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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 December 31, 2001

Commission File No. 000-20989

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

|                                |  |                    
|------------------------------- |  | -------------------
|Minnesota, U.S.A.               |  | 41-1719250         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | 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 [    ]

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 January 21, 2002 was $6,291,523.

The number of shares outstanding of the issuers only class of common stock on January 21, 2002 was 6,143,071.

Transitional Small Business Disclosure Format:

YES [    ]       NO [X]



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TABLE OF CONTENTS



|                              |                                                                   |  |  |  |  |  |  | 
|----------------------------- | ----------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                     
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|PART II. OTHER INFORMATION   
|                              | ITEM 1. LEGAL PROCEEDINGS                                        
|SIGNATURES                   



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PART I. FINANCIAL INFORMATION

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ITEM 1. FINANCIAL STATEMENTS

UROPLASTY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)

|       |                                     |                           |   |                   |         |  |                |           |           | 
|------ | ----------------------------------- | ------------------------- | - | ----------------- | ------- |  | -------------- | --------- | --------- | 
|       |                                     |                           |   | December 31, 2001 |         |  | March 31, 2001 |          
|       |                                     |                           |   |                   |         |  |                |          
|Assets |                                     |                           |   |                   |         |  |                |          
|       | Current assets:                     |                           |   |                   |         |  |                |           |          
|       |                                     | Cash and cash equivalents |   | $                 | 803,412 |  |                | $         | 1,012,397 | 
|       |                                     | Accounts receivable, net  |   |                   | 965,684 |  |                |           | 983,450   | 
|       |                                     | Inventories               |   |                   | 835,994 |  |                |           | 752,436   | 
|       |                                     | Other                     |   |                   | 131,102 |  |                |           | 258,997   | 
|       |                                     |                           |   |                   |         | 
|       | Total current assets                |                           |   | 2,736,192         |         |  |                | 3,007,280 |          
|       | Property, plant, and equipment, net |                           |   | 818,371           |         |  |                | 902,189   |          
|       | Intangible assets, net              |                           |   | 79,965            |         |  |                | 101,232   |          
|       |                                     |                           |   |                   |         | 
|       | Total assets                        |                           | $ | 3,634,528         |         |  | $              | 4,010,701 |          
|       |                                     |                           |   |                   |         | 

See accompanying notes to consolidated financial statements.





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UROPLASTY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)

|                                     |                                            |                                                                                                                                                                        |   |                   |            |   |                |           |            |  
|------------------------------------ | ------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------------- | ---------- | - | -------------- | --------- | ---------- | -
|                                     |                                            |                                                                                                                                                                        |   | December 31, 2001 |            |   | March 31, 2001 |          
|                                     |                                            |                                                                                                                                                                        |   |                   |            |   |                |          
|Liabilities and Shareholders Equity |                                            |                                                                                                                                                                        |   |                   |            |   |                |          
|                                     | Current liabilities:                       |                                                                                                                                                                        |   |                   |            |   |                |           |           
|                                     |                                            | Accounts payable                                                                                                                                                       |   | $                 | 202,155    |   |                | $         | 213,288    |  
|                                     |                                            | Accrued liabilities                                                                                                                                                    |   |                   | 386,966    |   |                |           | 593,997    |  
|                                     |                                            | Current maturities  long-term debt                                                                                                                                    |   |                   | 49,237     |   |                |           | 46,557     |  
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  
|                                     | Total current liabilities                  |                                                                                                                                                                        |   | 638,358           |            |   |                | 853,842   |           
|                                     | Long-term debt  less current maturities   |                                                                                                                                                                        |   | 415,865           |            |   |                | 438,335   |           
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  
|                                     | Total liabilities                          |                                                                                                                                                                        |   | 1,054,223         |            |   |                | 1,292,177 |           
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  
|                                     | Shareholders equity:                      |                                                                                                                                                                        |   |                   |            |   |                |           |           
|                                     |                                            | Common stock $.01 par value; 20,000,000
shares authorized, 6,143,071 and
6,041,071 shares issued and
outstanding at December 31, 2001 and
March 31, 2001, respectively |   |                   | 61,431     |   |                |           | 60,411     |  
|                                     |                                            | Additional paid-in capital                                                                                                                                             |   |                   | 6,104,468  |   |                |           | 5,999,398  |  
|                                     |                                            | Accumulated deficit                                                                                                                                                    |   |                   | (3,163,386 | ) |                |           | (2,954,456 | )
|                                     |                                            | Accumulated other comprehensive loss                                                                                                                                   |   |                   | (373,608   | ) |                |           | (386,829   | )
|                                     |                                            | Vendor deposits                                                                                                                                                        |   |                   | (48,600    | ) |                |           |           |  
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  
|                                     | Total shareholders equity                 |                                                                                                                                                                        |   | 2,580,305         |            |   |                | 2,718,524 |           
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  
|                                     | Total liabilities and shareholders equity |                                                                                                                                                                        | $ | 3,634,528         |            |   | $              | 4,010,701 |           
|                                     |                                            |                                                                                                                                                                        |   |                   |            |  

See accompanying notes to consolidated financial statements.





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UROPLASTY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)

|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |           |   |   |           |           |  
|------------------------------------------- | ------------------------------------- | - | ------------------ | --------- | - | ----------------- | --------- | --------- | ---- | - | --------- | --------- | - | - | --------- | --------- | -
|                                            |                                       |   | Three Months Ended |           |   | Nine Months Ended |          
|                                            |                                       |   | December 31,       |           |   | December 31,      |          
|                                            |                                       |   | 2001               |           |   | 2000              |           |           | 2001 |   |           | 2000      |  
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |           |  
|Net sales                                   |                                       | $ | 1,348,650          |           |   | $                 | 1,538,892 |           |      | $ | 3,554,977 |           |   | $ | 4,229,202 |          
|Cost of goods sold                          |                                       |   | 548,826            |           |   |                   | 403,831   |           |      |   | 982,626   |           |   |   | 920,864   |          
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Gross profit                                |                                       |   | 799,824            |           |   |                   | 1,135,061 |           |      |   | 2,572,351 |           |   |   | 3,308,338 |          
|Operating expenses                          |                                       |   |                    |           |   |                   |           |           |      |   |           |           |   |   |           |          
|                                            | General and administrative            |   |                    | 273,225   |   |                   |           | 295,347   |      |   |           | 856,790   |   |   |           | 986,250   |  
|                                            | Research and development              |   |                    | 454,835   |   |                   |           | 582,010   |      |   |           | 1,256,185 |   |   |           | 1,619,421 |  
|                                            | Selling and marketing                 |   |                    | 232,955   |   |                   |           | 431,279   |      |   |           | 905,578   |   |   |           | 1,438,868 |  
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|                                            |                                       |   | 961,015            |           |   |                   | 1,308,636 |           |      |   | 3,018,553 |           |   |   | 4,044,539 |          
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Operating loss                              |                                       |   | (161,191           | )         |   |                   | (173,575  | )         |      |   | (446,202  | )         |   |   | (736,201  | )        
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Other income (expense)                      |                                       |   |                    |           |   |                   |           |           |      |   |           |           |   |   |           |          
|                                            | Interest income                       |   |                    | 5,336     |   |                   |           | 10,632    |      |   |           | 15,353    |   |   |           | 46,778    |  
|                                            | Interest expense                      |   |                    | (6,611    | ) |                   |           | (6,876    | )    |   |           | (19,817   | ) |   |           | (20,305   | )
|                                            | Foreign currency exchange
gain (loss) |   |                    | (67,552   | ) |                   |           | 109,634   |      |   |           | 42,068    |   |   |           | (134,267  | )
|                                            | Settlement                            |   |                    | 200,000   |   |                   |           |          |      |   |           | 200,000   |   |   |           |          |  
|                                            | Other                                 |   |                    |          |   |                   |           | (594      | )    |   |           | (332      | ) |   |           | (594      | )
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|                                            |                                       |   | 131,173            |           |   |                   | 112,796   |           |      |   | 237,272   |           |   |   | (108,388  | )        
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Loss before income taxes                    |                                       |   | (30,018            | )         |   |                   | (60,779   | )         |      |   | (208,930  | )         |   |   | (844,589  | )        
|Income taxes                                |                                       |   |                   |           |   |                   |          |           |      |   |          |           |   |   |          |          
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Net loss                                    |                                       | $ | (30,018            | )         |   | $                 | (60,779   | )         |      | $ | (208,930  | )         |   | $ | (844,589  | )        
|                                            |                                       |   |                    |           |   |                   |           |           |      |   |           |          
|Basic loss per common share                 |                                       | $ | (0.01              | )         |   | $                 | (0.01     | )         |      | $ | (0.03     | )         |   | $ | (0.14     | )        
|Diluted loss per common share               |                                       | $ | (0.01              | )         |   | $                 | (0.01     | )         |      | $ | (0.03     | )         |   | $ | (0.14     | )        
|Weighted average common shares
outstanding: |                                       |   |                    |           |   |                   |           |           |      |   |           |           |   |   |           |          
|                                            | Basic                                 |   |                    | 6,140,625 |   |                   |           | 5,985,271 |      |   |           | 6,088,264 |   |   |           | 5,983,871 |  
|                                            | Diluted                               |   |                    | 6,140,625 |   |                   |           | 5,985,271 |      |   |           | 6,088,264 |   |   |           | 5,983,871 |  

See accompanying notes to consolidated financial statements.





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UROPLASTY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended December 31, 2001 and 2000
(Unaudited)

|                                                      |                                                                   |                      |           |          |          |   |            |          |          |  
|----------------------------------------------------- | ----------------------------------------------------------------- | -------------------- | --------- | -------- | -------- | - | ---------- | -------- | -------- | -
|                                                      |                                                                   |                      |           | 2001     |          |   | 2000       |         
|                                                      |                                                                   |                      |           |          |          |   |            |         
|Cash flows from operating activities:                 |                                                                   |                      |           |          |          |   |            |         
|                                                      | Net loss                                                          |                      | $         | (208,930 | )        |   | $          | (844,589 | )       
|                                                      | Adjustments to reconcile net loss to net cash used in operations: |                      |           |          |          |   |            |          |         
|                                                      | Depreciation and amortization                                     |                      |           | 157,530  |          |   |            | 153,007  |         
|                                                      | Loss on disposal of assets                                        |                      |           | 2,120    |          |   |            |         |         
|                                                      | Stock-based consulting expense                                    |                      |           | 6,790    |          |   |            | 5,056    |         
|                                                      | Changes in operating assets and liabilities:                      |                      |           |          |          |   |            |          |         
|                                                      |                                                                   | Accounts receivable  |           |          | 17,766   |   |            |          | (170,550 | )
|                                                      |                                                                   | Inventories          |           |          | (83,558  | ) |            |          | (287,354 | )
|                                                      |                                                                   | Other current assets |           |          | 145,242  |   |            |          | 116,286  |  
|                                                      |                                                                   | Accounts payable     |           |          | (11,133  | ) |            |          | (84,473  | )
|                                                      |                                                                   | Accrued liabilities  |           |          | (169,331 | ) |            |          | 31,355   |  
|                                                      |                                                                   |                      |           |          |          |  
|Net cash used in operating activities                 |                                                                   |                      | (143,504  | )        |          |   | (1,081,262 | )       
|                                                      |                                                                   |                      |           |          |          |  
|Cash flows from investing activities:                 |                                                                   |                      |           |          |          |   |            |         
|                                                      | Payments for property, plant and equipment                        |                      |           | (35,646  | )        |   |            | (50,514  | )       
|                                                      | Proceeds from sale of property, plant and equipment               |                      |           | 2,225    |          |   |            |         |         
|                                                      | Payments relating to intangible assets                            |                      |           |         |          |   |            | (19,489  | )       
|                                                      | Redemption of marketable securities                               |                      |           |         |          |   |            | 750,000  |         
|                                                      |                                                                   |                      |           |          |          |  
|Net cash (used in) provided by investing activities   |                                                                   |                      | (33,421   | )        |          |   | 679,997    |         
|                                                      |                                                                   |                      |           |          |          |  
|Cash flows from financing activities:                 |                                                                   |                      |           |          |          |   |            |         
|                                                      | Repayment of long-term debt                                       |                      |           | (37,103  | )        |   |            | (35,304  | )       
|                                                      | Proceeds from issuance of note payable                            |                      |           | 8,000    |          |   |            |         |         
|                                                      | Net proceeds from issuance of stock                               |                      |           | 13,000   |          |   |            | 5,000    |         
|                                                      | Deferred offering costs                                           |                      |           | (17,347  | )        |   |            |         |         
|                                                      |                                                                   |                      |           |          |          |  
|Net cash used in financing activities                 |                                                                   |                      | (33,450   | )        |          |   | (30,304    | )       
|                                                      |                                                                   |                      |           |          |          |  
|Effect of exchange rates on cash and cash equivalents |                                                                   |                      | 1,390     |          |          |   | (10,786    | )       
|                                                      |                                                                   |                      |           |          |          |  
|Net decrease in cash and cash equivalents             |                                                                   |                      | (208,985  | )        |          |   | (442,355   | )       
|Cash and cash equivalents at beginning of period      |                                                                   |                      | 1,012,397 |          |          |   | 1,553,093  |         
|                                                      |                                                                   |                      |           |          |          |  
|Cash and cash equivalents at end of period            |                                                                   | $                    | 803,412   |          |          | $ | 1,110,738  |         
|                                                      |                                                                   |                      |           |          |          |  
|Supplemental disclosure of cash flow information:     |                                                                   |                      |           |          |          |   |            |         
|                                                      | Cash paid during the period for interest                          |                      | $         | 22,201   |          |   | $          | 22,810   |         
|                                                      | Cash paid during the period for income taxes                      |                      |           |         |          |   |            |         |         

Supplemental disclosure of non-cash financing and investing activities:

The Company issued 29,000 shares of common stock valued at $37,700 as
payment for the Companys 401(k) plan profit sharing contribution during the
nine-month period ended December 31, 2001.

During the nine-month period ended December 31, 2001, the Company issued 60,000
shares of its common stock to a vendor valued at $48,600 at December 31, 2001
related to a deposit on a mold for one of the Companys products.

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, 2001.

The consolidated financial statements presented herein as of December 31, 2001
and for the three and nine-month periods ended December 31, 2001 and 2000
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.

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. 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. Management believes that
the Companys ability to manage cash, if required, through a less aggressive
clinical trial schedule should provide adequate cash flows to fund the
Companys obligations through fiscal 2003. In the event the Company were not
to generate adequate cash flows from operations or financing activities, the
Companys US market launch could be delayed. 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.

In December 2001, the Company filed a registration statement to register
1,534,518 rights to acquire 3,069,036 shares of Companys common stock and
warrants to acquire 1,534,518 shares of common stock. If all of the rights are
sold the Company will receive gross proceeds of $3.1 million. There is no
assurance that this offering will be partially or fully completed. Simultaneous
with the effectiveness of the registration statement, the Company intends to
effect a 1 for 2 reverse stock split. The accompanying financial statements
have not been adjusted to reflect the reverse stock split.

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
will adopt the provisions of Statement No. 144 effective April 1, 2002.

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:





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|                |  |                   |         |  |                |   |         | 
|--------------- |  | ----------------- | ------- |  | -------------- | - | ------- | 
|                |  | December 31, 2001 |         |  | March 31, 2001 |  
|                |  |                   |         |  |                |  
|Raw materials   |  | $                 | 82,314  |  |                | $ | 82,827  | 
|Work-in-process |  |                   | 188,516 |  |                |   | 337,077 | 
|Finished goods  |  |                   | 565,164 |  |                |   | 332,532 | 
|                |  |                   |         |  |                |  
|                |  | $                 | 835,994 |  |                | $ | 752,436 | 
|                |  |                   |         |  |                |  

5. Comprehensive Loss

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

|                                   |                        |   |                    |       |  |                   |         |        |      |   |          |        |  |   |          |         |  
|---------------------------------- | ---------------------- | - | ------------------ | ----- |  | ----------------- | ------- | ------ | ---- | - | -------- | ------ |  | - | -------- | ------- | -
|                                   |                        |   | Three Months Ended |       |  | Nine Months Ended |        
|                                   |                        |   | December 31,       |       |  | December 31,      |        
|                                   |                        |   | 2001               |       |  | 2000              |         |        | 2001 |   |          | 2000   | 
|                                   |                        |   |                    |       |  |                   |         |        |      |   |          |        | 
|Net loss                           |                        | $ | (30,018            | )     |  | $                 | (60,779 | )      |      | $ | (208,930 | )      |  | $ | (844,589 | )      
|Items of other comprehensive loss: |                        |   |                    |       |  |                   |         |        |      |   |          |        |  |   |          |        
|                                   | Translation adjustment |   |                    | 1,431 |  |                   |         | 41,816 |      |   |          | 13,221 |  |   |          | (20,986 | )
|                                   |                        |   |                    |       |  |                   |         |        |      |   |          |       
|Total comprehensive loss           |                        | $ | (28,587            | )     |  | $                 | (18,963 | )      |      | $ | (195,709 | )      |  | $ | (865,575 | )      
|                                   |                        |   |                    |       |  |                   |         |        |      |   |          |       

6. Reconciliation of Net Loss and Share Amounts Used in EPS Calculation

Basic loss per common share is calculated by dividing net loss by the
weighted-average common shares outstanding during the period. Diluted loss per
common share for the three and nine months ended December 31, 2001 and 2000 was
calculated using the treasury-stock method to compute the weighted average
common stock outstanding assuming the conversion of dilutive potential common
shares.

|                            |                   |                  |  |              |           |   |            |  |   |              |              |   |           |  
|--------------------------- | ----------------- | ---------------- |  | ------------ | --------- | - | ---------- |  | - | ------------ | ------------ | - | --------- | -
|                            |                   |                  |  | Basic loss   |           |   |            |  |   |              | Diluted loss |  
|                            |                   |                  |  | per share    |           |   | Effect of  |  |   | per share    |             
|                            |                   |                  |  | to common    |           |   | dilutive   |  |   | to common    |             
|                            |                   |                  |  | shareholders |           |   | securities |  |   | shareholders |             
|                            |                   |                  |  |              |           |   |            |  |   |              |             
|For the three months ended: |                   |                  |  |              |           |   |            |  |   |              |              |  
|                            | December 31, 2001 |                  |  |              |           |   |            |  |   |              |              |   |          
|                            |                   | Net loss         |  | $            | (30,018   | ) |            |  |  |              |              | $ | (30,018   | )
|                            |                   | Shares           |  |              | 6,140,625 |   |            |  |  |              |              |   | 6,140,625 |  
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            |                   | Per share amount |  | $            | (0.01     | ) |            |  |  |              |              | $ | (0.01     | )
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            | December 31, 2000 |                  |  |              |           |   |            |  |   |              |              |   |          
|                            |                   | Net loss         |  | $            | (60,779   | ) |            |  |  |              |              | $ | (60,779   | )
|                            |                   | Shares           |  |              | 5,985,271 |   |            |  |  |              |              |   | 5,985,271 |  
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            |                   | Per share amount |  | $            | (0.01     | ) |            |  |  |              |              | $ | (0.01     | )
|                            |                   |                  |  |              |           |   |            |  |   |             
|For the nine months ended:  |                   |                  |  |              |           |   |            |  |   |              |              |  
|                            | December 31, 2001 |                  |  |              |           |   |            |  |   |              |              |   |          
|                            |                   | Net loss         |  | $            | (208,930  | ) |            |  |  |              |              | $ | (208,930  | )
|                            |                   | Shares           |  |              | 6,088,264 |   |            |  |  |              |              |   | 6,088,264 |  
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            |                   | Per share amount |  | $            | (0.03     | ) |            |  |  |              |              | $ | (0.03     | )
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            | December 31, 2000 |                  |  |              |           |   |            |  |   |              |              |   |          
|                            |                   | Net loss         |  | $            | (844,589  | ) |            |  |  |              |              | $ | (844,589  | )
|                            |                   | Shares           |  |              | 5,983,871 |   |            |  |  |              |              |   | 5,983,871 |  
|                            |                   |                  |  |              |           |   |            |  |   |             
|                            |                   | Per share amount |  | $            | (0.14     | ) |            |  |  |              |              | $ | (0.14     | )
|                            |                   |                  |  |              |           |   |            |  |   |             





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##### Table of Contents



The following options and warrants outstanding at December 31, 2001 and 2000 to
purchase shares of common stock were excluded from diluted loss per share as
their impact would be anti-dilutive as follows:

|                            |                   |  |                       |           |  |                          |   |          | 
|--------------------------- | ----------------- |  | --------------------- | --------- |  | ------------------------ | - | -------- | 
|                            |                   |  | Number of             |           |  |                          |   |         
|                            |                   |  | Options/Warrants      |           |  | Range of exercise prices |  
|                            |                   |  | _____________________ |           |  | _____________________    |  
|For the three months ended: |                   |  |                       |           |  |                          |   |         
|                            | December 31, 2001 |  |                       | 1,603,300 |  |                          | $ | .50-3.50 | 
|                            | December 31, 2000 |  |                       | 1,271,400 |  |                          | $ | .50-3.50 | 
|For the nine months ended:  |                   |  |                       |           |  |                          |   |         
|                            | December 31, 2001 |  |                       | 1,603,300 |  |                          | $ | .50-3.50 | 
|                            | December 31, 2000 |  |                       | 1,271,400 |  |                          | $ | .50-3.50 | 

7. 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 60,000 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 $48,600, As of December 31, 2001, as a vendor deposit
in shareholders equity.

8. Settlement

On October 26, 2001, the Company reached a litigation settlement with a third
party. Due to collectibility uncertainties, the Company will record the
settlement gain on a cash basis. During the quarter ended December 31, 2001,
the Company received and recorded a $200,000 gain related to this settlement.




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

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 following 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.



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##### Table of Contents



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 name Bioplastique. In The Netherlands and
United Kingdom, the Companys direct sales force distributes on behalf of
another company certain wound care products 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 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. Through various urological investigators in various
clinical sites across the U.S., the Company is currently conducting the human
clinical procedures specified by the study protocol.

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.

In order to reduce costs positions an aggregate of 21 positions worldwide were
canceled in fiscal 2001 and August 2001, either by terminating employment
agreements or attrition. This has reduced salary costs and associated expenses
by approximately $75,000 a month. Broken down by department the reductions are
as follows: a $9,000 per month reduction in manufacturing, a $18,000 per month
reduction in general and administrative, a $24,000 per month reduction in
research and development and a $24,000 per month reduction in selling and
marketing. The Companys realized cost reductions were in line with
managements expectation.

Set forth below is managements discussion and analysis of the financial
condition and results of operations for the three and nine month periods ended
December 31, 2001 and 2000.

Results of Operations

Net Sales: The Macroplastique product line accounts for approximately 89% of
total net sales during the periods presented. In the third quarter ended
December 2001, net sales of all products were $1,348,650, representing a
$190,242 or 12% decrease when compared to net sales of $1,538,892 for the third
quarter ended December 31, 2000.

During the third quarter of fiscal 2002, the Company launched the enhanced
delivery system. In the third quarter ended December 2001, net sales of the
modified products were $635,018, or 47% of the total net sales. The percentage
of modified





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product sales will increase in the following quarters, as the non-modified
products will be sold to a selected group of customers only. Management
believes there could be a pricing pressure upon the non-modified products. The
Company recorded an allowance for inventory obsolescence on non-modified
inventory items of approximately $66,000, for                      estimated excess
quantities resulting from the new product launch. The introduction of the
modified products in the third quarter was successful and the products have
been well accepted by the Companys customers.

During the nine months ended December 31, 2001, net sales of all products were
$3,554,977 representing a $674,225 or 16% decrease when compared to net sales
of $4,229,202 during the nine months ended December 31, 2000. Management
believes the sales decrease was primarily due to aggressive marketing programs
targeted toward the urological and gynecological surgeons by large, competitive
companies.

Management expects unit sales of Macroplastique will increase in the remaining
quarter 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 $799,824 and $1,135,061 for the quarters ended
December 31, 2001 and 2000, respectively, or 59% and 74% of net sales. Low
production volumes in the third quarter of fiscal 2002 combined with producing
in relatively fixed-cost manufacturing plants and the additional allowance for
inventory obsolescence caused the decrease in gross margin. A build-up of the
modified products inventory took place in the first six month of fiscal 2002,
to prepare for the launch in November 2001. A continued low gross margin as a
percentage of sales is expected for the fourth quarter of fiscal 2002, as
production levels are not expected to increase until early fiscal 2003. Gross
profit was $2,572,351 and $3,308,338 for the nine months ended December 31,
2001 and 2000, respectively, or 72% and 78% of net sales. Excess capacity,
manufacturing inefficiencies due to the manufacturing of the modified products
and the additional allowance for inventory obsolescence of $66,000 caused the
decrease in the gross profit margin.

General and Administrative Expense: General and administrative (G&A) expenses
decreased 7% from $295,347 during the third quarter of fiscal 2001 to $273,225
during the third quarter of fiscal 2002 and decreased 13% from $986,250 during
the nine months ended December 31, 2000 to $856,790 during the nine months
ended December 31, 2001. The decrease in G&A expenses is primarily attributed
to the decrease in personnel as a result of the Companys restructuring
activities in late fiscal 2001 and in August 2001. Legal expenses were $26,000
higher in the third quarter of fiscal 2002, compared to the third quarter of
fiscal 2001, caused by the settlement noted below.

Research and Development Expense:  Research and development (R&D) expenses
decreased $127,175, or 22%, from $582,010 during the third quarter of fiscal
2001 to $454,835 during the third quarter of fiscal 2002 and decreased $363,236
or 22% from $1,619,421 during the nine months ended December 31, 2000 to
$1,256,185 during the nine months ended December 31, 2001. The decrease in R&D
expense resulted principally from a decrease in personnel related to the
Companys restructuring activities in fiscal 2001 and fiscal 2002. The human
clinical study costs are primarily comprised of clinical site costs relating to
patient procedures and follow-up examinations, in addition to the costs of
managing the study.

Selling and Marketing Expenses:  Selling and marketing (S&M) costs decreased
46% from $431,279 during the third quarter of fiscal 2001 to $232,955 during
the third quarter of fiscal 2002 and decreased $533,290 or 37% from $1,438,868
during the nine months ended December 31, 2000 to $905,578 during the nine
months ended December 31, 2001 as a result of the fiscal 2001 and fiscal 2002
restructuring of the international sales and marketing departments as well as
decreased salesperson travel costs and decrease 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
$131,173 and $112,796 for the quarters ended December 31, 2001 and 2000,
respectively and $237,272 and $(108,388) for the nine months ended December 31,
2001 and 2000, respectively. The majority of the differences between periods
was due to exchange gains and losses, reduced interest income and the $200,000
of proceeds in the third quarter of fiscal 2002 from the litigation settlement
as described in note 8 to the interim consolidated financial statements.
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 Dutch Guilder 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 December 31,
2001 and 2000, the Company had $4.3 million and 4.7 million of dollar
denominated debt at its foreign Dutch subsidiary. The Company recognized
foreign currency losses of $67,552 in the current-years quarter primarily as
the result of a strengthened US Dollar compared to the Dutch Guilder. In the
prior year quarterly period, the Company recognized $109,434 of foreign
currency gains. For the





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nine-month period ended December 31, 2001, the Company recognized foreign
currency gains of $42,068 as compared to losses of $134,267 for the same
prior-year period.

Liquidity and Capital Resources

As of December 31, 2001, the Companys cash and cash equivalent balances
totaled $803,412. The capital resources existing at December 31, 2001 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 December 31, 2001, the Company had working capital of approximately $2.1
million. During the third quarter of fiscal year 2002, operations provided
approximately $230,000 of cash and used approximately $144,000 of cash in
operating activities during the nine months ended December 31, 2001.

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, 2001 of approximately
$965,684 and $835,994, respectively.

The inventory includes approximately $15,000 raw materials and $112,000
finished goods relating to non-modified inventory items. The Company recorded
an allowance for inventory obsolescence on non-modified inventory items of
approximately $66,000, of which $15,000 for raw materials and $51,000 for
finished goods in the quarter ended December 31, 2001. The Company intends to
phase out the inventory of non-modified product totaling $61,000, for which no
allowance for inventory obsolescence has been recorded, during the next several
fiscal quarters. As of December 31, 2001 the allowance for inventory
obsolescence is $31,000 for specific inventory items and $66,000 for
non-modified inventory items.

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
significantly 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.
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, Dutch Guilder and/or the British Pound could have an adverse effect on
the Companys cash flow.

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 Companys cost reduction activities and the Companys
ability to manage the timing of the FDA clinical expenditures, 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 2003.

Additional funds from the sale of the Companys securities or other alternative
sources will be necessary to actively support the U.S. regulatory activities.
It is the intention of the Company to raise additional capital this fiscal
year. There can be no assurance that such alternative sources of funds will be
available to the Company.

In December 2001, the Company filed a registration statement to register
1,534,518 rights to acquire 3,069,036 shares of Companys common stock and
warrants to acquire 1,534,518 shares of common stock. If all of the rights are
sold the Company will receive gross proceeds of $3.1 million. There is no
assurance that this offering will be partially or fully completed. Simultaneous
with the effectiveness of the registration statement, the Company intends to
effect a 1 for 2 reverse stock split. The accompanying financial statements
have not been adjusted to reflect the reverse stock split.





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##### Table of Contents









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 and nine months ended December 31,
2001.

ITEM 1. LEGAL PROCEEDINGS

In July 21, 1998, the Company announced the United States Patent and Trademark
Office (USPTO) had informed the Company the USPTO would, as requested by the
Company, initiate an interference proceeding (the Interference Proceeding)
between the Company and Carbon Medical Technologies, Inc. (CMT), formerly
Advanced UroScience, Inc., White Bear Lake, Minnesota, to determine which
company was the first to invent pyrolytic carbon-coated micro beads for use in
treating urinary incontinence. The USPTO had not, as of October 31, 2001,
formally declared the Interference Proceeding.

Later in 1998, the Company commenced a related lawsuit against CMT for
misappropriation of trade secrets (Misappropriation Lawsuit) pertaining to
the pyrolytic carbon-coated micro beads, among other things and CMT
subsequently brought a counterclaim against the Company with respect to such
matter.

Effective October 26, 2001, the Company and CMT entered into a Settlement
Agreement terminating the above-referenced legal proceedings; as a part of such
Agreement, the Company agreed to dismiss the Misappropriation Lawsuit and to
abandon the Interference Proceeding.

Proceeds from the Settlement will be recognized upon the receipt of cash.
During the quarter ended December 31, 2001, the Company received and recorded a
$200,000 gain related to this settlement.





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##### Table of Contents






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:  February 14, 2002 |  | by: /s/ DANIEL G. HOLMAN
Daniel G. Holman
President, Chief Executive Officer,
Chief Financial Officer (Principal Financial Officer),
Director (Principal Executive Officer)
|                        
|Date:  February 14, 2002 |  | by: /s/ ARIE J. KOOLE
Arie J. Koole
Controller (Principal Accounting Officer)