##### 



SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q SB

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[X]   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
|     
|      |  | For the Quarter ended July 31, 2002                                                     
|     
|[   ] |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1943.     
|     
|      |  | For the Transition period from

to                                                      

Commission file number 33-24566-A

BIO-LOK INTERNATIONAL INC.
(Name of registrant in its charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|DELAWARE                                                       |  | 65-0317138                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer
Identification No.)
|                                                              
|312 S. Military Trail, Deerfield Beach, Florida                |  | 33442                            
|                                                               |  |                                  
|(Address of principal executive offices)                       |  | (Zip Code)                       
|                                                              
|Registrants telephone number, including area code:            |  | (954) 698-9998                   



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Securities registered pursuant to Section 12 (b) of the Exchange Act:

|                             |  |                                          
|---------------------------- |  | -----------------------------------------
|Title of each class          |  | Name of each exchange on which registered
|Common Stock, $.01 par value |  | NASD OTC Bulletin Board                  

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

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES [X]NO [   ].

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court (1997). YES
[X]   NO [   ]

As of July 31, 2002, the Registrant had 6,667,144 Common Stock shares
outstanding, at a par value $.01 per share.





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##### 



TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION

|        |  |                                                                                                                        |  |  |    | 
|------- |  | ---------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Item 1. |  | Financial Statements                                                                                                   |  |  | 2  | 
|       
|        |  | Condensed Consolidated Statements of Operations for the three and nine months
ended July 31, 2002 and 2001 (unaudited) |  |  |    | 
|       
|        |  | Condensed Consolidated Balance Sheets as of July 31, 2002 (unaudited)
and October 31, 2001                             |  |  |    | 
|       
|        |  | Condensed Consolidated Statements of Cash Flows for nine month
ended July 31, 2002 and 2001 (unaudited)                |  |  |    | 
|       
|        |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                       |  |  | 6  | 
|       
|Item 2. |  | Managements Discussion and Analysis of Financial Results of Operations                                                |  |  | 8  | 
|       
|        |  | Financial Condition                                                                                                    |  |  | 10 | 
|       
|Item 4. |  | Controls and Procedures                                                                                                |  |  | 10 | 
|       
|PART II |  |                                                                                                                        |  |  |    | 
|       
|Item 6. |  | Exhibits, List and Reports on Form 8-K                                                                                 |  |  | 11 | 
|       
|        |  | Signatures                                                                                                             |  |  | 11 | 
|       
|        |  | Qualifications                                                                                                         |  |  | 12 | 



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2



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##### 



PART I

Item 1. Financial Statements

BIO-LOK INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)

|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |   | 
|-------------------------------------------------------------- |  | - | ------------------ | - | ----------------- | - | --------- | - | ---- | - | --------- | - |  | - | --------- | - | 
|                                                               |  |   | Three Months Ended |   | Nine Months Ended
|                                                               |  |   | July 31,           |   | July 31,         
|                                                               |  |   |                    |   |                  
|                                                               |  |   | 2002               |   | 2001              |   | 2002      |   | 2001
|                                                               |  |   |                    |   |                   |   |           |   |     
|Net Sales                                                      |  | $ | 793,808            |   |                   | $ | 491,634   |   |      | $ | 2,166,426 |   |  | $ | 1,795,440 |  
|Cost of Goods Sold                                             |  |   | 413,724            |   |                   |   | 136,762   |   |      |   | 743,464   |   |  |   | 461,475   |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|GROSS PROFIT                                                   |  |   | 380,084            |   |                   |   | 354,872   |   |      |   | 1,422,962 |   |  |   | 1,333,965 |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Selling                                                        |  |   | 306,138            |   |                   |   | 133,255   |   |      |   | 959,767   |   |  |   | 350,054   |  
|Admin. & General Exp.                                          |  |   | 370,566            |   |                   |   | 281,815   |   |      |   | 1,204,854 |   |  |   | 840,445   |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|                                                               |  |   | 676,704            |   |                   |   | 415,070   |   |      |   | 2,164,621 |   |  |   | 1,190,499 |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Operating Income (Expense)                                     |  |   | (296,620           | ) |                   |   | (60,198   | ) |      |   | (741,659  | ) |  |   | 143,466   |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Other Income                                                   |  |   | 0                  |   |                   |   | 0         |   |      |   | 18,351    |   |  |   | 0         |  
|Other Expense                                                  |  |   | (25,250            | ) |                   |   | 0         |   |      |   | (77,750   | ) |  |   | 0         |  
|Exchange Rate gains/losses                                     |  |   | (2,918             | ) |                   |   | 0         |   |      |   | (2,918    | ) |  |   | 0         |  
|Interest Expense                                               |  |   | (25,105            | ) |                   |   | (36,798   | ) |      |   | (86,757   | ) |  |   | (93,088   | )
|Other Income (Expense)                                         |  |   | (53,273            | ) |                   |   | (36,798   | ) |      |   | (149,074  | ) |  |   | (93,088   | )
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|NET INCOME (loss)                                              |  | $ | (349,893           | ) |                   | $ | (96,996   | ) |      | $ | (890,733  | ) |  | $ | 50,378    |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Net Income Available to
Common Share Owners                    |  | $ | -0-                |   |                   | $ | -0-       |   |      | $ | -0-       |   |  | $ | 50,378    |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Net Income (loss) per
Common Share basic
and diluted           |  | $ | (.05               | ) |                   | $ | (.02      | ) |      | $ | (.14      | ) |  | $ | .01       |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Dividends per Common Share                                     |  | $ | -0-                |   |                   | $ | -0-       |   |      | $ | -0-       |   |  | $ | -0-       |  
|                                                               |  |   |                    |   |                   |   |           |   |      |   |           |   |  |   |           |  
|Weighted Average Common
Shares Outstanding  basic
and diluted |  |   | 6,667,144          |   |                   |   | 6,085,358 |   |      |   | 6,445,873 |   |  |   | 6,085,358 |  

The accompanying notes are an integral part of the
Condensed Consolidated Financial Statements.

3



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##### 



BIO-LOK INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

|                                         |                                                                                                                |                                  |           |             |           |             |           |           |           | 
|---------------------------------------- | -------------------------------------------------------------------------------------------------------------- | -------------------------------- | --------- | ----------- | --------- | ----------- | --------- | --------- | --------- | 
|                                         |                                                                                                                |                                  |           | July 31,    |           | October 31,
|                                         |                                                                                                                |                                  |           | 2002        |           | 2001       
|                                         |                                                                                                                |                                  |           |             |           |            
|                                         |                                                                                                                |                                  |           | (Unaudited) |           |             |           |          
|ASSETS                                   |                                                                                                                |                                  |           |             |           |             |           |          
|Current Assets                           |                                                                                                                |                                  |           |             |           |             |           |          
|                                         |                                                                                                                | Cash                             |           | $           | 50,084    |             |           | $         | 55,326    | 
|                                         |                                                                                                                | Accounts Receivable (Net)        |           |             | 880,430   |             |           |           | 833,320   | 
|                                         |                                                                                                                | Insurance claims receivable      |           |             | -0-       |             |           |           | 338,442   | 
|                                         |                                                                                                                | Inventory (Net)                  |           |             | 1,511,724 |             |           |           | 1,161,650 | 
|                                         |                                                                                                                | Other Current Assets             |           |             | 128,760   |             |           |           | 94,790    | 
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Total Current Assets                     |                                                                                                                |                                  | 2,570,998 |             |           |             | 2,483,528 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Machinery & Equipment (Net)              |                                                                                                                |                                  | 1,274,612 |             |           |             | 1,264,679 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Other Assets  Deposits                  |                                                                                                                |                                  | 13,499    |             |           |             | 12,878    |          
| Inventory (net)                        |                                                                                                                |                                  | 163,283   |             |           |             | 163,283   |          
| Other                                  |                                                                                                                |                                  | 2,433     |             |           |             | 3,611     |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|                                         |                                                                                                                |                                  | 179,215   |             |           |             | 179,772   |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|TOTAL ASSETS                             |                                                                                                                | $                                | 4,024,825 |             |           | $           | 3,927,979 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|LIABILITIES                              |                                                                                                                |                                  |           |             |           |             |           |          
|Current Liabilities                      |                                                                                                                |                                  |           |             |           |             |           |          
|                                         |                                                                                                                | Revolving Loan                   |           | $           | 1,241,000 |             |           | $         | 523,878   | 
|                                         |                                                                                                                | Accts. Payable & Accr. Exp.      |           |             | 247,771   |             |           |           | 180,161   | 
|                                         |                                                                                                                | Accounts Payable  Other         |           |             | 56,698    |             |           |           | 197,978   | 
|                                         |                                                                                                                | Notes & Loans payable  current  |           |             | 356,972   |             |           |           | 295,479   | 
|                                         |                                                                                                                | Liabilities under capital leases |           |             | 62,000    |             |           |           | 59,892    | 
|                                         |                                                                                                                | Due to related parties           |           |             | 26,424    |             |           |           | 40,309    | 
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Total Current Liabilities                |                                                                                                                |                                  | 1,990,865 |             |           |             | 1,297,697 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Long-Term Liabilities                    |                                                                                                                |                                  |           |             |           |             |           |          
|                                         |                                                                                                                | Notes & Loans payable-noncurrent |           |             | 250,000   |             |           |           | 49,739    | 
|                                         |                                                                                                                | Liabilities under capital leases |           |             | 129,038   |             |           |           | 175,236   | 
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Total Long-Term Liabilities              |                                                                                                                |                                  | 379,038   |             |           |             | 224,975   |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Total Liabilities                        |                                                                                                                |                                  | 2,369,903 |             |           |             | 1,522,672 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|STOCKHOLDERS EQUITY                     |                                                                                                                |                                  |           |             |           |             |           |          
|                                         | Preferred Stock - authorized
500,000; par value $.75;
outstanding 0 shares;                                    |                                  |           | -0-         |           |             |           | -0-       |          
|                                         | Common Stock - authorized
20,000,000; par value $.01;
outstanding 6,667,144 and
6,085,358 shares respectively; |                                  |           | 66,671      |           |             |           | 60,854    |          
|                                         | Treasury Stock                                                                                                 |                                  |           | (7,277      | )         |             |           | -0-       |          
|                                         | Additional Paid-in Capital                                                                                     |                                  |           | 2,363,394   |           |             |           | 2,221,586 |          
|                                         | Retained Earnings (Accum. Deficit)                                                                             |                                  |           | (767,866    | )         |             |           | 122,867   |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|Total Stockholders Equity               |                                                                                                                |                                  | 1,654,922 |             |           |             | 2,405,307 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          
|TOTAL
LIABILITIES 
STOCKHOLDERS EQUITY |                                                                                                                | $                                | 4,024,825 |             |           | $           | 3,927,979 |          
|                                         |                                                                                                                |                                  |           |             |           |             |           |          

The accompanying notes are an integral part of the
Condensed Consolidated Financial Statements.

4



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##### 



BIO-LOK INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)

|                                                  |                                                     |                                     |                            |            |                   |        |         |          |              |        | 
|------------------------------------------------- | --------------------------------------------------- | ----------------------------------- | -------------------------- | ---------- | ----------------- | ------ | ------- | -------- | ------------ | ------ | 
|                                                  |                                                     |                                     |                            |            | Nine Months Ended
|                                                  |                                                     |                                     |                            |            | July 31,         
|                                                  |                                                     |                                     |                            |            |                  
|                                                  |                                                     |                                     |                            |            | 2002              |        | 2001   
|                                                  |                                                     |                                     |                            |            |                   |        |        
|                                                  |                                                     |                                     |                            |            |                   |        |         |          | (see Note A)
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Net Income (Loss)                                   |                                     | $                          | (890,733   | )                 |        | $       | 50,378   |             
|                                                  | Adjustments to reconcile:                           |                                     |                            |            |                   |        |         |          |             
|                                                  |                                                     | Depreciation                        |                            |            | 105,961           |        |         |          | 72,406       |       
|                                                  |                                                     | Issuance of Common Stockfor service |                            |            | 147,625           |        |         |          | 0            |       
|                                                  | Change in Current assets & liabilities:             |                                     |                            |            |                   |        |         |          |             
|                                                  |                                                     | (Incr.) decr. in accts. rec.        |                            |            | (54,387           | )      |         |          | (28,371      | )     
|                                                  |                                                     | (Incr.) decr. in inventories        |                            |            | (350,074          | )      |         |          | 10,486       |       
|                                                  |                                                     | (Incr.) decr. in prepaid & other    |                            |            | (33,970           | )      |         |          | (184,910     | )     
|                                                  |                                                     | (Incr.) decr. in deposits           |                            |            | (621              | )      |         |          | -0-          |       
|                                                  |                                                     | (Incr.) decr. other                 |                            |            | 1,178             |        |         |          | 2,138        |       
|                                                  |                                                     | Incr. (decr.) in A/P & Accr. exp.   |                            |            | 67,610            |        |         |          | 105,936      |       
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Net Cash used in Operating Activities               |                                     |                            | (1,007,411 | )                 |        |         | 28,063   |             
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Purchase of Machinery & Equipment                   |                                     |                            | (115,894   | )                 |        |         | (194,346 | )           
|                                                  | Net proceeds from insurance claim                   |                                     |                            | 338,442    |                   |        |         | 0        |             
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Net Cash Provided by (used in)
Investing Activities |                                     |                            | 222,548    |                   |        |         | (194,346 | )           
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Net proceeds - revolving loan                       |                                     |                            | 717,122    |                   |        |         | 46,146   |             
|                                                  | Payments on capital leases                          |                                     |                            | (44,090    | )                 |        |         | 60,829   |             
|                                                  | Net increase in gross notes payable                 |                                     |                            | 261,754    |                   |        |         | (28,581  | )           
|                                                  | Payments on A/P and other                           |                                     |                            | (141,280   | )                 |        |         | 16,790   |             
|                                                  | Due to related parties                              |                                     |                            | (13,885    | )                 |        |         | 25,000   |             
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|                                                  | Net Cash Provided by Financing Activities           |                                     |                            | 779,621    |                   |        |         | 120,184  |             
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|NET DECREASE IN CASH                              |                                                     | $                                   | (5,242                     | )          |                   | $      | (46,099 | )       
|                                                  |                                                     |                                     | Cash - Beginning of Period |            |                   | 55,326 |         |          |              | 63,024 | 
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|                                                  |                                                     |                                     | Cash - End of Period       |            | $                 | 50,084 |         |          | $            | 16,925 | 
|                                                  |                                                     |                                     |                            |            |                   |        |         |         
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                     |                                     |                            |            |                   |        |         |         
|                                                  |                                                     |                                     | Interest Paid              |            | $                 | 86,757 |         |          | $            | 93,088 | 
|                                                  |                                                     |                                     | Income Taxes Paid          |            | $                 | -0-    |         |          | $            | -0-    | 

Supplemental disclosure of non-cash Investing and Financing activities:
During the first quarter 2002, the Company acquired 17,327 shares of Treasury
Stock in lieu of payment of a commercial customer account receivable balance of
$7,277.

Note A.Reclassification  Certain 2001 balances have been reclassified to
conform to the 2002 presentation

The accompanying notes are an integral part of the
Condensed Consolidated Financial Statements.

5



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##### 



BIO-LOK INTERNATIONAL INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note A  Basis of Presentation and Significant Accounting Policies

(1) Basis of Presentation

The financial statements represent the activities of all the
accounts of a consolidated Bio-Lok International Inc. (Bio-Lok or
Company). The consolidated results include the activities of
Bio-Lok International Inc., BLLI Operations Inc., Orthogen
Corporation, Micro-Lok Mexico S.A de C.Y., Micro-Lok Chile S.A. and
Bio-Lok Intl. Pty. Inc..

Effective May 1, 2002, management with approval of the Board of
Directors has transferred the manufacturing and operational
functions to a new wholly owned subsidiary of the Company titled
BLLI Operations Inc. The functions remaining with Bio-Lok
International Inc. consist of corporate management and sales
operations, and it will operate as a holding company. The
restructuring of the business was completed to enable the Company to
separately fund the sales operations and to separately finance the
manufacturing, operations and inventory activities. Additionally,
all products purchased for resale will be managed and controlled by
BLLI Operations Inc.; products purchased for resale consist of a
collagen membrane and SurgiPlaster, a bone augmentation material.
The reorganization of the Company will have no impact or effect on
the consolidated financial results of Bio-Lok International Inc.

(2) Principles of Consolidation

The condensed consolidated financial statements for 2002 include the
accounts of Bio-Lok International Inc., BLLI Operations Inc.,
Orthogen Corporation, Micro-Lok Mexico S.A de C.Y., Micro-Lok Chile
S.A. and Bio-Lok Intl. Pty. Inc.

All inter company accounts and transactions have been eliminated in
consolidation.

Revenues are recognized as product is shipped; inventory is stated
on a net basis at lower of average cost or market; inventory which
is not expected to be sold in one year is classified as long-term,
reviewed on-going and adjusted annually; inventory not sold on a
regular and continued basis is written down. Property and equipment
are stated at cost less accumulated depreciation.

(3) Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities and disclose
the nature of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting periods. Actual results could differ
from those estimates.

(4) Per Share Data

Basic loss per share is calculated by dividing net loss for the
period (less preferred stock dividends) by the weighted average
number of common stock shares outstanding during the period. The
assumed exercise of stock options and warrants is included in the
calculation of diluted earnings per share, if dilutive.

(5) Interim Consolidated Financial Statements

The condensed consolidated financial statements as of July 31, 2002
and for the three and nine months ended July 31, 2002 and 2001 are
unaudited. In the opinion of management, such condensed
consolidated financial statements include all adjustments
(consisting only of normal recurring accruals) necessary for the
fair presentation of the consolidated financial position and
consolidated results of operations. The consolidated results of
operations for the three and nine months ended July 31, 2002 and
2001 are not necessarily indicative of the results to be expected
for the full year. The condensed consolidated balance sheet
information as of October 31, 2001 was derived from the audited
consolidated financial statements included in the Companys annual
report Form 10-KSB. The interim condensed consolidated financial
statements should be read in conjunction with that report.

6



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##### 



Note B  Nature of Business

Bio-Lok is a manufacturer and distributor, both domestically and
internationally, of the Micro-Lok Precision Dental Implant System.
The product line consists of a number of select implants (both screw
and cylinder), related prosthetics parts, devices, associated tools,
irrigated drills and reamers, and products purchased and resold as a
part of the System. Select product purchased is private labeled.
The Company markets the product line domestically via its own sales
staff, and internationally utilizing distributors and its subsidiary
entities.

Revenues are attributable to the distribution and sale of its
manufactured or purchased for resale products. Products are
distributed directly to clinicians domestically and to distributors
or related companies internationally who in turn sell the products
to clinicians. Revenues are recognized as the product is shipped.

Orthogen Corporation is an advanced biomaterials R&D corporation.
Orthogen, together with researchers at the UMD-New Jersey Dental
School and New Yorks Hospital for Joint Diseases, uncovered basic
and wide-ranging surface-modification and bone growth enhancement
techniques for controlling cellular interaction.

Micro-Lok Mexico S.A. de C.Y., Bio-Lok Intl. Pty., Inc. and
Micro-Lok Chile S.A. operate as sales operations for Mexico,
Australia and Chile respectively. Product is shipped to the
entities on a cost basis and sold to the end market (clinicians and
institutions) at retail prices established on a country by country
basis.

Note C  Inventories

Inventories at July 31, 2002, and October 31, 2001, consisted of the
following:

|                         |  |               |           |                  |  |   |           | 
|------------------------ |  | ------------- | --------- | ---------------- |  | - | --------- | 
|                         |  | July 31, 2002 |           | October 31, 2001
|                         |  |               |           |                 
|Raw Materials & Supplies |  | $             | 20,973    |                  |  | $ | 23,459    | 
|Work in Process          |  |               | 241,690   |                  |  |   | 345,760   | 
|Finished Goods           |  |               | 1,412,344 |                  |  |   | 955,714   | 
|                         |  |               |           |                  |  |   |           | 
|                         |  | $             | 1,675,007 |                  |  | $ | 1,324,933 | 
|                         |  |               |           |                  |  |   |           | 

Inventory is stated on an average cost basis. Inventory is sold on
a first in first out basis to insure that the manufactured product
on-hand always represents current product. The Micro-Lok System
marketed by the Company consists of a broad product line which is
manufactured to ship on orders placed. Inventory classified as
non-current and included in finished goods was $163,283 the same as
for fiscal year end.

As detailed above the year-to-date increase in inventory totals
$350,074, a 26% increase. $250,000 of the increase in inventory was
due to bringing the new Silhouette IC (internal connection) implant
product line on-line, initial stocking of Laser-lok implants before
laser-machining, an increase in the base stock being maintained at
our subsidiaries and an increase planned for to cover the domestic
sales market development due to the start of hiring a domestic sales
staff.

Note D  Stockholders Equity

On February 28, 2002, the Company registered with the SEC under Form
S-8 500,000 shares of common stock. The shares provided under the
registration was to register the common stock shares for the
companys stock plan titled Stock Compensation Plan 2002. Under
the plan shares are allocated for employee compensation, the Bio-Lok
401(k) Plan and shares to be awarded to institutions, consultants
and other entities that provided a service, assistance and support.

During the nine months ended July 31, 2002, 581,786 shares of common
stock were issued for services valued at an aggregate amount of
$147,625 and 17,327 shares of treasury stock were acquired in lieu
of an account receivable on the books for $7,277 (no gain or loss
was recognized since the A/R was settled at the trading price of the
stock on the date of acquisition).

On January 3, 2002, three options to purchase
an aggregate of 50,000 shares of common stock at $.05 per share were issued to employees
and a clinician for services and support of the Company. On January
10, 2002, ten options to purchase an aggregate total of 180,000
shares of common stock at $.05 per share were issued to employees,
officers and

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directors of the Company for services and support of
the Company for the year 2001. On February 15, 2002, one option to
purchase an aggregate of 20,000 shares of common stock at $.10 per
share was issued to an entity for services rendered.

Effective May 2, 2002, the Board of Directors authorized the
increase of the common stock shares outstanding from 15,000,000 to
20,000,000. Stockholders had previously approved the authorization
of common stock shares to be increased to 30,000,000, which
increases was to be authorized by the Board of Directors as they
deemed necessary.

Note E  Financing

Effective November 22, 2001, the Company replaced its working
capital line of credit. The credit line was replaced with a new
financial institution and increased from $500,000 to $1,500,000 at a
reduced rate of interest. The new revolving loan was at 1% over the
prime rate (4.75 % at July 31, 2002), collateralized by receivables
and inventory with an annual review at May 31. On June 10, 2002,
the revolving loan was extended to August 31, 2002. The Company is
currently negotiating with the bank to extend the due date of the
line of credit and management anticipates that the credit line will
be extended and increased as necessary. Also, to have the bank
advance against receivables at a higher percentage rate, the Company
obtained added credit support for its international receivables in
the form of a insurance guarantees from the US Export/Import Bank
for a total of $800k. As of July 31, 2002, the outstanding debt on
the revolving line opf credit totalted $1,241,000.

Effective November 22, 2001, the Company also borrowed $300,000 at a
rate of 1.25% over the prime rate using existing equipment as
collateral. The loan is payable over five years with interest only
during the first year. The loan outstanding at 7/31/02 was $300,000
and is included in notes and loans payable ($50,000 in short term).

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

Effective with 2002 Management elected to develop and build the
domestic market. In the past only 10% of gross revenue was derived
from domestic sales with the remaining 90% coming from international
marketing activity. By July 2002, six key sales individuals had been
hired. Management expects as added staff is hired to dramatically
increase revenues over the ensuing months and years.

International activity has shown a turn around in select markets.
South America appears still to be very sluggish but Europe has
picked up and demonstrated growth for the long run. Continued
improving economic conditions and the weakened dollar has permitted
our existing Distributors to expand their market penetration.

At the beginning of the second quarter the Company introduced its
new Silhouette IC (internal connection) dental implant line and
related products. Today the dental market is covered by an external
hex (50% of the market), an internal connection (45% of the market)
and other (5% or less of the market) style of implants. With the
development and introduction into the market of the IC implant, the
Company offers to the marketplace implants for all potential users.

The Company is in the process of completing its final clinical
studies and evaluations of the new Laser-LokTM dental implant for
filing with the FDA for registration and eventual sale. The
implants represent a state-of-the-art technology, provide superior
tissue adhesion and retention and can be utilized for either single
or dual surgery. The Company and Management expect the implant to
become the product of choice for clinicians and quickly permit the
Company to grow to over 10% of the implant market. The implant
market world-wide is approximately $600 million.

As to Bio-Loks research and development entity Orthogen
Corporation, it has been awarded an NIH (National Institute of
Health) Grant totaling over $500k over two years for the development
of a mechanical/neural limb prosthetic interface. Other NIH Grant
applications have been submitted. The developed the prosthetic
interface represents an off-shoot from the Companys laser edging
technology developed for its Laser-Lok implant anticipated to be
brought to market later this year. The potential of the technology
to the nerve regenerating market is tremendous.

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Orthogen has contracted with Class Implant SRL of Italy to market
and distribute its SurgiPlaster product both domestically (US) and
internationally. SurgiPlaster is a bone augmentation material
utilized by clinicians in implantology. The market for bone
augmentation material in dentistry consists of approximately $100
million.

The Company is actively engaged in obtaining up to $5 million in
added equity. The proceeds will be utilized to continue developing
the domestic market, expand and improve marketing literature,
establish teaching centers and generally grow the company to
represent 5-10% of the market.

RESULTS OF OPERATIONS

Volume

Net sales were 61% above the comparable quarter prior year. Net
sales for the nine months ended July 31, 2002 increased 21% as
compared to the same period prior fiscal year. Much of the
revenue growth is attributed to increased domestic sales, which
year-to-date have increased by over 100%. Management expects sales
to continue to increase at an accelerated rate as the domestic
market penetration, acceptance of the Silhouette IC implant line and
the introduction later this year of the Laser-Lok implant occurs.

Cost of Goods Sold

For the quarter, costs reflected a considerable increase over the
comparable quarter prior year or 203%, and an increase of 61% for
year to date nine months to the same period prior year, which
increase was primarily due to new product development (custom
abutment, Silhouette, Silhouette IC (internal connection) and
Laser-Lok implants) and the hiring of additional machine operators
to enable Company to increase production capacity in support of
anticipated sales for the development of the domestic market.

Gross Profit

Gross Profit as a percent of sales decreased by 34% for the quarter
compared to the same period prior year and 11% for nine months year
to date over the comparable period prior year. The lower margins
were realized due to promotional efforts implemented in gaining
market share and penetration in support of the marketing effort
having been implemented for the development of the domestic market.
Promotional efforts which impacted operations are attributable to
the sales discounting, give-away and over-all sales promotions
initiated with the development of the domestic market.

Costs for the balance of the year will continue to fluctuate on a
monthly and quarterly basis and are expected to level-off at around
36% of sales as other new products developed are brought on-line 
i.e. the Laser-Lok implant and promotional and market targets are
achieved.

Selling Expenses

Selling expenses increased from the prior years comparable quarter
by 130% due to staff additions. With the decision by management to
develop the domestic market, to date six sales individuals have been
hired. This sales staff development is also reflected in the year
to date results of a 174% increase over comparable period prior
year. The year to date change in results reflects not just the
hiring of a new sales staff, but also the reorganizing of the
operation and the developing of new marketing tools. Additional
individuals are expected to be hired over the ensuing months.
Managements objective is to have 8 to 12 individuals in place by
the calendar year end with approximately another 10 to 12 to be
hired in the following year.

Administrative & General Expenses

Administrative and general expenses were 31% over the same quarter
prior year and 43% year-to-date above the same period prior year.
The cost increases for the quarter and year to date reflected a
considerable increase, which is solely attributable to support of
the domestic market development and sales growth activities, and an
increase by approximately 150% in insurance expense. Costs are
expected to continue to increase due to the continued planned market
developments, product introductions and general sales growth
anticipated.

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Operating Income

Loss from operations totaled $296,620 for the quarter and a loss of
$741,659 year-to-date. The reduced results is attributable to the
hiring of a domestic sales staff, development of the domestic market
activity, research and development expenses for the Silhouette IC
and Laser-Lok product line and related increased headquarter and
administrative costs for the domestic market development. Losses
are expected to continue to be incurred over the next months and
quarters as the domestic sales staff is hired. As market
penetration is achieved and sales revenues increase, the Company is
expected to return to profitability. Management expects losses to
continue to occur until the second quarter next fiscal year.

Other Income

Reflects year-to-date added gains from the insurance claim paid
pertaining to the machine fire in fiscal 2001. To date 99% of the
machinery and equipment claims have been paid. The claim for the
business interruption portion of the insurance policy is still being
determined and any potential gain may be ascertainable by the end of
the fourth quarter of this fiscal year.

Other Expense

Other expense for the quarter and year-to-date totaled approximately
$25k and $78k, respectively, and resulted from the amortization of
the balance of the fees incurred for the new revolving loan
financing closed in late November 2001.

Exchange rate losses relate to foreign currency transactions of the
Companys Mexican subsidiary. The entity in Mexico operates as a
sales organization for Mexico.

Interest Expense

Interest expense for the quarter decreased due to lower interest
rates being in effect and a slightly lower level of average
borrowings outstanding. Year-to date interest expense totaled
approximately $87k and was 7% below prior years same period. The
decrease is due to lower interest expenses incurred under the
revolving line of credit and lower interest expenses due on the
increased long term debt outstanding.

Net Income

Net loss for the quarter was approximately $350k compared to a loss
of approximately $97k for the same period prior year. Year-to-date
results approximated a loss of $891k compared to a profit of
approximately $50k for the same period prior year. The lower
results are the same already detailed under Operating Income above.
Management does not expect to return to a profitable position until
next year when revenues are expected to catch up to the domestic
market development initiated.

FINANCIAL CONDITION

Cash On Hand

Cash on hand year-to-date reflects approximately a $5k reduction.
Overall cash flow is adequate to cover the Companys cash
requirements. In addition, the company has availability under its
revolving line of credit, particularly as the total EximBank credit
guarantee comes on-line and as revenues increase.

Between borrowings against its line of credit and other borrowing
capacity the Company has and will have adequate and sufficient funds
available to continue operations for the next twelve months.

Financing

For the quarter no new financing activities have been entered. The
current revolving asset-based loan was extended to August 31, 2002,
to enable the Company to finalize new and improved receivable and
inventory insurance coverage. Presently, the loan is payable on a
demand basis and is scheduled for review by the end of September
2002. Due to the continued growth forecast the overall line of
credit available may increase to over $2 million from $1.5 million.

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Item 4. Disclosure Controls and Procedures

Timely collection and evaluation of information potentially subject
to disclosure are being reviewed and maintained on a continued
basis. All information that is relevant to an assessment of the
need to disclose developments and risks that pertain to the
registrants businesses have been disclosed herein.

PART II.

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

|    |  |                             
|--- |  | ----------------------------
|(b) |  | Reports on Form 8-K - none -
|    |  | 99.1 Certification of CEO   
|    |  | 99.2 Certification of CFO   

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                         |  |                                        
|------------------------ |  | ---------------------------------------
|                         |  | BIO-LOK INTERNATIONAL INC. (Registrant)
|                        
|Date: September 18, 2002 |  | By /s/ Bruce L. Hollander              
|                         |  |                                        
|                         |  | Bruce L. Hollander, President          

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated per the
final audit report issued by accountants.

|                                           |  |                                           |  |                         
|------------------------------------------ |  | ----------------------------------------- |  | ------------------------
|Signature                                  |  | Title                                     |  |                         
|                                           |  |                                           |  |                         
|/s/ Bruce L. Hollander

Bruce L. Hollander |  | President, CEO and Director               |  | Date: September 18, 2002
|                                          
|                                          
|/s/ Ingo K. Kozak                          |  | VP  Finance, CFO, Secretary and Director |  | Date: September 18, 2002
|Ingo K. Kozak                              |  |                                           |  |                         

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