffering from osteoporosis has grown
significantly with the aging of western populations. The clinical trials Inoteb
has run over the past nine years have demonstrated the feasibility of this
treatment to reduce the consequences of fractures caused by osteoporosis and to
avoid the occurrence of fracture as well. Inoteb is developing several variants
of its Biocoral(R) technology aimed at osteoporosis treatment. Biocoral(R)
offers a superior method of preventing and repair of bone fractures due to
osteoporosis. It has the ability to help the skeletal system, reinforcing it
where it is weak and fragile. Biocoral(R) can serve both to heal bones that are
already fractured and to prevent bone fractures from occurring. Phase II
clinical trials in Europe demonstrated the efficacy of Biocoral(R) for local
osteoporosis treatment in rebuilding bone, particularly in combination with
osteodensimatic screening. The Company also began Phase III multi-center
clinical trials of Biocoral(R) in 14 clinics in Europe last year. It is expected
that this study will demonstrate that the Company's product in this application
will stabilize the fracture and will permit better recovery for patients
providing them faster mobility and return to normalcy with a very low risk of
refracture. We are also working on a prevention concept which for the first time
will permit treatment for patients whom are susceptible to osteoporosis and
already have fractures as a result of it. The Company's product in this
application will permit the reconstruction of newly formed bone in the area that
is affected by the osteoporosis and has a low bone mass. An initial human
clinical study has demonstrated and confirmed the result of reconstruction of
newly formed bone in the bone mass area. The Company, through its subsidiaries,
owns the patents in these applications which are granted in United States. The
Company intends to raise additional capital to continue Phase III clinical
trials in North America which will be a prerequisite to human use in the United
States and Canada.

Autologous Fibrin Glue

We have developed what we believe is the world's first fully autologous fibrin
glue. This autologous fibrin glue is prepared using the patient's own blood, in
a closed system, eliminating immunological problems and the risk of blood-borne
disease transmission such as, for example, HIV and hepatitis. In contrast, all
fibrin glues currently on the market (whether autologous or homologous) require
foreign protein as thrombin or antifibrinolitic.

Surgical glue represents a fast growing segment of the biotech industry.
Clinical trials have been done especially for skin replacement


                                       2
<PAGE>

and skin grafts eliminating the need for protein based skin grafts.

The Company has completed phase III human clinical trials for specific
indications, and the product file has been approved by the AFSSPS. On
September 14, 2000, AFSSPS granted a blood bank the authorization to prepare,
use and distribute the Company's autologous fibrin glue. On June 8, 2000, the
Company also obtained EC certification for its innovative medical device, which
allows the company to market the product in the European community and which is
valid until June 7, 2005 and is renewable. However, before the Company can
commence commercialization of the autologous fibrin glue, AFSSPS requires that
the French blood bank EFS, the exclusive operator of blood transfusions in
France, prepare a report following up on the progress of the first fifty (50)
patients treated with the autologous fibrin glue.

The Company has been coordinating the program to prepare the report with EFS and
the blood bank of the French Army in Clamart, known as CTSA. The inclusion of
patients began in April of 2002. Shortly thereafter, the Company was required to
suspend the trial after nine preparations had been tested when a technical
problem with the testing materials was observed. Three of these nine
preparations were successful and has been used by the patient with successful
results. The investigation and correction of the technical problem has provided
the Company with additional information on the how to properly prepare and use
the final product. The complication that was discovered during the trial was
with the preparation materials used and not with the autologous fibrin glue. The
discovery of the materials problem will help the Company ensure that their final
product is safe for patients. The Company anticipates restarting the inclusion
of patients and preparation before the end of 2003 and expects to be ready for
distribution of the new device in France during 2004 and in other European
countries in beginning of 2005. The Company believes that the world market
segment for the autologous fibrin glue is in excess of $600 million. However,
there can be no assurance that the Company will be able to restart the patient
inclusion in 2003. Failure the restart the patient inclusion will delay bringing
this product to market and could have a negative impact on the Company's
financial condition.

Composite Biocoral and Growth Factor

For more than 13 years, studies have been undertaken to demonstrate that it is
possible to accelerate the bone repair process by combining growth factors with
a support matrix such as Biocoral(R). Some scientific research has shown that
Biocoral(R), as biomaterial, represents a useful support for growth factors.
European clinical trials conducted over the past 3 years have had positive
results confirming the acceleration of the bone repair process as aforesaid.

Raw Materials and Manufacturing

The primary raw material used by the Company to manufacture Biocoral(R) is
coral. The coral used in the Company's products is presently sourced from New
Caledonia, but is also found in abundance in wide areas of the Indian and
Pacific Oceans. The Company believes that its existing inventory of coral,
together with coral sources immediately available to it, are sufficient to meet
its present and future needs. To date, coral prices have been stable but no
assurance can be had that they will not rise. The Company is, however, unaware
of any factors which are likely to have a material adverse effect on the
Company's ability to obtain coral at a competitive price.

Manufacturing of Biocoral(R) is conducted at Inoteb's facility in Saint Gonnery,
France. This facility, which covers approximately 350 square meters (3150 square
feet), has been ISO 9002 rated since August 1995. On October 25, 1996, Inoteb
was granted, in addition to the ISO 9002 certification, European Norms 46002
certification for the quality assurance system set up in the manufacturing
process of Biocoral(R) and, on December 30, 1996, Inoteb was granted the EC
certification allowing sales of Biocoral(R) throughout the European Community.
This certification was valid for five (5) years and expired in 2001. In the last
quarter of 2001 the Company was audited for renewal of this certification and
the new certification was issued on December 20, 2001 and is valid through 2004.
Additionally, the Company is audited once a year by GMED to maintain its
certifications. The Company believes this facility is adequate to service the
Company's present and medium-term-future needs.

Competition

The Company's Biocoral(R) product competes with (i) natural bone obtained from
autograft procedures and allograft sources; and (ii) two other synthetic bone
products, one marketed in the United States by Interpore, Inc. a publicly-held
company with significantly greater resources and distribution capabilities than
the Company, and another that was approved by the FDA in May 1993. Autograft and
allograft bone have been used for graft material for a much longer period of
time than Biocoral(R) and similar materials, and in order to increase its future
sales of Biocoral(R), the Company will have to demonstrate to the medical
community the surgical and patient advantages, safety, efficacy, cost
effectiveness and clinical results of Biocoral(R). Most of the Company's
competitors have substantially greater resources, larger market share and
greater research and development capabilities than the Company and may,
therefore, be expected to compete aggressively and successfully in the markets
for the Company's products.

Homologous fibrin sealant is biologically prepared from large plasma pools, with
the addition of other biologicals such as thrombin and anti fibrinolytics
products necessary for their activation. Even after a safety process has been
implemented, there can be residual unexpected viral transmission or
immunological problems. Safer autologous fibrin glue can be prepared by
different processes, but are not standardized and need other biologicals such as
thrombin and antifibrinolytics.


                                       3
<PAGE>

The new autologous fibrin glue prepared by the Company's innovative medical
device is standardized, and truly safe due to the use of calcium as an
activator, without the addition of any other biologicals such as thrombin or
antifibrinolytics. In addition, the composition remains constant in terms of
components and properties.

The Company believes that Biocoral(R) provides an attractive alternative to
autograft and allograft bone graft materials. In an autograft procedure, bone
material is first harvested from another part of the patient's skeleton and
then, in a second procedure, grafted to the site of the bone deficit. The
harvesting procedure increases operating time and expense, and can lead to
complications such as infection, excessive blood loss, chronic pain and
deformity. When an autograft is not feasible or desirable, allograft bone,
typically obtained from a cadaver, can be used. In order to maintain mechanical
and biological properties, some allograft bone is not sufficiently secure to
avoid all risks of disease transmission. Therefore, unlike Biocoral(R), which is
a sterile and biocompatible material, allograft bone carries the risks of
implant rejection and the transmission of infectious agents such as hepatitis
and HIV. The use of Biocoral(R) entails none of these risks and provides
clinical results comparable to those of autograft material in suitable condition
for use.

In May 1993, a second bone graft substitute was approved by the FDA. This
product consists of hydroxyapatite-calcium phosphate and bovine collagen, which
must be mixed with the patient's own bone marrow. The company believes that this
three-part system is more difficult to use due to the mixing process and has
inferior mechanical qualities. It also requires refrigeration, has a shorter
shelf life and raises the risks of adverse reaction in patients allergic to
bovine collagen, and poses risk of infection. In addition, many countries have
prohibited the commercialization of product utilizing bovine collagen as a base.

The Company has been able to compete in Europe against producers that also sell
products in the United States. Despite their significantly greater resources,
management believes that it will, once its products have been approved by the
FDA, be able to be competitive with such companies because of the quality of its
products. See "Business -- Government Regulation" Biocoral(R) has been used in
European dental applications for more than 16 years. This use, together with the
scientific results of its in vivo use and clinical trials have demonstrated the
efficacy of using Biocoral(R) for bone regeneration in dental applications. The
Company competes with many businesses in the production and distribution of
biomaterials for filling bone cavities before rehabilitation of partially and
totally edentulous patients. These businesses compete primarily on the basis of
product performance and price, as well as customer loyalty and service.
Biocoral(R) also competes with bone grafts and bone graft substitutes. Companies
selling competitive products sometimes also sell dental implants, so bundling
these products is often a strategy. All of these businesses compete primarily on
the basis of product performance and price, as well as on customer loyalty and
service.

Management believes that the Company's products are superior to its competitors'
products. The Company has begun to make arrangements for the commencement of
clinical trials for certain of its products with a long term/ medium term view
toward FDA approval thereof . In the interim, the Company will focus on
increasing its European and other sales of its products and entering into joint
ventures with key strategic partners for distribution of its products, research
and development and the like. No assurance can be given that any such
arrangements will be reached or that they will be profitable.

Governmental Regulation

Biocoral(R) has been approved for marketing in more than fifteen countries in
Europe, Korea, South Africa, Canada and Australia. Biocoral(R) has been approved
for reimbursement by the Tarif Interministeriel des Prestations Sanitaires, the
French national health services agency and for reimbursement by social security
insurance. During 2002 we were informed that the Canadian health authorities
changed its system and the authorization which had been previously been granted
to the Company to market its products in Canada was no longer valid. We
initiated a new application process for the marketing of our product in Canada
in several applications, including dental, CMF and orthopedic. The Company was
informed on March 11, 2003 that its new application has been approved by the
Canadian health authorities. The Company expects to begin searching for an
accredited distributor to market their products in Canada.

The Company's products are subject to significant government regulation in the
United States and other countries. To test clinically, and to produce and mass
market products for human diagnostic and therapeutic use in the United States,
the Company must comply with mandatory procedures and safety standards
established by the Food and Drug Administration ("FDA") and comparable state and
foreign regulatory agencies. Typically, such standards require that products be
approved by the government agency as safe and effective for their intended use
before being marketed for human applications. Obtaining such approvals in the US
could take some time and involve substantial expenditures. No clinical testing
on humans may be undertaken in the United States without first obtaining an
Investigational Device Exemption ("IDE") from the FDA.

There are two principal methods by which FDA approval may be obtained to market
regulated products in the United States. One method is to seek FDA approval
through a premarket notification filing under Section 510(k) of the Food, Drug
and Cosmetics Act. Applicants under the 510(k) procedure must prove that the
device for which approval is sought is substantially equivalent to devices on
the market before the Medical Device Amendments of 1976 or devices approved
after the 510(k) procedure. The review period for a 510(k) application is 90
days from the date of filing the application; if not rejected, within such 90
days, applications are deemed approved.


                                       4
<PAGE>

The alternative method is to obtain premarket approval ("PMA") from the FDA.
Under the PMA procedure, the applicant must obtain an IDE before beginning the
substantial clinical testing required to determine the safety, efficacy and
potential hazards of the products. The review period under the PMA procedure may
last for several years. The FDA also imposes requirements on manufacturers and
sellers of products under its jurisdiction, such as labeling, manufacturing
practices, record keeping and reporting.

An accredited scientific team in the US has conducted human clinical studies
with a 5 year follow up to confirm bone reconstruction in oral application. This
study confirmed the stability of the successful result and management believes
that this study will facilitate FDA approval for our product used in this
indication when we file for FDA approval.

Employees

The Company, except for its wholly-owned subsidiary Inoteb, currently has no
employees other than its officers and directors who devote as much time as they
believe necessary to carry out the affairs of the Company. Inoteb currently has
10 employees whom are full time. In addition, the Company engages the services
of various scientific and research consulting teams under consulting contracts,
working on research and development projects in different laboratories and
hospitals in France and other countries.

Item 2. Description of Property.

Inoteb, the Company's subsidiary, currently leases its principal executive
offices from an unrelated third party for an aggregate annual rent of
approximately $56,000.

Item 3. Legal Proceedings.

There is no material litigation pending against the Company at this time.

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

On October 1, 2002, the Board of Directors approved an Amendment to the
Company's Articles of Incorporation to authorize and to effectuate a
one-for-fifteen reverse stock split of the issued and outstanding shares of the
Company's Common Stock, $0.001 par value per share. Stockholders of the Company
holding 19,070,354 (pre reverse split) shares of the outstanding shares of the
Company's Common Stock on November 8, 2002, consented in writing to the
amendment. The reverse stock split was effectuated on December 23, 2002 by
filing the amendment to the Company's Certificate of Incorporation with the
Delaware Secretary of State.

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

At December 31, 2002 there were 11,297,573 shares of our common stock issued and
outstanding. Unless these securities are registered under the Securities Act of
1933, as amended, or exempt under another provision of the Securities Act, these
securities are ineligible for sale in the public market. Sales in the public
market of substantial amounts of our common stock that are presently restricted
could adversely affect prevailing market prices.

The following table sets forth information regarding the high and low closing
price for our common stock as reported on the over-the-counter electronic
bulletin board for each of the periods set forth below. Such prices do not
necessarily reflect actual transactions and do not include retail mark-ups,
mark-downs or commissions. The prices set forth below are per share (the prices
in the following table have been adjusted to reflect a 1-for-50 reverse split of
the Company's common stock in April 2001 and a 1-for-15 reverse split of the
Company's common stock in December 2002.

           Quarter Ended                      High                 Low
           -------------                      ----                 ---
           December 31, 2002                  $15.15               $5.00
           September 30, 2002                 $28.50               $21.00
           June 30, 2002                      $52.50               $30.00
           March 31, 2002                     $150.00              $60.00

           December 31, 2001                  $157.50              $34.05
           September 30, 2001                 $171.90              $37.50
           June 30, 2001                      $277.50              $70.31
           March 31, 2001                     $140.62              $70.31


                                       5
<PAGE>

Holders

As of December 31, 2002 there were approximately 400 holders of record of the
shares of the Company's common stock.

Dividends

The Company has paid no cash dividends on its equity securities to date and does
not anticipate the payment of cash dividends on its equity securities in the
near future. The Company paid a dividend of one share of its common stock for
each three shares owned on December 18, 1995 and paid, in December 1996, another
stock dividend of one share for each three shares owned as of November 6, 1996.

Recent Sales of Unregistered Securities

During the year ended December 31, 2000, the Company completed a private
offering (the "Offering") of 6% convertible promissory notes payable (the
"Notes") due December 31, 2002. The Company sold the Notes in the aggregate
principal amount of $3,000,000 to "accredited investors" through a private
placement intended to be exempt from registration pursuant to the provisions of
Regulation D of the Act. The Company has received $2,000,000 of the proceeds and
the remaining $1,000,000 was restricted as of December 31, 2002 pending the
Company's issuance of all of the required regulatory documents and the listing
of the Company's common stock for trading on the NASDAQ Stock Market. As such,
these proceeds are classified as cash held in escrow, a non-current asset, in
the consolidated balance sheets included herein.

In October 2001, the Company commenced a new offering (the "New Offering") for a
maximum of 300,000 shares of its common stock at $6.00 per share to "accredited
investors" through a private placement intended to be exempt from registration
pursuant to the provisions of Regulation D of the Act. Consummation of at least
a portion of the offering was dependent on the sale of a minimum of 11,111
shares prior to the expiration of the New Offering on April 30, 2002. As of
December 31, 2002, the Company had received subscriptions for the purchase of
11,889 shares of common stock which generated gross proceeds of $1,070,000.
Approximately $1,010,000 of those proceeds were used primarily to repay the
Company's outstanding callable convertible 8% Notes and the accrued interest
thereon.

On April 18, 2001, we issued an aggregate of 1,259,259 shares of our common
stock upon the conversion of an aggregate principal amount of $850,000 of our 6%
promissory notes to the holders of such notes.

In March 2002, the Company issued 778 shares of common stock to an accredited
European investor for an aggregate purchase price of $70,000. These proceeds
were used primarily to repay the Company's outstanding interest due to callable
convertible 8% Notes.

On December 26, 2002, we issued an aggregate of 10,000,000 shares of our common
stock upon the conversion of an aggregate principal amount of $450,000 of our 6%
promissory notes to the holders of such notes.

We believe that the sales of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act of 1933, as amended, or Regulation D promulgated thereunder. The
recipients of securities in each such transaction represented their intentions
to acquire the securities for investment only and not with a view to or for sale
in connection with any distribution thereof and appropriate legends were affixed
to the instruments representing such securities issued in such transactions. All
recipients either received adequate information about us or had adequate access,
through their relationships with us, to such information.


                                       6
<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

The following discussion and analysis should be read in conjunction with our
consolidated financial statements and notes included in the financial statement
contained elsewhere in this annual report.

            Summary of Significant Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of
operations is based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, and expenses, and related disclosures
of contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to accounts receivable, property and
equipment, stock based compensation and contingencies. We base our estimates on
historical experience and on various assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The assumptions and bases
for estimates used in preparing our consolidated financial statements are set
forth as significant accounting policies in Note 1 of the notes to the
consolidated financial statements included in this annual report and are
summarized below:

Use of estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("USGAAP") requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.

Revenue recognition -- Sales are recognized when the earnings process is
complete and collectibility is assured, which is usually when the goods are
shipped to customers. Amounts billed related to shipping and handling, which are
not significant, are included in revenue.

Investments in securities -- The Company's investments in marketable equity
securities have been classified as "available-for-sale." Accordingly, they are
carried at fair value, with unrealized gains and losses, net of related tax
effects, reported as a separate component of stockholders' equity (deficiency)
and accumulated other comprehensive income (loss).

Inventories -- Inventories are stated at the lower of cost, determined on the
first-in, first-out ("FIFO") method, or market.

Property and equipment -- Property and equipment are recorded at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets (25 years for properties and two to ten years for
equipment).

Deferred interest -- Deferred interest is amortized to interest expense over the
term of the related loan on a straight-line basis.

Impairment of long-lived assets -- The Company reviews long-lived assets
when events or changes in circumstances indicate that the undiscounted cash
flows estimated to be generated by such assets are less than their carrying
value and, accordingly, all or a portion of such carrying value may not be
recoverable. Impairment losses are then measured by comparing the fair value of
assets to their carrying amounts.

Advertising -- The Company expenses the cost of advertising and promotions as
incurred.

Research and development -- Charges related to research and product development
are expensed as incurred.


                                       7
<PAGE>

Income taxes -- The Company accounts for income taxes pursuant to the asset and
liability method which requires deferred tax assets and liabilities to be
computed annually for temporary differences between the financial statement and
tax bases of assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates applicable to the
periods in which the temporary differences are expected to affect taxable
income. Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized.

Earnings (loss) per common share -- The Company presents "basic" earnings (loss)
per common share and, if applicable, "diluted" earnings per common share
pursuant to the provisions of Statement of Financial Accounting Standards No.
128, "Earnings per Share" ("SFAS 128") and certain other financial accounting
pronouncements. Basic earnings (loss) per common share is calculated by dividing
net income or loss by the weighted average number of common shares outstanding
during the period. The calculation of diluted earnings per common share is
similar to that of basic earnings per common share, except that the denominator
is increased to include the number of additional common shares that would have
been outstanding if all potentially dilutive common shares, such as those
issuable upon the exercise of stock options, were issued during the period.
Since the Company had losses in 2002 and 2001, the assumed effects of the
exercise of outstanding stock options and the application of the treasury stock
method were anti-dilutive and, accordingly, diluted per share amounts have not
been presented in the accompanying consolidated statements of operations.

Foreign currency translation and transactions -- Assets and liabilities of
Inoteb are translated at current exchange rates and related revenues and
expenses are translated at average exchange rates in effect during each year.
Resulting translation adjustments, if material, are recorded as a separate
component of stockholders' deficiency.

Recent pronouncements -- In August 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. Among other things, SFAS 144 provides guidance on the
implementation of previous pronouncements related to when and how to measure
impairment losses and how to account for discontinued operations. The adoption
of SFAS 144 in 2002 did not have a material impact on the Company's consolidated
financial position or results of operations.

The Financial Accounting Standards Board and the Accounting Standards Executive
Committee of the American Institute of Certified Public Accountants had issued
certain other accounting pronouncements as of December 31, 2002 that will become
effective in subsequent periods; however, management of the Company does not
believe that any of those pronouncements would have significantly affected the
Company's financial accounting measurements or disclosures had they been in
effect during 2002 and 2000, and it does not believe that any of those
pronouncements will have any significant impact on the Company's consolidated
financial statements at the time they become effective.

Results of Operations for the Year Ended December 31, 2002 Compared to the Year
Ended December 31, 2001

Net sales, which are solely attributable to Inoteb, SA ("Inoteb"), the Company's
wholly owned French subsidiary, totaled $350,300 for the year ended December 31,
2002, a decrease of $3,900 from $354,200 for the year ended December 31, 2001 or
approximately 1%. This decrease is attributable to a slight decline in sales
relating to the orthopedic and neurosurgery market during the fourth quarter.

Cost of sales totaled $102,400 for the year ended December 31, 2002, a decrease
of $99,400 from $201,800 for the year ended December 31, 2001 or approximately
49%. The decrease is primarily due to the reduction in purchases of raw
materials.

Operating expenses increased by approximately $151,000 to approximately $804,000
during the year ended December 31, 2002 from approximately $652,000 for the year
ended December 31, 2001 or approximately 23%. This increase was primarily
attributable to increases in expenditures for research and development in
connection with the patent application costs and other administrative and
operating expenses offset by a decrease in consulting and professional fees.


                                       8
<PAGE>

Research and development expenses increased approximately $76,000 to
approximately $140,000 during the year ended December 31, 2002 as compared to
approximately $64,000 during the year ended December 31, 2001. This increase was
the result of increase costs related to additional patent applications and
related to the investigation and coordination by the Company of the program to
prepare the report required by AFSSPS related to the autologous fibrin glue.

Consulting and professional fees during the year ended December 31, 2002
decreased by $153,000 to approximately $178,000 from $331,000 during the year
ended December 31, 2001 or approximately 46% The decrease was primarily
attributable to an effort by the Company to reduce costs in an effort to control
its budget.

Other expenses (net) totaled approximately $582,000 in the year ended December
31, 2002 as compared to approximately $1,202,000 in the year ended December 31,
2001. This is primarily due to a decrease in interest expense of approximately
$596,000 from approximately $1,163,000 in the year ended December 31, 2001 to
approximately $567,000 in the year ended December 31, 2002.

As a result of the above, the Company's net loss for the year ended December 31,
2002 totaled approximately $1,138,000 or $.34 per share compared to a net loss
of approximately $1,702,000 or $5.83 per share for the year ended December 31,
2001. These losses per share were based on weighted average common shares
outstanding of 3,324,813 for the year ended December 31, 2002 and 291,820 for
the year ended December 31, 2001, which reflect a 1-for 50 reverse split
effective April 16, 2001 and a 1-for-15 reverse split effective December 23,
2002 (see Note 9 in the notes to consolidated financial statements herein).

              Financial Condition, Liquidity and Capital Resources

As shown in the accompanying consolidated financial statements, the Company had
net losses of approximately $1,138,000 and $1,702,000 in 2002 and 2001,
respectively. The net loss in 2002 included a nonrecurring charge related to
beneficial conversion rights of $450,000. Management believes that it is likely
that the Company will continue to incur net losses through at least 2003,
although it is also likely that such losses will be substantially reduced in the
absence of the nonrecurring charge. The Company also had a working capital
deficiency and stockholders' deficiency of approximately $1,076,000 and
$1,743,000 at December 31, 2002, respectively. The working capital deficiency at
December 31, 2002 was attributable, in part, to the inclusion in current
liabilities of $842,000 of long-term debt obligations. Subject to satisfaction
of due diligence, an accredited investor has committed to fund $500,000 to the
Company to cover operating shortfalls for the balance of 2003.

On March 25, 2002 the holders of the Company's 6% convertible promissory notes
payable (the "6% Notes") agreed to extend the due date from December 31, 2002 to
December 31, 2004. The 6% Notes are convertible at any time, at a rate of $.045,
at the holder's option, subject to Company approval. The 6% Notes were not
affected by both reverse stock splits. As of March 28, 2002, the Company had
received additional subscriptions for the purchase of shares that generated
gross proceeds of approximately $115,000. The chairman of the Company has also
agreed to allow the Company to defer compensation pursuant to his consulting
agreement. Management also plans to seek additional equity and/or debt financing
for the Company and, if necessary, request the Company's lenders and other
creditors to extend the due dates of the Company's obligations and/or convert
the obligations to common stock. Accordingly, management believes, but cannot
assure, that the Company will have sufficient liquid resources for the payment,
or the ability to defer the payment, of its obligations as they come due and
continue to operate through at least December 31, 2003. During the year ended
December 31, 2002 changes in the Company's other operating assets and
liabilities provided cash totaling approximately $198,000. The Company's net
loss of approximately $1,138,000 increased its accumulated deficit to
approximately $18,459,000 at December 31, 2002.


                                       9
<PAGE>

During the year ended December 31, 2000, the Company completed a private
offering (the "Offering") of 6% convertible promissory notes payable (the
"Notes") due December 31, 2002. The Company sold the Notes in the aggregate
principal amount of $3,000,000 to "accredited investors" which represents the
maximum number of units available under the Offering. The Company has received
$2,000,000 of the proceeds and the remaining $1,000,000 was restricted as of
December 31, 2002 pending the Company's issuance of all of the required
regulatory documents and the listing of the Company's common stock for trading
on the NASDAQ Stock Market. As such, these proceeds are classified as cash held
in escrow, a non-current asset, in the consolidated balance sheets included
herein.

During the year ended December 31, 2002 the Company invested an additional
$15,550 of excess cash in marketable securities, which were classified as
available-for-sale and consisted of equity securities with an aggregate fair
value of $112,892 and a cost totaling $690,283 at December 31, 2002. The net
unrealized holding loss of $198,999 for the year ended December 31, 2002
increased accumulated other comprehensive loss, a component of total
stockholders' equity, to $633,000 as of December 31, 2002.

The Company also used $40,300 to repay long-term obligations during the year
ended December 31, 2002 as well as make capital expenditures in the amount of
$800. The Company does not presently have commitments to make material capital
expenditures during the next twelve months.

On December 23, 2002, the Company affected a 1-for-15 reverse split of the
Company's outstanding shares of common stock. On April 16, 2001 the Company
affected the following actions: (i) an increase in the number of common shares
authorized for issuance by the Company from 20,000,000 shares to 100,000,000
shares; (ii) a 1-for 50 reverse split of the Company's outstanding shares of
common stock; and (iii) an increase in the number of shares of common stock that
may be subject to stock options from 2,000,000 shares to 20,000,000 shares. The
numbers of shares and prices per share in the consolidated financial statements
and notes included herein have been retroactively restated for the effects of
the reverse splits.

On March 25, 2002 the maturity date of the 6% Notes was extended to December 31,
2004. The Company believes that the proceeds from the New Offering, the
extension of the maturity date of the 6% Notes, and its current sources of
liquidity and cash are sufficient to satisfy its cash needs through at least the
next twelve months.

                           Forward-Looking Statements

In this annual report, we include some forward-looking statements that involve
substantial risks and uncertainties and other factors that may cause our
operational and financial activity and results to differ from those expressed or
implied by these forward-looking statements. In many cases, you can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," "plan," "intend" and "continue," or similar
words. You should read statements that contain these words carefully because
they discuss our future expectations, contain projections of our future results
of operations or of our financial condition, or state other "forward-looking"
information.

You should not place undue reliance on these forward-looking statements. The
section captioned "Management's Discussion and Analysis of Financial Condition
and Plan of Operations," as well as any cautionary language in this annual
report, provide examples of risks, uncertainties and events that may cause our
actual results to differ materially from our expectations.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.

We do not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Because of the risks and uncertainties, the forward-looking
events and circumstances discussed in this annual report might not occur.


                                       10
<PAGE>

Item 7. Financial Statements

                         BIOCORAL, INC. AND SUBSIDIARIES

                                    I N D E X

                                                                       PAGE
                                                                       ----
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS                              F-2/4

CONSOLIDATED BALANCE SHEETS
     DECEMBER 31, 2002 AND 2001                                         F-5

CONSOLIDATED STATEMENTS OF OPERATIONS
     YEARS ENDED DECEMBER 31, 2002 AND 2001                             F-6

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY AND COMPREHENSIVE LOSS
     YEARS ENDED DECEMBER 31, 2002 AND 2001                             F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS
     YEARS ENDED DECEMBER 31, 2002 AND 2001                             F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                             F-9/18

                                      * * *


                                       F-1
<PAGE>

                          Independent Auditors' Report

To the Stockholders' and the Board of Directors
of Biocoral Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Biocoral, Inc.
and Subsidiaries (the "Company") as of December 31, 2002, and the related
consolidated statements of operations, changes in stockholders' equity and
comprehensive loss and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. We did not audit the financial statements of Inoteb SA, a 100% wholly
owned subsidiary as of December 31, 2002, which statements reflect total assets
of approximately $200,000 as of December 31, 2002, and losses of approximately
$174,000 for the year ended December 31, 2002. Those statements were audited by
other auditors, whose report has been furnished to us, and in our opinion,
insofar as it relates to the amounts included for Inoteb SA, is based solely on
the report of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Biocoral, Inc.
and Subsidiaries at December 31, 2002, and the consolidated results of their
consolidated operations and their cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Rogoff & Company, PC

New York, New York
April 11, 2003


                                      F-2
<PAGE>

                    Report of Independent Public Accountants

To the Board of Directors and Stockholders
INOTEB S.A. (France)

      We have audited the consolidated balance sheets of INOTEB S.A. (a French
corporation) AND SUBSIDIARY as of December 31, 2002 and 2001, and the related
consolidated statements of operations, stockholders' deficiency and cash flows
for the years then ended. These financial statements, which are not presented
separately herein, are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of INOTEB S.A.
AND SUBSIDIARY as of December 31, 2002 and 2001, and their results of operations
and cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.


Paris, France
Mars 15, 2003                                        CONSULTAUDIT

/s/ Sylvain ROJZEN
Sylvain ROJZEN


                                      F-3
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
BioCoral, Inc.

We have audited the accompanying consolidated balance sheet of BIOCORAL, INC.
AND SUBSIDIARIES as of December 31, 2001, and the related consolidated
statements of operations, changes in stockholders' deficit and comprehensive
loss and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We did not audit the
financial statements of Inoteb SA, a 100%-owned subsidiary as of December 31,
2001, which statements reflect total assets of approximately $433,000 as of
December 31, 2001 and losses of approximately $64,800 for the year ended
December 31, 2001. Those statements were audited by other auditors whose report
has been furnished to us, and our opinion, insofar as it relates to the amounts
included for Inoteb SA, is based solely on the report of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of BioCoral, Inc. and Subsidiaries as
of December 31, 2001, and their results of operations and cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.


                                        J.H. COHN LLP

Roseland, New Jersey
March 28, 2002


                                      F-4
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                  DECEMBER 31,

<TABLE>
<CAPTION>
                                      ASSETS
                                                                               2002                    2001
                                                                          ------------            ------------
<S>                                                                       <C>                     <C>
Current Assets:
   Cash                                                                   $     42,770            $    175,170
   Investment in marketable securities                                         112,892                 296,341
   Accounts receivable, net of allowance for doubtful accounts
     of $1,000                                                                  74,200                  52,000
   Inventory                                                                    86,100                  79,700
   Other current assets                                                             --                  30,300
                                                                          ------------            ------------

     Total current assets                                                      315,962                 633,511

Property and equipment, net                                                     29,900                  37,400

Cash held in escrow                                                          1,011,049               1,000,000
Investment in limited partnership                                               98,545                 122,003
Deferred financing costs, net                                                       --                  80,000
Deferred patent costs, net                                                      99,767                      --
Other assets                                                                     9,800                   8,700
                                                                          ------------            ------------
                                                                          $  1,565,023            $  1,881,614
                                                                          ============            ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current  liabilities:
   Current portion of long-term debt                                      $     84,200            $    840,300
   Accounts payable                                                            896,973                 444,757
   Accrued expenses                                                            411,275                 610,152
                                                                          ------------            ------------

     Total current liabilities                                               1,392,448               1,895,209

Long-term debt, net of current portion                                       1,880,400               2,351,500
Other liabilities                                                               35,600                  75,000
                                                                          ------------            ------------

     Total liabilities                                                       3,308,448               4,321,709
                                                                          ------------            ------------

Stockholders' Deficit
   Preferred stock; par value $.001 per share; 1,000,000  shares
     authorized ; none issued                                                       --                      --
   Common Stock; $.001 par value;  100,000,000 shares authorized;
     11,297,573 and 1,296,795 shares issued and outstanding                     11,298                   1,297
   Additional paid-in capital                                               17,337,292              16,377,293
   Accumulated deficit                                                     (18,458,833)            (17,321,093)
   Accumulated other comprehensive loss                                       (633,182)               (427,592)
   Stock subscriptions receivable                                                   --              (1,070,000)
                                                                          ------------            ------------

     Total Stockholders' Deficit                                            (1,743,425)             (2,440,095)
                                                                          ------------            ------------

                                                                          $  1,565,023            $  1,881,614
                                                                          ============            ============
</TABLE>

See accompanying notes to the consolidated financial statements


                                      F-5
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                        2002           2001
                                                                    -----------    -----------
<S>                                                                 <C>                <C>
Net sales                                                           $   350,300        354,200

Cost of sales                                                           102,400        201,800
                                                                    -----------    -----------

    Gross profit                                                        247,900        152,400
                                                                    -----------    -----------

Operating expenses
    Research and development, net of subsidies                          140,041         64,232
    Consulting and professional fees                                    177,599        330,681
    Depreciation and amortization                                        96,858         20,200
    Administrative expenses                                             389,184        237,045
                                                                    -----------    -----------

      Total operating expenses                                          803,682        652,158
                                                                    -----------    -----------

    Loss from operations                                               (555,782)      (499,758)
                                                                    -----------    -----------

Other income (expense)
    Interest, net                                                      (567,290)    (1,163,952)
    Equity in loss of partnership                                       (23,458)       (27,403)
    Realized gain (loss) on sale of available for sale securities            --        (21,418)
    Other                                                                 8,790         10,515
                                                                    -----------    -----------

      Total other income (expense)                                     (581,958)    (1,202,258)
                                                                    -----------    -----------

Net loss                                                            $(1,137,740)   $(1,702,016)
                                                                    ===========    ===========

Basic net loss per share                                            $     (0.34)   $     (5.83)
                                                                    ===========    ===========

Basic weighted average common shares outstanding                      3,324,813        291,820
                                                                    ===========    ===========
</TABLE>

See accompanying notes to the consolidated financial statements


                                      F-6
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
                         DEFICIT AND COMPREHENSIVE LOSS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                                                                       Accumulated
                                                                 Common Stock           Additional                        Other
                                                           -------------------------     Paid-in      Accumulated     Comprehensive
                                                             Shares        Amount         Capital       Deficit           Loss
                                                           ----------   ------------   ------------   ------------    ------------
<S>                                                         <C>         <C>            <C>            <C>             <C>
Balance, January 1, 2001                                       25,647   $         26   $ 13,608,564   $(15,619,077)   $    (42,234)

Conversion of notes payable to common stock                 1,259,259          1,259        848,741             --              --

Charge for beneficial conversion rights                            --             --        850,000             --              --

Subscription receivable for purchase of common stock           11,889             12      1,069,988             --              --

Unrealized holding loss on avalable-for-sale securities            --             --             --             --        (406,776)

Reclassification adjustment                                        --             --             --             --           21,418

Net loss                                                           --             --             --     (1,702,016)             --

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

Balance, December 31, 2001                                  1,296,795          1,297     16,377,293    (17,321,093)       (427,592)

Conversion of interest payable to common stock                    778              1         69,999             --              --

Application of debt to subscription receivable                     --             --             --             --              --

Application of interest to subscription receivable                 --             --             --             --              --

Conversion of notes payable to common stock                10,000,000         10,000        440,000             --              --

Charge for beneficial conversion rights                            --             --        450,000             --              --

Cash payment - subscription receivable                             --             --             --             --              --

Other comprehensive loss - decline in market value of
avalable-for-sale securitues                                       --             --             --             --        (198,999)

Other comprehensive loss on foreign curremcy translation           --             --             --             --          (6,591)

Net Loss                                                           --             --             --     (1,137,740)             --

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

Balance December 31, 2002                                  11,297,573   $     11,298   $ 17,337,292   $(18,458,833)   $   (633,182)
                                                           ==========   ============   ============   ============    ============

<CAPTION>

                                                                                Total
                                                           Subscription      Stockholders'   Comprehensive
                                                            Receivable          Deficit           Loss
                                                           ------------      -------------   ------------
<S>                                                        <C>               <C>             <C>
Balance, January 1, 2001                                   $         --      $ (2,052,721)   $         --

Conversion of notes payable to common stock                          --           850,000              --

Charge for beneficial conversion rights                              --           850,000              --

Subscription receivable for purchase of common stock         (1,070,000)               --              --

Unrealized holding loss on avalable-for-sale securities              --          (406,776)       (406,776)

Reclassification adjustment                                          --            21,418           21,418

Net loss                                                             --        (1,702,016)     (1,702,016)

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

Balance, December 31, 2001                                   (1,070,000)       (2,440,095)   $ (2,087,374)
                                                                                             ============

Conversion of interest payable to common stock                       --            70,000              --

Application of debt to subscription receivable                  800,000           800,000              --

Application of interest to subscription receivable              210,667           210,667              --

Conversion of notes payable to common stock                          --           450,000              --

Charge for beneficial conversion rights                              --           450,000              --

Cash payment - subscription receivable                           59,333            59,333              --

Other comprehensive loss - decline in market value of
avalable-for-sale securitues                                         --          (198,999)       (198,999)

Other comprehensive loss on foreign currency translation             --            (6,591)         (6,591)

Net Loss                                                             --        (1,137,740)     (1,137,740)

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

Balance December 31, 2002                                  $         --      $ (1,743,425)   $ (1,343,330)
                                                           ============      ============    ============
</TABLE>

See accompanying notes to the consolidated financial statements


                                      F-7
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                              2002           2001
                                                                          -----------    -----------
<S>                                                                       <C>             <C>
Cash flows from operating activities:

    Net loss                                                              $(1,137,740)    (1,702,016)

    Adjustments to reconcile net loss to net cash used in
      operating activities:
      Depreciation of property and equipment                                   14,300         20,200
      Amortization of deferred financing costs and other assets                80,000         80,000
      Amortization of deferred patent costs                                     2,558             --
      Charge for beneficial conversion rights                                 450,000        850,000
      Deferred patent costs                                                  (102,325)            --
      Equity in loss of partnership                                            23,458         17,219
      Foreign currency translation gain                                        (6,591)            --
      Realized loss on available-for-sale securities                               --         21,418
      Effect of subsidies on research and development expenses                     --       (199,600)
    (Increase) decrease in assets and liabilities
      Accounts receivable                                                     (22,200)           700
      Inventories                                                              (6,400)        58,500
      Other current assets                                                     30,300         (5,900)
      Cash held in escrow account                                             (11,049)            --
      Other assets                                                             (1,100)        10,584
      Accounts payable and accrued expenses                                   528,006         44,992
      Other liabilities                                                       (39,400)        75,000
                                                                          -----------    -----------

Net cash used in operating activities                                        (198,183)      (728,903)
                                                                          -----------    -----------

Cash flows from investing activities:
    Purchase of property and equipment                                           (800)        (6,700)
    Purchase of available-for-sale securities                                 (15,550)      (254,822)
    Proceeds from sales of available-for-sale securities                           --         46,414
                                                                          -----------    -----------

Net cash used in investing activities                                         (16,350)      (215,108)
                                                                          -----------    -----------

Cash flows from financing activities:
    Proceeds from long-term obligations                                        63,100             --
    Principal payments on long-term obligations                               (40,300)      (114,900)
    Payment on subscripton receivable                                          59,333             --
                                                                          -----------    -----------

Net cash provided by (used in) financing activities                            82,133       (114,900)
                                                                          -----------    -----------

Net decrease in cash                                                         (132,400)    (1,058,911)

Cash, beginning of year                                                       175,170      1,234,081
                                                                          -----------    -----------

Cash, end of year                                                         $    42,770    $   175,170
                                                                          ===========    ===========

Cash paid during the year for:
    Interest expense                                                      $     2,450    $    24,821
                                                                          ===========    ===========

Supplemental disclosures of noncash investing and financing activities:
    Conversion of debt to equity                                          $ 1,530,667    $   850,000
                                                                          ===========    ===========
</TABLE>

See accompanying notes to the consolidated financial statements.


                                      F-8
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 1 - Description of Business

      BioCoral, Inc. ("BioCoral") was incorporated under the laws of the State
      of Delaware on May 4, 1992. BioCoral is a holding company that conducts
      its operations primarily through a wholly-owned French subsidiary, Inoteb
      SA ("Inoteb"). BioCoral, Inoteb and BioCoral's other subsidiaries are
      referred to collectively herein as the "Company."

      Inoteb's operations consist primarily of researching, developing,
      manufacturing and marketing patented high technology biomaterials, bone
      substitute materials made from coral and other orthopedic, oral and
      maxillo-facial products, including products marketed under the trade name
      of BioCoral. The Company has obtained regulatory approvals to market its
      products throughout Europe and in Canada and certain other countries. The
      Company owns various patents for its products which have been validated
      and issued in the United States, Canada, Japan, Australia and various
      countries throughout Europe. However, the Company has not applied for the
      regulatory approvals needed to market its products in the United States.
      Obtaining such approvals in the United States could take a period of time
      and involve substantial expenditures.

Note 2 - Liquidity

      The Company had net losses of approximately $1,138,000 and $1,702,000 in
      2002 and 2001, respectively. The net loss in 2002 and 2001 included a
      nonrecurring charge related to beneficial conversion rights of $450,000
      and $850,000, respectively. Management believes that it is likely that the
      Company will continue to incur net losses through at least 2003, although
      it is also likely that such losses will be substantially reduced in the
      absense of the nonrecurring charge. The Company also had a working capital
      deficiency and stockholders' deficiency of approximately $1,076,000 and
      $1,743,000, respectively, at December 31, 2002 and $1,262,000 and
      $2,440,000, respectively, at December 31, 2001. The working capital
      deficiency at December 31, 2002 was attributable, in part, to the
      inclusion in current liabilities of $842,000 of long-term debt
      obligations. Subject to satisfaction of due diligence, an accredited
      investor has committed to fund $500,000 to the Company to cover operating
      shortfalls for the balance of 2003.

Note 3 - Summary of Significant Accounting Policies

      Consolidation

      The accompanying consolidated financial statements include all of the
      accounts of Biocoral, Inc. and its wholly-owned subsidiaries, Biocoral
      International, Cabestran, Inc., Immo Distribution, Ltd., S.A., for the
      years ended December 31, 2002 and 2001. All material intercompany balances
      and transactions have been eliminated in consolidation.

      Investments in securities

      The Company's investments in marketable equity securities have been
      classified as "available-for-sale." Accordingly, they are carried at fair
      value, with unrealized gains and losses, net of related tax effects,
      reported as a separate component of stockholders' equity (deficiency) and
      accumulated other comprehensive income (loss).


                                      F-9
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 3 - Summary of Significant Accounting Policies - continued

      Inventories

      Inventories are stated at the lower of cost or market, determined on the
      first-in, first-out ("FIFO") method.

      Property and Equipment

      Property and equipment are recorded at cost less accumulated depreciation
      and amortization. Depreciation and amortization are computed using the
      straight-line method over the estimated useful lives of the assets.
      Estimated useful lives are 25 years for building improvements, two to ten
      years for equipment and furnishings and one year for computer software.
      Normal maintenance and repairs of property and equipment are expensed as
      incurred, while renewals, betterments and major repairs that materially
      extend the useful live of the property and equipment are capitalized.

      Investment in subsidiary

      The Company owns an investment in a limited partnership, which is
      accounted for under the equity method of accounting. Under this method,
      the initial investment is recorded at cost. Subsequently, the investment
      is increased or decreased for the Company's pro-rata share of the
      limited partnership's income and losses.

      Deferred Interest

      Deferred interest is amortized to interest expense over the term of the
      related loan on a straight-line basis.

      Impairment of long-lived assets

      The Company reviews long-lived assets for impairment whenever
      circumstances and situations change such that there is an indication that
      the carrying amounts may not be recovered. In such circumstances, the
      Company will estimate the future cash flows expected to result from the
      use of the asset and its eventual disposition. Future cash flows are the
      future cash inflows expected to be generated by an asset less the future
      outflows expected to be necessary to obtain those inflows. If the sum of
      the expected future cash flows (undiscounted and without interest charges)
      is less than the carrying amount of the asset, the Company will recognize
      an impairment loss to adjust to the fair value of the asset.

      Income Taxes

      The Company uses the liability method for income taxes as required by SFAS
      No. 109 "Accounting for Income Taxes." Under this method, deferred tax
      assets and liabilities are determined based on differences between
      financial reporting and tax basis of assets and liabilities. Deferred tax
      assets and liabilities are measured using enacted tax rates and laws that
      will be in effect when the differences are expected to reverse. Valuation
      allowances are established when necessary to reduce deferred tax assets to
      the amount expected to be realized.

      Revenue recognition

      Sales are recognized when the earnings process is complete and
      collectibility is assured, which is usually when the goods are shipped to
      customers. Amounts billed related to shipping and handling are included in
      revenue.


                                      F-10
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 3 - Summary of Significant Accounting Policies - continued

      Research and development costs

      The Company expenses all research and development expenses as incurred.

      Stock based compensation

      The Company has adopted SFAS No. 123, "Accounting for Stock-Based
      Compensation" ("SFAS 123"). As permitted under SFAS 123, the Company has
      elected to follow Accounting Principles Board Opinion No. 25 ("APB 25"),
      "Accounting for Stock Issued to Employees," and related interpretations in
      accounting for its employee stock options. Under APB 25, when the exercise
      price of employee stock options equals or exceeds the market price of the
      underlying stock as of the grant date, no compensation expense is
      recorded. However, with respect to common stock and options granted to
      nonemployees, the Company records expense equal to the fair value of the
      common stock or option on the measurement date, which generally is the
      date the service is completed. Expenses relating to such common stock or
      options are estimated based upon the fair value as of the end of each
      reporting period prior to the measurement date. Expense related to these
      options is recognized ratably over the vesting or service period. When
      required, the Company has presented the additional pro forma disclosures
      required by SFAS 123 in Note 10.

      Computation of net loss per share

      The Company presents basic loss per share and, if applicable, diluted
      earnings per share pursuant to the provisions of SFAS No. 128, "Earnings
      per Share" ("SFAS 128").

      Under SFAS 128 basic net loss per share is computed by dividing the net
      loss for the year by the weighted average number of common shares
      outstanding during the year. Diluted net earnings per share is computed by
      dividing the net earnings for the year by the weighted average number of
      common share equivalents during the year. Common stock equivalents would
      arise from the exercise of stock options. As of December 31, 2002 no stock
      options have been exercised. Diluted net loss has not been disclosed for
      the years ended December 31, 2002 and 2001 as the effect is anti-dilutive.
      The numbers of common shares and the per share amounts in these notes and
      the accompanying consolidated financial statements have been retroactively
      adjusted, where appropriate, for a 1-for-50 and 1-for-15 reverse split
      effected on April 16, 2001 and December 23, 2002, respectively (See Note
      9).

      Concentration of credit risk

      Concentrations of credit risk with respect to trade accounts receivable
      are limited due to the large number of customers and their dispersion
      across geographic areas. However, all trade accounts receivable are
      concentrated in the health care sector in various countries around the
      world. The Company does not currently see a concentrated credit risk
      associated with these receivables, repayment is dependent upon the
      financial stability of this industry and the respective country's national
      economies.


                                      F-11
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 3 - Summary of Significant Accounting Policies - continued

      Foreign currency translation and transactions

      Assets and liabilities of the foreign subsidiaries are translated at
      current exchange rates and related revenues and expenses are translated at
      average exchange rates in effect during each year. Resulting translation
      adjustments, if material, are recorded as a separate component of
      stockholders' deficiency. The 2002 foreign currency transaction loss
      amounted to $6,591. Foreign currency translation and transaction gains and
      losses were not material in 2001.

      Comprehensive loss

      Comprehensive loss consists of net loss for the year and foreign currency
      translation adjustments, if material, and the unrealized gain or loss on
      investments held as available- for-sale securities.

      Financial instruments

      The carrying amounts of financial instruments, including cash, accounts
      receivable, accounts payable and accrued expenses approximate fair value
      as of December 31, 2002 and 2001, due to the relatively short maturity of
      the instruments. The investment in partnership is recorded using the
      equity method at December 31, 2002 and 2001. It is not practical to
      estimate the fair value without incurring excessive cost, as this
      investment is not publicly traded. Long-term debt at December 31, 2002 and
      2001 approximates fair value based upon the interest rates and other
      relevant terms of such financial instruments were the equivalent of those
      that the Company could have obtained for new loans as of those dates.

      Use of estimates

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

      Recent accounting pronouncements

      In June 2001, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 requires that
      all business combinations initiated after June 30, 2001 as well as
      purchase method business combinations completed after June 30, 2001 be
      accounted for using the purchase method of accounting and eliminates the
      pooling-of-interest method. In addition, SFAS 141 further clarifies the
      criteria intangible assets acquired in a purchase method business
      combination must meet to be recognized and reported apart from goodwill,
      noting that any purchased price allocable to an assembled workforce may
      not be accounted for separately. Specifically, SFAS 141 requires that an
      intangible asset may be separately recognized only if such an asset meets
      the contractual-legal criterion or the separability criterion. The
      adoption of SFAS 141 did not affect the Company's financial statements.


                                      F-12
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 3 - Summary of Significant Accounting Policies - continued

      In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
      Retirement Obligations" ("SFAS 143"), which is effective for fiscal years
      beginning after June 15, 2002. It requires that obligations associated
      with the retirement of a tangible long-lived asset be recorded as a
      liability when those obligations are incurred, with the amount of the
      liability initially measured at fair market value. Upon initially
      recognizing an accrued retirement obligation, an entity must capitalize
      the cost by recognizing an increase in the carrying amount of the related
      long-lived asset. Over time, the liability is accreted to its present
      value each period, and the capitalized cost is depreciated over the useful
      life of the related asset. Upon settlement of the liability, an entity
      either settles the obligation for its recorded amount or incurs a gain or
      loss upon settlement. Management believes the adoption of SFAS 143 will
      not have a significant effect on the Company's financial statements.

      In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
      Associated with Exit or Disposal Activities" ("SFAS 146"). SFAS 146
      requires that a liability for costs associated with an exit or disposal
      activity be recognized and measured initially at fair value only when the
      liability is incurred. SFAS 146 is effective for exit or disposal
      activities that are initiated after December 31, 2002. The Company does
      not expect the adoption of SFAS 146 to have a material impact on its
      operating results or financial position.

      In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
      Accounting and Disclosure Requirements for Guarantees, Including Indirect
      Guarantees of Indebtedness to Others, an interpretation of FASB Statements
      No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34" ("FIN
      45"). FIN 45 requires the recognition of an initial liability for the fair
      value of an obligation assumed by issuing a guarantee. The provision for
      the initial recognition and measurement of the liability will be applied
      on a prospective basis to guarantees issued or modified after December 31,
      2002. The adoption of FIN 45 is not expected to materially affect the
      consolidated financial statements.

      At December 31, 2002, the Company has one employee based stock option plan
      (the "Plan"), which is described in more detail in Note 10. Effective
      January 1, 2003, the Company has adopted the fair value recognition
      provisions of SFAS 123 prospectively for all stock options granted after
      January 1, 2003. Prior to 2003, the Company accounted for employee stock
      options under the recognition and measurement provisions of APB 25 and
      related interpretations. No employee compensation cost is reflected in the
      net loss for stock options granted, since all options granted under the
      Plan had an exercise price equal to the market value of the underlying
      common stock on the date of grant.

      Management does not believe that any recently issued, but not yet
      effective accounting pronouncements if currently adopted would have a
      material effect on the accompanying consolidated financial statements.

      Reclassifications

      Certain reclassifications have been made to the prior year financial
      statements in order to conform to the current year.

Note 4 - Investments in available-for-sale securities

      The Company's investments in marketable securities, all of which were
      classified as available-for-sale, at December 31, 2002 and 2001, consisted
      of equity securities with a cost of $690,283 and a fair value of $112,892
      based upon the quoted market value of the investments at December 31, 2002
      and a cost of $723,933 and a fair value of $296,341 at December 31, 2001.


                                      F-13
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 5 - Property and equipment

      Property and equipment consists of the following at December 31:

                                                               2002      2001
                                                            --------  --------
            Land                                            $ 10,900  $ 10,000
            Buildings and improvements                       169,030   149,330
            Equipment and furnishings                        218,600   195,000
                                                            --------  --------

                                                             398,530   354,330
           Less accumulated depreciation and amortization    368,630   316,930
                                                            --------  --------

                                                            $ 29,900  $ 37,400
                                                            ========  ========

      Depreciation expense for 2002 and 2001 amounted to $14,300 and $20,200,
      respectively.

Note 6 - Deferred financing and patent costs

      Deferred financing costs relates to the issuance of 6% notes payable,
      originally due on December 31, 2002. Deferred patent costs relate to legal
      charges incurred in defense of the patent. The balance of deferred
      financing costs consists of the following at December 31, 2002:

<TABLE>
<CAPTION>
                                                        Financing Costs         Patents Costs
                                                        ---------------         -------------
<S>                                                         <C>                   <C>
            Original cost                                   $200,000              $102,325
            Less: Accumulated amortization                   200,000                 2,558
                                                            --------              --------

                                                            $     --              $ 99,767
                                                            ========              ========
</TABLE>

      Amortization expense related to deferred financing costs for 2002 and 2001
      amounted to $80,000.

Note 7 - Income taxes

      As of December 31, 2002, the Company had net operating loss carryforwards
      of approximately $11,938,000 available to reduce future Federal taxable
      income which, if not used, will expire at various dates through December
      31, 2022. There are no other material differences between amounts used for
      financial reporting purposes and tax reporting purposes. Accordingly,
      since it more likely than not that the Company will not be able to utilize
      its net operating loss carryforward a 100% valuation allowance has been
      recorded to reduce the deferred tax asset to its net realizable value.

      The Company had also offset the potential benefits of $3,671,000 and
      $3,162,000 from net operating loss carryforwards by equivalent valuation
      allowances as of December 31, 2001 and 2000, respectively. As a result of
      the increase in the valuation allowance of $509,000 during the year ended
      December 31, 2001, there is no credit for income taxes reflected in the
      accompanying consolidated statement of operations to offset the pre-tax
      loss in 2001.


                                      F-14
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 8 - Long-term debt

      Long-term debt consists of the following at December 31:

                                                           2002          2001
                                                        ----------    ----------
      6% convertible promissory notes payable (A)       $1,700,000    $2,150,000
      ANVAR advances (B)                                   264,600       241,800
      8% callable convertible promissory notes
        payable (C)                                             --       800,000
                                                        ----------    ----------
                                                         1,964,600     3,191,800

      Less current portion                                  84,200       840,300
                                                        ----------    ----------

                                                        $1,880,400    $2,351,500
                                                        ==========    ==========

(A)   On March 25, 2002 the holders of the 6% convertible promissory notes
      payable (the "6% Notes") agreed to extend the due date from December 31,
      2002 to December 31, 2004. The 6% Notes are convertible at any time, at a
      rate of $.045, at the holder's option, subject to Company approval. The 6%
      Notes were not affected by both reverse stock splits (See Note 9).
      Interest on the 6% Notes is payable annually, at the Company's option,
      either in cash or shares of the Company's common stock. The Company sold
      the 6% Notes in the aggregate principal amount of $3,000,000 to
      "accredited investors" during 2000 through a private placement intended to
      be exempt from registration pursuant to the provisions of Regulation D of
      the Securities Act of 1933. A portion of the proceeds, $1,000,000, is
      being held in an escrow account pending the Company's issuance of all of
      the required regulatory documents and the listing of the Company's common
      stock for trading on The NASDAQ Stock Market. Accordingly, the restricted
      proceeds are classified as cash held in escrow and recorded as a
      non-current asset in the accompanying consolidated balance sheets.

      The Company sold the 6% Notes in the year ended December 31, 2000. The
      Company's common stock had a fair value that exceeded the conversion price
      of the 6% Notes. The excess constituted a beneficial conversion feature or
      right that totaled $3,000,000, and is chargeable to interest expense over
      the period from the respective dates of issuance through the date on which
      the 6% Notes first become convertible.

      On December 26, 2002, the Company approved requests from certain holders
      of 6% Notes for the conversion of $450,000 into shares of the Company's
      common stock. As a result of the conversion, the Company charged $450,000
      to interest expense in 2002 based on the beneficial conversion feature of
      these 6% Notes. On April 18, 2001, the Company approved requests from
      certain holders of 6% Notes for the conversion of $850,000 into shares of
      the Company's common stock. As a result of the conversion, the Company
      charged $850,000 to interest expense in 2001 based on the beneficial
      conversion feature of these Notes.

      The conversion of the 6% Notes that remained outstanding at December 31,
      2002 is contingent upon the Company's consent to such conversion and,
      therefore, the date on which the 6% Notes first become convertible cannot
      be determined until such consent is requested and granted. Accordingly,
      the Company will charge to interest expense a proportionate amount of the
      maximum of $1,700,000 attributable to the beneficial conversion rights
      related to the 6% Notes that remained outstanding at December 31, 2002 at
      such time as consent is requested and granted.

(B)   These non interest bearing 6% advances represent monies provided to Inoteb
      by ANVAR, an agency of the French government that finances or subsidizes
      certain "credible" research and development projects. If the research does
      not result in a commercially feasible product and certain other conditions
      are met, Inoteb will not have to pay some or all of the advances. As of
      December 31, 2002 these advances amounted to $264,000. The Company did not
      receive any material subsidies in 2001.

(C)   The 8% callable convertible promissory notes payable (the "8% Notes") were
      due on December 31, 2001 and were convertible at any time at the holder's
      option at the rate of $175 per share. Interest on the 8% Notes was payable
      annually, at the Company's option, either in cash or shares of the
      Company's common stock. The Company sold the 8% Notes to "accredited
      investors" during 1998 through a private placement intended to be exempt
      from registration pursuant to the provisions of Regulation D of the
      Securities Act of 1933. The principal balance and interest accrued on the
      8% Notes were repaid in March 2002.

      The aggregate maturities of long term debt at December 31, 2002 are as
      follows:

                     December 31,
                     ------------
                         2003                 $    84,200
                         2004                   1,775,200
                         2005                     105,200
                                              -----------

                                              $ 1,964,600
                                              ===========

      As of December 31, 2000, the Company had advances payable to the European
      Community, an economic development agency that also finances or subsidizes
      certain research and development projects. During 2001, the agency
      acknowledged that Inoteb had met the conditions set forth in the agreement
      under which the advances had been made and that Inoteb would not have to
      repay the outstanding balance of the advances. Accordingly, the Company's
      research and development expenses reflected in the accompanying 2001
      consolidated statement of operations have been offset by a subsidy of
      $199,600.


                                      F-15
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 9 - Equity transactions

      Effective April 16, 2001 and December 23, 2002, the Company authorized
      1-for-50 and 1-for-15 reverse stock splits, respectively. The numbers of
      common shares and per share amounts in these consolidated financial
      statements have been retroactively adjusted to account for these reverse
      stock splits.

Note 10 - Stock option plan

      Options to purchase up to 20,000,000 shares of the Company's common stock
      may be granted under the Company's stock option plan (the "Plan"). The
      exercise price, manner of exercise and other terms of each option are to
      be determined by the Board of Directors of the Company.

      A summary of the Company's stock option activity is as follows:

        ----------------------------------------------------------------------
                                                     Common Stock
        ----------------------------------------------------------------------
                                                              Weighted average
                                               Shares          Exercise Price
        ----------------------------------------------------------------------
        Outstanding, January 1, 2001              936               $85.77
        ----------------------------------------------------------------------

        ----------------------------------------------------------------------
        Grants                                 33,334               $90.00
        ----------------------------------------------------------------------
        Exercised                                  --
        ----------------------------------------------------------------------
        Outstanding, December 31, 2001         34,270               $90.15
        ----------------------------------------------------------------------

        ----------------------------------------------------------------------
        Grants                                     --
        ----------------------------------------------------------------------
        Exercised                                  --
        ----------------------------------------------------------------------

        ----------------------------------------------------------------------
        Outstanding, December 31, 2002         34,270               $89.88
        ----------------------------------------------------------------------

      A summary of the Company's stock options outstanding at December 31, 2002
      is as follows:

<TABLE>
<CAPTION>
        ------------------------------------------------------------------------------------------------------
                                            Options Outstanding                     Options Exercisable
        ------------------------------------------------------------------------------------------------------
                                                  Weighted-
                                                   Average
                                                  Remaining
           Range of                Number        Contractual  Weighted-Average    Number      Weighted-Average
        Exercise Prices         Outstanding         Life       Exercise Price   Exercisable    Exercise Price
        ------------------------------------------------------------------------------------------------------
<S>                               <C>               <C>            <C>            <C>                <C>
         $60.00                       668           6.50           $60.00             668            $60.00
        ------------------------------------------------------------------------------------------------------
         $90.00                    33,334           6.50           $90.00          33,334            $90.00
        ------------------------------------------------------------------------------------------------------
         $150.00                      268           8.34           $150.00            268           $150.00
        ------------------------------------------------------------------------------------------------------
                                   34,270           8.29           $89.88          34,270            $89.88
        ------------------------------------------------------------------------------------------------------
</TABLE>

      In the opinion of management, if compensation cost for the stock options
      granted to employees had been determined based upon the fair value of the
      options at the grant date under provisions of SFAS 123 using the
      Black-Scholes option pricing model, the Company's pro forma net loss and
      pro forma basic net loss per share arising from such computations would
      not have differed materially from the corresponding historical amounts
      presented in the accompanying consolidated statement of operations.

Note 11 - Segment and geographic information

      The Company operates principally in one industry segment which includes
      the research and development, manufacture and sale of biomedical materials
      used in medical products. The Company conducts operations outside of the
      United States, principally in France. Information about the Company's
      assets in different geographic locations as of December 31, 2002 is shown
      below pursuant to the provisions of SFAS No. 131, "Disclosures about
      Segments of an Enterprise and Related Information":


                                      F-16
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

Note 11 - Segment and geographic information - continued

<TABLE>
<CAPTION>
                                               United
2002                                           States           France         Others           Consolidated
----                                         ----------        --------       --------          -------------
<S>                                          <C>               <C>            <C>               <C>
Total assets                                 $1,147,042        $200,000       $217,981          $   1,565,023
                                             ----------        --------       --------          -------------

<CAPTION>
                                             United
                                             States             France         Others           Consolidated
                                             ------             ------         ------           ------------
<S>                                          <C>               <C>            <C>                <C>
2001
----
Net sales                                                      $ 354,200                         $  354,200
                                                               ---------                         ----------
Operating expenses:
   Depreciation of property
      and equipment                                               20,200                             20,200
   Other operating expenses                  $  393,672          388,000      $  52,086             833,758
                                             ----------        ---------      ---------          ----------
          Totals                                393,672          408,200         52,086             853,958
                                             ----------        ---------      ---------          ----------
Operating loss                               $ (393,672)       $ (54,000)     $ (52,086)         $ (499,758)
                                             ==========        =========      =========          ==========
Total assets                                 $1,096,231        $ 433,000      $ 352,383          $1,881,614
                                             ==========        =========      =========          ==========
</TABLE>


                                      F-17
<PAGE>

                         BIOCORAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 AND 2001

Note 12 - Preferred and common stock:

As of December 31, 2002 and 2001, the Company was authorized to issue up to
1,000,000 shares of preferred stock with a par value of $.001 per share. The
preferred stock may be issued in one or more series with dividend rates,
conversion rights, voting rights and other terms and preferences to be
determined by the Company's Board of Directors. No shares of preferred stock had
been issued by the Company as of December 31, 2002.

On October 31, 2001, the Company commenced an offering for a maximum of 20,000
shares of its common stock at $90.00 per share to "Accredited Investors" through
a private placement intended to be exempt from registration pursuant to the
provisions of Regulation D. As of December 31, 2001, the Company had received
subscriptions for the purchase of 11,889 shares of common stock for $1,070,000.
The subscriptions receivable were reflected as a separate component of
stockholders' equity in the accompanying consolidated balance sheet as of
December 31, 2001. These amounts were paid during 2002.


                                      F-18
<PAGE>

Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

      On April 17, 2002 we dismissed J.H.Cohn LLP as our independent public
accountants. The report of J.H.Cohn LLP on the consolidated financial statements
for the fiscal years ended December 31, 2001 and December 30, 2000 contained no
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principle. Our Board of Directors
participated in and approved the decision to change independent accountants. In
connection with its audit for the fiscal years ended December 31 2001 and
December 30, 2000, respectively, and during the subsequent interim period from
January 1, 2002 through the date of dismissal, there were no disagreements with
J.H.Cohn LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of J.H.Cohn LLP would have caused them to make
reference thereto in their report on the consolidated financial statements for
such years. We retained Rogoff & Company, P.C. as our new independent
accountants as of April 15, 2002. We authorized Rogoff & Company, P.C. to
respond to any and all inquiries of the successor accountant.


                                       11
<PAGE>

                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons

Directors and Executive Officers

The following persons are our executive officers and directors:

Name                      Age          Positions with our Company
----                      ---          --------------------------
Nasser Nassiri            39           President, Chief Executive Officer and
                                       Chairman of the Board
Yuhko Grossman            37           Secretary, Treasurer and Director
Jean Darondel             60           Director

----------

Nasser Nassiri. Mr. Nassiri has been the President, Chief Executive Officer and
Chairman of the Board of our company since 1997. Mr. Nassiri is a Paris-based
financier active in Europe and the Middle East. Since 1990, he has been a
private investor and financial advisor to several European financial and
portfolio institutions, as well as family investment companies and
pharmaceutical businesses in the Middle East. From 1983 to 1987, Mr. Nassiri was
a director of Prak Management, a privately-held Middle East-based oil and gas
holding company.

Yuhko Grossman. Ms. Grossman is Secretary, Treasurer and a director of the
Company. Ms. Grossman is currently a director of Ono Trading Company of Canada
Ltd., a large wholesale company dealing in industrial safety equipment, and a
director of Ono Import Export Company Ltd., an international trading company.
Previously, Ms. Grossman spent over ten years working with the largest retail
pharmaceutical chain in Canada, where her responsibilities included the
restructuring and implementation of new management and information systems
following corporate buy-outs. Ms. Grossman holds degrees from Simon Fraser
University in Modern European History, Political Science and Physics.

Jean Darondel. Dr. Dardonel is a director of the Company. Dr. Jean Darondel was
co-founder of Inoteb and was its President General until March 18, 2003. He is
an active member of different scientific pilotage committees programs. Dr.
Darondel is known for his research in the field of veterinary medicine and
business development in the medical/pharmaceutical fields. Dr. Darondel is
focusing his efforts on expanding the commercialization of Biocoral products in
Europe.

Board of Directors

All of our directors serve until the next annual meeting of stockholders or
until their successors are duly elected and qualified. All of our officers serve
at the discretion of the board of directors. There are no family relationships
among the directors and executive officers.

Scientific Advisory Board

We also have a scientific advisory board to aid us in the strategic development
of our products. The following list of people are the members of the scientific
advisory board:

Prof. Jean-Pierre Ouhayoun is a doctor of dental surgery and Professor and
Chairman of the Department of Periodontology at the University of Paris School
of Dentistry. He is also Chief of the dental clinic at Garanciere Hotel Dieu,
and is in charge of the research unit at the Orthopedic Research Laboratory in
Paris specializing in bone regeneration.

Dr. Alberto Jussman is a specialist in post-menopausal medicine and the
prevention of osteoporosis and is a consultant to the Laboratoires pour la
Pharmacie et les Devices Medical and teaches at the CHU Bichat-Claude Bernard in
Paris.

Dr. Rosy Eloy is the former Vice President of the Administrative Council of
INSERM, is Director of Biomatech, a French company that tests and evaluates
biomaterials and pharmaceutical products.

Dr. Jean Darondel, a director of our company, is also a member of the scientific
advisory board.

Mr. Roland Schmitthauesler is currently part of the National Center of Blood
Transfusion in France. He is the former Chief of the Laboratory of the Plasma
Unit at the CRTS in Strasborg. Mr. Roland Schmitthauesler has been associated
with the development of Biocoral's autologous glue since 1991.


                                       12
<PAGE>

Dr. Genevieve Guillemin is a scientist and director of CNRS (French National
Center of Scientific Research). Dr. Guillemin co-filed the original 1979 patent
for Biocoral(R) and still participates in the development of Biocoral.

Dr. Yves Cirotteau is an orthopedic and traumatologic surgeon. He is a member of
the SOFCOT (French Orthopaedic and Traumatologic Society), Hip and Knee Society
and AAAS (American Association for Advancement of Science). Dr. Cirotteau is the
principal inventor of Biocoral(R) applications in curative and preventive
treatments of osteoporotic fractures and is involved in its development.

None of our executive officers or directors are employed pursuant to an
agreement with us; however, we have engaged Mr. Nassiri as a consultant pursuant
to a consulting agreement in September 1997. This agreement expired in 2000 and
was renewed for two (2) years until August 30, 2002. The agreement was renewed
in 2002 for three years and will expire on August 30, 2005.

Limitation on Liability of Directors

As permitted by Delaware law, the Company's certificate of incorporation
includes a provision which provides that a director shall not be personally
liable to us or our stockholders for monetary damages for a breach of fiduciary
duty as a director, except (i) for any breach of the director's duty of loyalty
to us or our stockholders, (ii) under Section 174 of the General Corporation Law
of the State of Delaware, which prohibits the unlawful payment of dividends or
the unlawful repurchase or redemption of stock, or (iii) for any transaction
from which the director derives an improper personal benefit. This provision is
intended to afford directors protection against, and to limit their potential
liability for, monetary damages resulting from suits alleging a breach of duty
of care by a director. As a consequence of this provision, our stockholders will
be unable to recover monetary damages against directors for action taken by them
which may constitute negligence or gross negligence in performance of their
duties unless such conduct falls within one of the foregoing exceptions. The
provision, however, does not alter the applicable standards governing a
director's fiduciary duty and does not eliminate or limit our right, or the
right of any stockholder, to obtain an injunction or any other type of
non-monetary relief in the event of a breach of fiduciary duty. The Company
believes this provision will assist in securing and retaining qualified persons
to serve as directors.

Compliance With Section 16(a) Of The Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's Common Stock, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of the Common Stock of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. During the fiscal
year ended December 31, 2002, no such reports were submitted to the Company for
review and, based upon this, to the Company's knowledge, all Section 16(a)
filing requirements applicable to its officers and directors have been complied
with.

Item 10. Executive Compensation

Presently, none of our executive officers receive any salary. However, on
September 1, 1997, the Company entered into a Consulting Agreement with Nasser
Nassiri, its Chairman, pursuant to which Mr. Nassiri serves as Chairman of the
Company. The Agreement, which was for a three year term, provided for base
compensation of $150,000 per annum, reimbursement of certain expenses and for a
payment of two years' compensation thereunder in the event of a change in
control of the Company. The agreement was renewed, on the same terms, in 2000
for two years until August 30, 2002 and has been renewed during 2002 for an
additional three years until 2005. Through December 31, 2002, to help company
financial condition, Mr. Nassiri has deferred receipt of any cash compensation
pursuant to his Consulting Agreement.

Stock Option Plan

On May 4, 1992, the Company adopted a stock option plan pursuant to which it was
originally authorized to grant options to purchase up to 2,000,000 shares of
common stock. On April 16, 2001, the Company became authorized to grant options
to purchase up to 20,000,000 shares.

On November 15, 1999, the Company granted to each of Nasser Nassiri, its
Chairman and a director, and Ramine Almassi and Jean Darondel, each then a
director of the Company (although Mr. Almassi is no longer a director) options
to purchase up to 134 shares of the Company's common stock at an exercise price
of $150.00 per share. The consideration for the grant of such options was
nominal. The option was exercisable at any time during the five year period
following its grant. The option exercise price was in excess of the market price
of the shares of the Company's common stock on the date of grant.

On December 30, 1999, the Company granted to each of Nasser Nassiri, its
Chairman and a director, and Yuhko Grossmann, Secretary/Treasurer and a director
of the Company options to purchase up to 334 shares of the Company's common
stock at an exercise price of $60.00 per share. The consideration for the grant
of such options was nominal. The option was exercisable at any


                                       13
<PAGE>

time during the five year period following its grant. The option exercise price
was in excess of the market price of the shares of the Company's common stock on
the date of grant.

On May 1, 2001, the Company granted options to members of the Board of Directors
to purchase 33,334 (13,334 to Mr. Nassiri and 10,000 each to Mr. Darondel and
Ms. Grossman) shares of common stock at an exercise price of $90.00 per share
which exceeded the fair market value per share as of that date. No other options
were granted and no options were cancelled or exercised during the fiscal year
ended December 31, 2002 and, accordingly, options to purchase 34,270 shares of
common stock remained outstanding and options for the purchase of 19,965,730
shares were available for grant at December 31, 2002.

All of the above share numbers have been adjusted to reflect the 1-for-50
reverse stock split effectuated on April 16, 2001 and the 1-for-15 reverse stock
split effectuated on December 24, 2002

Aggregate Option Exercises and Fiscal Year-End Option Values

No options issued by the Company were 'in-the-money' in fiscal 2002.

The following table lists the number of securities underlying unexercised
options at December 31, 2002.

<TABLE>
<CAPTION>
                                                                         NUMBER OF
                                                                         SECURITIES         VALUE OF
                                                                         UNDERLYING       UNEXERCISED
                                                                        UNEXERCISED       IN-THE-MONEY
                                                                          OPTIONS           OPTIONS
                                               SHARES                    AT FY-END         AT FY-END
                                              ACQUIRED      VALUE       EXERCISABLE/      EXERCISABLE/
                     NAME                    ON EXERCISE   REALIZED   UNEXERCISABLE(1)   UNEXERCISABLE
                     ----                    -----------   --------   ----------------   -------------
<S>                                               <C>         <C>        <C>                    <C>
Nasser Nassiri.............................       --          --         13,802/ --             --
Jean Darondel..............................       --          --         10,134/ --             --
Yuhko Grossman.............................       --          --         10,334/ --             --
</TABLE>

      (1)   Per share information has been retroactively adjusted for the
            1-for-50 reverse stock split effectuated on April 16, 2001 and the
            1-for-15 reverse stock split approved on December 24, 2002

Director Compensation

Our directors do not receive compensation for their services as directors, but
are reimbursed for all reasonable out-of-pocket expenses incurred in connection
with each board meeting attended or other company services.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to us with respect to
the beneficial ownership of our common stock as of April 15, 2003 by:

o     all persons who are beneficial owners of five percent (5%) or more of our
      common stock;

o     each of our directors;

o     each of our named executive officers; and

o     all current directors and executive officers as a group.

Except as otherwise indicated, and subject to applicable community property
laws, the persons named in the table below have sole voting and investment power
with respect to all shares of common stock held by them.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of April 15, 2003 are deemed
outstanding. Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person.


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                         AMOUNT AND NATURE
                                                           OF BENEFICIAL
                                                           OWNERSHIP AS OF       PERCENT OF
NAME AND ADDRESS OF BENEFICIAL                                 APRIL 15,         SHARES IN
OUTSTANDING OWNER                      TITLE OF CLASS           2003              CLASS(5)
-----------------                      --------------    ------------------      ---------
<S>                                     <C>                     <C>                   <C>
Jean Darondel ..................        Common Stock            10,134(1)             *
  38 rue Anatole France,
  92594 Levallois Perret Cedex,
  France

Yuhko Grossman .................        Common Stock            10,334(2)             *
  38 rue Anatole France,
  92594 Levallois Perret Cedex,
  France

Nasser Nassiri .................        Common Stock            13,802(3)             *
  38 rue Anatole France,
  92594 Levallois Perret Cedex,
  France

All officers and directors
as a group                              Common Stock            34,270(4)             *
</TABLE>

----------

*- Indicates less than 1%

      (1)   Includes for Mr. Darondel options to purchase 10,134 shares of
            common stock, 134 of which are exercisable at $150 per share and
            $10,000 of which are exercisable at $90 per share.

      (2)   Includes for Mr. Grossman, options to purchase 10,334 shares of
            common stock, 334 of which are exercisable at $60 per share and
            $10,000 of which are exercisable at $90 per share.

      (3)   Includes for Mr. Nassiri, options to purchase 13,802 shares of
            common stock, 134 of which are exercisable at $150 per share, 334 of
            which are exercisable at $60 per share and $13,334 of which are
            exercisable at $90 per share.

      (4)   The issuance of options to the officers and directors were not
            approved by the shareholders of the Company.

      (5)   Based upon 11,297,574 shares of common stock outstanding.

      Securities Authorized for Issuance Under Equity Compensation Plans

      Other than those listed on the table above, the Company does not have any
equity securities outstanding or authorized for issuance pursuant to any equity
compensation plans.

Item 12. Certain Relationships and Related Transactions

None.

Item 13. Exhibits and Reports on Form 8-K.

(a) Unless otherwise indicated, the following is a list of exhibits filed as a
part of this annual report:

--------------------------------------------------------------------------------
Exhibit Number    Description of Document
--------------------------------------------------------------------------------
3.1               Certificate of Incorporation (1)
--------------------------------------------------------------------------------
3.2               By-laws (1)
--------------------------------------------------------------------------------
3.3               Amendment No. 1 to the Certificate of Incorporation (2)
--------------------------------------------------------------------------------
3.4               Amendment No. 2 to the Certificate of Incorporation (3)
--------------------------------------------------------------------------------
4.1               Form of Company's 3 year 8% Convertible Redeemable Debenture
                  due December 31, 2001(4)
--------------------------------------------------------------------------------
21.1              Subsidiaries (5)
--------------------------------------------------------------------------------
99.1              Certification of Nasser Nassiri pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.
--------------------------------------------------------------------------------

      (1)   Incorporated by reference to Exhibit 3.1 to the Company's Form 10-SB
            Registration Statement filed with the Commission on February 25,
            1994, as amended.

      (2)   Incorporated by reference from Amendment No.1 to the Company's Form
            10-SB filed with the Commission on April 18, 1994.

      (3)   Incorporated by reference to Exhibit 10.21 to the Company's Annual
            Report on Form 10-KSB filed December 27, 1996.

      (4)   Incorporated by reference from the Company's Annual Report on Form
            10-KSB filed April 16, 2001.

      (5)   Incorporated by reference from the Company's Annual Report on Form
            10-KSB filed April 17, 1998.


                                       15
<PAGE>

(b) During the fourth quarter of 2002, we filed no current reports on Form 8-K.

Item 14. Controls and Procedures.

(a) Disclosure controls and procedures. Within 90 days before filing this
report, the Company evaluated the effectiveness of the design and operation of
its disclosure controls and procedures. The Company's disclosure controls and
procedures are the controls and other procedures that it designed to ensure that
it records, processes, summarizes and reports in a timely manner the information
it must disclose in reports that it files with or submits to the Securities and
Exchange Commission. Nasser Nassiri, the Company's Chief Executive Officer and
the Principal Accounting Officer supervised and participated in this evaluation.
Based on this evaluation, Nasser Nassiri concluded that, as of the date of his
evaluation, to the best of his knowledge, the Company's disclosure controls and
procedures were effective.

(b) Internal controls. Since the date of the evaluation described above, there
have not been any significant changes in the Company's internal accounting
controls or in other factors that could significantly affect those controls


                                       16
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 23, 2003.

                                        BIOCORAL, INC


                                        By: /s/ Nasser Nassiri
                                        --------------------------------------
                                        Nasser Nassiri
                                        President, Chief Executive Officer and
                                        Principal Accounting Officer

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities indicated.

<TABLE>
<CAPTION>
Signature                              Title                               Date
---------                              -----                               ----
<S>                         <C>                                       <C>
/s/ Nasser Nassiri          President, Chief Executive Officer        April 23, 2003
------------------          and Chairman of the Board of
   Nasser Nassiri           Directors (Principal Executive
                            Officer and Principal Accounting
                            Officer)

/s/ Yuhko Grossman          Secretary, Treasurer and Director         April 23, 2003
------------------
  Yuhko Grossman

/s/ Jean Darondel           Director                                  April 23, 2003
-----------------
  Jean Darondel
</TABLE>


                                       17
<PAGE>

                                 CERTIFICATIONS

I, Nasser Nassiri, certify that:

1. I have reviewed this annual report on Form 10-KSB of Biocoral, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

      a. designed such disclosure controls and procedures to ensure that
      material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this annual report is
      being prepared;

      b. evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      annual report (the "Evaluation Date"); and

      c. presented in this annual report our conclusions about the effectiveness
      of the disclosure controls and procedures based on our evaluation as of
      the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

      a. all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      b. any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


      Date: April 23, 2003               /s/ Nasser Nassiri
                                         ------------------
                                         Nasser Nassiri
                                         President, CEO, Chairman of the Board
                                         and Principal Accounting Officer


                                       18