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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                     ======================================

                                    FORM 10-K

                     ======================================

 [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934

       For the Fiscal Year Ended December 31, 2001

 [_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934

       For the transition period from _________ to _________.


                         COMMISSION FILE NUMBER 1-11352


                             ABLE LABORATORIES, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)


          DELAWARE                                            04-3029787
-------------------------------                            ----------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)


     200 HIGHLAND AVENUE
          SUITE 301
         NEEDHAM, MA                                            02494
    ---------------------                                     ----------
    (Address of principal                                     (Zip Code)
     executive offices)


                  Registrant's telephone number: (781) 449-4926

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


                                                            Name of each
      Title of Class                                exchange on which registered
      --------------                                ----------------------------
Common Stock, $.01 par value                            Boston Stock Exchange


           Securities Registered pursuant to Section 12(g) of the Act:


                                 TITLE OF CLASS
                                 --------------
                          Common Stock, $.01 par value

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

     Check if no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

     The aggregate market value of the registered common stock, $0.01 par value
per share ("Common Stock") held by non-affiliates, based on the closing price of
the Common Stock on March 18, 2002 as reported on the OTC Bulletin Board, was
approximately $70,725,900.

     As of March 18, 2002, there were 171,184,665 outstanding shares of Common
Stock.
================================================================================
<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
PART I.

Item 1.       Business ....................................................  3
Item 2.       Properties ..................................................  9
Item 3.       Legal Proceedings ........................................... 10
Item 4.       Submission of Matters to a Vote of Security Holders.......... 10


PART II

Item 5.       Market for Common Equity and Related Stockholder Matters .... 11
Item 6.       Selected Financial Data...................................... 11
Item 7.       Management's Discussion and Analysis of Financial
                 Condition and Results of Operations....................... 12
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk... 19
Item 8.       Financial Statements and Supplementary Data.................. 19
Item 9.       Changes in and Disagreements with Accountants on
                 Accounting and Financial Disclosures...................... 19


PART III

Item 10.      Directors and Executive Officers............................. 46
Item 11.      Executive Compensation....................................... 46
Item 12.      Security Ownership of Certain Beneficial Owners and
                 Management................................................ 46
Item 13.      Certain Relationships and Related Transactions............... 46


PART IV

Item 14.      Exhibits and Reports on Form 8-K............................. 47


Signatures    ............................................................. 52
Exhibit Index


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement for its 2002 annual
meeting of stockholders are incorporated by reference into Items 10, 11, 12 and
13 of this Report.


               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

     Certain statements contained in this Annual Report on Form 10-K, including
information with respect to our future business plans, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. There are a number of important factors
that could cause our results to differ materially from those indicated by such
forward-looking statements. These factors include those set forth below under
the heading "Certain Factors That May Affect Future Results."
<PAGE>

                                     PART I

ITEM 1. BUSINESS

INTRODUCTION

     Able Laboratories, Inc., referred to in this Report as the "Company," "we"
or "us," develops, makes and sells generic drugs to our customers. Generic drugs
are the chemical and therapeutic equivalents of brand-name drugs. They must meet
the same governmental standards as the brand-name drugs they replace, and they
must meet all U.S. Food and Drug Administration, or FDA, guidelines before they
can be made or sold. We can manufacture and market a generic drug only if the
patent or other government-mandated market exclusivity period for the brand-name
equivalent has expired. Generic drugs are typically sold under their generic
chemical names at prices significantly below those of their brand-name
equivalents. We estimate that the U.S. generic or multi-source drug market
approximates $13 billion in annual sales. We believe that this market has grown
due to a number of factors, including:

o    a significant number of widely prescribed brand-name drugs are at or near
     the end of their period of patent protection, making it legally permissible
     for generic manufacturers to produce and market competing generic drugs;

o    managed care organizations, which typically prefer lower-cost generic drugs
     to brand-name products, continue to grow in importance and impact in the
     U.S. health care market; and

o    physicians, pharmacists and consumers increasingly accept generic drugs.

OUR STRATEGY

     Our strategy is to focus on developing generic drugs that either have large
established markets or are niche products with limited or no competition. For
example, suppositories form a basis of our niche product strategy, because there
are relatively few competitors in the market and a limited number of branded
suppository products currently do not have any generic equivalents. We also
intend to focus on products that have extended release dosage forms, which are
difficult to develop and therefore could be less likely to face competition from
other generic drug manufacturers. We believe that this approach will allow us to
bundle our products and offer the customer a line of products that reduces their
overall acquisition cost.

BACKGROUND

     From our inception in 1988 until 1996, we focused primarily on the business
of developing new drugs and licensing the resulting products and technologies to
others. Beginning in 1996, we began shifting our focus and, through acquiring
three separate companies, became a generic drug manufacturing and distribution
business. In 1996 we acquired Able Laboratories, Inc., our generic drug
development and manufacturing business. In 1997 and 1998, respectively, we
acquired Superior Pharmaceutical Company and Generic Distributors, Inc., our
distribution operations.

     Immediately after we acquired it, Superior began experiencing a sharp and
steady decline in its sales and margins. The decline was initially due, in part,
to the loss of key personnel after the acquisition, which resulted in the loss
of business with certain accounts. Also, price pressure in the generic drug
industry caused further erosion in Superior's margins. GDI also experienced a
decline in sales and margins during this time, primarily due to price erosion in
the industry. Although we provided ongoing capital to fund the subsidiaries'
operations, we did not have sufficient capital to continue to do so.

     Our distribution businesses sold mostly our competitors' products and the
combination of manufacturing and distribution business did not create the
strategic advantages we were seeking. On the contrary, we found that we were
divided both financially and managerially. As our financial performance failed
to meet expectations, our senior lender restricted our borrowing ability and, as
a result, we faced a working capital shortage. After careful analysis,

                                        3
<PAGE>

we decided to divest our distribution operations and continue only as a generic
drug development and manufacturing company, selling only our own products to
customers. Management concluded that the sale of Superior and GDI was in our
best interest because:

o    the sale enabled us to eliminate all our senior debt;

o    we also assigned our obligation to our subordinated lenders, subject to our
     continued guarantee;

o    we are now able to focus management resources on higher margin
     manufacturing operations and achieve greater value for our shareholders.

     We completed the sale of GDI on December 29, 2000 and the sale of Superior
on February 23, 2001. The sale of Superior to RxBazaar, Inc., a company founded
by two directors of Able, involved complex financial transactions, including:

o    we received a cash payment of $4,000,000 from RxBazaar;

o    RxBazaar became obligated to pay us approximately $1,000,000 in respect of
     existing intercompany advances and accounts payable owed by Superior to
     Able;

o    RxBazaar assumed our existing subordinated debt in the amount of
     $2,248,875;

o    we agreed to continue to guarantee the subordinated debt, which guarantee
     is secured by certain of our assets;

o    we further agreed that the subordinated lenders would be entitled to
     convert the subordinated debt into shares of our common stock to satisfy
     our obligations under the guarantee;

o    we issued warrants to the subordinated lenders to purchase 2,500,000 shares
     of common stock at a price of $0.01 per share, which warrants will become
     exercisable if the guaranteed debt is not repaid on or before June 17,
     2002; and

o    we agreed with certain equity investors in RxBazaar that they could, at
     their election, exchange their shares of RxBazaar Series A preferred stock
     for shares of our Series O Preferred Stock, which we would register for
     resale by the investors. The equity investors in RxBazaar later exchanged
     their shares of RxBazaar stock into shares of our Series O Preferred Stock.

     In 2001, after we completed the sale of the distribution subsidiaries, we
merged Able Laboratories, Inc. into DynaGen, Inc. and changed our company name
to "Able Laboratories, Inc."

     The sale of our two distribution subsidiaries involved complex financial
transactions. The effects of these transactions on the Company and the future
outcome of our current strategy is still unknown. In the section of this Report
entitled "Certain Factors That May Affect Future Results," we have described
several risk factors that we believe are significant. We consider each of these
risks specific to us, although some are industry or sector related issues, which
could also impact to some degree other businesses in our market sector. You
should give very careful consideration to these factors when you evaluate Able
Laboratories.

MULTISOURCE GENERIC DRUG BUSINESS

Product Line Information

     We manufacture and market prescription generic drugs. Our manufacturing
facility produces tablets, capsules and suppositories. In November 2000, we
received our first FDA approval to manufacture and sell

                                        4
<PAGE>

diphenoxylate with atropine sulfate tablets. Since then, we have received 13
additional approvals to manufacture and sell generic drugs. Our current products
are listed below:
<TABLE><CAPTION>
<S>                                            <C>                             <C>
                                                                               Equivalent
Product                                        Indication                      Brand Name Product(1)(2)
-------                                        ----------                      ------------------
Butalbital, Acetaminophen and
  Caffeine Tablets 50mg/325mg/40mg             Tension headaches               Fioricet(R)(2)
Butalbital, Acetaminophen and
  Caffeine Tablets 50mg/500mg/40mg             Tension headaches               Esgic Plus(R)(2)
Carisprodol Tablets, USP                       Muscle relaxant                 Soma(R)(2)
Clorazepate Dipotassium Tablets, USP           Anxiety disorder                Tranxene(R)(2)
Diphenoxylate and Atropine Sulfate
  Tablets, USP                                 Anti- diarrhea                  Lomotil(R)(2)
Hydrocortisone Acetate Suppository             Anti-inflammatory               Anusol(R)
                                               Hemorrhoids
Indomethacin Extended- Release
  Capsules, USP                                Rheumatoid arthritis            Indocin(R)SR(2)
Lithium Carbonate Capsules, USP                Manic-depressive illness        Eskalith(R)(2)
Methylphenidate HCl Tablets, USP               Attention disorder              Ritalin(R)(2)
Methylphenidate HCl
  Extended- Release Tablets, USP               Attention disorder              Metadate-SR(R)(2)
Nitrotab(TM) Nitroglycerin Sublingual
  Tablets, USP                                 Anti-angina                     Nitrostat(R)
Phenazopyridine HCl Tablets, USP               Urinary Tract Analgesic         Pyridium(R)
Phentermine HCl Capsules, USP  (beads)         Obesity                         Phentermine Hydrochloride
                                                                               Capsules (2)
Phentermine HCl Capsules, USP  (powder)        Obesity                         Phentermine Hydrochloride
                                                                               Capsules (2)
Phentermine HCl Tablets, USP                   Obesity                         Adipex-P(R)
Prochloroperazine Suppositories, USP           Nausea                          Compazine(R)(2)
Proproxyphene Napsylate and
  Acetaminophen Tablets, USP                   Pain relief                     Darvocet-N(R)(2)
Salsalate Tablets, USP                         Anti-inflammatory               Disalcid(R)
--------------------------------
(1) All brand names in the table above are trademarks or registered trademarks
    of their respective owners.
(2) Refers to the reference listed drug. A reference listed drug (21 CFR
    314.94(a)(3)) means the listed drug identified by FDA as the drug product
    upon which an applicant relies in seeking approval of its ANDA.
</TABLE>

RESEARCH AND DEVELOPMENT

     We are working on developing generic products in the form of tablets,
capsules, and suppositories. The research, development, clinical testing and the
FDA review process leading to approvals takes approximately two years for each
product. As discussed in the section titled "Government Regulation," some
products require no review or limited laboratory testing, in which case the time
required to complete the process can be less than two years. Typically, our
research and development activities consist of:

o    identifying brand name drugs for which patent protection has expired or
     will expire in the near future;

o    conducting research (including patent and market research) and developing
     new product formulations based upon such drugs;

o    developing and testing our formulation in laboratory and human clinical
     studies as necessary;

o    compiling and submitting all the information to the FDA; and

o    obtaining approval from the FDA for our new product formulations.

     As part of the approval process, we contract with outside laboratories to
conduct biostudies that are required for FDA approval. We use biostudies to
demonstrate that the rate and extent of absorption of a generic drug are not
significantly different from that achieved by the corresponding brand name drug.
These biostudies are subject to rigorous standards set by the FDA. They can cost
up to $500,000 each and are a major part of the overall cost of our drug
development work.

     We currently have thirteen (13) ANDAs pending approval at the FDA. Prior to
FDA approval of an ANDA, we generally undergo an on-site inspection, known as a
pre-approval inspection or PAI, by the district office of the FDA. To date, we
have had four pre-approval inspections covering several products. Our product

                                        5
<PAGE>

development program includes several active projects in various stages of
completion. We intend to develop and file ANDA applications covering eight to
ten additional products this year. We can, however, give no assurance that that
we will receive approval from the FDA to market these products, and if we do,
there is no assurance that we will be able to penetrate the market and achieve
reasonable levels of sales or achieve profitability.

     For the fiscal year ended December 31, 2001, we expended $2,352,666 on
research and development activities, compared to $2,392,166 for the fiscal year
ended December 31, 2000 and $1,713,416 for the fiscal year ended December 31,
1999.

SALES AND MARKETING

     Our products are sold primarily through direct sales efforts to drug
wholesalers, distributors and retail drug chains and other pharmaceutical
companies. We market our generic drug products under our "Able Laboratories"
label, as well as under private label arrangements. The majority of Able's sales
are to customers who purchase under firm purchase order commitments. These
purchase orders range from $25,000 to $400,000 and are filled within one to
three months from the time we receive them. Sales to Superior Pharmaceutical
Company were approximately 34% of our sales for 2001 and sales to Cardinal
Distribution, L.P. were approximately 20% of our sales in 2001. The dollar
amount of backlog orders as of March 8, 2002 was approximately $3,800,000.
Because the level of our customers' purchases can fluctuate over the course of
an operating period, backlog historically has not been a meaningful indication
of revenues for a particular period or for future periods.

     We have four senior and experienced executives in our sales department,
supported by three associates. In January 2001 we appointed Bi-Coastal
Pharmaceutical Corporation as our representative. Bi-Coastal, located in New
Jersey, has over 20 sales and support professionals representing several
pharmaceutical companies. Under our agreement, Bi-Coastal is limited to sell our
products only to generic drug distributors. We believe that this arrangement
allows us to optimize our sales costs and achieve national exposure for our
product line.


SUPPLIERS

     We manufacture our generic products at our facility in South Plainfield,
New Jersey. The principal components used in the manufacture of generic products
are active and inactive pharmaceutical ingredients and certain packaging
materials. The FDA must approve our sources for almost all of the materials, and
in many instances only one source may have been approved. We purchase active raw
material ingredients primarily from United States distributors of bulk
pharmaceutical materials manufactured by the U.S. or foreign companies. If raw
materials from a specified supplier were to become unavailable, we would have to
file a supplement to the applicable regulatory approval, and revalidate the
manufacturing process using any new supplier's materials. Delays in revalidating
the manufacturing process or in obtaining new materials could result in the loss
of revenues and could have a material adverse effect on our business, financial
condition and results of operations.

MANUFACTURING FACILITY

     Our facility consists of 46,000 square feet of manufacturing, warehousing,
laboratory and office space, and an additional 22,000 square feet of warehousing
and office space. Over the past two years we invested approximately $2,000,000
to upgrade our facility, including installing new flooring, building additional
tablet compression rooms, separating manufacturing areas for phenezopyridine
production and, most importantly, adding nine new air handling units. We also
built a self-contained research and development facility with its separate
support laboratory. In our production areas we built storage vaults required for
handling controlled substances. We also invested over $3,500,000 installing new
manufacturing and laboratory equipment. We believe our manufacturing facility
and our laboratories are adequate to handle our production needs for the next 12
months.

COMPETITION

     We compete primarily with other generic manufacturers and distributors.
Many of our competitors have substantially greater financial resources than we
have, as well as other resources such as expertise in formulations of
technologically advanced delivery systems and marketing, that are needed to
commercialize a pharmaceutical product.

                                        6
<PAGE>

     In the generic drug market, we compete with:

     o    off-patent drug manufacturers;

     o    brand-name pharmaceutical companies that also manufacture off-patent
          drugs;

     o    the original manufacturers of brand-name drugs; and

     o    manufacturers of new drugs that may be used for the same indications
          as our products.

     Revenues and gross profit derived from generic drugs tend to follow a
pattern based on regulatory and competitive factors unique to the generic
pharmaceutical industry. As patents for brand-name products and related
exclusivity periods mandated by regulatory authorities expire, the first generic
manufacturer to receive regulatory approval for generic equivalents of such
products is usually able to achieve relatively high revenues and gross profit.
As other generic manufacturers receive regulatory approvals on competing
products, prices and revenues typically decline. Accordingly, the level of
revenues and gross profit we can achieve from developing and manufacturing
generic products depends, in part, on our ability to develop and introduce new
generic products, the timing of regulatory approval of our products, and the
number and timing of regulatory approvals of competing products.

     Competition in the United States generic pharmaceutical market continues to
intensify as the pharmaceutical industry adjusts to increased pressures to
contain health care costs. Brand-name drug manufacturers are increasingly
selling their products into the generic market directly by acquiring or forming
strategic alliances with generic pharmaceutical companies. No regulatory
approvals are required for a brand-name manufacturer to sell directly or through
a third party to the generic market, nor do such manufacturers face any other
significant barriers to entry into such market. These competitive factors may
have a material adverse effect on our ability to sell our generic products.

     There can be no assurance that we will be able to successfully compete in
the generic drug business or market any of our current or proposed products. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Certain Factors That May Affect Future Results."

GOVERNMENT REGULATION

     Our products are highly regulated, principally by the FDA, the U.S. Drug
Enforcement Agency, state governments and governmental agencies of other
countries. Federal and state regulations and statutes impose certain
requirements on the testing, manufacture, labeling, storage, recordkeeping,
approval, advertising and promotion of our products. Noncompliance with
applicable requirements can result in judicially and administratively imposed
sanctions, including seizures of adulterated or misbranded products, injunction
actions, fines and criminal prosecutions. Administrative enforcement measures
can also involve product recalls and the refusal by the government to approve
new drug applications, known as NDAs, or abbreviated new drug applications,
known as ANDAs. In order to conduct clinical tests and produce and market
products for human diagnostic and therapeutic use, we must comply with mandatory
procedures and safety standards established by the FDA and comparable state and
foreign regulatory agencies. Typically, standards require that products be
approved by the FDA as safe and effective for their intended use prior to being
marketed for human applications.

     To obtain an NDA, or FDA approval for a new drug or generic equivalent, a
prospective manufacturer must, among other things, comply with the FDA's current
Good Manufacturing Practices, or cGMP, regulations. The FDA may inspect the
manufacturer's facilities to assure such compliance prior to approval or at any
other reasonable time. We must follow cGMP regulations at all times during the
manufacture and other processing of drugs. To comply with the requirements set
forth in these regulations, we must continue to expend significant time and
resources in the areas of development, production, quality control and quality
assurance.

     We must obtain FDA approval in the form of an ANDA before we can market a
generic equivalent of a previously approved drug. The process for obtaining an
ANDA approval is as follows:


                                        7
<PAGE>

     Abbreviated New Drug Application (ANDA) - The Waxman-Hatch Act of 1984
established a statutory procedure for the submission and FDA review and approval
of ANDAs for generic versions of drugs previously approved by the FDA. Under the
ANDA procedure, the FDA waives the requirement of conducting complete clinical
studies of safety and efficacy, and instead typically requires the applicant to
submit data illustrating that the generic drug formulation is "bioequivalent" to
a previously approved drug. "Bioequivalence" means that the rate of absorption
and the levels of concentration of a generic drug in the body needed to produce
a therapeutic effect are substantially equivalent to those of the previously
approved drug. For some drugs, the FDA may require other means of demonstrating
that the generic drug is bioequivalent to the original drug. The NDA and ANDA
approval processes both generally take a number of years and involve the
expenditure of substantial resources.

     The Waxman-Hatch Act establishes certain statutory protections for
FDA-approved drugs, which could preclude submission or delay the approval of a
competing ANDA. One such provision allows a five-year market exclusivity period
for NDAs involving new chemical compounds and a three-year market exclusivity
period for NDAs (including different dosage forms) containing data from new
clinical investigations essential to the approval of the application. Both
patented and non-patented drug products are subject to these market exclusivity
provisions. Another provision of the act extends patents for up to five years as
compensation for reduction of the effective market life of the patent resulting
from the time involved in the federal regulatory review process.

     The Prescription Drug User Fee Act of 1992, enacted to expedite drug
approval by providing the FDA with resources to hire additional medical
reviewers, imposes three types of user fees on manufacturers of NDA-approved
prescription drugs. Applicants submitting only ANDAs and most other off-patent
drug manufacturers, including Able Laboratories, are not currently subject to
any of the three user fees. If we submit NDAs for non-ANDA products, we may be
subject to user fees.

     Penalties for wrongdoing in connection with the development or submission
of an ANDA were established by the Generic Drug Enforcement Act of 1992,
authorizing the FDA to permanently or temporarily bar companies or individuals
from submitting or assisting in the submission of an ANDA. The FDA may also
temporarily deny approval and suspend applications to market generic drugs. The
FDA may also suspend the distribution of all drugs approved or developed in
connection with certain wrongful conduct, and under certain circumstances also
has authority to withdraw approval of an ANDA and to seek civil penalties. We do
not expect the law to have a material impact on the review or approval of our
ANDAs.

     Reimbursement legislation such as Medicaid, Medicare, Veterans
Administration and other programs govern reimbursement levels. All
pharmaceutical manufacturers rebate to individual states a percentage of their
revenues arising from Medicaid-reimbursed drug sales. Generic drug manufacturers
currently rebate 11% of average net sales price for products marketed under
ANDAs. Makers of NDA-approved products are required to rebate the greater of
15.2% of average net sales price or the difference between average net sales
price and the lowest net sales price during a specified period. We believe that
the federal and state governments may continue to enact measures in the future
aimed at reducing the cost of drugs and devices to the public. We cannot predict
the nature of such measures or their impact on our profitability.

     We currently manufacture several products which are regulated as "old
drugs" and subject to the requirements of the Over-the-Counter Drug Review
regulations promulgated by the FDA. This class of drugs requires no prior
approval from FDA before marketing, but such products must comply with
applicable FDA monographs which specify, among other things, required
ingredients, dosage levels, label contents and permitted uses. These monographs
may be changed from time to time, in which case we might be required to change
the formulation, packaging or labeling of any affected product. Changes to
monographs normally have a delayed effective date, so while we may have to incur
costs to comply with any such changes, disruption of distribution is not likely.

     The FDA can also significantly delay the approval of a pending NDA or ANDA
under its "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities Policy." Manufacturers of drugs and devices must also comply with the
FDA's current Good Manufacturing Practices or cGMP standards, or risk sanctions
such as

                                        8
<PAGE>

the suspension of manufacturing approval, the seizure of drug products or the
FDA's refusal to approve additional applications.

     We can give no assurance that we will obtain the requisite approvals from
the FDA for any of our proposed products or processes, that the process to
obtain such approvals will not be excessively expensive or lengthy, or that we
will have sufficient funds to pursue such approvals. Our failure to receive the
requisite approvals for our products or processes, when and if developed, or
significant delays in obtaining such approvals, would prevent us from
commercializing our products as anticipated and would have a materially adverse
effect on our business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Certain Factors That May Affect Future Results."

PRODUCT LIABILITY INSURANCE COVERAGE

     We presently maintain product liability insurance in the amount of
$10,000,000 for the products we market. We also maintain product liability
insurance for those products in clinical investigations. Although we intend to
obtain product liability insurance prior to the commercialization of certain
products which are not presently insured, there can be no assurance that we will
obtain such insurance at favorable rates or, even if obtained, that any
insurance will be adequate to cover potential liabilities.

     In the event of a successful suit against us, insufficiency of insurance
coverage could have a materially adverse impact on our operations and financial
condition. Furthermore, the costs of defending or settling a product liability
claim and any attendant negative publicity may materially adverse affect on us,
even if we ultimately prevailed. Furthermore, certain food and drug retailers
require minimum product liability insurance coverage as a precondition to
purchasing or accepting products for commercial distribution. Failure to satisfy
these insurance requirements could impede our ability to achieve broad
commercial distribution of our proposed products, which could have a materially
adverse effect upon our business and financial condition.

PROPRIETARY TECHNOLOGY

     Our generic business relies upon unpatented trade secrets and proprietary
technologies and processes. There is no assurance that others will not
independently develop substantially equivalent proprietary information and
techniques, or gain access to our trade secrets or proprietary technology, or
that we can meaningfully protect unpatented trade secrets. We require employees,
consultants and other advisors to execute confidentiality agreements. However,
these agreements may not provide meaningful protection for our trade secrets, or
adequate remedies in the event of unauthorized use or disclosure of such
information. The manufacture and sale of certain products will involve the use
of processes, products or information, including some owned by others.

EMPLOYEES

     As of March 18, 2002, we had 180 full-time employees, of whom 18 were
employed in selling, general and administrative activities and 162 were employed
in research and development and manufacturing. None of our employees are
represented by a union. We believe our relationship with our employees is good.


ITEM 2. PROPERTIES

     We maintain our principal executive offices at 200 Highland Avenue, Suite
301, Needham, Massachusetts 02494. The premises consist of approximately 2,580
square feet of space and we have an option to extend the lease annually.

     We have a 46,000 square foot leased manufacturing facility and a 22,000
square foot leased office and warehouse facility, both in South Plainfield, New
Jersey. The premises are leased from unaffiliated parties for terms expiring on
March 31, 2015 and September 30, 2004, respectively.

                                        9
<PAGE>

     We believe that our present facilities are adequate to meet our current
needs. If new or additional space is required, we believe that adequate
facilities are available at competitive prices in the respective areas.


ITEM 3. LEGAL PROCEEDINGS

     On August 27, 2001, Novopharm USA, Inc. filed a complaint against Able
Laboratories, Inc. in the Superior Court of New Jersey (Middlesex County).
Novopharm's complaint alleges that we breached a joint commercialization
agreement for the development, production, marketing, and sale of generic
clorazepate dipotassium tablets. In its complaint, Novopharm seeks approximately
$2,000,000 claimed to be due for payments made by Novopharm to improve our
facilities and in respect of Novopharm's raw material purchase costs, and makes
claims for compensation for assistance rendered by Novopharm to us and for our
sales of clorazepate dipotassium tablets.

     Novopharm served its complaint on Able on January 15, 2002, and we answered
on February 19, 2002, denying liability. We also made counterclaims against
Novopharm, asserting that it failed to pay us $900,000 for clorazepate sales,
and failed to undertake promised sales efforts. Further, we asserted that
Novopharm's only recovery for advances and raw material costs was through sales
under the joint commercialization agreement, and that Novopharm had breached a
separate product agreement, failing to pay us $269,000. In court, we intend to
contest Novopharm's claims vigorously, but we are also discussing the
possibility of resolving our differences through means other than litigation.

     We are also involved in certain other legal proceedings from time to time
incidental to our normal business activities. While the outcome of any such
proceedings, including the Novopharm suit, cannot be accurately predicted, we do
not believe the ultimate resolution of any existing matters should have a
material adverse effect on our financial position or results of operations.


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

     No matters were submitted to a vote of our security holders during the last
fiscal quarter of the year ended December 31, 2001.























                                       10
<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  Market Price of Common Stock

     Our Common Stock is traded on the Boston Stock Exchange and is quoted on
the OTC Bulletin Board under the symbol "ABRX." On February 28, 2002, based upon
information from American Stock Transfer & Trust Company, our transfer agent,
there were approximately 2,613 holders of record of Common Stock. We believe
that there are a substantial number of additional beneficial owners that hold
Common Stock in "street name" through brokerage firms. The following table sets
forth, for the periods indicated, the range of quarterly high and low sale
prices as reported on the OTC Bulletin Board for the Common Stock.


                                                            COMMON STOCK
                                                        ---------------------
                                                          HIGH         LOW
                                                        ---------   ---------
Fiscal 2000:
-----------
January 1 to March 31, 2000                              $ 1.32      $ 0.25
April 1 to June 30, 2000                                   0.90        0.33
July 1 to September 30, 2000                               0.46        0.25
October 1 to December 31, 2000                             0.32        0.16


Fiscal 2001:
-----------
January 1 to March 31, 2001                              $ 0.44      $ 0.17
April 1 to June 30, 2001                                   0.38        0.19
July 1 to September 30, 2001                               0.61        0.22
October 1 to December 31, 2001                             0.45        0.28
--------------


     We have never paid dividends to common stockholders since inception and do
not plan to pay dividends to common stockholders in the foreseeable future. We
intend to retain any earnings to finance our operations.

(b)  Sales of Unregistered Securities

     During the last fiscal quarter of the year ended December 31, 2001, we sold
the following securities pursuant to one or more exemptions from registration
under the Securities Act of 1933, as amended, including the exemption provided
by Section 4(2) thereof and Rule 506 promulgated thereunder:

     o    In December 2001, we issued 21,095,000 shares of common stock at $0.24
          per share in exchange for gross proceeds of $5,062,800.

     o    During the fiscal quarter ended December 31, 2001, we issued an
          aggregate of 9,751,669 shares of common stock upon exercise of options
          and warrants and conversion of convertible debt and convertible equity
          securities.

     We used all of the net cash proceeds raised by the sale of unregistered
securities for working capital.


ITEM 6.  SELECTED FINANCIAL DATA

     The selected financial data set forth below has been derived from our
audited financial statements. The information set forth below should be read in
connection with the financial statements and notes thereto, as well as

                                       11
<PAGE>

other information contained in this Report which could have a material adverse
effect on our financial condition and results of operations. In particular,
refer to the matters described under the heading "Certain Factors That May
Affect Future Results" contained elsewhere in this Report.
<TABLE><CAPTION>
                                                                   YEARS ENDED DECEMBER 31,
                                                 ----------------------------------------------------------
                                                    2001        2000        1999        1998        1997
                                                 ----------  ----------  ----------  ----------  ----------
                                                           (In thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
<S>                                              <C>         <C>         <C>         <C>         <C>
Sales, net...................................... $   19,594  $   31,456  $   29,140  $   24,980  $   14,010
Costs of sales..................................     12,533      25,711      24,378      21,283      13,256
                                                 ----------  ----------  ----------  ----------  ----------
       Gross profit.............................      7,061       5,745       4,762       3,697         754
Operating expenses..............................      8,262      12,358      11,026      14,227      10,832
                                                 ----------  ----------  ----------  ----------  ----------
       Operating income (loss)..................     (1,201)     (6,613)     (6,264)    (10,530)    (10,078)
Other income (expense), net.....................     (3,272)     (1,839)     (1,887)     (2,082)     (2,163)
                                                 ----------  ----------  ----------  ----------  ----------
       Net loss ................................     (4,473)     (8,452)     (8,151)    (12,612)    (12,241)
Less returns to preferred stockholders..........     (9,060)     (1,443)     (1,914)       (884)     (2,108)
                                                 ----------  ----------  ----------  ----------  ----------
       Net loss applicable to common stock...... $  (13,533) $   (9,895) $  (10,065) $  (13,496) $  (14,349)
                                                 ==========  ==========  ==========  ==========  ==========
Net loss per share - basic and diluted.......... $    (0.10) $    (0.13) $    (0.20) $    (0.67) $    (4.48)
                                                 ==========  ==========  ==========  ==========  ==========
Weighted average number of shares outstanding ..    129,441      78,485      51,221      20,059       3,204
                                                 ==========  ==========  ==========  ==========  ==========


                                                                       AT DECEMBER 31,
                                                 ----------------------------------------------------------
                                                    2001        2000        1999        1998        1997
                                                 ----------  ----------  ----------  ----------  ----------
BALANCE SHEET DATA:
Current assets.................................. $   11,304  $   11,239  $   13,785  $   11,168  $   13,933
Total assets....................................     17,638      16,914      21,230      21,445      29,348
Current liabilities.............................      5,155      15,529      14,912      21,672      25,644
Long-term debt..................................      2,291       2,700       5,642       2,369       1,079
Deferred gain on sale of subsidiary.............      1,297          --          --          --          --
Stockholders' equity (deficit)..................      8,895      (1,315)        676      (2,596)      2,625
Working capital (deficit).......................      6,149      (4,290)     (1,127)    (10,504)    (11,711)
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

     We develop, make and sell generic drugs. From our inception in 1988 until
1996, we focused primarily on developing new drugs and licensing the resulting
products and technologies to others. Beginning in 1996, we began shifting our
focus and through acquiring three separate companies became a generic drug
manufacturing and distribution business. In 1996 we acquired Able Laboratories,
Inc., our generic drug development and manufacturing business. In 1997 and 1998,
respectively, we acquired Superior Pharmaceutical Company and Generic
Distributors, Incorporated, our distribution operations.

     Generic drug development, manufacturing and distribution is a highly
competitive business and there are several companies with substantially greater
resources that compete with us. Our distribution businesses sold mostly our
competitors' products and the combination of manufacturing and distribution
business did not create the strategic advantages we were seeking. On the
contrary, we found that we were divided both financially and managerially. As
our financial performance failed to meet expectations, our senior lender
restricted our borrowing ability and as a result we faced a working capital
shortage. After careful analysis, we decided to divest our distribution
operations

                                       12
<PAGE>

and continue only as a generic drug development and manufacturing company
selling only our own products to customers. In November 2000, we sought and
obtained the approval of our shareholders to sell the Superior distribution
business and we completed the sale on February 23, 2001. We sold the assets of
our Generic Distributors, Incorporated subsidiary in a separate transaction on
December 29, 2000. On May 18, 2001, we merged our subsidiary, Able Laboratories,
Inc., into our parent company, DynaGen, Inc. and changed DynaGen's name to Able
Laboratories, Inc.

     The sale of the two distribution subsidiaries involved complex financial
transactions. The future outcome of our current strategy is still unknown. In
the section of this Report entitled "Certain Factors That May Affect Future
Results," we have described several risk factors which we believe are
significant. We consider each of these risks specific to us, although some are
industry or sector related issues which could also impact to some degree other
businesses in our market sector. You should give very careful consideration to
these risks and pay special attention to the recent developments when you
evaluate the Company.

     We have financed our operating losses primarily through the proceeds from
public and private stock offerings and debt offerings. We have incurred losses
since inception and may incur additional losses in the future.

CRITICAL ACCOUNTING POLICIES

     Our significant accounting policies are more fully described in Note 1 to
our consolidated financial statements. However, certain of our accounting
policies are particularly important to the portrayal of our financial position
and results of operations and require the application of significant judgment by
our management; as a result, they are subject to an inherent degree of
uncertainty. In applying these policies, our management makes estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses and related disclosures. Those estimates and judgments are based on our
historical experience, the terms of existing contracts, our observance of trends
in the industry, information that we obtain from our customers and outside
sources, and on various other assumptions that we believe to be reasonable and
appropriate under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. Our significant accounting
policies include:

     INVENTORIES. Inventories are stated at the lower of average cost or market,
with cost being determined on the first-in, first-out method. We establish
reserves for slow-moving and obsolete inventories based on our historical
experience and management's assessment of current product demand. We evaluate
the adequacy of these reserves quarterly.

     REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE. Revenue on product sales is
recognized when persuasive evidence of an arrangement exists, the price is fixed
and final, delivery has occurred and there is a reasonable assurance of
collection of the sales proceeds. We obtain oral or written purchase
authorizations from our customers for a specified amount of product at a
specified price and consider delivery to have occurred at the time of shipment.
We recognize revenue upon shipment. Revenues from sales of our products may be
subject to agreements with customers allowing chargebacks, rebates, rights of
return and other allowances. We establish allowances at the same time as we
recognize revenue, based on the underlying agreements. We also provide
allowances for estimated uncollectible accounts based on historical experience
and current developments with our customers.

RESULTS OF OPERATIONS

     YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

     SALES: Sales for the year ended December 31, 2001 were $19,594,231 compared
to $31,456,479 for the year ended December 31, 2000. In the year 2000, sales of
$30,163,418 were from GDI and Superior compared to sales of $3,067,567 from
Superior included in the current year. The sales generated by Able in the
current year of $16,526,664 is a significant increase over the prior year sales.
Following the sale of Superior, our sales for the second quarter of 2001 were
$3,530,737. Sales increased by 44% from the second quarter to $5,070,600 in the
third quarter of 2001 and increased by 39% to $7,066,599 in the fourth quarter
of 2001. Subsequent to the sale of

                                       13
<PAGE>

Superior Pharmaceutical, Able has continued to sell its products to Superior for
further distribution. Sales to Superior represent approximately 34% of net sales
for the year ended December 31, 2001. We expect that sales to Superior will
decrease as a percentage of sales in 2002 as we continue to add additional
customers who buy products directly from us.

     COST OF SALES: Cost of sales was $12,533,440 or 64% of sales for the year
ended December 31, 2001, compared to $25,711,147, or 82% of sales for the year
ended December 31, 2000. Cost of sales for the third and fourth quarters of 2001
were 59% and 57%, respectively. As sales continue to increase we expect cost of
sales to decline as a percentage of net sales. The margins of our new products
are much higher than the margins from our former distribution business.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses for the year ended December 31, 2001 were $5,909,245
compared to $9,966,250 for the year ended December 31, 2000, a decrease of
$4,057,005. The expenses relating to Superior and GDI for the prior year were
$5,473,234 compared to $581,292 in the current year, a decrease of $4,891,942.
This decrease was partially offset by the cost of new personnel at our
manufacturing facility.

     RESEARCH AND DEVELOPMENT: Research and development expenses were $2,352,666
for the year ended December 31, 2001 compared to $2,392,166 for the year ended
December 31, 2000. In the current year, we received twelve FDA approvals and
continued to spend significant funds on research and development.

     OTHER INCOME (EXPENSE): We recorded a $2,730,000 loss on our investment
securities in RxBazaar in 2001. We received these securities as a result of the
exchange agreement we entered into in connection with the sale of Superior. We
recorded a loss of $50,000 on the sale of $1,000,000 of preferred stock in
RxBazaar in the first quarter of 2001 and wrote down the balance of our
investment by $2,680,000 at December 31, 2001 based on our impairment analysis.
In addition, we have deferred the gain of $1,296,597 on the sale due to our
ownership interest and our guarantee of the $2,250,000 senior subordinated debt
of RxBazaar. RxBazaar assumed this debt in connection with our sale of Superior.
Interest and financing expenses of $1,077,100 for the year ended December 31,
2001, compared to $2,157,423 for the year ended December 31, 2000. The interest
expense was lower in 2001 by $1,080,323 as our senior secured debt was paid off
and our senior subordinated debt was eliminated as a result of the sale of
Superior. We expect that interest and financing expense will continue to
decrease in 2002 unless we need to borrow to finance the growth of our business.
Miscellaneous income was $535,313 for the year ended December 31, 2001, compared
to $632,463 for the year ended December 31, 2000. Miscellaneous income in 2001
consisted primarily of forgiveness of debt and a $125,000 licensing fee.
Miscellaneous income in 2000 consisted primarily of forgiveness of debt and
termination of a trade agreement.

     NET LOSS: The Company incurred a net loss of $4,472,907 for the year ended
December 31, 2001, compared to a net loss of $8,451,651 in the prior year. After
beneficial conversion features and dividends to preferred stockholders, we
recorded a net loss applicable to common stock of $13,532,931 or $0.10 per share
for the year ended December 31, 2001, compared to a net loss applicable to
common stock of $9,895,444 or $0.13 per share in the prior year. We have
received twelve new product approvals from the FDA during 2001 of which eight
were received in the quarter ending September 30, 2001. We reported operating
income of $194,542 and $546,932, respectively, in the third and fourth quarters
of 2001 compared to operating losses of $1,942,594 in the first six months of
2001. We expect the operating performance of the Company to continue to improve
in the upcoming year.

     YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     SALES: Sales for the year ended December 31, 2000 were $31,456,479,
compared to $29,139,553 for the year ended December 31, 1999. This increase of
$2,316,926 or 8.0% is primarily the result of improved new product sales at Able
Laboratories. Sales for the fourth quarter of 2000 declined to $6,764,563 from
$8,164,896 in 1999 as a result of our inability to purchase inventory at
Superior due to restrictions imposed on us by our senior lender.

     COST OF SALES: Cost of sales was $25,711,147 or 82% of sales for the year
ended December 31, 2000 compared to $24,377,890 or 84% for the year ended
December 31, 1999. The high percentage cost in 2000 and

                                       14
<PAGE>

1999 was due to low production and sales levels at Able, which did not support
the fixed manufacturing costs of the Able facility. Cost of sales for Superior
and GDI for 2000 and 1999 were 81% and 77%, respectively, of product sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses for the year ended December 31, 2000 were $9,966,250,
compared to $8,912,374 for the year ended December 31, 1999. The increase in
expenses was primarily attributable to increased salaries and benefits at Able
and Superior totaling approximately $276,000 and an increase in bad debt expense
of approximately $496,000.

     RESEARCH AND DEVELOPMENT: Research and development expenses for the year
ended December 31, 2000 were $2,392,166 or 7.6% of sales, compared to $1,713,416
or 5.9% of sales for the year ended December 31, 2000. All of these expenses
relate to research and biostudies conducted by Able Laboratories. The increase
was primarily due to the increased number of biostudies we initiated during
2000.

     OTHER INCOME (EXPENSE): Interest and financing expenses of $2,157,423 for
the year ended December 31, 2000, compared to $2,425,730 for the year ended
December 31, 1999, relate primarily to private placements of debt and bank
loans. During 2000, we converted several debt obligations to equity which
reduced our interest costs, however, the impact of a forbearance agreement we
entered into with our senior lender offset most of this benefit.

     NET LOSS: We incurred a net loss of $8,451,651 in 2000, compared to a net
loss of $8,151,318 in 1999. The increase in the net loss for the year ended
December 31, 2000 was primarily due to the negative impact of our fourth
quarter. In the fourth quarter of 2000, we incurred a net loss of $4,607,095
compared to a net loss of $2,988,177 in the prior year. Our fourth quarter
results were significantly impacted by the forbearance agreement with our senior
lender, which by reducing the amount we were able to borrow to finance our
operations negatively impacted our sales volume and our gross profit margin and
which also negatively affected our operating expenses. We also invested $878,254
in research and development expenses in the fourth quarter of this year compared
to $515,383 in the corresponding quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2001, we had working capital of $6,148,610, compared to
a working capital deficit of $4,289,639 at December 31, 2000. Cash was
$1,155,266 as of December 31, 2001, compared to $373,832 at December 31, 2000.
The $10,438,249 increase in our working capital is due to the August 2001 sale
of Series Q Preferred Stock and the December 2001 sale of common stock. With the
proceeds of these financings, we acquired raw materials for production of our
recently approved products. Accounts receivable was $4,646,203 and inventory was
$4,718,909 at December 31, 2001. The accounts receivable allowance at December
31, 2001 includes allowances for customer chargebacks, rebates, other pricing
adjustments and doubtful accounts. Management expects accounts receivable and
inventory will continue to increase over the near term as sales continue to
increase. We expect to fund our working capital needs from operations.

     On February 23, 2001, pursuant to an agreement between the Company,
RxBazaar, Inc. and Superior Pharmaceutical Company, RxBazaar acquired Superior
in a cash merger. As a result of the merger, we received a cash payment of
$4,000,000 and RxBazaar assumed our existing 13.5% senior subordinated debt in
the amount of $2,248,875. We remain liable for the subordinated debt as a
guarantor. In addition, the holders of the subordinated debt may convert such
debt, in whole or in part, into common stock of Able or RxBazaar, and we have
agreed to register for resale any shares of our common stock issued upon such a
conversion of the subordinated debt. We also issued contingent stock purchase
warrants which allow the holders of the senior subordinated debt to purchase
2,500,000 shares of our common stock at $.01 per share if the senior
subordinated debt is still outstanding on June 17, 2002. The purchase price and
terms of the merger were determined in arms-length negotiations between the
parties.

     On February 23, 2001, we used the proceeds of the sale to pay off our
obligations under a working capital loan with our senior lender. In addition, we
settled our warrant put liability obligation by paying $300,000 and issuing
$750,000 of 13.5% notes payable maturing February 2002. The notes were paid in
full in February 2002.

                                       15
<PAGE>

     In addition, in February 2001, we received $950,000 on the redemption of
$1,000,000 of RxBazaar Series A Preferred Stock. In May and June 2001, we
received $350,000 from the sale of Series P Preferred stock and $250,000 from
the sale of Series O Preferred stock. In August 2001, we received aggregate
consideration of $6,115,000 from the sale of Series Q Preferred Stock. In
December 2001, we received $5,062,800 in a sale of our common stock.

     A summary of our outstanding contractual obligations at December 31, 2001
is as follows:

                                          Payments Due by Period
                           -----------------------------------------------------
Contractual Obligations    Total      2002    2003-2004   2005-2006   After 2006
-----------------------    -----      ----    ---------   ---------   ----------

                                            (in thousands)

Debt Obligations          $ 2,877   $   587    $   493     $   412      $ 1,385

Operating Leases            4,152       443        744         527        2,438
                          -------   -------    -------     -------      -------

            Total         $ 7,029    $1,030    $ 1,237     $   939      $ 3,823
                          =======   =======    =======     =======      =======

     At December 31, 2001, our off-balance-sheet risk consists of our guarantee
of the $2,250,000 senior subordinated debt assumed by RxBazaar in connection
with the sale of Superior. This debt matures on June 17, 2004. RxBazaar is
current with its payments on this obligation but is in default of certain loan
covenants. RxBazaar is actively seeking additional equity financing and is
pursuing options for new senior subordinated financing. If the debt remains
outstanding on June 17, 2002, we will be obligated to issue warrants to purchase
2,500,000 shares of our common stock at $.01 per share.

ENVIRONMENTAL LIABILITY

     We have no known material environmental violations or assessments.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 141 requires that all business combinations initiated after
June 30, 2001 be accounted for under the purchase method and addresses the
initial recognition and measurement of goodwill and other intangible assets
acquired in a business combination. SFAS No. 142 addresses the initial
recognition and measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to their acquisition. SFAS No. 142 provides that intangible assets
with finite useful lives be amortized and that goodwill and intangible assets
with indefinite lives will not be amortized, but will rather be tested at least
annually for impairment. We will adopt SFAS No. 142 for our fiscal year
beginning January 1, 2002. The adoption of SFAS 142 is not expected to have any
material impact on the Company's financial statements.

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement establishes standards for accounting for obligations
associated with the retirement of tangible long-lived assets. This statement is
effective for fiscal years beginning after June 15, 2002. We are currently
evaluating the impact, if any, the adoption of this statement will have on our
financial position and results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement addresses financial accounting
and reporting for the impairment and disposal of long-lived assets. This
statement is effective for fiscal years beginning after December 15, 2001. We
are currently evaluating the impact the adoption of this statement will have on
our financial position and results of operations.

                                       16
<PAGE>

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

     IF WE CONTINUE TO INCUR LOSSES, THEN THE VALUE OF OUR COMMON STOCK WILL
LIKELY DECLINE.

     We have incurred operating losses in every year since our inception. We had
an accumulated deficit of $71,229,429 as of December 31, 2001. We incurred a net
loss of $4,472,907 in the year ended December 31, 2001. If we continue to incur
operating losses, then the value of our common stock will likely decline and
investors could lose their investment.

     Our losses have resulted principally from expenses we incurred in research
and development activities, and from general and administrative costs associated
with our development efforts. To continue development of our current and
proposed products, we will need to expend substantial additional resources to
conduct further product development and expand our manufacturing, sales,
marketing, regulatory and administrative capabilities. Therefore, we may incur
operating losses in the future as we expand our product programs.

     WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH.

     We have been experiencing a period of rapid growth that has been placing a
significant strain on all of our resources. Revenue from Able's operations for
the year ended December 31, 2001 increased to $16,526,664. The number of our
employees at our South Plainfield, New Jersey facility increased from 95 in
March 2001 to 180 in March 2002. We anticipate that our revenues and business
activities will continue to grow in 2002. To manage future growth effectively,
we must maintain and enhance our financial and accounting systems and our
manufacturing processes and compliance programs, as well as the operational and
administrative tasks associated with integrating new personnel and managing
expanded operations. The challenges inherent in managing growth are significant.
If we are unable to meet these challenges, we could experience a material
adverse effect on the quality of our products, our ability to retain key
personnel and our business, operating results and financial condition.

     WE DEPEND ON A NUMBER OF KEY PERSONNEL.

     Our future success depends to a significant degree on the skill, experience
and efforts of our chief executive officer and the other members of our senior
management team. The loss of any member of our senior management team could have
a material adverse effect on our business.


     WE FACE INTENSE COMPETITION FROM OTHER MANUFACTURERS OF GENERIC DRUGS.

     In order to succeed in the generic drug business, we need to achieve a
significant share of the market for each generic drug we market. The generic
drug manufacturing and distribution business is highly competitive. We compete
with several companies that are better capitalized than we are and that have
financial and human resources significantly greater than ours. Because we
manufacture generic drugs, our products by their very nature are chemically and
biologically equivalent to the products of our larger and profitable
competitors. Also, we believe that, as a rule, the first one or two companies to
bring a generic alternative to the market will capture the highest market share
for that product. These larger companies, with their greater resources, could
bring products to market before us, and could capture a significant share of the
market at our expense.

     WE ARE OBLIGATED TO ISSUE A LARGE NUMBER OF SHARES OF COMMON STOCK AT
     PRICES LOWER THAN MARKET VALUE.

     We are obligated to issue a large number of shares of common stock
at prices lower than market value. Therefore, our common stock could lose value
if a large number of shares are issued into the market. As of March 18, 2002,
171,184,665 shares of common stock were issued and outstanding. We have issued a
large number of securities, such as options, warrants and convertible preferred
stock, that are convertible by their holders into shares of common stock. As of
March 18, 2002, we were obligated to issue up to approximately 53,844,307
additional shares of common stock upon the conversion or exercise of convertible
securities and options. We have also reserved 41,654,218 shares of common stock
for issuance pursuant to options and warrants granted to our employees,
officers, directors and consultants. Because our certificate of incorporation
authorizes a maximum of 225,000,000 shares of common stock, if all of the
holders of these convertible securities exercised their rights to acquire common
stock, we would not be able to honor all of our obligations. We intend to seek
the approval of our stockholders for an increase in our authorized shares or a
reverse stock split of our common stock, but we cannot give any assurance that
we will obtain such approval. If we are unable to meet our obligations to issue
additional

                                       17
<PAGE>

shares of common stock, we would face material adverse consequences. The holders
of these convertible securities likely would only exercise their rights to
acquire common stock at times when the exercise price is lower than the price at
which they could buy the common stock on the open market. Because we would
likely receive less than current market price for any shares of common stock
issued upon exercise of options and warrants, the exercise of a large number of
these convertible securities could reduce the per-share market price of common
stock held by existing investors. Also, the exercise of a large number of
convertible securities could limit our ability to obtain additional equity
capital by selling common stock. In all likelihood, we would be able to sell
shares of common stock elsewhere on more favorable terms at the time the holders
of convertible securities chose to exercise their rights.

     CONVERSION OF OUTSTANDING SHARES OF CONVERTIBLE PREFERRED STOCK MAY REDUCE
     THE MARKET PRICE AND DILUTE THE RELATIVE VOTING POWER OF OUR OUTSTANDING
     COMMON STOCK.

     The conversion of outstanding shares of preferred stock may result in
substantial dilution to the equity interests of current holders of our common
stock. Specifically, the issuance of a significant amount of additional shares
of our common stock would result in a decrease of the relative voting power of
holders of our common stock which was issued and outstanding prior to the
conversion of the preferred stock. In addition, public resales of our common
stock following conversions of preferred stock may depress the prevailing market
price of our common stock. Even prior to the time of actual conversions of the
preferred stock, the perception of a significant market "overhang" resulting
from the existence of our obligation to honor such conversions could depress the
market price of our common stock.

     WE DO NOT HAVE A SUFFICIENT NUMBER OF SHARES OF AUTHORIZED COMMON STOCK TO
     CONVERT ALL OF OUR OUTSTANDING CONVERTIBLE SECURITIES.

     Our certificate of incorporation authorizes a maximum of 225,000,000 shares
of common stock. If all of the holders of our outstanding convertible
securities, options and warrants exercised their rights to acquire common stock,
we would not be able to honor all of our obligations. We intend to seek the
approval of our stockholders for an increase in our authorized shares or a
reverse stock split of our common stock, but we cannot give any assurance that
we will obtain such approval. If we are unable to meet our obligations to issue
additional shares of common stock, we would face material adverse consequences.

     THE VALUE OF OUR COMMON STOCK FLUCTUATES WIDELY AND INVESTORS COULD LOSE
     MONEY ON THEIR INVESTMENTS IN OUR STOCK.

     The price of our common stock has fluctuated widely in the past, and it is
likely that it will continue to do so in the future. The market price of our
common stock could fluctuate substantially based on a variety of factors,
including:

     o  quarterly fluctuations in our operating results;

     o  announcements of new products by us or our competitors;

     o  key personnel losses;

     o  sales of common stock; and

     o  developments or announcements with respect to industry standards,
        patents or proprietary rights.

     Over the past twelve months, the market price of our common stock has
fluctuated between approximately $.17 and approximately $.61, and was
approximately $.42 on March 18, 2002. These broad market fluctuations could
adversely affect the market price of our common stock, in that at the current
price, any fluctuation in the dollar price per share could constitute a
significant percentage decrease in the value of a stockholder's investment.
Also, when the market price of a stock has been volatile, holders of that stock
have often instituted securities class action litigation against the company
that issued the stock. If any of our stockholders brought such a lawsuit against
us, we could incur substantial costs defending the lawsuit and we would have to
divert management time and attention away from operations. A lawsuit based on
the volatility of the stock price in whole or in part could seriously harm our
business and your investment.

                                       18
<PAGE>

     WE MAY FACE PRODUCT LIABILITY FOR WHICH WE ARE NOT ADEQUATELY INSURED.

     The testing, marketing and sale of drug products for human use is
inherently risky. Liability might result from claims made directly by consumers
or by pharmaceutical companies or others selling our products. We presently
carry product liability insurance in amounts that we believe to be adequate, but
we can give no assurance that such insurance will remain available at a
reasonable cost or that any insurance policy would offer coverage sufficient to
meet any liability arising as a result of a claim. We can give no assurance that
we will be able to obtain or maintain adequate insurance on reasonable terms or
that, if obtained, such insurance will be sufficient to protect us against such
potential liability or at a reasonable cost. The obligation to pay any product
liability claim or a recall of a product could have a material adverse affect on
our business, financial condition and future prospects.

     INTENSE REGULATION BY GOVERNMENT AGENCIES MAY DELAY OUR EFFORTS TO
     COMMERCIALIZE OUR PROPOSED DRUG PRODUCTS.

     Before we can market any generic drug, we must first obtain FDA approval of
the proposed drug and of the active drug raw materials that we use. In many
instances, our approvals cover only one source of raw materials. If raw
materials from a specified supplier were to become unavailable, we would be
required to file a supplement to our Abbreviated New Drug Application to use a
different manufacturer and revalidate the manufacturing process using a new
supplier's materials. This could cause a delay of several months in the
manufacture of the drug involved and the consequent loss of potential revenue
and market share. For example, for a period of time we were unable to acquire
the active drug for our clorazapate dipotassium product, and so we had to
discontinue production of the product. The active drug ingredient has since
become available again and we have resumed manufacturing the product.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We do not use any derivative financial instruments. Our exposure to market
risk for a change in interest rates relates primarily to our debt instruments.
Our debt instruments at December 31, 2001, are subject to fixed interest rates
and principal payments. Management does not believe that any risk inherent in
these instruments is likely to have a material effect on our consolidated
financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Able Laboratories' Consolidated Financial Statements and Related
Independent Auditors' Report are presented in the following pages. The financial
statements filed in this Item 8 are as follows:

  Independent Auditors' Report................................................20

  Financial Statements:

     Consolidated Balance Sheets - December 31, 2001 and 2000.................21

     Consolidated Statements of Loss-
     Years Ended December 31, 2001, 2000 and 1999.............................22

     Consolidated Statements of Changes in Stockholders' Equity (Deficit)-
     Years Ended December 31, 2001, 2000 and 1999.............................23

     Consolidated Statements of Cash Flows-
     Years Ended December 31, 2001, 2000 and 1999.............................24

     Notes to Consolidated Financial Statements...............................25

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Not applicable.

                                       19
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders
Able Laboratories, Inc.
Needham, Massachusetts


     We have audited the accompanying consolidated balance sheets of Able
Laboratories, Inc. (formerly known as DynaGen, Inc.) and subsidiaries as of
December 31, 2001 and 2000, and the related consolidated statements of loss,
changes in stockholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Able Laboratories, Inc. and subsidiaries as of December 31, 2001 and 2000 and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.


/s/ WOLF & COMPANY, P.C.

Boston, Massachusetts
February 28, 2002

                                       20
<PAGE>

                             ABLE LABORATORIES, INC.

                           CONSOLIDATED BALANCE SHEETS

                                                            DECEMBER 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------   ------------
                                     ASSETS

Current assets:
  Cash and cash equivalents                         $  1,155,266   $    373,832
  Due on sale of subsidiary                                   --        800,000
  Accounts receivable, net of allowances
    of $8,116,822 and $485,068                         4,646,203      3,508,794
  Inventory                                            4,718,909      5,889,235
  Notes receivable                                       105,000         55,000
  Prepaid expenses and other current assets             678,482         612,159
                                                    ------------   ------------
        Total current assets                          11,303,860     11,239,020
                                                    ------------   ------------
Property and equipment, net                            4,495,511      3,701,501
                                                    ------------   ------------
Other assets:
  Investment in RxBazaar  securities                   1,040,000             --
  Customer lists, net of accumulated amortization             --      1,153,958
  Debt financing costs, net of accumulated
    amortization                                         182,606        402,784
  Cash deposits with bond trustee                        505,095        310,016
  Deposits and other assets                              110,617        106,343
                                                    ------------   ------------
        Total other assets                             1,838,318      1,973,101
                                                    ------------   ------------
                                                    $ 17,637,689   $ 16,913,622
                                                    ============   ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Notes payable and current portion of
    long-term debt                                  $    586,807   $  8,252,678
  Accounts payable and accrued expenses                4,568,443      6,183,233
  Warrant put liability                                       --      1,076,472
  Settlement obligation, current portion                      --         16,276
                                                    ------------   ------------
        Total current liabilities                      5,155,250     15,528,659
Long-term debt, less current portion                   2,290,500      2,248,875
Deferred gain on sale of subsidiary                    1,296,597             --
Settlement obligation, less current portion                   --        451,313
                                                    ------------   ------------
        Total liabilities                              8,742,347     18,228,847
                                                    ------------   ------------
Commitments and contingencies
Stockholders' equity (deficit):
  Preferred stock, $.01 par value, 10,000,000
    shares authorized, 67,910 and 52,260 shares
    of Series B through Q outstanding
    (liquidation value $6,791,000 and $5,215,880)            679            522

  Common stock, $.01 par value, 225,000,000 shares
    authorized, 169,529,646 and 98,002,026
    shares issued and outstanding                      1,695,297        980,020
      Additional paid-in capital                      78,428,795     64,460,755
      Accumulated deficit                            (71,229,429)   (66,756,522)
                                                    ------------   ------------
        Total stockholders' equity (deficit)           8,895,342     (1,315,225)
                                                    ------------   ------------
                                                    $ 17,637,689   $ 16,913,622
                                                    ============   ============

          See accompanying notes to consolidated financial statements.

                                       21
<PAGE>

                             ABLE LABORATORIES, INC.

                         CONSOLIDATED STATEMENTS OF LOSS
<TABLE><CAPTION>
                                                             Years Ended December 31,
                                                    ------------------------------------------
                                                        2001           2000           1999
                                                    ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>
Sales, net                                          $ 19,594,231   $ 31,456,479   $ 29,139,553
Cost of sales                                         12,533,440     25,711,147     24,377,890
                                                    ------------   ------------   ------------
      Gross profit                                     7,060,791      5,745,332      4,761,663
                                                    ------------   ------------   ------------
Operating expenses:
      Selling, general and administrative              5,909,245      9,966,250      8,912,374
      Research and development                         2,352,666      2,392,166      1,713,416
      Loss on impairment of customer lists                    --             --        400,000
                                                    ------------   ------------   ------------
            Total operating expenses                   8,261,911     12,358,416     11,025,790
                                                    ------------   ------------   ------------
            Operating loss                            (1,201,120)    (6,613,084)    (6,264,127)
                                                    ------------   ------------   ------------
Other income (expense):
      Loss on investment in RxBazaar securities       (2,730,000)            --             --
      Loss on sale of subsidiary                              --       (313,607)            --
      Interest and financing expense                  (1,077,100)    (2,157,423)    (2,425,730)
      Miscellaneous income, net                          535,313        632,463        538,539
                                                    ------------   ------------   ------------
         Other income (expense), net                  (3,271,787)    (1,838,567)    (1,887,191)
                                                    ------------   ------------   ------------
         Net loss                                     (4,472,907)    (8,451,651)    (8,151,318)
                                                    ------------   ------------   ------------
Less returns to preferred stockholders:
      Beneficial conversion feature                    8,536,886      1,292,142      1,745,377
      Dividends paid and accrued                         523,138        151,651        168,403
                                                    ------------   ------------   ------------
Net loss applicable to common stock                 $(13,532,931)  $ (9,895,444)  $(10,065,098)
                                                    ============   ============   ============

      Net loss per share-basic and diluted          $      (0.10)  $      (0.13)  $      (0.20)
                                                    ============   ============   ============

      Weighted average shares outstanding            129,440,562     78,484,857     51,221,275
                                                    ============   ============   ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       22
<PAGE>

                             ABLE LABORATORIES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                  Years Ended December 31, 2001, 2000 and 1999
<TABLE><CAPTION>
                                                          Preferred Stock                 Common Stock             Paid In
                                                       Shares         Amount         Shares         Amount         Capital
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Balance at December 31,1998                               52,152   $        521     37,612,612   $    376,126   $ 47,181,545
Stock options and warrants exercised                          --             --        363,172          3,632         (3,532)
Shares issued in private placements                       33,000            330             --             --      5,684,655
Conversion of preferred stock                            (39,228)          (392)    17,856,521        178,565       (178,173)
Conversion of debt and accrued interest                   10,000            100      3,407,641         34,076      1,766,709
Stock and warrants issued for Superior settlement             --             --      1,500,000         15,000      1,982,000
Stock, options and warrants issued for services               --             --      3,115,000         31,150      1,908,122
Comprehensive Income:  Net loss                               --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------

Balance at December 31, 1999                              55,924            559     63,854,946        638,549     58,341,326
Stock options and warrants exercised                          --             --      2,541,616         25,416         27,159
Shares issued in private placements                       43,600            436             --             --      3,551,249
Conversion of preferred stock                            (47,264)          (473)    26,089,555        260,896       (260,423)
Conversion of debt and accrued interest                       --             --      4,364,909         43,649      1,687,680
Stock, options and warrants issued for services               --             --      1,151,000         11,510      1,113,764
Comprehensive Income:  Net loss                               --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------

Balance at December 31, 2000                              52,260            522     98,002,026        980,020     64,460,755
Stock options and warrants exercised                          --             --        693,867          6,939         (6,539)
Shares issued in private placements                       67,150            672     21,095,000        210,950     10,770,885
Conversion and redemption of preferred stock             (98,700)          (987)    46,258,753        462,588     (2,655,020)
Conversion of debt and accrued interest                       --             --        650,000          6,500        108,500
Shares issued for investment securities                   47,200            472             --             --      4,719,528
Stock, options and warrants issued for services               --             --      2,830,000         28,300      1,214,136
Cash dividends accrued on preferred stock                     --             --             --             --       (183,450)
Comprehensive Income:  Net loss                               --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------
Balance at December 31, 2001                              67,910   $        679    169,529,646   $  1,695,297   $ 78,428,795
                                                    ============   ============   ============   ============   ============

                                                     Accumulated
                                                       Deficit        Total
                                                    ------------   ------------

Balance at December 31,1998                         $(50,153,553)  $ (2,595,361)
Stock options and warrants exercised                          --            100
Shares issued in private placements                           --      5,684,985
Conversion of preferred stock                                 --             --
Conversion of debt and accrued interest                       --      1,800,885
Stock and warrants issued for Superior settlement             --      1,997,000
Stock, options and warrants issued for services               --      1,939,272
Comprehensive Income:  Net loss                       (8,151,318)    (8,151,318)
                                                    ------------   ------------

Balance at December 31, 1999                         (58,304,871)       675,563
Stock options and warrants exercised                          --         52,575
Shares issued in private placements                           --      3,551,685
Conversion of preferred stock                                 --             --
Conversion of debt and accrued interest                       --      1,731,329
Stock, options and warrants issued for services               --      1,125,274
Comprehensive Income:  Net loss                       (8,451,651)    (8,451,651)
                                                    ------------   ------------

Balance at December 31, 2000                         (66,756,522)    (1,315,225)
Stock options and warrants exercised                          --            400
Shares issued in private placements                           --     10,982,507
Conversion and redemption of preferred stock                  --     (2,193,419)
Conversion of debt and accrued interest                       --        115,000
Shares issued for investment securities                       --      4,720,000
Stock, options and warrants issued for services               --      1,242,436
Cash dividends accrued on preferred stock                     --       (183,450)
Comprehensive Income:  Net loss                       (4,472,907)    (4,472,907)
                                                    ------------   ------------
Balance at December 31, 2001                        $(71,229,429)  $  8,895,342
                                                    ============   ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       23
<PAGE>

                             ABLE LABORATORIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE><CAPTION>
                                                                            Years Ended December 31,
                                                                   ------------------------------------------
                                                                       2001           2000           1999
                                                                   ------------   ------------   ------------
<S>                                                                <C>            <C>            <C>
Cash flows from operating activities:
Net loss                                                           $ (4,472,907)  $ (8,451,651)  $ (8,151,318)
Adjustments to reconcile net loss to
 net cash used for operating activities:
   Loss on impairment of customer lists                                      --             --        400,000
   Gain on settlement of put liability                                  (26,472)            --             --
   Loss on investment in RxBazaar securities                          2,730,000             --             --
   Loss on sale of subsidiary                                                --        313,607             --
   Stock, options and warrants issued for services                    1,242,436      1,125,274      1,939,272
   Depreciation and amortization                                        912,617      2,059,774      1,784,440
(Increase) decrease in operating assets:
   Accounts receivable                                               (4,710,139)     1,335,230     (1,909,174)
   Inventory                                                         (3,619,990)       568,946       (501,525)
   Prepaid expenses and other current assets                           (384,478)        45,947        (57,912)
   Deposits and other assets                                           (367,218)       (65,565)        64,067
Increase in operating liabilities:
   Accounts payable and accrued expenses                              2,813,414      2,053,311      1,629,786
                                                                   ------------   ------------   ------------
      Net cash used for operating activities                         (5,882,737)    (1,015,127)    (4,802,364)
                                                                   ------------   ------------   ------------
Cash flows from investing activities:
   Purchase of property and equipment                                (1,549,946)      (497,722)    (2,586,232)
   Proceeds from sale of subsidiaries                                 4,800,000             --             --
   Proceeds from sale of investment in RxBazaar securities              950,000             --             --
                                                                   ------------   ------------   ------------
      Net cash provided by (used for) investing activities            4,200,054       (497,722)    (2,586,232)
                                                                   ------------   ------------   ------------
Cash flows from financing activities:
   Net proceeds from stock warrants and options                             400         52,575            100
   Net proceeds from private stock placements                        10,207,507      3,551,685      5,684,985
   Redemption of preferred stock                                     (2,193,419)            --             --
   Net proceeds from debt                                             1,645,000        190,000      4,321,740
   Debt financing costs paid                                                 --             --       (723,212)
   Payment of debt obligations                                       (1,235,966)      (547,307)    (4,000,492)
   Net change in lines of credit                                     (5,959,405)    (1,670,821)     2,940,292
   Decrease in bank overdraft                                                --             --       (621,313)
                                                                   ------------   ------------   ------------
      Net cash provided by financing activities                       2,464,117      1,576,132      7,602,100
                                                                   ------------   ------------   ------------
Net change in cash and cash equivalents                                 781,434         63,283        213,504
Cash and cash equivalents at beginning of year                          373,832        310,549         97,045
                                                                   ------------   ------------   ------------
Cash and cash equivalents at end of year                           $  1,155,266   $    373,832   $    310,549
                                                                   ============   ============   ============

Supplemental cash flow information:
   Interest paid                                                   $    850,478   $  1,355,730   $  1,890,770
   Conversion of debt and accrued interest into common stock
                                                                        115,000      1,731,329      1,050,885
   Common stock and warrants issued for Superior
      settlement                                                             --             --      1,997,000
   Conversion of debt into preferred stock                              775,000             --        750,000
   Preferred stock issued for investment securities                   4,720,000             --             --
   Conversion of put liability to notes payable                         750,000             --             --
Additional cash flow information is included in Notes 2 and 6.
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       24
<PAGE>

                             ABLE LABORATORIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of Able
Laboratories, Inc. (the "Company" or "Able"), which is engaged in the
manufacture of generic pharmaceuticals and its inactive wholly-owned subsidiary,
Monroe Subsidiary, Inc. (formerly Generic Distributors, Inc. or "GDI") which was
engaged in the distribution of generic pharmaceuticals. On May 18, 2001, we
merged our wholly-owned subsidiary, Able Laboratories, Inc., into our parent
company, DynaGen, Inc. and changed DynaGen's name to Able Laboratories, Inc. All
significant inter-company balances and transactions have been eliminated in
consolidation.

     In December 2000, we completed the sale of substantially all the assets of
our GDI subsidiary to Louisiana Wholesale Distributors ("LWD"). We agreed to
sell accounts receivable, inventory and fixed assets for cash consideration of
$1,510,774 (see Note 2). Our GDI subsidiary changed its name to Monroe
Subsidiary, Inc. after the sale. On February 23, 2001, we completed the sale of
our subsidiary, Superior Pharmaceutical Company to RxBazaar, Inc. (see Note 2).

USE OF ESTIMATES

     In preparing consolidated financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of the
balance sheet date and reported amounts of revenues and expenses during the
reporting period. Material estimates that are particularly susceptible to
significant change in the near term relate to the carrying values of
receivables, including allowances for chargebacks, rebates and returns,
inventory and investment in RxBazaar securities and the valuation of equity
instruments issued by the Company. Actual results could differ from those
estimates.

RECLASSIFICATIONS

     Certain amounts have been reclassified in the 2000 and 1999 consolidated
financial statements to conform to the 2001 presentation. The reclassifications
had no effect on net loss.

CASH EQUIVALENTS

     Cash equivalents include interest-bearing deposits with original
maturities of three months or less.

INVENTORY

     Inventory is valued at the lower of average cost or market on a first-in
first-out (FIFO) method.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Depreciation expense is provided
over the estimated useful lives of the assets using the straight-line method.
Leasehold improvements are amortized on the straight-line method over the
shorter of the estimated useful life of the asset or the life of the related
lease term.

                                       25
<PAGE>

DEFERRED DEBT FINANCING COSTS

     Debt financing costs are being amortized on a straight-line basis over the
term of the debt. The related amortization expense for 2001, 2000 and 1999 was
$220,178, $483,204 and $136,289, respectively.

REVENUE RECOGNITION

     Revenues from product sales are recognized when products are shipped.
Revenues from sales may be subject to agreements allowing chargebacks, rebates,
rights of return and other allowances. The Company provides allowances for
potential uncollectible accounts, chargebacks, rebates, returns and other
allowances. Allowances for chargebacks, rebates, returns and other allowances
are established concurrently with the recognition of revenue.

     Shipping and handling fees billed to customers are recognized in net sales.
Shipping and handling costs are included in cost of sales.

ADVERTISING COSTS

     Advertising costs are charged to expense when incurred.

INCOME TAXES

     Deferred tax assets and liabilities are recorded for temporary differences
between the financial statement and tax bases of assets and liabilities using
the currently enacted income tax rates expected to be in effect when the taxes
are actually paid or recovered. A deferred tax asset is also recorded for net
operating loss, capital loss and tax credit carry forwards to the extent their
realization is more likely than not. The deferred tax expense for the period
represents the change in the deferred tax asset or liability from the beginning
to the end of the period.

STOCK-BASED COMPENSATION

     Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation" encourages all entities to adopt a fair value
based method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
APB Opinion No. 25, "Accounting for Stock Issued to Employees," whereby
compensation cost is the excess, if any, of the quoted market price of the stock
at the grant date (or other measurement date) over the amount an employee must
pay to acquire the stock. Stock options issued under the Company's stock option
plans generally have no intrinsic value at the grant date, and under Opinion No.
25 no compensation cost is recognized for them. The Company has elected to
remain with the accounting in Opinion No. 25 and as a result, has provided pro
forma disclosures of net income and earnings per share and other disclosures, as
if the fair value based method of accounting had been applied. The pro forma
disclosures include the effects of all awards granted on or after July 1, 1995.

EARNINGS PER SHARE

     Basic earnings per share represents income available to common stockholders
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income that would result from the assumed issuance.

     For all periods presented, options, warrants, put warrants, convertible
debt and convertible preferred stock were anti-dilutive and excluded from the
diluted earnings per share computations.

                                       26
<PAGE>

     The loss applicable to common stockholders has been increased by the stated
dividends on the convertible preferred stock and the amortization of discounts
on convertible preferred stock due to beneficial conversion features.

COMPREHENSIVE INCOME

     Accounting principles generally require that recognized revenue, expenses,
gains and losses be included in net income. Certain statements, however, require
entities to report specific changes in assets and liabilities, such as
unrealized gains and losses on available-for-sale securities, as a separate
component of the equity section of the balance sheet. Such items, along with net
income, are components of comprehensive income. There were no other items of
comprehensive income during 2001, 2000 and 1999.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 141 requires that all business combinations initiated after
June 30, 2001 be accounted for under the purchase method and addresses the
initial recognition and measurement of goodwill and other intangible assets
acquired in a business combination. SFAS No. 142 addresses the initial
recognition and measurement of intangible assets acquired outside of a business
combination and the accounting for goodwill and other intangible assets
subsequent to their acquisition. SFAS No. 142 provides that intangible assets
with finite useful lives be amortized and that goodwill and intangible assets
with indefinite lives will not be amortized, but will rather be tested at least
annually for impairment. We will adopt SFAS No. 142 for our fiscal year
beginning January 1, 2002. The adoption of SFAS 142 is not expected to have any
material impact on the Company's financial statements.

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement establishes standards for accounting for obligations
associated with the retirement of tangible long-lived assets. This statement is
effective for fiscal years beginning after June 15, 2002. We are currently
evaluating the impact, if any, the adoption of this statement will have on our
financial position and results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement addresses financial accounting
and reporting for the impairment and disposal of long-lived assets. This
statement is effective for fiscal years beginning after December 15, 2001. We
are currently evaluating the impact the adoption of this statement will have on
our financial position and results of operations.

2. BUSINESS ACQUISITIONS AND DISPOSITIONS

     SUPERIOR PHARMACEUTICAL COMPANY

     On June 18, 1997, the Company acquired Superior Pharmaceutical Company
("Superior") for $6,250,000 in cash, $4,600,000 in promissory notes and 166,667
shares of common stock with a guaranteed value of $5,000,000. The Company was
obligated to issue up to an additional 1,666,667 shares of its common stock on
June 18, 1998 and pay the difference between $5,000,000 and the current
aggregate market value of the shares issued. The Company recorded a $4,083,000
acquisition obligation at December 31, 1997 based on the difference between the
current estimated fair value of the 1,833,334 shares of common stock issued and
issuable and the guaranteed value of $5,000,000.

     In May 1999, we settled all issues between us and the former Superior
stockholders by:

     o    paying $1,500,000 in cash;
     o    issuing 1,500,000 shares of common stock;
     o    issuing warrants to purchase 1,000,000 shares of common stock at a
          price of $0.86 per share;
     o    issuing warrants to purchase 300,000 shares of Common stock at a price
          of $.01 per share; and;
     o    modifying the commercial lease agreement between Superior and a
          company controlled by the former stockholders.

                                       27
<PAGE>

     The Superior acquisition has been accounted for as a purchase. The Company
initially allocated $13,612,000 of the purchase price to customer lists, which
was being amortized on a straight-line basis over five years. In addition the
Company initially recorded goodwill of $386,219, which was being amortized over
15 years.

     In 1998, the Company recorded a $2,500,000 loss on impairment of the
Superior customer lists based on the Company's projections of future discounted
cash flows of Superior. In 1999, the Company recorded an additional $400,000
loss on impairment based on a revised projection of the future discounted cash
flows.

     Under the May 1999 settlement, the Company valued the modification of its
lease agreement for additional rent, using discounted cash flows, at $539,783,
to be amortized over 15 years. The Company wrote off all of its remaining
obligations to the former Superior shareholders. This transaction resulted in a
reduction of $3,756,162 in the customer list. In addition, the goodwill balance
of $329,047 was written off due to the reduction in the purchase price.

     Amortization of customer lists amounted to $128,218, $769,308 and $948,972
for 2001, 2000 and 1999, respectively. Amortization of goodwill amounted to
$8,605 for the year ended December 31, 1999.

     On October 20, 2000, the Company entered into an agreement to sell Superior
to RxBazaar, Inc. for $4,000,000 in cash and assumption of the Company's senior
subordinated debt of $2,248,875. The transaction was approved by the Company's
stockholders on November 27, 2000. The Company received a fairness opinion on
the transaction from an investment bank. RxBazaar, Inc. was founded in October
1999 by two of the Company's directors and others. As of December 31, 2000, the
Company owned 1,700,000 shares of RxBazaar's common stock which the Company
received for services. RxBazaar valued these shares at $8,500 on issuance in
January 2000. In addition, RxBazaar issued the Company a five year warrant to
purchase 1,200,000 shares of common stock at $2.50 per share in September 2000
for services. RxBazaar valued the warrant at $300,000. The Company deferred
recognition of the value of these securities at December 31, 2000.

     On February 23, 2001, RxBazaar acquired Superior in a cash merger. As a
result of the merger, the Company received a cash payment of $4,000,000 and
RxBazaar assumed the Company's existing 13.5% senior subordinated debt in the
amount of $2,248,875. The Company remains liable for the subordinated debt as a
guarantor and issued contingent stock purchase warrants to the senior
subordinated debt holders. The warrants allow the holders to purchase 2,500,000
shares of the Company's common stock at $.01 per share if the 13.5% senior
subordinated debt is still outstanding on June 17, 2002. In addition, the
holders of the subordinated debt may convert such debt, in whole or in part,
into common stock of the Company or RxBazaar, and the Company has agreed to
register for resale any shares of the Company common stock issued upon
conversion of the subordinated debt. In connection with the sale of Superior,
the Company sold accounts receivable of $3,572,730, inventory of $4,790,316,
property and equipment of $191,715 and miscellaneous assets totaling $391,387
net of accounts payable and accrued expenses of $4,596,654. The Company has
deferred the gain of $1,296,597 on the sale due to its continuing ownership
interest in RxBazaar and its guarantee of the subordinated debt.

     In February and March 2001, the Company received $4,700,000 of RxBazaar
Series A Preferred stock plus accrued dividends of $20,000 in exchange for the
Company's Series O Preferred Stock (see Note 10). RxBazaar redeemed $l,000,000
of this Series A Preferred Stock for $950,000 in February 2001. As of December
31, 2001, the Company owned 1,700,000 shares or approximately 7% of RxBazaar's
common stock and $3,700,000 of RxBazaar's Series A Preferred Stock. As of
December 31, 2001, the Company recorded a loss of $2,680,000 on its investment
in RxBazaar as a result of the Company's impairment analysis.

     A summary of Superior's condensed balance sheet and historical condensed
results of operations included in the accompanying consolidated financial
statements follows.

                                       28
<PAGE>

                             CONDENSED BALANCE SHEET
                                December 31, 2000

                                     ASSETS

              Cash                                                 $    135,561
              Accounts receivable                                     3,773,367
              Inventory                                               5,404,815
              Other current assets                                      156,083
                                                                   ------------
                 Total current assets                                 9,469,826
              Property and equipment, net                               205,070
              Due from parent company                                 4,279,776
              Other assets                                               20,145
                                                                   ------------
                 Total assets                                      $ 13,974,817
                                                                   ============

                      LIABILITIES AND STOCKHOLDER'S EQUITY

              Accounts payable and accrued expenses                $  3,654,262
              Due to Able Laboratories                                5,733,412
              Stockholder's equity                                    4,587,143
                                                                   ------------
                 Total liabilities and stockholder's equity        $ 13,974,817
                                                                   ============


                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
                                                    Period Ended
                                                    February 23,      Year Ended December 31,
                                                    ------------   ---------------------------
                                                        2001           2000           1999
                                                    ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>
 Sales, net                                         $  3,067,567   $ 25,411,832   $ 21,476,606
 Cost of sales                                         2,812,726     20,577,395     16,909,637
                                                    ------------   ------------   ------------
             Gross profit                                254,841      4,834,437      4,566,969
 Selling, general and administrative expense             581,292      4,438,024      3,768,664
                                                    ------------   ------------   ------------
             Operating profit (loss)                    (326,451)       396,413        798,305
 Miscellaneous income (expense)                              120          1,200         (3,163)
 Interest expense                                             --         (1,401)      (420,861)
                                                    ------------   ------------   ------------
             Net income (loss)                      $   (326,331)  $    396,212   $    374,281
                                                    ============   ============   ============
</TABLE>


GENERIC DISTRIBUTORS, INCORPORATED

     On March 2, 1998, the Company acquired Generic Distributors, Incorporated
("GDI") for $1,200,000 in cash, 10,500 shares of Series E Convertible Preferred
Stock valued at $1,050,000 and 1,500 shares of Series F Convertible Preferred
Stock valued at $100,000, for a total purchase price of $2,350,000.

     The GDI acquisition was accounted for as a purchase. The company allocated
$729,205 of the purchase price to customer lists, based on an independent
appraisal, which was amortized on a straight line basis over five years.
Amortization of customer lists amounted to $145,840 for each of the years 2000
and 1999.

     On December 29, 2000, the Company sold substantially all the assets of GDI
to Louisiana Wholesale Distributors, an unrelated third party, for $1,510,774.
The Company received $800,000 of the sale proceeds in cash on January 3, 2001
and accounts payable of GDI amounting to $710,774 were paid out of the remaining
proceeds. At December 31, 2000, the consolidated financial statements include
$442,000 of accounts payable owed to creditors of GDI that were not assumed by
the buyer. In August 2001, the Company settled these obligations with

                                       29
<PAGE>

the creditors of GDI and recorded $300,000 of forgiveness of debt income. The
Company recorded a loss of $313,607 on the sale in 2000 which included the
write-off of the $315,992 unamortized balance of the customer lists.

            Selected operating information for GDI is as follows:

                                                      Years Ended December 31,
                                                    ---------------------------
                                                        2000           1999
                                                    ------------   ------------
            Revenues                                $  4,751,586   $  5,618,282
                                                    ============   ============
            Net loss                                $   (388,680)  $   (239,275)
                                                    ============   ============
            Net loss per share-basic                $      (0.00)  $      (0.00)
                                                    ============   ============



3. ACCOUNTS RECEIVABLE

            Accounts receivable consists of the following:

                                                            December 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------   ------------
            Accounts receivable                     $ 12,763,025   $  3,993,862
            Allowances for returns and price
              adjustments                             (7,966,237)            --
            Allowance for doubtful accounts             (150,585)      (485,068)
                                                    ------------   ------------

                     Accounts receivable, net       $  4,646,203   $  3,508,794
                                                    ============   ============


     Accounts receivable, net includes $42,987 due from Superior Pharmaceutical
Company at December 31, 2001.

     A summary of the activity in accounts receivable allowances is as follows:
<TABLE><CAPTION>

                                                    Returns and
                                                       Price         Doubtful        Total
                                                    Adjustments      Accounts      Allowances
                                                    ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>
     Balance at December 31, 1998                   $         --   $     68,133   $     68,133
           Additions charged to operating expenses            --        225,120        225,120
           Writeoff of uncollectible accounts                 --        (23,228)       (23,228)
                                                    ------------   ------------   ------------
     Balance at December 31, 1999                             --        270,025        270,025
           Additions charged to net sales                450,000             --        450,000
           Additions charged to operating expenses            --        720,821        720,821
           Deductions allowed to customers              (450,000)            --       (450,000)
           Writeoff of uncollectible accounts                 --       (505,778)      (505,778)
                                                    ------------   ------------    -----------
     Balance at December 31, 2000                             --        485,068        485,068
           Additions charged to net sales             19,806,388             --     19,806,388
           Additions charged to operating expenses            --        192,953        192,953
           Deductions allowed to customers           (11,840,151)            --    (11,840,151)
           Writeoff of uncollectible accounts                 --       (527,436)      (527,436)
                                                    ------------   ------------   ------------
     Balance at December 31, 2001                   $  7,966,237   $    150,585   $  8,116,822
                                                    ============   ============   ============
</TABLE>

                                       30
<PAGE>

4. INVENTORY

   Inventory consists of the following:

                                                            December 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------   ------------
   Raw materials                                    $  2,968,959   $    998,327
   Work-in-progress                                      231,376         51,605
   Finished goods                                      1,518,574      4,839,303
                                                    ------------   ------------
                                                    $  4,718,909   $  5,889,235
                                                    ============   ============

5. PROPERTY AND EQUIPMENT

   Property and equipment consists of the following:
<TABLE><CAPTION>
                                                              December 31,
                                                    ---------------------------    Estimated
                                                        2001           2000       Useful Lives
                                                    ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>
   Machinery and equipment                          $  3,710,644   $  2,877,595      7 years
   Furniture, fixtures and computers                     511,817      1,206,933     2-7 years
   Leasehold improvements                              1,845,514      1,394,707      15 years
                                                    ------------   ------------
                                                       6,067,975      5,479,235
   Less accumulated depreciation and amortization     (1,572,464)    (1,777,734)
                                                    ------------   ------------
                                                    $  4,495,511   $  3,701,501
                                                    ============   ============
</TABLE>
     Depreciation and amortization expense for 2001, 2000 and 1999 was $564,221,
$569,719 and $418,400, respectively.

6. DEBT

   Notes payable consist of the following:

                                                            December 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------   ------------
   Bridge loans                                      $   110,000   $    236,000
   Machinery and equipment financing                      86,025        150,000
   Equipment loan                                        654,500             --
   NJEDA bonds                                         1,870,000      1,907,273
   Working capital loan                                       --      5,959,405
   Senior subordinated debt                                   --      2,248,875
   Notes payable-- put liability                         156,782             --
                                                    ------------   ------------
            Total                                      2,877,307     10,501,553
   Less current portion                                  586,807      8,252,678
                                                    ------------   ------------
            Long-term debt                            $2,290,500   $  2,248,875
                                                    ============   ============

BRIDGE LOANS

     During 1999, the Chairman of the Board periodically advanced personal funds
to the Company for working capital and on December 31, 2001 and 2000, the
balance payable was $110,000.

     Additionally, two officer/directors pledged 164,025 shares and 135,125
shares respectively, of the Company's common stock to secure a note payable.
These shares were subsequently sold by the creditor and a payable of $53,043 and
$43,697 was recorded in 1999 to these executives for the pledge of their
personal shares of

                                       31
<PAGE>

the Company. During 2000, the company issued a total of 385,000 shares of common
stock to the two executives in conversion of these notes and accrued interest.
On December 31, 2000, bridge loans included $26,000 due to an officer/director
for working capital loans made by him to the Company during the year. The loan
was repaid in 2001. These loans bear interest at 10% per annum.

     In November 1998, the Company received $500,000 from an unaffiliated
investor at an interest rate of 12% due on March 20, 1999. A warrant to purchase
1,000,000 shares of common stock at $.05 per share expiring on November 20,
2000, valued at $97,490, was also issued in connection with this loan. This
warrant was exercised in September 2000. During 1999, $400,000 was repaid
towards the loan, leaving a balance of $100,000 on December 31, 1999. The
Company issued a warrant to purchase 200,000 shares of common stock at an
exercise price of $0.40 per share for an extension of this loan during 1999. The
warrant was valued at $17,438 and charged to expense. In November 2000, the
investor exercised part of the warrant for 50,000 shares of common stock and the
remaining warrant expired in 2001. During 2000, the Company settled the amount
owed to this investor together with all accrued interest.

     On January 26, 1999, the Company received $500,000 from an accredited
investor by executing a 10% promissory note due on April 15, 1999. The terms of
the note required an increased interest rate from 12% to 18% if the note was not
paid on the due date. This note was partially paid during 1999 and the balance
on December 31, 1999 was $139,649. Two executives of the Company pledged their
personal shares of Company common stock to repay this loan (see above). Two
warrants to purchase a total of 535,000 shares of common stock at an exercise
price of $0.05 per share were issued in connection with this note. These
warrants were valued at $117,236 and charged to expense in 1999. The warrants
were exercised in January 2000. The balance due to this investor was settled
during 2000.

     In January and February 1999 the Company sold to unaffiliated accredited
investors unsecured 12% promissory notes due in ninety days in the aggregate
principal amount of $400,000. The Company issued five year warrants to purchase
a total of 240,000 shares of common stock at $0.25 per share and a warrant to
purchase 32,500 shares of common stock at $0.02 per share to the placement agent
in connection with this investment. The Company charged $12,253 to expense in
1999 in connection with the issuance of the warrants. In March 2000, we issued
786,000 shares of common stock of the Company to settle the debt of $400,000
together with accrued interest.

     The Company also borrowed $100,000 from an unaffiliated investor in June
1999 to meet some its working capital requirements. The loan carries an interest
rate of 10% per annum and is due on demand. The accrued interest on December 31,
2000 was $15,000 and on December 31, 1999, was $5,000. In February 2001, the
Company issued 650,000 shares of common stock upon conversion of this note and
the accrued interest.

     In July 2001, the Company issued $775,000 in 8% convertible subordinated
secured notes to several investors as part of a bridge financing. A director who
is Able's president, and the Chairman of the Board of Directors, each advanced
$250,000 to the Company in this transaction. In August 2001, the notes were
converted into Series Q Preferred Stock.

MACHINERY AND EQUIPMENT FINANCING

     In July 1998, Able entered into a machinery and equipment financing
agreement with the spouse of the Chairman of the Company whereby Able borrowed
$150,000 at an annual interest rate of 15%. On December 31, 2001, the Company
paid $63,975 in principal and interest of $36,025 on this loan. Interest expense
for 2001, 2000 and 1999 amounted to $22,500 per year.

EQUIPMENT LOAN

     On February 16, 2001, the Company entered into an equipment financing
transaction pursuant to which it borrowed $770,000 in a sale and leaseback
arrangement. The borrowed amount is payable over a five-year term at an interest
rate of 15%. Interest expense for 2001 was $86,625. At December 31, 2001,
maturities of the loan are as follows: $154,000 in 2002, $154,000 in 2003,
$154,000 in 2004, $154,000 in 2005 and $38,500 in 2006.

                                       32
<PAGE>

CONVERTIBLE DEBENTURES

     In 1999, the Company received $980,000 by issuing 9% convertible
subordinated debentures. The debentures matured in thirteen months and the
principal and interest accrued automatically converted into shares of common
stock on the maturity date. During 2000 and 1999, the Company recorded interest
expense of $40,833 and $41,629, respectively, related to these debentures. In
May 2000, the Company issued 2,948,909 shares of common stock and the debentures
together with accrued interest were converted to equity.

NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY BONDS

     On June 23, 1999, Able Laboratories, Inc., completed the Industrial
Development Revenue Bond offering issued by the New Jersey Economic Development
Authority. The bonds consist of series 1999A $1,700,000, 8% non-taxable and
series 1999B $300,000, 8.25% taxable. Series 1999A bonds will mature in 15 years
and series 1999B bonds will mature in 4 years. The total cost of the bond issue
was $216,140 and the net proceeds were used for the acquisition, installation
and commissioning of equipment and machinery. The bond cost is being amortized
over 15 years. Amortization expense for 2001, 2000 and 1999 was $14,400, $14,390
and $7,142, respectively. At December 31, 2001, maturities of the bonds are as
follows: $80,000 in 2002, $90,000 in 2003, $95,000 in 2004, $105,000 in 2005,
$115,000 in 2006 and $1,385,000 in years 2007 through 2014.

     In connection with these bonds, the Company has entered into various
agreements with the New Jersey Economic Development Authority and the
bondholders, including an escrow agreement pursuant to which the Company has
deposited into escrow amounts intended to cover the Company's obligations under
the bond documents. These amounts are included in other assets. Interest expense
for 2001, 2000 and 1999 was $163,691, $174,146 and $80,374, respectively.

WORKING CAPITAL LOAN

     On November 30, 1999, we completed a loan agreement with a bank that
provided us with a revolving credit in the maximum amount of $14,000,000,
secured by a lien on substantially all of our assets. The total amount available
for borrowing under the loan agreement was based on eligible accounts receivable
and inventory.

     During 2000, the Company was in default of certain loan covenants and as a
result the Company and the bank entered into a forbearance agreement. Under this
agreement the bank increased the interest rate to its base rate plus 4%, charged
us certain fees and gradually reduced the borrowing limit on the line. The limit
on the line on January 1, 2001 was $6,250,000 and the interest rate was 13.5%
under the agreement. This working capital loan was paid off on February 23, 2001
at the time of the sale of our subsidiary, Superior Pharmaceutical Company (see
Note 2).

     Interest expense for 2001 was $136,926, amortization of deferred expenses
was $42,439 and early termination fees were $120,000. Interest expense for 2000
was $849,310 and amortization of deferred expenses was $436,462. Interest
expense for 1999 was $56,582.

SENIOR SUBORDINATED DEBT AND WARRANT PUT LIABILITY

     In June 1997, the Company obtained senior subordinated debt financing of
$3,000,000 from two private investors bearing interest at 13.5% payable in
monthly installments. The principal was payable upon maturity at the end of five
years.

     In June 1997, the Company also issued to the investors warrants to purchase
40,000 shares of common stock at $.10 per share exercisable for five years. In
addition, these warrants were subject to put features under certain
circumstances. Proceeds of $702,000 from this financing were allocated to the
warrants, based on their estimated fair value. This amount is reflected as a
warrant put liability at December 31, 2000 because the warrants gave the holders
the choice of a cash settlement under certain conditions. The put allowed the
holders to sell two-thirds of the warrants to the Company after three years for
$667,000 and all of the warrants after five years for

                                       33
<PAGE>

$1,500,000 unless the market value of the shares issuable pursuant to the
warrant was equal to or greater than the put value. The Company was accruing the
put value of the warrants to their redemption amounts over their respective
terms. Amortization expense on the put liability for 2001, 2000, and 1999 was
$0, $91,703 and $126,234, respectively. In connection with the sale of Superior
on February 23, 2001, the Company settled its warrant put liability obligation
by paying $300,000 and issuing $750,000 of 13.5% notes payable maturing February
2002. The notes require 10 equal monthly installments of principal and interest
commencing May 2001.

     The remaining proceeds from this offering in 1997 of $2,298,000 were
allocated to the subordinated debt. The debt discount of $702,000 was being
amortized, using the interest method, over the term of the debt. At December 31,
1997, the Company amortized the entire debt discount as the Company was in
default under the terms of the debt agreement and the debt had been classified
as a current liability.

     In 1999, the Company exchanged $750,000 of this senior debt for 10,000
shares of Series L Preferred Stock. The Series L Preferred Stock is convertible
into common stock at an average of the closing bid prices of the common stock
for three days immediately preceding the conversion date. The Series L Preferred
Stock has a dividend of 13.5% per annum. When the proceeds of the conversion of
Series L Preferred Stock reach $750,000 plus accrued dividends, the balance of
the Series L Preferred Stock will be canceled. The Company also issued 400,000
warrants to purchase common stock at $0.38 per share and 168,750 warrants to
purchase common stock at $0.01 per share in connection with the negotiation of
terms of the loan with the senior lenders. The warrants to purchase 168,750
shares of common stock were exercised during 2000. The value of these warrants
totaling $122,344 was charged to expense during 1999. Interest expense on the
debt and the put notes for 2001, 2000 and 1999 was $112,034, $303,750 and
$396,562, respectively.

     As of December 31, 2001, the Company remains liable for the senior
subordinated debt as a guarantor. RxBazaar is current with its payments on this
obligation but is in default of certain loan covenants.

7. INCOME TAXES

     There was no provision for income taxes for 2001, 2000 and 1999, due to the
Company's net operating losses. The difference between the statutory Federal
income tax rate of 34% and the Company's effective tax rate is primarily due to
net operating losses incurred by the Company and the valuation reserve against
the Company's deferred tax asset.

     The components of the net deferred tax asset are as follows:

                                                            December 31,
                                                        2001           2000
                                                    ------------   ------------
            Deferred tax asset:
                  Federal                           $ 21,733,000   $ 19,093,000
                  State                                1,983,000      2,356,000
                                                    ------------   ------------
                                                      23,716,000     21,449,000
                  Valuation reserve                  (23,716,000)   (21,449,000)
                                                    ------------   ------------
                  Net deferred tax asset            $         --   $         --
                                                    ============   ============

                                       34
<PAGE>

     The following differences give rise to deferred income taxes:

                                                            December 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------   ------------
            Net operating loss carry forward        $ 20,928,000   $ 19,652,000
            Research tax credit carry forward            634,000        625,000
            Other                                      2,154,000      1,172,000
                                                    ------------   ------------
                                                      23,716,000     21,449,000
            Valuation reserve                        (23,716,000)   (21,449,000)
                                                    ------------   ------------
            Net deferred tax asset                  $         --   $         --
                                                    ============   ============


     The increases in the valuation reserve are due to the Company's net
operating losses.

     As of December 31, 2001, the Company has the following tax carryforwards:
<TABLE><CAPTION>

                             Net Operating Losses                   Tax Credits
                       ---------------------------------  --------------------------------
Expiration Date            Federal           State            Federal           State
---------------------- ---------------- ----------------  --------------- ----------------
                                                  (In thousands)

<S>                     <C>              <C>               <C>              <C>
December 31, 2003        $     150        $     830         $         2      $        --
December 31, 2004              757            2,983                  31               --
December 31, 2005            1,012            2,689                  20               --
December 31, 2006            2,545            3,403                 100               26
December 31, 2007            3,249            3,118                 170               26
December 31, 2008            3,426            3,083                 138               --
December 31, 2009            2,654               --                 121               --
December 31, 2010            5,162               --                  --               --
December 31, 2011            4,446               --                  --               --
December 31, 2017           10,999               --                  --               --
December 31, 2018            5,924               --                  --               --
December 31, 2019            6,349               --                  --               --
December 31, 2020            7,534               --                  --               --
December 31, 2021            3,083               --                  --               --
                         ---------        ---------         -----------      -----------
            Total        $  57,290        $  16,106         $       582      $        52
                         =========        =========         ===========      ===========
</TABLE>

     Use of net operating loss and tax credit carry forwards is subject to
annual limitations based on ownership changes in the Company's common stock as
defined by the Internal Revenue Code.

8. RELATED PARTY TRANSACTIONS

NOTES RECEIVABLE

     On December 31, 2000, the balance due from the officer of $55,000 plus
accrued interest of $14,000 was included in current assets. During 2001, the
Company advanced the officer an additional $50,000. The Company recognized
interest income of $3,525, $3,150 and $3,338 on this note during 2001, 2000 and
1999, respectively.

RXBAZAAR, INC.

     During 2000, the Company entered into certain transactions with RxBazaar
primarily through its wholly-owned subsidiary Superior Pharmaceutical Company.
RxBazaar, which was founded in October 1999 by two of the Company's directors
and others, provides an online marketplace for the purchase and sale of brand
and generic drugs on the Internet. On October 20, 2000, the Company entered into
an agreement to sell Superior to RxBazaar (see Note 2).

                                       35
<PAGE>

     During 2000, RxBazaar and Superior assisted each other in developing their
businesses. Superior acted as RxBazaar's fulfillment center for all sales made
by RxBazaar through its website. Sales to RxBazaar by Superior during 2000 were
approximately $1,362,000 or 5.4% of Superior's total sales for the year.
Superior's purchases from RxBazaar were approximately $425,000 or 2.1% of
Superior's cost of sales.

     Subsequent to the sale of Superior, the Company has continued to sell
products to Superior. Net sales to Superior were approximately $6,658,000 or 34%
of net sales for 2001.

9. COMMITMENTS AND CONTINGENCIES

LEASE AGREEMENTS

     The Company leases offices and warehouse facilities under operating leases
expiring in various years through March 31, 2015 that require the Company to pay
certain costs such as maintenance and insurance. The main facility at Superior
was rented from a related party. The related party rent was $70,000, $422,459
and $340,000 for 2001, 2000 and 1999, respectively.

     The following is a schedule of future minimum lease payments for all
operating leases (with initial or remaining terms in excess of one year) as of
December 31, 2001:

               Years Ending December 31,                 Amount
               -------------------------              -----------
               2002                                   $   442,758
               2003                                       384,470
               2004                                       359,193
               2005                                       263,580
               2006                                       263,580
               Thereafter                               2,438,115
                                                      -----------
               Total minimum future lease payments    $ 4,151,696
                                                      ===========

     Rent expense, net of subleases for 2001, 2000 and 1999 was $417,707,
$763,971 and $703,681, respectively.

EMPLOYMENT AGREEMENTS

     As of December 31, 2001, the Company has employment agreements with certain
of its officers that provide for minimum annual salaries, reimbursement of
business related expenses and participation in other employee benefit programs.
The agreements also include confidentiality, non-disclosure, severance,
automatic renewal and non-competition provisions. Salary levels are subject to
periodic review by the Compensation Committee.

CONTINGENCIES

     Legal claims arise from time to time in the normal course of business
which, in the opinion of management, will have no material effect on the
Company's financial position or results of operations.

     On August 27, 2001, Novopharm USA, Inc. filed a complaint against Able
Laboratories, Inc. in the Superior Court of New Jersey (Middlesex County).
Novopharm's complaint alleges that we breached a joint commercialization
agreement for the development, production, marketing, and sale of generic
clorazepate dipotassium tablets. In its complaint, Novopharm seeks approximately
$2,000,000 claimed to be due for payments made by Novopharm to improve our
facilities and in respect of Novopharm's raw material purchase costs, and makes
claims for compensation for assistance rendered by Novopharm to us and for our
sales of clorazepate dipotassium tablets.

     Novopharm served its complaint on Able on January 15, 2002, and we answered
on February 19, 2002, denying liability. We also made counterclaims against
Novopharm, asserting that it failed to pay us $900,000 for clorazepate sales,
and failed to undertake promised sales efforts. Further, we asserted that
Novopharm's only recovery for advances and raw material costs was through sales
under the joint commercialization agreement, and that Novopharm had breached a
separate product agreement, failing to pay us $269,000. In court, we intend to
contest Novopharm's claims vigorously, but we are also discussing the
possibility of resolving our differences through means other than litigation.

10. PREFERRED STOCK, COMMON STOCK, OPTIONS AND WARRANTS

PREFERRED STOCK

     A summary of convertible preferred stock, $.01 par value, 10,000,000 shares
authorized, is as follows:
<TABLE><CAPTION>
                                                                 December 31, 2001         December 31, 2000
                                                         ----------------------------------------------------------
                                                                        Liquidation                     Liquidation
                                                         Par Value         Value         Par Value         Value
                                                         ---------      -----------      ---------      -----------
<S>                                                       <C>           <C>                <C>           <C>
Series B convertible, 12,515 shares authorized, 0
     and 400 shares issued and outstanding                 $  --         $    --            $    4        $   39,880
Series E convertible, 10,500 shares authorized, 0
     and 10,500 shares issued and outstanding                 --              --               105         1,050,000
Series F convertible, 5,000 shares authorized, 0
     and 1,500 shares issued and outstanding                  --              --                15           150,000
Series H convertible, 20,000 shares authorized, 0
     and 650 shares issued and outstanding                    --              --                 6            65,000
Series K convertible, 20,000 shares authorized, 0
     and 6,500 shares issued and outstanding                  --              --                65           650,000
Series L convertible, 10,000 shares authorized,
     6,760 shares issued and outstanding                      68          676,000               68           676,000
Series M convertible, 30,000 shares authorized, 0
     and 12,850 shares outstanding                            --              --               129         1,285,000
Series N convertible, 30,000 shares authorized, 0
     and 13,000 shares issued and outstanding                 --              --               130         1,300,000
Series Q convertible, 61,150 shares authorized, 61,150
     and 0 shares issued and outstanding                     611         6,115,000              --                --
                                                          ------        ----------         -------        ----------

                 Total                                    $  679        $6,791,000         $   522        $5,215,880
                                                          ======        ==========         =======        ==========
</TABLE>
     The Series B has a stated dividend of $7.00 per share per annum. The Series
B was converted into common stock at a conversion price equal to the lesser of
125% of the average closing bid price, as defined (the "Series B Effective
Price") or discounted percentages of the Series B Effective Price decreasing
from 80% to 75% over time. During 1999, 5,200 shares were converted into
1,888,639 shares of common stock. During 2000, 1,900 shares were converted into
973,555 shares of common stock. During 2001, 400 shares were converted into
232,290 shares of common stock.

     On August 21, 1997, the Company sold 7,500 shares of Series C for $750,000
and issued a warrant to purchase 25,000 shares of common stock at $7.4609 per
share. The warrants expired on August 21, 2000. The Series C was converted into
common stock at a conversion price equal to the lesser of 125% of the five-day
average of the closing bid price of the common stock or discounted percentages,
ranging from 80% to 74% over time, of the current five-day average closing bid
price of the common stock. The Series C has a stated dividend of $7.00 per share
per annum. During 1999, the balance of 2,882 shares was converted into 2,145,219
shares of common stock.

     Effective December 31, 1997, the Company issued an 8% debenture due April
19, 2009 for $328,500 to settle certain penalties related to delayed
registration of the Series C. The debenture was payable in common stock at the
average trading value of common stock, for the five trading days preceding the
conversion date. In 1999, this debenture was converted into 952,644 shares of
common stock.

                                       37
<PAGE>

     In March 1998, the Company sold 15,000 shares of Series D for $1,500,000.
The conversion price was 85% of the average closing bid price for five trading
days prior to the conversion. During 1999, the balance of 5,000 shares of Series
D was converted into 1,955,999 shares of common stock.

     In March 1998, the Company issued 10,500 shares of Series E and 1,500
shares of Series F in connection with its acquisition of GDI (see Note 2). The
Series E and F were convertible into common stock at the market price on the
date of conversion. On March 14, 2001, pursuant to a settlement agreement, the
Company agreed to issue 3,110,000 shares of common stock and pay $105,000 in
cash in settlement of its obligations pertaining to the Series E and Series F.

     In 1997, the Company issued 6,500 shares of Series G in settlement of
$650,000 of accrued expenses. These shares were convertible into common stock at
the market price. The balance of 5,500 shares of Series G were converted into
300,000 shares of common stock in 1999.

     In 1998, the Company sold 19,000 shares of Series H for $1,900,000. The
Series H was convertible after a twelve month holding period into common stock
based on 67% the average closing bid price for the preceding five days. During
1999, 17,100 shares were converted into 4,806,404 shares of common stock. There
were no conversions of Series H in 2000. During 2001, the balance of 650 shares
was converted into 350,200 shares of common stock.

     In May and June 1999, the Company received $3,000,000 from the issuance of
3,000 shares of Series I to various unaffiliated investors. The Series I was
convertible into common stock at 80% of the average of the closing bid price for
the three selected closing bids of the five trading days immediately preceding
any conversion date. The Company issued three-year warrants to purchase 165,652
shares of common stock at $0.91 per share and 34,722 shares of common stock at
$0.396 per share in connection with this financing. The Company valued these
warrants at $52,117. During 1999, 2,026 shares were converted into 6,409,550
shares of common stock. During 2000, the balance of Series I was converted into
4,314,775 shares of common stock.

     In July 1999, the Company received $1,000,000 from the issuance of 1,000
shares of Series J to an unaffiliated investor. The Series J was convertible
into common stock at 80% of the average closing bid price for the five trading
days immediately preceding the conversion notice. During April and May 2000, the
Company received an additional $500,000 through the sale of 500 shares of its
Series J. The Company incurred $50,000 in expenses related to this financing.
During 2000, the Series J was converted into 4,755,364 shares of common stock.

     In August, September and November, 1999, the Company received $2,000,000
from the issuance of 20,000 shares of Series K to various unaffiliated
investors. The Series K was convertible into common stock at 80% of the average
price for the three days immediately preceding the conversion notice. The
conversion price decreased to 75% and then to 70% over time. During 2000, 13,500
shares were converted into 8,309,232 shares of common stock. During 2001, 6,500
shares were converted into 5,240,405 shares of common stock.

     In November 1999, the Company issued 10,000 shares of Series L in exchange
for the cancellation of $750,000 of senior subordinated debt. The Series L is
convertible into common stock having a value upon conversion of $750,000 plus
dividends accruing at the rate of 13.5% per annum. In November 2000, 3,240
shares of Series L were converted into 1,110,000 shares of common stock. In
January 2002, the balance of Series L was converted into 1,448,340 shares of
common stock.

     During July 2000, the Company received net proceeds of $1,220,000 from the
sale of Series M to an investor. The Company incurred $590,000 in expenses
related to the completion of this financing. In addition, the Company converted
a $750,000 bridge loan received during the second quarter from the same investor
into Series M. The Company issued 25,600 shares of Series M at $100 per share in
exchange for the total proceeds of $2,560,000. The Series M carried a dividend
of 4% and was convertible into common stock at 80% of the average of the three
lowest prices per share during the five consecutive trading days prior to
conversion. During 2000, 12,750 shares were converted into 6,886,792 shares of
common stock. During 2001, 12,850 shares were converted into 8,435,351 shares of
common stock.

                                       38
<PAGE>

     On November 2, 2000, the Company received net proceeds of $781,685 from the
sale of its Series N to an investor after expenses of $168,315. In addition, the
Company converted a $350,000 bridge loan received during the third quarter from
the same investor into Series N. The Company issued 13,000 shares of Series N at
$100 per share in exchange for the total proceeds of $1,300,000. The Series N
does not carry a dividend and was convertible into common stock at 80% of the
five day average price per share immediately preceding the conversion date if
the conversion occurs between sixty-one days and one hundred and twenty-one days
after the issue date. This conversion price decreased to 75% if conversion
occurs after one hundred and twenty-one days. During 2001, 12,950 shares of
Series N were converted into 6,379,925 shares of common stock. In December 2001,
the Company redeemed 50 shares of Series N for $6,666.

     On February 15, 2001, the Company entered into an exchange and purchase
agreement with equity investors of RxBazaar. The agreement gave the RxBazaar
investors the right to exchange shares of RxBazaar's Series A Preferred Stock
for shares of the Company's Series O. RxBazaar issued a total of $4,700,000 of
Series A Preferred Stock to the equity investors. On February 22, 2001, an
investor converted $1,000,000 of Series A Preferred Stock into $1,000,000 of
Series O of the Company. The Series A Preferred Stock used to effect the
exchange was immediately redeemed by RxBazaar for $950,000. In March 2001, the
investors exchanged the remaining $3,700,000 of Series A Preferred Stock plus
accrued dividends for $3,720,000 of Series O.

     The Series O Preferred Stock carries an 8% dividend and was convertible to
common stock at the lesser of $0.35 per share or 75% of the average of the three
lowest per share prices in the ten consecutive trading days prior to conversion
during the first 149 days and 70% on or after 150 days. The Company registered
the common stock issuable on conversion in September 2001. In June 2001, the
Company received an additional $250,000 from the sale of 2,500 shares of its
Series O Preferred stock from an investor. During 2001, 34,122 shares of Series
O were converted into 21,110,582 shares of common stock. In December 2001, the
company redeemed 15,578 shares of Series O for $2,081,752.

     In May and June 2001, the Company received $350,000 from the sale of 3,500
shares of its Series P. The Series P consists of 20,000 authorized shares priced
at $100 each. The Series P was convertible on or after six months from the date
of the investment at 80% of the average of the three-day closing bid price
ending on the day prior to the conversion notice. The Series P Preferred stock
does not carry any dividend. During 2001, the 3,500 shares were converted into
1,400,000 shares of common stock and the Company registered these shares on
February 14, 2002.

     In August 2001, the Company sold 61,150 shares of its Series Q at $100 per
share for $6,115,000 in cash and conversion of outstanding debt. Net proceeds
were $5,702,220 after placement costs of $412,780. The Company also issued a
five year warrant to purchase 200,000 shares of common stock at $0.25 per share
to the placement agent. The Company valued these warrants at $34,000. The Series
Q carries an 8% dividend and is convertible to common stock as a group into the
number of shares equal to the product of (a) the quotient obtained by dividing
(i) the number of outstanding shares of Common Stock (assuming conversion of all
outstanding floating rate convertible securities other than the Series Q) by
(ii) 0.75, times (b) 0.25. The conversion ratio for the Series Q is subject to
fluctuation since the number of shares issuable assumes conversion of all
outstanding shares of the Series L, N, O, and P convertible preferred stock and
the number of shares issuable upon conversion of such securities is based on a
percentage of the average closing price of the common stock for a specified
period prior to the date of conversion. After all of the shares of Series L, N,
O, and P preferred stock have been converted or redeemed, the conversion ratio
of the Series Q Preferred will be fixed. In January 2002, the conversion ratio
was fixed at 880.52 shares of common stock for each share of Series Q.

     The Company has agreed to register the shares of common stock issuable on
conversion of the Series Q. As long as at least 50% of the shares of Series Q
originally issued remain outstanding, during any period in which one or more
conditions described below shall exist, the holders of Series Q are entitled to
elect a majority of the directors of the Company. The conditions include: (1)
default on any material amount of indebtedness, (2) failure to convert the
Series Q in accordance with its terms, and (3) failure of the Company to report
positive operating profits for any two fiscal quarters during any fiscal year
beginning January 1, 2002.

                                       39
<PAGE>
     Certain series of preferred stock have conversion features that were in the
money at the date of issue ("beneficial conversion feature"). These securities
convert into common stock at the discount percentages specified above. The
beneficial conversion features were recognized and measured in the financial
statements by allocating a portion of the proceeds equal to the intrinsic value
of the conversion feature to additional paid-in capital. The intrinsic value was
calculated at the date of issue of the convertible preferred stock as the
difference between the conversion price and the fair value of the common stock
into which the securities are convertible, multiplied by the number of shares
into which the security is convertible. A summary of the amounts allocated to
the beneficial conversion feature is as follows:

                                              Years Ended December 31,
                                    -------------------------------------------
     Convertible Preferred Stock       2001             2000            1999
     ---------------------------    ----------      -----------      ----------
     Series H                       $       --      $        --      $  245,377
     Series I                               --               --         750,000
     Series J                               --          125,000         250,000
     Series K                               --          310,476         500,000
     Series M                               --          640,000              --
     Series N                          216,666          216,666              --
     Series O                        2,117,720               --              --
     Series P                           87,500               --              --
     Series Q                        6,115,000               --              --
                                    ----------      -----------      ----------
                                    $8,536,886      $ 1,292,142      $1,745,377
                                    ==========      ===========      ==========

     The discount resulting from the allocation of proceeds to the beneficial
conversion feature is analogous to a dividend and has been recognized as a
return to the preferred shareholders from the date of issuance through the date
the security is first convertible. The discounts for 2001, 2000 and 1999 were
amortized by a charge against additional paid-in capital because the Company had
no accumulated earnings at those dates. The amortization of the discount has
been reflected as a return to the preferred shareholders in the calculation of
basic earnings per share.

COMMON STOCK

     On May 9, 2001, the stockholders approved an amendment to our certificate
of incorporation to increase the number of shares of authorized common stock
from 125,000,000 to 225,000,000 shares.

     In December 2001, the Company sold 21,095,000 shares of common stock at
$0.24 per share for gross proceeds of $5,062,800 with commissions and expenses
of $379,513. The market price of the common stock was $0.29 per share, or an
aggregate fair value of approximately $6,118,000, on the closing date. The
company recorded a distribution on the difference between the fair market value
and the proceeds of $1,055,200, which was charged to additional paid-in capital.
The Company registered these shares on February 14, 2002.

STOCK OPTION PLANS

     The Company has adopted three stock option plans and reserved shares of
common stock for issuance to employees, officers, directors and consultants. Two
of the plans were terminated during 2001. Under the plans, the Board of
Directors may grant options, and establish the terms of the grant in accordance
with the provisions of the plans. Plan options are exercisable for up to ten
years from the date of issuance and certain options contain a net exercise
provision. The following table summarizes the activity of options granted under
the plans:
                                       40
<PAGE>
<TABLE><CAPTION>
                                                                          Years Ended December 31,
                                            ---------------------------------------------------------------------------------
                                                       2001                        2000                        1999
                                            -------------------------   -------------------------   -------------------------
                                                            Weighted                    Weighted                    Weighted
                                                             Average                     Average                     Average
                                                            Exercise                    Exercise                    Exercise
                                               Shares         Price        Shares         Price        Shares         Price
                                            ------------   ----------   ------------   ----------   ------------   ----------
<S>                                         <C>            <C>          <C>            <C>          <C>            <C>
Outstanding at beginning of year               1,002,200    $    0.14      1,397,500    $    0.21      1,205,800    $    0.37
Granted                                               --           --             --           --        245,000         0.17
Exercised                                        (40,000)        0.01       (380,000)        0.13        (28,500)        0.19
Canceled                                        (100,200)        0.21        (15,300)        6.46        (24,800)        7.86
                                            ------------                ------------                ------------
Outstanding at end of year                       862,000         0.13      1,002,200         0.14      1,397,500         0.21
                                            ============                ============                ============
Exercisable at end of year                       862,000         0.13      1,002,200         0.14      1,397,500         0.21
                                            ============                ============                ============
Reserved for future grants at end of year      1,205,000                   1,282,830                   1,188,130
                                            ============                ============                ============
Weighted average fair value of options
 granted during the year                                           --                          --                        0.10
</TABLE>

                       Options Outstanding and Exercisable
                       -----------------------------------
                                                           Weighted Average
Exercise Prices              Number Outstanding             Remaining Life
---------------              ------------------            ----------------
     $.10                          12,000                       3 years
     $.13                         800,000                     6.2 years
     $.20                          50,000                     6.2 years
                                 --------
                                  862,000
                                 ========

CONSULTANT STOCK PLAN

     The Company adopted the Consultant Stock Plan in June 1998 which provides
for stock grants for services rendered to the Company. The Company reserved
2,500,000 shares of common stock for issuance and registered the shares. During
2001, 2000 and 1999, the Company issued 180,000, 40,000 and 240,000 shares of
common stock under this Plan. The Company recorded expenses in 2001, 2000 and
1999 based on the fair value of the common stock issued. At December 31, 2001,
the Company has 653,500 shares reserved under this plan.

OTHER STOCK OPTIONS AND WARRANTS

     On December 29, 1998, the Company issued a warrant to purchase 1,200,000
shares of common stock at $.375 per share through December 29, 2003 in
consideration of services rendered by an investment banker. These warrants were
valued at $4,664 and charged to expense in 1999.

     In February 1999, the Company granted 1,500,000 non qualified stock options
at $.01 per share to three directors which vested during 1999. These stock
options expire in five years. These options were valued at $330,000 and charged
to expense in 1999. In October 2000 an option for 250,000 shares was exercised
on a cashless basis resulting in the issuance of 197,778 shares of common stock.

     During the first quarter of 1999 the Company issued 5,330,000 non-qualified
stock options to employees. The stock options were issued at $0.25 per share and
are exercisable for a period of ten years. The vesting period of these options
is between twelve and thirty-six months. The fair value of these options was
$0.12 per share on the date of grant. One employee exercised 71,450 options upon
termination of his employment in 2000, and his remaining 428,550 options were
cancelled.

     In September 1999, the Company granted 9,750,000 non-statutory stock
options to four directors at $0.25 per share which vest in three installments in
September 1999, January 2000 and April 2000. These stock options expire in ten
years. The Company also granted a non-statutory stock option to purchase 500,000
shares of common stock at $0.25 per share to a director, which becomes
exercisable upon fulfillment of certain terms and conditions.

                                       41
<PAGE>

The fair value of these options was $0.13 per share on the date of grant. The
option to purchase 500,000 shares of common stock was cancelled upon
non-fulfillment of these conditions and the director received 325,000 shares
upon cashless exercise of his option to purchase 450,000 shares of common stock
in October 2000.

     In November 1999, the Company issued four warrants to purchase 500,000
shares of common stock at $0.38 per share in connection with a new line of
credit. The Company also issued three warrants to purchase 400,000 shares of
common stock at $.01 per share in connection with this refinancing. The value of
all these warrants totaling $188,562 was capitalized as debt financing costs in
1999. The Company issued 378,367 shares of common stock in a cashless exercise
of the three warrants during 2001.

     In February 2000, the Company issued several warrants to purchase 197,500
shares of common stock at $0.25 per share in connection with investment banking
services. The value of these warrants $49,375 was charged to expense.

     In April 2000, the Company issued options to purchase 500,000 shares of
common stock at $.25 per share to two new directors. Half of these options
vested in the year 2000 and the balance vest by December 31, 2001. The Company
valued these options at $140,000 and recognized $70,000 in expense in 2000 and
$70,000 in expense in 2001.

     In May 2000, the Company issued options to purchase 1,000,000 shares of
common stock at $.18 per share to two directors. These options vest over eight
installments and are fully vested by December 31, 2001. The Company valued these
options at $170,000 and recognized $85,000 in expense in 2000 and $85,000 in
expense in 2001.

     In October 2000, the Company issued options to purchase 1,600,000 shares of
common stock at $.13 per share to two directors. These shares vested in full at
the date of the grant. The Company valued these options at $193,500 and expensed
them in 2000.

     In 2000, the Company granted stock options to purchase a total of 1,270,000
shares of common stock to employees at $0.25 per share. These options vest over
periods of three to four years. The weighted average fair value of these options
was $0.11 per share on the date of grant.

     In February 2001, the Company issued warrants to purchase a total of
150,000 shares of common stock at $.17 per share in connection with public
relations services. The Company also issued a warrant to purchase 100,000 shares
of common stock at $.30 per share for certain investor relations services. The
Company valued these warrants at $32,149 and expensed them in 2001.

     In February 2001, the Company granted seven year options to purchase a
total of 11,250,000 shares of common stock at $.22 per share to its directors.
These options vested during 2001. The weighted average fair value of these
options was $0.07 per share on the date of grant.

     In 2001, the Company granted stock options to purchase 3,630,000 shares of
common stock at $0.25 per share to forty employees. These options vest over
periods of one to five years. The Company recognized expense of $114,403 in 2001
related to these grants. The weighted average fair value of these options was
$0.16 per share on the date of grant.

     A summary of the activity for other stock option and warrant shares,
including warrants issued in connection with debt and equity placements, is
presented below:

                                         2001           2000           1999
                                     ------------   ------------   ------------
Outstanding at beginning of year       28,122,218     26,080,218      6,528,000
Granted                                15,330,000      4,667,500     19,937,718
Exercised                                (710,000)    (1,631,950)      (350,000)
Expired/Cancelled                      (1,687,000)      (993,550)       (35,500)
                                     ------------   ------------   ------------
Outstanding at end of year             41,055,218     28,122,218     26,080,218
                                     ============   ============   ============

                                       42
<PAGE>

     Information pertaining to other stock options and warrants outstanding at
December 31, 2001 is as follows:

                              Outstanding                     Exercisable
                  ------------------------------------  ------------------------
                                 Weighted    Weighted                  Weighted
                                  Average     Average                   Average
   Range of          Number      Remaining   Exercise      Number      Exercise
Exercise Prices    Outstanding     Life        Price     Exercisable     Price
----------------  ------------  ----------  ----------  ------------  ----------
$0.01 - $0.19        6,350,000   7.5 years     $0.13       6,350,000     $0.13
$0.20 - $0.29       31,312,500   8.5 years     $0.24      28,211,500     $0.24
$0.30 - $0.75        1,984,722   2.5 years     $0.37       1,984,722     $0.37
$0.75 - $1.50        1,298,996   7.0 years     $0.92       1,298,996     $0.92
$1.51 - $19.40         109,000   1.5 years    $18.94         109,000    $18.94
                  ------------                          ------------
                    41,055,218   7.9 years     $0.30      37,954,218     $0.30
                  ============                          ============

STOCK-BASED COMPENSATION

     At December 31, 2001, the Company has one stock-based compensation plan and
stock options issued outside of the plans, which are described above. The
Company applies APB Opinion No. 25 and related Interpretations in accounting for
stock options issued to employees and directors. Had compensation cost for the
Company's stock options issued to employees and directors been determined based
on the fair value at the grant dates consistent with SFAS No. 123, the Company's
net loss and net loss per share would have been adjusted to the pro forma
amounts indicated below:

                                        Years Ended December 31,
                          --------------------------------------------------
                               2001              2000              1999
                          --------------    --------------    --------------
Net loss:
  As reported             $  (4,472,907)    $  (8,451,651)    $  (8,151,318)
  Pro forma               $  (5,704,372)    $  (8,694,697)    $  (8,781,397)

Net loss per share:
  As reported             $       (0.10)    $       (0.13)    $       (0.20)
  Pro forma               $       (0.11)    $       (0.13)    $       (0.21)


     Common stock equivalents have been excluded from all calculations of net
loss per share because the effect of including them would be anti-dilutive.

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants during 2001, 2000 and 1999, respectively; dividend
yield of 0%; risk-free interest rates of 5%; expected volatility of 84%, 108%
and 87%; and expected lives of 1.25, 0.5 and 0.5 years.

                                       43
<PAGE>

COMMON STOCK RESERVED

The Company has reserved common stock at December 31, 2001 as follows:

                                            Number of Shares
                                            ----------------
     Stock option plans                          2,067,000
     Preferred stock conversion                 55,292,647
     Other stock options and warrants           41,055,218
     Consultants Stock Plan                        653,500
                                              ------------
                Total                           99,068,365
                                              ============


     At December 31, 2001 the Company has 225,000,000 shares of authorized
common stock of which 169,529,646 shares are outstanding. The Company only has
55,470,354 shares available which is less than the total common stock reserved.
The number of shares of common stock reserved in connection with the convertible
preferred stock is subject to adjustment. The Company will seek stockholder
approval at its annual meeting to resolve this issue.

11. SEGMENT INFORMATION, MAJOR CUSTOMERS AND MAJOR SUPPLIERS

     The Company operates in one principal business segment, the manufacturing
and distribution of generic pharmaceuticals which accounts for over 90% of the
Company's consolidated assets, revenues and operating losses. During 2001,
approximately 34% and 20% of net sales were from two major customers. There were
no major customers for 2000 and 1999.

     During 2001, the Company had one major supplier which provided the Company
with $3,286,000 of raw materials or 26% of cost of sales.

12. EMPLOYEE BENEFIT PLAN

     The Company has a Section 401(k) Profit Sharing Plan (the "401(k) Plan")
for all employees. Employees who have attained the age of 21 may elect to reduce
their current compensation, subject to certain limitations, and have that amount
contributed to the 401(k) Plan. The Company matches up to 25% of employee
contributions not to exceed 6% of employee compensation, subject to certain
limitations. Employee contributions to the 401(k) Plan are fully vested at all
times and all Company contributions become vested over a period of five years.

     For 2001, 2000 and 1999 the Company matched $44,426, $53,659 and $29,606,
respectively. The Company did not make any profit-sharing contributions in 2001,
2000 or 1999.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

     At December 31, 2001 and 2000, the Company's financial instruments include
notes receivable (see Note 7), investment in RxBazaar securities (see Note 2)
and debt obligations (see Note 6). The carrying value of the notes receivable
approximate their fair value as these instruments bear interest and mature in
less than one year. The carrying value of the Company's investment securities in
RxBazaar have been estimated based on the most recent sale of common stock by
RxBazaar at December 31, 2001. The carrying value of debt obligations
approximate fair values based on their maturities and interest rates.

                                       44
<PAGE>

14. QUARTERLY DATA (UNAUDITED)
<TABLE><CAPTION>
                                                                        Years Ended December 31,
                                       --------------------------------------------------------------------------------------------
                                                            2001                                           2000
                                       --------------------------------------------------------------------------------------------
                                        Fourth       Third      Second       First      Fourth       Third      Second       First
                                        Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter
                                       --------    --------    --------     -------     -------     -------     -------     -------
                                                                   (In thousands, except per share data)

<S>                                    <C>         <C>         <C>          <C>         <C>         <C>         <C>         <C>
Sales, net                             $  7,066    $  5,071    $  3,531     $ 3,926     $ 6,764     $ 8,591     $ 7,979     $ 8,122
Cost of sales                             4,056       2,998       2,848       2,631       5,792       7,775       6,048       6,096
                                       --------    --------    --------     -------     -------     -------     -------     -------
      Gross profit                        3,010       2,073         683       1,295         972         816       1,931       2,026
Selling, general and administrative      (1,646)     (1,352)     (1,093)     (1,818)     (3,609)     (2,089)     (2,437)     (1,831)
Research and development                   (816)       (527)       (570)       (440)       (878)       (446)       (760)       (308)
                                       --------    --------    --------     -------     -------     -------     -------     -------
      Operating income (loss)               548         194        (980)       (963)     (3,515)     (1,719)     (1,266)       (113)
Loss on investment securities            (2,680)         --          --         (50)         --          --          --          --
Loss on sale of subsidiary                   --          --          --          --        (314)         --          --          --
Interest and financing expense             (170)       (141)       (279)       (487)       (609)       (577)       (524)       (447)
Miscellaneous income (expense)              (52)        427         124          36        (170)         30         757          15
                                       --------    --------    --------     -------     -------     -------     -------     -------
      Net income (loss)                  (2,354)        480      (1,135)     (1,464)     (4,608)     (2,266)     (1,033)       (545)
Less returns to preferred
  stockholders                             (219)     (6,723)       (291)     (1,827)       (253)       (826)       (326)        (38)
                                       --------    --------    --------     -------     -------     -------     -------     -------
Net loss applicable to common stock    $ (2,573)   $ (6,243)   $ (1,426)    $(3,291)    $(4,861)    $(3,092)    $(1,359)    $  (583)
                                       ========    ========    ========     =======     =======     =======     =======     =======
Net loss per share-basic               $  (0.02)   $  (0.05)   $  (0.01)    $ (0.03)    $ (0.05)    $ (0.04)    $ (0.02)    $ (0.01)
                                       ========    ========    ========     =======     =======     =======     =======     =======
Weighted average shares outstanding     146,511     131,276     114,767     107,181      90,169      78,833      71,302      66,267
                                       ========    ========    ========     =======     =======     =======     =======     =======
</TABLE>
                                       45
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

     The information required by this item in connection with directors and
officers is hereby incorporated by reference to the information set forth under
the captions "Election of Directors," "Executive Officers" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in our definitive proxy statement for
the 2002 annual meeting of stockholders, which we expect to file on or before
April 30, 2002 (the "2002 Annual Meeting Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item with respect to executive
compensation is hereby incorporated by reference to the information set forth
under the caption "Executive Officer Compensation" in the 2002 Annual Meeting
Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item with respect to security ownership is
hereby incorporated by reference to the information set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the 2002
Annual Meeting Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item with respect to certain relationships
and related transactions is hereby incorporated by reference to the information
set forth under the caption "Certain Relationships and Related Transactions" in
the 2002 Annual Meeting Proxy Statement.

                                       46
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  Financial Statements

        See Item 8 for an index to the consolidated financial statements.

(b)  Exhibits

        The following exhibits are filed as part of this report:

    EXHIBIT
     NUMBER       DESCRIPTION

      3.1         Restated Certificate of Incorporation (filed as Exhibit 3a to
                  the Company's Report on Form 10-Q for the quarter ended June
                  30, 1998, as amended on September 14, 1998, and incorporated
                  herein by reference).

      3.2         Certificate of Amendment of Certificate of Incorporation dated
                  May 31, 2000 (filed as Exhibit 3.2 to the Company's Report on
                  Form 10-QSB for the quarter ended June 30, 2000 and
                  incorporated herein by reference).

      3.3         Amended and Restated By-laws dated as of May 26, 2000 (filed
                  as Exhibit 3.3 to the Company's Report on Form 10-QSB for the
                  quarter ended June 30, 2000 and incorporated herein by
                  reference).

      3.4         Certificate of Designations, Preferences and Rights of Series
                  Q Preferred Stock of Able Laboratories, Inc. (filed as Exhibit
                  4.1 to the Company's Current Report on Form 8-K filed August
                  31, 2001 and incorporated by reference).

      3.5         Certificate of Amendment of Certificate of Incorporation dated
                  May 9, 2001 (filed as Exhibit 3.3 to the Company's Report on
                  Form 10-QSB for the quarter ended June 30, 2001 and
                  incorporated herein by reference).

      3.6         Certificate of Ownership and Merger dated May 18, 2001 (filed
                  as Exhibit 99.1 to the Company's Current Report on Form 8-K
                  dated May 18, 2001 and incorporated herein by reference).

      4.1         Specimen common stock certificate (filed as Exhibit 4a to
                  Registrant's Registration Statement on Form S-18, No.
                  33-31836-B, and incorporated by reference).

      4.2         Contingent Stock Purchase Warrant dated February 23, 2001,
                  issued by DynaGen, Inc. to FINOVA Mezzanine Capital Inc.
                  (filed as Exhibit 4.1 to the Company's Current Report on Form
                  8-K dated March 9, 2001, and incorporated herein by
                  reference.)

      4.3         Contingent Stock Purchase Warrant dated February 23, 2001,
                  issued by DynaGen, Inc. to Argosy Investment Partners, L.P.
                  (filed as Exhibit 4.2 to the Company's Current Report on Form
                  8-K dated March 9, 2001, and incorporated herein by
                  reference.)

      4.4         Secured Promissory Note dated February 23, 2001, issued by
                  DynaGen, Inc. to FINOVA Mezzanine Capital Inc. in the
                  principal amount of $500,000 (filed as Exhibit 4.3 to the
                  Company's Current Report on Form 8-K dated March 9, 2001, and
                  incorporated herein by reference.)

      4.5         Secured Promissory Note dated February 23, 2001, issued by
                  DynaGen, Inc. to Argosy Investment Partners, Inc. in the
                  principal amount of $250,000 (filed as Exhibit 4.3 to the
                  Company's Current Report on Form 8-K dated March 9, 2001, and
                  incorporated herein by reference.)

                                       47
<PAGE>

     10.1         *1998 Stock Option Plan (filed as Appendix A to the
                  Registrant's definitive proxy materials for the Special
                  Meeting of Stockholders on March 4, 1998, and incorporated by
                  reference).

     10.2         *Employment Agreement dated November 1, 1991 by and between
                  the Company and Dhananjay G. Wadekar (filed as Exhibit 10d to
                  Registrant's Registration Statement on Form S-18, No.
                  33-31836-B, and incorporated by reference).

     10.3         *Amendment 1 to Employment Agreement by and between the
                  Company and Dhananjay G. Wadekar (filed as Exhibit 10c to
                  Registrant's Registration Statement on Form S-1, No. 33-71416,
                  and incorporated by reference).

     10.4         Lease Agreement dated November 29, 1984 between Hollywood
                  Court Associates and Able Laboratories, Inc. with respect to
                  the Company's facility at 6 Hollywood Court, South Plainfield,
                  New Jersey (filed as Exhibit 10d to Registrant's Annual Report
                  on Form 10-K for the fiscal year ended June 30, 1996, and
                  incorporated by reference).

     10.5         Space Expansion and Term Extension Agreement dated April 1988
                  between Hollywood Court. Associates and Able Laboratories,
                  Inc. with respect to the Company's facility at 6 Hollywood
                  Court, South Plainfield, New Jersey (filed as Exhibit 10d to
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended June 30, 1996, and incorporated by reference).

     10.6         Assignment of Lease dated April 1989 between Hollywood Court
                  Associates and CVN Associates L.P. with respect to the
                  Company's facility at 6 Hollywood Court, South Plainfield, New
                  Jersey (filed as Exhibit 10d to Registrant's Annual Report on
                  Form 10-K for the fiscal year ended June 30, 1996, and
                  incorporated by reference).

     10.7         Space Expansion Agreement dated June 1993 between CVN
                  Associates, L.P. and Able Laboratories, Inc. with respect to
                  the Company's facility at 6 Hollywood Court, South Plainfield,
                  New Jersey (filed as Exhibit 10v to Registrant's Annual Report
                  on Form 10-K for the fiscal year ended June 30, 1996, and
                  incorporated by reference).

     10.8         Term Extension Agreement dated June 1993 between CVN
                  Associates, L.P. and Able Laboratories, Inc. with respect to
                  the Company's facility at 6 Hollywood Court, South Plainfield,
                  New Jersey (filed as Exhibit 10d to Registrant's Annual Report
                  on Form 10-K for the fiscal year ended June 30, 1996 and
                  incorporated by reference).

     10.9         Assignment of Lease dated August 19, 1996 between Able
                  Laboratories, Inc. and Able Acquisition Corp. (predecessor
                  corporation to Able) with respect to the Company's facility at
                  6 Hollywood Court, South Plainfield, New Jersey (filed as
                  Exhibit 10d to Registrant's Annual Report on Form 10-K for the
                  fiscal year ended June 30, 1996, and incorporated by
                  reference).

    10.10         Guaranty of Lease dated August 19, 1996 between the Company
                  and Able Laboratories, Inc. with respect to the Company's
                  facility at 6 Hollywood Court, South Plainfield, New Jersey
                  (filed as Exhibit 10d to Registrant's Annual Report on Form
                  10-K for the fiscal year ended June 30, 1996, and incorporated
                  by reference).

    10.11         Term Extension Agreement dated August 28, 1997 between CVN
                  Associates, Inc., and Able Laboratories, Inc. with respect to
                  the Company's facility at 6 Hollywood Court, South Plainfield,
                  New Jersey (filed as Exhibit 10ii to the Registrant's Report
                  on Form 10-K for the Year Ended December 31, 1997, and
                  incorporated by reference).

    10.12         *Stock Option in the name of Dhananjay G. Wadekar, dated
                  November 19, 1998. (filed as Exhibit 10.80 to the Company's
                  Annual Report on Form 10-KSB for the fiscal year ended
                  December 31, 1998).

                                       48
<PAGE>

    10.13         *Stock Option in the name of C. Robert Cusick, dated November
                  19, 1998. (filed as Exhibit 10.81 to the Company's Annual
                  Report on Form 10-KSB for the fiscal year ended December 31,
                  1998).

    10.14         Consultant Stock Plan (filed as Exhibit 4.3 to the Company's
                  Registration Statement on Form S-8, File No. 33-57249, filed
                  on June 19, 1998 and incorporated hereby by reference).

    10.15         *Stock Option in the name of C. Robert Cusick, dated February
                  4, 1999 (filed as Exhibit 10.7 to the Company's Report on Form
                  10-QSB for the quarter ended March 31, 1999).

    10.16         *Stock Option in the name of Dhananjay Wadekar, dated February
                  4, 1999 (filed as Exhibit 10.8 to the Company's Report on the
                  Form 10-QSB for the quarter ended March 31, 1999).

    10.17         *Stock Option in the name of Howard Schneider, dated November
                  19, 1998 (filed as Exhibit 10.10 to the Company's Report on
                  Form 10-QSB for the quarter ended March 31, 1999).

    10.20         Loan Agreement between Able Laboratories, Inc. and New Jersey
                  Economic Development Authority dated June 1, 1999 (filed as
                  Exhibit 10.8 to the Company's Report on Form 10-QSB for the
                  quarter ended June 30, 1999).

    10.21         $2,000,000 Promissory Note of Able Laboratories, Inc. dated
                  June 1, 1999 (filed as Exhibit 10.9 to the Company's Report on
                  Form 10-QSB for the quarter ended June 30, 1999).

    10.22         Leasehold Mortgage Security Agreement, Assignment of Rents and
                  Financing Statement dated June 1, 1999 (filed as Exhibit 10.10
                  to the Company's Report on Form 10-QSB for the quarter ended
                  June 30, 1999).

    10.23         Guaranty of DynaGen, Inc. dated June 1, 1999 in favor of New
                  Jersey Economic Development Authority (filed as Exhibit 10.11
                  to the Company's Report on Form 10-QSB for the quarter ended
                  June 30, 1999).

    10.24         *Stock Option in the name of Dhananjay G. Wadekar, dated
                  October 13, 2000 (filed as Exhibit 10.1 to the Company's
                  Report on Form 10-QSB for quarter ended September 30, 2000,
                  and incorporated herein by reference).

    10.25         *Stock Option in the name of Harry Silverman, dated April 20,
                  2000.

    10.26         *Stock Option in the name of Harry Silverman, dated May 31,
                  2000.

    10.27         *Stock Option in the name of James B. Klint, dated April 20,
                  2000.

    10.28         *Stock Option in the name of James B. Klint, dated May 31,
                  2000.

    10.29         *Stock Option in the name of C. Robert Cusick, dated February
                  24, 2001 (filed as Exhibit 10.1 to the Company's Report on
                  Form 10-Q for the quarter ended March 31, 2001, and
                  incorporated herein by reference).

    10.30         *Stock Option in the name of James Klint, MD, dated February
                  24, 2001 (filed as Exhibit 10.2 to the Company's Report on
                  Form 10-Q for the quarter ended March 31, 2001, and
                  incorporated herein by reference).

    10.31         *Stock Option in the name of F. Howard Schneider, dated
                  February 24, 2001 (filed as Exhibit 10.3 to the Company's
                  Report on Form 10-Q for the quarter ended March 31, 2001, and
                  incorporated herein by reference).

    10.32         *Stock Option in the name of Harry Silverman, dated February
                  24, 2001 (filed as Exhibit 10.4 to the Company's Report on
                  Form 10-Q for the quarter ended March 31, 2001, and
                  incorporated herein by reference).

                                       49
<PAGE>

    10.33         *Stock Option in the name of Dhananjay Wadekar, dated February
                  24, 2001 (filed as Exhibit 10.5 to the Company's Report on
                  Form 10-Q for the quarter ended March 31, 2001, and
                  incorporated herein by reference).

    10.34         First Amended and Restated Loan Agreement dated February 23,
                  2001, among DynaGen Inc., RxBazaar.com, Inc., Superior
                  Pharmaceutical Company, Argosy Investment Partners, L.P. and
                  FINOVA Mezzanine Capital Inc. (filed as Exhibit 99.2 to the
                  Company's Current Report on Form 8-K filed on March 9, 2001,
                  and incorporated herein by reference).

    10.35         Unconditional Guaranty dated February 23, 2001, among DynaGen,
                  Inc., Argosy Investment Partners, L.P. and FINOVA Mezzanine
                  Capital Inc. (filed as Exhibit 99.3 to the Company's Current
                  Report on Form 8-K filed on March 9, 2001, and incorporated
                  herein by reference).

    10.36         Credit Agreement dated February 23, 2001, among DynaGen, Inc.,
                  Argosy Investment Partners, L.P. and FINOVA Mezzanine Capital
                  Inc. (filed as Exhibit 99.4 to the Company's Current Report on
                  Form 8-K filed on March 9, 2001, and incorporated herein by
                  reference).

    10.37         Unconditional Guaranty dated February 23, 2001, among Able
                  Laboratories, Inc., Argosy Investment Partners, L.P. and
                  FINOVA Mezzanine Capital Inc. (filed as Exhibit 99.5 to the
                  Company's Current Report on Form 8-K filed on March 9, 2001,
                  and incorporated herein by reference).

    10.38         Security Agreement dated February 23, 2001, between Able
                  Laboratories, Inc. and FINOVA Mezzanine Capital Inc. (filed as
                  Exhibit 99.6 to the Company's Current Report on Form 8-K filed
                  on March 9, 2001, and incorporated herein by reference).

    10.39         Intercreditor Agreement dated February 21, 2001, among Triple
                  L Ltd., K&L Financial, Inc., Northway State Bank, FINOVA
                  Mezzanine Capital Inc., Argosy Investment Partners, L.P., U.S.
                  Bank Trust National Association and Able Laboratories, Inc.
                  (filed as Exhibit 99.7 to the Company's Current Report on Form
                  8-K filed on March 9, 2001, and incorporated herein by
                  reference).

    10.40         Assignment and Assumption Agreement dated February 23, 2001,
                  among DynaGen, Inc., Able Laboratories, Inc. and Superior
                  Pharmaceutical Company (filed as Exhibit 99.8 to the Company's
                  Current Report on Form 8-K filed on March 9, 2001, and
                  incorporated herein by reference).

    10.41         Asset Purchase Agreement dated February 16, 2001, between Able
                  Laboratories, Inc. and Triple L, Ltd. (filed as Exhibit 99.9
                  to the Company's Current Report on Form 8-K filed on March 9,
                  2001, and incorporated herein by reference).

    10.42         Equipment Lease Agreement dated February 16, 2001, between
                  Able Laboratories, Inc. and Triple L, Ltd. (filed as Exhibit
                  99.11 to the Company's Current Report on Form 8-K filed on
                  March 9, 2001, and incorporated herein by reference).

    10.43         Indemnity and Stock Issuance Agreement dated February 15,
                  2001, among DynaGen, Inc., Infusion Capital Investment
                  Corporation and Ocean Marketing Corporation (filed as Exhibit
                  99.12 to the Company's Current Report on Form 8-K filed on
                  March 9, 2001, and incorporated herein by reference).

    10.44         Guaranty and Pledge Agreement dated February 15, 2001, among
                  DynaGen, Inc., RxBazaar.com, Inc., Kenilworth LLC, Infusion
                  Capital Investment Corporation and Ocean Marketing Corporation
                  (filed as Exhibit 99.13 to the Company's Current Report on
                  Form 8-K filed on March 9, 2001, and incorporated herein by
                  reference).

    10.45         Bill of Sale dated December 29, 2000, between Generic
                  Distributors, Inc. and Louisiana Wholesale Drug Company, Inc.
                  (filed as Exhibit 99.14 to the Company's Current Report on
                  Form 8-K filed on March 9, 2001, and incorporated herein by
                  reference).

                                       50
<PAGE>

    10.46         Stock Purchase Agreement for Series Q Preferred Stock dated
                  August 15, 2001 (filed as Exhibit 4.2 to the Company's Current
                  Report on Form 8-K filed August 31, 2001 and incorporated by
                  reference).

    10.47         Registration Rights Agreement for Series Q Preferred Stock
                  dated August 15, 2001 (filed as Exhibit 4.3 to the Company's
                  Current Report on Form 8-K filed August 31, 2001 and
                  incorporated by reference).

    10.48         Common Stock Purchase Agreement dated December 15, 2001 (filed
                  as Exhibit 4.5 to the Company's Registration Statement on Form
                  S-3 filed on January 10, 2002, and incorporated by reference).

    10.49         Registration Rights Agreement dated December 15, 2001 (filed
                  as Exhibit 4.6 to the Company's Registration Statement on Form
                  S-3 filed on January 10, 2002, and incorporated by reference)

    10.50         Lease dated September 26, 2001, by and between Kennedy
                  Montrose, L.L.C. and the Company for property located at 3601
                  Kennedy Road, South Plainfield, New Jersey 07080 (filed as
                  Exhibit 10.3 to the Company's Report on Form 10-Q for the
                  quarter ended September 30, 2001, and incorporated by
                  reference).

     21.1         Subsidiaries of the Registrant

     23.1         Consent of Wolf & Co., P.C.

     24.1         Power of Attorney (contained on the signature page of this
                  Report.)
---------------------------
* Indicates a management contract or any compensatory plan, contract or
arrangement.


(b)  Reports on Form 8-K

     The Company did not file any current reports on Form 8-K during the fourth
quarter of fiscal 2001.

                                       51
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                       ABLE LABORATORIES, INC.

                                       By:  /s/ Dhananjay G. Wadekar
                                            -------------------------------
                                            Dhananjay G. Wadekar
                                            President, Chief Executive Officer
                                            and Treasurer

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated; and each of the undersigned officers and directors of Able
Laboratories, Inc. hereby severally constitutes and appoints Dhananjay G.
Wadekar his true and lawful attorney-in-fact and agent, with full power to him,
to sign for him, in his name in the capacity indicated below, all amendments to
such report on Form 10-K, hereby ratifying and confirming his signature as it
may be signed by his attorney to such report and any and all amendments thereto.

<TABLE><CAPTION>

     Signature                        Date                          Title
<S>                              <C>                     <C>

/S/ DHANANJAY G. WADEKAR         March 28, 2002          Chief Executive Officer, President,
------------------------                                 Treasurer and Director
DHANANJAY G. WADEKAR                                     (PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
                                                          FINANCIAL AND ACCOUNTING OFFICER)


/S/ JAMES B. KLINT               March 28, 2002          Director
------------------------
JAMES B. KLINT


/S/ HARRY SILVERMAN              March 28, 2002          Director
------------------------
HARRY SILVERMAN
</TABLE>

                                       52