##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-QSB

(Mark One)



|[x]                                           | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934  | 
|--------------------------------------------- | ---------------------------------------------------------------------------------------- | 
|                                             
|For the quarterly period ended March 31, 2002
|                                             
|[   ]                                         | TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | 

For the transition period from _______________ to _______________

Commission File Number 0-27689

AMDL, Inc.

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(Exact name of small business issuer as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 33-0413161                       
|                                                               |  |                                  
|(State or other jurisdiction
of incorporation or organization) |  | (IRS Employer
Identification No.)

2492 Walnut Avenue, Suite 100, Tustin, California 92780

---

(Address of principal executive offices)


(714) 505-4460

---

(Issuers telephone number)


Not Applicable

---

(Former name, former address and former fiscal year, if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes X          
No

As of May 10, 2002 the Company had 8,683,324 shares of its $.001 par value
common stock issued and outstanding.



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TABLE OF CONTENTS



|                             |                                                                                               |                               |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1. Financial Statements                                                                 
|                             |                                                                                               | BALANCE SHEETS               
|                             |                                                                                               | STATEMENTS OF OPERATIONS     
|                             |                                                                                               | STATEMENTS OF CASH FLOWS     
|                             |                                                                                               | NOTES TO FINANCIAL STATEMENTS
|                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II  OTHER INFORMATION 
|SIGNATURES                  



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|                                                                                             |  |      |    | 
|-------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                             |  | PAGE
|                                                                                             |  |     
|PART I  FINANCIAL INFORMATION                                                               |  |      | 2  | 
|                                                                                            
|Item 1. Financial Statements                                                                 |  |      |    | 
|                                                                                            
|Balance Sheets at March 31, 2002 (unaudited) and December 31, 2001                           |  |      | 2  | 
|                                                                                            
|Unaudited Statements of Operations for the three
month periods ended March 31, 2002 and 2001 |  |      | 3  | 
|                                                                                            
|Unaudited Statements of Cash Flows for the
three month periods ended March 31, 2002 and 2001 |  |      | 4  | 
|                                                                                            
|Notes to Condensed Consolidated Financial Statements                                         |  |      | 5  | 
|                                                                                            
|Item 2. Managements Discussion and Analysis                                                 |  |      | 8  | 
|                                                                                            
|PART II OTHER INFORMATION                                                                    |  |      | 10 | 



1



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##### Table of Contents






PART I FINANCIAL INFORMATION




Item 1. Financial Statements




AMDL, INC.
 BALANCE SHEETS
 
ASSETS

|                                      |                                                                                                                                                                           |   |             |             |              |   |           |             |  
|------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | ----------- | ------------ | - | --------- | ----------- | -
|                                      |                                                                                                                                                                           |   | March 31,   |             | December 31,
|                                      |                                                                                                                                                                           |   | 2002        |             | 2001        
|                                      |                                                                                                                                                                           |   |             |             |             
|                                      |                                                                                                                                                                           |   | (Unaudited) |             | (Audited)   
|Current assets:                       |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                      | Cash and cash equivalents                                                                                                                                                 |   | $           | 1,710,981   |              |   | $         | 2,929,833   |  
|                                      | Accounts receivable                                                                                                                                                       |   |             | 10,371      |              |   |           | 10,287      |  
|                                      | Inventories                                                                                                                                                               |   |             | 82,375      |              |   |           | 79,466      |  
|                                      | Prepaid expenses                                                                                                                                                          |   |             | 102,936     |              |   |           | 27,727      |  
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|Total current assets                  |                                                                                                                                                                           |   | 1,906,663   |             |              |   | 3,047,313 |            
|Intellectual property, net            |                                                                                                                                                                           |   | 1,933,333   |             |              |   | 1,958,333 |            
|Fixed assets, net                     |                                                                                                                                                                           |   | 39,061      |             |              |   | 15,000    |            
|Other assets                          |                                                                                                                                                                           |   | 5,758       |             |              |   | 5,758     |            
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                      |                                                                                                                                                                           | $ | 3,884,815   |             |              | $ | 5,026,404 |            
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                     
|LIABILITIES AND STOCKHOLDERS DEFICIT
|                                     
|Current liabilities:                  |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                      | Accounts payable and accrued expenses                                                                                                                                     |   | $           | 125,919     |              |   | $         | 126,416     |  
|                                      | Accrued payroll and related expenses                                                                                                                                      |   |             | 51,651      |              |   |           | 85,778      |  
|                                      | Customer deposits                                                                                                                                                         |   |             | 5,800       |              |   |           | 5,800       |  
|                                      | Notes payable                                                                                                                                                             |   |             | 25,000      |              |   |           | 25,000      |  
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|Total current liabilities             |                                                                                                                                                                           |   | 208,370     |             |              |   | 242,994   |            
|Commitments and contingencies         |                                                                                                                                                                           |   |             |             |              |   |           |            
|Stockholders equity:                 |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                      | Common stock, $0.001 par value; 50,000,000 shares
authorized; 8,201,656 and 8,076,657 shares issued
and outstanding at March 31, 2002 and December
31, 2001, respectively |   |             | 8,202       |              |   |           | 8,077       |  
|                                      | Additional paid in capital                                                                                                                                                |   |             | 22,101,372  |              |   |           | 21,831,200  |  
|                                      | Accumulated deficit                                                                                                                                                       |   |             | (18,433,129 | )            |   |           | (17,055,867 | )
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|Total stockholders equity            |                                                                                                                                                                           |   | 3,676,445   |             |              |   | 4,783,410 |            
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            
|                                      |                                                                                                                                                                           | $ | 3,884,815   |             |              | $ | 5,026,404 |            
|                                      |                                                                                                                                                                           |   |             |             |              |   |           |            

See accompanying notes to financial statements.



2



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AMDL, INC.
 
STATEMENTS OF OPERATIONS
(Unaudited)

|                                    |                            |          |            |                    |            |      |           |         |          |  
|----------------------------------- | -------------------------- | -------- | ---------- | ------------------ | ---------- | ---- | --------- | ------- | -------- | -
|                                    |                            |          |            | Three Months Ended
|                                    |                            |          |            | March 31,         
|                                    |                            |          |            |                   
|                                    |                            |          |            | 2002               |            | 2001
|                                    |                            |          |            |                    |            |     
|Revenues:                           |                            |          |            |                    |            |      |           |        
|                                    | Product sales              |          | $          | 30,745             |            |      | $         | 44,230  |         
|                                    | Licensing                  |          |            |                   |            |      |           | 15,517  |         
|                                    |                            |          |            |                    |            |      |           |        
|                                    |                            |          | 30,745     |                    |            |      | 59,747    |        
|Cost of sales                       |                            |          | 15,294     |                    |            |      | 14,463    |        
|                                    |                            |          |            |                    |            |      |           |        
|Gross profit                        |                            |          | 15,451     |                    |            |      | 45,284    |        
|Operating expenses:                 |                            |          |            |                    |            |      |           |        
|                                    | Research and development   |          |            | 149,397            |            |      |           | 22,127  |         
|                                    | General and administrative |          |            | 1,253,788          |            |      |           | 501,756 |         
|                                    |                            |          |            |                    |            |      |           |        
|                                    |                            |          | 1,403,185  |                    |            |      | 523,883   |        
|                                    |                            |          |            |                    |            |      |           |        
|Loss from operations                |                            |          | (1,387,734 | )                  |            |      | (478,599  | )      
|Other income:                       |                            |          |            |                    |            |      |           |        
|                                    | Interest income            |          |            | 10,472             |            |      |           | 18,632  |         
|                                    |                            |          |            |                    |            |      |           |        
|                                    |                            | Net loss |            | $                  | (1,377,262 | )    |           | $       | (459,967 | )
|                                    |                            |          |            |                    |            |      |           |        
|Basic and diluted loss
per share    |                            | $        | (0.17      | )                  |            | $    | (0.09     | )      
|                                    |                            |          |            |                    |            |      |           |        
|Weighted average shares
outstanding |                            |          | 8,141,471  |                    |            |      | 5,349,357 |        
|                                    |                            |          |            |                    |            |      |           |        

See accompanying notes to financial statements.



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AMDL, INC.
 
STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |           |         |          |           | 
|------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ------- | ------------------ | --------- | --------- | ------- | -------- | --------- | 
|                                                  |                                                                                 |                                                               |                                       |                                                     |         | Three Months Ended
|                                                  |                                                                                 |                                                               |                                       |                                                     |         | March 31,         
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                   
|                                                  |                                                                                 |                                                               |                                       |                                                     |         | 2002               |           | 2001     
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Cash flows from operating activities:             |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  | Net loss                                                                        |                                                               | $                                     | (1,377,262                                          | )       |                    | $         | (459,967  | )      
|                                                  | Adjustments to reconcile net loss to net cash used in operating activities:     |                                                               |                                       |                                                     |         |                    |           |           |        
|                                                  |                                                                                 | Depreciation and amortization                                 |                                       |                                                     | 26,603  |                    |           |           |        |         
|                                                  |                                                                                 | Fair market value of common stock issued for services         |                                       |                                                     | 270,297 |                    |           |           | 131,200 |         
|                                                  |                                                                                 | Fair market value of warrants and options issued for services |                                       |                                                     |        |                    |           |           | 5,156   |         
|                                                  |                                                                                 | Changes in operating assets and liabilities:                  |                                       |                                                     |         |                    |           |           |         |         
|                                                  |                                                                                 |                                                               | Accounts receivable, net              |                                                     |         | (84                | )         |           |         | (6,332   | )        
|                                                  |                                                                                 |                                                               | Prepaid expenses                      |                                                     |         | (9,800             | )         |           |         |         |          
|                                                  |                                                                                 |                                                               | Inventories                           |                                                     |         | (2,909             | )         |           |         | 3,285    |          
|                                                  |                                                                                 |                                                               | Accounts payable and accrued expenses |                                                     |         | (497               | )         |           |         | (112,539 | )        
|                                                  |                                                                                 |                                                               | Accrued payroll and related expenses  |                                                     |         | (34,127            | )         |           |         | (5,303   | )        
|                                                  |                                                                                 |                                                               | Deferred revenue                      |                                                     |         |                   |           |           |         | (15,517  | )        
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Net cash used in operating activities             |                                                                                 |                                                               | (1,127,779                            | )                                                   |         |                    | (460,017  | )        
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Cash flows from investing activities:             |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  | Purchases of equipment                                                          |                                                               |                                       | (25,664                                             | )       |                    |           |          |        
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  |                                                                                 |                                                               |                                       | Net cash used in investing activities               |         |                    | (25,664   | )         |         |          |          | 
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Cash flows from financing activities:             |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  | Stock subscription receivable                                                   |                                                               |                                       |                                                    |         |                    |           | 2,000,000 |        
|                                                  | Proceeds from issuance of common stock,
net of offering costs of $4,375 in 2001 |                                                               |                                       |                                                    |         |                    |           | 39,375    |        
|                                                  | Offering costs paid in advance for monies raised                                |                                                               |                                       | (65,409                                             | )       |                    |           | (82,622   | )      
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  |                                                                                 |                                                               |                                       | Net cash (used in) provided by financing activities |         |                    | (65,409   | )         |         |          | 1,956,753 | 
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Net change in cash                                |                                                                                 |                                                               | (1,218,852                            | )                                                   |         |                    | 1,496,736 |          
|Cash at beginning of period                       |                                                                                 |                                                               | 2,929,833                             |                                                     |         |                    | 1,241,360 |          
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Cash at end of period                             |                                                                                 | $                                                             | 1,710,981                             |                                                     |         | $                  | 2,738,096 |          
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|Supplemental disclosure of cash flow information: |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  | Cash paid during the period for                                                 |                                                              
|                                                  |                                                                                 | Interest                                                      |                                       | $                                                   |        |                    |           | $         |        |         
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          
|                                                  |                                                                                 | Income taxes                                                  |                                       | $                                                   |        |                    |           | $         |        |         
|                                                  |                                                                                 |                                                               |                                       |                                                     |         |                    |           |          

See accompanying notes to financial statements.



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AMDL, INC.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
 
For the Periods Ended March 31, 2002 and 2001

NOTE 1  MANAGEMENTS REPRESENTATION

The financial statements included herein have been prepared by AMDL, Inc. (the
Company), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information normally included in
the financial statements prepared in accordance with accounting principles
generally accepted in the United States of America has been omitted pursuant
to such rules and regulations. However, the Company believes that the
disclosures are adequate to make the information presented not misleading. It
is suggested that the financial statements be read in conjunction with the
audited financial statements and notes for the fiscal year ended December 31,
2001 included in the Companys Annual Report on Form 10-KSB. The interim
results are not necessarily indicative of the results for the full year.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Since inception, the Company has primarily been engaged in the commercial
development of, and the obtaining of various governmental regulatory approvals
for the marketing of its proprietary diagnostic tumor-marker test kit (DR-70®)
to detect the presence of lung and other types of cancer, and its proprietary
test kit (Pylori Probe) designed to detect antibodies to Helicobacter pylori
(H. pylori), a bacterium associated with chronic gastritis and ulcers which,
if left untreated, may lead to stomach cancer. The Companys product line
also includes a selection of diagnostic test kits for several types of cancer,
infectious diseases, endocrinology, diabetes, nephrology and allergy.

Inventories

Inventories, which consist primarily of raw materials and related materials,
are stated at the lower of cost or market with cost determined on a first-in,
first-out (FIFO) basis. The Company regularly monitors inventories for excess
or obsolete items and makes any valuation corrections when such adjustments
are needed.

Common Stock Issued for Services Rendered

The Company periodically issues common stock for services rendered. Common
stock issued is valued at the estimated fair market value, as determined by
management and the board of directors of the Company. Management and the board
of directors consider market price quotations, recent stock offering prices
and other factors in determining fair market value for purposes of valuing the
common stock.

Risks and Uncertainties

Both of the Companys lines of proprietary test kits are deemed medical
devices or biologics, and as such are governed by the Federal Food and Drug
and Cosmetics Act and by the regulations of state agencies and various foreign
government agencies. Currently, the Company is not permitted to sell DR-70®
in the United States. The Company has received regulatory approval from
various foreign governments to sell its products and is in the process of
obtaining regulatory approval within other foreign markets. There can be no
assurance that the Company will maintain the regulatory approvals required to
market its products.

The Company is subject to the risk of failure in maintaining its current
regulatory approvals and in obtaining future regulatory approval, as well as
the timely receipt of such approval, if obtained. Therefore, the Company is
subject to substantial business risks and uncertainties inherent in such an
entity; including the potential of business failure.

The Companys revenue from product sales derived from its operations is small.
However, the Company believes that its current cash position of $1,710,981 at
March 31, 2002 is sufficient to fund its operations and working capital
requirements through at least December 31, 2002.



5



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##### Table of Contents



AMDL, INC.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
 
For the Periods Ended March 31, 2002 and 2001

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

Product sales revenue is recognized upon shipment of products to customers.
Licensing revenue is recognized ratably over the term of each respective
agreement.

Segments of an Enterprise and Related Information

During the three months ended March 31, 2002, approximately 44% of our sales
were to customers in foreign countries. Customers in Taiwan accounted for
approximately 40% of total sales, or 91% of foreign sales. During the three
months ended March 31, 2001, approximately 78% of our sales were to customers
in foreign countries. Customers in Taiwan accounted for approximately 64% of
total sales, or 82% of foreign sales and customers in the United Kingdom
accounted for approximately 14% of total sales, or 18% of foreign sales. The
Company currently operates in one segment.

NOTE 3  STOCK ISSUANCES

On November 15, 2001, we authorized the issuance of 200,000 shares of our
common stock to a consultant for services rendered or to be rendered over a
six-month period. On each of December 15, 2001 and January 15, 2002 we issued
33,333 shares pursuant to this agreement. These shares were valued at $75,083
and $56,383, respectively, based upon the trading price of our common stock on
the date of issue. On February 25, 2002, the Company issued the remaining
133,334 shares to the consultant. The value of 33,333 of these shares, or
$92,082, was charged to consulting expense in February 2002 and the value of
33,333 shares, or $121,832, was charged to consulting expense in March 2002.
The remaining shares will be expensed on the dates the shares are earned in
the same manner.

On January 22, 2002, the Company issued 25,000 shares of common stock to a
consultant for services rendered in connection with the raising of capital.
The shares were charged to equity as cost of funding.

During the three months ended March 31, 2002 the Company expended $65,409 in
fees, travel and other costs representing additional costs of funding in
connection with raising capital, which has been recorded as prepaid expense.
As of March 31, 2002 a total of $93,136 of expenses relating to raising future
capital are recorded as prepaid expenses in the accompanying balance sheet.
These costs will be netted against funds raised in 2002 in new offerings or
expensed if funding does not occur.

NOTE 4  STOCK OPTIONS

The Company has a 1999 Stock Option Plan (the 1999 Plan). Under the 1999
Plan, incentive stock options and nonqualified options may be granted to
officers and employees of the Company for the purchase of up to 2,000,000
shares of the Companys common stock. 191,000 options were granted under the
1999 Plan during the three months ended March 31, 2002 to employees and
directors. All options granted have an exercise price equal to the fair
market value at the date of grant, vested upon grant and expire in five years.
No stock option expense was recognized in the statement of operations during
the three months ended March 31, 2002.

On January 25, 2002, subject to shareholder approval, the board of directors
adopted the 2002 Stock Option Plan (the 2002 Plan). Under the 2002 Plan,
incentive stock options and nonqualified options may be granted to officers
and employees of the Company for the purchase of up to 1,000,000 shares of the
Companys common stock. The exercise price per share under the incentive
stock option plan shall not be less than 100% of the fair market value per
share on the date of grant. The exercise price per share under the
non-qualified stock option plan shall


6Table of Contents

AMDL, INC.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
 
For the Periods Ended March 31, 2002 and 2001

NOTE 4  STOCK OPTIONS (continued)

not be less than 85% of the fair market value per share on the date of grant.
Expiration dates for the grants may not exceed 10 years from the date of
grant. The 2002 Plan terminates on January 24, 2012. No options were granted
under the 2002 Plan during the three months ended March 31, 2002.

NOTE 5  SUBSEQUENT EVENTS

On April 15, 2002, the Company recognized the value of 33,334 shares of common
stock of $83,585 (based on the market price on the date of release) issued to
a consultant for services rendered. The remaining 33,334 shares are scheduled
to be released on May 15, 2002 (see Note 3)

On April 25, 2002, the Company issued 380,000 common shares upon exercise of
an aggregate of 380,000 previously outstanding warrants and options at $0.68
per share. The Company received gross proceeds of $258,400.

On May 3, 2002, the Company issued 35,000 shares of common stock to a
consultant for services rendered in connection with the raising of capital.
The shares were charged to equity as cost of funding.



7



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Liquidity and Capital Resources

Total assets decreased from $5,026,404 at December 31, 2001 to $3,884,815 at
March 31, 2002. The decrease is a result of cash used for research and
development and operations and funding activities.

Our total outstanding indebtedness decreased to $208,370 at March 31, 2002 as
compared to $242,994 at December 31, 2001. The decrease resulted from cash
used to pay accrued payroll at March 31, 2002.

From December 31, 2001 to March 31, 2002, our cash and cash equivalents
decreased by $1,218,852 as a result of (i) expenditures for research and
development, including $76,890 for research studies, (ii) operations,
including investor relations costs of $374,463 and (iii) expenditures for
prepaid funding costs of $65,409. As of May 1, 2002, cash is being depleted
at the rate of approximately $175,000 per month.

The Company is seeking to raise up to $7,500,000 in an offering of securities
in 2002. Through March 31, 2002 the Company has expended a total of $93,136
in costs related to its funding activities. There is no assurance that the
Company will be successful in these efforts. In addition, we expect to
receive some additional cash from product sales, although no definitive orders
or commitments have been received in any significant quantity. There is no
assurance as to when, if ever, we will be able to conduct our operations on a
profitable basis.

We do not anticipate any significant changes in the number of administrative
employees; however, we may seek to add one or more additional marketing or
manufacturing employees to further our efforts to distribute and manufacture
our products.

Results of Operations

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31,
2001.

During the three months ended March 31, 2002, the Company generated $30,745
from product sales compared to revenues from product sales for the three
months ended March 31, 2001 of $44,230. The decrease in product sales is due
to the failure of our former distributor in Asia to purchase DR-70® pursuant
to the terms of the agreement that we terminated in December 2001. A new
distributor in Taiwan and Hong Kong was appointed in December 2001 and placed
initial orders in February 2002. In the three months ended March 31, 2001, we
also recorded licensing revenues of $15,517 related to the terminated
agreement with the former distributor. The Companys gross profit on product
sales was 50.3% for the three months ended March 31, 2002 compared to 67.3%
for the prior year period. The decrease in gross profit is the result of
lower sales of DR-70® and higher sales of OEM products in the first quarter of
the current year over the prior year. Research and development expenses for
the three months ended March 31, 2002 were $149,397 as compared to $22,127 for
the three months ended March 31, 2001. The increase of $127,270 was primarily
a result of research studies costing $76,891 and the increased cost of
services provided by our principal consultant in the amount of $50,500.
General and administrative expenses increased by $752,032 from $501,756 for
the three months ended March 31, 2001 to $1,253,788 for the three months ended
March 31, 2002 primarily as a result of increases of: (i) legal fees of
$106,336; (ii) investor relations costs of $239,094; and (iii) consulting
expenses of $341,070, including non-cash compensation of $270,297 for stock
issued for services. As a result of the above, in the three months ended
March 31, 2002, the Companys net loss was $1,377,262 or $(0.17) per share
compared to a net loss of $459,967 or $(0.09) per share for the same period in
the prior year.

Forward Looking Statements

This Form 10-QSB contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements made by the Company involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially from the forward looking statements



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include, but are not limited to, risks associated with lack of significant
operating history, demand for the Companys products, international business
operations, dependence on licensees, governmental regulations, technological
changes, intense competition and dependence on management. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Companys management disclaims any obligation
to forward-looking statements contained herein to reflect any change in the
Companys expectation with regard thereto or any change in events, conditions,
circumstances or assumptions underlying such statements.



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PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

Inapplicable.

Item 2. Changes in Securities and Use of Proceeds.

On November 15, 2001, we authorized the issuance of 200,000 shares of our
common stock to a consultant for services rendered or to be rendered over a
six-month period. On each of December 15, 2001 and January 15, 2002 we issued
33,333 shares pursuant to this agreement. These shares were valued at $75,083
and $56,383, respectively, based upon the closing price of our common stock on
the date of issue. On February 25, 2002, the Company issued the remaining
133,334 shares to the consultant. The value of 33,333 of these shares, or
$92,082, was charged to consulting expense in February 2002 and the value of
33,333 shares, or $121,832, was charged to consulting expense in March 2002.
The remaining shares will be expensed on the dates the shares are earned in
the same manner. These shares of common stock were issued pursuant to Section
4(2) of the Securities Act. There was no underwriter involved in this
issuance.

On January 22, 2002, the Company issued 25,000 shares of common stock to a
consultant for services rendered in connection with the raising of capital.
The shares were charged to equity as cost of funding. The common stock was
issued pursuant to Section 4(2) of the Securities Act. There was no
underwriter involved in this issuance.

Item 3. Defaults Upon Senior Securities.

Inapplicable.

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

Inapplicable.

Item 5. Other Information.

Inapplicable.

Item 6. Exhibits and Reports on Form 8-K.

None




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.

|                    |                                     |                   
|------------------- | ----------------------------------- | ------------------
|                    | AMDL, Inc.                         
|                   
|Dated: May 10, 2002 | By:                                 | /S/ Gary L. Dreher
|                    |                                    
|                    | GARY L. DREHER,
          President



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