2001
================================================================================

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

                               ------------------

                                    FORM 10-Q

                                   (Mark One)
     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

                                       OR

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

        For the transition period from ____________ to _________________

                           Commission File No. 0-21015

                      CELL TECH INTERNATIONAL INCORPORATED
             (Exact Name of Registrant as Specified in its Charter)

                Delaware                                  22-3345046
     (State or other Jurisdiction of                   (I.R.S. Employer
     Incorporation or Organization)                   Identification No.)

                    565 Century Court
                  KLAMATH FALLS, OREGON                      97601
           (Address of Principal Executive Offices)       (Zip Code)

       Registrant's Telephone Number, including Area Code: (541) 882-5406

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|.

      As of April 30, 2002, the number of shares outstanding of the registrant's
sole class of common stock, par value $0.01 per share was 10,640,895.

<PAGE>

                                TABLE OF CONTENTS

Part I - FINANCIAL INFORMATION................................................1

   ITEM 1. FINANCIAL STATEMENTS...............................................1
      Consolidated Balance Sheets.............................................1
      Consolidated Statements of Loss.........................................2
      (Unaudited).............................................................2
      Consolidated Statements of Cash Flows...................................3
      (Unaudited).............................................................3
      Notes to Consolidated Financial Statements..............................4
      Lien on Company Stock...................................................8
      Dispute Between Principal Shareholders..................................8

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
   CONDITION AND RESULTS OF OPERATIONS........................................9
      Overview...............................................................10
      Results of Operations..................................................11
      Three months ended March 31, 2001 compared with the three months
      ended March 31, 2000...................................................11
      Liquidity and Capital Resources........................................13
      Cash Flows.............................................................14
      Recent Financial Accounting Standards Board Statements.................14
      Special Note Regarding Forward-Looking Statements......................15

   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........16

PART II - OTHER INFORMATION..................................................17

   ITEM 1. LEGAL PROCEEDINGS.................................................17
   ITEM 2. CHANGES IN SECURITIES.............................................18
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................18
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............18
   ITEM 5. OTHER INFORMATION.................................................18
      Dispute Between Principal Shareholders.................................18
   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................19

   SIGNATURES................................................................26


                                       ii
<PAGE>

                      CELL TECH INTERNATIONAL INCORPORATED
                                AND SUBSIDIARIES

                         Part I - Financial Information

Item 1. Financial Statements

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                             (Unaudited)
                                                                              March 31,      December 31,
                                                                                2001             2000
                                                                             -----------     ------------
<S>                                                                          <C>             <C>
Assets

Current assets
   Receivables                                                               $   379,589     $   535,145
   Current portion of inventories                                              2,000,000       2,500,000
   Prepaid expenses                                                              771,486         845,855
                                                                             -----------     -----------
Total current assets                                                           3,151,075       3,881,000
                                                                             -----------     -----------
Property and equipment, net of accumulated depreciation                       12,947,151      13,560,986
Long-term inventories, net of current portion                                  8,810,673       8,675,999
Other assets                                                                   1,102,803       1,131,661
                                                                             -----------     -----------
Total assets                                                                 $26,011,702     $27,249,646
                                                                             ===========     ===========
Liabilities and Shareholders' Equity

Current liabilities
   Bank overdraft                                                            $ 1,350,178     $ 1,310,551
   Accounts payable                                                            3,140,217       2,897,684
   Commissions payable                                                         1,858,785       1,869,135
   Sales taxes payable                                                           102,178         112,988
   Accrued payroll and related liabilities                                       319,618         255,132
   Other accrued expenses                                                        942,041         923,321
   Current portion of long-term debt                                           2,442,998       2,862,683
   Related party payable                                                         877,266         741,470
                                                                             -----------     -----------
Total current liabilities                                                     11,033,281      10,972,964
                                                                             -----------     -----------
Long-term liabilities
   Long-term debt, net of current portion                                        261,660         261,660
                                                                             -----------     -----------
Total liabilities                                                             11,294,941      11,234,624
                                                                             -----------     -----------

Commitments and contingencies

Shareholders' equity
   Series A convertible preferred stock - no par value; 4,175,000 shares
     authorized; none issued and outstanding in 2001 and 2000                         --              --
   Series B convertible preferred stock - no par value; 800,000 shares
     authorized; none issued and outstanding in 2001 and 2000                         --              --
   Undesignated preferred stock - no par value; 1,825,000 shares
     authorized; none issued and outstanding in 2001 and 2000                         --              --
   Common stock - $.01 par value; in 2001 and 2000, 50,000,000 shares
     authorized, 10,640,895 and 10,640,895 shares issued and outstanding         106,409         106,409
   Additional paid-in capital                                                  2,299,696       2,299,696
   Retained earnings                                                          12,310,656      13,608,917
                                                                             -----------     -----------
Total shareholders' equity                                                    14,716,761      16,015,022
                                                                             -----------     -----------
Total liabilities and shareholders' equity                                   $26,011,702     $27,249,646
                                                                             ===========     ===========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       1
<PAGE>

                      CELL TECH INTERNATIONAL INCORPORATED
                                AND SUBSIDIARIES

                        Consolidated Statements of Loss

                                                          (Unaudited)
                                                   For the Three Months Ended
                                                           March 31,
                                                 ------------------------------
                                                     2001              2000
                                                 ------------      ------------

Revenue                                          $  8,062,064      $ 11,135,803

Cost of sales                                       2,578,332         3,012,768
                                                 ------------      ------------

Gross profit                                        5,483,732         8,123,034

Commissions                                         3,953,788         5,109,269
                                                 ------------      ------------

Selling profit                                      1,529,944         3,013,765

Shipping and handling expenses                        467,387           591,202

Selling expenses                                    1,126,770         1,415,927

Research and development                               69,583           142,447

General and administrative                            801,678         1,151,182
                                                 ------------      ------------

Operating loss                                       (935,474)         (286,993)

Other income                                           66,300           149,337

Interest expense, net                                (179,087)         (175,930)
                                                 ------------      ------------

Net loss before taxes                              (1,048,261)         (313,586)
                                                 ------------      ------------

Basic and diluted loss per share                 $      (0.10)     $      (0.03)
                                                 ============      ============

Weighted average number of common shares
   outstanding used to calculate basic and
   diluted loss per share                          10,640,895        10,640,895
                                                 ============      ============

          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                      CELL TECH INTERNATIONAL INCORPORATED
                                AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                            For the Three Months Ended
                                                                     March 31,
                                                           ----------------------------
                                                              2001             2000
                                                           -----------      -----------
<S>                                                        <C>              <C>
Cash flows from operating activities
   Net loss                                                $(1,048,261)     $  (313,586)
   Adjustments to reconcile net loss to cash
    provided by (used for) operating activities:
     Depreciation and amortization                             869,103          542,227
     Changes in assets and liabilities:
       Receivables                                             155,556         (156,831)
       Inventories                                             365,326        1,088,464
       Prepaid expenses                                         74,369         (101,549)
       Other assets                                            (26,142)          45,508
       Accounts payable                                         (7,467)         182,673
       Commissions payable                                     (10,350)        (386,698)
       Sales tax payable                                       (10,810)         (14,665)
       Accrued payroll and payroll related liabilities          64,486            8,865
       Other accrued expenses                                   18,720         (140,434)
                                                           -----------      -----------

Net cash provided by operating activities                      444,530          835,706
                                                           -----------      -----------

Cash flows from investing activities
   Purchase of property and equipment                         (200,268)         (45,551)
   Proceeds from sale of equipment                                  --            3,824
                                                           -----------      -----------
Net cash used for investing activities                        (200,268)         (41,727)
                                                           -----------      -----------

Cash flows from financing activities
   Bank overdraft                                               39,627         (247,584)
   Net payments on long-term debt                             (419,685)        (448,532)
   Net proceeds from related party debt                        135,796           15,674
                                                           -----------      -----------
Net cash used for financing activities                        (244,262)        (680,442)
                                                           -----------      -----------

Net change in cash and cash equivalents                             --          113,537

Cash and cash equivalents, beginning of year                        --               --
                                                           -----------      -----------

Cash and cash equivalents, end of year                     $        --      $   113,537
                                                           ===========      ===========

Supplemental disclosure of cash flow information
   Cash paid during the year for:
     Interest                                              $   165,750      $   160,256
                                                           ===========      ===========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                   Notes to Consolidated Financial Statements

NOTE 1 -- SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Business

Cell Tech International Incorporated and The New Algae Company (NAC),
collectively the "Company", are engaged in the production and marketing of food
supplement products made with blue-green algae harvested from Klamath Lake,
Oregon. The Company uses a multi-level distributor network throughout the United
States and Canada to distribute its products.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of Company's
management, the accompanying unaudited consolidated financial statements contain
all adjustments, consisting of normal recurring adjustments, considered
necessary for a fair statement of the Company's financial information as of and
for the periods presented. The consolidated results of operations of any interim
period are not necessarily indicative of the consolidated results of operations
to be expected for the fiscal year. For further information, refer to the
consolidated financial statements and accompanying footnotes included in the
Company's annual report on Form 10-K for the year ended December 31, 2000.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As previously reported, the
Company has suffered recurring losses from operations. In addition, the Company
is not in compliance with certain restrictive covenants of its $15 million Line
of Credit Agreement with a financial institution. These factors raise
substantial doubt about the Company' ability to continue as a going concern.

Basis of Consolidation

The accompanying consolidated financial statements of the Company include the
accounts of the Holding Company and its subsidiary NAC. Intercompany
transactions and balances have been eliminated on consolidation.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported in the
financial statements and accompanying notes. Actual results could differ
materially from those estimates.


                                       4
<PAGE>

Revenue Recognition

The Company recognizes revenue when the risk of loss for the product sold passes
to the customer and any reserve for estimated returns can be quantified, which
is generally when goods are shipped. In December 1999, the SEC staff released
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB No. 101). SAB No. 101 provides interpretive guidance on the recognition,
presentation and disclosure of revenue in the financial statements. SAB No. 101
must be applied to the financial statements no later than the quarter ending
September 30, 2000. The adoption of SAB No. 101 in 2000 did not have a material
affect on the Company's financial results.

Shipping and Handling Cost

The Company adopted EITF 00-10, "Accounting for Shipping and Handling Fees and
Costs", since December 15, 2000. All shipping and handling costs for goods
shipped by the Company to customers are included in shipping and handling
expenses in the statements of income (loss). Shipping and handling costs of
goods shipped by the Company to customers for the three months ended March 31,
2001 and 2000 were $467,387 and $591,202, respectively.

NOTE 2 -- TRANSACTIONS IN SHAREHOLDERS' EQUITY

Covenants Related to the Private Placement to Mr. Zubair Kazi

In connection with the sale of 1,157,895 common shares to a private investor in
1999, the Company made certain commitments to the investor. In the event that
the consolidated shareholders' equity of the Company is less than $20,000,000 at
December 31, 1999 and the first reset date (see Annual Report on Form 10K for
the year ended December 31, 2000, incorporated herein by reference), the Company
shall immediately issue to Mr. Zubair Kazi ("Kazi") additional common stock and
warrants. The amount shall equal 1,157,895 multiplied by the percentage by which
the shareholders' equity is less than $20,000,000. The Company did not maintain
a shareholders' equity of $20,000,000 at December 31, 1999 and as a result,
883,107 shares and 883,107 warrants are due to Kazi as of March 31, 2001. The
accrued liability related to the issuance of these shares and warrants of
$277,177, based on the fair value of the securities, has been accounted for in
the financial statements.

Additionally, the shares sold were to be registered within 120 days of the sale.
Additional penalties have accrued until such time that the shares are
registered.

Also, if within one year after October 19, 1999, the Company sells its common
stock at a price less than $1.425 per share in an event other than in a
registered underwriting, the Company shall immediately issue to Kazi such
additional shares of common stock and warrants so that Kazi maintains his
percentage shareholdings as if he had purchased shares of common stock at the
reduced purchase price. The Company did not sell any common stock during the one
year period ended October 19, 2000 or for the year ended December 31, 2000.

The Company is obligated, upon the effective date of its next registration
statement (First reset date), to issue additional purchased securities in
accordance with certain reset rights.


                                       5
<PAGE>

Since the Company has not yet filed its first registration statement, the first
reset date has not yet occurred.

NOTE 3 -- EARNINGS PER SHARE COMPUTATION

The computations of the weighted-average common shares used in the computation
of basic and diluted net loss per share is based on 10,640,895 and 10,640,895
shares for the three months ended March 31, 2001 and 2000, respectively.
Potential dilutive securities were not included in the EPS calculation since
their effect would be antidilutive. Potential dilutive securities consisted of
outstanding stock options and convertible preferred stock and common stock
purchase warrants.

NOTE 4 -- RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other
Intangible Assets (SFAS 142).

SFAS 141 requires the use of the purchase method of accounting and prohibits the
use of the pooling-of-interests method of accounting for business combinations
initiated after June 30, 2001. SFAS 141 also requires that the Company recognize
acquired intangible assets apart from goodwill if the acquired intangible assets
meet certain criteria. SFAS 141 applies to all business combinations initiated
after June 30, 2001 and for purchase business combinations completed on or after
July 1, 2001. It also requires, upon adoption of SFAS 142, that the Company
reclassify the carrying amounts of intangible assets and goodwill based on the
criteria in SFAS 141. The adoption of SFAS 141 is not expected to have a
material impact on the consolidated financial statements.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to reassess the useful lives
of other intangible assets within the first interim quarter after adoption of
SFAS 142. The implementation of SFAS 142 is not expected to have a material
effect on the consolidated financial statements.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
143 ("SFAS No. 143"), "Accounting for Asset Retirement Obligations". SFAS No.
143 establishes standards associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This statement is effective
for financial statements issued for fiscal years beginning after


                                       6
<PAGE>

June 15, 2002. The Company has not yet assessed the impact of this standard on
its financial statements, but does not expect the impact to be material.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which is
effective for fiscal years beginning after December 15, 2001. SFAS No. 144,
which addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of, supercedes SFAS
No. 121. While the Company is currently evaluating the impact the adoption of
SFAS No. 144 will have on its financial position and results of operations, it
does not expect such impact to be material.

NOTE 5 - CONTINGENCIES

Litigation

The Company is involved in various legal matters arising in the normal course of
business. In the opinion of management, the Company's liability, if any, arising
from legal proceedings related to these matters is not expected to have a
material effect on the consolidated financial statements of the Company.

In 1996, the Company entered into a five-year contract with Oregon Freeze Dry,
Inc., one of its vendors to deliver 600,000 wet pounds of algae per month for
processing for a five-year period. The minimum monthly volume level increased in
September 1996 to 1,000,000 wet pounds of algae. On or about February 6, 1998,
the vendor filed a complaint against the Company. The complaint alleges that the
Company wrongfully terminated a contract requiring the Company to provide to the
vendor not less than a contractually agreed amount of raw product for processing
every month, or pay a penalty based on the shortfall until the contract was
validly terminated. In its amended complaint, the vendor is seeking $780,930 in
damages as of February 1998, plus additional damages that allegedly are
continuing to accrue, plus prejudgment interest and prevailing party attorney
fees as provided by the contract. The Company counter-claimed for breach of
contract, alleging liquidated damages due, overcharges, and failure to deliver
product, consequential damage for failure to utilize quality control methods
required by the contract, prejudgment interest and attorney fees. Subsequent to
December 31, 2000, a settlement agreement was negotiated in which the parties
have agreed to dismiss the lawsuit and counter-claim and to enter into a new
agreement for the processing of algae for a five-year period. The parties have
also agreed that the Company will pay $1,656,000 (included in accounts payable
at December 31, 2001) to the vendor, $1 million of which will be paid in cash
and $656,000 will be paid in the form of a promissory note payable to the vendor
with interest at 10.5% per annum. As of December 31, 2001, the Company has not
signed the processing and settlement agreements. The agreements are expected to
be executed upon the Company's receipt of financing. Subsequent to December 31,
2001, the parties have reached an interim arrangement whereby the Company will
pay $0.15 per pound processed by the vendor until a formal agreement is
finalized.

In May 1999, John Adams filed an action in the Circuit Court of Klamath County
alleging, among other things that, we breached our Distributor agreement by
refusing to reinstate him as a


                                       7
<PAGE>

Distributor and that we made certain health claims, and he is seeking an
unspecified amount of monetary damages. On June 22, 2001, we received a written
settlement offer from his legal counsel stating that Mr. Adams is willing to
settle the case by dropping all health related claims and a payment of $5,000
for his damages and $7,000 for his legal fees and costs. We have declined his
offer. On December 27, 2001, the parties agreed to a Stipulated Judgment for
Dismissal and the Court dismissed the case.

In October 2001, Teachers for Truth in Advertising filed an action in the
Superior Court for the County of Tulare, State of California, alleging among
other things, that our advertising is untrue or misleading, that our business
practices are unlawful and fraudulent and unfair and that our website contains
misleading information about our products and the benefits that a consumer may
derive from their use. The plaintiff is seeking injunctive relief, corrective
advertising, and restitution to California consumers who purchased our products.
The matter is presently in the discovery phase and no trial date has been
scheduled. We do not believe that the plaintiff's complaint is meritorious and
we believe that we will prevail in this matter.

Lien on Company Stock

The Company stock owned by Daryl J. Kollman and Marta C. Kollman, is the subject
of a tax lien filed by the Internal Revenue Service for income taxes due from
them arising from taxable income attributed from the Company. The lien is
subordinated in favor of the lender for the Receivable Loans, Advances and
Inventory Loans, Term Loans, and Equipment Acquisition Loans.

Dispute Between Principal Shareholders

      Daryl and Marta Kollman, shareholders who together own approximately 82%
of our outstanding shares of common stock, have filed divorce proceedings. Daryl
Kollman and Marta Kollman jointly, and their affiliate Klamath Cold Storage Co.,
are lessors of substantially all of our facilities, including office space,
processing and freezer storage space. Although one lease is in effect until
2005, we lease the rest of these facilities on a month-to-month or year-to-year
basis. The disposition of these properties pursuant to the divorce could have an
adverse or disruptive effect on our operations, if the party who receives a
particular property elects to significantly increase rents or terminate any such
lease arrangement at the end of the then current lease term. In addition,
compliance with discovery requests may also have a disruptive effect on our
business and operations, and it may be necessary for our Chief Executive
Officer, Marta Kollman, to spend a portion of her time devoted to handling
matters related to the divorce. Moreover, Daryl Kollman is no longer actively
involved in management and has been unwilling to execute personal guarantees on
our behalf, as he has done in the past. On May 14, 2001, Marta Kollman
petitioned the Circuit Court for the State of Oregon with a motion seeking,
among other court orders, to enjoin Daryl Kollman from interfering with any
future loan applications of Marta Kollman or us and a self executing judgment
provision whereby the court would sign a loan application on behalf of Daryl
Kollman. The court subsequently held that Daryl Kollman is to cease and desist
from any such endeavors of interfering with our loan applications during the
pendency of the dissolution proceedings and is prohibited from writing letters
or communicating orally with any lending institutions unless requested to do so
by the institution. The court also


                                       8
<PAGE>

held that Daryl Kollman, if presented with loan documents to sign and if he
objects to those documents in form or content, he must first raise it with the
court.

      On January 29, 2002, the Court issued its written Order after the matter
was heard before the court at trial on December 10, 11, and 12, 2001. The Court
ruled that Marta Kollman and Daryl Kollman were each entitled to an equal
division of their respective stock ownership in our Company, thus resulting in
no change in our current ownership. The Court also ruled Daryl Kollman and Marta
Kollman's joint ownership in certain real property assets leased by us from them
will be divided equally in each property and that they must sell the properties
and improvements to pay the indebtedness to the Internal Revenue Service. Any
remaining proceeds after the payment of Federal and State taxes applicable to
the sale will be shared equally.

      The Company does not believe the Court Order issued on January 29, 2002,
will have a material impact on our business since we believe that we can
maintain our favorable leases in the event of the sale of the properties or
provide for an adequate transition to other properties for the orderly
continuation of our business.

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

      From time to time, our representatives or we have made or may make
forward-looking statements, orally or in writing, including in this Report. Such
forward-looking statements may be included in, without limitation, press
releases, oral statements made with the approval of one of our authorized
executive officers and filings with the Securities and Exchange Commission. The
words or phrases "anticipates," "believes," "expects," "intends," "will
continue," "estimates," "plans," "projects," or similar expressions are intended
to identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.

      Our forward-looking statements are subject to certain risks, trends, and
uncertainties that could cause actual results to vary materially from
anticipated results, including, without limitation, market acceptance of our
marketing and merchandising concepts, changes in political and general market
conditions, demand for and market acceptance of new and existing products,
availability and development of new products, increased competition, our failure
to attain satisfactory outside financing and adverse weather conditions at Upper
Klamath Lake. These factors are discussed in further detail below. Should any
one or more of these risks or uncertainties materialize, or should any
underlying assumptions prove incorrect, actual results may vary materially from
those discussed herein as expected, believed, estimated, intended or
anticipated. We undertake no obligation to revise or publicly release the
results of any revisions to these forward-looking statements.

      The following discussion is intended to assist in the understanding of our
financial position and our results of operations for the three months ended
March 31, 2001 compared to the same period in 2000. The Consolidated Financial
Statements and related Notes should be referred to in conjunction with this
discussion. Unless stated otherwise, all financial information presented below,
throughout this report and in the Consolidated Financial Statements and related
Notes includes all of our subsidiaries on a consolidated basis.


                                       9
<PAGE>

Overview

      We develop and distribute products made with Aphanizomenon flos-aquae
(trade name Super Blue Green(R) Algae) ("SBGA") through a network of independent
distributors ("Distributors"). We currently offer twenty different products
intended to appeal to health-conscious consumers. Our products are divided into
five product lines including Daily Health Maintenance, Digestive Health,
Defensive Health, Powdered Drinks and Snacks, and Animal and Plant Food.

      We harvest SBGA and manufacture most of our products at our modern
production facilities in Klamath Falls, Oregon. We market our products through
independent Distributors located in all fifty states, the District of Columbia,
Guam, Puerto Rico, American Samoa, the Virgin Islands and Canada. We encourage
our Distributors to recruit interested people as new Distributors for our
products. These recruits are placed beneath the recruiting Distributor in the
"network" and are referred to as the distributor's "downline" or "organization."
Distributors earn commissions on sales by their organizations as well as retail
profits on the sales they generate directly. We assist Distributors in
establishing their own businesses and provide support programs such as audio and
videotapes for training, empowerment teams, seminars and an annual convention
called the August Celebration at our headquarters. We have approximately 54,643
active Distributors as of March 31, 2001 compared to approximately 65,948 active
Distributors as of March 31, 2000. We define an active Distributor as having
purchased products in the last six months.

      Our loss per share was $0.10 for the three months ended March 31, 2001
compared to $0.03 per share in 2000. The net loss for the three months ended
March 31, 2001 totaling $1.0 million primarily related to the decrease in net
sales directly attributed to the 17% decrease in our active Distributor base.
The net loss for the three months ended March 31, 2000 totaling $0.3 million
primarily related to the decrease in net sales.


                                       10
<PAGE>

Results of Operations

      The following table summarizes our operating results as a percentage of
net sales for each of the periods indicated.

                                                    Three Months ended March 31,
                                                       2000             2001
                                                     --------         --------

Revenue                                                 100.0%           100.0%

Cost of sales                                            32.0             27.1
                                                     --------         --------

Gross profit                                             68.0             72.9

Commissions                                              49.0             45.9
                                                     --------         --------

Selling profit                                           19.0             27.1

Shipping and handling expenses                            5.8              5.3

Selling expenses                                         14.0             12.7

Research and development                                  0.9              1.3

General and administrative                                9.9             10.3
                                                     --------         --------

Operating loss                                          (11.6)            (2.6)

Other income                                              0.8              1.3

Interest expense                                          2.2              1.6
                                                     --------         --------

Net loss before taxes                                   (13.0)            (2.8)

Income tax benefit                                         --               --
                                                     --------         --------
Net loss                                                (13.0)            (2.8)
                                                     ========         ========

Three months ended March 31, 2001 compared with the three months ended March 31,
2000

      Net sales for the three months ended March 31, 2001 were $8.1 million, a
decrease of $3.0 million or 27% from net sales of $11.1 million for the three
months ended March 31, 2000. The decrease in sales is directly related to a 24%
decrease in orders for the same period. Average order size decreased to $118
from $126 over the same period. The average number of distributors for the three
months ended March 31, 2001 decreased to an average of 55,139, which was 17%
lower than the average of 66,450 distributors for the three months ended March
31, 2000. Sales of our food supplement products are made through a multi-level
marketing network of distributors, so sales are positively linked with the
number of distributors.

      Gross profit represents net sales less the cost of goods sold, which
includes the cost of harvesting blue-green algae from Klamath Lake, the cost of
other materials, direct labor expenses, an allocation of overhead costs,
amortization, and depreciation. Gross profit decreased to 68% from 73% of net
sales between the three months ended March 31, 2001 and 2000,


                                       11
<PAGE>

respectively. The decrease in the gross profit margin is due to the fixed cost
component of cost of goods sold being spread over a decreased revenue base.

      Selling profit represents gross profit less commission expense. Commission
expense for the three months ended March 31, 2001 and 2000 was $3.95 million and
$5.1 million, respectively, a decrease of $1.15 million or 22.6%. We are a
multi-level marketing organization. Distributors make up our sales force.
Distributors buy algae products for their own consumption plus they actively
recruit other distributors into our network. Distributors are paid commissions
based upon their personal sales volumes and the sales of distributors beneath
them in their network. During the three months ended March 31, 2001, the Company
implemented a new commission structure in an attempt to attract and retain
Distributors. Commission expense as a percentage of sales was 49% and 46% during
the three months ended March 31, 2001 and 2000, respectively.

      Operating expenses include shipping and handling expenses, selling
expenses, research and development expenses and general and administrative
expenses. In total, operating expenses decreased $0.8 million or 25% to $2.5
million for the three months ended March 31, 2001 from $3.3 million for the
three months ended March 31, 2000. The components of operating expenses are
discussed below.

      o     Shipping and handling expenses includes purchasing, receiving, and
            materials management. Shipping and handling expenses decreased $0.1
            million or 21%, to $0.5 million in 2001 from $0.6 million in 2000.
            The decrease was due to a $91,036 decrease in freight expenses in
            2001 due to the overall decrease in sales. Shipping and handling
            expenses as a percent of net sales increased to 5.8% for the three
            months ended March 31, 2001 from 5.3% for the three months ended
            March 31, 2000.
      o     Selling expenses includes order operator and distributor services
            expenses, marketing and promotion expenses, and the expenses of the
            Office of the President and CEO. Selling expenses decreased $0.3
            million between 2001 and 2000 to $1.1 million from $1.4 million.
            This decrease was primarily due to a decrease in salaries and
            compensation of $35,975. Selling expenses were 14% of sales for the
            three months ended March 31, 2001 and 13% of sales for the three
            months ended March 31, 2000.
      o     Research and development expenses decreased 51% to approximately
            $70,000 in 2001 from approximately $142,000 in 2000, which
            constituted 0.9% and 1.3% of net sales, respectively.
      o     General and administrative expenses decreased by $0.4 million
            between 2001 and 2000 to $0.8 million from $1.2 million. For the
            three months ended March 31, 2001, general and administrative
            expenses averaged 9.9% of sales while they were 10.3% of sales for
            the three months ended March 31, 2000. The decrease between 2001 and
            2000 is attributable a decrease in payroll costs associated with the
            cost-cutting initiative of the Company, a decrease in legal and
            consulting fees incurred during 2001, and a decrease in costs
            associated with the consolidation of office space and leased
            facilities that occurred during 2000.

      Other income decreased to $66,300 for the three months ended March 31,
2001 from approximately $149,000 for the three months ended March 31, 2000
principally due to a


                                       12
<PAGE>

decrease in sundry income collected from Distributors offset by recording the
fair value cost of penalty shares and warrants to be issued to an investor in
the amount of $27,000.

      Net interest expense increased slightly to approximately $179,000 for the
three months ended March 31, 2001 from $176,000 for the three months ended March
31, 2000. This increase was due to various fees paid to the current lender,
partially offset by a decrease in interest expense due to a decrease in
outstanding debt in 2001 versus 2000. Net Interest expense represented 2.2% and
1.6% of sales for each of the three months ended March 31, 2001 and 2000,
respectively.

      Net loss increased 234% to $1,048,261 for the three months ended March 31,
2001 from $313,586 for the comparable period in 2000. As a percentage of net
sales, net loss increased to 13% for the three months ended March 31, 2001 from
3% for the comparable period in 2000. The dollar increase was due to net sales
decreasing by 27%, offset by the curtailment of various operating expenses.

Liquidity and Capital Resources

      Working capital deficit at March 31, 2001 amounted to $7,382,206, an
increase of $290,242 from a working capital deficit of $7,091,964 as of March
31, 2000. At March 31, 2001, we had a bank overdraft of $1,350,178 versus a bank
overdraft of $1,310,551 as of March 31, 2000. As a result of the working capital
deficit of $7,341,964 at December 31, 2001 (the Company's fiscal year end), the
Company's independent certified public accountants have expressed substantial
doubt about the Company's ability to continue as a going concern.

      We believe that our existing capital resources, bank borrowings and
suspension of dividend payments to shareholders, should be adequate to fund our
operations for at least the next twelve months. We have no present commitments
or agreements with respect to any acquisitions or purchases of manufacturing
facilities or new technologies. As a result of a resolution of the Board of
Directors and, as set forth in a recent court order regarding the dispute
between Marta and Daryl Kollman, we are no longer paying Daryl Kollman
consulting fees in the aggregate amount of $120,000 per year. Any future changes
in our operations could consume available capital resources faster than
anticipated. Our capital requirements depend on numerous factors, including:

      o     the introduction of new products;

      o     change in the number of Distributors and the retention of the
            current Distributor base; and

      o     research and development efforts.

      If existing capital resources are insufficient to meet our capital
requirements, we would be required to raise additional funds, which we cannot
assure will be available on favorable terms, if at all.


                                       13
<PAGE>

Cash Flows

      Net cash flows provided by operating activities for the three months ended
March 31, 2001 amounted to $444,530 compared to cash flows provided by
operations of $835,706 for the three months ended March 31, 2000. The decrease
in cash flows generated by operations is primarily due to a $1.5 million
decrease in selling profit between the three months ended March 31, 2001 and
2000 and changes in current assets and liabilities.

      Cash flows used in investing activities for the three months ended March
31, 2001 was $200,268 , representing an increase of $158,541 from net cash used
for investing activities of $41,727 for the three months ended March 31, 2000,
due to a increase in equipment purchases during the three months ended March 31,
2001. The increase was the result of costs incurred in building the barge to be
used for harvesting purposes.

      Net cash flows used for financing activities was $244,262 for the three
months ended March 31, 2001 versus net cash used for financing activities of
$680,442 during 2000. This change is principally due to a $287,211 increase in
our bank overdraft during 2001 versus 2000 and an increase in the proceeds from
related party borrowings.

Recent Financial Accounting Standards Board Statements

      In June 2001, the Financial Accounting Standards Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142).

      SFAS 141 requires the use of the purchase method of accounting and
prohibits the use of the pooling-of-interests method of accounting for business
combinations initiated after June 30, 2001. SFAS 141 also requires that the
Company recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria. SFAS 141 applies to all business
combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS 142, that the Company reclassify the carrying amounts of intangible
assets and goodwill based on the criteria in SFAS 141. The adoption of SFAS 141
is not expected to have a material impact on the consolidated financial
statements.

      SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to reassess the useful lives
of other intangible assets within the first interim quarter after adoption of
SFAS 142. The implementation of SFAS 142 is not expected to have a material
effect on the consolidated financial statements.


                                       14
<PAGE>

      In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 143 ("SFAS No. 143"), "Accounting for Asset Retirement Obligations". SFAS
No. 143 establishes standards associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. This statement is
effective for financial statements issued for fiscal years beginning after June
15, 2002. The Company has not yet assessed the impact of this standard on its
financial statements, but does not expect the impact to be material.

      In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," which is effective for fiscal years beginning after December 15, 2001.
SFAS No. 144, which addresses financial accounting and reporting for the
impairment of long-lived assets and for long-lived assets to be disposed of,
supercedes SFAS No. 121. While the Company is currently evaluating the impact
the adoption of SFAS No. 144 will have on its financial position and results of
operations, it does not expect such impact to be material.

Special Note Regarding Forward-Looking Statements

      Some of our statements under "Legal Proceedings," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Quantitative
and Qualitative Disclosures about Market Risk," "Other Information," the Notes
to Consolidated Financial Statements and elsewhere in this report constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements are subject to certain events, risks and uncertainties that may be
outside our control. Some of these forward-looking statements include statements
of:

      o     management's plans, objectives and budgets for its future operations
            and future economic performance;
      o     capital budget and future capital requirements;
      o     meeting future capital needs;
      o     realization of any deferred tax assets;
      o     the level of future expenditures;
      o     impact of foreign currency translations;
      o     impact of recent accounting pronouncements;
      o     the outcome of regulatory and litigation matters; and
      o     the assumptions described in this report underlying such
            forward-looking statements. Actual results and developments may
            materially differ from those expressed in or implied by such
            statements due to a number of factors, including:
      o     those described in the context of such forward-looking statements;
      o     future product development and manufacturing costs;
      o     changes in our incentive plans;
      o     timely development and acceptance of new products;
      o     the markets of our domestic and international operations;
      o     the impact of competitive products and pricing;
      o     the political, social and economic climate in which we conduct
            operations; and


                                       15
<PAGE>

      o     the risk factors described in other documents and reports filed with
            the Securities and Exchange Commission.

      In some cases, forward-looking statements are identified by terminology
such as "may," "will," "should," "could," "would," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "approximates," "predicts,"
"potential" or "continue" or the negative of such terms and other comparable
terminology.

      Although we believe that the expectations reflected in these
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor anyone
else assumes responsibility for the accuracy and completeness of such statements
and is under no duty to update any of the forward-looking statements after the
date of this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

      We have not entered into any transactions using derivative financial
instruments or derivative commodity instruments and believe that our exposure to
market risk associated with other financial instruments is not material.

      Our primary market risks include fluctuations in interest rates. Our
management believes that fluctuation in interest rates in the near term would
not materially affect our consolidated operating results, financial position or
cash flows as we have limited risks related to interest rate fluctuations.

      The Kollmans have sole voting and investment power with respect to their
shares. The Internal Revenue Service has a security interest in all of their
shares pursuant to a Notice of Determination dated June 18, 1999, under the
terms of which the shares are held in trust and will be released upon the
Kollmans' payment of their federal income tax liabilities for various specified
years. The Kollmans will sell their shares as needed and allowed by federal and
state securities laws to make quarterly payments to the Internal Revenue
Service. The Kollmans retain all voting rights incident to their shares while
the shares are held in trust. The Internal Revenue Service may seize the
Kollmans' shares from the trust if the Kollmans fail to timely cure a default
upon their commitments to the Internal Revenue Service under the Notice of
Determination. The Internal Revenue Service would thereafter proceed to sell or
judicially foreclose some or all of the shares for payment of the Kollmans' tax
liabilities as allowed by applicable law.


                                       16
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

      Other than as indicated below, there have been no material changes in, or
additions to, the legal proceedings previously reported in our Annual Report on
Form 10-K (File No. 0-21015) for year ended December 31, 2000 as filed with the
Commission on October 22, 2001.

      In 1996, we entered into a five-year contract with Oregon Freeze Dry,
Inc., one of our vendors to deliver 600,000 wet pounds of algae per month for
processing for a five-year period. The minimum monthly volume level increased in
September 1996 to 1,000,000 wet pounds of algae. On or about February 6, 1998,
the vendor filed a complaint against us. The complaint alleges that we
wrongfully terminated a contract requiring us to provide to the vendor not less
than a contractually agreed amount of raw product for processing every month, or
pay a penalty based on the shortfall until there was a validly terminated
contract. In its amended complaint, the vendor is seeking $780,930 in damages as
of February 1998, plus additional damages that allegedly are continuing to
accrue, plus prejudgment interest and prevailing party attorney fees as provided
by the contract. We counter-claimed for breach of contract, alleging liquidated
damages due, overcharges, and failure to deliver product, consequential damage
for failure to utilize quality control methods required by the contract,
prejudgment interest and attorney fees. Subsequent to December 31, 2000, the
parties negotiated a settlement agreement in which the parties have agreed to
dismiss the lawsuit and counter-claim and to enter into a new agreement for the
processing of algae for a five-year period. The parties have also agreed that we
will pay $1,656,000 (included in accounts payable at December 31, 2001) to the
vendor, of which we will pay $1 million in cash and $656,000 in the form of a
promissory note payable to the vendor with interest at 10.5% per annum. As of
December 31, 2001, we have not signed the processing and settlement agreements.
The parties expect to execute the agreements upon our receipt of financing.
Subsequent to December 31, 2001, the parties have reached an interim arrangement
whereby we will pay $0.15 per pound processed by the vendor until the parties
finalize a formal agreement.

      In May 1999, John Adams filed an action in the Circuit Court of Klamath
County alleging, among other things, we breached our Distributor agreement by
refusing to reinstate him as a Distributor and that we made certain health
claims, and he is seeking an unspecified amount of monetary damages. On June 22,
2001, we received a written settlement offer from his legal counsel stating that
Mr. Adams is willing to settle the case by dropping all health related claims
and a payment of $5,000 for his damages and $7,000 for his legal fees and costs.
We have declined his offer. On December 27, 2001, the parties agreed to a
Stipulated Judgment for Dismissal and the Court dismissed the case.

      In October 2001, Teachers for Truth in Advertising filed an action in the
Superior Court for the County of Tulare, State of California, alleging among
other things, that our advertising is untrue or misleading, that our business
practices are unlawful and fraudulent and unfair and that our website contains
misleading information about our products and the benefits that a consumer may
derive from their use. The plaintiff is seeking injunctive relief, corrective
advertising, and


                                       17
<PAGE>

restitution to California consumers who purchased our products. The matter is
presently in the discovery phase and no trial date has been scheduled. We do not
believe that the plaintiff's complaint is meritorious and we believe that we
will prevail in this matter.

Item 2. Changes in Securities

      None.

Item 3. Defaults Upon Senior Securities

      Not applicable.

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

      None.

Item 5. Other Information

Dispute Between Principal Shareholders

      Daryl and Marta Kollman, shareholders who together own approximately 82%
of our outstanding shares of common stock, have filed divorce proceedings. Daryl
Kollman and Marta Kollman jointly, and their affiliate Klamath Cold Storage Co.,
are lessors of substantially all of our facilities, including office space,
processing and freezer storage space. Although one lease is in effect until
2005, we lease the rest of these facilities on a month-to-month or year-to-year
basis. The disposition of these properties pursuant to the divorce could have an
adverse or disruptive effect on our operations, if the party who receives a
particular property elects to significantly increase rents or terminate any such
lease arrangement at the end of the then current lease term. In addition,
compliance with discovery requests may also have a disruptive effect on our
business and operations, and it may be necessary for our Chief Executive
Officer, Marta Kollman, to spend a portion of her time devoted to handling
matters related to the divorce. Moreover, Daryl Kollman is no longer actively
involved in management and has been unwilling to execute personal guarantees on
our behalf, as he has done in the past. On May 14, 2001, Marta Kollman
petitioned the Circuit Court for the State of Oregon with a motion seeking,
among other court orders, to enjoin Daryl Kollman from interfering with any
future loan applications of Marta Kollman or us and a self executing judgment
provision whereby the court would sign a loan application on behalf of Daryl
Kollman. The court subsequently held that Daryl Kollman is to cease and desist
from any such endeavors of interfering with our loan applications during the
pendency of the dissolution proceedings and is prohibited from writing letters
or communicating orally with any lending institutions unless requested to do so
by the institution. The court also held that Daryl Kollman, if presented with
loan documents to sign and if he objects to those documents in form or content,
he must first raise it with the court.

      On January 29, 2002, the Court issued its written Order after the matter
was heard before the court at trial on December 10, 11, and 12, 2001. The Court
ruled that Marta Kollman and Daryl Kollman were each entitled to an equal
division of their respective stock ownership in our


                                       18
<PAGE>

Company, thus resulting in no change in our current ownership. The Court also
ruled Daryl Kollman and Marta Kollman's joint ownership in certain real property
assets leased by us from them will be divided equally in each property and that
they must sell the properties and improvements to pay the indebtedness to the
Internal Revenue Service. Any remaining proceeds after the payment of Federal
and State taxes applicable to the sale will be shared equally.

      We do not believe the Court Order issued on January 29, 2002, will have a
material impact on our business since we believe that we can maintain our
favorable leases in the event of the sale of the properties or provide for an
adequate transition to other properties for the orderly continuation of our
business.

Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits required by Item 601 of Regulation S-K

Exhibit Number    Description
--------------    -----------

(2)               Plan of Acquisition, Reorganization, Arrangement, Liquidation
                  or Succession

                        (2.1)   Agreement and Plan of Reorganization, dated July
                                16, 1999, among the Company, Daryl J. Kollman
                                and Marta C. Kollman (filed as Exhibit 2.1
                                without schedules and exhibits to the Current
                                Report on Form 8-K on August 2, 1999 and
                                incorporated by reference)

(3)               Articles of Incorporation and Bylaws

                        (3.1)   Certificate of Incorporation, as amended (filed
                                as Exhibit 3.1 to the Registration Statement for
                                Small Business on Form SB-2 on June 21, 1996 and
                                incorporated by reference)

                        (3.2)   Certificate of Amendment of Certificate of
                                Incorporation (filed as Exhibit 3.1(a) to the
                                Current Report on Form 8-K on November 19, 1999
                                and incorporated by reference)

                        (3.3)   Certificate of Designations, Preferences and
                                Rights of Series B Convertible Preferred Stock
                                (filed as Exhibit 3.1 to the Current Report on
                                Form 8-K on August 2, 1999 and incorporated by
                                reference)

                        (3.4)   Amended and Restated Bylaws (filed as Exhibit
                                3.2 to the Registration Form for Small Business
                                on Form SB-2 on June 21, 1996 and incorporated
                                by reference)


                                       19
<PAGE>

(4)               Instruments Defining the Rights of Security Holders

                        (4.1)   Loan and Security Agreement, dated June 21,
                                1999, by and among The New Earth Company, The
                                New Algae Company and Coast Business Credit
                                (filed as Exhibit 4.1 to the Current Report on
                                Form 8-K on November 19, 1999 and incorporated
                                by reference)

                        (4.2)   Continuing Guaranty, dated August 6, 1999 (filed
                                as Exhibit 4.2 to the Current Report on Form 8-K
                                on November 19, 1999 and incorporated by
                                reference)

                        (4.3)   Form of Common Stock Certificate (filed as
                                Exhibit 4.1 to the Amendment to Registration
                                Statement for Small Business on Form SB-2/A on
                                July 26, 1996 and incorporated by reference)

                        (4.4)   Form of Series A Preferred Stock Certificate
                                (filed as Exhibit 4.2 to the Amendment to
                                Registration Statement for Small Business on
                                Form SB-2/A on July 26, 1996 and incorporated by
                                reference)

                        (4.5)   Form of Warrant to Purchase Shares of Common
                                Stock to be issued to Andromeda Enterprises,
                                Inc. or its designees, Hateley & Hampton or its
                                designees and Wharton Capital Partners, Ltd.
                                (filed as Exhibit 4.1 to the Current Report on
                                Form 8-K on August 2, 1999 and incorporated by
                                reference)

                        (4.6)   Nonqualified Stock Option Agreement between the
                                Company and Physicians World Communications
                                Group (filed as Exhibit 4.9 to the Quarterly
                                Report on Form 10-Q for the quarterly period
                                ended September 30, 1998 and incorporated by
                                reference)

                        (4.7)   Warrant to Purchase Shares of Common Stock
                                issued to Scantek Medical, Inc. as of May 15,
                                1998 (filed as Exhibit 4.7 to the Quarterly
                                Report on Form 10-Q for the quarterly period
                                ended September 30, 1998 and incorporated by
                                reference)

                        (4.8)   Warrant to Purchase Shares of Common Stock
                                issued to Zigmed, Inc. as of May 15, 1998 (filed
                                as Exhibit 4.8 to the Quarterly Report on Form
                                10-Q for the quarterly period ended September
                                30, 1998 and incorporated by reference)


                                       20
<PAGE>

                        (4.9)   Representative's Warrant Agreement between the
                                Company and Keane Securities Co., including Form
                                of Warrant Certificate (filed as Exhibit 4.3 to
                                the Amendment to Registration Statement for
                                Small Business on Form SB-2/A on July 26, 1996
                                and incorporated by reference)

                        (4.10)  Form of Warrant Certificate for March Bridge
                                Warrants (filed as Exhibit 4.4 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and incorporated by
                                reference)

                        (4.11)  Nonqualified Stock Option Agreements with
                                Certain Officers (Donald Brounstein, James
                                Whidden, Whidden & Associates, Inc., Amy Lewis,
                                and Everett Lautin) (filed as Exhibit 4.5 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and incorporated by
                                reference)

                        (4.12)  Form of Private Warrants issued in connection
                                with May Private Placement (filed as Exhibit 4.6
                                to the Registration Statement for Small Business
                                on Form SB-2 on June 21, 1996 and incorporated
                                by reference)

(10)              Material Contracts

                        (10.1)  General Release, dated January 25, 2000 between
                                the Company and Donald Brounstein (filed as
                                Exhibit 10.1 to the Annual Report on Form 10-K
                                for the year ended December 31, 2000 and
                                incorporated by reference)

                        (10.2)  Settlement Agreement, dated May 15, 1998,
                                between the Company and Scantek Medical, Inc.
                                (filed as Exhibit 10.16 to the Quarterly Report
                                on Form 10-Q for the quarterly period ended June
                                30, 1998 and incorporated by reference)

                        (10.3)  Settlement Agreement, dated May 15, 1998,
                                between the Company and Zigmed, Inc. (filed as
                                Exhibit 10.17 to the Quarterly Report on Form
                                10-Q for the quarterly period ended June 30,
                                1998 and incorporated by reference)

                        (10.4)  Employment Agreement between the Company and Dr.
                                Chris J. M. Blaxland, dated as of September 1,
                                1998 (filed as Exhibit 10.18 to the Quarterly
                                Report on Form 10-Q for the quarterly period
                                ended September 30, 1998 and incorporated by
                                reference)


                                       21
<PAGE>

                        (10.5)  Employment Agreement between the Company and
                                Donald Brounstein, dated January 1, 1996 (filed
                                as Exhibit 10.8 to the Registration Statement
                                for Small Business on Form SB-2 on June 21, 1996
                                and incorporated by reference)

                        (10.6)  Employment Agreement between the Company and
                                James J. Whidden (filed as Exhibit 10.9 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and incorporated by
                                reference)

                        (10.7)  Employment Agreement between the Company and
                                Kenneth S. Hollander, dated June 3, 1996 (filed
                                as Exhibit 10.10 to the Registration Statement
                                for Small Business on Form SB-2 on June 21, 1996
                                and incorporated by reference)

                        (10.8)  Consulting Agreement, dated March 1, 1996,
                                between the Company and Don Anderson (filed as
                                Exhibit 10.8 to the Annual Report on Form 10-K
                                for the year ended December 31, 2000 and
                                incorporated by reference)

                        (10.9)  Exclusive Supply and Distribution Agreement
                                between the Company and Physician Sales &
                                Services, Inc., as amended (filed as Exhibit
                                10.1 to the Amendment to Registration Statement
                                for Small Business on Form SB-2/A on July 26,
                                1996 and incorporated by reference)

                        (10.10) License Agreement, dated October 20, 1995,
                                between the Company and Scantek Medical, Inc.,
                                as amended (filed as Exhibit 10.2 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and incorporated by
                                reference)

                        (10.11) Construction Contract between the Company and
                                Zigmed, Inc. (filed as Exhibit 10.3 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and incorporated by
                                reference)

                        (10.12) Lease, dated June 11, 1996, between the Company
                                and the Moen Organization, Inc. (filed as
                                Exhibit 10.14 to the Registration Statement for
                                Small Business on Form SB-2 on June 21, 1996 and
                                incorporated by reference)

                        (10.13) Lease Termination Agreement, dated February 2,
                                1999, between the Company and the Moen
                                Organization, Inc.


                                       22
<PAGE>

                                (filed as Exhibit 10.13 to the Annual Report on
                                Form 10-K for the year ended December 31, 2000
                                and incorporated by reference)

                        (10.14) Intentionally omitted

                        (10.15) Commercial Lease Agreement, dated July 1, 1995,
                                between and among The New Earth Company, Daryl
                                Kollman and Marta Kollman (filed as Exhibit
                                10.15 to the Annual Report on Form 10-K for the
                                year ended December 31, 2000 and incorporated by
                                reference)

                        (10.16) Commercial Lease Agreement, dated August 15,
                                1995, between and among The New Algae Company,
                                Daryl Kollman and Marta Kollman (filed as
                                Exhibit 10.16 to the Annual Report on Form 10-K
                                for the year ended December 31, 2000 and
                                incorporated by reference)

                        (10.17) Ground Lease Agreement, dated December 9, 1995,
                                between and among The New Earth Company, Emil
                                Nobel and Mary Ann Nobel (filed as Exhibit 10.17
                                to the Annual Report on Form 10-K for the year
                                ended December 31, 2000 and incorporated by
                                reference)

                        (10.18) Commercial Lease Agreement, dated May 1, 1996,
                                between and among The New Algae Company, Daryl
                                Kollman and Marta Kollman (filed as Exhibit
                                10.18 to the Annual Report on Form 10-K for the
                                year ended December 31, 2000 and incorporated by
                                reference)

                        (10.19) Commercial Lease Agreement, dated September 1,
                                1996, between Klamath Cold Storage, Inc. and The
                                New Earth Company, including Sublease between
                                The New Earth Company and The New Algae Company
                                (filed as Exhibit 10.19 to the Annual Report on
                                Form 10-K for the year ended December 31, 2000
                                and incorporated by reference)

                        (10.20) Voting and Stockholders' Rights Agreement, dated
                                May 15, 1996 (filed as Exhibit 10.4 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and by this reference
                                incorporated herein)

                        (10.21) Agreement to Issue Warrants, dated March 19,
                                1996, between the Company and Udi Toledano
                                (filed as Exhibit 10.5 to the Registration
                                Statement for Small Business on


                                       23
<PAGE>

                                Form SB-2 on June 21, 1996 and by this reference
                                incorporated herein)

                        (10.22) Agreement to Issue Warrants, dated March 19,
                                1996, between the Company and Herbert V. Turk
                                (filed as Exhibit 10.6 to the Registration
                                Statement for Small Business on Form SB-2 on
                                June 21, 1996 and by this reference incorporated
                                herein)

                        (10.23) Non-Negotiable Warrant Certificate between the
                                Company and Physician Sales & Service, Inc.
                                (filed as Exhibit 10.7 to the Registration
                                Statement for Small Business on Form SB-2 on
                                June 21, 1996 and by this reference incorporated
                                herein)

                        (10.24) HumaScan, Inc. Non-Employee Director Stock
                                Option Plan (filed as Exhibit 10.12 to the
                                Registration Statement for Small Business on
                                Form SB-2 on June 21, 1996 and by this reference
                                incorporated herein)

                        (10.25) Form of Indemnification Agreement between the
                                Company and its Executive Officers and Directors
                                (filed as Exhibit 10.15 to the Annual Report for
                                Small Business on Form 10KSB40 for the fiscal
                                year ended December 31, 1997 and by this
                                reference incorporated herein)

                        (10.26) The Company's 2000 Stock Incentive Plan (filed
                                as Exhibit 10.26 to the Annual Report on Form
                                10-K for the year ended December 31, 2000 and
                                incorporated by reference)

(16)              Letter from KPMG, dated November 2, 1999, agreeing with the
                  statements contained in the Company's Form 8-K, dated November
                  2, 1999 (filed as Exhibit 16 to the Current Report on Form 8-K
                  on November 22, 1999 and by this reference incorporated
                  herein)

(99)              Additional Exhibits

                        (99.1)  Internal Revenue Service Notice of
                                Determination, dated July 18, 1999 (filed as
                                Exhibit 99.2 to the Current Report on Form 8-K
                                on November 19, 1999 and by this reference
                                incorporated herein)

                        (99.2)  Pledge and Escrow Agreement between and among
                                Daryl Kollman and Marta Kollman, the Internal
                                Revenue Service and West Coast Trust Co., Inc.
                                (filed as Exhibit 99.3 to the


                                       24
<PAGE>

                                Current Report on Form 8-K on November 19, 1999
                                and by this reference incorporated herein)

(b)   Reports on Form 8-K.      None.


                                       25
<PAGE>

                                   Signatures

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Klamath
Falls, State of Oregon on May 23, 2002.

                      CELL TECH INTERNATIONAL INCORPORATED

         Signature                      Title                         Date
         ---------                      -----                         ----

                             President and Chief Executive         May 23, 2002
By: /s/ Marta C. Kollman        Officer and Director
    --------------------     (principal executive officer,
      Marta C. Kollman       principal financial officer and
                             principal accounting officer)



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