U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

            [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001

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

                        For the transition period from to

                         Commission file number 33-6505D


                                  MORLEX, INC.
        (Exact name of small business issuer as specified in its charter)


                 Colorado                                      84-1028977
      (State or other jurisdiction of                       (I.R.S. employer
       incorporation or organization)                     identification number)


999 Walt Whitman Road, 3rd Floor, Melville, NY                   11747
   (Address of principal executive offices                     (Zip Code)


Issuer's telephone number, including area code: (631) 421-3600


                                    No change
                     (Former name, former address and former
                   fiscal year, if changed since last report)


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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity,  as of the latest  practicable  date:  750,160  shares of Common
Stock, par value $ .001 per share, outstanding as of November 7, 2001.

<PAGE>


                                  MORLEX, INC.

                                    - INDEX -


                                                                         Page(s)
PART I - FINANCIAL INFORMATION:

Item 1. Financial Statements:

  Balance Sheets-September 30, 2001 (unaudited) and December 31, 2000         3.

  Statements of Operations (unaudited) for the cumulative period during
  the development stage (January 1, 2000 to September 30, 2001) and the
  three and nine months ended September 30, 2001 and 2000                     4.

  Statements of Cash Flows (unaudited) for the cumulative period during
  the development stage (January 1, 2000 to September 30, 2001) and the
  nine months ended September 30, 2001 and 2000                               5.

  Note to Interim Condensed Financial Statements                              6.

Item 2. Management's Discussion and Analysis or Plan of Operation             7.


PART II - OTHER INFORMATION                                                   8.


SIGNATURES                                                                    9.

<PAGE>


                                  MORLEX, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                  September 30, December 31,
                                                                       2001         2000
                                                                    ---------    ---------
                                                                   (unaudited)
<S>                                                                 <C>          <C>
                                   - ASSETS -
CURRENT ASSETS:
  Cash                                                              $      48    $     683
                                                                    ---------    ---------
TOTAL ASSETS                                                        $      48    $     683
                                                                    =========    =========

                  - LIABILITIES AND SHAREHOLDERS' (DEFICIT) -

CURRENT LIABILITIES:
  Accrued expenses                                                  $   4,000    $   1,500
                                                                    ---------    ---------
TOTAL CURRENT LIABILITIES                                               4,000        1,500
                                                                    ---------    ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' (DEFICIT):
  Common stock, $.001 par value; 1,000,000,000 shares authorized,
    971,765 shares issued and outstanding in 2001 and 2000                972          972
  Additional paid-in capital                                          363,798      358,398
  Accumulated deficit                                                (341,027)    (341,027)
  Deficit accumulated during the development stage                    (27,473)     (18,938)
  Treasury stock, at par - 221,605 shares                                (222)        (222)
                                                                    ---------    ---------
                                                                       (3,952)        (817)
                                                                    ---------    ---------
                                                                    $      48    $     683
                                                                    =========    =========
</TABLE>


                             See accompanying notes.


                                                                         Page 3.
<PAGE>


                                  MORLEX, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (unaudited)


<TABLE>
<CAPTION>
                                      Cumulative During
                                       the Development
                                           Stage
                                      (January 1, 2000     For the Three Months       For The Nine Months
                                             to             Ended September 30,       Ended September 30,
                                        September 30,     ----------------------    ----------------------
                                            2001)            2001         2000         2001         2000
                                         ---------        ---------    ---------    ---------    ---------
<S>                                      <C>              <C>          <C>          <C>          <C>
REVENUES                                 $    --          $    --      $    --      $    --      $    --
                                         ---------        ---------    ---------    ---------    ---------
COSTS AND EXPENSES:
     Professional fees                      22,506            1,250        4,950        6,768        9,186
     Filing fees                             4,355             --            625        1,583        2,095
     Other expenses                            612               60         --            184           64
                                         ---------        ---------    ---------    ---------    ---------

                                            27,473            1,310        5,575        8,535       11,345
                                         ---------        ---------    ---------    ---------    ---------

NET LOSS                                 $ (27,473)       $  (1,310)   $  (5,575)   $  (8,535)   $ (11,345)
                                         =========        =========    =========    =========    =========

LOSS PER SHARE - BASIC AND DILUTED       $    (.03)       $    --      $    --      $    (.01)   $    (.01)
                                         =========        =========    =========    =========    =========
WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING                      971,765          971,765      971,765      971,765      971,765
                                         =========        =========    =========    =========    =========
</TABLE>


                             See accompanying notes.


                                                                         Page 4.
<PAGE>


                                  MORLEX, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                Cumulative During
                                                 the Development
                                                      Stage
                                                (January 1, 2000   For the Nine Months Ended
                                                        to               September 30,
                                                   September 30,    -----------------------
                                                       2001)          2001           2000
                                                     --------       --------       --------
<S>                                                  <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                          $(27,473)      $ (8,535)      $(11,345)


Changes in assets and liabilities:

   Increase (decrease) in accrued expenses              2,520          2,500           (510)
                                                     --------       --------       --------

      Net cash used by operating activities           (24,953)        (6,035)       (11,855)
                                                     --------       --------       --------


CASH FLOWS FROM FINANCING ACTIVITIES:

   Capital contributed                                 21,900          5,400          9,000
                                                     --------       --------       --------

      Net cash provided by financing activities        21,900          5,400          9,000
                                                     --------       --------       --------

NET (DECREASE) IN CASH                                 (3,053)          (635)        (2,855)

   Cash at beginning of period                          3,101            683          3,101
                                                     --------       --------       --------

CASH BALANCE AT END OF PERIOD                        $     48       $     48       $    246
                                                     ========       ========       ========
</TABLE>


                             See accompanying notes.


                                                                         Page 5.
<PAGE>


                                  MORLEX, Inc.
                          (a Development Stage Company)
                      NOTE TO INTERIM FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                   (Unaudited)


NOTE 1 -  DESCRIPTION OF COMPANY AND GOING CONCERN UNCERTAINTY:

          Morlex,  Inc.,  the Company,  was  incorporated  under the laws of the
          State of  Colorado  on April 23,  1986.  The  primary  activity of the
          Company was to seek merger or acquisition candidates. In January 1987,
          the Company,  in a  stock-for-stock  exchange acquired America OnLine,
          Inc.,  a then  wholly-owned  subsidiary  of  Info  Source  Information
          Service, Inc. The Company  simultaneously  changed its name to America
          OnLine,  Inc.  ("AOL  #1").  AOL  #1 was  never  affiliated  with  the
          well-known company of the same name. On December 28, 1992, the Company
          terminated  the  business  of AOL #1 and  has had no  active  business
          operations since. On May 15, 1998, the name of the Company was changed
          back to Morlex,  Inc.  The  Company  is  currently  seeking  potential
          business opportunities.

          As shown in the  financial  statements,  the Company has  incurred net
          losses,  has negative working capital and has accumulated a deficit of
          $368,500 as of September 30, 2001. It is  management's  assertion that
          these  circumstances may hinder the Company's ability to continue as a
          going concern. Management has not yet developed a formal plan to raise
          funds for either the Company's short or long term needs.

          In accordance with Statement of Financial  Accounting Standards No. 7,
          the Company is being  treated as a  development  stage  company  since
          January 1, 2000, the date the Company began devoting substantially all
          of their efforts to establish a new business.

          The accounting  policies followed by the Company are set forth in Note
          2 to the Company's financial  statements included in its annual report
          on Form  10-KSB  which  was filed  with the  Securities  and  Exchange
          Commission  and which is  incorporated  herein by reference.  Specific
          reference is made to this report for a  description  of the  Company's
          securities and the notes to the financial statements included therein.

          These  financial  statements have been prepared in accordance with the
          rules for Form 10-QSB and  therefore  may not contain all  disclosures
          required by  accounting  principles  generally  accepted in the United
          States of America.  In the  opinion of  management,  the  accompanying
          unaudited  interim  financial  statements of Morlex,  Inc. contain all
          adjustments  necessary  to  present  fairly  the  Company's  financial
          position as of  September  30, 2001 and the results of its  operations
          for the three and nine month periods ended September 30, 2001 and 2000
          and for the cumulative period during the development stage (January 1,
          2000 to  September  30,  2001) and its cash  flows for the nine  month
          periods  ended  September  30,  2001 and  2000 and for the  cumulative
          period during the development  stage (January 1, 2000 to September 30,
          2001).

          The results of  operations  for the three and nine month periods ended
          September  30,  2001 and 2000 are not  necessarily  indicative  of the
          results to be expected for the full year.


                                                                         Page 6.
<PAGE>


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

          The Company has incurred a net loss of $1,310 and $8,535 for the three
          and nine months ended September 30, 2001.  Combined with the fact that
          the  Company  has no working  capital  and an  accumulated  deficit of
          $368,500 as of September 30, 2001, it is  management's  assertion that
          these  circumstances may hinder the Company's ability to continue as a
          going concern.

          Results/Plan  of  Operation.  The Company has not conducted any active
          operations  in the past two fiscal  years,  except for its  efforts to
          locate   suitable   acquisition   candidates   (see  Item  5,  below).
          Accordingly,  we have not realized any revenues from operations in the
          past two fiscal years and through  September  30, 2001.  The Company's
          plan of operation  for the next twelve months shall be to continue its
          efforts to locate suitable acquisition candidates.  It is unlikely the
          Company  will  have  any  revenues  unless  it is  able to  effect  an
          acquisition  of, or merger with an operating  company,  of which there
          can be no assurance.

          The Company filed,  on June 14, 1999, a Registration  Statement  under
          the  Securities  Exchange Act of 1934 (the  "Exchange  Act"),  on Form
          10-SB,  pursuant  to which the Company  sought to register  its Common
          Stock  under the  Exchange  Act.  The  Registration  Statement  became
          effective on August 14, 1999. The Company believes that it can enhance
          its opportunities to acquire or merge with an operating company if its
          securities are listed on the Bulletin Board. There can be no assurance
          that the Company's securities will be listed on the Bulletin Board.

          Liquidity and Capital Resources. As of September 30, 2001, the Company
          had assets  consisting of $48 in cash. This compares to assets of $683
          in cash as of the year  ended  December  31,  2000.  The  Company  can
          provide  no  assurance  that  it can  continue  to  satisfy  its  cash
          requirements for at least the next twelve months.


                                                                         Page 7.
<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.  To the best knowledge of the officers and directors,
the Company is not party to any legal proceeding or litigation.

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. On August 1, 2001 an agreement and plan of merger was
executed by and between the Company, a newly formed,  wholly owned subsidiary of
the Company and an  operating  company.  However,  pursuant to the terms of that
agreement, in September 2001 the Board of Directors of the Company abandoned the
contemplated transaction and terminated the agreement due to material changes in
the  business of the  operating  company.  Management  continues  its efforts to
locate suitable acquisition candidates.

Item 6. Exhibits and Reports on Form 8-K.

     (a)  Exhibits.                          None

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


                                                                         Page 8.
<PAGE>


                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date: November 7, 2001


                                        MORLEX, INC.


                                        By:  /s/ Lawrence Kaplan
                                             ----------------------------------
                                             Lawrence Kaplan, President and
                                             Principal Accounting Officer


                                                                         Page 9.