SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                           FORM 10-K

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

For the Fiscal Year Ended 09/30/2000 Commission File Number 0-26504

                        Diasensor.com, Inc.
     (Exact name of registrant as specified in its charter)

 Pennsylvania                                            25-1605848
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                   Identification Number)

 2275 Swallow Hill Road, Building 2500; Pittsburgh, PA        15220
 (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code (412) 279-9740

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

   Securities registered pursuant to Section 12(g) of the Act:
                  Common Stock, $.01 par value

Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
and (2) has been subject to such filing requirements for the past
90 days.   Yes   X       No  ___

Indicate  by  check  mark  if  disclosure  of  delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not 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-K, or any amendment to this
Form 10-K. [ ]

The   aggregate  market  value  of  the  voting  stock  held   by
nonaffiliates of the registrant as of November 30, 2000:

          Common Stock, $.01 par value --  $__________*

*The  market  value  cannot be determined  because  there  is  no
 established trading market for the stock.

As  of November 30, 2000, 22,980,051 shares of Common Stock,  par
value  $.01 per share were outstanding.  As of November 30, 2000,
no shares of Preferred Stock were outstanding.

Exhibit index is located on page 38.


                             PART I


Item 1. Business

General Development of Business

Diasensor.com,  Inc.  was incorporated  in  the  Commonwealth  of
Pennsylvania  on July 5, 1989 as Diasense, Inc., a  wholly  owned
subsidiary of Biocontrol Technology, Inc., which changed its name
to BICO, Inc. in June 2000.

In June 2000, BICO decided to create a new division to focus on
its biomedical products.  The new division retained the name
Biocontrol Technology, and is headquartered in Indiana,
Pennsylvania.  At that time, David L. Purdy resigned his position
as a director and chairman of the board of BICO in order to
become the president and CEO of the new division so he could
focus his full-time efforts and energy on the continued
development and refinement of our noninvasive glucose sensor.  In
November 2000, Mr. Purdy resigned from all his positions with us
and with BICO.

Our  business is the development, marketing and manufacture of  a
noninvasive  glucose sensor for use by diabetics.  In  connection
with  the  noninvasive glucose sensor, we are also  developing  a
telemedicine  system,  a  monitoring  system  which  would  allow
diabetics to transmit glucose readings via the internet, allowing
both  a  central  monitoring department and  the  diabetic's  own
physician  to  monitor  glucose  levels  and  assist  in  glucose
control.   During Fiscal 2000, we continued to focus our  efforts
on  the  noninvasive glucose sensor.  We are working with  Joslin
Diabetes  Center, an affiliate of Harvard Medical School  and  an
international  leader  in  diabetes treatment,  to  conduct  FDA-
approved  clinical trials on the Diasensor in the  U.S.  -  those
trials  began  in  October  2000.  Based  on  several  agreements
between  Diasensor.com and BICO, Diasensor.com owns  the  patent,
marketing  and distribution rights to the sensor.  BICO  has  the
exclusive  rights to the research and development and manufacture
of  the sensor. Those agreements are described more fully in  the
Intercompany Agreements section.

Financial Information About Industry Segments

Diasensor.com operates in a single industry segment consisting of
the  research,  development, marketing  and  sale  of  biomedical
products and devices.

Forward-Looking Statements

From time to time, we may publish forward-looking statements
relating to such matters as anticipated financial performance,
business prospects, technological developments, new products,
research and development activities, the regulatory approval
process, specifically in connection with the FDA marketing
approval process, and similar matters.  You need to know that a
variety of factors could cause our actual results to differ
materially from the anticipated results or other expectations we
expressed in our forward-looking statements.  The risks and
uncertainties that may affect our operations, performance,
research and development and results include the following:
additional delays in the research, development and FDA marketing
approval of the noninvasive glucose sensor; delays in the
manufacture or marketing of our other products and medical
devices; our future capital needs and the uncertainty of
additional funding; Diasensor.com's substantial reliance on BICO
and BICO's uncertainty of additional funding; competition and the
risk that the noninvasive glucose sensor or our other products
may become obsolete; our continued operating losses, negative net
worth and uncertainty of future profitability; potential
conflicts of interest; the status and risk to our patents,
trademarks and licenses; the uncertainty of third-party payor
reimbursement for the sensor and other medical devices and the
general uncertainty of the health care industry; our limited
sales, marketing and manufacturing experience; the amount of time
or funds required to complete or continue any of our various
products or projects; the attraction and retention of key
employees; the risk of product liability; the uncertain outcome
and consequences of the lawsuits pending against us; our ability
to maintain a trading market for our common stock; and the
dilution of our common stock.

Description of Business

Development of the Noninvasive Glucose Sensor

Along with BICO, we have completed the development of the first
commercial noninvasive glucose sensor, which is able to measure
the concentration of glucose in human tissue without requiring
the drawing of blood.  Currently available glucose monitors
require the drawing of blood by means of a finger prick.

BICO's initial research and development with insulin pumps led to
a theory by which blood glucose levels could be detected
noninvasively by correlating points on the infrared spectrum that
are reflected by electromagnetic energy through the skin.  BICO
studied this method in 1986 and 1987 using laboratory instruments
and working with consultants at Battelle Memorial Institute in
Columbus, Ohio.  The results of the studies provided information
regarding the use of infrared light in the noninvasive
measurement of glucose.  The information from the studies, along
with later additional work, led to a patent application by BICO's
research team in 1990.  A patent covering the method was granted
to BICO's research team and assigned to Diasensor.com in December
1991.  We purchased those patent rights from BICO under a
purchase agreement.  BICO filed a second patent application in
December 1992, which was granted in January 1995.  That second
filing contained new claims, which extended the coverage of the
patent based on additional discoveries and data obtained since
the original patent was filed.  BICO assigned the rights to that
patent to us.   BICO developed additional concepts to improve the
capability of the instrument to recognize blood glucose, and, in
May 1993, filed corresponding patent applications.  As of
November 2000, a total of 13 patents have been issued, with
additional patent applications pending.  BICO has the right to
develop and manufacture sensors based on contracts with
Diasensor.com.

BICO's research team advanced this technology base through the
development of several research prototypes, which were tested in
human clinical trials.  BICO conducted a trial on 110 human
subjects in March 1992.  In that trial, BICO recorded spectral,
blood and chemical data for analysis in order to develop
calibration data for the noninvasive glucose sensor.  BICO
conducted a second trial on 40 human subjects in July 1992 that
indicated that the device did not have a satisfactory signal-to-
noise ratio to allow for sufficient accuracy to be acceptable for
patient use.  Signal-to-noise ratio is determined by the
relationship of the signal, which is the glucose level, and the
noise, which are the random interferences, such as differences in
skin surfaces.  BICO conducted other trials at several testing
sites under the guidance of the sites' Institutional Review Board
using prototypes, which addressed the signal -to-noise problem.
BICO designed and constructed those prototypes to simulate
production models.

On January 6, 1994, BICO submitted the initial 510(k)
Notification to the Food and Drug Administration for approval to
market the production model, the Diasensorr1000.  A 510(k)
Notification is a type of FDA filing used to ask the FDA to
approve a device for sale in the U.S.  BICO based the submission
on data obtained from the advanced research prototypes, since we
believed that the production model would be identical to the
advanced prototypes.  In February 1996, the FDA convened a panel
of advisors to make a recommendation regarding our 510(k)
Notification.  The majority of the panel members recommended that
we conduct additional testing and clinical trials of a production
model prior to marketing the Diasensor 1000.  We, along with
BICO, announced that we would remain committed to bringing the
Diasensor 1000 to diabetics, and that additional research,
development and testing would continue.

Due to continued delays in the FDA approval process, and while
continuing to work with the FDA and conduct its mandated testing,
we turned our focus to other markets for the Diasensor 1000
besides the U.S.

In 1998, BICO - as designer and manufacturer of the device, was
awarded International Organization for Standardization
certification by TUV Rheinland, a German company authorized to
conduct such audits, which was contracted to perform an audit of
BICO's quality system.  BICO was awarded ISO Certification to the
9001 standard, which is evidence that BICO has, in place, a total
quality system for the design, development and manufacture of our
products.  BICO was also awarded EN46001 Certification,
indicating we meet European standards for medical devices.  Once
the ISO 9001 certification was approved, and a technical file was
submitted and approved by TUV Rheinland, BICO received approval
to apply a CE mark to the device. Much like an Underwriters
Laboratory "UL" mark, the CE mark is provided by the regulatory
bodies of the European Community, or by authorized private
bodies, such as TUV Rheinland, to indicate that the device
adheres to "quality systems" of the ISO and the European
Committee for Standardization.  The CE mark permits us to sell
the Diasensor in Europe.

With regard to marketing the device within the United States, we
continued to work with the FDA to obtain approval.  After
discussions with the FDA, we submitted a revised 510(k)
Notification in October 1996, which was followed by continued
discussions with the FDA.  During 1997 and 1998, we continued to
meet with the FDA, and established a protocol for in-home testing
of the Diasensor 1000.  Due to our cash flow problems during
1998, testing did not proceed at the pace originally anticipated,
and completion of the testing was delayed.

We continued various aspects of the Diasensor development, which
resulted in a method that will allow the patient to transmit the
readings generated by the noninvasive glucose sensor to the
patient's clinic or physician.  Following an in-depth marketing
study, we determined that the machines with this capability are
more attractive to the patient, since there is the possibility of
selling a telemedicine service which includes the machine, the
patient, and his or her physician.  This model of the Diasensor
has been named the Diasensor 2000 to differentiate between the
earlier models.  Based on advice from the FDA, we decided it was
in our best interest to submit a PreMarket Approval Application
to the FDA, rather than continue with the 510(k) Notification
process, in order to seek FDA approval for the Diasensor 2000.
In 1999 the FDA implemented a new PMA system.  Under the new
system, individual modules - or parts - of a PMA submission could
be made as they were ready.   We discuss our PMA submissions in
the "Current Status of the Noninvasive Glucose Sensor" section,
which follows.

The Diasensor is a spectrophotometer, which is a machine capable
of illuminating a small area of skin on a patient's arm with
infrared light, and then making measurements from the infrared
light that is reflected back into the device.  The device then
displays the measurement in a window on the top of the device for
the user to read.  The Diasensor uses internal mathematical
calculations and customized software to calculate a glucose
measurement.

Since the Diasensor will be calibrated individually, each
instrument will be sold in the U.S. by prescription only and will
be calibrated in the patient's home.  This feature may limit the
marketability of the Diasensor, and if the device is unable to
qualify for third-party reimbursement - which means if the health
insurance companies won't pay for it -we will have a hard time
marketing and selling the device.

Current Status of the Noninvasive Glucose Sensor

We were hampered by cash flow problems during 1998, so we didn't
make as much progress on the noninvasive glucose sensor project
as we planned.  Once we raised more money, we re-started our
discussions with the FDA.  We hired Joslin Diabetes Center to
help us with the FDA in August 1999.  Joslin Diabetes Center
designed and is conducting the clinical trials the FDA requires
before they will give us approval to market the sensor.

Our contract with Joslin calls for Joslin's representatives to
conduct a clinical study on the effectiveness of the Diasensor
2000.  The study is contingent upon FDA approval of the Joslin
protocol for the clinical study, which we obtained in August
2000.  We had a meeting with the FDA in October 1999 to focus on
the protocol, and we made revisions to the protocol to comply
with the FDA's recommendations.  In the Joslin contract, we
agreed to pay for the study, and Joslin agreed to provide us with
a report on the data gathered.  Joslin also has the right,
subject to confidentiality provisions, to publish the results of
the clinical trials.  The Joslin contract requires us to pay fees
for their services - those fees will be paid when we pay for the
clinical trials and are based on the budgeted amounts for the
trials.  The budgets, and therefore the total payments due under
the contract, have not been finalized.

In addition to the agreement with Joslin, we took other
significant steps toward FDA approval.  In February 1999 we
submitted a PMA shell to the FDA for the Diasensor.  The PMA
shell is part of a relatively new FDA procedure, which divides
submissions into modules, or parts.  These modules, which were
designed to facilitate and expedite FDA review, contain different
pieces of the full PMA submission.  However, from both our own
experience and by observing other module submissions, we do not
believe that the FDA intends to "approve" the PMA one module at a
time.  Rather, we have had meetings with the FDA, including the
October 1999 meeting, where requirements for the "next step" in
the process have been discussed without a specific FDA finding on
prior submissions.

In May 1999, we submitted the first module, which covered
manufacturing methods and procedures for the Diasensor 2000.  The
FDA asked for additional information in September 1999, and we
responded.  We filed the second module in May 2000.  The second
module contained information regarding electrical and mechanical
standards for the FDA's requirements on safety and effectiveness,
and a description of how our noninvasive glucose sensor will be
used by patients.  Future modules will include raw data and
laboratory study methods and test results.  The final PMA
submission will include human clinical results and a summary of
safety and effectiveness data.

We met with the FDA in October 1999, and at that meeting, the FDA
made further recommendations regarding the protocol for the
upcoming clinical trials.  In November 1999, the FDA requested
further information.  With the help of our outside consultants,
we finished compiling all that additional information, and in
July 2000 we submitted an Investigational Device Exemption to the
FDA that included the protocol for our clinical trials.  An
Investigational Device Exemption is a request to the FDA for
approval to conduct clinical trials on a device that is not FDA-
approved.  The FDA approved the protocol for our clinical trials
in August 2000.

Clinical trials began in October 2000 at Joslin Diabetes Center
in Boston.  The trials are designed for a total of 50 diabetics,
all of whom will participate for 9 months. Trials will also be
conducted at two other sites: St. Luke's-Roosevelt Hospital
Center in New York City and SUNY Health Science Center in
Syracuse, New York.  We hired Amarex, LLC, an independent
research organization headquartered in Washington, D.C., which
has experience in conducting clinical trials, to monitor our
clinical trials.  Amarex will also collect data, and provide
training, data and site management, including statistics and
report writing, at all three sites.  Working with Joslin and
Amarex, we plan to submit data to the FDA when the trials are
completed.  We will also work with outside biomedical consultants
to help us obtain FDA approval following these clinical trials;
however, we can't assure you when or if that will happen.

The Diasensor 2000 will be used as part of a system of care that
includes home use of the Diasensor with regular evaluation of the
patient's blood glucose trends as determined by the device.  The
Diasensor also contains a telemedicine feature - a software
program that automatically transmits the patient's glucose
measurements to a secure website via the internet, where they can
be viewed and evaluated by the patient's health care provider.
The data can be graphed and displayed in a variety of ways and
for a variety of time periods as needed. This use of historical
readings is critical in the patient's analysis of trends in
glucose levels, an important tool in both the treatment of
diabetes and the use of insulin. We believe that this
telemedicine program, which would involve a monthly fee for the
use of the device and the service, rather than a purchase of the
device, will make the Diasensor technology available to larger
numbers of diabetics.  We are conducting market studies on the
best way to market and service the telemedicine program, but we
have not yet begun to market or provide the service.

As with all other FDA-related activities, we cannot provide any
assurances as to the date when we'll complete our studies, when
we'll submit our next PMA module, or when the FDA will complete
its review of our submission.

Although our research and development team continues to have
discussions with the FDA, due to the complex, technical nature of
the information being evaluated by the FDA, it is impossible for
us to estimate how much longer the FDA approval process will
take.

FDA approval is necessary to market the Diasensor in the United
States.  In 1999, we also focused additional effort on the
European market; since no material sales have occurred, we
decided to re-assess our marketing plan.  During 2000 and 2001,
we plan to send devices to different European sites for clinical
evaluation in order to encourage those markets to use the
Diasensor. In connection with adjusting our marketing plan, we
are currently re-evaluating our pricing structure for the
Diasensor in Europe.

Based on contracts between BICO and Diasensor.com, BICO has the
exclusive right to manufacture the noninvasive glucose sensor.
Diasensor.com will pay BICO for manufacturing, and that's how
BICO will make money if we ever successfully market and sell the
noninvasive glucose sensor.

Diasensor.com is responsible for the marketing and sales of the
noninvasive glucose sensor.  We plan to market the noninvasive
glucose sensor and the telemedicine program directly to
diabetics, through their doctors' orders.  Prescriptions are not
needed in Europe.  The telemedicine program will involve a
monthly fee for the use of both the sensor and the service.  We
may set those prices too high, which will limit our sales, unless
we can convince health insurance companies to pay for them.
Because the health insurance industry is in a constant state of
change, we can't predict whether - when - or if - we will
convince them to pay for our noninvasive glucose sensor or the
telemedicine program.  We have estimated, based on information
from the American Diabetes Association, that there are about 15.7
million diabetics in the United States, but not all diabetics
will be suitable users of our noninvasive glucose sensor.  Those
diabetics who require and benefit from frequent glucose
monitoring and whose physicians adjust their insulin dosages
based on glucose averages over time make up the potential market
for our sensor, and we can't accurately estimate the size of that
market at this time.

Invasive Glucose Sensors

Currently, blood glucose levels are generally measured by use  of
invasive  glucose  sensors  using  two  different  methods.   The
simplest method for monitoring blood glucose levels requires  the
user to prick a finger, draw a drop of blood, and place the blood
on  a chemically-treated test strip.  After a specified amount of
time  has elapsed, the blood must be blotted or wiped off.  After
an  additional amount of time has elapsed, the color of the  test
strip  is  visually compared to that of a color  chart,  and  the
glucose  level  is  read  from the  chart.    The  second  method
requires  the  user  of an invasive glucose  sensor  to  prick  a
finger,  draw a drop of blood, and to place the blood on  a  test
strip  similar  to those described above.  Later, the  user  must
wait a prescribed period of time and place the test strip in  the
invasive  glucose  sensor, which will display a  readout  of  the
blood  glucose  level.   We believe that  many  of  the  existing
invasive  glucose sensors are complicated, time-consuming,  prone
to  user  error, inconvenient, unpleasant and entail  significant
ongoing expenditures by the user for supplies.

We  believe  that  these methods generally yield accuracy  levels
within  plus  or  minus  25-30 mg/dl of  actual  glucose  levels,
depending  upon testing conditions.  We believe that  if  current
research  and development efforts are successful, our noninvasive
glucose sensor will have a range of accuracy at least as accurate
as currently available invasive glucose sensors.

With  either  method,  adequate control of blood  glucose  levels
requires  several finger pricks each day, which is an  unpleasant
experience for the user, especially for children.  Depending upon
the  relative facility of the user, it generally takes  at  least
two  to  four minutes for a readout to be provided from  existing
invasive  glucose  sensors.   Moreover,  the  ongoing  costs   of
repeated  testing are significant to the average user, given  the
cost of test strips, lancets, swabs, antiseptics, test solutions,
etc.,  and could represent a monthly cost of up to $100 or  more.
We believe that if our noninvasive glucose sensor is successfully
developed,  manufactured  and  marketed,  the  unpleasantness  of
existing testing methods will be effectively eliminated, and  the
expense   and  inconvenience  will,  over  the  long   term,   be
significantly reduced.

A  clinical  invasive glucose sensor marketed by  Yellow  Springs
Instruments,  Inc.  called  the "Yellow  Springs  Sensor"  is  an
invasive  glucose  sensor, which is relatively  non-portable  and
costs   approximately  $8,000  per  unit.   It  is  used   nearly
exclusively  by  hospitals  and other institutions.   The  Yellow
Springs    Sensor   has   significantly   different    abilities,
characteristics  and limitations than existing  invasive  glucose
sensors.   Although  we  believe that the Yellow  Springs  Sensor
yields higher accuracy levels than other invasive glucose sensors
- within plus or minus 3% of actual glucose levels - within up to
30  minutes, we believes that our noninvasive glucose sensor  may
be  more  desirable  to most users of existing  invasive  glucose
sensors,  who typically value speed and convenience, who  do  not
require the higher accuracy levels achieved by the Yellow Springs
Sensor, and who do not want to utilize invasive methods.

Diabetes

The American Diabetes Association has estimated that diabetes  is
the seventh leading cause of death in the United States.  The ADA
also  estimates  that  there are 15.7 million  diabetics  in  the
United  States, with corresponding estimated annual  health  care
and  work  loss  costs of more than $98 billion, and  that  about
798,000  people  will  be  diagnosed with  diabetes  this  year.1
Diabetics  who  are  stricken with juvenile  diabetes,  the  most
severe  form of the disease, can survive with insulin injections.
However,  the  quality and length of their  lives  are  generally
reduced  by problems associated with insulin therapy and  by  the
onset  of  serious  diabetic complications, including  blindness,
kidney   failure,  impotence  and  increased  susceptibility   to
infection.

Many  tissues  of the body normally rely on glucose,  a  form  of
sugar,  as  a  source  of  metabolic  energy.  Most  cells  store
significant amounts of glucose as glycogen, but certain  tissues,
especially  the  brain,  depend  upon  the  blood  to  deliver  a
continuous  supply of glucose.  The concentration of  glucose  in
the  bloodstream  must be controlled within  a  relatively  tight
range to maintain normal health.  If blood glucose drops too low,
causing  hypoglycemia, the brain and nervous system stop  working
properly,  thereby  causing faintness,  weakness,  tremulousness,
headache,    confusion,   and   personality   changes.     Severe
hypoglycemia  can progress to convulsions, coma, and  death.   If
blood glucose rises too high, causing hyperglycemia, there may be
excess urine production, thirst, weight loss, fatigue, and in the
most  severe  cases,  dehydration, coma,  and  death.   Moreover,
hyperglycemia causes damage from chemical reactions  between  the
excess glucose and proteins in cells, tissues, and organs.   Over
long  periods of time, episodes of hyperglycemia are  thought  to
lead  to  diabetic  complications,  including  blindness,  kidney
failure, impotence and increased susceptibility to infection.

To  control  the  storage and metabolism of  blood  glucose,  the
pancreas makes hormones that signal either removal or addition of
glucose  to  the  blood, depending on the  need.   Insulin  is  a
pancreatic hormone that lowers blood glucose levels.  Glucagon is
a  pancreatic hormone that raises blood glucose levels.  Although
certain  other hormones affect blood glucose levels, insulin  and
glucagon have been considered the principal regulators of glucose
metabolism associated with eating.

When  the  concentration  of glucose in the  bloodstream  is  not
controlled  within a relatively tight range, severe complications
result.   The principal disease associated with abnormal  glucose
metabolism is diabetes mellitus, which is defined by the presence
of elevated blood glucose levels.  Over the last 20 years, it has
become   generally  accepted  that  there  are  several  distinct
subclasses of diabetes, the two most important of which are  Type
I  diabetes and Type II diabetes.   Type I Diabetes, or  insulin-
dependent diabetes mellitus, typically begins during childhood or
early adulthood, and is therefore termed juvenile diabetes.  Type
II   Diabetes,   or   non-insulin-dependent  diabetes   mellitus,
typically  begins  during or after middle age, and  is  therefore
termed adult onset diabetes.

Type  I  Diabetes.   The  ADA estimates that  there  are  between
500,000  and  1  million Type I diabetics in the United  States.2
Type  I  Diabetes is caused by the destruction of the  pancreatic
cells  that make insulin, resulting in deficient hormonal control
of  glucose  metabolism and abnormally high blood glucose.   High
blood glucose levels can lead to coma and death if not adequately
controlled.

Before  the discovery of insulin, Type I Diabetes was  a  rapidly
fatal   disease.   Insulin  therapy  corrects  the  most  serious
metabolic disorders, and the discovery of insulin is regarded  as
a  major  triumph of medical science.  However, even with  modern
insulin therapy, Type I diabetics cannot lead normal lives.  Type
I  diabetics' life spans can be shortened by the onset of serious
complications, including blindness, kidney failure, impotence and
increased  susceptibility to infection.  Consequently,  intensive
insulin  therapy  to  control blood glucose is  an  objective  of
modern diabetes treatment.  For Type I diabetics, glucose control
requires   frequent  monitoring  of  glucose  levels  and   rigid
management  of  diet, exercise and therapy and  is  difficult  to
achieve for many patients.

Type  II  Diabetes. The ADA estimates that there  are  nearly  10
million  diagnosed  Type II diabetics in the United  States  plus
another  5  million  who are undiagnosed Type II  diabetics3  and
people with impaired glucose tolerance, a condition characterized
by  normal  blood  glucose levels before eating  but  a  tendency
toward hyperglycemia afterward.

The  cause of Type II Diabetes is not precisely known.   What  is
known  is  that Type II Diabetes usually occurs during  or  after
middle  age, heredity plays a role, and energy-rich diets coupled
with sedentary lifestyles are involved.  These factors appear  to
combine  to  cause  insulin resistance, which  is  a  failure  of
insulin  to  act normally to reduce blood glucose levels.   As  a
consequence, even though insulin continues to be secreted by  the
pancreas,  sometimes in above-normal amounts,  blood  glucose  is
poorly   controlled.   Over  time,  the  resulting  episodes   of
hyperglycemia  are  thought  to cause widespread  tissue  damage,
including possible damage to insulin secretion mechanisms in  the
pancreas.  Current therapies for Type II diabetics include  rigid
dietary  control, often in conjunction with the  prescription  of
sulfonylurea  compounds or, in the late stages  of  the  disease,
daily  insulin injections.  Again, frequent monitoring of glucose
levels is required.

Foreign Subsidiaries

In  connection with our office in London, we formed Diasensor.com
U.K. Limited.

Diabecore Medical, Inc.

During  2000, we invested in Diabecore Medical, Inc., a  Canadian
company  that  is  conducting research  and  working  with  other
research  institutions to develop a new type of insulin to  treat
diabetes.   In   preliminary  studies,  this  new   insulin   has
demonstrated  effectiveness in controlling hyperglycemia  without
risk of severe hypoglycemia.  Laboratory tests indicate that this
new  insulin,  when  administered in  large  doses,  extends  the
duration  of  insulin  action  for improved  control  of  glucose
levels,  rather  than producing hypoglycemia.  Those  tests  also
have  shown  the new insulin to be 3 to 4 times less hypoglycemic
when  compared  to  presently  available  insulin.   William   D.
Lougheed  and  Kusiel  Perlman, M.D. are  developing  Diabecore's
insulin  with  the  support  of the  Research  Institute  of  the
Hospital  for  Sick  Children  in  Toronto,  where  insulin   was
discovered, and the Loyal True Blue and Orange Research Institute
in  Richmond  Hill,  Ontario.  We  plan  to  invest  a  total  of
approximately  $1.6 million in Diabecore, and  will  own  35%  of
Diabecore's stock.

MicroIslet, Inc.

During 2000, we also invested in MicroIslet, Inc.  MicroIslet  is
a California company that is developing several diabetes research
technologies  with  Duke  University  that  focus  on  optimizing
microencapsulated  islets  for  transplantation.    The   current
research involves the use of microencapsulated pancreatic  cells,
which  are transplanted into diabetic animals.  The initial trial
on  a  non-human  primate continues to provide  very  encouraging
results.   The  diabetic  animal achieved and  maintained  normal
glucose  readings for over six months following  the  transplant.
MicroIslet believes that there are several benefits to using  the
microencapsulated   islets   for   transplants,    rather    than
transplanting human pancreatic cells.  One benefit is the supply;
the only source of human cells is from deceased organ donors, and
more  than one donor is needed for each transplant.  In addition,
human  transplants involve a serious course of immuno-suppression
therapy  so  the human recipient does not reject the transplanted
cells.   Dr.  Emmanuel  Opara, Ph.D. is  the  director  of  islet
transplantation research at Duke University Medical  Center,  and
he  is  heading up the research team.  Dr. Opara's team plans  to
replicate  the  testing on 3 more primates to  obtain  additional
data  to  support a planned request to the FDA to  conduct  human
trials.   We plan to invest a total of approximately $1.5 million
in MicroIslet, and will own 20% of MicroIslet's stock.

Net Sales

Although we have been attempting to market our sensor in  Europe,
only  minimal sales have occurred to date.  In 2000,  we  engaged
consultants to assist with European marketing and sales.

Research and Development

BICO   is  continuing  the  research  and  development   of   our
noninvasive  glucose  sensor.  The research  and  development  is
being  conducted  by  BICO  under the terms  of  a  research  and
development agreement with Diasensor.com.

Product Development

BICO  is  currently  developing other models of  the  noninvasive
glucose sensor for more universal use.

Manufacturing

During  2000,  we  completed production of the  Diasensor  models
needed for our clinical trials.  During 2001, we anticipate  that
production  and  inventory buildup of  the  Diasensor  2000  will
continue.  We don't plan to begin full scale manufacturing of the
Diasensor  2000  for  sale  in the  U.S.  until  we  receive  FDA
approval.  Based on our manufacturing agreement, BICO will act as
Diasensor.com's exclusive manufacturer of production units of our
noninvasive  glucose  sensor  for  fifteen  years.   Under   that
manufacturing  agreement,  BICO will  manufacture  units  of  the
noninvasive  glucose  sensor for sale  to  Diasensor.com  at  the
manufacturing  facility in Indiana, PA,  although  BICO  may  use
various subcontractors to provide certain components.  We plan to
have  the  optics,  software, electronics  and  other  mechanical
components  supplied to BICO for assembly on a coordinated  basis
with   BICO's   production  schedule.   After  manufacturing   is
underway,   BICO   does   not  expect  to  maintain   significant
inventories  and, as a result, backlogs may occur  from  time  to
time.

In  September  1992, BICO entered into a 10-year lease  with  the
Indiana  County Board of Commissioners for a 35,000  square  foot
facility located in Indiana, PA.  BICO renovated the facility and
ordered  the  required capital equipment and machinery  necessary
for  assembly  operations.  During 1999, all  of  the  companies'
Indiana, PA operations were moved to this location, which is  now
used   for   manufacturing,   research   and   development    and
administrative   functions.   During  2000,  BICO   obtained   an
additional  33,000 square feet of manufacturing space,  which  is
being  completed  for  manufacturing.   That  space,  which   was
originally  obtained in 1995, was vacated in 1998 in  return  for
the  lessor's  agreement not to pursue legal action against  BICO
for nonpayment of rent.  In 2000, BICO and the lessor settled any
pending legal issues when BICO re-acquired the space.

BICO has undertaken, in a manufacturing agreement, to comply with
good  manufacturing practices and other regulatory standards  and
intends  to  establish  a quality control and  quality  assurance
program  once  manufacturing begins.  Although we  plan  to  work
closely  with  BICO  to  coordinate the implementation  of  these
undertakings,  there  can be no assurance  that  BICO  will  meet
Diasensor.com's   requirements   for   quality,   quantity,    or
timeliness.

Marketing and Distribution

Although our officers and marketing employees have experience  in
sales, marketing, and/or distribution, we have no direct prior or
existing experience.  Our officers have such experience, but  not
specifically  in the biomedical device industry.    In  2000,  we
retained an outside firm to assist with European marketing of the
sensor.   Although  we  believe  that  a  successfully  developed
noninvasive  glucose sensor will attract a market, we  anticipate
that  substantial  marketing  efforts  and  the  expenditure   of
significant funds may be necessary to inform potential  customers
and  distributors of the distinctive characteristics and benefits
of the our sensor.  Our success will also depend to a significant
extent   on  our  ability  to  establish  an  effective  internal
marketing organization.

In  addition,  our operating results will depend largely  on  our
ability  to  establish successful arrangements with domestic  and
international  distributors  and  marketing  partners.   We  also
anticipate  that  we  will employ a direct sales  force  focusing
directly  on  diabetics.  Although we believe that a successfully
developed  noninvasive glucose sensor, including the telemedicine
internet monitoring program, will be a profitable product for us,
there  can  be  no assurances that we will be able  to  establish
sufficient    direct   sales   capabilities   and    distribution
relationships  or  that we will be successful in  gaining  market
acceptance and profitability through sales of our products.

Patents, Trademarks and Licenses

We  own  a patent entitled "Non-Invasive Determination of Glucose
Concentration  in Body of Patients" which covers certain  aspects
of  a  process  for measuring blood glucose levels noninvasively.
That  patent was awarded to BICO's research team in December 1991
and  was  sold to Diasensor.com under a purchase agreement  dated
November  18,  1991.  The patent will expire, if all  maintenance
fees  are  paid,  no  earlier than the year  2008.   If  clinical
testing  or regulatory review delays marketing of a product  made
under  the patent, we may be able to obtain an extension  of  the
term  of  the  patent.   Our patent relates only  to  noninvasive
sensing of glucose but not to other blood constituents.  We  have
filed  corresponding patent applications in a number  of  foreign
countries.

BICO  filed  a second patent application in December 1992,  which
was  assigned to Diasensor.com.  This second patent contained new
claims,   which   extend  the  coverage  based  upon   additional
discoveries  and  data  obtained since the  original  patent  was
filed.  The patent application was amended in October  1993,  and
was granted in January 1995.

In  May  1993, BICO's research teams filed four additional patent
applications related to the methods, measurement and  noninvasive
determination of analyze concentrations in blood.

As  of November 2000, a total of 13 patents have been issued, all
of  which  have  been assigned to Diasensor.com,  and  additional
patents  are  pending.    Corresponding patent applications  have
been filed in foreign countries where we anticipate marketing the
noninvasive glucose sensor.

BICO's  research  team  continues to  file  patent  applications,
provisional  patent  applications,  some  of  which   are   being
converted  into PCTs - Patent Cooperative Treaty -  that  reflect
the continued research and development and additional refinements
to the noninvasive glucose sensor.

Diasensor.com or BICO may file applications in the United  States
and  other  countries,  as appropriate,  for  additional  patents
directed to other features of the noninvasive glucose sensor  and
related processes.

We   know  that  competitors  currently  developing  non-invasive
glucose  sensors  own  patents directed to  various  devices  and
processes    related   to   the   non-invasive   monitoring    of
concentrations  of glucose and other blood constituents.   It  is
possible that those patents may require us to alter any model  of
the  noninvasive  glucose  sensor  or  the  underlying  processes
relating  to the noninvasive glucose sensor, to obtain  licenses,
or to cease certain activities.

We  also  rely  upon trade secret protection for our confidential
and  proprietary information.  Although we, along with BICO, take
all  reasonable steps to protect such information, including  the
use  of confidentiality agreements and similar provisions,  there
can  be  no assurance that others will not independently  develop
substantially  equivalent proprietary information or  techniques,
otherwise  gain  access to the our trade secrets,  disclose  such
technology,  or  that  we  can  meaningfully  protect  our  trade
secrets.

We  have registered our trademark "Diasensor ", which is intended
for  use  in connection with the Diasensor models. We  intend  to
apply,  at  the  appropriate  time, for  registrations  of  other
trademarks as to any future products.

Warranties and Product Liability

Our current product liability insurance coverage is $1,000,000 in
the aggregate, and we believe that's sufficient due to our sales
levels to date, as well as our potential exposure to liability.

Source of Supply

In connection with the manufacture of the noninvasive glucose
sensor, BICO will be dependent upon suppliers for some of the
components required to manufacture the device.  BICO plans to
assemble the devices, but will need to purchase components,
including some components that will be custom made for us by
certain suppliers.  These components will not be generally
available, and we may become dependent upon those suppliers,
which do provide such specialized products.

Competition

With the rapid progress of medical technology, and in spite of
continuing research and development programs, our developmental
products are always subject to the risk of obsolescence if some
other company introduces a better product or technique.  We are
aware that other research groups are developing noninvasive
glucose sensors, but we have limited knowledge about the actual
technology or the stage of development for most of our
competitors.  There is a risk that some other group will complete
the development of their devices before we do.  There is no other
company currently producing or marketing noninvasive sensors for
the measurement of blood glucose similar to ours.  Competitive
success in the medical device field is dependent upon product
characteristics including performance, reliability, and design
innovations.

Our noninvasive glucose sensor will compete with existing
invasive glucose sensors.  Although we believe that the features
of our noninvasive glucose sensor, particularly its convenience
and the fact that no blood samples are required, will compete
favorably with existing invasive glucose sensors, we can't assure
that it will succeed.  Most currently available invasive glucose
sensors yield accuracy levels of plus or minus 25% to 30%, range
in price from $80 to $200, not including monthly costs for
disposable supplies and accessories, and are produced and
marketed by eight to ten sizable companies.  Those companies
include Bayer, Inc., Boehringer Mannheim Diagnostics, and
Lifescan, an affiliate of Johnson & Johnson.

Those companies have established marketing and sales forces, and
represent established entities in the industry.  Certain
competitors, including their corporate or joint venture partners
or affiliates, currently marketing invasive glucose sensors have
substantially greater financial, technical, marketing and other
resources and expertise than we do, and may have other
competitive advantages over us, based on any one or more
competitive factors such as accuracy, convenience, features,
price or brand loyalty.  Additionally, competitors marketing
existing invasive glucose sensors may from time to time improve
or refine their products, or otherwise make them more price
competitive, so as to enhance their marketing competitiveness
over our noninvasive glucose sensor.  As a result, we can't make
any guarantees that our sensor will be able to compete
successfully.

We face more direct competition from other companies who are
currently researching and developing noninvasive glucose sensors.
We have very limited knowledge as to the stage of development of
these other devices; however, if another company successfully
develops a noninvasive glucose sensor, obtains FDA approval, and
reaches the market before we do, we would suffer.

Among the other companies investigating infrared technology to
measure blood glucose levels noninvasively is CME Telemetrix in
Waterloo, Ontario, Canada.  CME is reportedly conducting tests
with a desktop monitor that uses one type of infrared
wavelengths.  OptiScan Biomedical in Alameda, California is
developing a device that uses another type of infrared
wavelengths.  Rio Grande Medical Technologies of Albuquerque, New
Mexico is designing a photo-based device.  Rio Grande is
currently funded by Johnson & Johnson.

Other companies claim that they are designing systems that are
semi-invasive.  SpectRx in Norcross, Georgia is using a laser to
create small holes in the skin without the invasive penetration
of a metal needle or lancet.  The device, called the Accu-Chek D-
Tector, then gives a glucose reading from the fluid collected
from the holes in the skin. SpectRx has partnered with Roche
Diagnostics, and reported in November 2000 that they had received
expedited review status from the FDA for a three-module premarket
approval filing for their diabetes detection device; they expect
to file the first module by the end of 2000, and clinical trials
are underway.  Cell Robotics International, Inc. in Albuquerque,
New Mexico is also using a laser device that pierces the skin.
Called the Lasette, a laser makes a small hole in the fingertip
to draw blood for glucose testing.  A continuous glucose
monitoring system from MiniMed, Inc. in Sylmar, California
received FDA approval in June 1999.  The device includes a tube
with a small sensor at its tip that is inserted through the skin,
sending readings via a small wire to a sensor.  A new sensor must
be reinserted under the skin every two to three days.

Cygnus of Redwood, California recently underwent an FDA panel
review for its GlucoWatch that draws glucose through the skin
through an electric needle.  The glucose triggers a reaction in a
disposable pad.  Although Cygnus claims that its device is
noninvasive, the fact remains that, in addition to the use of
electrical charges to draw fluid through the skin, each person
must use finger prick technology every day to set and use the
device.  Although the panel recommended FDA approval, to the best
of our knowledge, the FDA has not issued that approval without
conditions.  We were interested to learn that the FDA panel
accepted Cygnus' use of the same error grid data analysis - a
specific method for displaying data - that the FDA rejected when
we used it for our own panel review.

Certain organizations are also researching and developing
technologies that may regulate the use or production of insulin
or otherwise affect or cure the underlying causes of diabetes.
We are not aware of any new or anticipated technology that would
effectively render our noninvasive glucose sensor obsolete or
otherwise not marketable.  However, future technological
developments or products could make our noninvasive glucose
sensor significantly less competitive or, in the case of the
discovery of a cure for diabetes, even obsolete.

Government Regulations

Since our noninvasive glucose sensor is a medical device as
defined by the Federal Food, Drug and Cosmetic Act, as amended,
it is subject to the regulatory authority of the FDA.  The FDA
regulates the testing, marketing and registration of new medical
devices, in addition to regulating manufacturing practices,
labeling and record keeping procedures.  The FDA can inspect our
facilities and operations and may also audit our record keeping
procedures at any time.  The FDA's Quality System Regulation
specifies various requirements for our manufacturing processes
and the way we must maintain certain records.

In   1997,   Congress  passed  legislation  that  addresses   the
regulation  of pharmaceutical and medical devices.  Although  the
impact  of the FDA Administration Modernization Act of  1997  was
expected  to  reduce the quantity of information a  company  must
submit for approval of devices that has not been our experience.

Because the FDA regulates our noninvasive glucose sensor, we have
to meet all FDA requirements before we can market and sell our
device in the United States.  These requirements include clinical
testing, which must be supervised by the chosen hospitals.
During 1999, the FDA recommended we file a Pre-Market Application
and conduct an additional clinical study.  We are in the process
of submitting a modular PMA, which allows us to submit parts of
the submission to the FDA over a period of time.  This modular
PMA is a new method of submitting information to the FDA, and
resulted from the passage of FDA legislation in 1997.  We have
submitted the first two parts of the PMA and we began our
clinical trials in October 2000, after the FDA approved our
submission that included the testing protocol.

We don't know how long it will take for the FDA to accept our
filings or approve our device, if ever.

In June of 1998, the FDA instituted a new Quality System
Regulation that took the place of Good Manufacturing Practices.
These regulations align closely with similar guidelines required
by the European Union and have added control of the design
process as well as the manufacturing process.

There are different requirements for selling our device in
Europe.  On January 14, 1998, we received certification to ISO
9001, and on June 23, 1998, we received the CE mark.  The CE mark
and the ISO certification are provided by the regulatory bodies
or other approved companies of the European Union.  The CE mark
indicates that the device adheres to quality systems guidelines.
Rigorous audits were conducted at our Indiana, Pennsylvania
facility to certify that our development and manufacturing
procedures, as well as the Diasensor 1000r itself met the
international standards laid down by Europe's medical device
directive.  In order to maintain our approval to ship the device
into the European Union, we must be vigilant in our adherence to
our quality system.  We will also be subject to annual audits to
be sure that we continue to meet the required standards.

Any changes in FDA or European procedures or requirements will
require corresponding changes in our obligations in order to
maintain compliance those standards.  Those changes may result in
additional delays or increased expenses.  Depending on which
other countries we target, our products may also be subject to
additional foreign regulatory approval before we can sell our
devices.

Human Resources

We  currently have no full-time employees.   We believe that,  if
and  when  FDA  approval is obtained for our noninvasive  glucose
sensor,  or  manufacturing and marketing begins, we  will  employ
approximately 48 people on a full-time or part-time basis in  the
United  States,  and  approximately 16  people  in  each  foreign
office.   Our  success will depend upon the efforts  of  our  key
management personnel, the departure of any of whom may  adversely
affect our business.  None of our employees are represented by  a
collective  bargaining unit, and we consider our  relations  with
our employees to be good.

Financial  Information About Foreign and Domestic Operations  and
Export Sales

Our  operations  are located primarily in the  United  States  of
America.   In  1994,  we  incorporated a  majority-owned  foreign
subsidiary,  Diasensor.com U.K. Limited, in order  to  facilitate
the opening of our office in London, England.    Although we have
taken  some  orders  from our distributor in the  U.K.  and  have
delivered devices for patient use, we have had no material sales,
foreign or domestic, since our inception.   We are in the process
of applying to receive approval to market our device in Canada.

Item 2. Properties

Due  to  cash  flow problems, we sold our office  condominium  in
1999,  and  we  now  lease the same space for our  administrative
offices. BICO and its subsidiaries continue to lease a portion of
the office at a monthly rental amount of $5,175 plus one-half  of
the utilities.

As of November 2000, we have an office in London, England for the
purpose of taking orders for the Diasensor 1000.

We  believe  that our existing facilities will be  sufficient  to
meet  our  needs  through Fiscal 2001.  If we require  additional
space,  we  believe  such space will be available  at  reasonable
commercial rates.

Item 3. Legal Proceedings

In April 1996, the Pennsylvania Securities Commission commenced a
private  investigation  into sales of our  common  stock  in  our
public offering in an effort to determine whether any sales  were
made  improperly to Pennsylvania residents.  We cooperated  fully
with the state and provided all of the information requested.  As
of  the date of this filing, no determinations had been made, and
no orders have been issued.

In May 1996, we, along with BICO and BICO's individual directors,
including David Purdy, Fred Cooper, and Anthony J. Feola, who are
also our officers and directors, were served with a federal class
action lawsuit based on alleged misrepresentations and violations
of  federal  securities  laws.  In 2000,  even  though  we  don't
believe any violations of the securities laws occurred, we agreed
to  settle  the  lawsuit.  The parties reached a settlement,  and
BICO has paid an aggregate of $2,150,000 toward the settlement to
date.  An additional $1,300,000 is due in June 2001.  Although we
don't know whether the class action plaintiffs have been formally
notified  of the settlement, or if they have accepted its  terms,
we  believe  the  existing  settlement agreement  will  end  this
matter.

In  April  1998,  we, along with our corporate  affiliates,  were
served with subpoenas requesting documents in connection with  an
investigation by the U.S. Attorneys' office for the U.S. District
Court  for the Western District of Pennsylvania.  We continue  to
submit various scientific, financial and contractual documents in
response to their requests.

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

Not applicable.


                            PART II

Item  5.  Market  for  Registrant's  Common  Equity  and  Related
Stockholder Matters

Diasensor.com   was   incorporated   in   the   Commonwealth   of
Pennsylvania  on  July 5, 1989.  We have the authority  to  issue
40,000,000  shares of common stock at a par value  of  $.01,  and
1,000,000  shares of preferred stock.  As of November  30,  2000,
22,980,051 shares of common stock were outstanding.  No shares of
preferred stock are outstanding.  As of November 30, 2000,  there
were  currently  exercisable  warrants  outstanding  to  purchase
10,463,013 shares of our common stock at exercise prices  ranging
from  $.50  to  $3.50  per  share.   The  warrants  have  various
expiration dates through April 4, 2005.

As  of  November  30, 2000, we had approximately 600  holders  of
record  for  our  common stock and no holders of record  for  our
preferred stock.

Our  stock  is  not  currently listed on any  stock  exchange  or
market.  We currently act as our own registrar and transfer agent
for  our  common  stock  and warrants.  Currently,  there  is  no
established public trading market for our common stock.

Common Stock

The  holders  of our common stock are entitled to  one  vote  per
share  on  all  matters  to be voted on by shareholders  and  are
entitled   to  cumulative  voting  rights  in  the  election   of
directors.  In cumulative voting, the holders of common stock are
entitled to cast, for each share held, the number of votes  equal
to  the number of directors to be elected.  A holder may cast all
of  his or her votes for one nominee or distribute them among any
number of nominees for election.  Subject to any preferences that
may be granted to any holders of preferred stock, the holders  of
common  stock  are  entitled to receive, on  a  pro  rata  basis,
dividends  out of funds legally available for distribution,  when
and  if  declared by the board of directors, and to share ratably
in   our  assets  legally  available  for  distribution  to   our
shareholders in the event of liquidation, dissolution or winding-
up  of  Diasensor.com.   The holders  of  common  stock  have  no
preemptive,  redemption or conversion rights. The shares  of  our
common   stock   currently  outstanding  are   fully   paid   and
nonassessable.

Preferred Stock

Our  Articles  of  Incorporation permit the  issuance  of  up  to
1,000,000  shares  of  preferred stock.  No shares  of  preferred
stock  are  currently issued or outstanding.  We have no  present
intention  to  issue any such shares; although there  can  be  no
assurance that we won't issue preferred stock in the future.

Dividends

We  have  not  paid  cash dividends on our common  stock  or  our
preferred stock since our inception, and cash dividends  are  not
presently contemplated at any time in the foreseeable future.  In
accordance with our Articles of Incorporation, cash dividends are
restricted under certain circumstances.

Warrants

As  of November 30, 2000 there were outstanding warrants, all  of
which are currently exercisable, to purchase 10,463,013 shares of
our  common stock at exercise prices ranging from $0.50 to  $3.50
per  share and having expiration dates ranging from December  20,
2000  to  April 5, 2005.  During Fiscal 2000, 2,085,000  warrants
were  granted.   The  warrants  were  issued  to  our  directors,
officers  and employees and to certain other persons for  certain
goods and services transferred or rendered to us and, in the case
of  certain  officers,  in consideration of meritorious  service.
The  number of shares of common stock issuable upon the  exercise
of  the  warrants  and the exercise prices relating  thereto  are
subject  to  adjustment upon the occurrence  of  certain  events,
including  stock dividends, stock splits, mergers, consolidations
and  reorganizations.  We may not redeem the  warrants  prior  to
their expiration.

Employment Agreement Provisions Related to Changes in Control

We entered into agreements with Fred E. Cooper and David L. Purdy
under  which  they  were originally entitled  to  receive  annual
salaries  of $100,000, and $50,000, respectively, although  those
salaries  are subject to review and adjustment annually.   As  of
the  end of Fiscal 2000, their annual salaries had been increased
to  $497,000 and $450,000 respectively, although, due to our cash
flow problems, full payment was not made during Fiscal 1998.  The
initial term of Messrs. Cooper and Purdy's agreements expired  on
October  31, 1999, but the agreements were automatically  renewed
for additional three-year periods; similar renewals will continue
unless  any  party  gives  proper  notice  of  non-renewal.    In
November  2000, Mr. Purdy gave his notice that he  would  resign.
The  agreements  also provide that in the event of  a  change  of
control,  we  are required to issue to Mr. Cooper and  Mr.  Purdy
shares  of common stock equal to 5% of the outstanding shares  of
our  common  stock immediately after the change in  control.   In
general,  a change of control is deemed to occur for purposes  of
the  agreements: when 20% or more of our outstanding voting stock
is  acquired  by  any  person; when  one-third  or  more  of  our
directors  are  not  continuing  directors,  as  defined  in  the
agreements;  or when a controlling influence over our  management
or policies is exercised by any person or by persons acting as  a
group  within  the  meaning of Section 13(d)  of  the  Securities
Exchange Act of 1934, as amended.

Item 6. Selected Financial Data

The  selected  financial data presented herein has  been  derived
from   our  audited  consolidated  financial  statements.   These
financial  statements have been audited by Goff  Backa  Alfera  &
Company,  LLC,  for the twelve-month periods ended September  30,
2000,  1999, 1998; and by our previous auditors, Thompson  Dugan,
P.C, for the twelve-month periods ended September 30, 1997, 1996,
1995  and  1994, the reports of all of which include  explanatory
paragraphs  as to "going concern" considerations.   The  selected
financial  data should be read in conjunction with  "MANAGEMENT'S
DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION AND  RESULTS  OF
OPERATIONS"  and  our  financial  statements  and  related  notes
thereto included elsewhere in this report.


                   FISCAL YEARS ENDED SEPTEMBER 30th

                      2000          1999        1998         1997        1996
Total Assets      $1,299,610   $   38,324   $  292,322   $3,108,243  $4,171,910

Total
Liabilities       $1,817,760   $   91,214   $   92,327   $   22,419  $   20,624

Working Capital
 (Deficit)       ($1,704,662) ($   84,559) ($   44,724)  $2,862,349  $3,914,198

Total Revenues    $        0   $        0   $        0   $        0  $        0

General and
Administrative    $2,110,922   $1,354,066   $  669,764   $1,023,961  $1,509,298
Expenses

Warrant
Extensions        $        0   $  272,078   $   25,000   $5,593,875  $7,644,033

Benefit
(Provision)       $        0   $        0   $        0   $        0  $        0
for Income
Taxes

Net Loss         ($  695,438) ($  753,501) ($2,914,329) ($6,564,837)($9,021,823)

Net Loss
per Common
Share:
  Basic          ($.03)       ($.03)       ($.13)        ($.29)      ($.39)
  Diluted        ($.03)       ($.03)       ($.13)        ($.29)      ($.39)

Cash Dividends
 per share:
  Preferred       $ 0          $ 0          $ 0           $ 0         $ 0
  Common          $ 0          $ 0          $ 0           $ 0         $ 0



Item   7.  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations.

We  operate  on  a fiscal year ended September 30th.   Therefore,
years are referred to as fiscal years; for example, the year from
October  1,  1999 through September 30, 2000 is  referred  to  as
fiscal 2000.

Forward-Looking Statements

In  addition  to  Part  I  of this Form 10-K,  this  Management's
Discussion and Analysis section also contains the type of forward-
looking statements we discussed on page 2.  Please refer to  such
discussion in connection with the information presented here.

Liquidity and Capital Resources

Our  cash balance at September 30, 2000 was $113,098, an increase
from  $6,525  at September 30, 1999 and $41,811 at September  30,
1998.  The  increase occurred because BICO advanced us additional
funds  during  fiscal  2000.  We did not raise  any  of  our  own
additional  capital during fiscal 1998, Fiscal  1999,  or  Fiscal
2000, and we had no income generated from our operations.   As  a
result, we continue to suffer significant cash flow problems.  We
had  negative  working capital of ($1,704,662) at  September  30,
2000;  ($84,559)  at  September  30,  1999;  and   ($44,724)   at
September  30,  1998.  This fluctuation in  working  capital  was
primarily attributable to net advances and repayments of advances
to BICO, which supports our operations from sales of BICO stock.

In fiscal 2000, we paid rent for our office space at 2275 Swallow
Hill  Road.   BICO and its other subsidiaries use  part  of  that
space  for  their offices, and the subsidiaries' portion  of  the
rent  is  shown as $19,838 due from subsidiaries of BICO  on  our
balance sheet.  We did not have any similar amounts due in fiscal
1999, because we owned the space during fiscal 1999 and BICO paid
its  portion, as well as the subsidiaries' portion, of  the  rent
directly to us.

During fiscal 2000, we made investments in unconsolidated
subsidiaries.  In January 2000, we initiated an alliance with
MicroIslet, Inc.; in return for our initial equity investment of
$500,000, we received a 10% stake with an option to purchase an
additional 10% in the future, which we partially exercised during
Fiscal 2000.  We invested a total of $900,000 in MicroIslet
during Fiscal 2000, and we plan to invest an additional $600,000
during fiscal 2001.  MicroIslet is developing several diabetes
research technologies with Duke University that focus on
optimizing microencapsulated islets for transplantation.  The
project is in the research and development phase.  We also
invested in Diabecore Medical, Inc.  Diabecore is a company in
Toronto working with other research institutions to develop a new
insulin to treat diabetes.  We initially invested $500,784 in
Diabecore and received a 15.9% ownership interest.  We invested a
total of $500,784 in Diabecore during fiscal 2000, and we plan to
invest approximately an additional $1 million during fiscal 2001.
This project is also in the research and development phase.  We
made these investments because our management believes that these
diabetes research organizations and the institutions they
affiliate with will bring strength and support to our own
diabetes research and development projects.

In  July 1995, BICO and Diasensor.com agreed to suspend billings,
accruals  and  payments  due under the Research  and  Development
Agreement  pending the FDA's review of the Diasensor 1000.    The
suspension continued during fiscal 2000, so no amounts are due or
being accrued based on the R&D Agreement.

During  fiscal  1998, we made allowances for  doubtful  accounts,
including amounts owed to us from BICO.  During fiscal  1999  and
2000  we  reduced the allowance for doubtful accounts to  reflect
repayments  made by BICO.  These allowances were  recorded  based
upon  the  current financial position of BICO.  BICO  repaid  all
advances as of September 30, 2000.

We  entered  into employment agreements with Fred E.  Cooper  and
David  L.  Purdy effective November 1, 1994.  As of  the  end  of
fiscal  2000,  their annual salaries were $497,000 and  $450,000,
respectively;  however,  due  to our  cash  flow  problems,  they
weren't  paid in full during fiscal 1998. At September  30,  1999
and  2000,  there  was  $45,000 and $29,000 included  in  accrued
payroll for Mr. Cooper and Mr. Purdy, respectively.

Because we still don't have any revenue sources, we will have to
find additional financing that we'll use to finance development
of, and to proceed to manufacture, our noninvasive glucose
sensor.  Currently, we're dependent upon BICO to support all
sensor-related activity, and we can't assure you that BICO will
be able to continue to support us.

Our noninvasive glucose sensor models are at various stages of
development and we'll need more money to complete them. We may
decide to discontinue any of our projects at any time if research
and development efforts dictate that's the best thing to do.

Our financial statements contain a going concern opinion from our
auditors.  Our auditors issued that opinion because we have a
history of losses and no revenue to support our operations.  In
the past, we got money to fund our operations by selling
securities - but we haven't been able to continue because there
is no market for our common stock.  Since 1997, we've become
dependent on BICO to sell stock to raise money to support us, and
we don't know if BICO will be able to continue to raise enough
money that way.  Because we're not sure - and our auditors are
not sure - how long we can continue, our financial statements
include the auditor's opinion that we may not be able to continue
operating as a going concern.

Given our expenses and the other factors we discussed, as
compared to our sources of funds, we estimate that we will be
able to meet our funding needs for at least a year from September
30, 2000.  We make that estimate based in part because we are not
aware of any extraordinary technological, regulatory or legal
problems.  If any of those problems, which could include
unanticipated delays resulting from new developmental hurdles in
product development, FDA requirements, or the loss of a key
employee, arise, we would have to re-evaluate our position.  We
can't assure you that, despite our good-faith efforts, our
estimates will be correct.

We think that our long-term liquidity needs will include working
capital to fund the marketing and manufacture of our noninvasive
glucose sensor, along with continued research and development
expenses for existing and future models.   If our projects are
delayed, we will need more money.  We believe BICO will be able
to continue selling its stock and other securities in order to
raise funds for the noninvasive glucose sensor project, but we
can't assure you BICO will be successful.  If BICO can't raise
enough money to fund our projects and operations, we will not be
able to continue. We don't have any other sources of funds, such
as bank lines of credit. We believe that, at some point, we will
be able to sell our products to generate revenue, but we can't
assure you when, or if, that will happen.

Based on our available cash, BICO's ability to raise capital, our
rate  of  monthly expenditures and the deferrals agreed  upon  by
Diasensor.com  and  BICO, we believe that  we  will  be  able  to
continue  our current activities for a limited time.   If  we  or
BICO  are  not  able to obtain additional financing  or  if  that
additional  financing is insufficient, we  will  be  required  to
cease  operations and the development of the noninvasive  glucose
sensor altogether.

Results of Operations

During  fiscal  2000,  1999  and 1998, research  and  development
expenses  were zero due to the agreed-upon suspension of  charges
and  billings  by Diasensor.com and BICO under the  Research  and
Development Agreement.

General  and  administrative expenses totaled  $2,110,922  during
fiscal  2000, as compared to $1,354,066 during fiscal  1999,  and
$669,764 during fiscal 1998.  The lower total in fiscal 1998  was
due  primarily  to  the  suspension of  billings  under  the  R&D
Agreement,  and the reduction in personnel due to our  cash  flow
problems.   In  addition, our executive officers  were  not  paid
their full salaries in fiscal 1998.  The increase in fiscal  1999
occurred  when  salaries were returned to full  levels,  with  an
increase  in  salaries  paid of $232,528 over  fiscal  1998.   In
fiscal 2000, payments for salaries increased $546,763.  Fees  for
outside consultants and marketing fees increased by $271,440 from
fiscal  1998 to fiscal 1999, and increased by $15,386 from fiscal
1999  to  fiscal  2000  -  those  increases  were  primarily   in
connection with our efforts to market the sensor in Europe.    In
addition,  we issued warrants for services aggregating  $230,178,
$228,528  and  $0  in  fiscal 2000, 1999 and 1998,  respectively.
Other  income aggregated $62,100 in fiscal 2000, as  compared  to
$48,973 in fiscal 1999, and $62,914 in fiscal 1998.  General  and
administrative  expenses also include a $154,246 amortization  of
goodwill  in  fiscal 2000 in connection with our  investments  in
Diabecore  and  MicroIslet.  We had no  similar  amortization  in
fiscal  1998  or  fiscal  1999, since our  investments  in  those
companies began in fiscal 2000.

Our other income is made up of interest income and rental income.
During  fiscal  2000, the entire $62,100 was from rental  income,
all  of  which is charged to BICO and its subsidiaries for  their
share of our 2275 Swallow Hill Road office space. In fiscal  1999
and  1998,  rental income was $42,528 for each of the two  years,
and  the  balance of $6,445 and $20,386, respectively,  was  from
interest earned on deposits of liquid assets.

During  fiscal  2000  and  1999,  we  recognized  $1,458,809  and
$823,670  in  recovery  of  doubtful accounts  when  BICO  repaid
amounts  due.   Those amounts had been part of  the  fiscal  1998
charge  of  $2,282,479  to  a provision  for  doubtful  accounts,
because BICO's financial position at that time indicated we might
not receive the money back from BICO.

During  fiscal  1999 and 1998, we extended 2,561,213  and  10,000
warrants, respectively.  The warrants were originally granted  to
certain  officers, directors, employees and consultants  in  1993
through  1995,  with expiration dates during 1998  through  2000,
respectively.  Rather than letting them expire, we extended them.
Because  the exercise price of some of the warrants  -  $1.00  or
$.50  per  share - was lower than the market price of our  common
stock at the time of the extensions - which is assumed to be $.50
per  share, although there is currently no public trading  market
for  our  common stock -  $272,078 was charged against operations
in  fiscal 1999; and $25,000 was charged to operations in  fiscal
1998.  In fiscal 2000, we extended warrants to purchase 2,202,050
shares  with exercise prices between $1.00 and $3.50  per  share.
Because  those exercise prices exceeded the assumed market  price
for  our  common  stock,  we didn't have any  amount  charged  to
operations as a result.

We  had  a  loss from our unconsolidated subsidiaries,  Diabecore
Medical  and MicroIslet, during fiscal 2000.  We had  no  similar
loss in previous years because we just started investing in those
two  companies during fiscal 2000.  The $105,425 loss  in  fiscal
2000 resulted because we absorbed part of the losses incurred  by
Diabecore and MicroIslet.  Our share of the loss is determined by
applying our ownership percentage to the total loss incurred, and
we  get  to  deduct  the  portion of the loss  allocated  to  the
unrelated investors from our total net loss.

Income Taxes

As of September 30, 2000, we had approximately $25,495,000 in net
operating losses available for federal tax purposes.  Subject  to
certain  limitations,  these losses will be  available  as  carry
forwards to offset future taxable income through the years  2004-
2015.  We also have federal research and development credit carry
forwards   available   to   offset  federal   income   taxes   of
approximately  $700,000, subject to limitations and  expiring  in
the years 2005 through 2013.

Supplemental Financial Information (unaudited)

In November 2000 we made additional investments in MicroIslet and
Diabecore  Medical.   We  invested  an  additional  $100,000   in
MicroIslet,  bringing  our ownership  interest  to  15%,  and  we
invested  an  additional $193,000 in Diabecore Medical,  bringing
our ownership interest to 21%.

Item 8.  Financial Statements and Supplementary Data.

Our consolidated financial statements appear on pages F-1 through
F-21.

Item  9.  Changes  in  and  Disagreements  with  Accountants   on
Accounting and Financial Disclosure

Effective November 8, 2000, upon a determination by the board  of
directors,  we engaged Goff Backa Alfera & Company,  LLC  as  our
independent  auditors and accountants to replace Thompson  Dugan,
P.C.    Goff  Backa  Alfera & Company, LLC  also  serves  as  the
independent auditors and accountants for BICO, replacing Thompson
Dugan,  P.C.  Neither company had any disagreements with Thompson
Dugan, P.C. or Goff Backa Alfera & Company, LLC on any matter  of
accounting   principles   or   practices,   financial   statement
disclosure or auditing scope or procedure.



                            PART III

Item 10. Directors and Executive Officers

As  of  September 30, 2000, our directors and executive  officers
were as follows:

  Name                  Age   Director        Positions Held
                                Since

David L. Purdy*          72     1989          Chairman of the
                                              Board, Chief Scientist,
                                              Director

Fred E. Cooper           55     1989          President, CEO, Director

Anthony J. Feola         53     1991          Director

Patrick H. O'Neill*      85     1999          Director

*Mssrs. Purdy and O'Neill resigned in November 2000.

DAVID  L.  PURDY,  72, was the chairman of the  board  and  chief
scientist.   Mr.  Purdy was a director since  our  inception  and
became chairman of the board in October 1992.  Mr. Purdy acted as
our  treasurer  until  October 1992, when  he  became  our  chief
scientist.   He was employed primarily as the president  of  BICO
from 1972 until June 2000, when he resigned as a BICO officer and
director   to  become  the  president  of  BICO's  new  division,
Biocontrol Technology, Inc., in order to focus on the noninvasive
glucose  sensor  project.  In November 2000, Mr.  Purdy  resigned
from  both  Diasensor.com  and  Biocontrol  Technology,  Inc.,  a
subsidiary of BICO, Inc.

FRED  E. COOPER, 55, has been the president and a director  since
our  inception.   Prior  to  joining us,  Mr.  Cooper  co-founded
Equitable Financial Management, Inc. of Pittsburgh, PA, a company
in  which  he  served  as  executive  vice  president  until  his
resignation and divestiture of ownership in August 1990.   He  is
the chief executive officer and a director of BICO.

ANTHONY  J.  FEOLA, 53, has been a director since February  1991.
In  addition,  Mr.  Feola served as our chief  operating  officer
until  April  1994,  when he rejoined BICO  as  its  senior  vice
president.   At  that  time, BICO assumed Mr. Feola's  employment
contract with Diasensor.com.    Prior to joining BICO in November
1989, Mr. Feola was vice president and chief operating officer of
Gateway  Broadcasting  in Pittsburgh, PA  and  a  national  sales
manager for Westinghouse Corporation, also in Pittsburgh, PA.  He
also serves as a director of BICO.

PATRICK H. O'NEILL, 85, was appointed to the board in 1999.   Mr.
O'Neill  is  a  former chairman of the board of  Joslin  Diabetes
Center in Boston, Mass.  He obtained his engineering degree  from
the  University of Alaska, which has subsequently honored him  as
both  a  distinguished alumni and an outstanding alumnus  of  the
School  of Mineral Industry.  His career began with a  job  as  a
miner  in  Alaskan open cut gold mines, where he worked  his  way
through college.  Other than four years of military service,  his
career  was spent in the mining industry. He progressed to  chief
engineer  and  ultimately the president of  International  Mining
Corporation and several of its subsidiaries.  Since 1982, he  has
worked   as  an  international  consultant  to  the  gold  mining
industry,  and  serves  as  a director of  Zemex  Corporation  in
Toronto,  the American Geographical Society in New York  and  the
Ireland  U.S. Council for Commerce and Industry.  On November  9,
2000, Mr. O'Neill resigned from our board of directors.

Based on the requirements of Item 405 of Regulation S-K regarding
timely  filings  required by Section 16(a) of the Securities  and
Exchange  Act, we represent the following.  Based solely  on  our
review  of  copies of forms received and written  representations
from  certain  reporting  persons, we believe  that  all  of  our
executive  officers,  directors, and  greater  than  ten  percent
beneficial owners complied with applicable filing requirements.

Item 11. Executive Compensation

The  following table sets forth information concerning the annual
and long-term compensation for services in all capacities for the
Fiscal  Years  ended September 30, 2000, 1999 and 1998  of  those
persons  who were, at September 30, 2000: (i) the Chief Executive
Officer,  and  (ii)  the other most highly compensated  executive
officers whose remuneration exceeded $100,000.  These individuals
are referred to as the Named Executives.


<TABLE>
             SUMMARY COMPENSATION TABLE

                 Annual Compensation                       Long-Term               All Other
                                                           Compension (1)          Compensation
                                                                                   ($)     (2)
<S>              <C>   <C>          <C>         <C>        <C>                     <C>
-----------------------------------------------------------------------------------------------
Name and         Year  Salary ($)   Bonus ($)   (2)Other   Awards
Principal                                           ($)    Warrants
Position                                                   (number of
                                                           shares) (#)
-----------------------------------------------------------------------------------------------
Fred E.          2000  $ 465,750    $ 0         $ 0        713,500(3)(4)           $ 0
Cooper,          1999  $ 288,792    $ 0         $ 0        678,545(3)(4)           $ 0
CEO (5)          1998  $ 173,875    $ 0         $ 0        0                       $ 0
-----------------------------------------------------------------------------------------------
David L.         2000  $ 418,750    $ 0         $ 0        506,250(3)(4)           $ 0
Purdy            1999  $ 202,083    $ 0         $ 0        800,000(3)(4)           $ 0
Chief Scientist* 1998  $  91,667    $ 0         $ 0        0                       $ 0
(6)
-----------------------------------------------------------------------------------------------
</TABLE>

*In November 2000, Mr. Purdy resigned.

(1)  We  do  not  currently have a Long-Term  Incentive  Plan  or
     LTIP,  and  no payouts were made under any LTIP  during  the
     years  2000,  1999  or 1998.  Except as noted  in  Note  (3)
     below,  the  Named  Executives  were  awarded  warrants   to
     purchase the number of shares of our common stock set  forth
     in  the table above in each of the years noted.  We have  no
     retirement,  pension  or  profit-sharing  programs  for  the
     benefit of our directors, officers or other employees.

(2)  During  the  years ended September 30, 2000, 1999  or  1998,
     the  Named  Executives received medical benefits  under  our
     group insurance policy.

(3)  During  Fiscal  2000,  we  granted  warrants  to  the  Named
     Executives  as  follows: Fred E. Cooper and David  L.  Purdy
     each  received  warrants to purchase 500,000 shares  of  our
     common  stock at $.50 per share until April 4, 2005.  During
     Fiscal 1999, we granted warrants to the Named Executives  as
     follows:   Fred  E. Cooper and David L. Purdy each  received
     warrants  to purchase 200,000 shares of our common stock  at
     $.50  per  share until January 27, 2004.  No  warrants  were
     granted to the Named Executives during Fiscal 1998.

(4)  During   Fiscal   2000  and  1999,  we   extended   warrants
     previously issued to the Named Executives, which would  have
     otherwise   expired.   Although  the  extensions   were   in
     connection   with  warrants  already  held  by   the   Named
     Executives, they are shown in the table set forth  above  as
     "awards"  for  executive compensation  disclosure  purposes.
     However,  the  extended  warrants  do  not  appear  in   the
     "Option/Warrant  Grant" Table, since, at  the  time  of  the
     extension,  the  exercise  price  of  the  warrants,   which
     remained  unchanged  at  $1.00 per share  for  the  warrants
     extended  in  Fiscal  2000,  and  $.50  per  share  for  the
     warrants extended in Fiscal 1999, was greater than or  equal
     to  the  designated  "market price"  of  the  common  stock,
     assumed  to  be $.50 per share, although there is  currently
     no  public  trading  market for the  common  stock.   During
     Fiscal  2000, Fred E. Cooper's warrants to purchase  213,500
     shares  of our common stock at $.100 per share were extended
     until  January  27, 2003, and David L. Purdy's  warrants  to
     purchase  6,250  shares of our common  stock  at  $1.00  per
     share  were  extended until April 15, 2003.   During  Fiscal
     1999 both Fred E. Cooper's and David L. Purdy's warrants  to
     purchase  300,000  shares of our common stock  at  $.50  per
     share  were  extended until March 25, 2004; and warrants  to
     purchase 178,545 and 300,000 shares were extended to May  7,
     2004 for Fred E. Cooper and David L. Purdy, respectively.

(5)  Due  to our cash flow problems, Mr. Cooper's full salary was
     not  paid  during Fiscal 1998. Mr. Cooper will be,  or  was,
     paid  salary and bonuses aggregating approximately $642,000,
     $660,000,  and  $383,000 by BICO and its other  subsidiaries
     during calendar years 2000, 1999 and 1998, respectively.

(6)  Due  our cash flow problems, Mr. Purdy's full salary was not
     paid  during Fiscal 1998.  Mr. Purdy will be, or  was,  paid
     salary   and  bonuses  aggregating  approximately  $424,000,
     $183,000,  and $75,000 by BICO during calendar  years  2000,
     1999 and 1998, respectively.


          Option/Warrant/SAR Grants in Last Fiscal Year


                                                           POTENTIAL REALIZED
                                                            VALUE AT ASSUMED
                                                            ANNUAL RATES OF
                                                                 STOCK
INDIVIDUAL GRANTS (1)                                      PRICE APPRECIATION
                                                                  FOR
                                                             OPTION TERM (3)
                       Percent
                         of
            Number      Total
              of       Options/
         Securities      SARs    Exercise  Expiration
Name     Underlying    Granted      or        Date     5% ($)   10%($)     0%($)
          Options/       to        Base
           SARs        Employee    Price
         Granted         in        ($/Sh)
           (#)         Fiscal
                       Year(2)


Fred E.
Cooper   500,000       24.0%      $ .50    04/04/05    $75,000  $155,000   $0


David L.
Purdy    500,000       24.0%      $ .50    04/04/05    $75,000  $155,000   $0

__________________________________________
(1)  During  Fiscal 2000 certain warrants previously  granted  to
     the   Named   Executives  in  1995  were  extended.    These
     warrants,  which  aggregate 6,250  and  213,500  for  Mssrs.
     Purdy  and  Cooper, respectively, are not included  in  this
     Table,  since  the  $1.00 per share exercise  price  of  the
     warrants  was greater than the designated "market price"  of
     $.50 per share at the time of the extension.

(2)  For  purposes  of calculating these percentages,  the  total
     number   of   warrants  granted  during  Fiscal   2000   was
     2,085,000.

(3)  Potential  realizable values reflect the difference  between
     the  warrant  exercise price at the end of Fiscal  2000  and
     the  fair value of our common stock price from the  date  of
     the  grant or extension until the expiration of the warrant.
     The  5% and 10% appreciation rates, compounded annually, are
     assumed  based  on  SEC  rules and  do  not  reflect  actual
     historical or projected rates of appreciation of the  common
     stock.     Assuming   such   appreciation,   the   following
     illustrates  the  per share value on the  dates  set  forth,
     which  are  the expiration dates for the warrants,  assuming
     the values set forth ($.50 per share, which is the price  we
     designated;  there is currently no trading  market  for  the
     common stock):

         STOCK PRICE ON DATE       EXPIRATION
             OF GRANT                 DATE        5%        10%

          4/04/00: $.50             4/04/05     $.65       $.81

The   foregoing  values  do  not  reflect  appreciation  actually
realized   by  the  Named  Executives  (See,  "Option/Warrant/SAR
Exercises    in   Last   Fiscal   Year   and   Fiscal    Year-End
Option/Warrant/SAR Value" Table, Below).

  AGGREGATED OPTION/WARRANT/SAR EXERCISES IN LAST FISCAL YEAR
       AND FISCAL YEAR-END OPTION/WARRANT/SAR VALUE TABLE

                                       Number of        Value of
                                       Securities       Unexercised
                                       Underlying       In-the-
                                       Unexercised      Money
                                       Options/SARs     Options/SARs
                                       at FY-End(#)     at FY-End($)


Name           Shares       Value      Exercisable/     Exercisable/
               Acquired     Realized   Unexercisable    Unexercisable
               on Exercise  ($)(3)     (4)              (5)
               (#)(1)(2)


Fred E. Cooper    -0-         -0-       1,680,045(6)     $ 0

David L. Purdy    -0-         -0-       1,556,250(7)     $ 0
__________________

(1)  This  figure represents the number of shares of common stock
     acquired  by  each  Named Executive  upon  the  exercise  of
     warrants.

(2)  During  the  fiscal year ended September 30, 2000,  none  of
     the  Named  Executives  exercised any warrants  to  purchase
     common stock.

(3)  The  value  realized  of  the warrants  exercised  would  be
     computed by determining the spread between the market  value
     of  the underlying securities at the time of exercise  minus
     the exercise price of the option or warrant.

(4)  All  warrants  held  by the Named Executives  are  currently
     exercisable.

(5)  The   value   of   unexercised  warrants  is   computed   by
     subtracting  the exercise price of the outstanding  warrants
     from  $.50 per share, the price per share in our last public
     offering,  although there is currently  no  market  for  our
     common   stock.   Because  none  of  the  Named  Executive's
     warrants were granted at exercise prices less than $.50  per
     share,  none of the warrants are "in-the-money" for purposes
     of this table.

(6)  Includes  warrants  to purchase: 138,000  shares  of  common
     stock  at  $.50  per  share until April 24,  1995  (extended
     until  April  24, 2001); 300,000 shares of common  stock  at
     $.50  per  share until March 25, 1996 (extended until  March
     25,  2004); 178,545 shares of common stock at $.50 until May
     7,  1996  (extended  until May 7, 2004); 150,000  shares  of
     common  stock  at  $1.00 per share until  October  25,  1996
     (extended until October 25, 2002); 213,500 shares of  common
     stock  at  $1.00 per share until January 27, 1997  (extended
     until January 27, 2003);  200,000 shares of common stock  at
     $.50  per  share until January 27, 2004; and 500,000  shares
     of common stock at $.50 per share until April 4, 2005.

(7)  Includes  warrants  to purchase: 250,000  shares  of  common
     stock  at  $.50  per  share until April 24,  1995  (extended
     until  April  24, 2001); 300,000 shares of common  stock  at
     $.50  per  share until March 25, 1996 (extended until  March
     25,  2004); 6,250 shares of common stock at $1.00 per  share
     until  April  15,  1997  (extended until  April  15,  2003);
     300,000  shares of common stock at $.50 per share until  May
     7,  1996  (extended  until May 7, 2004); 200,000  shares  of
     common  stock at $.50 per share until January 27, 2004;  and
     500,000  shares  of  common stock at $.50  per  share  until
     April 4, 2005.

Employment Agreements

We  entered  into employment agreements with Fred E.  Cooper  and
David L. Purdy effective November 1, 1994, under which they  were
originally  entitled to receive annual salaries of  $100,000  and
$50,000  respectively, which are subject to review and adjustment
annually.   As  of the end of Fiscal 2000, their annual  salaries
had  been  increased  to  $497,000, and  $450,000,  respectively,
although,  due  to our cash flow problems, full payment  was  not
made  during  Fiscal 1998.  The initial term  of  the  agreements
expired  on October 31, 1999, they were renewed for an additional
three-year  term; those renewals will occur automatically  unless
any  of  the  parties  give  proper notice  of  non-renewal.   In
November  2000, Mr. Purdy resigned.  The agreements also  provide
that  in  the  event of a change of control, we are  required  to
issue to Messrs. Cooper and Purdy shares of common stock equal to
5%  of  the  outstanding shares of our common  stock  immediately
after the change in control.  In general, a change of control  is
deemed to occur for purposes of the agreements: when 20% or  more
of  our outstanding voting stock is acquired by any person:  when
one-third  or more of our directors are not continuing directors,
as defined in the agreement; or when a controlling influence over
our  management  or policies is exercised by  any  person  or  by
persons acting as a group within the meaning of Section 13(d)  of
the Securities Exchange Act of 1934, as amended.

In  addition, in the event of a change in control within the term
of  the agreements or within one year thereafter, Messrs. Cooper,
and  Purdy are entitled to receive severance payments in  amounts
equal  to: 100% of their most recent annual salary for the  first
three  years  following termination; 50%  of  their  most  recent
annual  salary  for  the next two years; and 25%  of  their  most
recent  salary for the next five years.  We are also required  to
continue medical insurance coverage for Messrs. Cooper and  Purdy
and  their families during those periods.  The severance payments
will terminate in the event of the employee's death.

In  the  event  that  either  Mr. Cooper  or  Mr.  Purdy  becomes
disabled, as defined in the agreements, they will be entitled  to
the  following payments, in lieu of salary, such payments  to  be
reduced  by  any amount paid directly to them under a  disability
insurance policy provided by us or our affiliates: 100% of  their
most  recent annual salary for the first three years; and 70%  of
their most recent salary for the next two years.

The  agreements also generally restrict the disclosure of certain
confidential  information obtained by Messrs.  Cooper  and  Purdy
during  the  term  of  the  agreements  and  restrict  them  from
competing  with  us for a period of one year in specified  states
following the expiration or termination of the agreements.

Item  12.  Security  Ownership of Certain Beneficial  Owners  and
Management

                                                                  Percent of
                     Amount & Nature               Ownership with Class with
Name and Address     of Beneficial     Percent of  Warrants and   Warrants and
of Beneficial Owner  Ownership(1)      Class (2)     Options(3)   Options (4)

Bico, Inc.             11,975,000         52.1%      11,975,000       52.1%
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA  15220

David  L.  Purdy (5)       32,000            *        1,588,250(6)     6.5%
300 Indian Springs Road
Indiana, PA 15701

Fred  E.  Cooper           22,000            *        1,702,045(7)     6.9%
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

Anthony J. Feola           20,000            *        1,020,000(8)     4.2%
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

All directors and          74,000            *        4,315,295(9)     15.8%
executive officers
as a group (4 persons)

* Less than one percent
________________________

(1)  Excludes  currently exercisable warrants set  forth  in  the
     third column and detailed in the footnotes below.

(2)  Represents  current common stock owned by  each  person,  as
     set   forth   in  the  first  column,  excluding   currently
     exercisable  warrants, as a percentage of the  total  number
     of  shares  of common stock outstanding as of September  30,
     2000, which was 22,980,051.

(3)  Includes ownership of all shares of common stock which  each
     named person or group has the right to acquire, through  the
     exercise  of  warrants or options, within sixty  (60)  days,
     together with the common stock currently owned.

(4)  Represents total number of shares of common stock  owned  by
     each  person, as set forth in the third column,  which  each
     named person or group has the right to acquire, through  the
     exercise  of  warrants or options within  sixty  (60)  days,
     together  with common stock currently owned, as a percentage
     of  the  total number of shares of common stock  outstanding
     as  of  September  30,  2000.   For  individual  computation
     purposes,  the  total  number  of  shares  of  common  stock
     outstanding  as of September 30, 2000 has been increased  by
     the  number  of additional shares which would be outstanding
     if  the person or group owned the number of shares set forth
     in the third column.

(5)  Does  not  include shares held solely by Mr.  Purdy's  adult
     children.   Mr. Purdy disclaims any beneficial  interest  to
     shares  held  by members of his family.  Mr. Purdy  resigned
     from our board of directors in November 2000.

(6)  Includes  currently  exercisable warrants  to  purchase  the
     following: 250,000 shares of common stock at $.50 per  share
     until  April  24,  1995  (extended until  April  24,  2001);
     300,000  shares  of  common stock at $.50  per  share  until
     March  25,  1996  (extended until  March  25,  2004);  6,250
     shares  of  common stock at $1.00 per share until April  15,
     1997  (extended  until April 15, 2003);  300,000  shares  of
     common  stock at $.50 per share until May 7, 1996  (extended
     until  May 7, 2004); 200,000 shares of common stock at  $.50
     per  share  until  January 27, 2004; and 500,000  shares  of
     common stock at $.50 per share until April 4, 2005.

(7)  Includes  currently  exercisable warrants  to  purchase  the
     following:   138,000  shares of common  stock  at  $.50  per
     share  until April 24, 1995 (extended until April 24, 2001);
     300,000  shares  of  common stock at $.50  per  share  until
     March  25,  1996  (extended until March 25,  2004);  178,545
     shares  of  common stock at $.50 until May 7, 1996 (extended
     until  May 7, 2004); 150,000 shares of common stock at $1.00
     per  share  until October 25, 1996 (extended  until  October
     25,  2002);  213,500  shares of common stock  at  $1.00  per
     share  until  January 27, 1997 (extended until  January  27,
     2003);   200,000  shares of common stock at $.50  per  share
     until  January 27, 2004; and 500,000 shares of common  stock
     at $.50 per share until April 4, 2005.

(8)  Includes  currently  exercisable warrants  to  purchase  the
     following:   100,000  shares of common  stock  at  $.50  per
     share  until April 24, 1995 (extended until April 24, 2001);
     100,000  shares  of  common stock at $.50  per  share  until
     October  23, 1995 (extended until October 23, 2003); 300,000
     shares  at  $.50  per share until March 25,  1996  (extended
     until  March  25, 2004); 300,000 shares at  $.50  per  share
     until  May 7, 1996 (extended until May 7, 2004); and 200,000
     shares  of  common stock at $.50 per share  until  April  4,
     2005.

(9)  Includes  shares of common stock, including stock  currently
     owned,  available  under currently exercisable  warrants  as
     set forth above.

Item 13. Certain Relationships and Related Transactions

We  share  common officers and directors with BICO.  In addition,
we  have entered into several intercompany agreements with  BICO,
which are summarized below.  Our management believes that it  was
in  our best interest to enter into these agreements and that the
transactions were based on terms as fair as those which may  have
been  available  in comparable transactions with  third  parties.
However,   no   unaffiliated  third   party   was   retained   to
independently  determine the fairness of the  transactions.   Our
policy   concerning  related  party  transactions  requires   the
approval of a majority of the disinterested directors.

Employment Relationships

Our  board  of directors approved employment agreements effective
November  1, 1994 for our officers and directors Fred  E.  Cooper
and David L. Purdy.

David L. Purdy, our chairman of the board, chief scientist and  a
director,  resigned  in  November 2000.    Fred  E.  Cooper,  our
president  and  a director, is a director on the BICO,  Coraflex,
and Petrol Rem boards.  He is also the CEO of BICO.   Anthony  J.
Feola,  our  director, is also a director on the BICO,  Coraflex,
and  Petrol Rem boards.  He is also the senior vice president  of
BICO.

Leases and Property

We  rent  an  office  condominium at 2275 Swallow  Hill  Road  in
Pittsburgh,  PA.   BICO  and its other  subsidiaries  have  their
Pittsburgh offices in the same office condominium and pay us rent
in the amount of $5,175 per month plus one-half of the utilities.

Three  of  our  current executive officers and/or  directors  and
three of our former directors are members of the eight-member 300
Indian  Springs Road Real Estate Partnership which in July  1990,
purchased  BICO's  real  estate in  Indiana,  PA,  and  each  has
personally  guaranteed the payment of lease  obligations  to  the
bank  providing the funding.  In 1999, after all our Indiana,  PA
operations were moved out of 300 Indian Springs Road location  to
Kolter Drive, the property was put up for sale.  The property was
sold  in  October  2000 for $475,000, and each  of  the  partners
received $12,698.  In 1990, the cost of the property to BICO  was
$1,084,852.  The property was sold to the Partnership subject  to
the  leaseback  provision and outstanding liens for approximately
$800,000;  BICO  received approximately $403,000  in  cash  as  a
result   of   the  sale-leaseback.   First  West  Virginia   Bank
determined  the  sale  price.  Each  member  of  the  Partnership
received  warrants  in  consideration  of  his  or  her  personal
guarantees.  The six members of the Partnership who are also  our
current or former officers and/or directors, David L. Purdy, Fred
E.  Cooper, Gary R. Keeling, Jack H. Onorato, Richard M. Erenberg
and  C.  Terry Adkins, each received warrants to purchase 100,000
shares  of BICO's common stock at an exercise price of  $.33  per
share  until  June 29, 1995 (which were extended until  June  29,
2000),  and  warrants to purchase 100,000 shares  of  our  common
stock at an exercise price of $.50 per share until June 29, 1995,
all  of  which expired unexercised.  The warrant exercise  prices
were  equal to the market prices of the common stock at the  time
of  issuance.    Mr. Keeling, who was not a director at the  time
of  the  transaction, joined the board in October 1991, became  a
vice  president in October 1992, and resigned from both positions
in  August 1997.  Mr. Adkins, who was not a director at the  time
of  the transaction, joined the board in March 1992 and became  a
vice president in October 1992; Mr. Adkins resigned as an officer
and  director  during fiscal 1998.  Mr. Onorato, who  was  not  a
director  at  the time of the transaction, was a  director  until
September  1992  when he became a director of  BICO  until  April
1994.   Mr. Erenberg, who was not a director at the time  of  the
transaction,  was  a  director until April 1993.   Mr.  Purdy,  a
director since our inception, resigned in November 2000.

Intercompany Agreements

License  and  Marketing  Agreement.  We  acquired  the  exclusive
marketing  rights for the noninvasive glucose sensor and  related
products  and  services from BICO in August 1989 in exchange  for
8,000,000  shares  of  our  common  stock.   That  agreement  was
canceled  with a cancellation agreement dated November 18,  1991,
and  superseded by a purchase agreement dated November 18,  1991.
The   cancellation  agreement  provides  that  BICO  retain   the
8,000,000  shares of our common stock, which BICO received  under
the license and marketing agreement.

Purchase  Agreement.  We entered into a purchase  agreement  with
BICO  dated  November 18, 1991. BICO conveyed to  us  its  entire
right,  title and interest in the noninvasive glucose sensor  and
its  development,  including its extensive knowledge,  technology
and  proprietary  information.  The  conveyance  includes  BICO's
patent received in December 1991.

In  consideration of the conveyance of its entire  right  in  the
noninvasive  glucose  sensor and its development,  BICO  received
$2,000,000.  In addition, we may endeavor, at our own expense, to
obtain  patents  on other inventions relating to the  noninvasive
glucose  sensor.  We also guaranteed BICO the right  to  use  the
patented   technology  in  the  development  of  BICO's  proposed
implantable  closed-loop system, a related system  in  the  early
stages of development.

In  December 1992, we, along with BICO, executed an amendment  to
the  purchase  agreement, which clarified terms of  the  purchase
agreement.   The  amendment  defines  "sensors"  to  include  all
devices  for the noninvasive detection of analytes in mammals  or
in  other  biological  materials.   In  addition,  the  amendment
requires  BICO to pay us a royalty connection with any  sales  by
BICO of its proposed closed-loop system.

Research and Development Agreement.  We entered into an agreement
with  BICO dated January 20, 1992 in connection with the research
and  development of the noninvasive glucose sensor.   Under  that
agreement,  BICO will continue the development of the noninvasive
glucose  sensor,  including the fabrication  of  prototypes,  the
performance of clinical trials, and the submission to the FDA  of
all necessary applications in order to obtain market approval for
the  noninvasive glucose sensor.  BICO will also manufacture  the
models  of the noninvasive glucose sensor to be delivered  to  us
for  sale.   Upon  the  delivery of  the  completed  models,  the
research and development phase of the noninvasive glucose  sensor
will be deemed complete.

We  agreed  to  pay  BICO $100,000 per month for  indirect  costs
beginning  April  1,  1992,  during  the  15  year  term  of  the
agreement,  plus  all direct costs, including labor.   BICO  also
received  a first right of refusal for any program undertaken  to
develop,  refine or improve the noninvasive glucose  sensor,  and
for  the  development of other related products.  In  July  1995,
BICO  and we agreed to suspend billings, accruals of amounts  due
and payments under the research and development agreement pending
the FDA's review of the sensor.

Manufacturing Agreement.  We entered into an agreement with  BICO
dated  January  20, 1992, whereby BICO will act as the  exclusive
manufacturer of the noninvasive glucose sensor and other  related
products.   We  will provide BICO with purchase  orders  for  the
products  and  will  endeavor to provide  projections  of  future
quantities  needed.  The original manufacturing agreement  called
for  the  products to be manufactured and sold at a price  to  be
determined  in  accordance with the following  formula  that  was
amended in July 1994, and is now as follows: costs of goods  sold
(defined  as  BICO's  aggregate  cost  of  materials,  labor  and
associated  manufacturing overhead) + a fee equal  to  one  third
(1/3)  of the difference between the cost of goods sold  and  our
sales  price of each sensor.  Our sales price of each  sensor  is
defined  as  the price paid by any purchaser, whether  retail  or
wholesale,  directly to us for each sensor.  Subject  to  certain
restrictions,  BICO  may  assign its manufacturing  rights  to  a
subcontractor  with  our  written  approval.   The  term  of  the
agreement is fifteen years.

Warrants

During  Fiscal 1998 through Fiscal 2000, we issued the  following
warrants to our officers and directors:

On  January  27, 1999, we issued warrants to purchase our  common
stock  at $.50 per share until January 27, 2004 to: Fred  Cooper:
200,000 shares; and David Purdy: 200,000 shares.

On  September  8,  1999, we issued warrants to  purchase  100,000
shares  of our common stock at $.50 per share until September  8,
2004 to Patrick H. O'Neill.

On April 4, 2000, we issued warrants to purchase our common stock
at  $.50  per share until April 4, 2005 to: Fred Cooper:  500,000
shares;  David  Purdy: 500,000 shares; Anthony J. Feola:  200,000
shares; and Patrick O'Neill: 25,000 shares.

                            PART IV

Item 14. Exhibits, Financial Statements and Reports on Form 8-K


1.   Consolidated Financial Statements

The  consolidated financial statements, together with the  report
thereon of the Company's independent accountants, are included in
this report on the pages listed below.


(a)  Consolidated Financial Statements                             Page

     Report of Independent Accountants Goff Backa Alfera &
     Company, LLC..........................................         F-1

     Consolidated Balance Sheets as of September 30, 2000;
     September 30, 1999...................................          F-3

     Consolidated  Statements of Operations For  the  Fiscal
     Years Ended September 30, 2000, 1999, 1998, 1997, 1996;
     and July 5, 1989 (inception) through September 30, 2000        F-4

     Consolidated  Statements  of Changes  in  Stockholders'
     Equity  for the Fiscal Years Ended September 30,  2000,
     1999, 1998, 1997, 1996, 1995, 1994; 1993; 1992; the  12
     months ended December 31, 1991, 1990, and from July  5,
     1989 (inception) through December 31, 1989. . . . . . .        F-5

     Consolidated  Statements of Cash Flows for  the  Fiscal
     Years Ended September 30, 2000, 1999, 1998, 1997, 1996;
     and July 5, 1989 (inception) through September 30, 2000.       F-6

     Notes to Consolidated Financial Statements for the Fiscal
     Year Ended September 30, 2000...........................       F-7

2.   Exhibits

(a)  Reports on Form 8-K

     The  Company filed a Form 8-K on November 14, 2000 for  the
     event dated November 9,  2000

     The  Company filed a Form 8-K on November 14, 2000  for  the
     event dated November 13, 2000

     The  Company filed a Form 8-K on November 14, 2000  for  the
     event dated November 13, 2000

     The  Company filed a Form 8-K on November 15, 2000  for  the
     event dated November 8, 2000

     The  Company filed a Form 8-K on November 27, 2000  for  the
     event dated November 22, 2000

     The Company filed a Form 8-K/A on December 12, 2000 to amend
     the Form 8-K filed November 15, 2000

(c)  Exhibits Required by Item 601 of Regulation S-K

     The following Exhibits required by Item 601 of Regulation S-
     K  are  filed  as part of this report.  Except as  otherwise
     noted,  all  exhibits  are incorporated  by  reference  from
     Exhibits to Form S-1 (Registration #33-56574) filed December
     31, 1992 or from exhibits to Form 10-K filings subsequent to
     that date.

3.1       Articles of Incorporation of Diasensor.com, Inc.,
          as amended

3.2       Amended and Restated Bylaws of Diasensor.com, Inc.

4.1       Form   of   Specimen  Common  Stock  Certificate   of
          Diasensor.com, Inc.

10.1      Purchase Agreement dated as of November 18,  1991
          between Diasensor.com, Inc. and Biocontrol Technology, Inc.

10.2      Manufacturing Agreement dated as of  January  20, 1992,
          between Diasensor.com, Inc. and Biocontrol Technology, Inc.

10.3      Research  and Development Agreement dated  as  of
          January  20,  1992  between  Diasensor.com,  Inc.   and
          Biocontrol Technology, Inc.

10.4      Lease   dated   as  of  May  1,   1992   between
          Diasensor.com, Inc. and Biocontrol Technology, Inc.

10.5      First Amendment to Purchase Agreement dated as of
          December 8, 1992 between Diasensor.com, Inc. and
          Biocontrol Technology, Inc.

10.6(1)   Amendment to Manufacturing Agreement dated as  of
          June 7, 1994 between Diasensor.com, Inc. and Biocontrol
          Technology, Inc.

10.7(1)   Deferral  Agreement, dated as of  July  1,  1994,
          between Diasensor.com, Inc. and Biocontrol Technology, Inc.

10.8      Deferral Agreement dated as of September 30, 1994
          between  Diasensor.com, Inc. and Biocontrol Technology, Inc.

10.9      Employment Agreement dated as of November 1, 1994
          between Diasensor.com, Inc. and Fred E. Cooper

10.10     Employment Agreement dated as of November 1, 1994
          between Diasensor.com, Inc. and David L. Purdy

10.11(2)  Letter of Resignation of director C. Terry Adkins

10.12(3)  Letter of Resignation of director Patrick H. O'Neill

10.13(4)  Letter of Resignation of director David L. Purdy

(1)  Incorporated by reference from Exhibit with this title filed
     with  the  Company's Form S-1 filed August 17, 1994  at  33-
     82796.

(2)  Incorporated by reference from Exhibit with this title filed
     with the Company's Form 8-K dated August 29, 1997.

(3)  Incorporated by reference from Exhibit with this title filed
     with the Company's Form 8-K dated November 14, 2000.

(4)  Incorporated by reference from Exhibit with this title filed
     with the Company's Form 8-K dated November 14, 2000.


                           SIGNATURES

Based  on  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized, on the 22nd day of December 2000.

                                       DIASENSOR.COM, INC.

                               By:    /s/ Fred E. Cooper
                                      Fred E. Cooper, President,
                                      Director, principal
                                      executive officer,
                                      principal financial
                                      officer and principal
                                      accounting officer


Based on 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.

     Signature                  Title               Date


 /s/ Anthony J. Feola           Director            December 22, 2000
     Anthony J. Feola


_______________________________
1 American Diabetes Association, Diabetes Facts and Figures,
www.diabetes.org
2 American Diabetes Association, Diabetes Facts and Figures,
www.diabetes.org
3 American Diabetes Association, Diabetes Facts and Figures,
www.diabetes.org

                Goff, Backa, Alfera & Company, LLC
                   CERTIFIED PUBLIC ACCOUNTANTS
                   ----------------------------

                     3325 Saw Mill Run Blvd.
                   Pittsburgh, PA  15227-2736


           Report of Independent Certified Public Accountants



Independent Auditors' Report

Board of Directors
Diasensor.com, Inc.

     We have audited the accompanying consolidated balance sheets
of Diasensor.com, Inc. (a development stage company) as of
September 30, 2000 and 1999, and the related statements of
operations, changes in stockholders' equity and cash flows for
each of the three years in the period ended September 30, 2000,
and for the period from July 5, 1989 (inception) through
September 30, 2000.  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 audits. The financial statements of Diasensor.com, Inc. (a
development stage company) as of September 30, 1997, and for the
period from July 5, 1989 (inception) through September 30, 1997,
were audited by other auditors whose report dated December 30,
1997, expressed an unqualified opinion on these statements.

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

     In our opinion, such financial statements present fairly, in
all material respects, the consolidated financial position of
Diasensor.com, Inc. as of September 30, 2000 and 1999, and the
results of its operations and its cash flows for each of the
three years in the period ended September 30, 2000, and for the
period from July 5, 1989 (inception) through September 30, 2000,
in conformity with generally accepted accounting principles.

     The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  As discussed in note B to the financial statements, the
Company is in the development stage and has incurred losses from
operations and negative cash flows from operations for each of
the three years in the period ended September 30, 2000 and from
July 5, 1989 (inception) through September 30, 2000 raising
substantial doubt about its ability to continue as a going
concern.  Management's plans in regard to these matters are also
described in note B.  The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty, including adjustments relating to the recoverability
and classification of recorded assets that might be necessary in
the event the Company cannot continue to meet its financing
requirements and achieve productive operations.

     In addition, as discussed in notes B and F, the Company is
dependent upon its parent, BICO, Inc. to continue to perform and
fund contractual arrangements related to research, development
and manufacturing activities of products for the Company.  There
has been and continues to be substantial doubt about BICO's
ability to continue as a going concern due to their recurring
losses from operations and negative cash flow.  These financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.


/s/ Goff Backa Alfera & Company, LLC

Pittsburgh, Pennsylvania
December 9, 2000

<PAGE>1
                               Diasensor.com, Inc.
                         (A Development Stage Company)

                          CONSOLIDATED BALANCE SHEETS

                                                    September 30,  September 30,
     ASSETS                                              2000           1999
                                                    ------------   ------------
Current assets
  Cash and cash equivalents (note A)                 $   113,098    $     6,525
  Prepaid expenses                                          -               130
                                                     -----------    -----------
               Total current assets                      113,098          6,655

Property and equipment-at cost(note A)
  Furniture and fixtures                                  42,750         42,750
                                                     -----------    -----------
                                                          42,750         42,750
  Less accumulated depreciation                           34,438         28,331
                                                     -----------    -----------
                                                           8,312         14,419
                                                     -----------    -----------
Other assets
 Due from BICO(notes A and G)                               -         1,458,809
 Due from Subsidiaries of BICO (notes A and G)            19,838           -
 Investment in unconsolidated subsidiaries(note C)     1,141,112           -
 Allowance for doubtful account(note G)                     -        (1,458,809)
 Security deosit (note D)                                 17,250         17,250
                                                     -----------    -----------
                                                       1,178,200         17,250
                                                     -----------    -----------
     TOTAL ASSETS                                    $ 1,299,610    $    38,324
                                                     ===========    ===========

     LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
  Due to BICO (notes A and G)                        $ 1,725,920    $      -
  Accrued payroll and withholdings(note G)                91,840         91,214
                                                     -----------    -----------
            Total current liabilities                  1,817,760         91,214

Commitments and Contingencies (notes B and H)

Stockholders' equity (deficiency) (note I)
  Preferred stock, 1,000,000 shares authorized, none issued
  Common stock, 40,000,000 shares of $.01 par value
  authorized; issued and outstanding
  22,980,051 at Sep. 30, 2000 and
  Sep. 30, 1999                                          229,801        229,801
  Additional paid-in capital                          26,892,071     26,892,071
  Warrants                                            18,684,017     18,453,839
  Deficit accumulated during the
  development stage                                  (46,324,039)   (45,628,601)
                                                     -----------    -----------
                                                        (518,150)       (52,890)
            TOTAL LIABILITIES AND                    -----------    -----------
              STOCKHOLDERS' EQUITY (DEFICIENCY)      $ 1,299,610    $    38,324
                                                     ===========    ===========
[FN]
The accompanying notes are an integral part of this statement.
<PAGE>3
                                 Diasensor.com, Inc.
                         (A Development Stage Company)

                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                        From July 5, 1989
                                         For the year ended    For the year ended  For the year ended  (inception) thru
                                         September 30, 2000    September 30,1999   September 30, 1998   September 30, 2000
                                         ------------------    ------------------  ------------------   ------------------
<S>                                        <C>                  <C>                  <C>                  <C>
Research and development expenses
 (notes A, G, and H)                       $       -            $       -             $      -           $   10,556,405

General and administrative expenses           2,110,922            1,354,066              669,764            15,383,053

Provision for (recovery of) doubtful
 accounts(note G)                            (1,458,809)            (823,670)           2,282,479                  -

Warrant extensions (note I)                        -                 272,078               25,000            18,184,986

Technology and patent rights acquired (note G)     -                    -                    -                2,650,000

Interest expense                                   -                    -                    -                   10,529

Other income - (note E)                         (62,100)             (48,973)             (62,914)             (633,764)

Loss on unconsolidated subsidiaries (note C)    105,425                 -                    -                  105,425

Other expense                                      -                    -                    -                   37,405
                                           --------------       --------------       --------------       ---------------
Net loss                                   $   (695,438)        $   (753,501)        $ (2,914,329)       $  (46,294,039)
                                           ==============       ==============       ==============       ===============
Net loss per common share (note A)         $      (0.03)        $      (0.03)        $      (0.13)       $        (2.41)
                                           ==============       ==============       ==============       ===============

<FN>
The accompanying notes are an integral part of this statement.

</TABLE>
<PAGE>4
<TABLE>

                                 Diasensor.com, Inc.
                         (A Development Stage Company)

  CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Note I)

       For the period July 5, 1989 (inception) through September 30, 2000


                                                                                                           Deficit     Total
                                                                                                        Accumulated   Stock-
                                                                        Common   Additional              During the   Holders'
                                                   Common   Stock       Stock     Paid-in               Development   equity
                                                   Shares   Amount   Subscribed  Capital    Warrants       Stage     (Deficit)
                                                ---------- --------- ---------- ---------- -----------  ------------ -----------
<S>                                             <C>         <C>      <C>        <C>        <C>         <C>          <C>
July 10,1989 Issuance of stock to BICO in connection with
   obtaining License and Marketing Agreement     8,000,000  $ 80,000  $       -  $       -   $       -   $        -   $   80,000
 Aug. 21 through Dec. 31, 1989 (various dates)
   First Private Placement                         656,000     6,560          -    321,440           -            -      328,000
 Sep. 29, 1989 - Issuance of stk in connection
   with patent rights acquired by BICO           1,040,000    10,400          -    509,600           -            -      520,000
 Net loss                                                -         -          -          -           -      (80,000)     (80,000)
                                                ---------- --------- ---------- ---------- -----------  ------------ -----------
Balances at December 31, 1989                    9,696,000    96,960          -    831,040           -      (80,000)     848,000
 Jan. 1 to Dec. 31, 1990 (various dates)
    First private Placement                      1,240,000    12,400          -    607,600           -            -      620,000
 May 1, 1990 through Aug. 31, 1990 (various dates)
    First Private Placement
    Exchange of debt for shares of stock           136,000     1,360          -     66,640           -            -       68,000
 Warrants issued - to BICO                               -         -          -          -      27,500            -       27,500
 Net loss                                                -         -          -          -           -     (497,628)    (497,628)
                                                ---------- --------- ---------- ---------- -----------  ------------ -----------
Balances at December 31, 1990                   11,072,000   110,720          -  1,505,280      27,500     (577,628)   1,065,872
 Jan. 1 to Dec. 31, 1991 (various dates)
   First Private Placement                         768,000     7,680          -    376,320           -            -      384,000
   Second Private Placement                      3,948,250    39,482          -  3,896,468           -            -    3,935,950
 December 31, 1991 - common stock subscribed
   62,500 shares at $ 1                                  -         -        625     61,875           -            -       62,500
 Warrants issued - to BICO                               -         -          -          -      19,085            -       19,085
 Net loss                                                -         -          -          -           -   (3,650,203)  (3,650,203)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at December 31, 1991                   15,788,250   157,882        625  5,839,943      46,585   (4,227,831)   1,817,204
 Jan. 1 to Sep. 30, 1992 (various dates)
   Second Private Placement                        986,750     9,868          -    976,883           -            -      986,751
   Third Private Placement                           7,212        72          -     25,170           -            -       25,242
   Fourth Private Placement                        120,000     1,200          -    418,800           -            -      420,000
 Jan. 1992 - Exchange of debt for share of stk     235,000     2,350          -    232,650           -            -      235,000
 Jan. 1992 - Common stk subscriptions recieved      62,500       625       (625)         -           -            -            0
 Net loss                                                -         -          -          -           -   (2,846,584)  (2,846,584)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1992                  17,199,712   171,997          -  7,493,446      46,585   (7,074,415)     637,613
 Sep. 30, 1992 to Oct. 31,1992(various dates)
   Fourth Private Placement                        180,000     1,800          -    628,200           -            -      630,000
 June 1993 thru July 1993 warrants exercised        25,000       250          -     28,520      (3,770)           -       25,000
 Net loss                                                -         -          -          -           -   (3,763,101)  (3,763,101)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1993                  17,404,712   174,047          -  8,150,166      42,815  (10,837,516)  (2,470,488)
 Oct. 1, 1993 to Sep. 30, 1994(various dates)
   Registered Stock                                230,961     2,309          -    783,936           -            -      786,245
 Consulting service in exchange for stock            7,200        72          -     25,128           -            -       25,200
 Treasury Stock purchase                           (10,000)     (100)         -     (4,900)          -      (30,000)     (35,000)
 Treasury Stock sale                                10,000       100          -     34,900           -            -       35,000
 Nov. 1993 thru Aug. 1994 warrants exercised       105,000     1,050          -     38,950      (2,500)           -       37,500
 June 1994 Private Placement subject to Reg. S      91,667       917          -    287,834           -            -      288,751
 Net Loss                                                -         -          -          -           -   (5,145,081)  (5,145,081)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1994                  17,839,540   178,395          -  9,316,014      40,315  (16,012,597)  (6,477,873)
 Consulting service in exchange for stock           17,500       175          -     61,075           -            -       61,250
 May 1995 Exchange of debt for shrs of stk       3,000,000    30,000          - 10,470,000           -            -   10,500,000
 Oct. 1994 thru Sep. 1995 warrants exercised        29,512       295          -      9,771           -            -       10,066
 Warrant extensions                                      -         -          -          -   4,650,000            -    4,650,000
 Oct. 1, 1994 to Sep. 30, 1995(various dates)
    Registered Stock                               437,768     4,378          -  1,497,114           -            -    1,501,492
 July 12, 1995 unregistered stock to BICO        1,200,000    12,000          -  4,188,000           -            -    4,200,000
 Net Loss                                                -         -          -          -           -  (10,361,514) (10,361,514)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1995                  22,524,320   225,243          - 25,541,974   4,690,315  (26,374,111)   4,083,421
 Consulting service in exchange for stock:Reg.      10,000       100          -     34,900           -            -       35,000
 Consulting service in exchange for stock:Unreg.     5,000        50          -     17,450           -            -       17,500
 Oct. 1995 thru Sep. 1996 warrants exercised        56,000       560          -     27,440           -            -       28,000
 Warrant extensions                                      -         -          -          -   7,644,033            -    7,644,033
 Oct. 1, 1995 to Sep. 30, 1996(various dates)
   Registered Stock                                410,731     4,108          -   1,361,047          -            -    1,365,155
 Net Loss                                                -         -          -          -           -   (9,021,823)  (9,021,823)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1996                  23,006,051   230,061          -  26,982,811 12,334,348  (35,395,934)   4,151,286
 Warrant extensions                                      -         -          -          -   5,593,875            -    5,593,875
 Oct. 1, 1996 to Sep. 30, 1997(various dates)
   Registered Stock                                (27,000)     (270)         -    (94,230)          -            -      (94,500)
 Net Loss                                                -         -          -          -           -   (6,564,837)  (6,564,837)
                                                ---------- --------- ---------- ----------  ----------  ------------ -----------
Balances at September 30, 1997                  22,979,051   229,791          - 26,888,581  17,928,223  (41,960,771)   3,085,824
 Warrant extensions                                      -         -          -          -      25,000            -       25,000
 Oct. 1, 1997 to Sep. 30, 1998(various dates)
    Registered Stock                                 1,000        10          -      3,490           -            -        3,500
 Net Loss                                                -         -          -          -           -   (2,914,329)  (2,914,329)
                                                ---------- --------- ---------- ----------  ----------   ----------  -----------
Balances at September 30, 1998                  22,980,051   229,801          - 26,892,071  17,953,223  (44,875,100)     199,995
 Warrants issued for services                            -         -          -          -     228,538            -      228,538
 Warrant extensions                                      -         -          -          -     272,078            -      272,078
 Net Loss                                                -         -          -          -           -     (753,501)    (753,501)
                                                ---------- --------- ---------- ----------  ----------  -----------   ----------
Balances at September 30, 1999                  22,980,051  $229,801          - 26,892,071  18,453,839  (45,628,601)     (52,890)
 Warrants issued for services                            -         -          -          -           -            -            -
 Warrant extensions                                      -         -          -          -     230,178            -      230,178
 Net Loss                                                -         -          -          -           -     (695,438)    (695,438)
                                                ---------- --------- ---------- ----------  ----------  -----------   ----------
Balances at September 30, 2000                  22,980,051  $229,801 $        -$26,892,071 $18,684,017 $(46,324,039)  $ (518,150)
                                                ========== ========= ========== ==========  ==========  ===========   ===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>5
<TABLE>

                                 Diasensor.com, Inc.
                         (A Development Stage Company)

                      CONSOLIDATED STATEMENT OF CASH FLOWS (Note J)

<CAPTION>
                                                                                                       From July 5, 1989
                                         For the year ended    For the year ended  For the year ended  (inception) thru
                                         September 30, 2000    September 30, 1999  September 30, 1998  September 30, 2000
                                         ------------------    ------------------  ------------------   ------------------
<S>                                        <C>                   <C>                 <C>                 <C>

Cash flows from operating activities:
 Net loss                                   $   (695,438)         $  (753,501)        $  (2,914,329)      $ (46,294,039)
 Adjustments to reconcile net loss to net
 cash used by operating activities:
  Depreciation                                     6,107                6,074                13,615              81,734
  Amortization                                   154,247                 -                     -                154,247
  Provision for (recovery of)doubtful
    accounts                                  (1,458,809)            (823,670)            2,282,479                -
  Impairment loss                                   -                    -                   14,367              14,367
  Loss on unconsolidated subsidiaries            105,425                 -                     -                105,425
  Stock issued in exchange for services             -                    -                     -                138,950
  Stk issued for License & Marketing Agreement      -                    -                     -                 80,000
  Warrants issued for services                   230,178              228,538                  -                458,716
  Warrant extensions                                -                 272,078                25,000          18,184,986
  Inventory deposit - BICO                          -                    -                     -             (1,000,000)
  (Increase) decrease in prepaid expenses            130                5,662                 7,906                 -
  Increase in payable due to BICO              1,763,314                 -                     -             12,263,314
  (Increase)decrease in rec. due from BICO Sub.  (19,838)                -                     -                (19,838)
  Increase (decrease) in accounts payable           -                 (23,606)               14,173                 -
  Increase in accrued payroll and withholdings       626               22,493                55,735              91,840
  Increase in other assets                          -                 (17,250)                 -                (17,250)
                                            -------------        -------------         -------------       -------------
Net cash used in operating activities             85,942           (1,083,182)             (501,054)        (15,757,548)

Cash flows from investing activities:
  Disposal of property and equipment                -                 175,000                 -                 175,000
  Purchase of property and equipment                -                    -                    -                (279,413)
  Investment - MicroIslet                       (900,000)                -                    -                (900,000)
  Investment - Diabecore                        (500,784)                -                    -                (500,784)
  (Increase)in notes rec-related parties            -                    -                (125,000)            (125,000)
  (Increase)in interest rec-related parties         -                  (4,266)              (9,272)             (13,538)
                                            -------------        -------------         -------------       -------------
Net cash used in investing activities         (1,400,784)             170,734             (134,272)          (1,643,735)

Cash flows from financing activities:
  Advances to BICO                              (437,405)             (97,438)          (2,853,665)          (7,498,369)
  Repayment of advances to BICO                1,858,820              974,600            1,656,232            9,166,099
  Proceeds from issuance of common stock            -                    -                   3,500           10,971,834
  Proceeds from issuance of common stk to BICO      -                    -                    -               4,200,000
  Proceeds from warrants exercised                  -                    -                    -                 118,066
  Purchase from treasury stock                      -                    -                    -                 (35,000)
  Proceeds from Regulation S                        -                    -                    -                 288,751
  Proceeds from issuance of notes payable           -                    -                    -                 303,000
                                            -------------       --------------          ------------       --------------
Net cash provided (used)by fin. activities     1,421,415              877,162           (1,193,933)          17,514,381
                                            -------------       --------------          ------------       --------------
Net increase(decrease)in cash and cash equiv.    106,573              (35,286)          (1,829,259)             113,098
Cash and cash equivalents at beg of period         6,525               41,811            1,871,070                    -
                                            -------------       ---------------         ------------       --------------
Cash and cash equivalents at end of period  $    113,098        $       6,525           $   41,811         $    113,098
                                            ============        ==============          ============       ==============

The accompanying notes are an integral part of this statement.

</TABLE>



                       DIASENSOR.COM, INC.
                  (A Development Stage Company)

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       September  30, 2000



NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   ORGANIZATION

Diasensor.com,  Inc.  (the  Company)  was  incorporated  in   the
Commonwealth  of Pennsylvania on July 5, 1989 as a  wholly  owned
subsidiary of BICO, Inc. (BICO).  BICO owned approximately 52% of
the  stock of the Company at September 30, 2000.  The Company and
BICO  are currently developing a Noninvasive Glucose Sensor  (the
Sensor),  which management believes will be able to  measure  the
concentration  of glucose in human tissue without  requiring  the
drawing  of  blood.  The Company plans to market  the  Sensor  to
diabetics through their doctors and is currently negotiating with
domestic and international distribution organizations.

The  consolidated financial statements include  the  accounts  of
Diasensor.com  UK LTD., a 100% owned subsidiary of Diasensor.com,
Inc.  as  of  September  30, 2000.  All significant  intercompany
accounts and transactions have been eliminated.

2.   CASH AND CASH EQUIVALENTS

For  purposes  of the consolidated statement of cash  flows,  the
Company  considers  all highly liquid investments  with  original
maturities  of three months or less to be cash equivalents.   The
Company  places temporary cash deposits in financial institutions
and such deposits may be in excess of the FDIC insurance limit.

3.   PROPERTY AND EQUIPMENT

Property  and  equipment  are  accounted  for  at  cost  and  are
depreciated  over  their estimated useful  lives  (37  years  for
property  and  10 years for equipment) on a straight-line  basis.
The  carrying  value of property and equipment  are  reduced  for
impairment losses determined by management.

4.   INCOME TAXES

The  Company  previously adopted Financial  Accounting  Standards
Board  Statement No. 109 (FAS 109), Accounting for Income  Taxes,
which  requires the asset and liability method of accounting  for
income  taxes.   Enacted  statutory  tax  rates  are  applied  to
temporary  differences arising from the differences in  financial
statement  carrying amounts and the tax basis of existing  assets
and  liabilities.  Due to the uncertainty of the  realization  of
income  tax  benefits (Note F), the adoption of FAS  109  had  no
effect on the financial statements of the Company.

5.   ESTIMATES AND ASSUMPTIONS

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

6.   NET LOSS PER COMMON SHARE

Net loss per common share is based on the weighted average
number of common  shares  outstanding  which  amounted   to
22,980,051  for  the  years  ended  September  30,  2000 and
September  30, 1999  and  22,979,884  for  the  year  ended
September 30, 1998. The loss per share does not include common
stock equivalents  since  the  effect would be anti-dilutive.

For the period from July 5, 1989 (inception) to September 30,
2000,  net  loss  per common share is based  on  the  weighted
average number of common shares outstanding and the number  of
common  shares issuable on the exercise of 1,708,000  warrants
issued  in  1992; reduced by 488,000 common shares  that  were
assumed  to  have  been purchased with the proceeds  from  the
exercise  of  the warrants at an assumed price  of  $3.50  per
share.   The inclusion of the warrants in the loss  per  share
calculation  is  required by the rules of the  Securities  and
Exchange  Commission  relative  to  the  initial  registration
statement  which  included the Company's financial  statements
through  the  period ended March 31, 1993.   The  registration
statement  became  effective  July  19,  1993.   The  weighted
average  number of common shares including the effect  of  the
conversion  of the warrants for the period from July  5,  1989
(inception) to September 30, 2000 amounted to 19,656,059.

7.   RESEARCH AND DEVELOPMENT

All research and development costs incurred by the Company, or
by  BICO on its behalf, are charged to operations as incurred.
Patent and technology rights acquired from BICO (Note G)  have
also been written off as a charge to operations.

8.   TREASURY STOCK

The Company records treasury stock transactions using the par
value method.

9.   INTERCOMPANY ACTIVITY

Certain expenses are allocated by management between the Company,
BICO  and BICO's subsidiaries.  These expenses are reimbursed  to
the paying entity through the use of intercompany accounts, which
accounts  are also used to account for non-interest bearing  cash
advances between the companies.

10.  COMMON STOCK WARRANTS

The Company recognizes cost on warrants granted or extended based
upon  the  minimum value method.  There is currently  no  trading
market  for  the Company's warrants or common stock.  Under  this
method, the warrants are valued by reducing the exercise price of
the  underlying stock by the present value of the exercise  price
discounted  at  an estimated risk-free interest rate  of  5%  and
assuming no dividends.

11.  COMPREHENSIVE INCOME

The Company's consolidated net income (loss) is substantially the
same  as  comprehensive  income  required  to  be  disclosed   by
Financial Accounting Standards Board Statement No. 130.

12.  CONCENTRATION OF CREDIT RISK

At September 30, 2000, financial instruments which potentially
subjected  the  Company to significant concentrations  of  credit
risk  consisted  principally  of  investments  in  unconsolidated
subsidiaries.   In 1999, the Company was potentially  subject  to
significant  concentrations of credit risk related to receivables
from BICO.  All receivables from BICO were repaid as of September
30, 2000.

NOTE B - OPERATIONS

The  Company  is  developing the Sensor  and  has  not,  as  yet,
achieved a commercially marketable product.  The ability  of  the
Company  to  continue  in existence is dependent  on  its  having
sufficient   financial  resources  to  maintain  operations,   to
complete  the  research and development necessary to successfully
bring  the Sensor to market, and for marketplace acceptance.  The
Company has no other commercial products and is dependent on  the
successful development of the Sensor technology.  The Company has
had  no sales of its common stock over the last two fiscal years.
An  intercompany receivable from BICO of $1,458,809 was collected
during  the  year ended September 30, 2000 and the proceeds  were
used  to  finance  the  Company's operations.   In  addition,  an
increase  of  $1,725,920  in  the  amount  payable  to  BICO  was
recognized  during the year and this increase represents  amounts
provided by BICO to fund the Company's operations.

The  Company is in the development stage, and accordingly, it has
presented  cumulative information on results of operations,  cash
flows, and changes in stockholders' equity since inception.

The  Company  has incurred significant losses and  negative  cash
flows  from operations from inception through September 30,  2000
and  has  a  significant accumulated deficit as of September  30,
2000, raising substantial doubt about its ability to continue  as
a  going  concern.  The Company has financed its losses  and  its
research  and  development  program,  the  billing  on  which  is
temporarily  suspended, primarily from the sale of the  Company's
common  stock  through private placements.   Management  believes
that  its available cash resources, including funds to be  raised
by  the Company or its affiliates will be sufficient to fund  its
operations through the year ending September 30, 2001.

As  a  result  of  agreements with BICO relating to development  and
manufacture  of  the  Noninvasive Glucose  Sensor,  the  Company  is
dependent  on  BICO  for  substantially all  of  its  activities  in
connection with the development and manufacture of the Sensor, other
than   its   marketing  efforts.   Pursuant  to  the  Research   and
Development  Agreement, BICO has undertaken the development  of  the
Sensor and has assumed certain other obligations.  In July 1995, the
Company and BICO agreed to suspend billings, accruals of amounts due
and payments pursuant to the R&D Agreement pending FDA review of the
Sensor.  No amounts are due pursuant to the R&D Agreement which have
not been recorded, and no adjustments will be made retroactively  or
cumulatively if and when billings resume.  Management believes  that
billings  may resume, based on negotiations between both  companies,
if  and when the Diasensor 2000 is approved for marketing.  Pursuant
to a manufacturing agreement between BICO and the Company, BICO will
manufacture  the  Sensor  once development  is  completed.   In  the
absence of such agreements with BICO, the research, development  and
manufacture   of  the  Sensor  could  not  continue   as   currently
contemplated.    BICO's   ability  to  successfully   complete   the
development  of  the  Sensor, to obtain FDA  approval  in  a  timely
fashion  and  to manufacture production units of the Sensor  without
significant  delays  or defects will directly affect  the  Company's
business  and  ability to achieve profitable operations.   BICO  has
experienced,  and  continues to experience, substantial  losses  and
financial  difficulties.  The consolidated financial statements  for
BICO for the year ended December 31, 1999 included disclosures which
referred to the existence of substantial doubt about BICO's  ability
to  continue  as a going concern. BICO has a net loss for  the  nine
month  period  ended September 30, 2000 of  $25,611,501  (unaudited)
and  for  the  fiscal year ended December 31, 1999  of  $38,072,578,
compared  to a net loss for the fiscal year ended December 31,  1998
of  $22,402,644.  As of December 31, 1999, and September  30,  2000,
BICO's   accumulated  deficit  was  $181,174,458  and   $206,785,959
(unaudited) respectively.

In  the  past, BICO has financed its own operations from proceeds
generated  from  private and public sales of its securities,  the
issuance  of  debt  in the form of convertible  debentures,  from
funds paid by the Company to BICO for research and development of
the  Noninvasive  Glucose Sensor and from  intercompany  advances
from  the  Company and other BICO subsidiaries.  The  failure  of
BICO  to  continue  to  exist as a going  concern  would  have  a
material adverse effect on the Company's business and ability  to
continue operations.

If  BICO does not continue as a going concern, the Company  would
need to rely on other arrangements to develop and manufacture the
Sensor or to perform that work itself.  There can be no assurance
that  the  Company would be able to find acceptable alternatives,
negotiate   acceptable   collaborative  arrangements   with   any
alternative organizations, or to perform the work itself.

NOTE C - INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

In  January  2000,  the  Company acquired  a  ten  percent  (10%)
interest in MicroIslet, Inc. for an investment of $500,000.   The
Company  made additional investments of $400,000 during the  year
bringing  its total interest in MicroIslet to 14%.   The  Company
has an option to purchase an additional 6% interest in MicroIslet
and  it  is management's intention to exercise this option.   The
Company  is  represented on the board of directors of MicroIslet.
MicroIslet  is  a California company, which has licensed  several
diabetes  research  technologies  from  Duke  University  with  a
specific   focus  on  optimizing  microencapsulated  islets   for
transplantation.

In  March  2000,  the Company acquired an equity  interest  in
Diabecore  Medical, Inc., a Toronto-based company  working  to
develop  a  new  insulin for the treatment  of  diabetes,  for
$500,784.   With  this initial investment,  the  Company  owns
15.9%  of  Diabecore.   The  Company  also  owns  warrants  to
purchase  additional shares of Diabecore, which, if exercised,
will   increase  the  Company's  ownership  to  35%.   It   is
management's  intention  to  exercise  these  warrants.    The
Company is represented on the board of directors of Diabecore.

These  investments  are being reported on the  equity  basis  and
differences between the investment and the underlying net  assets
of   the  unconsolidated  subsidiaries  are  being  amortized  as
goodwill over a 5-year period.  The Company's investments in  the
underlying   assets  and  the  unamortized   goodwill   of   each
unconsolidated  subsidiary  as  of  September  30,  2000  are  as
follows:


                         Investment
   Unconsolidated            in       Unamortized
     Subsidiary          Underlying    Goodwill      Total
                         Net Assets
MicroIslet, Inc.          89,657        635,409      725,066
Diabecore Medical,Inc.    37,003        379,043      416,046
                         -------      ---------    ---------
Total                   $126,660     $1,014,452   $1,141,112
                         =======      =========    =========

NOTE D - LEASE

In December 1998 the Company sold its building and leased it back
under an agreement which requires monthly rent of $5,750 for five
years  beginning  on  January  1, 1999.   Future  minimum  rental
payments  under  this lease are $69,000 for each  of  the  fiscal
years  ending on September 30, 2001 through 2003 and $17,250  for
the final three months of the lease concluding December 31, 2003.
The Company paid a security deposit of $17,250 upon entering into
this lease agreement.

NOTE E - OTHER INCOME

Other  income for the years ending September 30, 2000,  1999  and
1998 consists of $ 0, $6,445 and $20,386 of interest income and $
62,100, $42,528 and $42,528 of rental income for their respective
periods.   The total rental income for the years ended  September
30,  2000, 1999 and 1998, was from BICO and its subsidiaries  for
office space.

NOTE F - INCOME TAXES

As of September 30, 2000, the Company has available approximately
$25,495,000  of  net  operating loss  carryforwards  for  federal
income  tax purposes.  These carryforwards are available, subject
to  limitations, to offset future taxable income, and  expire  in
the  tax  years 2004 through 2015.  The Company also has research
and  development credit carryforwards available to offset federal
income  taxes  of approximately $700,000 subject to  limitations,
expiring in the years 2005 through 2013.

The  Company  has  temporary differences arising  from  different
methods  of  accounting  for the costs of patent  and  technology
rights  for  financial statement and tax purposes. For  financial
statement  purposes, these costs have been charged to operations.
For tax purposes, the costs of approximately $2,650,000 have been
capitalized and are being amortized over seventeen years.   Also,
warrant  extensions have been recorded and expensed for financial
statement  purposes in the amount of $18,642,598 as of  September
30,  2000.  For tax purposes, warrants are not recorded until the
warrants  are  exercised.   Bad debt allowance  recorded  against
intercompany receivables in the amount of $2,282,479 at September
30,  1998 was expensed for financial statement purposes  but  not
for  tax  purposes.    Reductions in  the  allowance  account  of
$823,670 at September 30, 1999 and $1,458,809 as of September 30,
2000  are also reflected in the financial statements but are  not
included in the tax return.

The  Company has not reflected any future income tax benefits for
these  temporary differences or for net operating loss and credit
carryforwards because of the uncertainty as to their realization.
Accordingly,  the  adoption of FAS  109  had  no  effect  on  the
financial statements of the Company.

The  following  is a summary of the composition of the  Company's
deferred   tax  asset  and  associated  valuation  allowance   at
September 30, 2000 and 1999:

                                   2000         1999

       Net Operating Loss       $8,667,240   $8,049,126
       Warrant Expense           6,336,783    6,258,898
       Patent Amortization         435,896      488,174
       Allowance for Bad Debts           0      443,400
       Tax Credit Carry Forward    700,000      700,000
                                ----------   ----------
                                16,139,919   15,939,598

       Valuation Allowance     (16,139,919) (15,939,598)
                                ----------   ----------
       Net Deferred Tax Asset   $        0   $        0
                                ==========   ==========


The  deferred  tax  benefit and the associated  increase  in  the
valuation allowance are summarized in the following schedule:


                                                     Increase
                                                        in
                                      Deferred       Valuation
                                        Tax          Allowance      Net
                                      Benefit

   Year Ended September 30,2000   $   (200,321)    $   200,321      $0

   Year Ended September 30,1999   $   (203,637)    $   203,637      $0

   Year Ended September 30,1998   $   (846,487)    $   846,487      $0

   Year Ended September 30,1997   $ (2,326,496)    $ 2,326,496      $0

   Year Ended September 30,1996   $ (3,000,971)    $ 3,000,971      $0

   Year Ended September 30,1995   $ (3,877,527)    $ 3,877,527      $0

   From July 5,1989 (inception)
    through September 30, 2000    $(16,139,919)    $16,139,919      $0


NOTE G - RELATED PARTY TRANSACTIONS

1.   SENSOR RELATED AGREEMENTS

The Company has a development agreement with BICO for the Sensor.
If  successfully  developed,  the Sensor  will  enable  users  to
measure  blood glucose levels without taking blood  samples.   On
November 18, 1991, the Company acquired for $2,000,000 the  right
from  BICO to one United States patent, which covers the  process
of  measuring  blood glucose levels non-invasively.  Approval  to
market the Sensor is subject to federal regulations including the
Food and Drug Administration (FDA).  Each model of the Sensor  is
subject to clinical testing and regulatory approvals by the FDA.

The  Company  and BICO have entered into a series  of  agreements
related  to  the  development, manufacture and marketing  of  the
Sensor.  Under such agreements, BICO is required to carry out all
steps  necessary  to  bring the Sensor  to  market  including  1)
developing and fabricating the prototypes necessary for  clinical
testing; 2) performing the clinical investigations leading to FDA
approval for marketing; 3) submitting all applications to the FDA
for  marketing  approval; and 4) developing a manufacturable  and
marketable  product.   Diasensor.com,  Inc.  is  to  conduct  the
marketing of the Sensor.  Following is a brief description of the
agreements:

Manufacturing Agreement

The  manufacturing  agreement between the Company  and  BICO  was
entered into on January 20, 1992.  Under such agreement, BICO  is
to  act as the exclusive manufacturer of production units of  the
Sensor and to sell the units to the Company at a price determined
by the agreement.  The term of the agreement is fifteen years.

Research and Development Agreement

Under  a January 1992 agreement effective April 1992, the Company
is  to  pay BICO $100,000 for indirect costs per month, plus  all
direct costs for the research and development of the Sensor. This
agreement replaced a previous agreement dated May 14, 1991  under
which  Diasensor.com,  Inc.  had been  paying  BICO  $50,000  for
indirect  costs per month, plus all direct costs for  the  design
and development activities.  The term of the agreement expires in
2007.  In  July  1995,  the Company and BICO  agreed  to  suspend
billings,  accruals of amounts due and payments pursuant  to  the
R&D Agreement, pending FDA review of the Sensor.

The monthly charges from BICO for indirect costs are reflected as
general  and  administrative expenses and direct  costs  for  the
research  and  development of the Sensor  incurred  by  BICO  are
reflected as R&D expenses in the statement of operations.

Purchase Agreement

In  November 1991, the Company entered into a Purchase  Agreement
with  BICO under which the Company acquired all of BICO's  rights
to  the Sensor for a cash payment of $2,000,000 which was charged
to operations.

Sublicensing Agreement

In  1989,  BICO acquired rights to certain concepts  and  patents
related  to the Sensor from outside parties.  The purchase  price
was $650,000, and was paid by the conveyance of stock in BICO and
1,040,000  shares  of  Diasensor.com,  Inc.  common  stock.   The
$520,000  value  of  the  Diasensor.com, Inc.  stock  issued  was
charged  to  the  receivable due from BICO.   On  May  14,  1991,
Diasensor.com, Inc. and BICO entered into a sublicense  agreement
under  which Diasensor.com, Inc. acquired these rights from  BICO
for a cash payment of $650,000 which was charged to operations.

License and Marketing Agreement

In  August  1989, BICO granted Diasensor.com, Inc. the  exclusive
right  to  represent  BICO and to market the Sensor  and  related
products worldwide.  In exchange for these rights, Diasensor.com,
Inc. conveyed 8,000,000 shares of its common stock to BICO.   The
assigned  value of these shares was $80,000 which was charged  to
operations.  In November 1991, this agreement was superseded when
the Company purchased all rights to the Sensor technology.

2.   INTERCOMPANY ACTIVITY

For the fiscal year ended September 30, 2000 net intercompany
charges  from  BICO  and its subsidiaries  to  the  Company  were
$1,743,476.   For the fiscal years ended September 30,  1999  and
1998,  net  intercompany charges by the Company to BICO  and  its
subsidiaries were $81,261 and $160,433, respectively.

3.  RECEIVABLES FROM OFFICERS AND DIRECTORS

During the fiscal year ended September 30, 1998 the Company  made
loans  to certain officers and directors totaling $125,000.  The
loans  were  due  upon demand with interest at a rate  of  8.25%.
Total amounts due, including accrued interest, on these loans  at
September 30, 1998, were $80,599 from Fred E. Cooper and  $53,673
from  Anthony  J. Feola.  During the fiscal year ended  September
30, 1999, the Company (by agreement with BICO) assigned the above
$134,272  of  notes  receivable and  accrued  interest,  plus  an
additional $4,266 accrued interest, to BICO by an increase in the
intercompany due from BICO account.

4.  ALLOWANCE FOR DOUBTFUL ACCOUNTS

Due  to the financial condition of BICO, as discussed in Note  B,
management  had  established an allowance for  doubtful  accounts
covering  amounts  due from BICO.  During the fiscal  year  ended
September  30,  2000,  the  Company  reduced  the  allowance  for
doubtful  accounts  from  $1,458,809  to  zero  to  reflect   the
repayment of all amounts due from BICO.

5.  ACCRUED PAYROLL

Included  in  accrued payroll and withholdings at  September  30,
2000,  is $45,208 and $29,167 for unpaid wages from fiscal  years
1997  through  1999  of  Fred  E.  Cooper  and  David  L.  Purdy,
respectively, which were earned but voluntarily deferred by these
two directors.

NOTE H - COMMITMENTS AND CONTINGENCIES

1.  RESEARCH AND DEVELOPMENT

Under  terms of a Research and Development Agreement  with  BICO,
the Company is to pay BICO $100,000 for indirect costs per month,
plus  direct  costs associated with the research and  development
through January, 2007. In July 1995, the Company and BICO  agreed
to  suspend  billings,  accruals  of  amounts  due  and  payments
pursuant to the R&D Agreement, pending FDA review of the Sensor.

2.  EMPLOYMENT AGREEMENTS

Diasensor.com,  Inc.  has entered into agreements  with  Fred  E.
Cooper  and David L. Purdy pursuant to which they receive  annual
salaries (as adjusted through September 30, 2000) of $497,000 and
$450,000,  respectively, from Diasensor.com, Inc. both  of  which
are  subject to review and adjustment annually.  The initial term
of  the  agreements  with Mr. Cooper and  Mr.  Purdy  expired  on
October  31,  1999,  but  were  automatically  renewed   for   an
additional three-year period; such renewals will continue  unless
either  party  gives proper notice of non-renewal.  In  November,
2000,  Mr. Purdy resigned effective February 2001. The agreements
also  provide  that  in  the event of a "change  of  control"  of
Diasensor.com, Inc., Diasensor.com, Inc. is required to issue  to
Mr.  Cooper  and Mr. Purdy shares of common stock equal  to  five
percent  (5%)  of the outstanding shares of common stock  of  the
Company immediately after the change in control.

3.  LITIGATION

Several  class  action lawsuits were filed  against  the  Company
along with BICO and certain of their directors, all of which were
consolidated  into  a  single action.  The suit  alleges  various
violations  of federal securities laws on behalf of  a  class  of
plaintiffs who purchased common stock of BICO between  April  25,
1995  and  February 26, 1996, at which time the value  of  BICO's
stock dropped as a result of an unfavorable recommendation  of  a
Panel  Review  convened  by  the  United  States  Food  and  Drug
Administration with respect to a certain medical device owned  by
Diasensor.com,  Inc. and manufactured by BICO.  Without  agreeing
to   the  alleged  charges  or  acknowledging  any  liability  or
wrongdoing, the Company and BICO agreed to settle the lawsuit for
a  total  amount  of  $3,450,000.   As  of  September  30,  2000,
$2,150,000  has  been  paid toward the settlement  by  BICO.   An
additional  $1,300,000  will  be  paid  in  June  2001  by  BICO.
Although it is not known whether the class action plaintiffs have
been  formally  notified  of  the settlement,  or  if  they  have
accepted  its  terms,  the  company believes  that  the  existing
settlement will end this matter.

During April 1998, the Company and its affiliates were served
with           subpoenas          by           the           U.S.
Attorneys'  office for the U.S. District Court  for  the  Western
District  of  Pennsylvania.   The  subpoenas  requested   certain
corporate, financial and scientific documents and the Company has
provided documents in response to such requests.

4.  PENNSYLVANIA SECURITIES COMMISSION

The   Pennsylvania  Securities  Commission  initiated  a  private
investigation of the Company and BICO in connection with the sale
of  securities in 1996.  The Companies have cooperated  with  and
provided information to the Pennsylvania Securities Commission in
connection  with the private investigation.  As the  Commission's
investigation is not yet complete and the Company  has  not  been
advised   of  any  finding  or  order  in  connection  with   the
investigation,  there  can be no estimate or  evaluation  of  the
likelihood of an unfavorable outcome in this matter or the  range
of possible loss, if any.


NOTE I - STOCKHOLDERS' EQUITY

Common Stock

The  Company sold 2,800,000 shares of common stock at  $0.50  per
share,  from August 1989 to May 1991 in connection with  a  joint
private  offering  with BICO.  The aggregate  amount  raised  was
$1,400,000, on which no commissions were paid to any third party.
The  Company sold 4,997,500 shares of common stock, at $1.00  per
share, in a private offering from May 1991 to January 1992.   The
aggregate  amount raised was $4,985,201, on which no  commissions
were paid to any third party.

The Company sold, in July 1992, 7,212 shares of common stock,
at  $3.50  per  share, in a private offering to one  accredited
investor.  The aggregate amount raised was $25,242, on which no
commissions were paid to any third party.

The Company sold 300,000 shares of common stock, at $3.50 per
share,  in  a private offering from July 1992 through  November
1992.  The aggregate amount raised was $1,050,000, on which  no
commissions were paid to any third party.

In December 1991, the Company issued 235,000 shares of common
stock   in   exchange  for  the  cancellation  of   outstanding
promissory notes for $235,000.

In June 1994, the Company sold 91,667 shares of its common
stock pursuant to the requirements set forth in Regulation S of
the  Securities  Act of 1933 ("Regulation S").   In  connection
with such sale, the purchasers and any entity which facilitated
such  sale  undertook to ensure compliance with  Regulation  S,
which  among other things, limits a foreign investor's  ability
to trade the Company's stock in the United States.  The Company
received  net  proceeds in the amount of $288,751  pursuant  to
such sales.

During  1995,  the Company issued the following shares  of  its
common stock to BICO:  3,000,000 shares at an assigned price of
$3.50 per share in return for a corresponding reduction in  the
amount due from Diasensor.com, Inc. to BICO pursuant to the R&D
Agreement  of $10,500,000;  and 1,200,000 shares of its  common
stock at a price of $3.50 per share.

In  July, 1993, the Company commenced a public offering.  As of
September 30, 1998, an aggregate of 1,063,460 shares  had  been
issued  with  proceeds to the Company of $3,561,892.   Of  that
total, 230,961 shares with net proceeds of $786,245 were issued
in  fiscal 1994; 437,768 shares with net proceeds of $1,501,492
were issued in fiscal 1995; 410,731 shares with net proceeds of
$1,365,155  were sold in fiscal 1996; 1,000 shares were  issued
in  fiscal  1998 at $3.50 per share; 10,000 shares were  issued
for consulting services at a charge to operations of $35,000 in
fiscal  1996;  and  27,000  shares  were  reimbursed  with  net
repayment of $94,500 in fiscal 1997.

The  Company  issued unregistered common stock  in  exchange  for
consulting services of 7,200 shares in fiscal 1994, 17,500 shares
in  fiscal  1995, 5,000 shares in fiscal 1996 and none in  fiscal
1997,  1998  or 1999.  The associated consulting service  expense
was  recognized at a rate of $3.50 per share, which is the  price
at  which the common stock was being sold in the Company's public
offering.

Common Stock Warrants

At September 30, 2000, the Company has reserved 10,463,013 shares
of  the  Company's unissued common stock for warrants which  were
outstanding  and  exercisable. Of these, warrants  for  7,509,550
shares  were  issued to directors, officers,  and  employees  for
meritorious service, employment contracts and personal guarantees
on  Company  indebtedness.  Also, warrants for  2,553,463  shares
were  issued to consultants and medical advisers and for  400,000
shares  to individuals for personal guarantees on Company  loans.
The  per  share exercise price for 7,380,000 shares is $.50,  for
2,170,463  shares is $1.00 and for 912,550 shares is $3.50.   The
fiscal years in which warrants expire are as follows:


     Warrant Expiration Fiscal Year          Number of Shares

               2001                             1,475,750
               2002                               117,213
               2003                             2,283,050
               2004                             4,502,000
               2005                             2,085,000
                                               ----------
                                               10,463,013
                                               ==========

The  following is a summary of warrant transactions during fiscal
years ended September 30,


                            2000       1999        1998       1997      1996

Outstanding beginning    8,644,113  6,676,513   7,476,513  7,533,263  7,077,213
 of year

Granted during the year  2,085,000  2,070,000           0     59,000    743,250

Canceled during the year  (266,100)  (102,400)   (800,000)  (115,750)  (231,200)

Exercised during the
years at prices ranging
from $.1875 to $1.00 per
share                            0          0           0          0    (56,000)
                         ---------   ---------  ---------  ---------  ---------
Outstanding, and        10,463,013  8,644,113   6,676,513  7,476,513  7,533,263
eligible for exercise.   =========   =========  =========  =========  =========


During the period October 1, 1999 through September 30, 2000, the
Company  extended  the  exercise date  of  warrants  to  purchase
2,202,050  shares of common stock to certain officers, directors,
employees  and consultants.  Warrants for 2,120,250  shares  were
originally granted at an exercise price of $1.00 and warrants for
81,800  shares  were originally granted at an exercise  price  of
$3.50  and  were  extended at the same  price.   No  expense  was
recognized  in  connection with the extension of  these  warrants
because  the present value of the exercise price is greater  than
the  estimated fair value of the underlying shares.  In addition,
during  the  year  ended September 30, 1999, the Company  granted
warrants  to  purchase  2,085,000  shares  of  common  stock   to
employees and consultants at an exercise price of $.50 per share.
These  warrants  were  granted for services rendered  which  were
recognized in general and administrative expenses for a total  of
$230,178.

During the period October 1, 1998 through September 30, 1999, the
Company  extended  the  exercise date  of  warrants  to  purchase
2,561,213  shares of common stock to certain officers, directors,
employees   and   consultants.   Warrants  for   2,477,000   were
originally  granted  at  an exercise price  of  $.50  per  share,
warrants  for  29,213  shares  were  origainally  granted  at  an
exercise  price  of  $1.00 and warrants for  55,000  shares  were
originally  granted  at  an exercise  price  of  $3.50  and  were
extended at the same price.  In connection with the extension  of
these  warrants the Company recorded a charge of $272,078 against
operations.   In  addition, during the year ended  September  30,
1999,  the Company granted warrants to purchase 2,070,000  shares
of common stock to employees and consultants at an exercise price
of  $.50  per  share.  These warrants were granted  for  services
rendered  which  were  recognized in general  and  administrative
expenses for a total of $228,538.

During the period October 1, 1997 through September 30, 1998, the
Company  extended  the  exercise date  of  warrants  to  purchase
2,236,550  shares of common stock to certain officers, directors,
employees  and consultants.  Warrants for 748,000 were originally
granted  at an exercise price of $.50 per share and warrants  for
10,000  shares  were originally granted at an exercise  price  of
$1.00  and were extended at the same price.  The Company recorded
$25,000  against operations in connection with the  extension  of
these warrants.

During the period October 1, 1996 through September 30, 1997, the
Company  extended  the  exercise date  of  warrants  to  purchase
2,236,550  shares of common stock to certain officers, directors,
employees   and   consultants.   Warrants  for   2,236,550   were
originally  granted at an exercise price of $1.00 per  share  and
were  extended at the same price. The Company recorded $5,593,875
against  operations  in connection with the  extension  of  these
warrants.

During the period October 1, 1995 through September 30, 1996, the
Company  extended  the  exercise date  of  warrants  to  purchase
2,556,213  shares of common stock to certain officers, directors,
employees  and  consultants.  Warrants for 49,213  and  2,507,000
shares were originally granted at an exercise price of $1.00  and
$.50  per  share, resepectively, and were extended  at  the  same
price.    The  Company recorded $7,644,033 against operations  in
connection with the extensions of these warrants.

During the period October 1, 1994 through September 30, 1995, the
Company  extended  the  exercise date  of  warrants  to  purchase
1,550,000  shares of common stock to certain officers, directors,
employees and consultants.  The warrants were originally  granted
at  an exercise price of $.50 per share and were extended at  the
same  price.  The assumed value of the stock when the  extensions
were  granted was $3.50.  The Company recorded $4,650,000 against
operations in connection with the extensions of these warrants.

In  1990, the Company granted warrants to purchase 800,000 shares
of  common stock at an exercise price of $.50 per share to  eight
current  or former directors or officers of the Company  or  BICO
who  personally guaranteed the payment of a lease  obligation  to
the  bank  for  the premises occupied by BICO at the  300  Indian
Springs  Road  location.  The Company also  granted  warrants  to
purchase 100,000 shares of common stock each to an individual and
his company at an exercise price of $.50
per   share  for  personally  guaranteeing  the  payment  of   an
obligation  related  to the purchase of equipment  by  BICO.   In
addition, the Company granted warrants to purchase 100,000 shares
of
common stock for services performed by consultants at an exercise
price  of $.50.  The Company recorded an estimated value of these
warrants at $27,500 which was charged to operations.

NOTE J- SUPPLEMENT CASH FLOW INFORMATION

The Company's financing activities included the following noncash
transactions.

  During  1992 and 1990, notes payable aggregating $303,000  were
  canceled  and  exchanged for 371,000 shares  of  the  Company's
  common stock.

  On  March 31, 1995, the Company issued 3,000,000 shares of  its
  unregistered  stock  to BICO in payment of $10,500,000  due  to
  BICO.

  During  the  Fiscal year ended September 30, 1999, the  Company
  (by   agreement   with   BICO)                        converted
  $125,000  of  related  party notes receivable  and  $13,538  of
  associated interest receivable to due from BICO.

Cash paid for interest and income taxes were as follows:

                                                            From July 5, 1989
                                                              (inception)
                    September       September   September    through September
                     30,2000         30,1999     30,1998         30,2000

Interest Paid        $    0          $    0      $     0         $10,529
                     ======          ======      =======         =======
Income Taxes Paid    $    0          $    0      $     0         $     0
                     ======          ======      =======         =======


NOTE K - SUBSEQUENT EVENT

In  November  2000,  the Company made additional  investments  of
$100,000  in  MicroIslet and $192,736 in Diabecore Medical,  Inc.
These  additional  investments increased the Company's  ownership
percentages  to  approximately 15%  and  21%  in  MicroIslet  and
Diabecore, respectively.