TABLE OF CONTENTS




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|PART I              
|                     | ITEM 1. DESCRIPTION OF BUSINESS                                                                                        
|                     | ITEM 2. DESCRIPTION OF PROPERTY                                                                                        
|                     | ITEM 3. LEGAL PROCEEDINGS                                                                                              
|                     | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            
|PART II             
|                     | ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                       
|                     | ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                      
|                     | ITEM 7. FINANCIAL STATEMENTS                                                                                           
|                     | ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                           
|PART III            
|                     | ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
|                     | ITEM 10. EXECUTIVE COMPENSATION                                                                                        
|                     | ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                
|                     | ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                
|                     | ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                                                              
|SIGNATURES          
|Financial Statements
|Subsidiaries        



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

FORM 10-KSB

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

For the Fiscal Year Ended March 31, 2001

Commission File No. 000-20989

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

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

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

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

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

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

YES [X]       NO [   ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of Companys knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

Issuers revenues for its most recent fiscal year: $5,668,483

The aggregate market value of the voting stock held by non-affiliates computed
by reference to the price at which the stock was sold or the average bid and
asked prices of such stock as of May 25, 2001 was $10,737,101.

The number of shares outstanding of the issuers only class of common stock on
May 25, 2001 was 6,049,071.

Documents Incorporated By Reference: Portions of the Companys Proxy Statement
for its 2001 Annual Meeting of Shareholders (the Proxy Statement), are
incorporated by reference in Part III.

Transitional Small Business Disclosure Format:

YES [X]       NO [   ]

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PART I

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

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

Forward-looking statements may be contained in the Managements Discussion and
Analysis or Plan of Operation and other section of this filing. Various
factors and risks (not all of which are identifiable at this time) could cause
the Companys results, performance or achievements to differ materially from
that contained in the Companys forward-looking statements, and investors are
cautioned that any forward-looking statement contained herein or elsewhere is
qualified by and subject to the warnings and cautionary statements contained
above and in the Factors Affecting the Business section of this filing.

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




ITEM 1. DESCRIPTION OF BUSINESS

Overview

The Company designs, develops, manufactures, and markets medical products
primarily for the treatment of urinary incontinence and vesicoureteral reflux.
The Companys key product is Macroplastique® Implants, an
injectable, soft tissue bulking agent used to treat stress urinary incontinence
(SUI), the most common form of urinary incontinence. SUI refers to the
involuntary loss of urine as a result of activities that increase
intra-abdominal pressure, such as coughing, laughing, or exercising.
Macroplastique is also used to treat vesicoureteral reflux (VUR), a condition
occurring mostly in children in which urine flows backward from the bladder
into the kidney. Additionally, men recovered from prostate surgery who
experience incontinence are also candidates for Macroplastique treatment. In
June 1996, Macroplastique received the CE mark in Europe (similar to FDA
approval in the United States), allowing the product to be sold throughout the
European Union. Macroplastique is not sold in the United States because it is
not approved by the Food and Drug Administration (FDA) for marketing in the
United States. However, the Company is currently conducting human clinical
trials in the United States on Macroplastique for the treatment of female SUI
pursuant to an Investigational Device Exemption (IDE) granted by the FDA in
July 1999.

It is estimated urinary incontinence afflicts about 5% of the general
population and women comprise approximately 85% of the sufferers. In Europe,
currently the Companys largest market, approximately 17 million people suffer
from various forms of urinary incontinence and about 14.5 million of these
sufferers are women. Bulking agents such as Macroplastique are used to treat
women with SUI caused by intrinsic sphincter deficiency, estimated by the
Company to comprise 10% of the female incontinence market or about 1.4 million
women in Europe alone. Of the estimated 2.6 million European men who are
incontinent, the Company believes about 25% are candidates for treatment with
Macroplastique. VUR is primarily a pediatric concern, with a prevalence
estimated to be as high as 1% of the pediatric population. The Company
estimates about half of this population are candidates for Macroplastique
treatments.

Macroplastique® Implants

Macroplastique is an injectable soft tissue-bulking agent used to treat SUI and
VUR. Macroplastique is a proprietary composition of heat vulcanized, highly
textured, solid, soft, irregularly shaped polydimethylsiloxane (solid silicone)
implants suspended in a biocompatible carrier solution. Based on the Companys
clinical experience outside the United States, Macroplastique does not cause an
adverse tissue response, and is not resorbed by the body. Macroplastique is
used to provide bulking of the urethral sphincter to treat female SUI. The
implantation of Macroplastique is minimally

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invasive and can be accomplished in less than 30 minutes in an inpatient or
outpatient setting. It is designed to restore the patient to normal urinary
continence almost immediately following treatment. Macroplastique is also used
to treat vesicoureteral reflux, a condition occurring primarily in children, as
well as incontinence in men after prostate surgery.

The Company markets Macroplastique through Uroplasty BV, The Netherlands, on
the basis its use can lead to lower surgical risk, provides a long-lasting
treatment, shorter recovery time, and less expense when compared to invasive
alternatives. The Company believes the advantages of Macroplastique are its
biocompatibility, cost effectiveness, and successful use in patients outside
the United States since 1991.

Urinary Incontinence Market

Urinary incontinence is an involuntary loss of urine so severe it has
emotional, social and/or hygienic consequences. In varying degrees, urinary
incontinence is a problem suffered by millions of people worldwide. The Agency
for Health Care Policy and Research (a division of the Public Health Service,
U.S. Department of Health and Human Services) estimated in 1996 there were
approximately 13 million adults with urinary incontinence in the United States.
The same agency estimated the total cost (utilizing all management and
curative approaches) of treating incontinence of all types in the United States
as $15 billion in 1996. Urinary incontinence can result in a substantial
decrease in a persons quality of life and is often the main reason a family
moves an elderly person to nursing home care. The Company expects the
incidence of urinary incontinence will rise as the percentage of elderly people
continues to increase.

Types of Urinary Incontinence

The mechanisms of urinary incontinence are complicated and involve the
interaction between several anatomical structures. In females, urinary
continence is controlled primarily by the sphincter muscle. This muscle
surrounds the urethra and provides constrictive pressure to prevent urine from
flowing out of the bladder. Urination occurs when the sphincter relaxes as the
bladder contracts, allowing urine to flow through the urethra. The urinary
sphincter is also responsible for maintaining continence during periods of
physical stress. Incontinence may result when any part of the urinary tract
fails to function as intended. A broad range of conditions and disorders can
cause incontinence, including birth defects (e.g., Spina Bifida), pelvic
surgery, injuries to the pelvic region or the spinal cord, neurological
diseases (e.g. Multiple Sclerosis, Poliomyelitis), and degenerative changes
associated with aging.

Stress Urinary Incontinence: Stress urinary incontinence (SUI) refers to the
involuntary loss of urine due to an increase in intra-abdominal pressure from
coughing, sneezing, laughing, straining or lifting. In women, the most common
cause of SUI is hypermobility, a lack of anatomic stability primarily caused by
weak surrounding tissue, resulting in the abnormal movement of the bladder neck
and urethra. This anatomical problem is often the result of childbirth. SUI
can also be caused by intrinsic sphincter deficiency (ISD), or the inability
of the sphincter valve or muscle to function properly. ISD can be due to
congenital sphincter weakness or deterioration of the muscular wall of the
urethra after trauma, spinal cord lesion or radiation therapy. To date,
Macroplastique has been used to treat incontinence in women suffering from SUI
caused by intrinsic sphincter deficiency.

Urge Incontinence: Urge incontinence refers to the involuntary loss of urine
associated with an abrupt, strong desire to urinate. Urge incontinence often
occurs with neurologic problems, causing the bladder to contract and empty with
little or no warning.

Overflow Incontinence: Overflow incontinence is associated with an
over-distention of the bladder. This can be the result of an underactive
bladder or an obstruction in the bladder or urethra.

Mixed Incontinence: Mixed incontinence is the combination of urge and stress
incontinence (and, in some cases, overflow). Since prostate enlargement often
obstructs the urethra, older men often have urge incontinence coupled with
overflow incontinence.

Management and Treatment of Urinary Incontinence

There are two general approaches to dealing with urinary incontinence. One
approach is to manage symptoms with items such as pads or diapers. The other
approach is to undergo curative treatments in an attempt to restore continence,
such as injection of bulking agents or by invasive surgeries. The Company
believes and endorses the treatment of urinary incontinence from the least
invasive to the most invasive therapy as needed.

Management of Urinary Incontinence

Absorbent Products: Absorbent products are the most common form of management
for urinary incontinence because men and women can use them without consulting
a physician. The cost of adult diapers and pads can be substantial, thus

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creating a continuous financial burden for patients. Additionally, this
management technique may require frequent changing of diapers and pads to
control patient embarrassment due to odor and/or soiling.

Behavior Modification: The techniques used in behavior modification include
bladder training, scheduled voiding, and pelvic floor muscle exercises known as
Kegels. Some of the tools used in conjunction with these training regimes are
vaginal cones or weights, biofeedback devices, and electrical stimulation.
While these are typically low-risk activities, they do not work for many
patients. Even when considered effective they may only partly alleviate the
symptoms and are seldom curative. These techniques are recommended for lower
grade or less severe cases of urinary incontinence.

Penile Compression Devices: Penile clamps are reserved for temporary use with
male incontinence. Complications such as penile and urethral erosion, penile
edema, pain, and obstruction can be associated with extended and/or improper
use.

Pelvic Organ Support Devices: A pessary is a doughnut-shaped device made of
flexible materials. They are designed to temporarily reduce pelvic prolapse
and alleviate symptoms of pelvic relaxation in females with and without
incontinence. When these devices are misused or neglected, complications such
as ulceration of the vagina and rectovaginal and vesicovaginal fistula can
occur. Persons using pessaries require frequent, regular monitoring.

Occlusion Devices: Urethral occlusion devices, or plugs, of various designs
are temporarily applied to occlude the urethra and/or bladder. They are
disposable products and either fit over the urethral opening or in the urethra
and/or bladder to obstruct the involuntary leakage of urine. Younger, more
physically active stress incontinent women use them because they are more
likely to be motivated to use a disposable urethral plug on a daily basis. The
primary problems with these devices are urinary tract infections, treatment
compliance, and progressive urethral dilation that may require larger plugs
over time.

Urinary Catheters and Collection Devices: There are four types of urinary
catheters: 1) intermittent (inserted through the urethra into the bladder
every 3 to 6 hours for bladder drainage; may be appropriate for the management
of acute or chronic urinary retention); 2) indwelling (a closed sterile system
inserted through the urethra to allow bladder drainage; may be needed for
short-term treatment and for terminally ill patients); 3) suprapubic (requires
percutaneous or surgical introduction of a catheter into the bladder through
the abdominal wall, for short-term use following gynecologic, urologic and
other types of surgery or as an alternative to long-term urethral catheter use
in men); and 4) external collection (devices made from latex rubber, polyvinyl
or silicone resembling a condom, are secured on the shaft of the penis by a
double-sided adhesive, latex or foam strap and are connected to urine
collecting bags by a tube; may be useful for short-term maintenance). The type
and severity of incontinence and the patients physical and mental condition
determine which is the best catheter option for the patient.

Drug Therapy: Drug treatment is used to manage multiple types of urinary
incontinence. These drugs tend to fall into one of two categories: those that
manage urge urinary incontinence by affecting the contraction of the muscle
tissue of the bladder and those that manage stress urinary incontinence by
either affecting contraction of the muscle tissue of the bladder neck or
improving the quality of the mucosal lining of the bladder neck and urethra.
Drugs seldom cure stress urinary incontinence and the potential side effects
include urinary retention, nausea, dizziness, blurred vision and the
possibility of unwanted interactions with other drugs.

Curative Treatments for Urinary Incontinence

Surgery: In women, SUI can be surgically corrected through various suspension
and sling procedures. In these procedures, the physician elevates and
stabilizes the urethra and bladder neck. Current surgical procedures require
vaginal or abdominal incisions and are typically performed under general
anesthesia. Surgery is expensive, traumatic, and involves a 3 to 10 day
hospital stay with several months required for full recovery. In men, the main
surgical option is an implanted artificial urinary sphincter. It carries with
it the inherent risks of device malfunction, tissue erosion and atrophy, and
infection. In practice, the artificial urinary sphincter is rarely applicable
to the management of uncomplicated stress incontinence.

Injectable Bulking Agents: Bulking agents are inserted with a needle into the
area around the urethra, thereby augmenting or bulking the sphincter. Hence,
these materials are often called bulk-enhancing agents, bulking agents, or
injectables. Bulking agents may be either synthetic or biologically derived.
Bulking agents are an attractive alternative to surgery because they are
considerably less invasive than many of the surgical procedures described
above. For this reason, bulking agents represent a particularly desirable
treatment option for the elderly or infirm who may not otherwise be able to
withstand the trauma and morbidity resulting from a fully invasive surgical
procedure. Active women benefit from the use of bulking agents since their use
will often allow the patient to return to normal activities in a matter of days
instead of weeks for fully invasive surgical procedures. The 1996 Clinical
Practice Guidelines published by the U.S. Department of Health and Human
Services recommend periurethral bulking agents as a first line treatment for
men with ISD and for women with ISD who do not have co-existing hypermobility.

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The two major types of bulking agents are biologically derived and synthetic
agents. Biologically derived bulking agents include injections of a patients
own fat cells, polysaccharides (not commercially available in the U.S.) or
bovine collagen. Fat injections involve complex, invasive harvesting of the
patients own fat cells and reinjecting them into the bladder neck. Some of
these biological agents require pre-treatment allergy tests, and since the body
resorbs these agents over time, subsequent reinjections may be necessary.
Macroplastique (polydimethylsiloxane) is a synthetic bulking agent. Other
synthetic bulking agents are composed of polytetrafluoroethylene (PTFE) (not
commercially available in the U.S.) and pyrolytic carbon-coated beads.

Marketing, Distribution, and Sales

The Company markets and sells Macroplastique and the related ancillary products
used in the implantation procedure only in countries outside the United States.
The Company has a direct sales forces consisting of four persons in the United
Kingdom. Additionally, the Company employs two sales managers in The
Netherlands and two in the United States to manage a network of distributors
selling the Companys products outside the United States in approximately 40
countries including Canada, Europe, Asia, Australia, and Latin America. The
Companys technical staff in The Netherlands and the United States trains both
new as well as existing distributors. The Company has written
territory-specific distribution agreements with each of the individual
distributors. None of the distributors may sell injectable products that
compete directly with Macroplastique. No distributor accounted for more than
10% of the Companys sales. Collectively, the Companys distributors accounted
for approximately 58% and 57% of total net sales in fiscal years 2001 and 2000,
respectively.

The Company recently introduced a newly developed set of instruments for the
delivery of Macroplastique named the Macroplastique® Implantation
System (MIS) to markets outside the United States. The MIS is for use by
urologists, gynecologists, and urogynecologists for the implantation of
Macroplastique without the aid of an endoscope. Historically, urologists have
principally performed the Macroplastique procedure. The Company believes that
with the MIS, Macroplastique will be available to a larger number of physicians
and therefore more female SUI sufferers. However, there can be no assurance
the MIS will have any significant effect on increasing sales of Macroplastique.

Other Products

In addition to the urological applications, the Companys implantable bulking
material is also marketed outside the United States for reconstructive and
cosmetic plastic surgery applications and vocal cord rehabilitation under the
trade name Bioplastique Implants. In The Netherlands and United
Kingdom only, the Companys direct sales force distributes certain wound care
products in accordance with a distributor agreement. Under the terms of the
Distributor Agreement, the Company is not obligated to purchase any minimum
level of wound care products.

Government Regulations

The Companys medical device products are subject to regulation by various
governmental agencies depending upon where the products are manufactured and/or
sold. In markets such as the United States and Europe, these regulations are
substantial and can significantly affect a companys ability to obtain and/or
maintain approval for manufacturing and distribution of medical device
products.

In order to market its products within the countries consisting of the European
Union, the Company is required to obtain CE marking for its products. To
obtain CE marking, a product must comply with the requirements set forth in
Council Directive 93/42/EEC published in Volume 36 (12 July 1993) of the
Official Journal of the European Communities, referred to as the Medical Device
Directives (MDD). CE mark authorization is granted by organizations called
Notified Bodies who are approved by their respective national Competent
Authorities (sometimes referred to as National Health Ministries) to conduct
medical device evaluations. Notified Bodies are technical experts serving as
the auditing and certifying arm of the Competent Authorities.

Under the European MDD, Macroplastique is considered a Class IIb long-term
implantable device. To obtain the CE mark for Macroplastique, the Company was
required to submit extensive information regarding product design, labeling,
and preclinical and clinical safety testing to its Notified Body for evaluation
by expert reviewers. In addition, the Company maintains registration to
rigorous quality standards ISO 9001 and EN 46001. After successfully
demonstrating full compliance to the MDD, the Notified Body issued a
Certificate of Authorization to the Company in June 1996, allowing the Company
to place the CE mark on Macroplastique and Bioplastique and their related
accessories. Upon fulfilling any additional national requirements,
Macroplastique can be marketed throughout the entire European Union. The
Company is subject to periodic surveillance audits by its Notified Body to
ensure it adheres to the requirements of the MDD. Changes in existing
requirements or adoption of new requirements or policies could adversely affect
the ability of the Company to comply with regulatory requirements. Failure to
comply with regulatory requirements could have a material adverse effect on the
Companys business, financial condition, and results of operations. There can
be no assurance the Company will not be required to incur significant costs to
comply with laws and regulations in the future,

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or that laws or regulations will not have a material adverse effect upon the
Companys business, financial condition, or results of operations.

The Company maintains facilities in the United States, United Kingdom, and The
Netherlands, each of which has numerous federal, state, and local laws relating
to such matters as safe working conditions, manufacturing practices,
environmental protection, fire hazard control and disposal of hazardous or
potentially hazardous substances. There can be no assurance that the Company
will not be required to incur significant costs to comply with such laws and
regulations now or in the future or that such laws or regulations will not have
a material adverse effect upon the Companys ability to do business, financial
condition, or results of operations.

In the United States, the Company must comply with the Federal Food, Drug, and
Cosmetic Act, as amended, which is enforced by the FDA. The FDA has determined
urethral bulking agents such as Macroplastique are Class III devices subject to
a Pre-Market Approval (PMA) application prior to marketing in the United
States.

A PMA is a rigorous submission requiring the manufacturer to substantiate
claims of safety and effectiveness with valid scientific evidence. The PMA
process is lengthy and expensive with no guarantee of final approval at its
completion. In some instances, the FDA may decide additional testing or
clinical studies are necessary to support the PMA submission. Such a decision
considerably lengthens the time and expense required for obtaining U.S.
marketing approval. If the FDA approves the PMA submission, it may still place
certain conditions on the manufacturer such as the initiation of a
post-marketing study or restrictions to the products intended use.

After PMA approval, the Company must comply with FDA regulations to maintain
its U.S. marketing approval. The Companys manufacturing facilities will be
subject to routine inspections by the FDA to ensure compliance with Quality
System Requirements. Even though the Company has achieved ISO 9001 and EN
46001 registrations, there can be no assurance the FDA would find the Companys
quality system to be in compliance with all relevant aspects of the
requirements. The Company is also subject to a variety of state and local laws
and regulations in those states or localities where its product will be
manufactured and/or marketed. Any applicable state or local regulations may
hinder the Companys ability to market its products in those states or
localities.

Third-Party Reimbursement

Throughout much of the world, the Company sells Macroplastique to hospitals and
other users who often transfer the cost of the medical product and services to
third-party payers. These third-party payers consist of government health
programs, private health insurance plans, managed care organizations, and other
similar programs. They may deny or substantially limit reimbursement if they
believe a medical device was not used in accordance with established payer
protocols regarding cost-efficient treatment methods, used for an unapproved
indication, and/or was not otherwise covered. In some markets, medical device
manufacturers are being forced to demonstrate the clinical efficacy and
cost-effectiveness of their products to third-party payers before these
organizations will agree to provide reimbursement to patients. Changes to
third-party reimbursement policies in the United States, Europe, and other
Macroplastique markets could significantly reduce the Companys ability to
commercialize its products.

In most Macroplastique markets, third-party reimbursement is currently
available for Macroplastique for the treatment of urinary incontinence and
vesicoureteral reflux. Within the United States, third-party reimbursement is
currently available for certain bulking agents and the Company believes it can
obtain third-party reimbursement for Macroplastique near the time the product
is approved for marketing or sometime thereafter. However, there is currently
no uniform policy for reimbursement throughout the United States and no
guarantee Macroplastique will be reimbursed at the levels expected by the
Company, if at all. The availability of third-party reimbursement for
Macroplastique or competitors products and continuing efforts to reduce the
costs of health care by decreasing reimbursement rates may reduce the price
received by the Company for sale of Macroplastique in the future.

Product Liability

The medical device industry is subject to substantial litigation. The Company
is a manufacturer of a long-term implantable device and consequently faces an
inherent business risk of exposure to product liability claims resulting from
alleged adverse effects to the patient. The Company currently carries $2
million of worldwide product liability insurance on a claims made form, plus
another policy specific to the United Kingdom only. There can be no assurance,
however, that the Companys existing insurance coverage limits are adequate to
protect the Company from any liabilities that it might incur in connection with
the clinical trials of Macroplastique or the initial commercialization of
Macroplastique in the United States. There can be no assurance that liability
claims will not exceed coverage limits. Such insurance is expensive and in the
future may not be available on acceptable terms, if at all. Furthermore, the
Company does not expect to be able to obtain insurance covering its costs and
losses as a result of any recall of its products due to alleged defects,
whether such a recall is instituted by the Company or required by a regulatory
agency. A product liability claim,

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recall, or other claim with respect to uninsured liabilities or in excess of
insured liabilities could have a material adverse effect on the business,
financial condition, and results of operations of the Company.

Manufacturing

The Company manufactures Macroplastique at its own facilities. Components are
manufactured in the United States, and finished products in The Netherlands
from medical grade materials obtained from qualified suppliers. The Companys
facilities utilize dedicated heating, ventilation, and high efficiency
particulate air (HEPA) filtration systems for the manufacturing areas to
provide a controlled working environment. All manufacturing processes are
performed by trained production technicians according to written procedures
approved by the Companys Quality Department. All critical manufacturing
processes are performed in a cleanroom environment. An outside vendor
sterilizes Macroplastique, Bioplastique and their accessories using validated
methods and returns the products to the Company for final inspection and
testing.

The Company currently purchases some of its components without supply
agreements from companies that are single sources of supply for such materials
at the moment. Alternate suppliers for these materials do exist should the
current suppliers discontinue production or distribution. However, the Company
would need to complete additional testing to qualify the materials obtained
from any new suppliers. Limited notice of the need to switch suppliers for
either of these materials could result in production delays and inventory
depletion.

The Companys manufacturing facilities are periodically audited by an
independent registrar to ensure compliance with ISO 9001 and EN 46001 quality
system requirements. Prior to marketing the product in the United States, the
Company will also be inspected by the U.S. FDA and will be subject to
additional state, local, and federal government regulations in both the U.S.
and The Netherlands applicable to the manufacture of the Companys products.
See Description of Business  Government Regulations.

Competition

Competition in the urinary incontinence products market is intense. The
Company faces competition from existing manufacturers of management and
curative treatments, competing manufacturers of commercially available bulking
agents, and from companies developing new or improved treatment methods. The
Company believes the principal competitive factors among treatment methods
include physician and patient acceptance of the method in managing or curing
incontinence, cost and availability of third-party reimbursement, marketing and
sales capability, and the existence of meaningful patent protection. The
Companys ability to compete in this market also will depend on the consistency
of its product quality as well as delivery and product pricing. Other factors
within and outside the Companys control include its product development and
innovation capabilities, ability to obtain required regulatory approvals,
ability to protect its proprietary technology, manufacturing and marketing
capabilities, and ability to attract and retain skilled employees.

Other soft-tissue injectable bulking agents competing directly with
Macroplastique for the treatment of stress urinary incontinence are
Urethrin® manufactured and distributed only outside the U.S. by
Mentor Inc., Contigen® distributed by C.R. Bard, Inc. worldwide
pursuant to a licensed agreement with McGhan Medical Corporation (an Inamed
Company), Deflux® manufactured and distributed only outside the
U.S. by Q-Med AB, and Durasphere® manufactured and distributed by
Carbon Medical Technologies (formerly Advanced UroScience, Inc.). Recently
American Medical Systems acquired Urovive, a system of detachable balloons for
implantation in the urethra as a bulking agent, from UroSurge, Inc. In
addition, the Company believes Curis, Inc., Protein Polymer Technologies, Genyx
Medical, and Bioform, Inc. are performing research and development and/or are
seeking regulatory approval for various types of soft-tissue injectable bulking
agents for treatment of urinary incontinence. The Company expects continued
stiff competition with Johnson & Johnson, American Medical Systems, C.R. Bard
Inc., Cook Urological, Boston Scientific Corporation and others who manufacture
urinary incontinence surgical products such as sling devices.

Many of the Companys competitors and potential competitors have significantly
greater financial, manufacturing, marketing, distribution and technical
resources, and experience than the Company. In addition, many of the Companys
competitors offer broader product lines within the urology market, which may
give such competitors the ability to negotiate exclusive, long-term supply
contracts and to offer comprehensive pricing for their products. It is
possible other large health care and consumer products companies may enter this
industry in the future. Furthermore, smaller companies, academic institutions,
governmental agencies, and other public and private research organizations will
continue to conduct research, seek patent protection, and establish
arrangements for commercializing products. Such products may compete directly
with any products, which may be offered by the Company in the future.

Dependence on One or a Few Major Customers

No customer accounted for 10% or more of the Companys consolidated net sales
during either fiscal 2001 or fiscal 2000.

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Patents, Trademarks, and Licenses

The Companys success depends in part on its ability to obtain and maintain
patent protection for its products, preserve its trade secrets, and operate
without infringing the proprietary rights of third parties. The Company seeks
to protect its technology by filing patent applications for patentable
technologies it considers important to the development of its business based on
an analysis of the cost of obtaining a patent, the likely scope of protection,
and the relative benefits of patent protection compared to trade secret
protection, among other considerations. The Company also relies upon trade
secrets, know-how, and continuing technological innovation to develop and
maintain its competitive position.

Multiple patents covering the Macroplastique materials, processes, and
applications have been issued to the Company by the Patent Offices in the
United States, United Kingdom, Japan, Germany, The Netherlands, and Canada.
Such patents will expire in the U.S. at various times between 2010 and 2013.
Applications are also currently pending in various other European countries.
There can be no assurance any of the Companys pending and/or future U.S.
and/or foreign patent applications will result in issued patents, or that any
issued patents will be of sufficient scope or strength to provide meaningful
protection of the Companys products. The coverage sought in a patent
application can be denied or significantly reduced before the patent is issued.
In addition, there can be no assurance any current and/or future U.S. and/or
foreign patents of the Company will not be challenged or circumvented by
competitors or others, or that such patents will be found to be valid or
sufficiently broad to protect the Companys technology or provide the Company
with any competitive advantage. Should attempts be made to challenge,
circumvent, or invalidate the Companys patents in the U.S. Patent and
Trademark Office or courts of competent jurisdiction, including administrative
boards or tribunals, the Company may have to participate in legal or
quasi-legal proceedings therein to maintain, defend, and/or enforce its rights
in these patents. Any legal proceedings to maintain, defend, and/or enforce
the Companys patent rights could be lengthy and costly, with no guarantee of
success.

The Company also relies heavily upon trade secrets and other proprietary
information. The Company seeks to maintain the confidentiality of such
information by requiring employees, consultants, and other parties to sign
confidentiality agreements, and by limiting access by parties outside the
Company to such information. There can be no assurance, however, these
measures will prevent the unauthorized disclosure or use of this information or
that others will not be able to independently develop such information.
Additionally, there can be no assurance any agreements regarding
confidentiality and non-disclosure will not be breached, or, in the event of
any breach, that adequate remedies would be available to the Company.

In February 2001, the United States Court of Appeals for the Federal Circuit
(the Circuit Court) granted the Companys appeal of the dismissal of its
claims against Carbon Medical Technologies, Inc. relating to, among other
things, misappropriation of the Companys trade secrets as summarized in the
Uroplasty, Inc. Form 10-KSB filed with the Securities and Exchange Commission
for the year ended March 31, 2000 and subsequent Form 10-QSB filings for the
quarters ended June 30, 2000, September 30, 2000 and December 31, 2000. The
Circuit Court vacated the dismissal by the U.S. District Court for Minnesota
due to lack of jurisdiction and remanded the case; a motion to dismiss brought
by Carbon Medical Technologies, Inc. is now pending in Ramsey County District
Court in Minnesota.

In 1992, the Company and its then parent, Bioplasty, Inc., were sued by
Collagen Corporation, which alleged that Macroplastique infringed on one of its
U.S. patents for a bulking agent. The parties entered into a license and
settlement agreement in 1993 pursuant to which the Company pays Collagen a
royalty of 5% of net sales in the U.S. of certain products with a minimum of
$50,000 per year. Collagen has not brought any new or renewed legal action in
connection with its allegations. There can be no assurance, however, Collagen
and/or any other third party will not pursue legal action with respect to these
matters.

Claims by competitors such as Collagen and other third parties that the
Companys products allegedly infringe the patent or other intellectual property
rights of others could have a material adverse effect on the Company. There
has been substantial litigation regarding patent and other intellectual
property rights in the medical device industry, and intellectual property
litigation may be used against the Company as a means of gaining a competitive
advantage. Intellectual property litigation is complex, time-consuming, and
expensive, and the outcome of such litigation is difficult to predict. Any
future litigation, regardless of outcome, could result in substantial expense
to the Company and significant diversion of the efforts of the Companys
technical and management personnel. An adverse outcome in any litigation could
subject the Company to significant liabilities to third parties, require
disputed rights to be licensed from others, if licenses to such rights could be
obtained, or require the Company to cease making, using, or selling certain
products. There can be no assurance that any licenses required under any
patents or proprietary rights would be made available on terms acceptable to
the Company, if at all. In addition to being costly, protracted litigation to
defend or prosecute intellectual property could result in the Company being
unable to commercialize Macroplastique on a timely basis or at all, and could
have a material adverse effect on the Companys business, financial condition,
and results of operations.

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Although the Company intends to apply for additional patents and vigorously
defend issued patents, management believes its success as a business will
depend primarily upon its development and marketing skills, and the quality and
economic value of its products rather than on its ability to obtain and defend
patents.

The Company has a Royalty Agreement with three individuals, two of whom are
former officers and directors. Under such Agreement, the Company pays
royalties, in the aggregate, of three to five percent of net sales of
Macroplastique and Bioplastique, subject to a monthly minimum of $4,500. The
royalties payable under this Agreement will continue until the patent
referenced in the Agreement expires in 2010.

In December 1995, the Company obtained a license from a British surgeon, which
became superseded by a subsequent Agreement entered into by the parties in
October 1998. Pursuant to this subsequent Agreement, the Company received an
absolute assignment of a patent relating to the Macroplastique Implantation
System in return for a royalty for each unit sold during the life of the
patent. The Company began commercialization of the product outside the U.S. in
March 2000.

Research and Development

The Company has an active Research and Development program working to develop
new products in the field of incontinence. The Company is also continually
evaluating potential improvements as well as new methods and devices for the
implantation of Macroplastique and on new applications for this material. R&D
expenses also include the costs of clinical studies including the U.S. trial
currently underway pursuant to the IDE approved by the FDA. Expenditures for
research and development totaled $2,150,177 and $1,684,178 for the fiscal years
ended March 31, 2001 and March 31, 2000, respectively. None of these costs
were borne directly by customers.

Compliance with Environmental Laws

Compliance by the Company with applicable environmental requirements during its
fiscal years ended March 31, 2001 and 2000 has not had a material effect upon
its capital expenditures, earnings, or competitive position.

Employees

As of March 31, 2001, the Company had fifty-one employees, of which forty-seven
were full-time and four part-time. No employee has a collective bargaining
agreement with the Company.

Incorporation and Current Subsidiaries

The Company was incorporated in January 1992 as a Minnesota Corporation and a
wholly owned subsidiary of its parent. In February 1995, the Company became a
stand-alone, privately held company pursuant to a Plan of Reorganization
confirmed by the U.S. Bankruptcy Court. The Companys shares became registered
and the Company became a reporting company pursuant to a registration statement
filed with the Securities and Exchange Commission in July 1996.

The Companys wholly owned foreign subsidiaries and their respective principal
functions are as follows:

|                |  |                                                                                                                                                                
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Uroplasty BV    |  | Incorporated in The Netherlands, is the manufacturer of
Macroplastique and Bioplastique and all their accessories,
and sells its products through distributors.
|               
|               
|               
|               
|Uroplasty LTD   |  | Incorporated in and acts as the sole distributor of
Macroplastique and wound care products in the United
Kingdom.                                              
|               
|               
|               
|               
|Bioplasty BV    |  | Incorporated in The Netherlands and is the distributor of
Bioplastique to subdistributors, distributes wound care
products in The Netherlands.                 
|               
|               
|               
|               
|Uroplasty Corp. |  | Incorporated in Canada; no longer has any activities.                                                                                                          

Factors Affecting the Business

The following factors are important and should be considered carefully in
connection with any evaluation of the Companys business, financial condition,
results of operations and prospects. Additionally, any one or combination of
the following factors could cause the Companys actual results to materially
differ from those reflected in any forward-looking statements of the Company.

Government Regulation: The Companys product, manufacturing processes, and
product development activities are subject to extensive and rigorous regulation
by governmental and regulatory authorities in foreign countries similar to the
U.S. Food and Drug Administration (FDA). In Europe, where
Macroplastique® has been used since 1991, the

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Companys introduction of medical devices as well as the design, manufacturing,
labeling, distribution, sale, marketing, advertising, promotion, and
recordkeeping procedures for the Companys products are subject to laws and
regulations governing medical devices contained in the European Medical Device
Directives (MDD).

In the United States, the Company cannot market or sell Macroplastique until
pre-market approval (PMA) authorization is received from the FDA. In July
1999, Uroplasty received approval from the FDA of an Investigational Device
Exemption (IDE) relating to a U.S. clinical trial for the treatment of female
stress urinary incontinence (SUI) using Macroplastique. Upon successful
completion of the clinical trial, the Company plans to submit a PMA application
to the FDA requesting approval to commercialize Macroplastique in the U.S.
There can be no assurance the U.S. clinical trials will be successfully
completed or that the requisite approvals or certifications will be granted for
Macroplastique or any other product on a timely basis, or at all, or that such
regulatory reviews will not involve delays that would conflict with the
Companys ability to commercialize its products in the U.S.

If and when regulatory approval to market a product is obtained from the FDA,
this approval may necessitate limitations on the indicated uses of the product.
Marketing approval can also be withdrawn by the FDA in the United States (and
by regulatory authorities in foreign countries) due to failure to comply with
regulatory requirements or the occurrence of unforeseen problems following
initial approval. The Company may be required to make further filings with the
FDA and other regulatory authorities in foreign countries under certain
circumstances, such as the addition of product claims or product reformulation.
The FDA and other regulatory authorities in foreign countries could also limit
or prevent the manufacture and/or distribution of the Companys products and
have the power to demand the recall of such products. Medical device
regulations depend strongly on administrative interpretation, and there can be
no assurance future interpretation made by the FDA or other regulatory bodies,
with possible retroactive effect, will not adversely affect the Company. The
FDA and various other authorities either currently inspect or will inspect the
Companys facilities from time to time to determine whether Uroplasty is in
compliance with regulations relating to medical device manufacturing including
regulations concerning design, manufacturing, testing, quality control, product
labeling, distribution, promotion, and record keeping practices. A
determination that the Company is in material violation of such regulations
could lead to the imposition of civil penalties, including fines, product
recalls, product seizures or, in extreme cases, criminal sanctions.

Effects of Technological Developments: The Company competes in a market
characterized by technological innovation, extensive research efforts, and
significant competition. Improvements in existing treatment options or
developments of new treatment methods may have a material adverse effect on the
Companys ability to increase sales of Macroplastique, successfully
commercialize any future products, and may render such products noncompetitive
or obsolete. Other companies are currently engaged in the development of
products and innovative methods for treating SUI that are similar to or
competing with Macroplastique and these companies may have greater financial
resources and know how than the Company. Significant developments by any of
these companies or advances by medical researchers could eliminate the market
for Macroplastique or otherwise render Macroplastique obsolete. Although
technological change has not had a direct material impact on the Company in
recent years, the potential such a change might occur is a continuing risk for
the Company.

Macroplastique Market Acceptance: The Company currently sells Macroplastique
in Europe and other foreign countries. Acceptance of Macroplastique by
physicians in preference to other treatment options, including other bulking
agents, will depend upon the demonstration of its safety and effectiveness,
relative performance of Macroplastique compared to other market approved
products, availability of other treatment options, and ease of use and relative
cost compared to treatment options including other bulking agents. Physicians
may elect not to use Macroplastique unless adequate reimbursement from health
care payers is available. Health care payer acceptance of a treatment
utilizing Macroplastique will require, among other things, evidence of the cost
effectiveness of this treatment as compared to other treatment options. There
can be no assurance the acceptance of Macroplastique by urological and
gynecological health care providers will develop or continue to grow in
countries where Macroplastique is already used.

Single Product: The Company currently derives over 90% of its revenues from
sales of Macroplastique and related products. Discontinuance or reduction of
revenues from Macroplastique sold outside of the U.S. could therefore have a
material adverse effect on the Companys business, financial condition, and
results of operations. The Company does not expect commercialization of other
new products will be feasible without a substantial, continuing commitment to
research and development for an extended period of time or acquisitions of new
products, or both. Also, new medical products must typically undergo clinical
trials and regulatory clearance or approval before commercialization. There
can be no assurance as to whether or when commercialization of other products
might begin or as to the likelihood that any such initiative would be
successful. The market for medically-related products changes constantly. If
the market changes, new or strengthened competition emerges, customer
preferences change, and/or new technology causes Macroplastique to be viewed as
a less effective treatment, the Companys business, financial condition, and
results of operation would be adversely affected.

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Patents and Proprietary Rights: The Companys success depends in part on the
ability to preserve trade secrets, obtain and maintain patent protection for
Uroplastys products under United States and international patent laws and
other intellectual property laws, and operate without infringing upon the
proprietary rights of third parties. Patents covering the materials, process,
and applications have been issued to the Company by the Patent Offices in the
United States, United Kingdom, Japan, Germany, The Netherlands, and Canada.
Applications are also currently pending in various other European countries.
No assurances can be given that the scope of any patent protection will prevent
competitors (most of which have financial and other resources substantially
greater than the Company) from introducing products competitive with the
Companys products, the Companys patents will be held valid if subsequently
challenged, others will not claim rights in or ownership of the patents and
other proprietary rights held by the Company, or the Companys product and
processes will not infringe, or be alleged to infringe, the proprietary rights
of others.

A number of patents have been issued to others in the area of injectable
bulking agents. The validity and breadth of claims covered in medical device
technology patents involve complex legal and factual questions and may
therefore be highly uncertain. The Company also relies upon unpatented trade
secrets to protect the Companys proprietary technology. No assurance can be
given that others will not independently develop or otherwise acquire
substantially equivalent techniques and/or gain access to and disclose the
Companys proprietary technology. Further, no assurance can be given that the
Company can ultimately protect meaningful rights to such unpatented proprietary
technology. There has been substantial litigation regarding patent and other
intellectual property rights in the medical device industry. Companies in the
medical device industry have employed intellectual property litigation to gain
a competitive advantage. Litigation may be necessary to enforce any patents
issued to the Company, protect trade secrets or proprietary information owned
by the Company against claimed infringement of the rights of others, or
determine the scope and validity of the proprietary rights of others. The
defense and prosecution of patent litigation or other legal and/or
administrative proceedings related to patents is costly and time-consuming
regardless of the outcome. An adverse outcome in any litigation could subject
the Company to significant liabilities to third parties, require disputed
rights to be licensed from others, and/or require the Company to cease making,
using, or selling any products. There can be no assurance that any licenses
required under any patents or proprietary rights would be made available on
terms acceptable to the Company, if at all.

Public Reaction to Silicone Products: Macroplastique is comprised of
heat-vulcanized polydimethylsiloxane, which results in a solid, flexible
silicone elastomer. In the 1990s the United States breast implant industry
became the subject of significant controversies surrounding the possible
effects upon the human body of the use of silicone gel in breast implants
resulting in a massive flood of product liability litigation, leading to the
bankruptcy of several companies, including Uroplastys former parent,
Bioplasty, Inc. (which in turn caused Uroplasty, Inc. to file for bankruptcy in
1993). The Company uses only solid silicone material and not semi-liquid
silicone gel (as was used in breast implants) in the Macroplastique product.
However, there can be no assurance that the use by the Company and others of
solid silicone in medical devices implanted in the human body will not result
in controversies, litigation, or negative publicity from news media,
competitors or legislative and regulatory investigations. Furthermore, there
can be no assurance that in the event such negative publicity occurred, that it
would not have a significant adverse effect on the Companys future financial
position or results of operations.

Third-Party Reimbursement: Any success of the Company will depend, in part,
upon satisfactory reimbursement for Macroplastique procedures from third-party
health care payers. In the U.S. and many foreign countries, third-party
reimbursement is currently generally available for surgical procedures for
urinary incontinence, but there is no uniform policy for such reimbursements.
The Company sells Macroplastique to physicians, hospitals and other users which
bill various third-party payers, such as government health programs, private
health insurance plans, managed care organizations, and other similar programs
for the health care products and services provided to their patients. Payers
may deny reimbursement if they determine a product used in a procedure was not
used in accordance with established payer protocols regarding cost-efficient
treatment methods, was used for an unapproved indication or was not otherwise
covered. Third-party payers are increasingly challenging the prices charged
for medical products and services and, in some instances, have pressured
medical suppliers to lower their prices. The availability of third-party
reimbursement for Macroplastique or competitors products and continuing
efforts to reduce the costs of health care by decreasing reimbursement rates
may reduce the price received by the Company for Macroplastique or increase the
relative expense to the consumer. The Company believes a material amount of
Macroplastique revenues are received from third-party payers; therefore failure
to receive sufficient reimbursement from health care payers for procedures
using Macroplastique or adverse changes in governmental and third-party payers
policies toward reimbursement for such procedures would materially adversely
affect the Companys business, financial condition, and results of operations.

Lack of Long-Term Controlled Clinical Studies: Although the Company is
currently conducting a controlled human clinical trial pursuant to an IDE
approved by the FDA and the Company believes Macroplastique is safe when used
as recommended based on its 10-year clinical experience, no controlled
long-term human clinical studies substantiating the safety and efficacy have
yet been completed on this product. Accordingly, no assurance can be given
that Macroplastique, even when used as recommended, will have the effect
intended or will not have adverse effects over a patients lifetime. For
example, there can be no assurance as to whether or how frequently patients
will require

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additional treatments of Macroplastique and whether any such additional
treatments will be effective or will have a negative effect on physician,
payer, or patient acceptance.

Raw Material Suppliers: The Company currently purchases certain raw materials
from single sources. Alternative suppliers for these materials exist should
the current suppliers discontinue production or distribution. However, the
Company would need to complete additional testing to qualify the materials
obtained from any new suppliers. Additionally, limited notice of the need to
switch suppliers for any of these materials could result in production delays
and inventory depletion, and alternative suppliers could change prices
significantly higher than current costs. The Company has not experienced any
shortage of these materials to date; however, no assurance can be given that
shortages of these materials will not be experienced in the future.

Research and Development Expenses and Expected Losses: The Companys future
success will depend upon, among other factors, its ability to introduce and
market Macroplastique on a timely basis in the U.S. and, to that end, the
Company has committed the largest portion of the proceeds resulting from its
private placement of Common Stock in fiscal 1998. Although the Company
realized net income during fiscal years 1997 through 1999, the Company incurred
substantial losses in fiscal 2000 and fiscal 2001. The development and
commercialization by the Company of Macroplastique and other products in the
U.S. will require substantial additional product development, clinical,
regulatory, and other expenditures for the foreseeable future.

Additional Capital Requirements: In the event product sales and/or expenses
differ from expected levels, the Company may require additional financing to
complete the IDE clinical study and pre-market approval application for
Macroplastique in the U.S. Further, the Company will need additional funds for
market introduction of Macroplastique to the U.S. for female SUI, as well as
for the development of VUR and male incontinence markets, because separate
regulatory approval is needed for each of these indications. There can be no
assurance that additional capital will be available to the Company when needed
or on terms acceptable to the Company.

International Operations and Currency Fluctuations: The Company currently
sells its products only outside the U.S. through its wholly owned foreign
subsidiaries. Sales and operations outside of the U.S. are subject to certain
inherent risks, including, without limitation, fluctuations in the value of the
U.S. dollar relative to foreign currencies, tariffs, quotas, taxes and other
market barriers, political and economic instability, restrictions on the import
and export of technology, difficulties in staffing and managing international
operations, difficulties in obtaining work permits for employees, difficulties
in collecting receivables, potentially adverse tax consequences, potential
language barriers, and difficulties in operating in a different culture and
legal system. There can be no assurance that any of these factors will not
have a materially adverse effect on the Companys financial condition or
results of operations. In particular, because the Companys international
sales are denominated primarily in Dutch Guilders or in Euros, currency
fluctuations in countries where the Company does business may render the
Companys products less price competitive than those of competing companies
whose sales are denominated in weaker currencies. The Company reports its
financial results in U.S. dollars, and fluctuations in the value of either the
dollar or the currencies in which the Company transacts business can have a
negative impact on its financial condition or results of operations.
Consequently, the Company has exposure to foreign currency exchange risks. The
Company attempts to lessen that exposure by keeping to a minimum the amount of
time trade payables and receivables are outstanding, and by denominating
product sales in a currency which historically has been more stable than other
foreign currencies. However, there can be no assurance that historical
stability of any currency is any indication of its future stability.

Limited Public Market for Common Stock; Possible Stock Price Volatility:
Announcements of new products and services by the Company or its competitors,
technological innovations by competitors, disputes regarding patents or other
proprietary rights, regulatory developments and economic and other external
factors, as well as period-to-period fluctuations in the Companys financial
results, could cause the market price of the Companys Common Stock to
fluctuate significantly. In addition, the stock market in general and, in
particular the market prices for medical technology companies, have
historically experienced significant volatility which has affected the market
price of securities of many companies and which has sometimes been unrelated to
the operating performance of such companies. Such volatility may adversely
affect the market price of the Companys Common Stock.




ITEM 2. DESCRIPTION OF PROPERTY

The Company owns office and warehouse space at Hofkamp 2, 6161 DC Geleen, The
Netherlands. In addition, the Company leases office, warehouse, laboratory and
production space at 2718 Summer Street NE, Minneapolis Minnesota 55413-2820,
USA; office and warehouse space at Unit 3, Woodside business Park, Whitley Wood
Lane, Reading, Berkshire RG2 8LW, United Kingdom; and office, warehouse,
laboratory and manufacturing space at Industrieweg 12, 5627 BS Eindhoven, The
Netherlands. The Company considers its facilities adequate; however, additional
office,

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production, and warehouse space will likely be necessary upon FDA approval and
subsequent increases in production, marketing, and sales activities in the U.S.




ITEM 3. LEGAL PROCEEDINGS

On July 21, 1998, the Company announced that the United States Patent and
Trademark Office (USPTO) had informed the Company that the USPTO will, as
requested by the Company, initiate an interference proceeding (the
Interference Proceeding) between the Company and Carbon Medical Technologies,
Inc. (CMT), formerly Advanced UroScience, Inc., White Bear Lake, Minnesota,
to determine which company was the first to invent pyrolytic carbon-coated
micro beads for use in treating urinary incontinence. The USPTO has not, as of
June 14, 2001, formally declared the Interference Proceeding.

At such time as the Interference Proceeding is formally declared, it could take
the USPTO twenty-four months or more to reach a final decision concerning this
matter. Although the USPTO originally granted the applicable patent to CMT,
the Interference Proceeding may result in a determination that either
Uroplasty, Inc. or CMT is the proper holder, or that a patent should not have
been granted. An interference proceeding, like other patent litigation, can be
complex, time consuming and expensive.

Later in 1998, the Company commenced a related lawsuit against CMT for
misappropriation of trade secrets (Misappropriation Lawsuit) pertaining to
the pyrolytic carbon-coated micro beads, among other things. CMT, subsequent to
December 31, 1998, brought a counterclaim against the Company with respect to
such matter. In October 1999, the Company announced that the U.S. District
Court for Minnesota had granted a motion by CMT to dismiss the Misappropriation
Lawsuit, which the Company appealed.

Subsequently, the U.S. Court of Appeals, Eighth Circuit, notified the Company
that pursuant to the Companys request, the Companys appeal was transferred to
the Federal Circuit, and in May 2000 the Company filed its appeal of the
District Courts order granting summary judgment with the U.S. Court of Appeals
for the Federal Circuit.

In February 2001, the United States Court of Appeals for the Federal Circuit
(the Circuit Court) granted the Companys appeal of the dismissal of the
Misappropriation Lawsuit. The Circuit Court vacated the dismissal by the U.S.
District Court for Minnesota due to lack of jurisdiction and remanded the case;
a motion to dismiss the Misappropriation Lawsuit brought by CMT is now pending
in Ramsey County District Court in Minnesota.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matter to a vote of its security holders during
the fourth quarter of its recently completed fiscal year.




PART II




ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of the date hereof, there is only a limited public trading market for the
Companys Common Stock.

The following table sets forth the high and low bid prices for the Companys
Common Stock, as reported in the NASDS Bulletin Board system (market symbol
UROP.OB) on a quarterly basis, from April 2000 through March 2001, and for the
period April 1, 2001 through May 25, 2001. Such quotations represent
interdealer prices, without retail markup, mark down or commission, and do not
necessarily represent actual transactions.

|                             |  |         |        |          |  |   |        | 
|---------------------------- |  | ------- | ------ | -------- |  | - | ------ | 
|Fiscal Quarters              |  | Low Bid |        | High Bid
|First Quarter                |  | $       | 2.2500 |          |  | $ | 2.8750 | 
|                            
|                            
|                            
|                            
|Second Quarter               |  |         | 1.7500 |          |  |   | 2.3125 | 
|                            
|                            
|                            
|                            
|Third Quarter                |  |         | 1.4375 |          |  |   | 2.1875 | 
|                            
|                            
|                            
|                            
|Fourth Quarter               |  |         | 1.4375 |          |  |   | 2.0000 | 
|                            
|                            
|                            
|                            
|April 1, 2001  May 25, 2001 |  | $       | 1.5200 |          |  | $ | 1.7500 | 

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As of May 25, 2001, approximately 575 holders held the Companys Common Stock
of record. Registered ownership includes nominees who may hold securities on
behalf of multiple beneficial owners.




ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THIS DISCUSSION OF THE FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS OF THE
COMPANY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS ENTIRETY
BY, THE FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE WITHIN THIS
ANNUAL REPORT, THE MATERIAL CONTAINED IN THE RISK FACTORS AND BUSINESS
SECTIONS OF THIS ANNUAL REPORT, AND THE CAUTIONARY DISCLOSURE ABOUT
FORWARD-LOOKING STATEMENTS AT THE FRONT OF PART I OF THIS ANNUAL REPORT.

Overview

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

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

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

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

In order to reduce costs thirteen positions worldwide were canceled in the
fourth quarter of fiscal 2001, either by terminating employment agreements or
attrition. Two manufacturing positions were eliminated, three administrative
positions, four positions in Research and development and four sales and
marketing positions. An increased focusing on the Companys goals and increased
efficiencies should streamline the operations. No activities will be
discontinued. The total severance payments recorded in the fourth quarter
fiscal 2001 for terminated employees were $178,249. Substantially all
termination obligations were paid in fiscal 2001.

Set forth below is managements discussion and analysis of the financial
condition and results of operations for the year ended March 31, 2001 and 2000.
See note 8 to the Consolidated Financial Statements for business segment
information.

Results of Operations

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Net Sales: The Macroplastique product line accounts for over 90% of total net
sales during the periods presented. In fiscal year ended March 31, 2001, net
sales of all products were $5,668,483, representing a $108,464 or 2% increase
when compared to net sales of $5,560,019 for fiscal 2000. The sales increase
was the result of a 13% increase in units and a modest price increase for the
cost of inflation. These increases were offset by exchange rate changes
(strengthening of the dollar in fiscal 2001 caused foreign sales to be
translated into less dollars than they would have been in fiscal 2000).

Management expects that unit sales of Macroplastique will increase in fiscal
2002 as a result of improving and enhancing our distributors in existing and
new geographical markets and as a result of enhancements to the surgical
technique leading to an increased number of implanting doctors and greater
penetration of the SUI market. There can be no assurance however, that the
Companys efforts to increase sales and market penetration will be successful.

Gross Profit: Gross profit was $4,355,300 and $3,955,896 for the years ended
March 31, 2001 and 2000, respectively, or 77% and 71% of net sales. During the
year ended March 31, 2001, manufacturing efficiencies and increased utilization
of manufacturing facilities and manufacturing related personnel had a positive
effect on gross profit margins when compared to the year ended March 31, 2000.

General and Administrative Expense: General and administrative (G&A)
expenses decreased 7% from $1,491,529 during fiscal 2000 to $1,389,943 during
fiscal 2001. The decrease in General and Administrative expenses is primarily
attributed to decreased costs of professional fees related to the legal
proceeding described in Item 3 of Part I.

Research and Development Expense: Research and development (R&D) expenses
increased $465,999, or 28%, from $1,684,178 during fiscal 2000 to $2,150,177
during fiscal 2001. The increase in R&D expense during the year ended March
31, 2001 resulted principally from additional costs associated with development
of product enhancements and the on-going FDA human clinical trials.

The human clinical study costs are primarily comprised of physician and medical
fees relating to the patient procedures and follow-up examinations, in addition
to the costs of monitoring the study, maintaining and evaluating the patient
treatment, and follow-up examination data.

Selling and Marketing Expenses: Selling and marketing (S&M) costs increased
6% from $2,071,547 during fiscal 2000 to $2,185,809 during fiscal 2001. In the
fourth quarter of fiscal 2001 $294,000 was expensed as a termination fee of a
distribution agreement. Selling and Marketing expenses decreased as a result of
decreases in personnel and related costs designed to streamline the selling
function and reduce the selling cost to revenue dollar ratio.

Other Income (Expense): Other income (expense) includes interest income,
interest expense, foreign currency exchange gains and losses, and other
non-operating costs when incurred. Other income (expense) was $(310,270) and
$(82,582) for the years ended March 31, 2001 and 2000, respectively. The
majority of the difference was due to exchange gains and losses and a $68,000
reduced interest income. Exchange gains and losses are recognized primarily as
a result of fluctuations in currency rates between the U.S. Dollar (the
functional reporting currency) and the Dutch Guilder and British Pound
(currencies of the Companys subsidiaries), as well as their effect on the
valuation of intercompany obligations between the Company and its foreign
subsidiaries.

Liquidity and Capital Resources

As of March 31, 2001, the Companys cash and cash equivalent balances totaled
$1,012,397. The capital resources existing at March 31, 2001 were derived from
operations during the fiscal years ended March 31, 1997 and 1998, plus the net
proceeds from the Companys sale of approximately 1.7 million shares of Common
Stock in June 1998.

At March 31, 2001, the Company had working capital of approximately $2.2
million. During fiscal year 2001, the Company used approximately $1,225,000 of
cash from operating activities.

The Company currently has no financing arrangements in place with any bank for
general working capital needs, and no material unused sources of liquidity
other than the cash, equipment leasing arrangements, and its accounts
receivable and inventory balances at March 31, 2001 of approximately $983,000
and $752,000, respectively.

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

The Companys financial condition and results of operations could be
significantly affected by fluctuations in foreign currency exchange rates and
weak economic conditions in foreign markets where the Companys products are

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distributed. The effects of these conditions could include reduced unit sales
and reduced sales in dollars when converted from foreign currency amounts.
Furthermore, because the Companys U.S. operations are funded by sales
denominated in foreign currency, strengthening of the U.S. dollar against the
Euro, Dutch Guilder and/or the British Pound could have an adverse effect on
the Companys cash flow.

Management expects continued high costs associated with the conduct of the U.S.
human clinical study for Macroplastique pursuant to the FDA approved IDE, the
subsequent PMA submission and review process, and pre-commercialization and
market launch costs in the U.S. relating to Macroplastique for female SUI.
Additionally, the Company has incurred an added expense associated with
replacement of its distributor in France, which may not be offset by increased
sales to the new distributor.

As a result of the Companys cost reduction activities and the Companys
ability to manage the timing of the FDA clinical expenditures, management
believes that current resources and the funds generated from sale of the
Companys products outside the U.S. will be adequate to meet the Companys cash
flow needs through fiscal 2002. In the event that anticipated increases in
current sales levels are not achieved, additional funds from the sale of the
Companys securities or other alternative sources will be necessary to support
the U.S. regulatory activities. There can be no assurance that such alternative
sources of funds will be available to the Company when they are needed or
pursuant to terms considered acceptable to the Company at that time.

Conversion to Euro Currency

On January 1, 1999, eleven of the fifteen member countries of the European
Union (the participating countries) adopted the Euro as their common legal
currency and established fixed conversion rates between their existing
sovereign currencies and the Euro. The Euro trades on currency exchanges and
is available for non-cash transactions. The participating countries will issue
sovereign debt exclusively in Euro, and will redenominate outstanding sovereign
debt in Euro.

With respect to presently known trends and uncertainties related to the Euro
conversion, the Company does not expect there will be any long-term competitive
implications of the conversion (such as effects on product or service pricing
due to increased transparency), nor does it anticipate any material costs in
connection with the conversion nor a lack of ability to pass any costs that
might result along to customers.

New Accounting Pronouncements

Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, established accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. The
statement requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. SFAS No. 133, as amended by SFAS No. 137, is
effective for the Company as of April 1, 2001. The Company has evaluated SFAS
No. 133 and determined that the pronouncement will not impact the Companys
consolidated financial statements.




ITEM 7. FINANCIAL STATEMENTS

The information contained under the headings Consolidated Statements of
Operations, Consolidated Balance Sheets, Consolidated Statements of
Shareholders Equity and Comprehensive Loss, Consolidated Statements of Cash
Flows, Notes to Consolidated Financial Statements and Independent Auditors
Report is incorporated herein by reference.




ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

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PART III




ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The Companys Directors and Executive Officers as of March 31, 2001 were as
follows:

|                     |  |     |    |          |  |                                                              |  |              |      |  |  |  |      | 
|-------------------- |  | --- | -- | -------- |  | ------------------------------------------------------------ |  | ------------ | ---- |  |  |  | ---- | 
|Name                 |  | Age |    | Position |  | Director Since                                               |  | Term Expires
|Daniel G. Holman     |  |     | 55 |          |  | Chairman, President, CEO, CFO                                |  |              | 1994 |  |  |  | 2003 | 
|                    
|                    
|                    
|                    
|Joel R. Pitlor       |  |     | 62 |          |  | Director                                                     |  |              | 1994 |  |  |  | 2001 | 
|                    
|                    
|                    
|                    
|R. Patrick Maxwell   |  |     | 56 |          |  | Director                                                     |  |              | 1994 |  |  |  | 2002 | 
|                    
|                    
|                    
|                    
|Thomas E. Jamison    |  |     | 41 |          |  | Director                                                     |  |              | 2000 |  |  |  | 2001 | 
|                    
|                    
|                    
|                    
|Christopher Harris   |  |     | 42 |          |  | Vice President of Corporate Development                     
|                    
|                    
|                    
|                    
|Larry Heinemann      |  |     | 48 |          |  | Vice President of Sales & Marketing                         
|                    
|                    
|                    
|                    
|Susan Hartjes Holman |  |     | 47 |          |  | Vice President of Operations &
Regulatory Affairs, Secretary
|                    
|                    
|                    
|                    
|Arie J. Koole        |  |     | 37 |          |  | Controller                                                  

All directors are members of the Nominating Committee; all directors except Mr.
Holman are members of the Compensation Committee; and Mr. Maxwell and Mr.
Jamison are members of the Audit Committee.

The Company has entered into Employment Agreements with Mr. Holman, Ms. Holman,
Mr. Heinemann, and Mr. Harris, the terms of which, among other things, specify
a base salary subject to annual adjustment by mutual agreement of the Company
and the Employee, and a severance payment to the employee upon employment
termination without cause. Any severance amounts payable under the Agreement
shall be limited to the Employees base salary for not less than four months
and not longer than twelve months after employment termination, depending on
the Employees years of service. Contemporaneously with the execution of the
Employment Agreement, each of the officers executed an Employee
Confidentiality, Inventions, Non-Solicitation, and Non-Compete Agreement,
certain terms of which specify the Employee shall not disclose confidential
information, shall assign to the Company without charge all intellectual
property relating to the Companys business which is created or conceived
during the term of employment, shall not encourage Employees to leave the
employment of the Company for any reason and shall not compete with the Company
during the term of employment and for a period of eighteen months thereafter.
Also in connection with the execution of these Agreements, the officers were
granted varying amounts of stock options to purchase the Companys Common Stock
at the fair market value at date of grant of $2.50 per share. In all cases the
options are exercisable for five years or until one year after employment
termination (subject to certain termination provisions), whichever date is
earlier, and vest in three equal amounts on each one year anniversary date
subsequent to the option grant date.

The following paragraphs describe the business experience of each of the
Companys directors and officers.

Daniel G. Holman: Mr. Holman has served as Chairman of the Board, President
and Chief Executive Officer of Uroplasty, Inc. since February 1994, and as
Chief Financial Officer from June 1996 to November 1999. He was Executive Vice
President of Bioplasty, Inc. from 1973 to 1985, its President from 1985 to
1987, and Secretary from 1986 to March 1992. Mr. Holman has been Chairman of
the Board of Bioplasty, Inc. since March 1992, and President and CEO since
February 22, 1993. He served as Chairman of the Board and Chief Executive
Officer of Bio-Vascular, Inc. from June 1988, to September 1991, served as a
director of Genetic Laboratories Wound Care, Inc. from February 1988 until July
1993, and as Vice President from February 1988 through November 1992. Mr.
Holman holds a Bachelor of Arts degree in Biology from St. Cloud State
University.

Joel R. Pitlor: Mr. Pitlor has been a director since February 1994. He served
as a director of Bioplasty from January 1989 until May 1996. For over sixteen
years, he has been the owner and manager of a management consulting firm. Mr.
Pitlor is presently a Director of Precision Optics Corporation, which is
publicly held. Mr. Pitlor holds a Bachelor of Science degree from MIT and
serves as Personal Advisor to several CEOs.

R. Patrick Maxwell: Mr. Maxwell has over 30 years of experience as a turn
around management specialist, an entrepreneur and executive in both the
business and non-profit sectors. He has held various management positions
including: Board Chairman, Director, Chief Executive Officer, Chief Financial
Officer, Vice President and General Counsel. He has served as Executive
Director of two membership associations and one charitable organization. Mr.
Maxwell has served on numerous Boards of Directors of both business and
charitable organizations. The organizations he

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has worked with include: manufacturing, insurance, personnel placement,
education, business services, medical, legal, membership and charities. The
companies are located throughout the United States, Europe and the Pacific Rim.
He has a B.A. in philosophy from St. Johns University and a Juris Doctor from
Northwestern University School of Law.

Thomas E. Jamison: Mr. Jamison was elected a Director of Uroplasty in August
2000. Mr. Jamison is an attorney with the business litigation law firm of
Fruth, Jamison & Elsass, P.A. in Minneapolis. From 1996 to 1999, Mr. Jamison
served as an investment banker in the Corporate Finance Department of R.J.
Steichen & Co. From 1991 to 1996, Mr. Jamison practiced law at Fruth & Anthony,
P.A. in Minneapolis. Mr. Jamison graduated magna cum laude from William
Mitchell College of Law in 1991.

Christopher Harris: Mr. Harris joined Bioplasty in October 1989 as Area Sales
Manager in the United Kingdom. Since September 1994, he has been the Managing
Director of the Companys subsidiary in the United Kingdom. In February 1996,
Mr. Harris was appointed as Director of Corporate Development and in January
1997 he was appointed Vice President of Corporate Development. Mr. Harris, a
certified nurse in the United Kingdom, practiced general surgery nursing for
two years and operating room nursing for nine years prior to 1989.

Larry Heinemann: Mr. Heinemann joined Uroplasty in September 1998 as Director
of Sales for North and South America. In July 1999 he was promoted to Vice
President of Sales and Marketing for Uroplasty, Inc. Prior to joining
Uroplasty, Inc., Mr. Heinemann worked for two divisions of C. R. Bard, Inc.
From January 1996 to September 1998, he was employed by the Bard Medical
Division in the positions of Territory Manager and Sales Training. From May
1987 to January 1996, Mr. Heinemann was employed by the Bard Urological
Division in various positions of Sales Consulting and Training Management.
Prior to that time, Mr. Heinemann was employed by surgical device divisions of
Squibb and Sterling Drug in various sales management positions. Mr. Heinemann
holds a Bachelor of Science Degree from the School of Business of Eastern
Illinois University and majored in Marketing and Personnel Management. He is a
member of SUNA (Society of Urological Nursing Association), and has been
serving on the Board as an Industry Liaison for the Upper Midwest Chapter since
1991.

Susan Hartjes Holman: Ms. Holman joined Bioplasty, Inc. in September 1991 as
Director of Operations and served as Vice President of Operations and
Regulatory Affairs from April 1993 until May 1996. In November 1994 she was
appointed Vice-President of Operations and Regulatory Affairs for Uroplasty,
Inc. and was elected Secretary in September 1996. Prior to 1991, Ms. Holman
was Director of Operations at Bio-Vascular, Inc. in St. Paul, Minnesota from
November 1989 to September 1991. Prior to that time, she served at various
other pharmaceutical and medical device companies in management-oriented
positions in manufacturing, quality assurance, and research. Ms. Holman has
Bachelor of Arts degrees in Biology-Microbiology and Biomedical Science from
St. Cloud State University, and has done graduate work in the biological
sciences. Ms. Holman is a senior member and a Certified Quality Auditor of the
American Society for Quality and served several years on its Executive
Committee and is a member of the American Society of Microbiology, and the
Henrici Society for Microbiologists. She has served on several national and
international standards committees.

Arie Koole: Mr. Koole joined Bioplasty in May 1993 as Financial Manager in The
Netherlands. Since January 2000 he has been the Managing Director of the
Companys subsidiaries in The Netherlands. In June 1996, Mr. Koole was
appointed as Director of Finance and in January 2000, Mr. Koole was appointed
as Controller. From 1987 to 1993, Mr. Koole was a financial auditor with the
international accounting firm Deloitte & Touche in The Netherlands. Mr. Koole
has a bachelor degree in Business Economics.

Mr. Holman and Ms. Holman became husband and wife in June 1999.




ITEM 10. EXECUTIVE COMPENSATION

The information contained under the heading Executive Compensation in the
Proxy Statement is incorporated herein by reference.




ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the heading Principal Shareholders in the
Proxy Statement is incorporated herein by reference.




ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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The information contained under the heading Certain Transactions in the Proxy
Statement is incorporated herein by reference.




ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits incorporated by reference (Rule 12b-23). The following
Exhibits are incorporated by reference to the Companys Registration
Statement on Form 10SB filed July 10, 1996:

|       |  |                                                                                                                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                                                
|2.1    |  | First Amended Joint Plan of Reorganization (Modified) of the Company dated
January 31, 1994 (Filed as Exhibit 8.1 to Form 10SB)                                                                                                            
|      
|      
|      
|      
|3.1    |  | Articles of Incorporation of Uroplasty, Inc. (Filed as Exhibit 2.1 to Form 10SB)                                                                                                                                                           
|      
|      
|      
|      
|3.2    |  | Bylaws of Uroplasty, Inc. (Filed as Exhibit 2.2 to Form 10SB)                                                                                                                                                                              
|      
|      
|      
|      
|4.1    |  | Form of Stock Certificate of the Company representing shares of the Companys
Common Stock (Filed as Exhibit 3.1 to Form 10SB)                                                                                                             
|      
|      
|      
|      
|10.1   |  | Settlement Agreement and Release dated November 30, 1993 by and between
Bioplasty, Inc., Bio-Manufacturing, Inc., Uroplasty, Inc., Arthur A. Beisang,
Arthur A. Beisang III, MD and Robert A. Ersek, MD (Filed as Exhibit 6.1 to Form
10SB)
|      
|      
|      
|      
|10.2   |  | Purchase and Sale Agreement dated December 1, 1995 by and among Bio-Vascular,
Inc., Bioplasty, Inc., and Uroplasty, Inc. (Filed as Exhibit 6.2 to Form 10SB)                                                                               
|      
|      
|      
|      
|10.3   |  | License Agreement dated December 1, 1995 by and between Bio-Vascular, Inc. and
Uroplasty, Inc. (Filed as Exhibit 6.3 to Form 10SB)                                                                                                         
|      
|      
|      
|      
|10.4   |  | Lease Agreement dated January 10, 1995 between Summer Business Center
Partnership and Uroplasty, Inc. (Filed as Exhibit 6.4 to Form 10SB)                                                                                                  
|      
|      
|      
|      
|10.5   |  | Unsecured $640,000 Promissory Note dated March 30, 1994 by and between
Bioplasty, Inc., Uroplasty, Inc. and Bioplasty Product Claimants Trust (Filed
as Exhibit 6.5 to Form 10SB)                                                         
|      
|      
|      
|      
|10.6   |  | Agreement and Satisfaction dated January 30, 1995 by and between Bioplasty
Product Claimants Trust and Bioplasty, Inc. (Filed as Exhibit 6.6 to Form
10SB)                                                                                
|      
|      
|      
|      
|10.7   |  | Asset Sale and Satisfaction of Debt Agreement dated June 23, 1995 by and
between Bioplasty, Inc. and Uroplasty, Inc. (Filed as Exhibit 6.7 to Form 10SB)                                                                                   
|      
|      
|      
|      
|10.8   |  | Executory Contract Assumption Stipulation dated December 28, 1993 by and
between Bioplasty, Inc., Uroplasty, Inc., and Collagen Corporation (Filed as
Exhibit 6.8 to Form 10SB)                                                            
|      
|      
|      
|      
|10.9   |  | Settlement and License Agreement dated July 23, 1992 by and between Collagen
Corporation, Bioplasty, Inc., and Uroplasty, Inc. (Filed as Exhibit 6.9 to Form
10SB)                                                                         

(b) The following exhibits are filed as part of this report:

|       |  |                            
|------ |  | ---------------------------
|Number |  | Description                
|13.0   |  | Financial Statements       
|      
|      
|      
|      
|21.0   |  | Subsidiaries of the Company

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Company caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                    |  |                                                                                                                                                                                            
|------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dated: June 1, 2001 |  | UROPLASTY, INC.
By: /s/ DANIEL G. HOLMAN
Daniel G. Holman
President, Chief Executive Officer,
Chief Financial Officer (Principal Financial Officer),
Director (Principal Executive Officer)

In accordance with the Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the Company and in the capacities and on
the dates indicated.

|                                          |  |                                                                                                    |  |             
|----------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | ------------
|Name                                      |  | Title / Capacity                                                                                   |  | Date        
|/s/ DANIEL G. HOLMAN
Daniel G. Holman     |  | President, Chief Executive Officer
Chief Financial Officer,
Director (Principal Executive Officer) |  | June 1, 2001
|                                         
|                                         
|                                         
|                                         
|/s/ ARIE J. KOOLE
Arie J. Koole           |  | Controller
(Principal Accounting Officer)                                                          |  | June 1, 2001
|                                         
|                                         
|                                         
|                                         
|/s/ JOEL R. PITLOR
Joel R. Pitlor         |  | Director                                                                                           |  | June 1, 2001
|                                         
|                                         
|                                         
|                                         
|/s/ R. PATRICK MAXWELL
R. Patrick Maxwell |  | Director                                                                                           |  | June 1, 2001
|                                         
|                                         
|                                         
|                                         
|/s/ THOMAS E. JAMISON
Thomas E. Jamison   |  | Director                                                                                           |  | June 1, 2001

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