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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

Quarterly Report Under section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2002

Commission File No. 000-20989

UROPLASTY, INC.
(Name of Small Business Issuer in its Charter)

|                                                                                 |  |                                                
|-------------------------------------------------------------------------------- |  | -----------------------------------------------
|Minnesota, U.S.A.
(State or other jurisdiction of
incorporation or organization) |  | 41-1719250
(I.R.S. Employer
Identification No.)

2718 Summer Street NE
Minneapolis, Minnesota 55413-2820
(Address of principal executive offices)

(612) 378-1180
(Issuers telephone number, including area code)

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.01 par value (Title of class)

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



| | YES x     NO o
| | --------------

The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the
stock was sold or the average bid and asked prices of such stock as of July 29, 2002 was $4,886,168.

The number of shares outstanding of the issuers only class of common stock on July 29, 2002 was 4,441,971.

Transitional Small Business Disclosure Format:



| | YES o       NO x
| | ----------------



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TABLE OF CONTENTS



|                                                       |  |  |  |  |  |  |  | 
|------------------------------------------------------ |  |  |  |  |  |  |  | 
|CONSOLIDATED BALANCE SHEETS                           
|CONSOLIDATED STATEMENTS OF OPERATIONS                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|EX-99.1 Certification Pursuant to 18 USC Sec. 1350    
|EX-99.2 Certification Pursuant to 18 USC Sec. 1350    




PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UROPLASTY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

|       |                                     |                           |   |               |           |  |                |           |           | 
|------ | ----------------------------------- | ------------------------- | - | ------------- | --------- |  | -------------- | --------- | --------- | 
|       |                                     |                           |   | June 30, 2002 |           |  | March 31, 2002 |          
|       |                                     |                           |   |               |           |  |                |          
|Assets |                                     |                           |   |               |           |  |                |          
|       | Current assets:                     |                           |   |               |           |  |                |           |          
|       |                                     | Cash and cash equivalents |   | $             | 1,228,283 |  |                |           | 1,046,121 | 
|       |                                     | Accounts receivable, net  |   |               | 944,071   |  |                |           | 845,431   | 
|       |                                     | Inventories               |   |               | 628,293   |  |                |           | 632,102   | 
|       |                                     | Deferred offering costs   |   |               | 150,043   |  |                |           | 112,544   | 
|       |                                     | Other                     |   |               | 192,736   |  |                |           | 130,518   | 
|       |                                     |                           |   |               |           | 
|       | Total current assets                |                           |   | 3,143,426     |           |  |                | 2,766,716 |          
|       | Property, plant, and equipment, net |                           |   | 841,123       |           |  |                | 764,855   |          
|       | Intangible assets, net              |                           |   | 67,217        |           |  |                | 72,877    |          
|       |                                     |                           |   |               |           | 
|       | Total assets                        |                           | $ | 4,051,766     |           |  |                | 3,604,448 |          
|       |                                     |                           |   |               |           | 

See accompanying notes to consolidated financial statements.

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UROPLASTY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                     |                                            |                                                                                                                                                                   |   |               |            |   |                |           |            |  
|------------------------------------ | ------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | ---------- | - | -------------- | --------- | ---------- | -
|                                     |                                            |                                                                                                                                                                   |   | June 30, 2002 |            |   | March 31, 2002 |          
|                                     |                                            |                                                                                                                                                                   |   |               |            |   |                |          
|Liabilities and Shareholders Equity |                                            |                                                                                                                                                                   |   |               |            |   |                |          
|                                     | Current liabilities:                       |                                                                                                                                                                   |   |               |            |   |                |           |           
|                                     |                                            | Accounts payable                                                                                                                                                  |   | $             | 295,003    |   |                |           | 230,631    |  
|                                     |                                            | Accrued liabilities                                                                                                                                               |   |               | 347,907    |   |                |           | 399,478    |  
|                                     |                                            | Current maturities  long-term debt                                                                                                                               |   |               | 41,280     |   |                |           | 42,311     |  
|                                     |                                            |                                                                                                                                                                   |   |               |            |  
|                                     | Total current liabilities                  |                                                                                                                                                                   |   | 684,190       |            |   |                | 672,420   |           
|                                     | Long-term debt  less current maturities   |                                                                                                                                                                   |   | 446,233       |            |   |                | 399,222   |           
|                                     |                                            |                                                                                                                                                                   |   |               |            |  
|                                     | Total liabilities                          |                                                                                                                                                                   |   | 1,130,423     |            |   |                | 1,071,642 |           
|                                     |                                            |                                                                                                                                                                   |   |               |            |  
|                                     | Shareholders equity:                      |                                                                                                                                                                   |   |               |            |   |                |           |           
|                                     |                                            | Common stock $.01 par value; 6,666,666
shares authorized, 2,343,249 and
2,314,734 shares issued and
outstanding at June 30, 2002 and
March 31, 2002, respectively |   |               | 20,758     |   |                |           | 20,473     |  
|                                     |                                            | Additional paid-in capital                                                                                                                                        |   |               | 6,149,309  |   |                |           | 6,149,571  |  
|                                     |                                            | Accumulated deficit                                                                                                                                               |   |               | (2,754,585 | ) |                |           | (3,204,370 | )
|                                     |                                            | Vendor deposit                                                                                                                                                    |   |               | (21,000    | ) |                |           | (51,000    | )
|                                     |                                            | Accumulated other comprehensive loss                                                                                                                              |   |               | (473,139   | ) |                |           | (381,868   | )
|                                     |                                            |                                                                                                                                                                   |   |               |            |  
|                                     | Total shareholders equity                 |                                                                                                                                                                   |   | 2,921,343     |            |   |                | 2,532,806 |           
|                                     |                                            |                                                                                                                                                                   |   |               |            |  
|                                     | Total liabilities and shareholders equity |                                                                                                                                                                   | $ | 4,051,766     |            |   |                | 3,604,448 |           
|                                     |                                            |                                                                                                                                                                   |   |               |            |  

See accompanying notes to consolidated financial statements.

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UROPLASTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                            |                                                 |   |                    |           |   |      |           |           |  
|------------------------------------------- | ----------------------------------------------- | - | ------------------ | --------- | - | ---- | --------- | --------- | -
|                                            |                                                 |   | Three Months Ended |          
|                                            |                                                 |   | June 30,           |          
|                                            |                                                 |   | 2002               |           |   | 2001 |          
|                                            |                                                 |   |                    |           |   |      |          
|Net sales                                   |                                                 | $ | 1,309,099          |           |   |      | 1,149,389 |          
|Cost of goods sold                          |                                                 |   | 419,714            |           |   |      | 179,872   |          
|                                            |                                                 |   |                    |           |   |     
|Gross profit                                |                                                 |   | 889,385            |           |   |      | 969,517   |          
|                                            |                                                 |   |                    |           |   |     
|Operating expenses                          |                                                 |   | 272,467            |           |   |      | 272,610   |          
|                                            | General and administrative                      |   | 272,467            |           |   |      | 272,610   |          
|                                            | Research and development                        |   |                    | 519,418   |   |      |           | 390,038   |  
|                                            | Selling and marketing                           |   |                    | 254,163   |   |      |           | 355,067   |  
|                                            |                                                 |   |                    |           |   |     
|                                            |                                                 |   | 1,046,048          |           |   |      | 1,017,715 |          
|                                            |                                                 |   |                    |           |   |     
|Operating loss                              |                                                 |   | (156,663           | )         |   |      | (48,198   | )        
|                                            |                                                 |   |                    |           |   |     
|Other income (expense)                     
|                                            | Interest
income                                 |   |                    | 12,865    |   |      |           | 5,918     |  
|                                            | Interest expense                                |   |                    | (6,280    | ) |      |           | (6,438    | )
|                                            | Foreign currency exchange gain (loss) (note 10) |   |                    | 420,020   |   |      |           | (86,008   | )
|                                            | Settlement                                      |   |                    | 180,000   |   |      |           |          |  
|                                            | Other                                           |   |                    | (157      | ) |      |           |          |  
|                                            |                                                 |   |                    |           |   |     
|                                            |                                                 |   | 606,448            | )         |   |      | (86,528   | )        
|                                            |                                                 |   |                    |           |   |     
|Income (loss) before income taxes           |                                                 |   | 449,785            |           |   |      | (134,726  | )        
|Income taxes                                |                                                 |   |                   |           |   |      |          |          
|                                            |                                                 |   |                    |           |   |     
|Net income (loss)                           |                                                 | $ | 449,785            |           |   |      | (134,726  | )        
|                                            |                                                 |   |                    |           |   |     
|Net income (loss) per common share:         |                                                 |   |                    |           |   |      |           |          
|                                            | Basic                                           |   | $                  | 0.19      |   |      |           | (0.06     | )
|                                            | Diluted                                         |   | $                  | 0.19      |   |      |           | (0.06     | )
|Weighted average common shares outstanding: |                                                 |   |                    |           |   |      |           |          
|                                            | Basic                                           |   |                    | 2,343,249 |   |      |           | 2,282,910 |  
|                                            | Diluted                                         |   |                    | 2,362,030 |   |      |           | 2,282,910 |  

See accompanying notes to consolidated financial statements.

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UROPLASTY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWSThree Months Ended June 30, 2002 and 2001
(Unaudited)

|                                                      |                                                                                          |                                |           |         |         |   |           |          |          |  
|----------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------ | --------- | ------- | ------- | - | --------- | -------- | -------- | -
|                                                      |                                                                                          |                                |           | 2002    |         |   | 2001      |         
|                                                      |                                                                                          |                                |           |         |         |   |           |         
|Cash flows from operating activities:                 |                                                                                          |                                |           |         |         |   |           |         
|                                                      | Net income (loss)                                                                        |                                | $         | 449,785 |         |   |           | (134,726 | )       
|                                                      | Adjustments to reconcile net income (loss) to
net cash provided by (used in) operations: |                                |           |         |         |   |           |          |         
|                                                      |                                                                                          | Depreciation and amortization  |           |         | 54,502  |   |           |          | 37,146   |  
|                                                      |                                                                                          | Loss on disposal of assets     |           |         |        |   |           |          | 1,789    |  
|                                                      |                                                                                          | Stock-based consulting expense |           |         | 1,508   |   |           |          | 3,828    |  
|                                                      | Changes in operating assets and liabilities:                                             |                                |           |         |         |   |           |          |         
|                                                      |                                                                                          | Accounts receivable            |           |         | (98,640 | ) |           |          | 46,190   |  
|                                                      |                                                                                          | Inventories                    |           |         | 3,809   |   |           |          | (161,519 | )
|                                                      |                                                                                          | Other current assets           |           |         | (62,218 | ) |           |          | 31,981   |  
|                                                      |                                                                                          | Accounts payable               |           |         | 64,372  |   |           |          | 31,677   |  
|                                                      |                                                                                          | Accrued liabilities            |           |         | (51,571 | ) |           |          | (115,080 | )
|                                                      |                                                                                          |                                |           |         |         |  
|Net cash provided by (used in) operating activities   |                                                                                          |                                | 361,547   | )       |         |   | (258,714  | )       
|                                                      |                                                                                          |                                |           |         |         |  
|Cash flows from investing activities:                 |                                                                                          |                                |           |         |         |   |           |         
|                                                      | Payments for property, plant and equipment                                               |                                |           | (29,206 | )       |   |           | (2,402   | )       
|                                                      | Payments relating to intangible assets                                                   |                                |           | (675    | )       |   |           |         |         
|                                                      |                                                                                          |                                |           |         |         |  
|Net cash used in investing activities                 |                                                                                          |                                | (29,881   | )       |         |   | (2,402    | )       
|                                                      |                                                                                          |                                |           |         |         |  
|Cash flows from financing activities:                 |                                                                                          |                                |           |         |         |   |           |         
|                                                      | Repayment of long-term debt                                                              |                                |           | (13,408 | )       |   |           | (11,491  | )       
|                                                      | Net proceeds from issuance of stock                                                      |                                |           | 28,515  |         |   |           | 8,000    |         
|                                                      | Deferred offering costs                                                                  |                                |           | (37,499 | )       |   |           |         |         
|                                                      |                                                                                          |                                |           |         |         |  
|Net cash used in financing activities                 |                                                                                          |                                | (22,392   | )       |         |   | (3,491    | )       
|                                                      |                                                                                          |                                |           |         |         |  
|Effect of exchange rates on cash and cash equivalents |                                                                                          |                                | (127,112  | )       |         |   | 15,096    |         
|                                                      |                                                                                          |                                |           |         |         |  
|Net increase (decrease) in cash and cash equivalents  |                                                                                          |                                | 182,162   |         |         |   | (249,511  | )       
|Cash and cash equivalents at beginning of period      |                                                                                          |                                | 1,046,121 |         |         |   | 1,012,397 |         
|                                                      |                                                                                          |                                |           |         |         |  
|Cash and cash equivalents at end of period            |                                                                                          | $                              | 1,228,283 |         |         |   | 762,886   |         
|                                                      |                                                                                          |                                |           |         |         |  
|Supplemental disclosure of cash flow information:     |                                                                                          |                                |           |         |         |   |           |         
|                                                      | Cash paid during the period for interest                                                 |                                | $         | 6,575   |         |   |           | 6,457    |         
|                                                      | Cash paid during the period for income taxes                                             |                                |           |        |         |   |           |         |         

Supplemental disclosure of non-cash financing and investing activities:

At June 30, 2002, the Company had incurred $150,043 of costs related to the rights offering, which are included
in deferred offering costs. As of that same date $123,887 of these costs were paid.

See accompanying notes to consolidated financial statements.

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UROPLASTY, INC. AND SUBSIDIARIES

Notes to the Interim Consolidated Financial Statements
(Unaudited)

1. Basis of Presentation

The consolidated financial statements included in this Form 10-QSB have been
prepared by Uroplasty, Inc. (Uroplasty or the Company), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted, pursuant to such rules and regulations, although management believes
the disclosures are adequate to make the information presented not misleading.
The consolidated results of operations for any interim period are not
necessarily indicative of results for a full year. These consolidated
statements should be read in conjunction with the consolidated financial
statements and related notes included in the Companys Annual Report on Form
10-KSB for the year ended March 31, 2002.

The consolidated financial statements presented herein as of June 30, 2002 and
for the three-months periods ended June 30, 2002 and 2001 reflect, in the
opinion of management, all material adjustments consisting only of normal
recurring adjustments necessary for a fair presentation of the consolidated
financial position, consolidated results of operations and consolidated cash
flows for the interim periods.

The Company has identified certain of its accounting policies that it considers
particularly important for the portrayal of the Companys results of operations
and financial position and which may require the application of a higher level
of judgment by the Companys management, and as a result are subject to an
inherent level of uncertainty. These are characterized as critical accounting
policies and address revenue recognition, inventories, foreign currency
translation and transactions, and impairment of long-lived assets, each more
fully described in the Companys Annual Report on Form 10-KSB for the year
ended March 31, 2002. Based upon the Companys review, it has determined that
these policies remain its most critical accounting policies for the three-month
period ended June 30, 2002, and has made no changes to these policies during
fiscal 2003.

2. Nature of Business

The Company is currently selling its products outside of the United States and
is undertaking clinical trials in the United States and Canada. Based on the
Companys current plans, it is anticipated that the Company will launch its
products in the US after obtaining FDA approval. Completing clinical trials and
obtaining FDA approval is a costly and time-consuming process. As a result of
the $2.4 million gross proceeds of a Rights Offering completed July 2002,
management believes that current resources and the funds generated from sale of
the Companys products outside the U.S. will be adequate to meet the Companys
cash flow needs, including R&D activities associated with existing products and
markets through fiscal 2004. Ultimately, the Company will need to achieve
profitability and positive cash flows from operations or obtain additional debt
or equity financing to fund its operations.

3. New Accounting Pronouncement

In August 2001, the Financial Accounting Standards Board issued Statement No.
144, Accounting for the Impairment or disposal of Long-Lived Assets. Statement
No. 144 addresses the financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of. However, this statement retains the fundamental provisions of Statement No.
121 for (a) recognition and measurement of the impairment of long-lived assets
to be held and used and (b) measurement of long-lived assets to be disposed of
by sale. Statement No. 144 also supersedes the accounting and reporting
provisions of APB Opinion No. 30, Reporting the Results of Operations-Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions, for the disposal of a
segment of a business. However, this Statement retains the requirement of APB
No. 30 to report discontinued operations separately from continuing operations
and extends that reporting to a component of an entity that either has been
disposed of or is classified as held for sale. This statement also amends ARB
No. 51, Consolidated Financial Statements, to eliminate the exception to
consolidation for a temporarily controlled subsidiary. The Company is adopting
the provisions of Statement No. 144 effective April 1, 2002. The Statement had
no impact on the Companys financial statements.

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In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, which requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability
is incurred and nullifies EITF 94-3. The Company plans to adopt SFAS No. 146 in April 2003.
Management believes that the adoption of this statement will not have a
material effect on the Companys future results of operations.

4. Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or
market (net realizable value) and consist of the following:

|                |  |               |         |  |                |  |         | 
|--------------- |  | ------------- | ------- |  | -------------- |  | ------- | 
|                |  | June 30, 2002 |         |  | March 31, 2002 | 
|                |  |               |         |  |                | 
|Raw materials   |  | $             | 117,604 |  |                |  | 91,050  | 
|Work-in-process |  |               | 113,931 |  |                |  | 134,490 | 
|Finished goods  |  |               | 396,758 |  |                |  | 406,562 | 
|                |  |               |         |  |                | 
|                |  | $             | 628,293 |  |                |  | 632,102 | 
|                |  |               |         |  |                | 

5. Comprehensive Income (loss)

Comprehensive income (loss) consists of net income (loss), and the translation
adjustment as follows:

|                                   |                        |   |                            |         |   |      |          |        |  
|---------------------------------- | ---------------------- | - | -------------------------- | ------- | - | ---- | -------- | ------ | -
|                                   |                        |   | Three Months Ended June 30 |        
|                                   |                        |   | 2002                       |         |   | 2001 |         
|                                   |                        |   |                            |         |   |      |         
|Net income (loss)                  |                        | $ | 449,785                    |         |   |      | (134,726 | )     
|Items of other comprehensive loss: |                        |   |                            |         |   |      |          |       
|                                   | Translation adjustment |   |                            | (91,271 | ) |      |          | (4,445 | )
|                                   |                        |   |                            |         |   |     
|                                   |                        | $ | 358,514                    |         |   |      | (139,171 | )     
|                                   |                        |   |                            |         |   |     

6. Reconciliation of Net income (loss) and Share Amounts Used in EPS Calculation

Basic income (loss) per common share is calculated by dividing net income
(loss) by the weighted-average common shares outstanding during the period.
Diluted income (loss) per common share for the three months ended June 30, 2002
and 2001 was calculated using the treasury-stock method to compute the weighted
average common stock outstanding assuming the conversion of dilutive potential
common shares.

|               |                  |  |                     |           |   |            |  |        |              |                       |  |           |  
|-------------- | ---------------- |  | ------------------- | --------- | - | ---------- |  | ------ | ------------ | --------------------- |  | --------- | -
|               |                  |  | Basic income (loss) |           |   |            |  |        |              | Diluted income (loss) | 
|               |                  |  | per share           |           |   | Effect of  |  |        | per share    |                      
|               |                  |  | to common           |           |   | dilutive   |  |        | to common    |                      
|               |                  |  | shareholders        |           |   | securities |  |        | shareholders |                      
|               |                  |  |                     |           |   |            |  |        |              |                      
|Quarter ended: |                  |  |                     |           |   |            |  |        |              |                       |  |          
|June 30, 2002  |                  |  |                     |           |   |            |  |        |              |                       |  |          
|               | Net income       |  | $                   | 449,785   |   |            |  |       |              |                       |  | 449,785   |  
|               | Shares           |  |                     | 2,343,249 |   |            |  | 18,781 |              |                       |  | 2,362,030 |  
|               |                  |  |                     |           |   |            |  |        |              |                      
|               | Per share amount |  | $                   | 0.19      |   |            |  |       |              |                       |  | 0.19      |  
|               |                  |  |                     |           |   |            |  |        |              |                      
|Quarter ended: |                  |  |                     |           |   |            |  |        |              |                       |  |          
|June 30, 2001  |                  |  |                     |           |   |            |  |        |              |                       |  |          
|               | Net loss         |  | $                   | (134,726  | ) |            |  |       |              |                       |  | (134,726  | )
|               | Shares           |  |                     | 2,282,910 |   |            |  |       |              |                       |  | 2,282,910 |  
|               |                  |  |                     |           |   |            |  |        |              |                      
|               | Per share amount |  | $                   | (0.06     |   |            |  |       |              |                       |  | (0.06     | )
|               |                  |  |                     |           |   |            |  |        |              |                      

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The following options and warrants outstanding at June 30, 2002 and 2001 to
purchase shares of common stock were excluded from diluted loss per share,
because of the anti-dilutive effect:

|                            |               |  |                  |         |  |                   |                 |  | 
|--------------------------- | ------------- |  | ---------------- | ------- |  | ----------------- | --------------- |  | 
|                            |               |  | Number of        |         |  | Range of exercise
|                            |               |  | Options/Warrants |         |  | prices           
|                            |               |  |                  |         |  |                  
|For the three months ended: |               |  |                  |         |  |                   |                 | 
|                            | June 30, 2002 |  |                  | 451,248 |  |                   | $2.00 to $10.50
|                            | June 30, 2001 |  |                  | 389,733 |  |                   | $1.50 to $10.50

7. Rights Offering

In July 2002, the Company completed its rights offering to its shareholders in
which the Company sold 798,213 units with aggregate proceeds of $2.4 million.
Each unit consisted of three shares of common stock and a warrant to acquire
one additional share of common stock for $2.00 per share. These warrants
expire on July 31, 2004. The allocated relative fair value of the shares issued
in the offering were less than the Companys common stock price on the
offerings closing date which resulted in a bonus element to the stockholders
who participated in the offering, similar to a stock dividend. Therefore, the
Company has retroactively increased the weighted average shares outstanding for
all periods to reflect the incremental 267,402 shares attributable to the bonus
element.

8. Vendor Deposits

In September 2001, the Company executed an agreement with a vendor to
manufacture a mold for one of the Companys products. As consideration, the
Company issued 20,000 shares of common stock to be held in escrow until
completion of the mold. The Company recorded the fair value of the restricted
common stock aggregating $21,000, as of June 30, 2002, as a vendor deposit in
shareholders equity.

9. Settlement

On October 26, 2001, the Company reached a litigation settlement with a third
party. Net proceeds from the Settlement, totaling $388,000, were recognized
upon receipt of cash. During the quarter ended June 30, 2002, the Company
received the final payment and recorded a $180,000 gain related to this
settlement.

10. Foreign Currency Gains (Losses)

For the three-month period ended June 30, 2002 and 2001, the Company recognized
foreign currency gains (losses) of $420,020 and ($86,008), respectively. At
June 30, 2002 and 2001, the Company had $3.5 million and $4.7 million of
dollars denominated intercompany debt at its foreign Dutch subsidiary. Except
for $1.2 million of dollars of long-term balance as per June 30, 2001, these
intercompany balances are revolving in nature and are not deemed to be
long-term balances.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This Report on Form 10-QSB should be read in conjunction with the Annual Report
on Form 10-KSB for the period ended March 31, 2002.

Forward-looking Statements

The Registrant may from time to time make written or oral forward-looking
statements, including statements contained in this filing by the Company with
the Securities and Exchange Commission and in its reports to stockholders, as
well as elsewhere. Forward-looking statements are statements such as those contained
in projections, plans, objectives, estimates, statements of future economic
performance, and assumptions related to any of the foregoing, and may be
identified by the use of forward-looking terminology, such as may, expect,
anticipate, estimate, goal, continue, or other comparable terminology.
By their very nature, forward-looking statements are subject to known and
unknown risks and uncertainties relating to the Companys future performance
that may cause the actual results, performance, or achievements of the Company,
or industry results, to differ materially from those expressed or implied in
any such forward-looking statements. Any such statement is qualified by
reference to the following cautionary statements.

The Registrants business operates in highly competitive markets and is subject
to changes in general economic conditions, competition, customer and market
preferences, government regulation, the impact of tax regulation, foreign
exchange rate fluctuations, the degree of market acceptance of products, the
uncertainties of potential litigation, as well as other risks and uncertainties
detailed elsewhere herein and from time to time in the Registrants Securities
and Exchange Commission filings.

In this filing, the section entitled Managements Discussion and Analysis of
Financial Condition and Results of Operations contains forward-looking
statements. Various factors and risks (not all of which are identifiable at
this time) could cause the Companys results, performance, or achievements to
differ materially from that contained in the Companys forward-looking
statements, and investors are cautioned that any forward-looking statement
contained herein or elsewhere is qualified by and subject to the warnings and
cautionary statements contained above and in the Companys other filings with
the Securities and Exchange Commission.

The Company does not undertake and assumes no obligation to update any
forward-looking statement that may be made from time to time by or on behalf of
the Company.

Overview

Uroplasty, Inc. develops, manufactures, and/or markets medical products in
certain segments of the urology, wound care, otolaryngology and plastic surgery
markets. Products sold by the Company are subject to regulation by the U.S.
FDA and/or various regulating agencies in countries outside the U.S. Existing
sales have been, and future sales growth is expected to be, derived from
Macroplastique and related ancillary products designed for use by urologists,
gynecologists, and uro-gynecologists for the primary treatment of SUI and for
the treatment of VUR (backflow of urine from the bladder to the kidneys).
Macroplastique is comprised of soft, irregularly textured, vulcanized, medical
grade silicone elastomer implants suspended in a biocompatible carrier
solution. When injected via a minimally invasive procedure in the soft tissue
of the mid-urethra and bladder neck (in the case of SUI), and at the ureteral
orifice (in the case of vesicoureteral reflux), the implants act as a bulking
material to restore urinary continence or to eliminate reflux of urine from the
bladder to the kidneys.

In addition to the urological applications, the Companys implantable tissue
bulking material is also marketed by the Company outside the U.S. for
reconstructive and cosmetic plastic surgery applications and vocal cord
rehabilitation under the trade names Bioplastique Implants and VOX Implants,
respectively. In The Netherlands and United Kingdom, the Companys direct
sales force distributes certain wound care products on behalf of another
company in accordance with an executed Distributor Agreement. Under the terms
of the Distributor Agreement, the Company is not obligated to purchase any
minimum level of wound care products.

The Companys products are currently sold by a direct sales force in the United
Kingdom, and by a network of distributors in numerous countries outside the
U.S., including Canada, Western Europe, Australia, and Central and South
America. In September 1999, the Company received unconditional approval from
the FDA pursuant to a previously filed IDE Application to initiate human
clinical studies in the U.S. for the Companys primary product Macroplastique
in the treatment of female SUI. The Company is currently conducting the human
clinical procedures specified by an FDA approved study protocol at various
clinical sites across the United States and Canada.

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The Companys current objectives are to focus on sales and marketing activities
designed to increase market penetration and sales of Macroplastique for SUI and
VUR applications in countries outside the U.S., and to efficiently and
effectively execute the Macroplastique human clinical study for treatment of
female SUI within the U.S.

The Company has identified certain of its accounting policies that it considers
particularly important for the portrayal of the Companys results of operations
and financial position and which may require the application of a higher level
of judgment by the Companys management, and as a result are subject to an
inherent level of uncertainty. These are characterized as critical accounting
policies and address revenue recognition, inventories, foreign currency
translation and transactions, and impairment of long-lived assets, each more
fully described in the Companys Annual Report on Form 10-KSB for the year
ended March 31, 2002. Based upon the Companys review, it has determined that
these policies remain its most critical accounting policies for the three-month
period ended June 30, 2002, and has made no changes to these policies during
fiscal 2003.

Set forth below is managements discussion and analysis of the financial
condition and results of operations for the three-month periods ended June 30,
2002 and 2001.

Results of Operations

Net Sales: The Macroplastique product line accounts for approximately 90% of
total net sales during the periods presented. In the first quarter ended June
30, 2002, net sales of all products were $1,309,099, representing a $159,710 or
14% increase when compared to net sales of $1,149,389 for the first quarter
ended June 30, 2001. The sales increase is the result of increased unit sales
to our customers and fluctuations in foreign currency exchange rates between
the U.S. Dollar (the functional reporting currency) and the Euro and the
British Pound (currencies of the Companys subsidiaries).

Management expects unit sales of Macroplastique will increase in the remaining
three quarters of fiscal 2003, as compared to the first quarter of fiscal 2003
and unit sales of fiscal 2002. This will be a result of a November 2001 product
launch with Macroplastique product enhancements and distributor training. The
goal is to improve the surgical technique, which will lead to an increased
number of doctors performing procedures that will broaden the Macroplastique
penetration of the SUI market. There can be no assurance, however, the
Companys efforts to increase sales and market penetration will be successful.

Gross Profit: Gross profit was $889,385 and $969,517 for the quarter ended
June 30, 2002 and 2001, respectively, or 68% and 84% of net sales. High
production volumes in the first quarter of last year to prepare for the product
launch in November 2001 resulted in a high gross margin. Excess manufacturing
capacity is causing lower gross profit margins in the current-year period.
Gross profit in any one period is highly variable depending on production
volumes. The Company anticipates increased utilization of manufacturing
capacity and unit sales in the remaining three quarters of fiscal 2003, which
should result in higher gross margins.

General and Administrative Expense: General and administrative (G&A) expenses
decreased from $272,610 during the first quarter of fiscal 2002 to $272,467
during the first quarter of fiscal 2003.

Research and Development Expense: Research and development (R&D) expenses
increased $129,380, or 33%, from $390,038 during the first quarter of fiscal
2002 to $519,418 during the first quarter of fiscal 2003. The increase in R&D
expense resulted from an increase in clinical costs relating to patient
procedures and follow-up examinations due to a significant increase in clinical
study patient enrollment.

Selling and Marketing Expenses: Selling and marketing (S&M) costs decreased
28% from $355,067 during the first quarter of fiscal 2002 to $254,163 during
the first quarter of fiscal 2003 as a result of the fiscal 2002 restructuring
of the international sales and marketing departments as well as decreased
salesperson travel costs and decreased costs relating to trade-shows,
conventions and congresses.

Other Income (Expense): Other income (expense) includes interest income,
interest expense, foreign currency exchange gains and losses, settlement income
and other non-operating costs when incurred. Other income (expense) was
$606,448 and $(86,528) for the quarters ended June 30, 2002 and 2001. The
majority of the differences between periods was due to exchange gains and
losses and the $180,000 of proceeds in the first quarter of fiscal 2003 from
the litigation. Exchange gains and losses are recognized primarily as a result
of fluctuations in currency rates between the U.S. Dollar (the functional
reporting currency) and the Euro and British Pound (currencies of the Companys
subsidiaries), as well as their effect on the dollar denominated intercompany
obligations between the Company and its foreign subsidiaries. At June 30, 2002
and 2001, the Company had $3.5 million and $4.7 million of dollars denominated
intercompany debt at its foreign Dutch subsidiary. Except for $1.2 million of
dollars of long-term balance as per June 30, 2001, these intercompany balances
are revolving in nature and are not deemed to be long-term balances. The
Companys financial results are subject to material fluctuations based on
changes in currency exchange rates. The Company recognized foreign
currency gains of $420,020 in the

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current-years quarter primarily as the result of a
weakened U.S. Dollar compared to the Euro. In the prior year quarterly period,
the Company recognized $(86,008) of foreign currency losses due to a
strengthening of the U.S. Dollar in the prior-year period.

As described in note 7 to the financial statements, the Company has
retroactively increased the weighted average shares outstanding for all periods
to reflect the incremental 267,402 shares attributable to the bonus element
related to the rights offering.

Liquidity and Capital Resources

As of June 30, 2002, the Companys cash and cash equivalent balances totaled
$1,228,283. The capital resources existing at June 30, 2002 were derived from
operations during the fiscal years ended March 31, 1997 and 1998, plus the net
proceeds from the Companys sale of approximately 1.7 million shares of Common
Stock in June 1998.

At June 30, 2002, the Company had working capital of approximately $2.5
million. During the first quarter of fiscal year 2003, operating activities
provided approximately $362,000 of cash, compared to using $259,000 of cash in
the prior-year period. This improvement of cash was primarily attributable to
foreign currency exchange gains of $420,000, $180,000 gain from the proceeds
from a lawsuit settlement. Accounts receivable increased by $98,640, due to the
timing of payment by our customers. Other current assets, accounts payable,
accrued expenses fluctuated due to the timing of payments.

The Company currently has no financing arrangements in place with any bank for
general working capital needs, and no material unused sources of liquidity
other than the cash, equipment leasing arrangements, and its accounts
receivable and inventory balances at December 31, 2002 of $944,071 and
$628,293, respectively.

As of June 30, 2002, the allowance for inventory obsolescence is $85,000. The
introduction last year of the modified products has made some units of the
non-modified products obsolete. An additional allowance of $28,000 in the first
quarter of fiscal 2003 was necessary, because of lower than expected sales of
the non-modified products.

During the term of the fiscal 2003 Rights Offering, a total of 2,394,639 shares
of Common Stock and 798,213 Common Stock Purchase Warrants were sold to
shareholders of the Company. Gross proceeds recorded in the first quarter of
fiscal 2003 were $45,363. In July 2002 the remaining gross proceeds of
$2,349,276 were recorded.

The Company has operations in the U.S. and internationally. U.S. net operating
loss carryforwards cannot be used to offset taxable income in foreign
jurisdictions. Furthermore, repatriation of dividends to the U.S. parent may
result in additional foreign or U.S. taxes.

The Companys financial condition and results of operations could be materially
affected by fluctuations in foreign currency exchange rates and weak economic
conditions in foreign markets where the Companys products are distributed.
The effects of these conditions could include reduced unit sales and reduced
sales in dollars when converted from foreign currency amounts and material
gains and losses on transactions denominated in foreign currencies.
Furthermore, because the Companys U.S. operations are funded by sales
denominated in foreign currency, strengthening of the U.S. dollar against the
Euro, and/or the British Pound could have an adverse effect on the Companys
cash flow and results of operations.

Management expects continued high costs associated with the conduct of the U.S.
human clinical study for Macroplastique pursuant to the FDA approved IDE, the
subsequent U.S. Premarket Approval process, and pre-commercialization and
market launch costs in the U.S. relating to Macroplastique for female SUI.

As a result of the proceeds of the Rights Offering, management believes that
current resources and the funds generated from sale of the Companys products
outside the U.S. will be adequate to meet the Companys cash flow needs,
including R&D activities associated with existing products and markets through
fiscal 2004.

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PART II. OTHER INFORMATION

Except for the following, none of the items contained in PART II of Form 10-QSB
are applicable to the Company for the three months ended June 30, 2002.

ITEM 1. LEGAL PROCEEDINGS

None.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

|                       |  |                                                                                                                                                                           
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|UROPLASTY, INC         |  |                                                                                                                                                                           
|                      
|                       |  |                                                                                                                                                                           
|                      
|Date:  August 14, 2002 |  | by: /s/ DANIEL G. HOLMANDaniel G. Holman
President, Chief Executive Officer,
Chief Financial Officer (Principal Financial Officer),
Director (Principal Executive Officer)
|                      
|                       |  |                                                                                                                                                                           
|                      
|Date:  August 14, 2002 |  | by: /s/ ARIE J. KOOLEArie J. Koole
Controller (Principal Accounting Officer)                                                                                              

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