SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended March 31, 2002

Commission file number 0-10822

BICO, INC.
(Exact name of registrant as specified in its charter)

Pennsylvania 25-1229323
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification no.)

2275 Swallow Hill Road, Bldg. 2500, Pittsburgh, PA 15220
(Address of principal executive offices) (Zip Code)

(412) 429-0673
Registrant's telephone number, including area code

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 March 31, 2002, 2,656,885,988 shares of BICO, Inc.
common stock, par value $.10 were outstanding.

BICO, Inc. and Subsidiaries
Consolidated Balance Sheets

Mar. 31, 2002 Dec. 31, 2001
(Unaudited) (Note A)
------------- -------------

CURRENT ASSETS
Cash and equivalents $ 607,628 $ 268,095
Accounts receivable - net of allowance for doubtful accounts
of $43,664 at Mar. 31, 2002 and Dec. 31, 2001 1,097,370 1,235,957
Inventory - net of valuation allowance 1,325,615 1,190,796
Related party notes receivable 118,922 138,394
Interest receivable 222,649 144,411
Prepaid expenses 2,691,864 1,055,901
Other current assets 62,268 62,268
------------ -------------

TOTAL CURRENT ASSETS 6,126,316 4,095,822

PROPERTY, PLANT AND EQUIPMENT
Building 2,566,777 2,566,777
Land 246,250 246,250
Leasehold improvements 2,113,057 2,071,629
Machinery and equipment 7,517,837 7,526,201
Furniture, fixtures & equipment 937,607 937,607
------------- -------------
Subtotal 13,381,528 13,348,464

Less accumulated depreciation 6,435,317 6,151,384
------------- -------------
6,946,211 7,197,080

OTHER ASSETS
Related Party Receivables
Notes receivable 1,036,293 1,036,293
Interest receivable 35,176 14,406
-------------- ------------
1,071,469 1,050,699
Allowance for related party receivables (1,071,469) (1,050,699)
------------- ------------
- -

Notes receivable 82,738 111,041
Notes receivable-Practical Environmental Solutions, Inc. 3,148,404 3,148,404
Goodwill, net of amortization 238,102 595,217
Intangible assets - marketing rights 5,600,000 6,866,398
Investment in unconsolidated subsidiaries 1,515,079 2,409,843
Other assets 137,110 213,616
------------- -------------
10,721,433 13,344,519
------------- -------------
TOTAL ASSETS $ 23,793,960 $ 24,637,421
============= =============

The accompanying notes are an integral part of these statements.

BICO, Inc. and Subsidiaries
Consolidated Balance Sheets
(Continued)

Mar. 31, 2002 Dec. 31, 2001
(Unaudited) (Note A)
------------- -------------

CURRENT LIABILITIES
Accounts payable $ 5,153,986 $ 4,755,455
Note payable 6,997,278 7,037,198
Current portion of long-term debt 80,449 86,420
Current portion of capital lease obligations 99,427 75,523
Accrued liabilities 4,000,409 2,568,526
Escrow payable 2,700 2,700
------------- -------------
TOTAL CURRENT LIABILITIES 16,334,249 14,525,812

LONG-TERM LIABILITIES
Capital lease obligations 2,110,205 2,128,149
Long - term debt 111,111 127,777
Other 19,603 25,009
------------- -------------
2,240,919 2,280,935

UNRELATED INVESTORS' INTEREST
IN SUBSIDIARY 273,340 293,527

STOCKHOLDERS' EQUITY

Common stock, par value $.10 per share,
authorized 4,000,000,000 shares at Dec. 31, 2001
and March 31, 2002, issued and outstanding
2,656,885,988 at Mar. 31, 2002 and 2,450,631,111
at Dec. 31, 2001 265,688,598 245,063,111
Convertible preferred stock, par value $10 per
share authorized 500,000 shares issuable in
series, shares issued and outstanding 17,880
at March 31, 2002 and 16,930 at Dec. 31, 2001 178,800 169,300
Discount assigned to beneficial conversion
feature - preferred stock 0 (141,000)
Additional paid-in capital(Discount on issuance
of common stock) (5,256,283) 10,887,152
Warrants 6,221,655 6,221,655
Accumulated deficit (261,887,318) (254,663,071)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 4,945,452 7,537,147

TOTAL LIABILITIES AND ------------- -------------
STOCKHOLDER' EQUITY $ 23,793,960 $ 24,637,421
============= =============

The accompanying notes are an integral part of these statements.

F-3

BICO, INC. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

For the three months ended March 31,
2002 2001
---------- -----------

Revenues
Net Sales $ 1,575,871 $ 599,007
Other income 24,803 7,418
---------- -----------
1,600,674 606,425

Costs and expenses
Cost of products sold 1,155,542 424,092
Research and development 426,754 1,285,222
General and administrative 4,838,617 6,238,852
Amortization of goodwill 186,817 182,715
---------- -----------
6,607,730 8,130,881
---------- -----------
Loss from operations (5,007,056) (7,524,456)

Other income and expense
Interest income (102,727) (124,600)
Debt issue costs - 679,174
Beneficial convertible debt feature - 2,063,915
Unusual item (170,077) -
Impairment loss 2,202,642 -
Interest expense 142,737 229,194
Loss on unconsolidated subsidiary 140,635 72,192
Loss on disposal of assets 24,168 18,311
---------- -----------
2,237,378 2,938,186
---------- -----------
Loss before unrelated
investors' interest (7,244,434) (10,462,642)

Unrelated investors' interest in
net loss of subsidiary 20,187 63,930
---------- -----------

Net loss $ (7,224,247) $(10,398,712)
========== ===========

Loss per common share - Basic:
Net Loss $ (0.003) $ (0.008)
Less: Preferred stock dividends (0.000) (0.000)
---------- -----------
Net loss attributable to
common stockholders $ (0.003) $ (0.008)
========== ===========

Loss per common share - Diluted:
Net Loss $ (0.003) $ (0.008)
Less: Preferred stock dividends (0.000) (0.000)
---------- -----------
Net loss attributable to
common stockholders $ (0.003) $ (0.008)
========== ===========

The accompanying notes are an integral part of these statements.

4
BICO, Inc. and Subsidiaries
Consolidated Statements Of Cash Flows
(Unaudited)

For the three months ended
March 31, 2002 March 31, 2001
-------------- --------------

Cash flows used by operating activities:
Net loss $(7,224,247) $(10,398,712)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 298,148 228,528
Amortization 186,817 182,715
Loss on disposal of assets 24,168 18,311
Loss on unconsolidated subsidiaries 140,635 72,192
Unrelated investors' interest in subsidiaries (20,187) (63,934)
Beneficial convertible debt feature - 2,063,915
Warrants granted - 17,414
Allowance for related party note receivable 20,770 (31,726)
Impairment expense 2,202,642 -
(Increase) decrease in accounts receivable 138,587 (5,577)
(Increase) decrease in inventories 56,287 (299,360)
Increase (decrease) in inventory
valuation allowance (191,106) 150,000
Increase in prepaid expenses 224,037 1,788
(Increase) decrease in other assets 64,689 (10,622)
Increase (decrease) in accounts payable 398,541 (132,561)
Increase in other liabilities 1,426,477 305,826
------------ ------------
Net cash flow used by operating activities (2,253,742) (7,901,803)
------------ ------------

Cash flows from investing activities:
Purchase of property, plant and equipment (71,447) (328,179)
Increase in notes receivable - (1,082,609)
Payments received on notes receivable 47,775 55,633
Increase in interest receivable (99,008) (43,419)
Acquisition of unconsolidated subsidiary
interests - (753,948)
-------------- ------------
Net cash used by investing activities (122,680) (2,152,522)
-------------- ------------

Cash flows from financing activities:
Proceeds from sale of Preferred stock-Series F 430,000 -
Stock issued in exchange for services 2,342,552 -
Proceeds from debentures payable - 8,255,659
Increase in notes payable 248,024 -
Payments on long term debt (22,637) -
Payments on notes payable (287,944) (563,727)
Payments on capital lease obligations 5.960 (29,052)
-------------- ------------

Net cash provided by financing activities 2,715,955 7,662,880
-------------- ------------

Net increase (decrease) in cash 339,533 (2,391,445)

Cash and cash equivalents, beginning of period 268,095 7,844,807
------------- -----------

Cash and cash equivalents, end of period $ 607,628 $ 5,453,362
============== ============

The accompanying notes are an integral part of these statements.

BICO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE A - Basis of Presentation

The accompanying consolidated financial statements of BICO,
Inc. (the "Company") and its 52% owned subsidiary, Diasense,
Inc., and its 75% owned subsidiary, Petrol Rem, Inc., and its
99% owned subsidiary, ViaCirQ, Inc., and its 99% owned
subsidiary, ViaTherm, Inc., and its 75% owned subsidiary,
Rapid HIV Detection Corp., and its 98% owned subsidiary
Ceramic Coatings Technologies, Inc., and its 100% owned
subsidiary, B-A-Champ, Inc., have been prepared in accordance
with generally accepted accounting principles for interim
financial information, and with the instructions to Form 10-Q
and Rule 10-01 Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. Also included in the consolidated
financial statements are the accounts of the following
subsidiaries which are inactive: International Chemical
Technologies, Inc., a 58% owned subsidiary, Coraflex, Inc., a
90% owned subsidiary and Barnacle Ban, Inc., a 100% owned
subsidiary. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. For further
information, refer to the consolidated financial statements
and footnotes included in the Company's annual report on Form
10-K for the year ended December 31, 2001.

NOTE B - Prepaid Expenses

On March 28, 2002, the Company issued 100 million shares of
common stock to an individual in payment for consulting
services to be provided over a twelve-month period. The total
value of the stock on the date of issue was $1,860,000. This
amount was recorded as a prepaid expense at March 31, 2002 and
will be expensed at $155,000 per month beginning in April
2002.

NOTE C - Investments in Unconsolidated Subsidiaries

Our investments in unconsolidated subsidiaries are being
reported on the equity basis and differences between the
investment and the underlying net assets of the unconsolidated
subsidiaries were being amortized as goodwill over a 5-year
period during prior years. However, Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" became effective for the Company's financial
statements as of January 1, 2002 and, under this provision,
goodwill is no longer amortized but is evaluated for
impairment at least annually. Due to the history of negative
cashflow and the uncertainty of the Company's ability to
recover the carrying amount of the investment in AIM, an
impairment loss of $712,500 was recognized in the quarter
ended March 31, 2002. Also in the quarter ended March 31,
2002, the goodwill associated with IDL was evaluated and
management determined that an impairment loss of $41,629
should be recognized. No impairment of the goodwill related
to Microislet or Diabecore was deemed necessary at this time.
The company's investment in the underlying assets and the
unamortized goodwill of each unconsolidated subsidiary as of
March 31, 2002 and December 31, 2001 are as follows:

Investment in
Unconsolidated Underlying Net Unamortized
Subsidiary Assets Goodwill Total
- -------------- ----------------- ---------------- ------------------
Mar.31, Dec. 31, Mar. 31, Dec. 31, Mar. 31, Dec. 31,
2002 2001 2002 2001 2002 2001
---- ---- ---- ---- ---- ----
American Inter-
Metallics, Inc. $ - $318,200 $ - $ 394,300 $ - $ 712,500

Insight Data Link.com 21,028 22,876 - 41,629 21,028 64,505

MicroIslet, Inc. - 130,477 786,874 786,874 786,874 917,351

Diabecore Medical,Inc 150,625 158,935 556,552 556,552 707,177 715,487
_________ ________ __________ _________ __________ ________
Total $ 171,653 $630,488 $1,343,426$1,779,355$1,515,079 $2,409,843
========= ======== ========== ========= ========== ========

NOTE D- Intangible Assets - Marketing Rights

During 2001, the Company entered into a marketing agreement
with GAIFAR, a German company that owned all the rights to
certain rapid HIV tests, and Dr. Heinrich Repke, the man who
developed the tests. The marketing rights were assigned to
Rapid HIV Detection Corp., of which the Company owns 75% and
GAIFAR owns 25%. GAIFAR retained the manufacturing rights for
the tests. The marketing agreement has a 10-year minimum term
and calls for total payments of $7,000,000 to GAIFAR. During
2001, the Company paid $1,285,000 to GAIFAR. The remaining
payments are due in monthly amounts ranging from $125,000 to
$1,000,000 through August 20, 2002, including a total of
$1,040,000 due during the quarter ended March 31, 2002. Due
to cashflow problems, only $115,000 was paid to GAIFAR during
the quarter ended March 31, 2002. Payment is necessary
to satisfy the agreement and for Rapid HIV Detection Corp.
to retain the marketing rights.

The marketing rights are being amortized as an intangible
asset over the ten-year minimum term of the marketing
agreement. Amortization of $175,000 was recognized during the
three months ended March 31, 2002.

Because of the uncertainty of the Company's ability to recover
the value of the intangible asset recognized for the Marketing
rights at March 31, 2002, an impairment charge was recorded to
reduce the intangible asset to $5,600,000, which is the
balance of the obligations due under that agreement. Even if
the exclusive marketing rights are terminated, this amount
will be realized in the elimination of the corresponding note
payable.

In May 2002, the Company lost its exclusive marketing rights
because the Company was unable to make the payments required.
The Company is still marketing the Rapid HIV tests, but no
additional payments are due.

NOTE E - Shareholders' Equity

Preferred Stock

During the three months ended March 31, 2002, 950 shares of
Series J preferred stock were issued and these shares include
a beneficial conversion feature providing the preferred
stockholder a discount of 20% upon conversion to the Company's
common stock after 30 days. The value of this beneficial
conversion feature is determined by reducing the market price
of the Company's common stock by the discounted conversion
price on the date of commitment. This discount is recognized
as a discount assigned to the beneficial conversion feature of
preferred stock and is amortized as constructive dividends to
the preferred shareholders over the holding period using the
effective interest method. The total valuation discount of
this beneficial conversion feature on the preferred stock
issued during the quarter ending March 31, 2002 was $118,750.
Total amortization of the discount, including amortization of
amounts related to preferred shares issued in 2001 that were
not fully amortized at December 31, 2001, was $259,750 and
this amount is recognized as a constructive dividend charged
to additional paid in capital at March 31, 2002.

Common Stock

The Company filed a Form S-8 in December 2001 that included
125 million shares. The Form S-8 allows the Company to issue
freely tradable stock to non-executive employees under the
Employees' Equity Compensation plan and to certain consultants
in lieu of paying them in cash. As of March 31, 2002,
approximately 106 million shares of common stock had been
issued from that Form S-8. Two additional Form S-8s were
filed in March 2002 that included shares for consultants. One
Form S-8 registered 100 million shares for a consultant. The
other Form S-8 included stock for a consultant to obtain upon
a warrant exercise. The consultant did exercise $770,000 in
warrants and he was issued 110 million shares of common stock
in April 2002.

Additional Paid-In Capital / Discount on Issuance of Common
Stock

Additional paid-in capital decreased from $10,887,125 at
December 31, 2001 to ($5,256,283) at March 31, 2002. The
deficit balance at March 31, 2002 is classified as "discount
on issuance of common stock" and it represents the effect of
issuing common stock at prices less than the par value of
$0.10 per share.

NOTE F - Unusual Item - Recovery of Inventory Valuation
Allowance

It is the Company's policy to record an inventory valuation
allowance against finished goods and raw materials for
products for which a market has not yet been established.
During the three months ended March 31, 2002, Petrol Rem sold
inventory for which an inventory allowance had previously been
established. Therefore, the Company reduced its inventory
valuation allowance and recorded an unusual item for the
recovery of inventory valuation allowance of $170,077.

NOTE G - Impairment

In June 2001, the FASB issued statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible
Assets." SFAS 142 addresses financial accounting and
reporting for goodwill and other intangible assets. Under
this provision, goodwill and certain intangible assets will no
longer be amortized but will be evaluated for impairment at
least annually. The provisions of this statement became
effective for the Company's fiscal year beginning January 1,
2002. Based on the Company's evaluation, an impairment charge
of $1,111,244 was recognized related to goodwill associated
with investments in Insight Data Link, American Intermetallics
(see Note C), Tireless and B-A Champ. In addition, the value
of the intangible asset representing the Company's exclusive
marketing rights for certain rapid HIV tests was evaluated
during the quarter. Because of the uncertainty of the
Company's ability to recover the full carrying value of the
marketing rights, an impairment charge of $1,091,398 was
recorded to reduce the intangible asset to its estimated net
realizable value.

NOTE H - Legal Proceedings

During April 1998, the Company and its affiliates were served
with subpoenas by the U.S. Attorneys' office for the U.S.
District Court for the Western District of Pennsylvania. The
subpoenas requested certain corporate, financial and
scientific documents and the Company continues to provide
documents in response to such requests.

On April 30, 1996, a class action lawsuit was filed against
the Company, Diasense, Inc., and individual officers and
directors. The suit, captioned Walsingham v. Biocontrol
Technology,et al., was certified as a class action in the U.S.
District Court for the Western District of Pennsylvania. The
suit alleged misleading disclosures in connection with the
Noninvasive Glucose Sensor and other related activities, which
the company denies. Without agreeing to the alleged charges
or acknowledging any liability or wrongdoing, the company
agreed to settle the lawsuit for a total amount of $3,450,000.
As of March 31, 2002 $3,250,000 has been paid toward the
settlement. During 2001, the parties agreed to extend the
payments on the remaining balance. The remaining $425,000 is
included in accrued liabilities, including $225,000 for
extending the due dates, and was due in the fourth quarter of
2001. Due to cashflow problems, the final payment was not
made in 2001 or the first quarter of 2002. A payment of
$50,000 was made in April 2002 and the Company still owes
$375,000. Payment is necessary in order to satisfy the terms
of the settlement. Although it is not known whether the class
action plaintiffs have been formally notified of the
settlement, or if they have accepted its terms, the company
believes that the existing settlement will end this matter.

NOTE I - Subsequent Events

In the first quarter of 2002, the Company began pursuing the
disposition of two consolidated subsidiaries, Ceramic Coating
Technologies, Inc. and TruePoints.com - which was formerly B-A-
Champ. TruePoints operations were closed in April 2002 and
negotiations are still ongoing with a buyer for CCTI.

The Company received proceeds from two promissory notes early
in April 2002. One loan for $1,000,000 is payable in a single
installment on March 28, 2003 with interest of 22%. This loan
is collateralized by all equipment of the Company. A second
loan for $230,000 is payable in a single installment on April
8, 2003 with interest of 22%.

In May 2002, the Company registered 1,210,000,000 shares of
common stock on Form S-1 on behalf of the selling
shareholders. These shares are issuable upon conversion of
preferred stock. Through May 14, 2002, 1,665,653 shares of
common stock were issued when $10,960 of these shares were
converted.

Management's Discussion and Analysis of Financial Condition
and Cash Flows

Liquidity and Capital Resources

Our cash increased to $607,628 as of March 31, 2002 from
$268,095 as of December 31, 2001 primarily due to $378,979 in
advance payments on manufacturing contracts and the factors
discussed below.

During the three months ended March 31, 2002 our net cash flow
used by operating activities was $(2,253,742). During the
same period, our net cash flow used by investing activities
was ($122,680) due primarily to the acquisition of property,
plant and equipment and cashflow provided by financing
activities was $2,715,955 mostly due to stock issued to
employees and consultants as compensation for services and
sales of preferred stock.

Accounts receivable decreased from $1,235,957 at December 31,
2001 to $1,097,370 at March 31, 2002 primarily due to a
decrease in revenues for INTCO in the first quarter of 2002
compared with revenues recognized during the latter part of
2001 and the timing of billings and collections related to
these revenues.

Our net inventory increased by $134,819 during the quarter
ending March 31, 2002. The increase was mostly due to an
inventory build-up for contract manufacturing projects at our
Biocontrol Technology division.

Current related party receivables decreased by $19,472 during
the three-month period ended March 31, 2002 due to scheduled
repayments on related party notes.

Interest receivable increased from $144,411 as of December 31,
2001 to $222,649 at March 31, 2002 due to additional interest
accrued on notes receivable. The majority of this increase is
related to interest on the note receivable from Practical
Environmental Solutions, a Pennsylvania company that acquired
technology to safely convert municipal sludge to recyclables
that comply with state and federal environmental laws. Petrol
Rem has loaned a total of $3,148,404 to Practical
Environmental as of March 31, 2002. The loan is classified as
a non-current asset because our management is considering
whether to convert all or part of that loan to an equity
investment - they are making that decision because Practical
Environmental is willing to make that conversion and because
Practical Environmental has been generating revenues since
January 2001.

Prepaid expenses increased from $1,055,901 as of December 31,
2001 to $2,691,864 as of March 31, 2002. The increase is
primarily due to the issuance of 100 million shares of common
stock to an individual in payment for consulting services to
be provided over a twelve-month period. The total value of
the stock on the date of issue was $1,860,000. This amount
was recorded as a prepaid expense at March 31, 2002 and will
be expensed at $155,000 per month beginning in April 2002.

Goodwill, net of amortization, decreased by $357,115 during
the quarter ended March 31, 2002. The amounts invested in BA
Champ and Tireless in excess of their net book value were
reported as goodwill as of December 31, 2001. Under new
accounting standards effective for our current fiscal year, we
evaluated the investments and determined that there was
considerable uncertainty concerning our ability to recover
these amounts. Therefore, an impairment charge was recorded
to write off the goodwill related to these investments. A
similar evaluation was made of our investments in
unconsolidated subsidiaries, American Intermetallics, Inc.,
Insight Data Link, Microislet and Diabecore. We determined
that there was considerable uncertainty regarding the
recoverability of our investments in American Intermetallics
and Insight Data Link and an impairment charge of $754,129 was
recognized to reduce the carrying value of these investments.

Our investment in the marketing agreement for the rapid HIV
tests was also reduced by an impairment charge of $1,091,398.
The investment was reduced to a carrying amount equal to the
remaining obligations which would be eliminated should the
marketing agreement be terminated. (See Supplemental
Information.)

Accounts payable increased by $398,541 during the quarter
ended March 31, 2002 due to the timing of payments that were
slower than normal due to our cash flow problems. Accrued
liabilities increased by $1,431,883 due to increases in
accrued wages due to our cash flow problems. Also
contributing to the increase were payments received on
manufacturing contracts in excess of amounts billed.

Results of Operations

Our sales and corresponding costs of products sold during the
three months were $1,575,871 and $1,155,542 respectively in
2002 compared to $599,007 and $424,092 in 2001. The increase
in sales was primarily due to contract revenue of $519,274 at
our Biocontrol Technology division. There was no contract
revenue during the first quarter of 2001. Petrol Rem also had
increased revenue in the first quarter of 2002 compared to the
same period in the prior year. Bioremediation product sales
were up from $4,089 in the first three months of 2001 to
$109,922 for the first three months of 2002. In addition,
Petrol Rem's subsidiary, INTCO reported an increase in sales
from $516,089 in the first quarter of 2001 to $599,776 during
the first quarter of 2002. Tireless, another Petrol Rem
subsidiary, began generating revenue in the fourth quarter of
2001 and they reported revenue of $72,424 during the first
quarter of 2002 compared to zero in the prior year. ViaCirq's
sales of its hyperthermia products increased from $48,838 in
the first quarter of 2001 to $168,433 in the first quarter of
2002. Our other product sales increased in total, but not
significantly. Metal coating sales totaled $21,766 during the
first three months of 2001, with an increase to $77,085 during
the first three months of 2002. During the first three months
of 2001 and 2002, sales of $8,225 and $4,527, respectively,
were from sales of our theraPORT, an implantable device used
by patients who have to have repeated injections of drugs.
The theraPORT is implanted in the patient's chest, and
provides a fixed port for catheters used to deliver the drugs
the patient needs. We also realized $20,690 in sales for the
rapid HIV kits and $3,750 from our internet marketing
services, both of which produced no sales in the prior year's
first quarter. Our costs increased due to the increase in
sales of our various products. Until we have significant
sales, we can't predict any trends for future revenues.

Interest income decreased during the first three months to
$102,727 in 2002 from $124,600 in 2001. The decrease occurred
because we had fewer funds to invest.

Research and Development expenses during the first three
months decreased to $426,754 in 2002 from $1,285,222 in 2001.
The decrease was due to reduced research activities on our
noninvasive glucose monitor and hyperthermia products and the
redeployment of resources from research activities to contract
manufacturing and production of the hyperthermia products.

General and Administrative expenses during the first three
months decreased from $6,238,852 in 2001 to $4,838,617 in
2002. The decrease is primarily due to decreases in
professional services, marketing and travel expenses as well
as $912,727 paid in the first quarter of 2001 under an
agreement with David L. Purdy in connection with his
resignation from the Company and its affiliates.

Beneficial conversion terms included in our convertible
debentures are recognized as expense and credited to
additional paid in capital at the time the associated
debentures are issued. We recognized $2,063,915 of expense in
connection with the issuance of our subordinated convertible
debentures in the first three months of 2001. In addition, we
recognized $679,174 in debt issue costs during the first
quarter of 2001. This was mostly for commissions paid when
debentures were issued. We had no corresponding expenses in
2002 because we did not issue any debentures.

In prior years, we wrote off bioremediation inventory because
we did not know if we would eventually be able to establish a
market to sell this inventory. During the three months ended
March 31, 2002, Petrol Rem sold inventory that was previously
written off. Therefore, we recorded an unusual item for the
recovery of inventory valuation allowance of $170,077.

Interest expense decreased from $229,194 in the first quarter
of 2001 to $142,737 during the first quarter of 2002 due to
the settlement we reached with Mr. and Mrs. Farrell Jones in
the fourth quarter of 2001 to reduce the amounts owed to them
in connection with our purchase of ICTI in 1998.

Our loss on unconsolidated subsidiaries increased to $140,635
for the quarter ended March 31, 2002 compared to $72,192 for
the same period in 2001. This loss results because we absorb
part of the losses incurred by unconsolidated subsidiaries.
Our share of the subsidiaries' losses is determined by
applying our ownership percentage to the total loss incurred.
The increase in the loss recognized is due to larger losses
incurred by the unconsolidated subsidiaries and an increase in
our ownership percentage compared to the prior year.

We recognized an impairment loss of $2,202,642 in the first
quarter of 2002 due to an evaluation of our goodwill and
intangible assets that is required under new accounting
regulations that became effective at the beginning of 2002.
Due to our decision to shut down our subsidiary, BA
Champ/TruePoints, all goodwill associated with this investment
was written off as an impairment charge. In addition,
evaluations were made of our investments in consolidated and
unconsolidated subsidiaries. Based on the progress made so
far and the uncertainty of future success, the goodwill
associated with our investments in Tireless, American
Intermetallics and Insight Data Link were also written off as
impairment charges. The carrying value of the marketing
agreement for rapid HIV tests was written down to the balance
of obligations due under that agreement. Since this change in
accounting regulations was not effective in the prior year,
there were no similar impairment charges recognized in the
first quarter of 2001.

Supplemental Financial Information

In May 2002, we were unable to make up the payments due under
our exclusive marketing agreement with Rapid HIV Detection
Corp. As a result, we no longer have the exclusive marketing
rights to the rapid HIV tests. However, we are still
marketing the tests and we are negotiating with GAIFAR to
enter into a contract to define what revenues we would receive
on any sales we make. Since we are no longer obligated under
the marketing agreement, we don't have to make the remaining
$5.6 million in payments that would have been due this year.

In May 2002, we disposed of our remaining assets and
obligations in connection with International Chemical
Technologies, Inc. We are in the process of dissolving that
Florida corporation.

In April 2002, MicroIslet participated in a merger with ALD
Services, Inc., a publicly traded shell company also known as
ALDI. In connection with the merger, Diasense, along with the
other MicroIslet shareholders, consented to a forward stock
split of MicroIslet stock where each common stockholder
received 3.1255 shares of MicroIslet for every one share
owned. As a result, Diasense received 3,465,451 shares of
MicroIslet common stock. All the common stockholders
maintained their same percentage ownership. Diasense, along
with the other MicroIslet stockholders, also approved the
merger with ALDI. As a result of the merger, each MicroIslet
common stockholder - including Diasense - received one share
of ALDI stock for each share of MicroIset stock owned. After
the merger, Diasense owns approximately 15.3% of restricted
ALDI stock. In May 2002, ALDI changed its trading symbol to
MIIS.OB.

We received proceeds from two promissory notes early in April
2002. One loan for $1,000,000 is payable in a single
installment on March 28, 2003 with interest of 22%. This loan
is collateralized by all of our equipment. A second loan for
$230,000 is payable in a single installment on April 8, 2003
with interest of 22%.

Our registration statement, which included 620 million shares
to cover our Series K preferred stock, was declared effective
on May 7, 2002. We can now begin to receive funding under a
commitment from J. P. Carey Asset Management to purchase these
securities. In order to have sufficient shares available to
continue our funding under the total $25 million commitment
from J. P. Carey Asset Management, we will need to have more
stock authorized. We've scheduled a stockholders' meeting for
July 2002 to ask our stockholders to authorize more stock for
us to sell.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings
None.

Item 2. Changes in Securities
None.

Item 3. Defaults Upon Senior Securities
None.

Item 4. Submission of Matters to a Vote of Security Holders
None.

Item 5. Other Information
None

Item 6. Exhibits and Reports on Form 8-K

(A) Exhibits

(B) Reports on Form 8-K

A report on form 8-K filed April 4, 2002 for the
event dated April 3, 2002. The items listed were
Item 5, Other Events, and Item 7(c), Exhibits.

A report on form 8-K filed April 9, 2002 for the
event dated April 5, 2002. The items listed were
Item 5, Other Events, and Item 7(c), Exhibits.

A report on form 8-K filed May 14, 2002 for the
event dated May 14, 2002. The items listed were
Item 5, Other Events, and Item 7 (c), Exhibits.

SIGNATURES

Pursuant to the requirements 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 on this 15th day of May 2002.

BICO, INC.

By /s/ Fred E. Cooper
Fred E. Cooper
CEO and Director

By /s/ Michael P. Thompson
(Principal Financial
Officer and Principal
Accounting Officer)