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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________

FORM 10-K/A
(Amendment No. 1)

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended July 31, 2002
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 number 0-17521
ZILA, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware 86-0619668
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

5227 North 7th Street, Phoenix, Arizona 85014-2800
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (602) 266-6700

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

Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
None N/A

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

Common Stock, $.001 par value
(Title of Class)

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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

At September 30, 2002, the aggregate market value of common stock held by
non-affiliates of the registrant was $ 54,371,000.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] N/A

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

At September 30, 2002, the number of shares of common stock outstanding was
45,485,260.
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TABLE OF CONTENTS

Page
----
PART III 3
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 3
Item 11. EXECUTIVE COMPENSATION 6
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS 11
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 12

PART IV
Item 15. EXHIBITS AND REPORTS ON FORM 8- K 13

SIGNATURES 16

CERTIFICATIONS 17

-2-

EXPLANATORY NOTE

This Amendment No. 1 to our Annual Report on Form 10-K for the year ended
July 31, 2002 reflects the addition of the information required by Part III of
the report. Other than these items, none of the information contained in our
Form 10-K filed on November 13, 2002 has been revised or amended.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

Information regarding the names, ages, positions with us, and business
experience of each of our directors is set forth in the table below. Each
director has served continuously with us since his first election as indicated
below.

Director
Name Age Position(s) Since
---- --- ----------- -------

Douglas D. Burkett, Ph.D. 39 Chairman of the Board, President 2002
and Chief Executive Officer
Joseph Hines(1) 74 Director 1983
Carl A. Schroeder (2) (3) 73 Director 1984
Michael S. Lesser (3) 60 Director 1995
Curtis M. Rocca III 40 Director 1997
Christopher D. Johnson (2) 50 Director 1999
Kevin J. Tourek (3) 44 Director 1999
H. Richard Grisham (2) 57 Director 2001

(1) Previously President and Chief Executive Officer until June 6, 2002 and
Chairman of the Board until September 26, 2002

(2) Member of the Audit Committee

(3) Member of the Compensation Committee

DIRECTORS

Douglas D. Burkett, Ph.D. Dr. Burkett has served as our President and Chief
Executive Officer since June 2002 and Chairman
since September 2002. From May to June 2002 he was
Vice President and General Manager-Pharmaceutical
and Business Development. From September 2000 to
May 2002 he was Vice President and General Manager
- Zila Technical Operations. From August 1995 to
September 2000 he held a variety of positions with
us. These positions included serving as Vice
President of our Innovative Swab Technologies
subsidiary from February 2001 to June 2002; as
Vice President and General Manager-BioTech from
August 1997 to September 2000; as Director of
Research, Development and Manufacturing from
August 1996 to August 1997; and as
Manager-Research and Development from August 1995
to August 1996. At various points during his
tenure with us he has had responsibility for the
development of the manufacturing facility and the
refining and production of Zila Tolonium Chloride,
the active ingredient in Zila's OraTest(R) oral
cancer detection product. The U.S. Patent Office
granted Dr. Burkett three patents (which were
assigned to us) relating to the process of
manufacturing a pharmaceutical grade of Tolonium
Chloride. Prior to joining Zila, Dr. Burkett was a
research associate from May 1994 to August 1995
with the Cancer Research Institute at Arizona
State University where he collaborated with the
National Cancer Institute in developing efficient
techniques to prepare supplies of new cancer
treatment drugs for clinical trials. Dr. Burkett
received a B.S. in Chemistry from Missouri Western
State College in 1987 and a Ph.D. in Organic
Chemistry from Arizona State University in 1994.

-3-

Joseph Hines Mr. Hines served as our President and Chief
(former officer) Executive Officer from 1983 until June 2002 and as
our Chairman from 1983 until September 2002. From
1976 until 1983, Mr. Hines owned and operated
Desert Valley Companies, Inc., a management
consulting firm headquartered in Phoenix, Arizona.
From 1966 until 1976, Mr. Hines served as Chief
Executive Officer of several subsidiaries of Dart
Industries, formerly Rexall Drug and Chemical
Company. In December 2001, we and Mr. Hines
reached a settlement with the SEC relating to
certain public statements made by us in January
1999 with respect to the prospects for approval by
the FDA of the OraTest(R) Product. In order to
resolve the matter, and without admitting or
denying the Commission's findings, we and Mr.
Hines consented to the entry of an Order
Instituting Public Proceedings pursuant to Section
21C of the Act and the issuance of a
Cease-and-Desist Order prohibiting future
violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder.

Carl A. Schroeder Mr. Schroeder is retired. From September 1991 to
August 1996, Mr. Schroeder was the President of
Dixon Capital Corp. Between 1982 and September
1991, Mr. Schroeder was a private business
consultant. Mr. Schroeder was also a principal in
certain mining, drilling and farming operations
from 1987 to 1992. From 1977 to 1982, he served as
Chief Financial Officer with a high technology
division of the MEAD Corporation. Mr. Schroeder
received an engineering degree from MIT and an MBA
degree from Harvard Business School.

Michael S. Lesser Mr. Lesser is the president of Dental Concepts
LLC. From 1994 to January 1999, Mr. Lesser was
president of T.V. Direct, Inc. Mr. Lesser also was
the founder of Lesser & Roffe Company, a business
development consulting company. Prior to founding
Lesser & Roffe Company, Mr. Lesser served as
President of Ogilvy & Mather Co., Inc. from 1989
to 1990, as Chairman and Chief Executive Officer
of Lowe Marschalk Co., Inc. (a subsidiary of
Interpublic) from 1980 to 1989, and as Executive
Vice President and General Manager of Norcliff
Thayer, Inc. (a subsidiary of Revlon) from 1973 to
1979.

Curtis M. Rocca III Mr. Rocca is the Chief Executive Officer of
Douglas, Curtis & Allyn LLC, a business advisory
firm. From March 1998 to May 2001 Mr. Rocca was
the Chief Executive Officer and Director of Dental
Partners, Inc., a privately held dental practice
consulting and management company. Mr. Rocca was
President of the Zila Professional Products Group,
having held this position following Zila's
acquisition of Bio-Dental Technologies Corporation
in January 1997. Prior to the firm's acquisition
by Zila, Mr. Rocca served as President, CEO and
Chairman of Bio-Dental Technologies Corporation.
Mr. Rocca holds a B.A. in Economics from the
University of California at Davis, where he
graduated with honors. Mr. Rocca currently serves
as a director of Schick Technologies, Inc.,
located in Long Island City, New York.

Christopher D. Johnson Since 1995, Mr. Johnson has been a corporate
finance partner with Squire, Sanders & Dempsey,
LLP, a law firm with over 750 attorneys and
offices in ten major U.S. cities, eight European
capitals, Beijing, Taipei and Hong Kong. Mr.
Johnson served on the firm's five-member
Management Committee from 1997 to 2001. From 1994
to 1995, he was a partner with the firm of Meyer,
Hendricks, Victor, Osborn & Maledon, in Phoenix,
Arizona and before that he was a partner with the
firm of Streich Lang, also in Phoenix, Arizona.
Mr. Johnson received a B.A. from Princeton
University and a J.D. from the University of
Virginia. During fiscal 2002 Mr. Johnson's firm
performed limited legal services for us.

-4-

Kevin J. Tourek Mr. Tourek is Senior Vice President of Legal and
Human Resources for National Airlines, Inc., based
in Las Vegas, Nevada. National Airlines filed for
bankruptcy protection under Chapter 11 in December
2000. It is currently operating under such
protection. From 1987 to August 1998, Mr. Tourek
was a partner with the law firm of Streich Lang in
Phoenix, Arizona where his practice focused mainly
on corporate, securities and finance matters. Mr.
Tourek received his B.A. from Michigan State
University and a J.D. from the Ohio State
University College of Law.

H. Richard Grisham Mr. Grisham is retired. From January 1999 until
his retirement in December 1999 Mr. Grisham was
Executive Vice President and Managing Director -
Health Care for Johnson Research and Capital. From
January 1997 to January 1999, he was the Chief
Operating Officer and Vice President - Commercial
Business for United Healthcare of the Midwest -
HMO, one of the primary operating businesses of
United Health Group. From June 1995 to June 1996,
he was the President and Chief Operating Officer
of Unity Health System, a health care system
comprised of several acute care hospitals in St.
Louis, Missouri. From September 1981 to May 1995,
Mr. Grisham was the President and Chief Executive
Officer of St. Anthony's Medical Center, an acute
care facility in St. Louis. Mr. Grisham received a
B.S. in Pharmacy from the University of Oklahoma
College of Pharmacy and a M.H.A. (Masters in
Health Administration) from the Washington
University School of Medicine.

EXECUTIVE OFFICERS

Information regarding the names, ages, positions
with the Company, and business experience of the
Company's Executive Officers is set forth below.

Bradley C. Anderson Mr. Anderson, age 41, joined us as Vice President
and Treasurer in November 1996 and was named Chief
Financial Officer in January 1998. Prior to
joining the Company, from 1985 to 1996, Mr.
Anderson was employed by Deloitte & Touche LLP,
most recently as an Audit Senior Manager, in which
capacity Mr. Anderson provided auditing, planning,
and other assistance and consulting to numerous
privately and publicly held companies, including
the Company. Mr. Anderson received his B.S. in
Accountancy from Brigham Young University. Mr.
Anderson is a Certified Public Accountant.

Janice L. Backus Ms. Backus, age 53, retired as Secretary and Vice
(former officer) President effective October 11, 2002. She served
as our Secretary since April 1989 and in 1993 was
named a Vice President of the Company. From 1983
until April 1989, Ms. Backus served as Assistant
Secretary of the Company. Ms. Backus has also
served as the Assistant to the President since
1983. Prior to joining the Company, Ms. Backus
held administrative and secretarial positions with
the American Heart Association, Arizona Division,
BX International and Century Capital Corporation.

-5-

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors and persons who beneficially own
more than 10% of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers Automated
Quotation System. Officers, directors and greater than 10% stockholders are
required by Exchange Act regulations to furnish us with copies of all Section
16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms were
required for such persons, we believe that during the fiscal year ended July 31,
2002 its officers, directors, and greater than 10% beneficial owners have
complied with all filing requirements applicable to them.

Item 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The table below sets forth annual and long-term compensation for services
in all capacities to us for the fiscal years ended July 31, 2002, 2001, and 2000
of the persons who were, at July 31, 2002: (i) the Chief Executive Officer and
(ii) our other executive officers (the "Named Officers") whose total annual
salary and bonus exceeded $100,000.

Long-Term All Other
Annual Compensation Compensation Compensation(1)
------------------- ------------ ---------------
Securities
Name and Principal Fiscal Other Annual Underlying
Position Year Salary ($) Bonus ($) Compensation(3) Options(2)
- -------- ---- ---------- --------- --------------- ----------

Douglas D. Burkett, 2002 $180,506 $54,455 - 215,000 -
Ph.D.(4)
President, Chairman,
Chief Executive Officer
and Director

Bradley C. Anderson 2002 $195,060 $19,622 - 25,000 $7,932
Vice President and Chief 2001 184,080 18,876 - 25,000 7,001
Financial Officer 2000 163,857 10,725 - 30,000 5,582

Joseph Hines(5) 2002 $276,552 $20,625 - 25,000 $9,768
Director, Former 2001 262,000 26,681 - 40,000 8,224
President, Chief 2000 231,858 10,000 - 90,000 6,760
Executive Officer and
Chairman of the Board

Janice L. Backus(6) 2002 $156,088 $15,274 - 25,000 $6,360
Former Vice President and 2001 147,096 14,694 - 25,000 5,031
Secretary 2000 134,231 8,700 - 30,000 5,339

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

(1) Represents Company 401(k) plan-matching contributions.

(2) The exercise price of all stock options granted were at least equal to the
fair market values of the Company's Common Stock on the date of grant.

(3) If no amount is indicated, the amount of perquisites and other personal
benefits, securities or property given to each named executive officer
valued on the basis of aggregate incremental cost to the Company, was less
than the lower of $50,000 or 10% of the total of annual salary and bonus
for that executive officer during each of those years.

-6-

(4) Dr. Burkett was appointed President and Chief Executive Officer of the
Company on June 6, 2002 and Chairman on September 26, 2002. Dr. Burkett was
not an Executive Officer during fiscal years ended 2001 or 2000 and
accordingly compensation information is provided only for the full fiscal
year ended July 31, 2002.

(5) Mr. Hines resigned as President and Chief Executive Officer on June 6, 2002
and as Chairman on September 26, 2002. We entered into a severance
agreement with Mr. Hines effective October 11, 2002, further described in
"Employment Contracts and Severance Agreements."

(6) Ms. Backus resigned as Vice President and Secretary effective October 11,
2002. We entered into a severance agreement with Ms. Backus effective
October 11, 2002, further described in "Employment Contracts and Severance
Agreement".

STOCK OPTION GRANTS

The following Named Officers were granted stock options under the Company's
Stock Option Award Plan during the fiscal year ended July 31, 2002.

OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants
-----------------
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates of
Underlying Granted to Exercise of Stock Price
Option Employees in Price Expiration Appreciation for
Name Granted(1)(#) Fiscal Year (per share)(2) Date Option Term(3)
- ---- ------------- ------------ -------------- ---------- ---------------------------
5% 10%
-- ---

Douglas D. Burkett, 15,000 $2.37 12/14/2011 $22,357 $56,658
Ph.D. 200,000 41.9% $0.76 7/24/2012 $95,592 $242,249

Joseph Hines 35,000 6.8% $2.37 12/14/2011 $52,167 $132,201

Bradley C. Anderson 25,000 4.9% $2.37 12/14/2011 $37,262 $94,429

Janice L. Backus 25,000 4.9% $2.37 12/14/2011 $37,262 $94,429

(1) All options granted, except for the 200,000 options granted to Dr. Burkett,
vest annually over a three-year period in equal one-third increments and
vesting commences on the first anniversary date following the date of
grant. Dr. Burkett's 200,000 options vest one-third upon grant and the
balance in two equal installments on the first and second anniversaries of
the date of grant. All of the above options were granted on December 14,
2001, except for Dr. Burkett's 200,000 stock options, which were granted
effective July 24, 2002.

(2) All options were granted at the fair market value (the mean of the final
closing bid and asked prices of the Common Stock on the NASDAQ) on the date
of grant. The exercise price and tax withholding obligations related to
exercise may be paid by delivery of already owned shares or by offset of
the underlying shares, subject to certain conditions.

-7-

(3) The potential realizable value is calculated based on the ten-year term of
the option at the time of its grant. It is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate,
compounded annually over the term of the option. These numbers are
calculated based upon rules promulgated by the SEC and do not represent the
Company's estimated or projection of the future value of the Common Stock.
Potential gains are reported net of the option exercise price, but before
taxes associated with the exercise. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock and
overall stock market conditions, as well as the option holder's continued
employment. The amounts reflected in the table may not necessarily be
achieved.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUE AS OF JULY 31, 2002

The following table sets forth information with respect to the exercise of
stock options pursuant to the Company's Stock Option Award Plan during the
fiscal year ended July 31, 2002 by the Named Officers.

Number of Securities Underlying Value of Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year-End (#) Fiscal Year End ($)
------------------------------- --------------------
Shares
Acquired on Value
Name Exercise(#) Realized ($)(1) Exercisable(2) Unexercisable Exercisable(3) Unexercisable(3)
- ---- ----------- --------------- -------------- ------------- -------------- ----------------

Douglas D. - - 140,553 179,999 $4,000 $8,000
Burkett, Ph.D.

Bradley C. - - 233,334 51,666 -0- -0-
Anderson

Joseph Hines - - 235,603 91,666 -0- -0-

Janice L. - - 169,186 51,666 -0- -0-
Backus

- -----------------
(1) Represents the market value of the underlying securities on the date of
exercise, minus the exercise price of the options.

(2) Options are considered to be exercisable if they could be exercised on or
before July 31, 2002.

(3) Represents the difference between the bid and ask closing prices ($0.82) of
the Company's Common Stock on July 31, 2002 and the exercise price of the
options.

-8-

COMPENSATION OF DIRECTORS

Effective for the current fiscal year, non-employee members of the
Company's Board of Directors receive compensation in the amount of $10,000 per
year and $2,000 per meeting of the Board that they attend in person and $1,000
for each meeting that they attend by telephone. Directors receive $1,000 per
meeting for any committee meeting that they attend. Additionally, the director
serving as committee chair of the Audit Committee receives an annual fee of
$5,000 and the director serving as chair of the Compensation Committee receives
an annual fee of $2,500. Previously, during the fiscal year ended July 31, 2002
non-employee members of the Company's Board of Directors received compensation
in the amount of $1,500 per meeting of the Board of Directors attended by such
Director in person, and $500 per meeting of the Board of Directors attended by
such Director by telephone. Directors received $750 per meeting of any of the
Committees of the Board that they attended in person and $500 per meeting that
they attended by telephone. In 1989, the Board of Directors adopted and the
stockholders approved the Company's Non-Employee Directors Stock Option Plan
(the "Directors Plan"). The Board of Directors has approved an amendment to the
Director's Plan, subject to stockholder approval. Under the terms of the
Directors Plan, as proposed to be amended, immediately exercisable options to
purchase 20,000 shares of Common Stock are granted to each non-employee member
of the Board of Directors upon election to the Board of Directors and annually
on the third trading day following the day the Company publicly announces its
year-end financial results for the immediately preceding fiscal year; provided,
however, that options may not be granted to any non-employee director who,
during the fiscal year immediately preceding the grant date, attended less than
75% of the Board meetings and committee meetings (if he is a member of such
committee) held while he was a member of the Board of Directors. As proposed to
be amended, the options will vest quarterly over a one-year period. The per
share price at which the options may be exercised is the average of the closing
bid and asked prices of the Common Stock on the date of grant. The term of each
option granted under the Directors Plan is five years from the date of grant.
The Board may from time to time amend the Directors Plan in whole or in part in
such respects as the Board may deem advisable, subject to approval by the
shareholders, or may terminate the Directors Plan.

On August 9, 2002 and September 21, 2001, each non-employee director
serving on the Board was granted an option to purchase 5,000 and 2,500 shares,
respectively, of Common Stock at a per share exercise price of $1.12 and $1.865,
respectively. As of September 26, 2002, options to purchase 92,089 shares of
Common Stock granted under the Directors Plan have been exercised.

EMPLOYMENT CONTRACTS AND SEVERANCE AGREEMENTS
AND CHANGE-IN-CONTROL ARRANGEMENTS

During the first quarter of fiscal 2003, we entered into an employment
agreement with Douglas D. Burkett, Ph.D. pursuant to which Dr. Burkett is
employed as President and Chief Executive Officer of the Company. The agreement
is effective as of July 24, 2002 and terminates January 24, 2004, but may be
automatically renewed for successive six-month terms unless terminated by either
party upon thirty days notice. The agreement provides for an initial base salary
of $250,000, which is subject to periodic review by the Board or the
Compensation Committee to determine whether to increase such amount. We paid Dr.
Burkett a bonus of $35,000 in connection with the execution of the agreement. He
is also eligible for a performance bonus of up to 35% of his annual base salary
as determined by the Board or the Compensation Committee at the end of each
fiscal year. Dr. Burkett is eligible to participate in any applicable Company
bonus plan or program or stock option plan or program. We granted him options to
purchase 200,000 shares of stock on the effective date at an exercise price of
$.76 per share and will grant him options to purchase 100,000 shares of stock on
the first anniversary of the effective date at an exercise price equal to the
mean of the closing bid and ask prices of the common stock on such date. Such
options will vest one-third on the date of grant and one-third on each of the
first and second anniversaries of the date of grant. In addition to his cash
compensation, Dr. Burkett will also receive an automobile allowance of $950 per
month, reimbursement of certain tax and estate planning expenses and other
benefits, including those generally provided to our other employees.

We entered into a Severance Agreement with Joseph Hines dated as of October
11, 2002 in connection with his earlier resignation as Chairman of the Board and
Chief Executive Officer and pursuant to which his employment with the Company
Terminated effective October 11, 2002. Under the Agreement, we will pay Mr.
Hines a severance payment of $177,375, payable on a semi-monthly basis through
July 31, 2003. We will also pay for Mr. Hines' COBRA payments and provide
funding for off-site office space for six months.

-9-

We entered into a Severance Agreement with Janice Backus dated as of
October 11, 2002 in connection with her resignation as an employee and officer
of the Company. Under the Agreement, we will pay Ms. Backus a severance payment
equal to her continued salary until December 31, 2003 ($170,172), payable on a
semi-monthly basis in accordance with our standard payroll practices. We will
also pay for Ms. Backus' COBRA benefits through December 31, 2003.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The compensation committee of the Board of Directors consists of Carl A.
Schroeder, Michael S. Lesser, and Kevin J. Tourek. No member of the compensation
committee is our employee. There are no compensation committee interlocks (i.e.
no executive officer of ours serves as a member of the board of directors or the
compensation committee of another entity which has an executive officer serving
on our board of directors or the compensation committee).

STOCK PRICE PERFORMANCE GRAPH

The graph below compares the cumulative total return of the Company's
Common Stock with the NASDAQ stock market index (U.S. companies) and the NASDAQ
pharmaceutical index from July 31, 1997 to July 31, 2002.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG ZILA, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX,
AND THE NASDAQ PHARMACEUTICAL INDEX

Cumulative Total Return
------------------------------------------------------------------------
7/97 7/98 7/99 7/00 7/01 7/02

ZILA, INC. 100.00 85.47 46.58 52.99 34.60 10.94
NASDAQ STOCK MARKET (U.S.) 100.00 117.68 168.18 239.52 128.56 84.94
NASDAQ PHARMACEUTICAL 100.00 100.27 156.57 297.80 248.18 159.83

*$100 Invested on 7/31/97 in stock or index-including reinvestment of dividends.
Fiscal year ending July 31.

-10-

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table sets forth, as of September 30, 2002, the number and
percentage of outstanding shares of Common Stock beneficially owned by (a) each
person known by us to beneficially own more than 5% of such stock, (b) each
director of the Company, (c) each of the Named Officers, (d) each nominee for
Director, and (e) all our directors, executive officers and nominee as a group.
The address of each stockholder listed below is c/o Zila, Inc., 5227 North 7th
Street, Phoenix, Arizona 85014-2800.

Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Common Stock
- ------------------- ------------------- ------------

Joseph Hines 1,262,355(1) 2.8%
Douglas D. Burkett, Ph.D. 150,553(2) *
Janice L. Backus 280,067(3) *
Bradley C. Anderson 238,694(4) *
Carl Schroeder 37,500(5) *
Michael S. Lesser 26,000(5) *
Curtis M. Rocca III 64,074(6) *
Christopher D. Johnson 15,000(7) *
Kevin J. Tourek 15,500(7) *
H. Richard Grisham 130,000(8) *

All officers and directors 2,219,743 4.9%
as a group (10 persons)(9)

- --------------------------
* Represents less than 1%.

(1) Includes 235,603 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(2) Includes 140,553 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(3) Includes 169,186 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(4) Includes 233,334 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(5) Includes 20,000 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

-11-

(6) Includes 17,500 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(7) Includes 15,000 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(8) Includes 5,000 shares of Common Stock which are subject to unexercised
options that were exercisable on September 30, 2002 or within 60 days
thereafter.

(9) Includes the shares of Common Stock subject to the options described above.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes options, warrants and securities available
for issuance under the Company's equity compensation plans as of July 31, 2002.

NUMBER OF SECURITIES
REMAINING AVAILABLE
NUMBER OF SECURITIES FOR ISSUANCE UNDER
TO BE ISSUED UPON WEIGHTED-AVERAGE EQUITY COMPENSATION
EXERCISE OF EXERCISE PRICE OF PLANS (EXCLUDING
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, SECURITIES REFLECTED
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS IN COLUMN (a)
(a) (b) (c)
- -----------------------------------------------------------------------------------------------------------------------------

Equity compensation plans 2,196,000 $4.42 3,428,990 (2)
approved by security holder
(1)
Equity compensation plans 25,000 $4.36 --
not approved by security _____________
holders (3)
Total 2,221,000

(1) Includes the 1997 Stock Option Award Plan, the 1988 Stock Option Award
Plan, the Non-Employee Directors Stock Option Plan, and the Zila, Inc. Employee
Stock Purchase Plan

(2) Includes 1,974,990 shares issuable under the Zila, Inc. Employee Stock
Purchase Plan.

(3) In March 2000, we issued a warrant to purchase 10,000 shares of our
common stock to a financial advisor. The warrant was issued pursuant to the
terms of an engagement agreement, and the exercise price is $4.906 per share. In
December 2000, we issued a warrant to purchase 15,000 shares of our common stock
to a financial advisor. The warrant was issued pursuant to the terms of a
consulting agreement and 7,500 of the shares underlying the warrant have an
exercise price of $4.00 per share and 7,500 of the shares have an exercise price
of $5.00 per share.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATED TRANSACTIONS

In fiscal 2002, we paid $194,829 to Douglas, Curtis and Allyn, LLC
("Douglas"), a limited liability company owned by a member of our Board of
Directors, Mr. Curtis Rocca. The payment was related to consulting work
performed in connection with the sale of the Zila Dental Supply businesses and
pursuant to an engagement letter, dated March 15, 2001, between Douglas and us.
In addition, Douglas was paid an advisory retainer of $60,000 during fiscal
2002. The arrangements were terminated in July 2002.

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In fiscal 2002, we paid legal fees and expenses totaling $38,000 to Squire,
Sanders & Dempsey LLP, of which a member of our Board of Directors, Christopher
D. Johnson, is a partner.

As of July 31, 2002, Douglas D. Burkett, Ph.D., our current President,
Chief Executive Officer and Chairman, owed the Company $19,038 consisting of a
loan and an advance. The loan and the advance predated the enactment of the
Sarbanes-Oxley Act on July 30, 2002. Approximately $11,300 (all of which was in
the form of an advance) was repaid in August 2003. The remaining loan amount,
which bears interest at an annual rate of 6%, will be paid in full by January
31, 2003 through regular payroll deductions. There have been no changes to the
terms of the loan.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON FORM 8-K

Method of Filing
----------------

(a) Financial Statements
(1) Report of Deloitte & Touche LLP **
(2) Consolidated Financial Statements and Notes thereto of the Company including **
Consolidated Balance Sheets as of July 31, 2002 and 2001 and related
Consolidated Statements of Operations, Comprehensive Income (Loss),
Shareholders' Equity, and Cash Flows for each of the years in the
three-year period ended July 31, 2002
(3)Financial Statement Schedule Schedule II Valuation and Qualifying Accounts **
(b)Reports on Form 8-K for the quarter ended July 31, 2002.

During the quarter ended July 31, 2002, we filed a Current Report on
Form 8-K dated June 18, 2002 containing information pursuant to Item 2
("Acquisition or Disposition of Assets") announcing the restructure and
finalization of the sale of the Zila Dental Supply mail order
operations (assets and liabilities) to PracticeWares, Inc. of
Sacramento, CA.

Exhibit
Number Description Method of Filing
-------- ----------- ----------------

3-A Certificate of Incorporation, as amended A
3-B Amended and Restated Bylaws (as amended through September 26, 2002) *
3-C Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock C
3-D Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock L
4-A Specimen Stock Certificate A
10-A Revolving Line of Credit Loan Agreement dated February 1, 1999 between Zila, Inc. and Bank One,
Arizona A
10-B Stock Option Award Plan (as amended through April 10, 1991) B
10-C Non-Employee Directors Stock Option Plan (as amended through April 10, 1991) B
10-L Asset Purchase Agreement dated October 28, 1999 between Zila, Inc., Cygnus Imaging, Inc. and
Procare Laboratories, Inc A
10-M Secured Note dated October 28, 1999 between Zila, Inc. and Procare Laboratories, Inc A
10-N Asset Purchase agreement dated as of November 30, 1999 by and among Zila, Inc., Integrated Dental
Technologies, Inc., InfoCure Systems, Inc., and InfoCure Corporation E
10-O Revolving Line of Credit Loan Agreement dated December 1, 2000 between Zila, Inc. and Bank One,
Arizona, NA H
10-P First Loan Modification Agreement dated May 7, 2001 between Zila, Inc. and Bank One Arizona, NA H
10-Q Engagement Letter dated March 15, 2001 between Zila, Inc. and Douglas, Curtis and Allyn, LLC H

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Exhibit
Number Description Method of Filing
-------- ----------- ----------------

10-R Extension to First Loan Modification Agreement dated effective May 31, 2001 between Zila, Inc.
and Bank One Arizona, NA H
10-S Second Extension to First Loan Modification Agreement dated effective June 29, 2001 between Zila,
Inc. and Bank One Arizona, NA I
10-T Third Extension to First Loan Modification Agreement dated effective July 31, 2001 between Zila,
Inc. and Bank One Arizona, NA J
10-U 1997 Stock Option Award Plan (as amended through September 13, 2001) G
10-V Employee Stock Purchase Plan F
10-W Loan and Security Agreement dated August 17, 2001 by and between Congress Financial Corporation
and Zila, Inc., Zila Pharmaceuticals, Inc. Ryker Dental of Kentucky, Inc. and Inter-Cal
Corporation, Inc K
10-X Asset Purchase Agreement, dated as of November 1, 2001, by and between Ryker Dental of Kentucky,
Inc. and Henry Schein, Inc. M
10-Y Amended and Restated Asset Purchase Agreement dated as of December 4, 2001 by and among
Zila, Inc., Ryker Dental of Kentucky, Inc. and PracticeWares, Inc. M
10-Z First Amendment to Engagement Letter dated as
of June 6, 2002 between Zila, Inc. and Douglas, Curtis & Allyn, LLC N
10-Aa Fourth Extension and Modification Agreement dated as of June 6, 2002 between Ryker Dental
of Kentucky, Inc., PracticeWares, Inc. and PracticeWorks, Inc. and Gregory A. Jones N
10-Ab First Amendment to Amended and Restated Asset Purchase Agreement dated as of June 18, 2002
between Ryker Dental of Kentucky, Inc., PracticeWares, Inc. and Zila, Inc N
10-Ac Stockholders Agreement dated as of June 18, 2002, among PracticeWorks, Inc., Gregory A.
Jones, Ryker Dental of Kentucky, Inc. and PracticeWares, Inc N
10-Ad Employment Agreement dated effective as of July 24, 2002 by and between Zila, Inc. and Douglas D.
Burkett, Ph.D. *
10-Ae Severance Agreement dated as of October 11, 2002 by and between Zila, Inc. and Joseph and Nancy
Hines *
10-Af Severance Agreement dated as of October 11, 2002 by and between Zila, Inc. and Janice Backus *

21 Subsidiaries of Registrant D
23 Consent of Deloitte & Touche LLP (regarding Form S-8 and Form S-3 Registration Statements) **

24-A Power of Attorney of Bradley C. Anderson **
24-B Power of Attorney of Douglas D. Burkett **
24-C Power of Attorney of H. Richard Grisham **
24-D Power of Attorney of Joseph Hines **
24-E Power of Attorney of Christopher D. Johnson **
24-F Power of Attorney of Michael S. Lesser **
24-G Power of Attorney of Curtis M. Rocca **
24-H Power of Attorney of Carl A. Schroeder **
24-I Power of Attorney of Kevin J. Tourek **
99.1 Sarbanes-Oxley Section 906 Certification of the Chief Executive Officer **
99.2 Sarbanes-Oxley Section 906 Certification of the Chief Financial Officer **
99.3 Sarbanes-Oxley Section 906 Certification of the Chief Executive Officer *
99.4 Sarbanes-Oxley Section 906 Certification of the Chief Financial Officer *

* Filed herewith
** Filed with the Company's Annual Report on Form 10-K for fiscal year ended July 31,
2002, filed on November 13, 2002.

A Incorporated by reference to the Company's Annual Report on Form 10-K for fiscal year ended July 31, 1999
B Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
January 31, 1996, as amended
C Incorporated by reference to the Company's Annual Report on Form 10-K for fiscal year ended July 31, 1997
D Incorporated by reference to the Company's Annual Report on Form 10-K for fiscal year ended July 31, 1998
E Incorporated by reference to the Company's Current Report on Form 8-K dated January 3, 2000

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F Incorporated by reference to the Company's Form S-8 Registration Statement No. 333-54958 dated February 5, 2001
G Incorporated by reference to the Company's Form S-8 Registration Statement No. 333-54960 dated February 5, 2001
H Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
April 30, 2001
I Incorporated by reference to the Company's Current Report on Form 8-K dated June 29, 2001
J Incorporated by reference to the Company's Current Report on Form 8-K dated July 31, 2001
K Incorporated by reference to the Company's Current Report on Form 8-K dated August 17, 2001
L Incorporated by reference to the Company's Annual Report on Form 10-K for fiscal year ended July 31, 2001
M Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
October 31, 2001
N Incorporated by reference to the Company's Current Report on Form 8-K dated June 18, 2002

-15-

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 on Form 10-K/A
to be signed on its behalf by the undersigned, thereunto duly authorized, this
29th day of November, 2002.

ZILA, INC., a Delaware corporation

By /s/ BRADLEY C. ANDERSON
------------------------
Bradley C. Anderson
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report on Form 10-K/A has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:

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

/s/DOUGLAS D. BURKETT, Ph.D. Chairman of the Board, November 29, 2002
- -------------------------------------------- President, Chief
Douglas D. Burkett Ph.D. Executive Officer

* Director November 29, 2002
- --------------------------------------------
H. Richard Grisham

* Director November 29, 2002
- --------------------------------------------
Joseph Hines

* Director November 29, 2002
- --------------------------------------------
Christopher D. Johnson

* Director November 29, 2002
- --------------------------------------------
Michael S. Lesser

* Director November 29, 2002
- --------------------------------------------
Curtis M. Rocca III

* Director November 29, 2002
- --------------------------------------------
Carl A. Schroeder

* Director November 29, 2002
- --------------------------------------------
Kevin J. Tourek

* By /s/ Bradley C. Anderson November 29, 2002
- --------------------------------------------
Bradley C. Anderson
Attorney-in Fact

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CERTIFICATIONS

I, Douglas D. Burkett, certify that:

1. I have reviewed this annual report on Form 10-K of Zila, Incorporated;
and
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report.

Date: November 29, 2002

/s/ Douglas D. Burkett Ph. D.
---------------------------------
Douglas D. Burkett Ph. D.
Chief Executive Officer

I, Bradley C. Anderson, certify that:

Date: November 29, 2002

/s/ Bradley C. Anderson
--------------------------
Bradley C. Anderson
Chief Financial Officer

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