U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB
(Mark One)
     [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                    For the fiscal year ended March 31, 2002

 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934
                  For the transition period from _____ to _____
                           Commission File No. 0-28034

                         CardioTech International, Inc.
                         ------------------------------
                  (Name of small business issuer in its charter)

             Massachusetts                                     04-3186647
     ------------------------------                        -------------------
     State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization                         Identification No.)

     78E Olympia Avenue, Woburn, Massachusetts                      01801
     -----------------------------------------                    ----------
     (Address of principal executive offices)                     (Zip Code)

   Issuer's telephone number                                   (781) 933-4772
                                                               --------------

         Securities registered under Section 12 (b) of the Exchange Act:
        Title of each class            Name of each exchange on which registered
Common Stock, $.01 par value per share               American Stock Exchange
--------------------------------------               -----------------------

       Securities registered pursuant to Section 12 (g) of the Act:  None

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

     Indicate  whether the registrant (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 is not 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.  [ ]

     State issuer's revenues for its most recent fiscal year.  $3,220,000

     As of June 7, 2002, 9,161,546 shares of the registrant's Common Stock were
outstanding,  and  the  aggregate  market value of the registrant's Common Stock
held  by  non-affiliates  of  the registrant (without admitting that such person
whose  shares  are  not  included  in  such  calculation  is  an  affiliate) was
approximately  $12,368,000  based  on  the  last  sale  price as reported by the
American  Stock  Exchange  on  such  date.

                       DOCUMENTS INCORPORATED BY REFERENCE

     The  registrant  hereby  incorporates  by  reference  into Part III of this
report  portions  of  its  proxy  statement  for  the  2002  annual  meeting  of
stockholders,  which  will  be  filed within 120 days of the registrant's fiscal
year  ended  March  31,  2002.

Transitional Small Business Disclosure Format (check one):
Yes     No  X
    ---    ---

<PAGE>
PART  I

Item  1.  Description  of  Business

GENERAL

     CardioTech International, Inc. ("CardioTech" or the "Company") is using its
proprietary  manufacturing  technology  to  develop  and  manufacture small bore
vascular  grafts,  or  synthetic  blood vessels, made of ChronoFlex, a family of
polyurethanes  that  has  been  demonstrated  to be biocompatible and non-toxic.
Vascular  grafts are used to replace, bypass or provide a new lining or arterial
wall  for occluded, damaged, dilated or severely diseased arteries.  The Company
developed a vascular access graft tradenamed VascuLink Vascular Access Graft and
was  developing  a  peripheral  graft  tradenamed MyoLink Peripheral Graft.  The
Company  sold  the VascuLink and MyoLink products to Nervation Ltd in connection
with  the  disposition of the Company's UK subsidiary, Cardiotech International,
Ltd  ("CTL")  (See  Note  L to Notes to Consolidated Financial Statements).  The
Company  is  currently  developing  a layered microporous coronary artery bypass
graft  tradenamed  CardioPass.

     On  May 4, 2001, the Company completed the acquisition of all the shares of
CMED Catheter and Disposables Technology, Inc., a Minnesota corporation ("CDT"),
from  Colorado  Medtech, Inc., a Colorado corporation ("Medtech") pursuant to an
Acquisition  Agreement  dated as of April 30, 2001, by and among Cardiotech, CDT
and  Medtech.

     CDT  is  an  original  equipment  manufacturer;  supplier  of  specialized
disposable  medical devices to medical device companies from concept to finished
packaged,  sterile  product; and uses its experience in the design, development,
prototyping and manufacturing to provide turnkey contract services. Some devices
designed,  developed  and  manufactured  for  customers  by CDT include sensing,
balloon,  and  drug  delivery  catheters;  disposable  endoscopes;  and in-vitro
diagnostic  and  surgical  disposables.

     Additionally,  through  its  Biomaterials  division,  the Company develops,
manufactures  and  markets polyurethane-based biomaterials for use in both acute
and  chronically  implanted  devices  such  as  stents,  artificial  hearts, and
vascular  ports.  These  premium  biomaterials  are  sold  under the tradenames:
ChronoFlex,  ChronoThane,  HydroThane,  ChronoFilm,  HydroMed  and  Hydroslip.
CardioTech owns a number of patents relating to its vascular graft manufacturing
technology.  In  addition,  PolyMedica  Corporation  ("PMI")  has  granted  to
CardioTech  an exclusive, perpetual, worldwide, royalty-free license for the use
of one polyurethane patent and related technology in the field consisting of the
development,  manufacture and sale of implantable medical devices and biodurable
polymer  material  to  third  parties  for  the use in medical applications (the
"Implantable  Device  and  Materials  Field").  PMI  also  owns,  jointly  with
Thermedics, Inc., the ChronoFlex polyurethane patents relating to the ChronoFlex
technology ("Joint Technology".)  PMI has granted to CardioTech a non-exclusive,
perpetual,  worldwide,  royalty-free  sublicense of these patents for use in the
Implantable  Devices  and  Materials  Field.

     The  Company  was founded in 1993 as a subsidiary of PMI. In June 1996, PMI
distributed  all  of the shares of CardioTech's common stock, par value $.01 per
share,  that  PMI  owned  to  PMI stockholders of record as of June 3, 1996. The
Company is headquartered in Woburn, Massachusetts and operates contract research
and  development  services and outsourced manufacturing from its CDT facility in
Plymouth,  Minnesota.

     ChronoFilm  is  a registered trademark of PMI.  ChronoFlex, is a registered
trademark  of  the  CardioTech.  ChronoThane, ChronoPrene, HydroThane, PolyBlend
and  PolyWeld  are  tradenames  of  CardioTech.  DuraGraft  and  CardioPass  are
trademarks  of  CardioTech.


                                        1
<PAGE>
MEDICAL  BACKGROUND

     Blood  is pumped from the heart throughout the body via arteries.  Blood is
returned  to  the heart at relatively low pressure via veins, which have thinner
walls  than  arteries  and  have  check  valves which force blood to move in one
direction.  Because  a  specific  area of the body is often supplied by a single
main  artery,  rupture,  severe  narrowing  or occlusion of the artery supplying
blood  to  that  area  is likely to cause an undesirable or catastrophic medical
outcome.

     Vascular grafts are used to replace or bypass occluded, damaged, dilated or
severely  diseased  arteries  and  are  sometimes  used to provide access to the
bloodstream for patients undergoing hemodialysis treatments. Existing small bore
graft  technologies  suffer  from a variety of disadvantages in the treatment of
certain  medical  conditions,  depending  upon  the  need  for  biodurability,
compliance  (elasticity)  and  other  characteristics  necessary  for  long-term
interface  with  the  human  body.

PRODUCT  IN  PRE-CLINICAL  DEVELOPMENT

CARDIOPASS  CORONARY  ARTERY  BYPASS  GRAFT

     Coronary  artery  bypass  graft  ("CABG") surgery is performed to treat the
impairment  of  blood  flow to portions of the heart.  CABG surgery involves the
addition  of  one  or  more  new  vessels  to the heart to re-route blood around
blocked  coronary  arteries.

     Autogenous  grafts  (using  the  patient's  own  saphenous  vein or mammary
artery) have been successfully used in CABG procedures for a number of years and
have  shown  a  relatively high patency rate (80% to 90% for saphenous veins and
over  90%  for  mammary  arteries one year after surgery) with no risk of tissue
rejection.  However,  the  surgical  harvesting of vessels for autogenous grafts
involves significant trauma and expense. In addition, not all patients requiring
CABG  surgery  have  sufficient  native  vessels  as a result of previous bypass
surgeries, or their vessels may be of inferior quality due to trauma or disease.
Cryo-preserved  saphenous veins are available, but these veins often deteriorate
due  to  attack  by  the  body's  immune  system.

     CardioTech  is  developing  its  grafts  using  specialized  ChronoFlex
polyurethane  materials  that  it  believes  will provide significantly improved
performance  in  the  treatment  of  arterial  disorders.  The grafts have three
layers,  similar  to natural arteries and are designed to replicate the physical
characteristics  of  human  blood  vessels.

     The Company is developing the CardioPass Coronary Artery Bypass Graft to be
a  synthetic  graft  of  3mm  in  diameter specifically designed for use in CABG
surgery.  If  successfully  developed,  the Company believes that the CardioPass
Graft  may  be  used  initially  to  provide  an  alternative  to  patients with
insufficient  or inadequate native vessels for use in bypass surgery as a result
of  repeat  procedures,  trauma, disease or other factors. The Company believes,
however,  that  the  CardioPass Graft may ultimately be used as a substitute for
native saphenous veins, thus avoiding the trauma and expense associated with the
surgical  harvesting  of  the  vein.

     The  Company  believes  that  approximately  700,000  CABG  procedures were
performed worldwide, of which nearly 500,000 were performed in the United States
during  1999.  The  Company  believes  that  approximately  20%  of  these  CABG
procedures  were  performed  on  patients  who  had  previously undergone bypass
surgery, and that the number of repeat procedures will continue to increase as a
percentage  of  procedures  performed.  Currently,  approximately  70%  of  CABG
procedures  are  performed utilizing the saphenous vein. The CardioPass Coronary
Artery  Bypass  Graft  is  in  pre-clinical  development.

     The  Company estimates that approximately 100,000 patients are diagnosed by
their  physicians as having native vessels that are inadequate for use in bypass
surgery. If the CardioPass Graft is successfully developed, the Company believes
that  the  graft  may  initially  be  used  for these patients. The Company also
believes  that  if  long-term  clinical  results  are  acceptable  to clinicians
(generally,  greater  than  50% patency five years after implant), the graft may
ultimately  be  used  as  a  direct  substitute  for autogenous saphenous veins.


                                        2
<PAGE>
BIOMATERIALS

     CardioTech  also  develops, manufactures and sells a range of polymer-based
materials  customized  for  use in the manufacture of certain medical devices to
other  medical  device  manufacturers.  CardioTech  sells  these custom polymers
under  the  tradenames  ChronoFilm,  ChronoFlex,  ChronoThane,  ChronoPrene,
HydroThane,  PolyBlend  and  PolyWeld.  The  Company  also  provides development
services  relating  to  biomaterials  to  medical  device  customers.

     CardioTech  also  manufactures  and  sells  its  proprietary  HydroThane
biomaterials  to medical device manufacturers that are evaluating HydroThane for
use  in  their  products.  HydroThane  is  a  thermoplastic,  water-absorbing,
polyurethane  elastomer, that possesses properties that CardioTech believes make
it  well  suited  for  the  complex  requirements  of a variety of catheters. In
addition  to its physical properties, CardioTech believes HydroThane exhibits an
inherent  degree  of bacterial resistance, clot resistance and biocompatibility.
When  hydrated,  HydroThane  has  elastic  properties  similar to living tissue.

     In July 1999, CardioTech acquired the assets of Tyndale-Plains-Hunter, Ltd.
(TPH), a manufacturer of specialty hydrophilic polyurethanes. TPH's common stock
was  acquired  in  consideration  of $350,000 cash, 446,153 shares of CardioTech
common  stock  valued  at  $725,000, and assumption of approximately $178,000 of
liabilities.  TPH  polymers  are  primarily  sold  to  customers  as  part of an
exclusive  arrangement.  Customers  are  supplied tailored, patented hydrophilic
polyurethanes  in  exchange  for  multi-year,  royalty-bearing  exclusive supply
contracts.  TPH  owns  29  patents in the field of hydrophilic polyurethanes. In
October  2000,  the  Company  completed  the  transfer  of TPH's operations from
Lawrenceville,  NJ  to  the  Company's  headquarters  in  Woburn,  MA.

     During  the fiscal year ended March 31, 2001, the Company was the recipient
of  one  Small Business Innovation Research grant awarded by National Institutes
of  Health  ("NIH")  to support the Company's research and development programs.

     Revenues  were  approximately $3,220,000 and $1,543,000 for the years ended
March  31, 2002 and 2001, respectively. For the year ended March 31, 2002 26% of
revenues  were  generated  from  royalties from one customer and grants from the
NIH.  For  the  year  ended  March 31, 2001, 29% of revenues were generated from
royalties  from  one  customer,  Inc.  and  grants  from  the  NIH.

MANUFACTURING

     CardioTech  currently  manufactures  limited  quantities  of ChronoFlex and
HydroThane  for  sale  to  medical  device  manufacturers. To date, CardioTech's
manufacturing  activities  with  respect to the specialized ChronoFlex materials
used  in  vascular  grafts  have  consisted  primarily  of  manufacturing  small
quantities  of  such  products  for  use  in clinical trials. The Company has an
agreement  with  CTL  pursuant to which the Company is required to purchase from
and  CTL  has agreed to sell to the Company the vascular grafts it needs subject
to  the  Company's ability to obtain another supplier and to obtain the transfer
of  the  technology.  Cardiotech  could have its newly acquired subsidiary, CMED
Catheter  and  Disposables  Technology,  Inc.  ("CDT"),  undertake  large  scale
commercial  production of vascular grafts, when, and if it elects to do so. This
would  entail,  among  other  things,  the  purchase  of  specialized  extrusion
equipment  capable  of  producing  the  grafts.  To  achieve  profitability,
CardioTech's  products  must  be manufactured in larger commercial quantities in
compliance  with  regulatory requirements and at acceptable costs. Production in
larger commercial quantities will require CardioTech to expand its manufacturing
capabilities  significantly  and  to  hire  and  train  additional  personnel.

     The  development  and  manufacture  of CardioTech's products are subject to
good  laboratory  practice  ("GLP")  and  good  manufacturing  practice  ("GMP")
requirements  prescribed  by  the Food and Drug Administration ("FDA") and other
standards prescribed by the appropriate regulatory agency in the country of use.
There  can be no assurance that CardioTech will be able to obtain or manufacture
products  in  a  timely fashion at acceptable quality and prices, that it or any
suppliers  can  comply  with  GLP  or  GMP,  as  applicable,  or that it or such
suppliers  will  be  able  to  manufacture  an adequate supply of product. CDT's
facility  is ISO 9001 and EN 46001 certified and includes a "Class 10,000" clean
room.

                                        3
<PAGE>
COMPETITION

     Competition  in the medical device industry in general is intense and based
primarily  on  scientific  and technological factors, the availability of patent
and  other  protection for technology and products, the ability to commercialize
technological  developments  and the ability to obtain governmental approval for
testing,  manufacturing  and  marketing  products.

     Competition  among  products  will be based, among other things, on product
efficacy,  safety,  reliability,  availability,  price  and  patent position. An
important  factor  will be the timing of the market introduction of CardioTech's
or  competitors' products. Accordingly, the relative speed with which CardioTech
can  develop  products,  complete the clinical trials and approval processes and
supply  commercial quantities of the products to the market is expected to be an
important competitive factor. CardioTech's competitive position will also depend
upon  its  ability  to  attract and retain qualified personnel, to obtain patent
protection or otherwise develop proprietary products or processes, and to secure
sufficient  capital  resources  for  the  often  substantial  period  between
technological  conception  and  commercial  sales.

RESEARCH  AND  DEVELOPMENT

     CardioTech's research and development efforts are focused on developing its
synthetic  vascular  graft technologies.  CardioTech's development decisions are
based  on  (1) development costs, (2) product need, (3) third-party interest and
funding availability, and (4) regulatory considerations.  CardioTech believes it
will need substantial additional financing to conduct human clinical trials, and
produce  coronary artery bypass grafts and other planned products.  No assurance
can  be  given,  however,  that  such  financing,  or  other  financing, will be
available  on  terms  attractive  to  CardioTech,  if  at  all.  Research  and
development  expenditures,  including  costs  of  research grants, for the years
ended  March  31,  2002  and  2001  were  $501,000  and  $557,000, respectively.
Cardiotech  granted  CTL  the  option to become the exclusive distributor of the
CardioPass  Coronary  Artery  Bypass Graft ("CABG") in Europe.  If CTL exercises
this  option,  it  agreed  to fund up to $3,000,000 to perform European clinical
trials  to  obtain  CE  marking.

     In  April  2002,  the  Company  concluded a technology transfer and license
agreement  with  Credent  Vascular  Technologies,  Ltd.,  of  Wrexham,  U.K.
(``Credent'').  Total  consideration to be paid by Credent to CardioTech for the
purchase of the transferred rights to ChronoFlex RC is a minimum of $500,000 and
may  be  as  high  as  $1,000,000,  payable  in  installments  linked to certain
performance  requirements.

     Under  terms of the agreement, CardioTech irrevocably granted an exclusive,
worldwide license of its intellectual property rights relating to ChronoFlex RC,
enabling  Credent  to  exclusively  synthesize  ChronoFlex  RC  biodurable
polycarbonate-urethane.  Credent  will  use  ChronoFlex RC in the manufacture of
its  vascular  access  and  peripheral vascular grafts and potentially in future
development  products.  Credent has licensed back to CardioTech the right to use
ChronoFlex  RC  for  the  manufacture  and  marketing  of coronary artery bypass
grafts.

GOVERNMENT  REGULATION

     CardioTech's  research  and  development  activities  are  also  subject to
regulation for safety, efficacy and quality by numerous governmental authorities
in  the United States.  In the United States, the development, manufacturing and
marketing  of synthetic vascular grafts are subject to regulation for safety and
efficacy  by  the  FDA  in  accordance  with  the  Food,  Drug and Cosmetic Act.
Synthetic  vascular  grafts  are  subject  to rigorous FDA regulation, including
pre-clinical  and  clinical  testing.  The process of completing clinical trials
and  obtaining  FDA approvals for a medical device is likely to take a number of
years, requires the expenditure of substantial resources and is often subject to
unanticipated  delays.  There  can be no assurance that any product will receive
such  approval  on  a  timely  basis,  if  at  all.

     There  can  be  no  assurance that the FDA will approve any of CardioTech's
products  currently  under research for marketing, or if they are approved, that
they  will be approved on a timely basis. Furthermore, CardioTech or the FDA may
suspend  clinical  trials  at any time upon a determination that the subjects or
patients  are being exposed to an unacceptable adverse health risk ascribable to
CardioTech's  products.  If  clinical  studies  are suspended, CardioTech may be
unable  to  continue  the  development of the investigational products affected.


                                        4
<PAGE>
EMPLOYEES

     Prior  to  the acquisition of CDT on April 30, 2001, the Company had 9 full
time  employees  consisting  of  one  in  research  and  development,  four  in
manufacturing  and  production,  and  four  in  management,  administrative  and
marketing  postitions.  As  of  May  31,  2002,  the  Company  has  30 full-time
employees.  Of these full-time employees, 13 are in research and development, 10
are  in  manufacturing  and production, and 7 are in management, administrative,
and  marketing  positions.  None  of  the  Company's  employees  is covered by a
collective bargaining agreement, and management considers its relations with its
employees  to  be  good.


                                        5
<PAGE>
Item  2.  Description  of  Property

     CardioTech  leases  a  total of approximately 16,000 square feet in Woburn,
Massachusetts on a five year lease expiring August 30, 2003.  As a result of the
acquisition  of  CDT, and effective as of May 1, 2001, Cardiotech also leased an
additional  11,000 square feet in Plymouth, Minnesota on a three year lease with
an option to extend for an additional three years.  CardioTech believes that its
current  facilities  are  adequate  for  the  next  several  years.

Item  3.  Legal  Proceedings

     The Company is not a party to any legal proceedings.

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

     No  matters  were  submitted  to a vote of security holders of the Company,
through  solicitations  of  proxies or otherwise, during the last quarter of the
fiscal  year  ended  March  31,  2002.


                                        6
<PAGE>
PART  II

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

     The  common  stock  trades  on the American Stock Exchange under the symbol
"CTE."  The  following  table  sets  forth  the high and low sales prices of the
common  stock for each of the last two fiscal years, as reported on the American
Stock  Exchange.

<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 2001  High  Low
                                  ----  ----
<S>                               <C>   <C>
June 30                           3.25  1.19
September 30                      3.50  1.38
December 31                       3.63  0.63
March 31                          1.56  0.75
</TABLE>

<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 2002  High  Low
                                  ----  ----
<S>                               <C>   <C>
June 30                           1.43  0.85
September 30                      2.20  1.00
December 31                       3.50  1.30
March 31                          2.20  1.21
</TABLE>

     As  of  March 31, 2002, there were approximately 344 stockholders of record
and  4,017 additional beneficial stockholders (stockholders holding common stock
in  brokerage  accounts).  The last sale price as reported by the American Stock
Exchange  on June 7, 2002 was $1.35.  The Company has never paid a cash dividend
on its common stock and does not anticipate the payment of cash dividends in the
foreseeable  future.

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

RESULTS  OF  OPERATIONS

Year  Ended  March  31,  2002  vs.  March  31,  2001

     Revenue  for  the  year  ended March 31, 2002 was $3,220,000 as compared to
$1,543,000  for  the  comparable prior year period, an increase of $1,677,000 or
109%.  The increase in the Company's revenues is attributable to the acquisition
of  CMED  Catheter  and  Disposables  Technology,  Inc.  ("CDT"), which provided
approximately $1,962,000 in revenues for the eleven month period ended March 31,
2002.  The  increase  in  the  Company's  revenues  were  offset by decreases of
approximately  i)  $121,000  in biomaterials sales resulting from reduced demand
from  certain  customers  and management's focus on sales operations at CDT; ii)
$67,000  in  royalty  income  resulting  from the loss of one customer; and iii)
$64,000  in  vascular  access  graft sales resulting from the disposition of the
Company's  UK  subsidiary  in  fiscal  2001.


                                        7
<PAGE>
     Cost  of  product sales for the year ended March 31, 2002 was $1,726,000 as
compared  to  $767,000  for  the  comparable  prior  year period, an increase of
$959,000,  or  125%.  Gross margin on product sales, including royalty revenues,
was  approximately  41% for the year ended March 31, 2002 as compared to 38% for
the  year  ended  March  31, 2001. The improvement in gross margins results from
higher  margin  activities  realized  through  the acquisition of CDT; continued
improvements  in  operational  efficiencies,  including  the  relocation  of the
Tyndale  Plains-Hunter  operations from Lawrenceville, NJ to Woburn, MA; and the
disposition  of  the  Company's  UK  subsidiary  which  was  incurring losses in
connection  with the manufacture and sales of the vascular access graft. Cost of
research  grants and contracts for the year ended March 31, 2002 was $228,000 as
compared  to  $147,000  for  the  comparable  prior  year period, an increase of
$81,000 or 55%. The increase in cost of research grants and contracts was due to
the  increased  efforts  spent  on  certain new research grants and contracts in
fiscal  2002.

     Research  and  development  expense  for  the year ended March 31, 2002 was
$273,000  as  compared  to  $410,000  for  the  comparable  prior year period, a
decrease  of  $137,000,  or  33%.  This  decrease  was  the  result  of  the
discontinuation  of  research  and  development expenditures by CTL prior to the
Company's  disposition  of  this  UK  subsidiary  in  November  2000.

     Selling,  general  and  administrative expense for the year ended March 31,
2002  was  $3,070,000  as  compared  to $1,736,000 for the comparable prior year
period,  an increase of $1,334,000 or 77%. The increase is primarily a result of
a $786,000 charge for stock based compensation for options issued by the Company
to consultants during fiscal 2002 and the affect of the acquisition of CDT which
had  selling,  general  and  administrative  costs of $804,000 since the date of
acquisition.

     Other income (expense), net for the year ended March 31, 2002 was income of
$106,000  as  compared  to  income  of  $7,222,000 for the comparable prior year
period,  a  decrease  of  $7,116,000.  The  decrease  is primarily a result of a
$7,337,000  gain  resulting  from the sale of the Company's UK subsidiary during
fiscal  2001. Offsetting the decrease resulting from the gain on the sale of the
UK subsidiary was a decrease in interest expense resulting from the reduction in
the  convertible  senior  notes  as  part  of  the  sale  of  the UK subsidiary.

     The  Company's net loss for the year ended March 31, 2002 was $1,971,000 as
compared  to  net income of $5,705,000 for the comparable prior year period. The
Company's  net  income  in fiscal 2001 includes a $7,337,000 gain resulting from
the disposition of the UK subsidiary. Additionally, included in net loss for the
year ended March 31, 2002 is a charge of approximately $786,000 related to stock
based  compensation as compared to a charge of approximately $54,000 included in
net  income  for  the  year  ended  March  31,  2001.  The Company's loss before
interest,  taxes, depreciation, amortization, stock based compensation, and gain
on  disposition  of  subsidiary ("Adjusted EBITDA") for the year ended March 31,
2002  was  a  negative  Adjusted  EBITDA  of  $707,000 as compared to a negative
Adjusted  EBITDA  of $1,125,000 for the comparable prior year period, a decrease
in  negative Adjusted EBITDA of $418,000 or 37%. The decrease in Adjusted EBITDA
results  primarily  from  the  positive  affect  of  the CDT acquisition and the
reduced  costs  experienced in fiscal 2002 as a result of the disposition of the
Company's  UK  subsidiary  in  the  previous fiscal year. The Company calculated
Adjusted  EBITDA  by  adding  depreciation,  amortization  and  stock  based
compensation  of  $1,370,000  and  $392,000  to  the  loss  from  operations  of
$2,077,000  and  $1,517,000  for  the  year  ended  March  31,  2002  and  2001,
respectively.  Adjusted  EBITDA  is  not  comparable  to  earnings determined in
accordance  with generally accepted accounting principles. Accordingly, Adjusted
EBITDA  as  determined  by the Company may not be comparable to similarly titled
measures reported by other companies. We believe that this computation is useful
in  analyzing operating performance, but should be used only in conjunction with
results  reported  in  accordance with generally accepted accounting principles.
The  basic  net  loss  per share for the year ended March 31, 2002 was $0.23 per
share  as  compared  to  basic  net  income per share of $0.68 per share for the
comparable  prior year period, an increase in basic net loss per share of $0.91.
The  diluted  net loss per share for the year ended March 31, 2002 was $0.23 per
share  as  compared  to  diluted net income per share of $0.61 per share for the
comparable  prior  year  period,  an  increase  in diluted net loss per share of
$0.84.


                                        8
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company used $398,000 of cash to fund operations during the year ended
March  31,  2002  compared  to  the  use  of $869,000 to fund operations for the
comparable  prior  year  period.  For the year ended March 31, 2002, the Company
used  funds  primarily  as  a result of a net loss of $1,971,000, an increase in
inventory of $60,000, a decrease in accounts payable of $222,000, and a decrease
in deferred revenue of $67,000; offset by the decrease in accounts receivable of
$417,000  and  an  increase  in  accrued  expenses of $115,000.  Funds were also
provided  by  non-cash  activities  such  as  depreciation  and  amortization of
$584,000  and  the  effect  of  the  fair  value  ascribed to options granted to
nonemployees  of $786,000.    Investing activities used cash of $790,000 for the
year  ended  March  31, 2002, as compared to cash provided of $6,096,000 for the
year  ended  March 31, 2001, and is primarily attributable to the acquisition of
CDT  for $1,300,000 in cash, plus $154,000 in transaction costs; the purchase of
approximately $115,000 of property and equipment, and the release from escrow of
$730,000  related  to  the  prior  year's  sale  of the Company's UK subsidiary.
Financing  activities  provided  cash  of  $171,000 for the year ended March 31,
2002,  as compared to cash used of $1,910,000 for the year ended March 31, 2001.
Cash  was  primarily provided through the proceeds of $164,000 from the exercise
of stock options and warrants.  Cash and cash equivalents amounted to $4,093,000
at  March  31,  2002  as compared to $5,110,000 at March 31, 2001, a decrease of
$1,017,000  or  20%.

     On  November  17, 2000, the Company entered into a Share Purchase Agreement
in  respect  of  CardioTech  International Ltd. (the "Agreement") with Nervation
Limited  ("Nervation").  This  Agreement  provided  for  the purchase of all the
issued  and  outstanding  ordinary  shares  (the  "Shares")  of  CardioTech
International,  Ltd.  ("LTD")  by  Nervation  from  CardioTech  for  total  cash
consideration  of  $7,000,000. The Company obtained stockholder approval for the
sale  of  the  Shares  on  October  26,  2000.

     The  Company  agreed to i) transfer all the Shares of LTD to Nervation; ii)
extend  the  right  to  Nervation  the  use  of the name "CardioTech" and/or any
similar  imitations  thereof  for a period of not less than five (5) years; iii)
transfer legal title to all assets used by LTD in connection with manufacturing,
marketing,  development and exploration of the access and peripheral grafts (the
"Business");  iv)  grant  an  exclusive  worldwide  license  to  manufacture the
specific  formulation  of  Chronoflex  RC  for  the  Business  in certain events
including  business  interruption,  sale,  merger  or acquisition of the Company
and/or the inability of the Company to furnish the Chronoflex RC to Nervation in
sufficient  quantity  and/or  consistently  and  on  a  reasonable  and  timely
commercial  basis;  v)  grant  Nervation  the  option  to  become  the exclusive
distributor of the Company's CardioPass Coronary Artery Bypass Graft ("CABG") in
Europe.  If  Nervation exercises this option, it agreed to fund up to $3,000,000
to  perform  European  clinical  trials  to  obtain CE Marking; vi) enter into a
covenant  by  the  Company  not  to compete with Nervation in the manufacturing,
marketing,  development  and  exploitation  of  the access and peripheral grafts
currently  used  in  the Business, including the Vasculink Vascular Access Graft
and  the  Myolink  Arterial  Bypass  Graft;  vii)  assign  all  Trademarks  and
Intellectual  Property  used  in  connection  with the Business and assets being
transferred  to  Nervation;  and  viii)  purchase  CABG  grafts  from Nervation.
Nervation  agreed to supply the Company with such grafts. This is subject to the
Company's  ability  to obtain another supplier and to obtain the transfer of the
technology.

     In  exchange  for  the  above  referenced terms and conditions, the Company
received and/or maintained as consideration for consummating said transaction i)
a cash payment of $7,000,000; ii) the exclusive, worldwide right to the CABG and
a  covenant  from  Nervation not to compete directly or indirectly with the CABG
product utilizing ChronoFlex technology; iii) the release of certain obligations
and  guarantees with respect to certain debts and obligations of LTD; and iv) an
advance  payment  of  $200,000  for  ChronoFlex  RC  to  be  sold  to Nervation.

     Under  terms of the agreement, CardioTech irrevocably granted an exclusive,
worldwide license of its intellectual property rights relating to ChronoFlex RC,
enabling  Credent  to  exclusively  synthesize  ChronoFlex  RC  biodurable
polycarbonate-urethane. Credent will use ChronoFlex RC in the manufacture of its
vascular  access  and  peripheral  vascular  grafts  and  potentially  in future
development  products.  Credent has licensed back to CardioTech the right to use
ChronoFlex  RC  for  the  manufacture  and  marketing  of coronary artery bypass
grafts.


                                        9
<PAGE>
     In  connection  with  the  transaction,  the  Company  repaid approximately
$2,034,000  of  7%  senior  convertible  notes held by Dresdner Kleinwort Benson
Private  Equity  Partners  LP,  including  all  accrued  interest and redemption
premiums.  Per  the Agreement, the Company was also required to place in escrow,
for  a period of eighteen months from the date of the Agreement, $700,000 of the
gross  proceeds to fulfill certain indemnification provisions. On April 9, 2002,
the  provisions  of escrow had been met and approximately $730,000, representing
the  escrow principal plus accrued interest, was transferred to the Company. The
Company  incurred  transaction  related  costs  of  approximately  $230,000.

     In  April  2002,  the  Company  concluded a technology transfer and license
agreement  with  Credent  Vascular  Technologies,  Ltd.,  of  Wrexham,  U.K.
("Credent").  Total  consideration  to  be paid by Credent to CardioTech for the
purchase of the transferred rights to ChronoFlex RC is a minimum of $500,000 and
may  be  as  high  as  $1,000,000,  payable  in  installments  linked to certain
performance  requirements.

     On  February 6, 2002, DKB elected to convert the Note having an outstanding
principal  and  interest  balance  outstanding  on  the  date  of  conversion of
approximately  $398,000.  The  Note  was  converted  into  433,094 shares of the
Company's  common  stock  at  a  conversion  price  of  $0.91875.

     During  the  fiscal year ended March 31, 2002, warrants representing 63,200
shares  of the Company's common stock were exercised, resulting in cash proceeds
of approximately $88,000 to CardioTech. In connection with the exercise of stock
options,  the  Company  issued  84,377 shares of common stock, resulting in cash
proceeds  of  $72,000.

     During  fiscal 2002, the Company made open market purchases of 5,000 shares
of  the  Company's  common stock at a cost of approximately $8,000. Accordingly,
total  shares  held in treasury as of March 31, 2002 is 25,822 at an approximate
cost  of  $48,000.

     On  May 4, 2001, the Company completed the acquisition of all the shares of
CMED Catheter and Disposables Technology, Inc., a Minnesota corporation ("CDT"),
from  Colorado  Medtech, Inc., a Colorado corporation ("Medtech") pursuant to an
Acquisition  Agreement  dated as of April 30, 2001, by and among Cardiotech, CDT
and  Medtech.

     CDT  is  an  original  equipment  manufacturer;  supplier  of  specialized
disposable  medical devices to medical device companies from concept to finished
packaged,  sterile  product; and uses its experience in the design, development,
prototyping  and  manufacturing  to  provide  turnkey  contract  services. CDT's
facility  is ISO 9001 and EN 46001 certified and includes a "Class 10,000" clean
room.

     The  consideration  paid  by Cardiotech to Medtech was $1,300,000 in a cash
payment,  $130,000  of which was placed into escrow pursuant to the terms of the
agreement.  The  cash  consideration used in the purchase came from Cardiotech's
working  capital.  In  connection  with the transaction, Cardiotech acquired net
assets  of  CDT having a book value of approximately $375,000. Additionally, the
Company  incurred transaction costs of approximately $130,000. Operations of CDT
are  included  in  CardioTech's  operations  from  May  1, 2001, the date of the
acquisition.

     The  Company  leases  facilities  in  Woburn,  Massachusetts  and Plymouth,
Minnesota  under  operating  leases  that  expire in 2004. The aggregate minimum
annual  rental  payments  under  these  leases is $446,000, of which $283,000 is
payable  in 2003 (See Note H to the Notes to Consolidated Financial Statements).

     CardioTech's future growth will depend upon its ability to raise capital to
support  research and development activities and to market and sell its vascular
graft  technology,  specifically  the coronary artery bypass graft, when, and if
developed.  Through  March  31,  2002, CardioTech continued to generate revenues
from  the  sale  of  vascular  grafts  and  biomaterials,  royalties  earned  on
biomaterials  and  NIH research grants. As of November 17, 2000, and as a result
of  the  transaction  whereby  the  Company  disposed  of its UK subsidiary, the
Company  will  no  longer generate revenues from the sales or potential sales of
vascular  access  or peripheral grafts. However, the Company will also not incur
further  sales  and marketing costs associated with the vascular access graft or
research  and  clinical  costs  associated  with  the  peripheral  graft.


                                       10
<PAGE>
     CardioTech  will  require  substantial  funds  for  further  research  and
development,  future  pre-clinical  and  clinical  trials, regulatory approvals,
establishment  of commercial-scale manufacturing capabilities, and the marketing
of  its  products. CardioTech's capital requirements depend on numerous factors,
including  but  not  limited  to,  the  progress of its research and development
programs;  the progress of pre-clinical and clinical testing; the time and costs
involved  in  obtaining  regulatory  approvals; the cost of filing, prosecuting,
defending  and  enforcing  any  intellectual  property  rights;  competing
technological  and  market  developments; changes in CardioTech's development of
commercialization  activities  and  arrangements; and the purchase of additional
facilities  and  capital  equipment.

     As  of  March  31,  2002,  CardioTech  was  conducting  its operations with
approximately $4,093,000 in cash and cash equivalents. CardioTech estimates such
amount  combined  with  its cash flow from operations will be sufficient to fund
its  working  capital  and  research and development activities for at least the
next  twelve  months.  Future  expenditures  for product development, especially
relating  to  outside  testing  and  clinical  trials,  are  discretionary  and,
accordingly,  can  be  adjusted  based  on  the  availability  of  cash.

Recent  Accounting  Pronouncements

     In July 2001, the FASB issue SFAS No. 141, Business Combinations.  SFAS No.
141  improves  the  transparency  of  the  accounting and reporting for business
combinations by requiring that all business combinations are accounted for under
a  single  method,  the  purchase  method.  This  statement is effective for all
business  combinations  initiated  after  June  30,  2001.

     In  July  2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets.  This  statement applies to intangibles and goodwill acquired after June
30,  2001,  as  well as goodwill and intangibles previously acquired. Under this
statement  goodwill  as well as other intangibles determined to have an infinite
life  will  no  longer  be amortized; however, these assets will be reviewed for
impairment  on a periodic basis. This statement is effective for the Company for
its  first  quarter  of its 2003 fiscal year. Management is currently evaluating
the  impact that this statement will have on the Company's financial statements.

     In  August  2001,  the  FASB  issued  SFAS  No.  143,  Accounting for Asset
Retirement  Obligations.  SFAS  No.  143  addresses  financial  accounting  and
reporting  obligations  associated  with  the  retirement of tangible long-lived
assets and the associated asset retirement costs. It applies to (a) all entities
and  (b)  legal  obligations associated with the retirement of long-lived assets
that  result  from  the acquisition, construction, development and/or the normal
operation of a long-lived asset, except for certain obligations of lessees. SFAS
No.  143  amends  SFAS No. 19, Financial Accounting and Reporting by Oil and Gas
Producing Companies, and is effective for financial statements issued for fiscal
years  beginning  after  June 15, 2002. The Company does not anticipate that the
adoption  of  SFAS  No.  143  will  have  a  material  impact  on  its financial
statements.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
Impairment  or  Disposal  of  Long-Lived  Assets.  SFAS  No.  144  addresses the
financial  accounting and reporting for the impairment or disposal of long-lived
assets.  SFAS  No. 144 supersedes SFAS No. 121, Accounting for the Impairment of
Long-Lived  Assets and for Long-Lived Assets to be Disposed Of, but retains SFAS
No.  121's  fundamental provisions for (a) recognition/measurement of impairment
of  long-lived  assets  to  be  held  and used and (b) measurement of long-lived
assets  to  be  disposed  of  by  sale.  SFAS  No.  144  also  supersedes  the
accounting/reporting provisions of Accounting Principles Board (APB) Opinion No.
30, Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment  of  a  Business  and  Extraordinary, Unusual and Infrequently Occurring
Events  and  Transactions,  for  segments  of  a  business to be disposed of but
retains  APB  No.  30's requirement to report discontinued operations separately
from  continuing  operations  and  extends  that  reporting to a component of an
entity  that either has been disposed of or is classified as held for sale. SFAS
No.  144  is  effective  for fiscal years beginning after December 15, 2001, and
interim  periods within those fiscal years. The Company does not anticipate that
the  adoption  of  SFAS  No.  144  will  have a material impact on its financial
statements.


                                       11
<PAGE>
Critical  Accounting  Policies

     Our  significant  accounting  policies  are  summarized  in  Note  A to our
consolidated  financial statements.  However, certain of our accounting policies
require  the  application  of  significant  judgment by our management, and such
judgments  are  reflected  in the amounts reported in our consolidated financial
statements.  In  applying  these  policies,  our management uses its judgment to
determine  the  appropriate  assumptions  to  be  used  in  the determination of
estimates.  Those  estimates  are  based  on our historical experience, terms of
existing  contracts,  our observance of trends in industry, information provided
by  our strategic partners and information available from other outside sources,
as  appropriate.  Actual  results  may  differ  significantly from the estimates
contained  in  our  consolidated  financial statements.  Our critical accounting
policies  are  as  follows:

     -    Revenue  Recognition  -  Product,  Research  and  Royalty  Revenue

          The  Company  recognizes  revenue  from  product  sales upon shipment,
          provided  that  a  purchase  order has been received or a contract has
          been  executed,  there  are  no  uncertainties  regarding  customer
          acceptance, the sales price is fixed or determinable and collection is
          deemed probable. If uncertainties regarding customer acceptance exist,
          the  Company recognizes revenue when those uncertainties are resolved.
          Amounts  collected  or  billed  prior  to satisfying the above revenue
          recognition  criteria  are  recorded  as  deferred  revenue.

          In  addition,  the Company recognizes revenue from research grants and
          contracted  development  fees  from  corporate  partners.  The Company
          recognizes  revenue from research grants over the term of the grant on
          a  percentage  of  completion  basis  determined by estimates of costs
          incurred  as  compared to total budgeted costs. The Company recognizes
          revenues  from  contracted development fees upon completion of service
          or  the  attainment  of  technical  benchmarks,  as  appropriate.

     -    Inventory  Valuation

          We  value our inventory at the lower of our actual cost or the current
          estimated  market  value.  We regularly review inventory quantities on
          hand  and  inventory commitments with suppliers and record a provision
          for  excess  and  obsolete inventory based primarily on our historical
          usage  for  the  prior twelve to twenty-four month period. Although we
          make  every  effort  to ensure the accuracy of our forecasts of future
          product  demand,  any  significant  unanticipated  change in demand or
          technological  developments  could  have  a  significant impact on the
          value  of  our  inventory  and  our  reported  operating  results.

     -    Intangibles

          Our long-lived assets include intangible assets and goodwill. At March
          31,  2002,  we  had $1,421,000 of intangible assets and goodwill, net,
          which  accounted  for  approximately  22%  of  our  total  assets.  In
          assessing the recoverability of our intangible assets and goodwill, we
          must  make  assumptions  in determining the fair value of the asset by
          estimating  future cash flows and considering other factors, including
          our  significant  changes  in  the  manner  or  use  of the assets, or
          negative  industry  reports or economic conditions. If those estimates
          or  their related assumptions change in the future, we may be required
          to  record  impairment  charges  for  those  assets.  We  adopted  the
          provisions  of  Statement  of Financial Accounting Standards, or SFAS,
          No.  142, "Goodwill and Other Intangible Assets," as of April 1, 2002,
          and  will  be  required  to  test our intangible assets for impairment
          during  the  first  six  months of fiscal 2003, and then on a periodic
          basis  thereafter.  We  are  currently  evaluating  the impact of this
          statement.  Regardless  of  the  results  of this initial test, future
          events could cause us to conclude that impairment indicators exist and
          that  goodwill  or other intangible assets are impaired. Any resulting
          impairment  could  have  a  material  adverse  impact on our financial
          condition  and  results  of  operations.


                                       12
<PAGE>
Forward  Looking  Statements

     The  Company  believes  that  this  Form  10-KSB  contains  forward-looking
statements  that  are subject to certain risks and uncertainties. These forward-
looking  statements  include  statements such as (i) the expected performance of
its  grafts,  (ii) the expected size of the market for the Company's products in
development,  (iii) the Company's ability to manufacture grafts that taper, (iv)
HydroThane's  bacterial  resistance,  clot resistance, and biocompatibility, (v)
the  sufficiency of the Company's liquidity and capital and the steps that would
be  taken  in  the  event funding is not available. Such statements are based on
management's  current  expectations  and  are subject to a number of factors and
uncertainties  that  could  cause  actual  results to differ materially from the
forward-looking  statements. The Company cautions investors that there can be no
assurance  that actual results or business conditions will not differ materially
from those projected or suggested in such forward-looking statements as a result
of  various  factors.


                                       13
<PAGE>
<TABLE>
<CAPTION>
Item  7.  Financial  Statements                                        Page
<S>                                                                   <C>

The following documents are filed as part of this report on Form 10-KSB

Report of Arthur Andersen LLP, Independent Public Accountants         F-1

Report of BDO Seidman, LLP, Independent Certified Public Accountants  F-2

Consolidated Balance Sheet at March 31, 2002                          F-3

Consolidated Statements of Operations for the years ended
  March 31, 2002 and 2001                                             F-4

Consolidated Statements of Stockholders' Equity for the years ended
  March 31, 2002 and 2001                                             F-5

Consolidated Statements of Cash Flows for the years ended
  March 31, 2002 and 2001                                             F-6 - F-7

Notes to Consolidated Financial Statements                            F-8 - F-21
</TABLE>

Item  8.  Changes  In  and  Disagreements  With  Accountants  on  Accounting and
          Financial  Disclosure

     On August 1, 2001, CardioTech International, Inc. (the "Company"), with the
approval  of the Company's Audit Committee and Board of Directors, dismissed its
independent accountants, BDO Seidman, LLP ("BDO").  During the years ended March
31, 2001 and 2000, and the subsequent interim period through August 1, 2001 (the
date  of  BDO's  dismissal  as the Company's independent accountants), (i) there
were  no  disagreements  with  BDO  on  any  matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of BDO, would have caused BDO
to  make  a  reference  to the subject matter of the disagreements in connection
with  its reports in the financial statements for such years and (ii) there were
no  "reportable  events"  as  described  in  Items  304  of Regulation S-K.  The
independent  accountant's  report of BDO on the Company's consolidated financial
statements  for  the  years  ended  March 31, 2001 and 2000 contained no adverse
opinion  or  disclaimer  of  opinion  and  were  not qualified or modified as to
uncertainty,  audit  scope  or  accounting  principles.

     On  August  1,  2001,  the  Company  appointed,  with  the  approval of the
Company's  Audit  Committee  and Board of Directors, the firm of Arthur Andersen
LLP  as  its  independent  accountants.


                                       14
<PAGE>
PART III

Item  9.  Directors,  Executive  Officers,  Promoters  and  Control  Persons;
          Compliance  with  Section  16(a)  of  the  Exchange  Act.

     The  information  required  by  this item will be set forth in the sections
entitled  "Management"  and  "Section 16(a) Beneficial Ownership, Reporting, and
Compliance"  in the Proxy Statement for the Annual Meeting of Stockholders to be
held  on  or  about  September  24, 2002 and to be filed with the Securities and
Exchange  Commission not later than July 29, 2002, and is incorporated herein by
this  reference.

Item 10.  Executive  Compensation

          The  information  required  by  this  item will be set forth under the
section  entitled "Executive Compensation" in the Proxy Statement for the Annual
Meeting  of  Stockholders  to  be  held on or about September 24, 2002 and to be
filed  with the Securities and Exchange Commission not later than July 29, 2002,
and  is  incorporated  herein  by  this  reference.

Item 11.  Security  Ownership  of  Certain  Beneficial  Owners  and  Management

     The  information  required  by  this item will be set forth in the sections
entitled  "Share  Ownership"  in  the  Proxy Statement for the Annual Meeting of
Stockholders  to be held on or about September 24, 2002 and to be filed with the
Securities  and  Exchange  Commission  not  later  than  July  29,  2002, and is
incorporated  herein  by  this  reference.

Item 12.  Certain  Relationships  and  Related  Transactions

     The  information  required  by  this  item will be set forth in the section
entitled "Certain Relationships and Related Transactions" in the Proxy Statement
for the Annual Meeting of Stockholders to be held on or about September 24, 2002
and  to be filed with the Securities and Exchange Commission not later than July
29,  2002,  and  is  incorporated  herein  by  this  reference.

Item 13.  Exhibits,  Financial  Statement Schedules, and Reports on Form 10-KSB

     (a)  The  following  are  filed  as  part  of  this  Form  10-KSB:

          (1)  Financial  Statements:  For  a list of financial statements which
               are  filed  as  part  of  this  Form  10-KSB,  See  Page  11
          (2)  Exhibits

     Exhibit Number:

      3.1   Articles  of  Incorporation were filed as Exhibit 3.1 of the Form 10
            and  are  incorporated  herein  by  reference.

      3.1.1 Certificate  of  Vote of Directors Establishing a Class or Series of
            Stock  for  Series  A  Preferred  Stock  was filed as Exhibit 3.1 to
            CardioTech's  Form  10-Q  for  the quarter ended September 30, 1998,
            filed on November 16, 1998, and is incorporated herein by reference.

      3.1.2 Certificate  of  Correction  dated  December  11,  1998 was filed as
            Exhibit 3.1 to CardioTech's Form 10-Q for the quarter ended December
            31,  1998, filed on February 16, 1999, and is incorporated herein by
            reference.

                                       15
<PAGE>
      3.2   Bylaws were filed as Exhibit 3.2 of the Form 10 and are incorporated
            herein  by  reference.

      10.2  Tax  Matters  Agreement  between  PMI  and CardioTech, dated May 13,
            1996,  was  filed as Exhibit 10.2 of the Form 10 and is incorporated
            herein  by  reference.

      10.3  Amended  and  Restated License Agreement between PMI and CardioTech,
            dated  May 13, 1996, was filed as Exhibit 10.4 of the Form 10 and is
            incorporated  herein  by  reference.

      10.4  CardioTech 1996 Employee, Director and Consultant Stock Option Plan,
            as  amended, was filed as Exhibit 10.4 to CardioTech's Form 10-K for
            the  year  ended  March  31,  1998,  filed  on June 29, 1998, and in
            incorporated  herein  by  reference.

      10.5  Employment  Agreement  of Michael Szycher, dated March 26, 1998, was
            filed  as  Exhibit 10.5 to CardioTech's Form 10-K for the year ended
            March  31,  1998, filed on June 29, 1998, and in incorporated herein
            by  reference.

      10.10 Development,  Supply  and  License  Agreement  between  PMI and Bard
            Access  Systems, dated November 11, 1992, was filed as Exhibit 10.10
            of  the  Form  10  and  is  incorporated  herein  by  reference.

      10.11 Lease  Agreement  between  CardioTech  and  Cummings  Properties
            Management, Inc., dated June 26, 1998, was filed as Exhibit 10.11 to
            CardioTech's  Form  10-K for the year ended March 31, 1998, filed on
            June  29,  1998,  and  in  incorporated  herein  by  reference.

      10.15 Note  Purchase  Agreement  dated  as  of  March  31,  1998  between
            CardioTech and Dresdner Kleinwort Benson Private Equity Partners, LP
            ("Kleinwort  Benson") was filed as Exhibit 99.1 to CardioTech's Form
            8-K  filed  with  the  Securities  and  Exchange  Commission  (the
            "Commission")  on  April  15,  1998  and  is  incorporated herein by
            reference.

      10.15.1  Amendment,  dated  as  of  November  12,  1998,  to Note Purchase
            Agreement  and  Registration  Rights  Agreement was filed as Exhibit
            10.1  to  CardioTech's Form 10-Q for the quarter ended September 30,
            1998,  filed  on  November  16,  1998  and is incorporated herein by
            reference.

      10.16 7%  Convertible  Senior  Note  dated  as  of  March 31, 1998 between
            CardioTech  and  Kleinwort  Benson  was  filed  as  Exhibit  99.2 to
            CardioTech's  Form  8-K  filed with the Commission on April 15, 1998
            and  is  incorporated  herein  by  reference.

      10.18 Form  of  Unit  Purchase  Agreement  between  CardioTech and certain
            individuals  was  filed  as  Exhibit  99.1 to CardioTech's Form S-3,
            filed  with  the  Securities and Exchange Commission on February 12,
            1999,  and  is  incorporated  herein  by  reference.

      10.19 Form  of  Warrant  to  Purchase Shares of Common Stock of CardioTech
            issued  to  certain  individuals  was  filed  as  Exhibit  99.2  to
            CardioTech's  Form  S-3,  filed  with  the  Securities  and Exchange
            Commission  on  February  12,  1999,  and  is incorporated herein by
            reference.


                                       16
<PAGE>
      21    Subsidiaries  of  CardioTech

      23    Consent  of  Arthur  Andersen,  LLP,  Independent Public Accountants

      23.2  Consent  of  BDO  Seidman,  LLP,  Independent  Certified  Public
            Accountants

     (b)  Reports on Form 8-K:  None

Copies of these exhibits are available for a reasonable fee upon written request
to  the  Company at its corporate headquarters:  CardioTech International, Inc.,
78-E  Olympia  Avenue,  Woburn,  MA  01801.  ATTN:  Thomas  F.  Lovett.


                                       17
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of CardioTech International, Inc.:

We  have  audited  the  accompanying  consolidated  balance  sheet of CardioTech
International,  Inc.  and  subsidiaries  as  of  March 31, 2002, and the related
consolidated  statements of operations, stockholders' equity, 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  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  CardioTech
International, Inc. and subsidiaries at March 31, 2002, and the results of their
operations and their cash flows for the year ended March 31, 2002, in conformity
with  accounting  principles generally accepted in the United States of America.


                                                      /S/ Arthur  Andersen  LLP
Boston, Massachusetts
May 15, 2002


                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To  the  Board  of Directors and Stockholders of CardioTech International, Inc.:

We  have  audited  the  accompanying  consolidated  statements  of  operations,
stockholders'  equity,  and  cash  flows  of  Cardiotech International, Inc. and
subsidiaries  for the year ended March 31, 2001.  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  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 consolidated results of operations and
cash flows of Cardiotech International, Inc. and subsidiaries for the year ended
March  31,  2001, in conformity with accounting principles generally accepted in
the  United  States  of  America.


                                                         /S/  BDO  Seidman,  LLP
Boston, Massachusetts
May 18, 2001


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                       CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEET


                                                                                 MARCH 31,
                                                                                   2002
                                                                               -------------
<S>                                                                            <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                                    $  4,093,000
  Accounts receivable -- trade                                                      338,000
  Accounts receivable -- other                                                       81,000
  Inventory                                                                         134,000
  Prepaid expenses                                                                   82,000
                                                                               -------------
    Total Current Assets                                                          4,728,000

Property and equipment, net                                                         365,000
Amortizable intangible assets, net                                                  336,000
Goodwill                                                                          1,085,000
Other non-current assets, net                                                        40,000
                                                                               -------------

      Total Assets                                                             $  6,554,000
                                                                               =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                                                             $    260,000
  Accrued expenses                                                                  635,000
  Deferred revenue                                                                  225,000
                                                                               -------------
      Total Current Liabilities                                                   1,120,000
                                                                               -------------

Commitments and contingencies (Note H)

Stockholders' Equity:
  Common stock, $.01 par value, 50,000,000 shares authorized, 9,158,601
    issued and 9,132,779 outstanding                                                 91,000
  Additional paid-in capital                                                     16,078,000
  Accumulated deficit                                                           (10,197,000)
  Subscriptions receivable from related parties                                    (490,000)
                                                                               -------------
                                                                                  5,482,000
  Less: treasury stock, 25,822 shares at cost                                       (48,000)
                                                                               -------------
    Total Stockholders' Equity                                                    5,434,000
                                                                               -------------

      Total Liabilities and Stockholders' Equity                               $  6,554,000
                                                                               =============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                         FOR THE YEARS ENDED MARCH 31,
                                                2002          2001
                                            ------------  ------------
<S>                                         <C>           <C>
Revenue:
  Product sales                             $ 2,550,000   $   773,000
  Research grants and contracts                 278,000       311,000
  Royalties                                     392,000       459,000
                                            ------------  ------------
                                              3,220,000     1,543,000
                                            ------------  ------------

Operating Expenses:
  Cost of product sales                       1,726,000       767,000
  Cost of research grants and contracts         228,000       147,000
  Research and development                      273,000       410,000
  Selling, general and administrative         3,070,000     1,736,000
                                            ------------  ------------
                                              5,297,000     3,060,000
                                            ------------  ------------

Loss from operations                         (2,077,000)   (1,517,000)
                                            ------------  ------------

Other Income (Expense):
  Gain on sale of subsidiary                          -     7,337,000
  Interest expense                              (23,000)     (289,000)
  Interest income                               114,000       165,000
  Other income                                   15,000         9,000
                                            ------------  ------------
Other income (expense), net                     106,000     7,222,000
                                            ------------  ------------

Net income (loss)                           $(1,971,000)  $ 5,705,000
                                            ============  ============

Other comprehensive  income (loss):
  Foreign currency translation adjustment             -        24,000
                                            ------------  ------------

Comprehensive income (loss)                 $(1,971,000)  $ 5,729,000
                                            ============  ============

Net income (loss) per common share:
  Basic                                     $     (0.23)  $      0.68
                                            ============  ============
  Diluted                                   $     (0.23)  $      0.61
                                            ============  ============

Shares used in computing net income (loss)
  per common share:
  Basic                                       8,620,956     8,424,374
                                            ============  ============
  Diluted                                     8,620,956     9,393,742
                                            ============  ============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                          CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                                                STATEMENTS OF STOCKHOLDERS' EQUITY
                                            FOR THE YEARS ENDED MARCH 31, 2002 AND 2001


                                  Common Stock                               Subscriptions            Accumulated
                               ------------------  Additional                  Receivable                 Other          Total
                               Number of             Paid-In     Accumulated  from Related Treasury   Comprehensive  Stockholders'
                                Shares    Amount     Capital       Deficit      Parties      Stock    Income (Loss)      Equity
                               ---------  -------  -----------  -------------  ----------  ---------  --------------  ------------
<S>                            <C>        <C>      <C>          <C>            <C>         <C>        <C>             <C>
Balance at March 31, 2000      8,099,067  $81,000  $14,092,000  $(13,931,000)  $(150,000)  $      -   $     (24,000)  $    68,000

Issuance of common
  stock in connection with
  exercise of stock options      254,750    3,000      311,000                  (295,000)                                  19,000
Issuance of common stock
  in connection with
  exercise of stock warrants      97,000    1,000      144,000                                                            145,000
Issuance of common stock
  in connection
  with license agreement          67,113        -       79,000                                                             79,000
Fair value of options
  granted to consultant                                 54,000                                                             54,000
Treasury stock, at cost                                                                     (40,000)                      (40,000)
Net income                                                         5,705,000                                            5,705,000
Effect of cumulative
  translation adjustment                                                                                     24,000        24,000
                               ---------  -------  -----------  -------------  ----------  ---------  --------------  ------------

Balance at March 31, 2001      8,517,930   85,000   14,680,000    (8,226,000)   (445,000)   (40,000)              -     6,054,000

Conversion of convertible
  notes to common stock          433,094    4,000      394,000                                                            398,000
Issuance of common stock
  in connection with
  exercise of stock options       84,377    1,000       71,000                                                             72,000
Issuance of common stock
  in connection with
  exercise of stock warrants      63,200    1,000       87,000                                                             88,000
Fair value of options
  granted to consultants                               786,000                                                            786,000
Payment of officers
  and consultant note                                                             15,000                                   15,000
Sale of common
  stock to related party          60,000        -       60,000                   (60,000)                                       -
Treasury stock, at cost                                                                      (8,000)                       (8,000)
Net loss                                                          (1,971,000)                                          (1,971,000)
                               ---------  -------  -----------  -------------  ----------  ---------  --------------  ------------

Balance at March 31, 2002      9,158,601  $91,000  $16,078,000  $(10,197,000)  $(490,000)  $(48,000)  $           -   $ 5,434,000
                               =========  =======  ===========  =============  ==========  =========  ==============  ============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                CARDIOTECH INTERNATIONAL, INC.
                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                              FOR THE YEARS ENDED MARCH 31,
                                                                    2002          2001
                                                                ------------  ------------
<S>                                                             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                             $(1,971,000)  $ 5,705,000
  Adjustments to reconcile net income (loss) to net
    cash flows used in operating activities:
    Fair value ascribed to options granted to nonemployees          786,000        54,000
    Noncash interest expense on convertible notes payable            20,000        37,000
    Depreciation and amortization                                   584,000       338,000
    Write-off of deferred debt issuance costs                             -        88,000
    Gain on sale of subsidiary                                            -    (7,337,000)
    Changes in current assets and liabilities:
      Accounts receivable - trade                                   417,000       277,000
      Accounts receivable - other                                    16,000             -
      Inventory                                                     (60,000)       17,000
      Prepaid expenses                                              (16,000)      (38,000)
      Accounts payable                                             (222,000)     (129,000)
      Accrued expenses                                              115,000        70,000
      Deferred revenue                                              (67,000)       49,000
                                                                ------------  ------------
    Net cash used in operating activities                          (398,000)     (869,000)
                                                                ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                               (115,000)      (67,000)
  Proceeds from sale of subsidiary, less cash held in
    escrow of $700,000 and transaction costs of $230,000                  -     6,070,000
  Release of cash held in escrow                                    730,000             -
  Cash paid for acquisition of CDT, net                          (1,454,000)            -
  Increase in other assets                                           49,000        93,000
                                                                ------------  ------------
    Net cash provided by (used in) investing activities            (790,000)    6,096,000
                                                                ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of convertible senior notes                                   -    (1,975,000)
  Payment of premium on repayment of senior notes                         -       (59,000)
  Net proceeds from issuance of common stock, options
    and warrants                                                    164,000       164,000
  Purchase of treasury stock                                         (8,000)      (40,000)
  Net proceeds from repayment of note receivable                     15,000             -
                                                                ------------  ------------
    Net cash provided by (used in) financing activities             171,000    (1,910,000)
                                                                ------------  ------------

  Net increase (decrease) in cash and cash equivalents           (1,017,000)    3,317,000

  Cash and cash equivalents at beginning of year                  5,110,000     1,793,000
                                                                ------------  ------------

  Cash and cash equivalents at end of year                      $ 4,093,000   $ 5,110,000
                                                                ============  ============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                           CARDIOTECH INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                                           FOR THE YEARS ENDED MARCH 31,
                                                           -----------------------------
                                                                2002        2001
                                                              --------  ------------
<S>                                                           <C>       <C>
License acquired in connection with issuance of common stock  $      -  $    79,000
Issuance of notes receivable to officers                             -       15,000
Issuance of stock subscription receivable to consultant              -      280,000
Conversion of convertible notes payable and accrued interest
  into common stock                                            398,000            -
Interest income received                                       114,000      166,000
Interest expense paid                                                -       59,000
Income taxes paid                                                1,000            -



On  May 4, 2001, the Company completed the acquisition of all the shares of CMED
Catheter  and  Disposables Technology, Inc. pursuant to an Acquisition Agreement
dated  as  of  April  30,  2001,  as  follows:

Fair value of assets acquired, excluding cash                           $ 2,019,000
Cash paid for acquisition                                                (1,454,000)
                                                                        ------------

Liabilities assumed                                                     $   565,000
                                                                        ============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                      F-7
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE  OF  BUSINESS

     CardioTech  International,  Inc.  (including its subsidiaries, collectively
"CardioTech"  or  the  "Company") is using its proprietary technology to develop
and  manufacture small bore vascular grafts, or synthetic blood vessels, made of
ChronoFlex,  a  family  of  polyurethanes,  that  has  been  demonstrated  to be
biocompatible  and  non-toxic.  The  Company  is  headquartered  in  Woburn,
Massachusetts  where  it  also  operates  its  manufacturing  and  laboratory
facilities.

A.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Basis  of  Presentation

     CardioTech  was  incorporated  in  March  1993.  CardioTech  and CardioTech
International, Ltd. ("CTL") were spun off of PolyMedica Industries, Inc. ("PMI")
in  June  1996.  CardioTech  Acquisition  Corp, a wholly-owned subsidiary of the
Company,  was  incorporated  in  April  1999.  CTL  was  sold  in November 2000.
The  consolidated  financial  statements include the accounts of the Company and
its  wholly-owned  subsidiaries.  All  significant  intercompany  balances  and
transactions  have  been  eliminated.

Uses  of  Estimates

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted in the United States requires management to make
estimates  and  assumptions  that  affect  the amounts reported in the financial
statements  and  accompanying  notes.  Actual  results  may  differ  from  those
estimates  and  such  differences  may  be material to the financial statements.
Uncertainties

     The  Company  is subject to risks common to companies in the medical device
industry,  including,  but  not  limited  to,  development  of  new  technology
innovations  by  competitors  of  the  Company,  dependence  on  key  personnel,
protection  of  proprietary  technology,  and  compliance  with  FDA  government
regulations.

Cash  and  Cash  Equivalents

     Cash  and  cash  equivalents  include  cash  on  hand,  demand deposits and
short-term  investments  with original maturities of three months or less.  Cash
equivalents  represent  a  deposit  in  a  money  market  account.

Accounts  Receivable  -  Other

     Accounts  Receivable - Other principally consist of revenue receivable from
research  and  development  work completed on National Institute of Health Small
Business  Innovative  Research  Grants  and  royalty  income  receivable.

Revenue Recognition - Product, Research and Royalty Revenue

     Revenue  is  generated  in  connection  with  the  development  and sale of
ChronoFlex  and  other proprietary biomaterials for use in medical devices.  The
Company  also  receives  license and royalty fees for the use of its proprietary
biomaterials.  CardioTech  recognizes  these  fees as revenue in accordance with
the terms of the contracts.  Contracted development fees from corporate partners
are  recognized  upon  completion  of  service  or  the  attainment of technical
benchmarks,  as  appropriate.

     During  the years ended March 31, 2002 and 2001, the Company earned revenue
from  a  Small Business Innovation Research (SBIR) grant awarded by the National
Institute  of Health to support the Company's research and development programs.
Revenue  from  these  grants  is  recognized  over  the  term  of the grant on a
percentage  of  completion  basis  determined  by estimates of costs incurred as
compared  to  total  budgeted  costs.


                                      F-8
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Research  and  Development  Expense

     Research  and  development  expense  is  charged  to  expense  as incurred.

Foreign  Currency  Translation

     In  accordance with Statement of Financial Accounting Standard ("SFAS") No.
52,  "Foreign  Currency  Translation,"  assets  and liabilities of the Company's
foreign  subsidiary, which was disposed of in November 2000, are translated into
U.S. dollars using current exchange rates at the balance sheet date and revenues
and  expenses  are  translated  at  average exchange rates prevailing during the
year.  Transaction  gains and losses are recorded in the Consolidated Statements
of  Operations.

Reporting  Comprehensive  Income  (Loss)

     SFAS  No.  130,  "Reporting  Comprehensive  Income  (Loss),"  establishes
standards  for  the  reporting  and  display  of  comprehensive  income  and its
components  in  the  consolidated  financial  statements.  Comprehensive  income
(loss)  is  the  total  of  net income (loss) and all other non owner changes in
equity  including  such items as unrealized holding gains (losses) on securities
classified  as  available-for-sale, foreign currency translation adjustments and
minimum  pension  liability  adjustments.  The  Company  has  chosen to disclose
comprehensive  income  (loss)  in  the  accompanying  consolidated statements of
operations.

Basic  and  Diluted  Earnings  Per  Share

     The  Company  follows  SFAS  No.  128,  "Earnings  Per  Share," where basic
earnings  per  share  is  computed by dividing net income (loss) by the weighted
average number of common shares outstanding during the period.  Diluted earnings
per  share  are  based  upon  the  weighted  average  number  of  common  shares
outstanding during the period plus additional weighted average common equivalent
shares  outstanding  during  the  period.

     Common  equivalent  shares  result from the assumed exercise of outstanding
stock  options and warrants, the proceeds of which are then assumed to have been
used  to  repurchase  outstanding  common stock using the treasury stock method.
Common  equivalent shares also result from the assumed conversion of convertible
debt using the "If Converted" method. In addition, the numerator is adjusted for
any  changes  in income or loss that would result from the assumed conversion of
potential  shares.

Equipment  and  Leasehold  Improvements

     Equipment  and  leasehold  improvements  are  stated at cost.  Equipment is
depreciated  using  the  straight-line method over the estimated useful lives of
the  assets,  ranging  from three to seven years, and leasehold improvements are
amortized  using the straight-line method over the shorter of the estimated life
of  the  asset or the remaining term of the lease.  Expenditures for repairs and
maintenance  are  charged  to  expense  as  incurred.

Inventory

     Inventory  is  stated  at  the  lower  of  cost  (determined on a first-in,
first-out  basis)  or  market, and is made up of Raw Materials, Work in Process,
and  Finished  Goods  of  $103,000,  $8,000,  and  $23,000,  respectively.

Income  Taxes

     The  Company  follows  SFAS  No.  109, "Accounting for Income Taxes," where
deferred  tax  assets  and  liabilities  are  recognized  based  on  temporary
differences  between  the  financial  statements  and  tax  basis  of assets and
liabilities  using currently enacted tax rates.  A valuation reserve against the
net  deferred  assets  is  recorded,  if,  based  upon  the  weight of available
evidence, it is more likely than not that some or all of the deferred tax assets
will  not  be  realized.


                                      F-9
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt  Issuance  Cost

     The  costs related to the issuance of debt are capitalized and amortized to
interest  expense  on  a  straight-line  basis  over  the life of the debt.  The
Company  wrote  off  the  remaining $88,000 of debt issuance costs during fiscal
2001  in  connection  with  the  repayment  of  the  related debt. (See Note L).

Intangible  Assets  and  Impairment  of  Long-Lived  Assets:

     Intangible assets consist of the following at March 31, 2002:

<TABLE>
<CAPTION>
                                  Estimated
                                 Useful Life
                                 -----------
<S>                              <C>          <C>
Customer intangibles                 5 years  $  412,000
Goodwill                             5 years   1,814,000
                                              -----------
                                               2,226,000

Less - Accumulated amortization                 (805,000)
                                              -----------
                                              $1,421,000
                                              ===========
</TABLE>

     The  Company  evaluates  it  long-lived  assets, which include property and
leasehold  improvements  and  intangible  assets  for  impairment  as events and
circumstances  indicate that the carrying amount may not be recoverable and at a
minimum  at  each balance sheet date. The Company evaluates the realizability of
its  long-lived  assets  based  on  profitability  and  undiscounted  cash  flow
expectations for the related asset or subsidiary. Management believes that as of
the  balance  sheet  date presented none of the Company's long-lived assets were
impaired.

     In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  142,  "Goodwill  and  Other  Intangible  Assets." This statement supercedes
Accounting  Principles Board Opinion No. 17 ("APB 17"), "Intangible Assets," and
applies  to goodwill and intangible assets acquired after June 30, 2001, as well
as  goodwill  and  intangible  assets previously acquired. SFAS No. 142 requires
that goodwill and intangible assets with indefinite lives no longer be amortized
but  instead be tested for impairment at least annually, or when events indicate
that  there  may  be  an  impairment.  In  connection  with  the  SFAS  No.  142
transitional  goodwill  impairment evaluation, Cardiotech is required to perform
an  assessment of whether there is an indication that goodwill is impaired as of
the date of adoption. To accomplish this, Cardiotech must identify its reporting
units  and  determine the carrying value of each reporting unit by assigning the
assets  and  liabilities, including the existing goodwill and intangible assets,
to  those  reporting units as of the date of adoption. Cardiotech will then have
up  to  six months from the date of adoption to determine the fair value of each
reporting  unit  and compare it to the carrying amount of the reporting unit. To
the extent the carrying amount of a reporting unit exceeds the fair value of the
reporting  unit,  an  indication  exists that the reporting unit goodwill may be
impaired  and  Cardiotech  must  perform  the  second  step  of the transitional
impairment  test.  In  the second step, Cardiotech must compare the implied fair
value  of  the reporting unit goodwill with the carrying amount of the reporting
unit  goodwill,  both of which would be measured as of the date of adoption. The
implied fair value of goodwill is determined by allocating the fair value of the
reporting  unit  to  all  of  the  assets  (recognized  and  unrecognized)  and
liabilities  of  the  reporting  unit  in  a  manner similar to a purchase price
allocation,  in accordance with SFAS No. 141. The residual fair value after this
allocation is the implied fair value of the reporting unit goodwill. This second
step  is required to be completed as soon as possible, but no later than the end
of  the year of adoption. Any transitional impairment loss will be recognized as
a  cumulative  effect  of  a  change in accounting principle in the statement of
income  as  of  April  1,  2002.


                                      F-10
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     SFAS  No.  142  is  effective for fiscal years beginning after December 15,
2001.  Cardiotech expects to adopt SFAS No. 142 in the fiscal quarter ended June
30,  2002,  the  extensive  effort  needed to comply with adopting the statement
makes  it  impracticable  to reasonably estimate the financial statement impact,
specifically  whether  there will be any transitional impairment losses realized
as  a  cumulative  effect  of  a change in accounting principle. As of March 31,
2002,  Cardiotech  had  unamortized  goodwill  of  $1,085,000  and  unamortized
identifiable  intangible  assets  of  $336,000.  Amortization expense related to
goodwill  was  approximately  $350,000  and $216,000, for the fiscal years ended
March  31,  2002  and  2001, respectively. Amortization expense related to other
identifiable  intangible assets that will continue to be amortized in the future
was  approximately  $76,000 for the fiscal year ended March 31, 2002. Under this
statement  goodwill,  as  well as certain other intangible assets, determined to
have  an indefinite life, will no longer be amortized, instead these assets will
be  reviewed  for  impairment  on  a  periodic  basis.

Recent  Accounting  Pronouncements

     In  July 2001, the FASB issued SFAS No. 141, "Business Combinations."  SFAS
No.  141  improves the transparency of the accounting and reporting for business
combinations by requiring that all business combinations are accounted for under
a  single  method,  the  purchase  method.  This  statement is effective for all
business  combinations  initiated  after  June  30,  2001.

     In  July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets."  This statement applies to intangibles and goodwill acquired after June
30,  2001,  as  well as goodwill and intangibles previously acquired. Under this
statement, goodwill as well as other intangibles, determined to have an infinite
life  will  no  longer  be amortized; however, these assets will be reviewed for
impairment  on a periodic basis. This statement is effective for the Company for
its  first  quarter  of its 2003 fiscal year. Management is currently evaluating
the  impact that this statement will have on the Company's financial statements.

     In  August  2001,  the  FASB  issued  SFAS  No.  143, "Accounting for Asset
Retirement  Obligations."  SFAS  No.  143  addresses  financial  accounting  and
reporting  obligations  associated  with  the  retirement of tangible long-lived
assets and the associated asset retirement costs. It applies to (a) all entities
and  (b)  legal  obligations associated with the retirement of long-lived assets
that  result  from  the acquisition, construction, development and/or the normal
operation of a long-lived asset, except for certain obligations of lessees. SFAS
No.  143  amends SFAS No. 19, "Financial Accounting and Reporting by Oil and Gas
Producing  Companies,"  and  is  effective  for  financial statements issued for
fiscal years beginning after June 15, 2002. The Company does not anticipate that
the  adoption  of  SFAS  No.  143  will  have a material impact on its financial
statements.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting for the
Impairment  or  Disposal  of  Long-Lived  Assets."  SFAS  No.  144 addresses the
financial  accounting and reporting for the impairment or disposal of long-lived
assets.  SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," but retains SFAS
No.  121's  fundamental provisions for (a) recognition/measurement of impairment
of  long-lived  assets  to  be  held  and used and (b) measurement of long-lived
assets  to  be  disposed  of  by  sale.  SFAS  No.  144  also  supersedes  the
accounting/reporting provisions of Accounting Principles Board (APB) Opinion No.
30, Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment  of  a  Business  and  Extraordinary, Unusual and Infrequently Occurring
Events  and  Transactions,  for  segments  of  a  business to be disposed of but
retains  APB  Opinion  No.  30's  requirement  to report discontinued operations
separately  from continuing operations and extends that reporting to a component
of an entity that either has been disposed of or is classified as held-for-sale.
SFAS  No.  144  is effective for fiscal years beginning after December 15, 2001,
and  interim  periods within those fiscal years. The Company does not anticipate
that  the  adoption of SFAS No. 144 will have a material impact on its financial
statements.

Reclassifications

     Certain prior-year amounts have been reclassified to conform to the current
year's  presentation.


                                      F-11
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

B. RELATED  PARTY  TRANSACTIONS

     In  December  1998, certain executive officers of the Company purchased, in
the  aggregate,  160,000  units  during  a  private  placement  offering  of the
Company's common stock.  A note issued by each officer to the Company funded the
purchase  of  the  units, valued at $200,000.  The terms of the note provide for
each  executive  to  repay  the Company with interest at 4.25% per annum, within
five  years.  The  promissory  notes,  which are full recourse against the maker
personally  with  respect  to  any  amount  due  under the promissory notes, are
secured  by  the  common stock and warrants underlying the units.  The principal
balance  due  is  included  as  Subscriptions receivable from related parties in
Stockholders'  Equity  of the consolidated balance sheet.  As of March 31, 2002,
the  principal  balance  outstanding  was  $430,000.

     SFAS  No.  57,  "Related  Party  Disclosures,"  specifies  the  nature  of
information  that  should be disclosed in financial statements regarding related
party  transactions. Implant Sciences Corporation ("Implant"), a public company,
is  a  related  party  with  the  Company  by virtue of its significant business
relationships.

     In  March  2000,  Implant  entered into a $250,000 joint research agreement
with  the  Company  for  the purpose of having the Company develop a proprietary
porous  polymer  biocompatible  coating  technology  as a platform for Implant's
proprietary  radioactive  brachytherapy  technology.  During  fiscal  2001,  the
Company  was  paid  $50,000 by Implant pursuant to the aforementioned agreement.
The joint research and development agreement provides for the Company to develop
the  polyurethane  coating  instrumental  in  the  development of a polyurethane
coated  drug-eluting  stent  and  for  the  Company to grant Implant a perpetual
worldwide  exclusive  license  to  use,  sublicense  and  otherwise  deal in any
technology  developed  by  the Company in connection with the development of the
stents.  In  consideration of the research, development and technology transfer,
Implant  will pay the Company $150,000 in cash pursuant to a milestone schedule.
In  addition,  Implant will purchase 100,000 shares of CardioTech's common stock
at a price of $1.00 per share upon the achievement of certain milestones related
to  the research and development. As of March 31, 2002, Implant was obligated to
purchase  60,000  shares  of  the  Company's  common  stock  at $1.00 per share.
Accordingly, the Company recorded the related subscription receivable of $60,000
as  Subscription  receivable from related parties in Stockholders' Equity in the
consolidated  balance  sheet.  This amount was paid by Implant on April 6, 2002.

     The  owner  of  the  technology  used  in connection with the stent will be
CardioTech, however such technology will be transferred to Implant pursuant to a
technology  license.  The  developed  technology  represents a "platform" in the
sense  that  the  polyurethane developed by CardioTech and utilized to cover the
stent  will  be  the  medium  in  which  specific  anti-restenosis drugs will be
implanted  and  therefore  becomes  the  key  technological  component  of  this
drug-eluting stent. The research and development agreement provides for 6 phases
including  the design of equipment necessary to produce prototypes of the stent,
development  of  a  series  of  prototypes,  production  of  a limited number of
prototypes  and  the delivery of prototypes to Implant. The material deadline is
therefore  the  delivery  of an operative prototype. Implant is obligated to pay
the  entire $250,000 if all milestone conditions are met. Through March 31, 2002
Implant  has  made  cash  payments  of  $115,000  to  CardioTech.

     Certain  of our directors hold positions as directors of Implant. Our chief
executive  officer  and chairman of the board of directors is also a director of
Implant.  The  chief executive officer and chairman of the board of directors of
Implant  is  also  a one of our directors. Our acting chief financial officer is
also  the  acting  chief  financial  officer  of  Implant.

     On October 10, 2001, the Company provided Implant a $500,000 Line of Credit
facility.  The Line of Credit provides for funding at the discretion of Implant,
is  subject to a security agreement providing a second lien on substantially all
of Implant's assets, and provides for a $15,000 commitment fee which was paid in
February  2002. The Company and Implant mutually agreed to terminate the Line of
Credit  on  March 29, 2002. There were no borrowings on this Line of Credit from
inception  through  its  termination  on  March  29,  2002.


                                      F-12
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

C.  LICENSE  AGREEMENTS

     Polymedica  Corporation  ("PMI")  has  granted  to CardioTech an exclusive,
perpetual,  worldwide,  royalty-free  license  for  CardioTech to use all of the
necessary patent and other intellectual property owned by PMI in the implantable
devices  and materials field (collectively, "PMI Licensed Technology").  PMI, at
its  own  expense, will file patents or other applications for the protection of
all  new  inventions formulated, made or conceived by PMI during the term of the
license  that related to PMI Licensed Technology and all such inventions will be
part  of the technology licensed to CardioTech.  CardioTech, at its own expense,
will file patents or other applications for the protection of all new inventions
formulated, made, or conceived by CardioTech during the term of the license that
related  to PMI Licensed Technology and all such inventions shall be exclusively
licensed  to PMI for use by PMI in fields other than the implantable devices and
materials  field.

D.  PROPERTY  AND  EQUIPMENT

     Property  and  equipment  at  March  31,  2002  consists  of the following:

<TABLE>
<CAPTION>
<S>                                             <C>
Laboratory equipment                            $ 569,000
Furniture, fixtures and office equipment          150,000
Leasehold improvements                            213,000
                                                ----------
                                                  932,000
Less accumulated depreciation and amortization   (567,000)
                                                ----------

                                                $ 365,000
                                                ==========
</TABLE>

     Depreciation  expense for property and equipment for the fiscal years ended
March  31,  2002 and 2001 was approximately $162,000 and $122,000, respectively.

E.  ACCRUED  EXPENSES

     Accrued  expense  at  March  31,  2002  consists  of  the  following:

<TABLE>
<CAPTION>
<S>                          <C>
Legal and professional fees  $ 78,000
Salaries and benefits         396,000
Research and development      112,000
Accrued interest               19,000
Other                          30,000
                             --------

                             $635,000
                             ========
</TABLE>


                                      F-13
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F.  INCOME  TAXES

     Income  (loss)  before  income  taxes was generated as follows in the years
ended  March  31:

<TABLE>
<CAPTION>
                   2002         2001
               ------------  -----------
<S>            <C>           <C>

United States  $(1,971,000)  $6,101,000
Foreign                  -     (396,000)
               ------------  -----------

               $(1,971,000)  $5,705,000
               ============  ===========
</TABLE>

     Reconciliation  between  the  Company's  effective  tax rate and the United
States  statutory  rate  is  as  follows:

<TABLE>
<CAPTION>
                                                 2002    2001
                                                ------  ------
<S>                                             <C>     <C>
Expected federal tax rate                        34.0%   34.0%
State income taxes, net of federal tax benefit    3.9%    6.2%
Other                                            -7.5%    3.1%
Change in valuation allowance                   -30.4%  -43.3%
                                                ------  ------

Effective tax rate                                0.0%    0.0%
                                                ======  ======
</TABLE>

     A  valuation allowance has been recorded to offset the related deferred tax
assets  due to uncertainty of realizing the benefit of this asset. The following
is  a summary of the significant components of the Company's deferred tax assets
and  liabilities  as  of  March  31,  2002:

<TABLE>
<CAPTION>
<S>                                                <C>
Deferred Tax Assets (Liabilities):

Net operating loss carryforwards                   $ 1,850,000
Stock options exercised                                316,000
Tax credits                                             99,000
Other                                                   26,000
Depreciation                                            (6,000)
                                                   ------------
Net deferred tax asset before valuation allowance    2,285,000

Valuation allowance                                 (2,285,000)
                                                   ------------

Net deferred tax asset                             $         -
                                                   ============
</TABLE>

     As  of March 31, 2002, the Company had federal and state net operating loss
carryforwards  of  approximately  $4,600,000  and  $4,300,000,  respectively,
available  to  offset future taxable income that begin to expire in 2019 through
2023.


                                      F-14
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

G. CONCENTRATION  OF  CREDIT  RISK  AND  MAJOR  CUSTOMERS

     Customers  comprising  more than 10% of CardioTech's total revenues for the
years  ended  March  31  are  shown  as  follows:

<TABLE>
<CAPTION>
            2002   2001
            -----  -----
<S>         <C>    <C>
Customer A    11%    26%
Customer B    10%    24%
Customer C     7%    17%
Customer D    12%     0%
</TABLE>

H. LEASE  COMMITMENTS

     The  Company  leases  offices,  laboratory  and  manufacturing  space under
non-cancelable  operating  leases.  Future minimum lease payments are as follows
for  the  years  ending  March  31:

<TABLE>
<CAPTION>
<S>   <C>
2003  $283,000
2004   157,000
2005     6,000
      --------

      $446,000
      ========
</TABLE>

     Rent  expense  for operating leases was $330,000 and $261,000 for the years
ended  March  31,  2002  and  2001,  respectively.

I. LONG-TERM  OBLIGATIONS

     7%  Convertible  Senior  Notes  due  2003
     -----------------------------------------

     On  March  31, 1998, the Company issued $1,660,000 of 7% Convertible Senior
Notes  (the  "Senior  Notes") with a maturity date of March 20, 2003 to Dresdner
Kleinwort  Benson  Private  Partners  LP  ("DKB").  The Senior Notes and accrued
interest  were  repaid in connection with proceeds related to the disposition of
the  Company's  UK  subsidiary  (See  Note  L).

     On September 24, 1999, the Company issued a 7% Convertible Senior Note (the
"Note")  in  the  amount  of  $340,000  to  DKB,  on  terms similar to and as an
amendment  to  the Note Purchase Agreement, as amended, dated March 31, 1998. On
February  6,  2002,  DKB  elected  to  convert  the  Note  having an outstanding
principal  and  interest  balance  outstanding  on  the  date  of  conversion of
approximately  $398,000.  The  Note  was  converted  into  433,094 shares of the
Company's  common  stock  at  a  conversion  price  of  $0.91875.

     As  of  March  31, 2002, the Company had no obligations outstanding to DKB.

J. STOCKHOLDERS'  EQUITY

     Common  Stock  Options  and  Warrants
     -------------------------------------

     On December 22, 1998, the Company completed a private offering of 1,866,000
units  at  a  price  of  $1.25 per unit. Each unit consisted of one share of the
Company's  common stock, (the "Units"), and one warrant to purchase one share of
the  Company's  common  stock.  Each warrant expires on December 15, 2003 and is
exercisable  at $1.50 per share. In connection with this offering, the Company's
executive  officers  purchased  160,000  Units  in exchange for promissory notes
having  a  principal  balance  of $200,000. The Company received net proceeds of
$1,782,000,  net  of  placement  agent  fees  of  $128,000,  promissory notes of
$200,000,  and  related  offerings costs of $223,000. In addition to these fees,
the  Company  issued to the placement agent a warrant to purchase 170,600 shares
of  the  Company's  common  stock  at an exercise price of $1.475 per share. The
warrants  are exercisable at any time and from time to time after the grant date
and  prior  to  December  15,  2003.


                                      F-15
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  principal  balance  of  the  promissory  notes issued by the Company's
executives  is  payable  on  December  15,  2003  and classified as Subscription
receivable  from  related  parties  in  Stockholders' Equity in the consolidated
balance  sheet.  The  promissory  notes bear interest at 4.25% per annum and are
payable  annually in arrears. The promissory notes, which are with full recourse
against the maker personally with respect to any amount due under this note, are
secured  by  the common stock and warrants underlying the Units. Interest in the
amount  of  $21,000  was accrued as of March 31, 2002. As of March 31, 2002, the
principal  balance  outstanding  is  $150,000.

     During  the fiscal year ended March 31, 2000, warrants representing 969,000
shares  of the Company's common stock were exercised, resulting in cash proceeds
of  $1,469,000  to  CardioTech. In connection with the exercise of the warrants,
the  Company  granted  to  the  placement  agent  and  certain of its employees,
warrants  to purchase an additional 200,000 shares of the Company's common stock
at  an exercise price of $1.88 per share (the closing price of the shares on the
date  of  the agreement). The warrants have an expiration date of March 5, 2005.

     During  the  fiscal year ended March 31, 2001, warrants representing 97,000
shares  of the Company's common stock were exercised, resulting in cash proceeds
of $145,000 to CardioTech. In connection with the exercise of stock options, the
Company  issued  24,750  shares  of  common stock, resulting in cash proceeds of
$19,000. The Company also issued stock as a result of the exercise of options by
a  director  for  30,000 shares of the Company's common stock, in exchange for a
promissory note payable on April 30, 2001 in the principal amount of $15,000 and
bearing interest at the rate of 4.54% per annum. During fiscal 2002, the Company
received payment in full of all principal and interest in the approximate amount
of  $16,000.  As  of March 31, 2002, there was no principal and accrued interest
balance  outstanding.

     During  the  fiscal year ended March 31, 2002, warrants representing 63,200
shares  of the Company's common stock were exercised, resulting in cash proceeds
of approximately $87,000 to CardioTech. In connection with the exercise of stock
options,  the  Company  issued  84,377 shares of common stock, resulting in cash
proceeds  of  $72,000.

     The  Company  also issued stock as a result of the exercise of options by a
consultant  for  200,000 shares of the Company's common stock, in exchange for a
stock subscription receivable in June 2000 and July 2000 in the aggregate amount
of  $280,000,  all  of  which  remains  outstanding  as  of  March  31,  2002.

     Treasury  Stock  and  Other  Transactions
     -----------------------------------------

     In  April  2000,  the  Company issued 67,113 shares of the Company's common
stock  to  PolyBioMed Ltd., having a fair market value of $79,000 on the date of
issuance,  in  consideration of a technology license agreement. In May 2000, the
Company  also  loaned  PolyBioMed  Ltd  $40,000.  In  June 2000, PolyBioMed Ltd.
delivered  to the Company 20,822 shares of the originally issued common stock at
a  cost of $40,000 in repayment of the loan, which has been recorded as treasury
stock  as  of  March  31, 2001. During fiscal 2002, the Company made open market
purchases  of  5,000  shares  of  the  Company's  common  stock  at  a  cost  of
approximately $8,000. Accordingly, total shares held in treasury as of March 31,
2002  is  25,822  at  an  approximate  cost  of  $48,000.

     On  February  6,  2002, DKB elected to convert a 7% Convertible Senior Note
having  an outstanding principal and interest balance outstanding on the date of
conversion of approximately $398,000. The Note was converted into 433,094 shares
of  the  Company's  common stock at a conversion price of $0.91875 (See Note I).


                                      F-16
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

K. ACQUISITION

     On  May 4, 2001, the Company completed the acquisition of all the shares of
CMED Catheter and Disposables Technology, Inc., a Minnesota corporation ("CDT"),
from  Colorado Medtech, Inc., a Colorado corporation ("Medtech"), pursuant to an
Acquisition  Agreement  dated as of April 30, 2001, by and among Cardiotech, CDT
and  Medtech.

     CDT  is  an  original  equipment  manufacturer;  supplier  of  specialized
disposable  medical devices to medical device companies from concept to finished
packaged,  sterile  product; and uses its experience in the design, development,
prototyping  and  manufacturing  to  provide  turnkey  contract  services. CDT's
facility  is ISO 9001 and EN 46001 certified and includes a "Class 10,000" clean
room.

     The  consideration  paid  by Cardiotech to Medtech was $1,300,000 in a cash
payment,  $130,000  of which was placed into escrow pursuant to the terms of the
agreement.  The  cash  consideration used in the purchase came from Cardiotech's
working  capital.  In  connection  with the transaction, Cardiotech acquired net
assets  of  CDT having a book value of approximately $375,000. Additionally, the
Company  incurred  transaction  costs of approximately $130,000. The acquisition
was  accounted  for  in  accordance  with the purchase method of accounting. The
excess  of  purchase  price  over  the fair value of the net assets acquired was
approximately  $1,144,000  and  was  recorded  as  goodwill and other intangible
assets,  which  is  being  amortized  on  a straight-line basis over five years.

     Operations  of CDT are included in CardioTech's operations from the date of
the  acquisition.  The  unaudited pro forma results of operations of the Company
and  acquired  business for the years ended March 31, 2002 and 2001 assuming the
acquisition  had  occurred  on  April  1,  2000  are  as  follows:

<TABLE>
<CAPTION>
                                       2002         2001
                                   ------------  ----------
<S>                                <C>           <C>
Revenues                           $ 3,420,000   $3,935,000
                                   ============  ==========

Net loss                           $(1,973,000)  $5,659,000
                                   ============  ==========

Income (loss) per share - basic    $     (0.22)  $     0.67
                                   ============  ==========

Income (loss) per share - diluted  $     (0.22)  $     0.60
                                   ============  ==========
</TABLE>


                                      F-17
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

L. DISPOSITIONS

     On  November  17, 2000, the Company entered into a Share Purchase Agreement
in  respect  of  CardioTech  International Ltd. (the "Agreement") with Nervation
Limited  ("Nervation").  This  Agreement  provided  for  the purchase of all the
issued  and  outstanding  ordinary  shares  (the  "Shares")  of  CardioTech
International,  Ltd.  ("CTL")  by  Nervation  from  CardioTech  for  total  cash
consideration  of $7,000,000.  The Company obtained stockholder approval for the
sale  of  the  Shares  on  October  26,  2000.

     The  Company  agreed to i) transfer all the Shares of CTL to Nervation; ii)
extend  the  right  to  Nervation  the  use  of the name "CardioTech" and/or any
similar  imitations  thereof  for a period of not less than five (5) years; iii)
transfer legal title to all assets used by CTL in connection with manufacturing,
marketing,  development and exploration of the access and peripheral grafts (the
"Business");  iv)  grant  an  exclusive  worldwide  license  to  manufacture the
specific  formulation  of  Chronoflex  RC  for  the  Business  in certain events
including  business  interruption,  sale,  merger  or acquisition of the Company
and/or the inability of the Company to furnish the Chronoflex RC to Nervation in
sufficient  quantity  and/or  consistently  and  on  a  reasonable  and  timely
commercial  basis;  v)  grant  Nervation  the  option  to  become  the exclusive
distributor of the Company's CardioPass Coronary Artery Bypass Graft ("CABG") in
Europe.  If  Nervation exercises this option, it agreed to fund up to $3,000,000
to  perform  European  clinical  trials  to  obtain CE Marking; vi) enter into a
covenant  by  the  Company  not  to compete with Nervation in the manufacturing,
marketing,  development  and  exploitation  of  the access and peripheral grafts
currently  used  in  the Business, including the Vasculink Vascular Access Graft
and  the  Myolink  Arterial  Bypass  Graft;  vii)  assign  all  Trademarks  and
Intellectual  Property  used  in  connection  with the Business and assets being
transferred  to  Nervation;  and  viii)  purchase  CABG  grafts  from Nervation.
Nervation  agreed to supply the Company with such grafts. This is subject to the
Company's  ability  to obtain another supplier and to obtain the transfer of the
technology.

     In  exchange  for  the  above  referenced  terms and conditions the Company
received and/or maintained as consideration for consummating said transaction i)
a cash payment of $7,000,000; ii) the exclusive, worldwide right to the CABG and
a  covenant  from  Nervation not to compete directly or indirectly with the CABG
product utilizing ChronoFlex technology; iii) the release of certain obligations
and  guarantees with respect to certain debts and obligations of CTL; and iv) an
advance  payment  of  $200,000  for  ChronoFlex  RC  to  be  sold  to Nervation.

     In  connection  with  the  transaction,  the  Company  repaid approximately
$2,034,000  of  7%  senior  convertible  notes held by Dresdner Kleinwort Benson
Private  Equity  Partners  LP,  including  all  accrued  interest and redemption
premiums.  Per  the Agreement, the Company was also required to place in escrow,
for  a period of eighteen months from the date of the Agreement, $700,000 of the
gross  proceeds to fulfill certain indemnification provisions. On April 9, 2002,
the  provisions  of escrow had been met and approximately $730,000, representing
the  escrow principal plus accrued interest, was transferred to the Company. The
Company  incurred  transaction  related  costs  of  approximately  $230,000.

     The  unaudited  financial data related to the CTL operations for the period
from  April  1,  2000  through  November  17,  2000  is  as  follows:

<TABLE>
<CAPTION>
                        2001
                     ----------
<S>                  <C>
Revenues             $  64,000
Net loss             $(396,000)
Net loss per share:
  Basic              $   (0.05)
  Diluted            $   (0.05)
</TABLE>

                                      F-18
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

M. ENTERPRISE  AND  RELATED  GEOGRAPHIC  INFORMATION

     In  accordance  with SFAS 131, "Disclosures about Segments of an Enterprise
and Related Information", the Company managed its business in fiscal 2001 on the
basis  of  one  reportable operating segment.  As a result of the acquisition of
CDT in May 2001, the Company managed its business in fiscal 2002 on the basis of
two  reportable  operating  segments;  Biomaterials  and  Outsourced  R&D  and
Manufacturing.  Net  sales  by  geographic  area  are  presented  by attributing
revenues  from  external  customers  or  distributors  on the basis of where the
products  are sold.  Long-lived assets by geographic areas and information about
products  and  services  are  included  as  enterprise-wide  disclosures.

<TABLE>
<CAPTION>
                                              2002         2001
                                          ------------  -----------
<S>                                       <C>           <C>
Net sales:
  Domestic - Biomaterials                 $ 1,258,000   $1,479,000
  CDT - Outsourced R&D and Manufacturing    1,962,000            -
  Europe                                            -       64,000
                                          ------------  -----------

                                          $ 3,220,000   $1,543,000
                                          ============  ===========

Net income (loss):
  Domestic - Biomaterials                 $(1,963,000)  $6,101,000
  CDT - Outsourced R&D and Manufacturing       (8,000)           -
  Europe                                            -     (396,000)
                                          ------------  -----------

                                          $(1,971,000)  $5,705,000
                                          ============  ===========

Total assets:
  Domestic - Biomaterials                 $ 6,355,000   $7,251,000
  CDT - Outsourced R&D and Manufacturing      199,000            -
  Europe                                            -            -
                                          ------------  -----------

                                          $ 6,554,000   $7,251,000
                                          ============  ===========

Long-lived assets, net:
  Domestic - Biomaterials                 $   487,000   $1,160,000
  CDT - Outsourced R&D and Manufacturing      934,000            -
  Europe                                            -            -
                                          ------------  -----------

                                          $ 1,421,000   $1,160,000
                                          ============  ===========
</TABLE>

N. SUPPLEMENTAL  DISCLOSURES  FOR  STOCK-BASED  COMPENSATION

     CardioTech's 1996 Employee, Director and Consultants Stock Option Plan (the
"Plan")  was  approved  by  CardioTech's  Board of Directors and Stockholders in
March  1996.  A  total of 7,000,000 shares have been reserved for issuance under
the  Plan.  Under  the  terms  of the Plan the exercise price of Incentive Stock
Options  issued  under  the  Plan  must be equal to the fair market value of the
common  stock  at the date of grant. In the event that Non Qualified Options are
granted under the Plan the exercise price may be less than the fair market value
of  the  common  stock  at  the time of the grant (but not less than par value).
During  fiscal  2002,  the  Company  issued  options  to consultants to purchase
725,000  shares of the Company's common stock, which were valued using the Black
Scholes option pricing model.  These options were vested immediately upon grant.


                                      F-19
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  fair  value  of  the  options  granted  of  $786,000  was  recorded as
consulting  expense  and  is  included  in  selling,  general and administrative
expense  in  the  Consolidated Statements of Operations for the year ended March
31,  2002.

     Activity  under the Plans for the years ended March 31, 2002 and 2001 is as
follows:

<TABLE>
<CAPTION>
                              NUMBER    WEIGHTED AVERAGE
                            OF SHARES    EXERCISE PRICE
                            ----------  -----------------
<S>                         <C>         <C>
Outstanding March 31, 2000  2,381,428   $            2.06
Granted                     1,188,454                1.20
Cancelled                    (981,887)               1.51
Exercised                    (254,750)               1.23
                            ----------
Outstanding March 31, 2001  2,333,245                1.86
Granted                     2,376,588                1.43
Cancelled/Expired            (140,647)               1.93
Exercised                     (92,790)               0.76
                            ----------
Outstanding March 31, 2002  4,476,396                1.66
                            ==========
</TABLE>

     Summarized information about stock options outstanding at March 31, 2002 is
as  follows:

<TABLE>
<CAPTION>
                                                            EXERCISABLE
                                 WEIGHTED               --------------------
                                 AVERAGE     WEIGHTED               WEIGHTED
                   NUMBER OF    REMAINING     AVERAGE               AVERAGE
RANGE OF            OPTIONS    CONTRACTURAL  EXERCISE   NUMBER OF  EXERCISE
EXERCISE PRICES   OUTSTANDING      LIFE        PRICE     OPTIONS     PRICE
----------------  -----------  ------------  ---------  ---------  ---------
<S>               <C>          <C>           <C>        <C>        <C>
0.50 - $0.88         858,988           8.1  $    0.69    734,598  $    0.67
----------------  -----------  ------------  ---------  ---------  ---------
1.01 - $1.94       2,877,569           8.4  $    1.53  2,248,256  $    1.51
----------------  -----------  ------------  ---------  ---------  ---------
2.06 - $2.25         178,875           8.2  $    2.18    178,875  $    2.18
----------------  -----------  ------------  ---------  ---------  ---------
3.06 - $3.80         560,964           7.9  $    3.59    558,922  $    3.59
----------------  -----------  ------------  ---------  ---------  ---------

0.50 - $3.80       4,476,396           8.3  $    1.66  3,720,651  $    1.69
----------------  -----------  ------------  ---------  ---------  ---------
</TABLE>

     Options exercisable at March 31, 2002 and March 31, 2001 were 3,720,651 and
1,968,574  respectively.

     As  permitted  by  SFAS No. 123, "Accounting for Stock-Based Compensation",
the Company applies APB Opinion No. 25 and related interpretations in accounting
for  the  plan.  SFAS  123,  issued  in  1995,  defined  a  fair value method of
accounting  for stock options and other equity instruments. Under the fair value
method,  compensation cost is measured at the grant date based on the fair value
of  the  award  and  is recognized over the service period, which is usually the
vesting  period.  The  Company  elected  to  continue  to  apply  the accounting
provisions  of  APB  Opinion  No.  25  for  stock  options.


                                      F-20
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Had compensation cost for the Company's stock option grants been determined
consistent  with SFAS 123, the Company's net income (loss) and net income (loss)
per  share  would  approximate  the  pro  forma  amounts  below:

<TABLE>
<CAPTION>
                                    YEAR ENDED MARCH 31,
                                  ------------------------
                                      2002         2001
                                  ------------  ----------
<S>                               <C>           <C>
Net income (loss):
As reported                       $(1,971,000)  $5,705,000
Pro forma                          (2,921,000)   4,526,000

Basic income (loss) per share:
As reported                             (0.23)        0.68
Pro forma                               (0.34)        0.54

Diluted income (loss) per share:
As reported                             (0.23)        0.61
Pro forma                               (0.34)        0.48
</TABLE>

     The  effects  of  applying  SFAS  123  in this pro forma disclosure are not
indicative  of  future  amounts. SFAS 123 does not apply to awards made prior to
1995.  Additional  awards  in  future  years  are  anticipated.

     The fair value of each option granted during the fiscal years 2002 and 2001
is  estimated  on the date of grant using the Black-Scholes option pricing model
with  the  following  weighted  average  assumptions:

<TABLE>
<CAPTION>
                                  2002        2001
                               ----------  ----------
<S>                            <C>         <C>
Dividend yield                   None        None
Expected volatility                 80.0%       80.0%
Risk-free interest rate              4.9%        5.6%
Expected life                   10 years    10 years
Fair value of options granted  $    0.92   $    1.14
</TABLE>


                                      F-21
<PAGE>
                 CARDIOTECH INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

O. EARNINGS  PER  SHARE

     The  following  table reconciles the numerator and denominator of the basic
and diluted earnings per share computations shown on the Consolidated Statements
of  Operations  for  the  years  ended  March  31:

<TABLE>
<CAPTION>
                                                 2002         2001
                                             ------------  ----------
<S>                                          <C>           <C>
Numerator:
Net income (loss) - Basic                    $(1,971,000)  $5,705,000
Adjustments:
Convertible debt interest                              -       25,000
                                             ------------  ----------
Net income (loss) after assumed conversions
  of dilutive securities - Diluted           $(1,971,000)  $5,730,000
                                             ============  ==========

Denominator:
Common shares outstanding - Basic              8,620,956    8,424,374
Effect of dilutive securities:
Options                                                -      433,890
Warrants                                               -      309,941
Convertible debt                                       -      225,537
                                             ------------  ----------

Common shares outstanding - Diluted            8,620,956    9,393,742
                                             ============  ==========

Net income (loss) per share:
Basic                                        $     (0.23)  $     0.68
                                             ============  ==========
Diluted                                      $     (0.23)  $     0.61
                                             ============  ==========
</TABLE>

     Options  and warrants outstanding during the years ended March 31, 2002 and
2001  to purchase 5,003,071 shares and 2,043,062 shares, respectively, of common
stock  were  excluded from the calculation of diluted earnings per share because
the  effect  of  their  inclusion  would  have  been  anti-dilutive.

P. SUBSEQUENT  EVENTS

     In  April  2002,  the  Company  concluded a technology transfer and license
agreement  with  Credent  Vascular  Technologies,  Ltd.,  of  Wrexham,  U.K.
("Credent'').  Total  consideration  to be paid by Credent to CardioTech for the
purchase of the transferred rights to ChronoFlex RC is a minimum of $500,000 and
may  be  as  high  as  $1,000,000,  payable  in  installments  linked to certain
performance  requirements.

     Under  terms of the agreement, CardioTech irrevocably granted an exclusive,
worldwide license of its intellectual property rights relating to ChronoFlex RC,
enabling  Credent  to  exclusively  synthesize  ChronoFlex  RC  biodurable
polycarbonate-urethane. Credent will use ChronoFlex RC in the manufacture of its
vascular  access  and  peripheral  vascular  grafts  and  potentially  in future
development  products.  Credent has licensed back to CardioTech the right to use
ChronoFlex  RC  for  the  manufacture  and  marketing  of coronary artery bypass
grafts.


                                      F-22
<PAGE>
SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act of 1934, as amended, the registrant has duly caused this report to
be  signed  on  its  behalf  by  the  undersigned,  thereunto  duly  authorized.


Dated:  June  28,  2002               CardioTech  International,  Inc.

                                      By:  /s/  Michael  Szycher
                                      --------------------------------------
                                      Michael  Szycher
                                      Chairman  and  Chief  Executive  Officer

     Pursuant  to  the requirements of 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  and  on  the  dates  indicated.

Dated:  June  28,  2002               /s/  Michael  Szycher
                                      --------------------------------------
                                      Michael  Szycher
                                      Chairman,  Chief  Executive  Officer
                                      (Principal  Executive  Officer)

Dated:  June  28,  2002               /s/  Michael  F.  Adams
                                      --------------------------------------
                                      Michael  F.  Adams
                                      Director

Dated:  June  28,  2002               /s/  Michael  Barretti
                                      --------------------------------------
                                      Michael  Barretti
                                      Director

Dated:  June  28,  2002               /s/  Anthony  J. Armini
                                      --------------------------------------
                                      Anthony  J.  Armini
                                      Director

Dated:  June  28,  2002               /s/  David  C.  Volpe
                                      --------------------------------------
                                      David  C.  Volpe
                                      Acting  Chief  Financial  Officer


Dated:  June  28,  2002               /s/  Thomas F. Lovett
                                      --------------------------------------
                                      Thomas  F.  Lovett
                                      Controller
                                      (Principal  Accounting  Officer)


<PAGE>