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


                                  FORM 10-KSB/A
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                   For the Fiscal Year Ended December 31, 2001
                           Commission File No. 0-23761

                      ADVANCED TECHNOLOGY INDUSTRIES, INC.
                      ------------------------------------
                 (Name of small business issuer in its charter)

               Delaware                              13-4000208
               --------                              ----------
   (State or other jurisdiction of                (I.R.S. Employer
    incorporation or organization)               Identification No.)

                            Taubenstrasse 20, D-10117
                                 Berlin, Germany
                    (Address of principal executive offices)
                    Issuer's telephone number: 49 30 201-7780

Securities registered pursuant to Section 12(b) of the Act:      None

Securities registered pursuant to Section 12(g) of the Act: Common Stock
(Title of class)

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best or registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year:  $ 0

At April 15, 2002 there were 23,125,052 outstanding shares of registrant's
common stock held by non-affiliates, with a market value of approximately
$29,600,066 based on a closing bid quotation on the NASD OTC Bulletin Board on
that date of $1.28 per share.

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 and 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Not applicable

At April 15, 2002, a total of 46,270,605 shares of registrant's common stock
were outstanding.

Transitional Small Business Disclosure Format (check one):  Yes; [ ] No [X]

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                      ADVANCED TECHNOLOGY INDUSTRIES, INC.

PART I

ITEM 1. Description of Business

BUSINESS DEVELOPMENT

         Advanced Technology Industries, Incorporated (the "Company", "we" or
"us"), was incorporated under the laws of the State of Delaware on October 25,
1995. We were organized to identify, assess, acquire and capitalize on
innovative technologies introduced and developed by scientists throughout the
world with particular emphasis on technologies originating in Israel, Russia,
Germany and the United States.

         Our principal activities include identifying, reviewing and assessing
technologies for their commercial applicability and potential. During the period
from January 1, 2001 through December 31, 2001, we engaged in the following
activities;

         Formed RESEAL, Ltd, a Delaware corp., to hold the Company's ownership
of two proprietary resealable beverage packaging products and successfully
commercialize the products, which is now 96% owned by us.

         We formed SIBCONVERS, a Russian joint-stock company, in which we now
hold a 50% ownership interest. This company will pursue programs offered by
various governmental agencies of Russia, the United States, and the European
Union for the conversion of Russian nuclear defense industries into high tech
non-defense and nuclear remediation enterprises and to re-train nuclear and
military researchers, technicians and engineers employed in these industries.
These industries are primarily located in the closed "Nuclear Cities" situated
in Siberia.

         We formed Container Engineering, a Russian joint-stock company, in
which we own 50%. This company was formed to exploit and manufacture silicon
carbide technologies developed by Russian scientists.

         We formed International Center for Advanced Technologies, a Russian
joint-stock company. The company has entered into an agreement with a Russian
company known as The Research Institute of Physics and Engineering to explore
the development of an incubator/technology park in the Russian city of
Zhelesnogorsk. The proposal is to take a portion of a large underground nuclear
complex in that city and develop it into a facility to be known as the
International Center of Advanced Technologies ("ICAT") for the conversion of
existing companies engaged in nuclear defense technologies into non-nuclear
technologies and nuclear waste remediation technologies.

         During 2001, we acquired a 29.27% interest in Nurescell Inc., a Nevada
corporation. On January 11, 2001 we acquired a total of 3,500,000 shares of
Nurescell Common Stock from trusts controlled by Adrian and Diana Joseph in
exchange for the issuance of 3,500,000 shares of our Common Stock and a proxy
giving voting right for the stock to Mr. Kurt Seifman for a period of six years.
On April 16, 2001 we executed an agreement with a shareholder of Nurescell,

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Inc., Glenn A. Cramer, to exchange 1,090,000 shares of our common stock for
1,090,000 shares of stock of Nurescell, Inc. The agreement also granted
piggy-back registration rights to the shareholder. This transaction was reported
on Current Form 8-K which was filed on April 30, 2001.

         We acquired the remaining 51% of ATI Nurescell AG from Nurescell Inc
and renamed the company ATI Nuklear AG. ATI Nuklear is a German company engaged
in the development of radiation shielding and nuclear waste storage and
transportation. We owned 49% of ATI Nuklear AG prior to entering into this
agreement.

         We formed the International Laboratory for Nuclear Waste Management. In
forming this lab, we entered into an agreement with the Federal Republic of
Germany nuclear research center (Forschungszentrum Juelich Institute fur
Sicherheitsforschung and Reaktortechnik) and the Institute of Physics and
Engineering of the State University of Krasnoyarsk to develop new methods or
treating, transporting and storing nuclear waste.

BUSINESS OF ISSUER

         We acquire interests in a portfolio of technologies and companies.
Daily operation of our companies in which we have stock ownership is handled
directly by each company's existing management. All acquired technologies and
companies function fully autonomous of us. When we acquire an interest in a
company, we negotiate for representation on its board of directors. Our
designated representative is responsible for monitoring all aspects of our
investment and reporting material events directly to our Board of Directors. In
instances where we own a controlling interest in a portfolio company, we have
the ability to direct the development, marketing, and commercialization of
products. However, where we own only a minority interest or do not otherwise
exercise control over a portfolio company we must rely upon and be governed by
the decisions of management of those companies concerning those matters. In
addition, where we have a non-controlling interest in a portfolio company, in
the absence of other agreements (such as revenue sharing agreements), we will
earn revenues from the portfolio company only in the form of dividends which may
be declared by the portfolio company only in the form of dividends which may be
declared by the portfolio company and the declaration of said dividends are
solely within the discretion of the Board of Directors of the portfolio company.

PORTFOLIO TECHNOLOGIES AND COMPANIES
------------------------------------

Described below are the various technologies in which we presently own an
interest.

         During April, 1999, we acquired a 20% equity interest in each of two
Israeli companies, Flexitech, Ltd. ("Flexitech") and Pirocat, Ltd. ("Pirocat").
Flexitech has developed a heating element, which can be printed on a thin film
substrate, and Pirocat has developed a technology, which allows for conversion
of plastic waste into fuel, which can be used to produce gasoline, diesel fuel,
and heating oil.

         We purchased our interest from Ofek Le-Oleh Foundation, Ltd. (the
"Foundation"), an Israeli company with the authority to manage and distribute
Israeli government funds needed to create the infrastructure for incubation
technologies, which holds the remaining 80% interest. The agreements require us
to pay $60,000 for our equity stake in each company, payable in four $15,000
tranches, all of which has been paid. Additionally, we have been granted an
option to purchase an additional 25% of the common equity of each company from

<PAGE>

the Foundation for a sum to be mutually determined when and if we decide to
exercise the option. These options are exercisable for a period of 90 days
commencing after the first year of the Development Period (defined in each
agreement as the period during which the Foundation or the Israeli Technology
Company is being financed by the government of Israel, and generally a period of
two years commencing as of the date of registration of the project as an Israeli
corporation). Further, we have entered into an oral agreement with the inventors
of each technology which permit us to (i) acquire from them an additional 31% of
each corporation's common equity, which verbal options are exercisable at any
time during the Development Period, each at an exercise price to be negotiated
in the future, (ii) acquire from the inventor of the technology the shares of
each company's stock which he has the option to acquire from the Foundation, and
(iii) direct the voting of the common equity in said entities owned by the
inventors of each of the technologies, giving us voting control of each of
Flexitech and Pirocat. There is no assurance that if and when such options
become exercisable we will have sufficient funds to exercise any of them.

         During the Development Period, the sale or other transfer of 25% or
more of the inventor's equity of each of Flexitech and Pirocat requires the
consent of the Chief Scientist of the Israeli Ministry of Commerce and
Technology. In the event we wish to transfer our shares in either company, we
would be required to pay to the Foundation a sum equal to 25% of the value we
receive for our shares in either company. Our options to acquire the common
equity of Flexitech and Pirocat from the respective inventors of the
technologies are exercisable within such two-year periods and any acquisition of
the common equity purchasable thereunder will, therefore, require the Chief
Scientist's consent. Although we presently expect, based upon discussions with
the Chief Scientist's office that, if requested, such consent would be given,
there is no assurance that such consent will be obtained.

         Each of Flexitech and Pirocat are required to pay the Foundation a
royalty equal to 3% of the total annual revenues generated from the technologies
or products derived therefrom for the first three years after execution of the
respective agreements governing the transfer of the technology to us. The
royalty payment increases to 4% for the next three years, and finally to 5% for
the three years thereafter until all funds invested by the Foundation in each of
Flexitech and Pirocat have been repaid.

         We have the right to appoint one director on each of Flexitech's and
Pirocat's Board of Directors, which is comprised initially of four persons: Two
directors appointed by the Foundation, a third director appointed by the
scientist, and our director. All decisions of the Board must be carried by a
majority of the directors.

A. Polymer Heating Element ("PHE") Technology.

         PHE technology allows for the application of a proprietary polymer
thick film onto a polymer, ceramic or metal surface, which, when charged with an
energy source, emits heat. The surface to which the film is applied becomes a
heating element, thereby allowing for the application of heat directly to the
surface to be heated. The more energy supplied to the polymer film, the higher
the temperature emitted. The heating element involved is highly conductive,
flexible and energy efficient. The proprietary film, which forms the basis of
the PHE technology, may be applied onto multidimensional surfaces. The
advantages of the PHE technology over other existing heat sources include its
higher heat dissipation from the unit surface on the surface to be heated, its
durability, versatility, very low thermal mass and high price competitiveness

<PAGE>

with similar heat technologies. The commercial applications of the PHE
technology may include consumer heating appliances, automotive industry for
heated rear view mirrors and industrial machinery requiring heating elements.

B. Organic Waste Conversion Technology.

         Organic Waste Conversion technology represents a process whereby
organic elements present primarily in plastics are converted into liquid fuel
base products, which are used to make market grade gasoline, diesel fuel and
fuel oils. The process is based on pyrolisis and catalytic cracking of the
hydrocarbons and fluidized bed technologies, which have been in use for many
years. More specifically, pyrolisis is the process of heating plastic into a
liquid. Once liquefied, plastic is subjected to catalytic cracking whereby the
plastic is broken down to elemental components, including hydrocarbons, which
comprise fuels such as gasoline. The process, when fully developed may offer oil
products that are both ecologically cleaner and more economical to produce.

EKOR COMPOUND TECHNOLOGY

         On November 30, 1999, we acquired an interest which entitles us to
receive 2% of the gross revenues generated by Eurotech (the "EKOR Compound")
from Eurotech, Ltd., a former affiliate disclosed in their entirety in our Form
10-K for the period ending December 31, 2000. EKOR Compound is a patented
silicon geo-polymer developed by scientists at the Kurchatov Institute in
Moscow, Russia, specifically designed and developed for possible containment of
ecologically hazardous radioactive materials that persist from the 1986
explosion of the Chernobyl Nuclear Power Plant Reactor 4 in Chernobyl, Ukraine.
Application of the EKOR Compound foam layer is intended to contain radioactive
dust in an enclosed area by forming a permanent barrier between the soil and the
air thus trapping the contamination. Eurotech, Ltd. has advised us that in tests
conducted at the Kurchatov Institute, the EKOR Compound has been shown to be
highly resistant to radiation and structural degradation from exposure to
radiation, and is fire-resistant, waterproof, and capable of being formulated in
densities that display considerable structural strength and weight-bearing
properties. Eurotech has stated that in high dosage radiation tests, the EKOR
compound has met or exceeded all specifications for containment materials
developed by the Chernobyl authorities. Eurotech has exclusive licensing rights
to the production and application of this compound, with the exception of the
Former Soviet Union, and is marketing it to the nuclear waste industry as a
tested material capable of containing radioactive waste for hundreds of years.
Eurotech has publicly stated that the EKOR compound has completed preliminary
field and laboratory testing and Eurotech has begun commercialization of the
product.

         Our interest in the EKOR Compound is based upon a series of agreements
between us and Eurotech. During 1996, we entered into an agreement with
Eurotech, Ltd., which entitled us to receive 50% of the net profits (after
deducting development costs and related expenses attributable to EKOR) derived
from the sale of licensing by Eurotech of the EKOR Compound.

CONSUMER PRODUCTS

         By agreement dated December 6, 1999, we acquired all of the outstanding
shares of the capital stock of Cetoni Unwelttechnologies-Entwicklungs GmbH
("Cetoni") in consideration for 5,000,000 shares of our common stock and agreed
to assume up to DM4,500,000 ($2,250,000) of Cetoni's liabilities. Cetoni is a
German based design and engineering firm focused on developing and patenting
technologies and products for the consumer market. Since 1995, Cetoni has
successfully designed and patented products for the beverage, automotive
accessory, sport, healthcare, household, office and general consumer markets.

<PAGE>

Cetoni's products are designed to fill a gap in a market where products do not
exist or to make a significant improvement over products currently serving the
target market. The markets for Cetoni's products are automotive accessory (Tool
Star, Rain Safe, Car Plus and Ring Memory), healthcare (Pharmaceutical packaging
and Table Boy), household goods (butter dish, sugar dispenser, candy dispenser,
fruit peeler and fruit peeler with tray), sports (Power Ball and Walk and Roll),
office (Desk Organizer) and general consumer markets (Light Boy, Inflatable
Umbrella, Mega Contour, Cleaning Center, Alarm Transmission System and
Multi-Table System). Cetoni markets its products by way of strategic
partnerships and through entering into global distribution agreements with major
product wholesalers. It is anticipated that Cetoni will devote the majority of
its focus during 2002 on the successful commercialization of RESEAL, Ltd.'s
products, which it developed.

RESEAL, Ltd.

         RESEAL was formed to hold the Company's ownership of two proprietary
resealable beverage packaging products, specifically a resealable aluminum
beverage can and a resealable cardboard tetra-pak package. Those products were
originally developed by Cetoni GmbH, another Company subsidiary. The main
emphasis of RESEAL over the next twelve months will be on the successful
commercialization of its beverage packaging products. Cetoni previously entered
into a marketing agreement with The Falcon Group, Ltd. ("Falcon") to provide for
the introduction of the resealable products into the European brewery market,
which RESEAL is the successor. In December 2001, we entered into an agreement
whereby we sold a 2.75% equity stake in RESEAL to an accredited investor for
$275,000. Furthermore, in January 2002, we entered into an agreement with the
same party and sold an additional 1.25% equity stake in RESEAL for $125,000. We
currently own 96% of RESEAL.

ATI Nuklear AG

         In June 2001, we acquired the remaining 51% of Nurescell AG from
Nurescell Inc and changed the name of Nurescell AG to ATI Nuklear AG. The name
change was accepted by the German government on November 7, 2001.

         On June 11, 2001, ATI entered into a new agreement to modify its
license agreement with Nurescell Inc. Under the terms of this new agreement, ATI
has an exclusive and transferable right to Nurescell Inc. proprietary technology
in certain countries in Europe and Asia. ATI Nuklear is required to pay
Nurescell Inc. a royalty for the utilization of the technology and products in
the amount of 8% of the net sales of the Nurescell Inc. technology. Net sales
are defined as gross sales, less discounts, rebates, credits and freight.

         In addition, under the terms of this modified agreement, Nurescell Inc.
agreed to assign to ATI all ownership in Nurescell AG, which has been renamed to
ATI Nuklear AG. Nurescell Inc. has agreed to repay to ATI all monies that ATI
has previously paid to, or on behalf of, Nurescell Inc. for its acquisition of a
49% interest in Nurescell AG. As part of the agreement, ATI agreed to continue
to finance Nurescell Inc's continued monthly operations on a non-interest
bearing basis through December 31, 2001. Nurescell Inc. has also executed a
convertible promissory note for the monies due to ATI up to and including the
date of this agreement. Principal and interest on this note shall be all due and
payable on demand. The principal and interest may be converted by ATI into
shares of the $.001 par value common stock of Nurescell Inc. Interest is payable
at the rate of 10% per annum.

<PAGE>

         As of September 30, 2001, ATI, Nurescell Inc. and ATI Nuklear AG
entered into another agreement pursuant to which, among other things, (i)
Nurescell US was released from any and all past, present, and future
obligations, whether past due or otherwise, with respect to the funding of ATI
Nuklear AG, (ii) Nurescell Inc agreed that all payments required of ATI Nuklear
AG pursuant to the License Agreement (other than 8% royalty payments) were
deemed paid in full, (iii) Nurescell Inc. amended its June 11, 2001 promissory
note to the following terms: $1 million convertible promissory note payable to
ATI Nuklear AG. The note is secured by (i) 15,000,000 shares of Nurescell Inc's
common stock, (ii) a first priority security interest in Nurescell Inc.'s
technology and (iii) all royalties from ATI Nuklear AG.

Nurescell Inc.

         On August 23, 2000 we entered into an Agreement For Purchase of Stock
with Adrian Joseph and his wife Dianna Joseph to purchase 3,500,000 shares of
the $0.0001 par value common stock of Nurescell Inc. owned by them in
consideration for the issuance to the Joseph's of 3,500,000 shares of the
$0.0001 par value common stock of ATI. In addition, the voting rights of the
Joseph shares of ATI are held in an irrevocable proxy with Kurt Seifman for a
period of six years. Also, the Agreement provides that the Josephs may receive
up to an additional 2,000,000 shares of the common stock of ATI in the event
that ATI Nuklear achieves certain gross revenue numbers over a period of five
years. The shares of Nurescell Inc. to be received by ATI constitute
approximately 22.9% of the outstanding shares of Nurescell Inc. This transaction
was concluded on January 11, 2001.

         The shares to be received by the Josephs are restricted shares. In
addition, the Agreement prohibits the Josephs from selling or otherwise
transferring in excess of 600,000 shares per year. However, the Agreement
provides for the execution of a Registration Rights Agreement giving the Josephs
the right to have up to 600,000 shares per year registered over a six year
period. The Josephs have the right to demand registration of their shares each
year at their expense, or, if ATI is filing a registration statement to register
other shares during that time, to require that their shares be registered at the
expense of ATI. In lieu of registering the shares ATI has the right to purchase
the shares at 80% of the average bid price at determined times. The Agreement
also provides for the execution of an Irrevocable Proxy by the Josephs, which
would give Mr. Kurt Seifman the right to vote any of the shares received by the
Josephs under the Agreement for a period of six years. Mr. Seifman and ERBC
Holdings, Ltd., which he owns, own as of December 31, 2001 17,988,578 shares of
the outstanding $0.0001 per value common stock of ATI, which constitutes
approximately 42.23% of the outstanding shares of ATI as of December 31, 2001.
The transaction closed on January 11, 2001. These transactions were reported on
Current Form 8-K's filed on September 7, 2000 and January 22, 2001.

<PAGE>

         On April 16, 2001 we executed an agreement with a shareholder of
Nurescell, Inc., Glenn A. Cramer, to exchange 1,090,000 shares of our common
stock for 1,090,000 shares of stock of Nurescell, Inc. The agreement also
granted piggy-back registration rights to the shareholder. This transaction was
reported on Current Form 8-K which was filed on April 30, 2001.

         As of December 31, 2001, we owned 4,590,000 shares of Nurescell Inc.
common stock, representing 29.27% of their outstanding and issued shares.


INTERNATIONAL CENTER OF ADVANCED TECHNOLOGIES.

         The Company has entered into an agreement with a Russian company known
as The Research Institute of Physics and Engineering to explore the development
of an incubator/technology park in the Russian city of Zhelesnogorsk. The
proposal is to take a portion of a large underground nuclear complex in that
city and develop it into a facility to be known as the International Center of
Advanced Technologies ("ICAT") for the conversion of existing companies engaged
in nuclear defense technologies into non-nuclear technologies and nuclear waste
remediation technologies. During 2002, the Company will be working with a
strategic partner to (i) define the portion of the complex that could be used
for ICAT, (ii) prepare capital and operating budgets, (iii) locate funding from
governmental sources that may be available for ICAT, and (iv) locate additional
strategic partners to provide financing, research and development, and marketing
services to the companies that may occupy ICAT.

SIBCONVERS.

         The Company has entered into an agreement with a Russian group to form
a Russian company called Sibconvers in which the Company will have a 50%
interest. During 2002, Sibconvers will pursue programs offered by various
governmental agencies of Russia, the United States, and European Union countries
for the conversion of Russian nuclear defense industries into high-tech
non-defense and nuclear remediation enterprises and to retrain nuclear and
military researchers, technicians and engineers employed in those industries.
Those industries are primarily located in the closed "nuclear cities" situated
in Siberia.

INTERNATIONAL LABORATORY FOR NUCLEAR WASTE MANAGEMENT.

         The Company has entered into an agreement with the Federal Republic of
Germany-Nuclear Research facility-Forschungszentrum Juelich Institute fur
Sicherheitsforschung and Reaktortechnik and the Institute of Physics and
Engineering of Krasnoyarsk State University for the formation of a laboratory to
be known as the International Laboratory for Nuclear Waste Management. During
2002, this venture will pursue contracts and programs concerning the research,
development, testing, and certification for nuclear waste remediation
applications in the closed "nuclear cities" of the Russian Federation.


CURRENT OPERATIONS

         The competition in the technology proliferation and transfer market is
highly intense and is based on product and technology recognition and
acceptance, novelty and marketability of an invention, price, and sales
expertise. Currently, we have the primary emphasis on product development,
dependability, patentability and commercialization of our acquired technology.
As a part of our day-to-day operations, our employees and consultants review a
number of technologies, innovations, ideas and intellectual properties with the
purpose of evaluating the novelty of a technological idea, assessing additional
research and development investment required to bring an invention to a point

<PAGE>

where it may be commercially exploited, and prospects for patentability and
marketability of a reviewed technology. We also estimate the costs and time
required to complete research and development of a technology necessary to
achieve commercial viability as well as the initial steps required for
introducing the technology to the market, e.g. production of samples and
development of marketing strategy and documentation required to obtain patent
protection covering the technology. A proposed acquisition of an invention or
technology is usually accomplished by means of equity investment, purchase,
assignment and licensing arrangements directly from the scientists or technology
developers.

         We have not generated any revenues from any of our acquired
technologies, and we are currently operating at a loss. We will require
additional funding to achieve our growth objectives. If we do not receive
additional funding, we will not be able to pursue the intended marketing plan
and, in such case, may not be able to successfully conduct our operations. There
is no assurance that we will be successful in marketing any of our technologies
or in generating any meaningful revenues from operations.

MARKETING AND DISTRIBUTION
--------------------------

         Our primary business focus is the acquisition and commercialization of
advanced technologies and the commercial products that result from these
efforts. We anticipate that beverage packaging and radioactive contamination
containment industries will be the primary markets for our products and
technologies during 2002. We have limited experience in marketing of products
and services in these fields and intend to rely on licensing and joint venture
opportunities with multi-national companies for the marketing and sale of its
technologies. Consequently, we will rely on our distribution partners and
affiliates to market our technologies worldwide.

         We believe that several of our acquired technologies and products are
ready for commercialization and marketing specifically our beverage packaging
products. As a result, we will devote significant business activities and
resources to the successful commercialization and marketing of our acquired
technologies and products. We also have little experience marketing products of
a technological or consumer nature. The introduction of a new product or
technology into the market place requires vast capital resources and an increase
in corporate personnel. Our product marketing relies on the development of
strategic alliances with global distributors. This places the burden of
marketing the products directly on the strategic partners and keeps our cost
risk low and reduces the amount of capital resources we need to operate
successfully. Conversely, the risks include the inability to locate the proper
partner and or the partner is ineffective.

         Cetoni entered into an agreement, during 2000, with the Falcon Group
Ltd., for the exclusive marketing rights of the resealable can technology,
Developed by Cetoni, for the European Brewery market.

         On August 3, 2001, we entered into an agreement with Styner+Bienz for
the production of samples of our resealable beverage can and conducting certain
tests required for commercialization of the product.

COMPETITION
-----------

         Competition in all of the areas in which we own and propose to purchase
technologies is intense. We compete against a wide range of companies,
universities, think tanks, consumer product companies and others, most which
possess substantially greater financial and marketing resources and experience
than us. Competition in our core business segments is typically based on product
recognition and acceptance, price, and sales and marketing expertise and
resources. Any one or more of our competitors or other enterprises not presently
identified by or known to us may develop technologies and/or products which are
superior to ours, less expensive than our products and technologies or market
more successfully existing or new competing products and technologies. To date,
we have not generated any revenues from our products or technologies and are
competing against companies that may have significantly greater financial and
human resources.

<PAGE>

RESEARCH AND DEVELOPMENT
------------------------

         In the fiscal year ended December 31, 2001, we spent $868,878 on
research and development.

         By comparison, in the fiscal year ended December 31, 2000, we spent
$1,347,075 on research and development.

         We are not aware of any U.S. or foreign laws or regulations that govern
the marketing, sale or use of any of its present technologies, other than U.S.,
Russian and Western European environmental safety laws and regulation pertaining
to the containment and remediation of radioactive contamination and the toxicity
of materials used in connection therewith (in the case of the EKOR and Nurescell
materials). Based on the results of tests conducted at the Kurchatov Institute
Eurotech believes that the EKOR compound meets applicable U.S. and German
regulatory standards. Based on the results of tests conducted at the University
of Missouri and by various Russian and German institutes, Nurescell believes
that their material meets applicable U.S. and German regulatory standards.
However, there can be no assurance that more stringent or different standards
may not in the future be adopted or applied depending on EKOR or Nurescell's
intended use, or that if adopted or applied, they will not materially increase
the cost to Eurotech and Nurescell of licensing and using the EKOR and Nurescell
compounds, or prevent their use altogether. Moreover, there can be no assurance
that any or all jurisdictions in which we presently operate or in the future may
conduct our business will not enact laws or adopt regulations which increase the
cost of or prevent us from licensing or marketing its other technologies or
otherwise doing business therein. Particularly in the case of Russia, the
enactment of such laws or the adoption of such regulations may have a presently
unquantifiable, substantial adverse impact on our financial condition, business
and business prospects.

INTELLECTUAL PROPERTY
---------------------

         Set forth below is a description of all intellectual property rights
owned by us, Cetoni and ATI Nuklear AG.

         Israeli PHE and Waste Conversion Patents. We have entered into
exclusive patent arrangements with Flexitech and Pirocat covering Heating
Element and Waste Conversion technologies. Patent applications for these
technologies have been filed in Israel.

         EKOR Compound Technology. Eurotech, Ltd. holds all right, title and
interest, inclusive of all patent and other intellectual property rights, in and
to the EKOR Compound technology in Canada, China, Japan, Republic of Korea, the
United States of America, Ukraine and all member countries of the European
Patent Agreement until August 1, 2014. On March 23, 1999 Euro-Asian Physical
Society ("EAPS") was issued a patent on the process for manufacturing its EKOR
Compound from the United States Patent and Trademark Offices, Patent No.
5,886,060. On November 28, 1997, the Ministry of Health of the Russian
Federation certified the EKOR Compound and its components as non-toxic, thereby
allowing for EKOR's production, delivery, sale and use in the Russian
Federation.

         Cetoni has applied for patents covering twenty-two products developed
through its in-house research and development department in the major industrial
countries in the world. Currently, Cetoni plans to focus its intellectual
property efforts on the continued development of new beverage packaging products
to compliments those its has already developed.

         Nurescell Inc. has been granted patents in the United States and
Pakistan. Additionally, Nurescell has filed for patent protection in the major
countries in North America, Europe, Asia and South America.

<PAGE>

EMPLOYEES
---------

         We currently employ 15 full-time and one part-time employees. We engage
a number of independent consultants to assist in the identification, assessment,
acquisition and marketing of technologies in the regular course of our business.
Our subsidiary, Cetoni, currently employs seven full-time and one part-time
employee. Cetoni's employees engage in product research, development and
marketing. ATI Nuklear currently employs three employees and four consultants.
We believe that we have good relations with our employees.

ITEM 2. DESCRIPTION OF PROPERTY

         Our principal executive offices are at Berlin, Germany. The 800 square
foot executive space is located at Taubenstrasse 20, D-10117, Berlin, Germany
with a monthly rent of approximately $3,578 and a lease with a remaining term of
4 years. Our telephone number is (49) 30 201-7780. RESEAL's executive offices
are also located in the offices of the Company.

         Cetoni's principal executive offices are located in a 220 square meter
space at Patriching 26, D-94034, Passau, Germany. The facility is leased with a
monthly rent of $750 with no expiration date. The facility is leased from a
family member of the former principal shareholder of Cetoni.

         ATI Nuklear AG maintains its executive office space adjacent to our
executive offices in Berlin, German. The 100 square meter executive space is
leased for a period of four years at a monthly rent of approximately $3,400.

ITEM 3. LEGAL PROCEEDINGS

         There is no current outstanding litigation in which we are involved and
we are unaware of any pending actions or claims against us.

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

         On May 18, 2001, the Company received approval of the Advanced
Technology Industries, Inc. 2000 Stock Option Plan ("Plan") from shareholders
owning or having the right to vote 20,334,333 shares, which constituted a
majority of the outstanding shares. Delaware General Corporation Law ("Law")
sections 228(a) and (c) provide that any action that may be taken at a special
meeting of the shareholders, such as approval of the Plan, may be taken by
written consent of shareholders holding a majority of the shares of the Company.
Section 228(e) of the Law provides that notice of such action be sent to
shareholders who have not consented to such action. Pursuant to the Law, May 18,
2001 has been set as the record date for such notice.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

COMMON STOCK

         Each share of Common Stock entitles the holder thereof to share ratably
in dividends and distributions, if any, on the Common Stock when, as and if

<PAGE>

declared by the Board of Directors, from funds legally available. There are no
preemptive, subscription or conversion rights. Upon liquidation, dissolution or
winding up of the affairs of the company and after payment of creditors and
satisfaction of any amounts outstanding to holders of the Preferred Stock, the
assets legally available for distribution will be divided ratably on a
share-for-share basis among the holders of the outstanding shares of Common
Stock. The holders of the outstanding shares of Common Stock are not entitled to
cumulative voting and are entitled to one vote per share with respect to all
matters that are required by law to be submitted to a vote of shareholders,
including the election of Directors. Accordingly, the holders of more than 50%
of the outstanding shares of Common Stock will have the ability to elect all of
the Directors.

PREFERRED STOCK

         Currently, no shares of Preferred Stock have been designated by the
Board of Directors. The Board of Directors has the authority, without further
action by the holders of the Common Stock, to issue Preferred Stock in one or
more series and to fix as to any such series the dividend rate, redemption
prices, preferences on liquidation or dissolution, sinking fund terms, if any,
conversion rights, voting rights and any other preference or special rights and
qualifications. Shares of Preferred Stock issued by the Board of Directors could
be utilized, under certain circumstances, as a method of raising additional
capital, for possible acquisitions or for any purpose. The Board of Directors
has not authorized the issuance of any series of Preferred Stock and there are
no agreements, understandings or plans for the issuance of any Preferred Stock.

MARKET INFORMATION.

Our common stock is traded on the NASD OTC Bulletin Board currently under the
symbol AVDI.

         The table below sets forth the range of high and low bid quotes of our
common stock for each quarter for the last two fiscal years as reported by the
OTC-BB. The bid prices represent inter-dealer quotations, without adjustments
for retail mark-ups, markdowns or commissions and may not necessarily represent
actual transactions.

2000                                High             Low
-------                            -------          -------
First Quarter                      3.00             1.50
Second Quarter                     3.0625           1.50
Third Quarter                      2.00              .96875
Fourth Quarter                      .9375            .15625

2001                                High             Low
-------                            -------          -------
First Quarter                         .50              .22
Second Quarter                       1.91              .19
Third Quarter                         .85              .22
Fourth Quarter                        .40              .22

         There were approximately 151 shareholders of record of common stock as
of April 15, 2001. We believe that there are an addition 300 who hold their
shares in street name.

         There are currently fifteen active market makers of our common stock
consisting of, Fleet Trading Division of Fleet Securities, GVR Company, Hill

<PAGE>

Thompson Magid and Co. Inc., Herzog, Heine, Geduld, Inc., Knight Securities,
Inc., Ladenburg Thalmann & Co., Wm V. Frankel & Co., Sierra Brokerage Services,
Paragon Capital Corporation, Meyerson (M.H.) & Co. Inc., Schwab Capital Markets
LP, Phillip Louis Trading, Inc., Ladenburg Capital Management Inc., North
American Institutional Brokers and V Finance Investments Inc..

         Interwest Stock Transfer Company, located at 1981 East Holiday Road,
Salt Lake City, Utah, is the transfer agent and registrar for our common stock.

         We have never declared or paid cash dividends on our Common Stock, and
we anticipate that future earnings, if any, will be retained for development of
our business. Payment of cash dividends in the future will be wholly dependent
upon our earnings, financial condition, capital requirements and other factors
deemed relevant by us. It is not likely that cash dividends will be paid in the
foreseeable future. In the event of the acquisition of a business by us or the
merger with another company, control of our company and our Board of Directors
may pass to others. In that event, the payment of dividends would be wholly
dependent upon such persons.

SALE OF UNREGISTERED SHARES

         During the last three years we have sold securities which were not
registered under the Securities Act of 1933 (the "Act"). The transactions not
reported in our previously filed quarterly reports are as follows:

               During December 2001, the Company issued in connection with a
private placement of debt 691,696 shares of common stock as additional
consideration to the purchaser.

         During October and November 2001, the Company issued in connection with
a private placement of debt 578,304 shares of common stock as additional
consideration to the purchaser. The shares were valued at $255,000.

         During October 2001, the Company issued 17,000 shares of common stock
pursuant to consulting arrangements with two consultants. Shares issued under
these arrangements were valued at $9,890.

         During December 2001, the Company issued 1,328,000 shares of common
stock pursuant to consulting arrangements with various consultants. Shares
issued under these arrangements were valued at $332,000.

         During November 2001, the Company issued 36,826 shares of its common
stock as consideration for consulting services performed by two consultants
totaling $15,133.

         In November and December 2001, the Company issued 75,000 shares of
common stock to two employees of the Company as a sign-on bonus, which was
valued at $18,751.

<PAGE>

         In December 2001, the Company issued 477,429 shares of common stock as
consideration for legal services performed by its attorneys. Shares issued under
these arrangements were valued at $112,761.

         During November 2001, the Company issued in connection with a private
placement of debt 10,000 shares of common stock as additional consideration to
the purchaser. The shares were valued at $3,200.

         During December 2001, the Company had to issue an additional 510,000
shares of its common stock as additional consideration for extending the due
date on promissory notes related to private placement of debt. The shares were
valued at $140,200.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis should be read in conjunction
with the remainder of this Annual Report on Form 10-KSB including, but not
limited to, the financial statements and notes thereto included herein.

PLAN OF OPERATION
-----------------

         We are a development stage company and our efforts have been primarily
devoted to technology identification and acquisition, research and development,
organizational efforts and raising capital. This discussion provides an analysis
of our plan of operation for the next twelve months.

         We were formed to acquire and commercialize new or previously existing
but non-commercialized technologies particularly those developed by scientists
and engineers in Israel, Russia, and Germany. We may acquire a direct interest
in the technology, a right to use the technology, and/or an ownership interest
in the entity owning the technology. The acquisition of technologies by us may
be made by the issuance of our stock or securities, cash, or other consideration
or a combination thereof.

         During the next twelve months the Company intends to concentrate on (i)
the commercialization of certain products of RESEAL, Ltd, our 96% owned
subsidiary, (ii) commercialization of technologies licensed or developed by ATI
Nuklear (iii) completion of evaluation of technologies being presently
considered and the acquisition thereof if appropriate, and (iv) identification,
evaluation, and possible acquisition of additional technologies and v) pursuit
of the business plans of the International Center of Advanced Technologies,
Sibconvers, and the International Laboratory for Nuclear Waste Management.

         We anticipate that we will incur significant capital costs for the
continued development of technologies for ATI Nuklear.

         We will require additional financing to continue our planned operations
during 2002. Management believes that it will be able to raise the necessary
financing to continue planned operations. However, there is no guarantee that we
will be able to successfully raise the required funds for operations, or that
such funds will be available on terms satisfactory to us. Any inability to raise
additional fund would require that we significantly scale back our planned
operations.

         RESEAL, Ltd. ("RESEAL"), the Company's 96% owned subsidiary, was formed
to hold the Company's ownership of two proprietary resealable beverage packaging
products, specifically a resealable aluminum beverage can and a resealable
cardboard tetra-pak package. These products were originally developed by Cetoni
GmbH, an ATI subsidiary. The main emphasis of RESEAL over the next twelve months
will be on the successful commercialization of its beverage packaging products.
We have previously entered into a marketing agreement during 2000 with the

<PAGE>

Falcon Group, Ltd. ("Falcon") to provide for the introduction of the resealable
products into the European brewery market. Falcon is entitled to a royalty
payment plan based on unit sales of the resealable beverage can.

         We have begun, in partnership with Styner+Bienz, scheduled production
of the first 10,000 machine-fabricated production samples for distribution to
beverage producers who have previously expressed a high degree of interest in
the resealable beverage cans. It is anticipated that production of those
samples, marketing and general operational expenses will require less than
$450,000. We anticipate that in the event we are required to purchase capital
equipment for the full scale production of our resealable beverage cans, an
additional $2,000,000 would be required.

         RESEAL believes that it can obtain financing on favorable terms for a
substantial portion of that amount from the beverage producers, suppliers and/or
other sources. However, if financing is not available, management believes that
RESEAL will be able to obtain the necessary funds to pay for the production,
marketing and operational expenses from other sources.

ATI Nuklear AG
--------------

         ATI Nuklear AG is presently developing a business plan for the
manufacture and marketing of the technology in the Soviet Union and Continental
Europe. ATI Nuklear AG is presently continuing its test program for the
technology in Russia and Germany to verify the suitability of its technology
rights for these applications in shielding, transporting and storing nuclear
waste.

         ATI Nuklear intends to be active in the development and marketing of
its technology rights in Germany and Russia during the next 12 months. ATI
Nuklear intend to raise up to $20,000,000 to support its required investments to
fully implement its business plan. If necessary financing is not available,
management of ATI Nuklear would be required to significantly scale back its
business plan and operations.

OTHER MATTERS
-------------

         During the period of the plan, we do not anticipate any significant
changes in the numbers of employees employed by us, RESEAL, ATI Nuklear or
Cetoni, our subsidiary.

         We may incur substantial expenses associated with performing due
diligence incident to the investigation of technologies suitable for
acquisition. The amount and type of expenses incurred will vary depending on the
technology being investigated and it is not possible to project what these
expenses might be during the period of the plan.

         Except for a nominal amount of revenue from the sale of Cetoni products
in a prior period, we have not generated any revenue from operations since our
inception and we have not been profitable since our inception. Although we
believe that we will recognize additional revenues during the next twelve months
based on expressions of interest from third parties to acquire licenses to use
our technologies and purchase our products, there can be no assurances as to
when and whether we will be able to commercialize our products and technologies
and realize any revenues therefrom or that RESEAL or ATI Nuklear AG will be able
to do so. Neither our products and technologies or those of RESEAL or ATI
Nuklear have ever been utilized on a large-scale commercial basis.


<PAGE>

         We expect that we will continue to generate losses until at least such
time as we can commercialize our technologies or those of our subsidiaries., if
ever. No assurance can be given that we can complete the development of any
technology or that, if any technology is fully developed, it can be manufactured
and marketed on a commercially viable basis. Furthermore, no assurance can be
given that any technology will receive market acceptance. Being a development
stage company, we are subject to all risks inherent in the establishment of a
developing or new business.

RESULTS OF OPERATIONS FOR THE PERIOD ENDED DECEMBER 31, 2001 AS COMPARED TO THE
PERIOD ENDED DECEMBER 31, 2000.


         As of December 31, 2001 we had working capital deficiency of
$4,309,452, shareholders' deficiency of $3,149,589 and an accumulated deficit of
$14,695,600. We anticipate that we will continue to incur significant operating
losses for the next twelve months. We may incur additional losses thereafter,
depending upon our ability or the ability of ATI Nuklear AG and RESEAL Ltd to
generate revenues from the license or sale of technologies or products.

LIQUIDITY AND CAPITAL RESOURCES
--------------------------------

We will require additional financing to continue to fund our efforts, operating
costs and to complete additional technology acquisitions. We anticipate that we
will be able to raise the needed funds for continuing operations.

We will attempt to raise this additional capital through the public or private
placement of our securities, debt or equity financing, joint ventures, or the
licensing or sale of our technologies and products. However, the Company has not
entered into any definitive agreements or arrangements to obtain any such
sources of capital and no assurance can be given that it can successfully obtain
additional capital.

During January 2001, the Company borrowed $100,000 from an individual and issued
a promissory note which provides that the loan is due in three months and
provides for interest at the rate of 1% per month. The Company issued 100,000
shares of its common stock to the lender as an incentive to make that loan. In
addition, the Company granted the lender piggyback registration rights for the
shares for a period of five years from the date of the loan. On April 30, 2001,
the principal amount of $100,000 was converted into 278,884 shares of the
Company's common stock.

On April 30, 2001, the Company, in order to provide working capital, issued a
promissory note for $240,000, with a maturity date of three months. Interest is
payable at the rate of 1% per month. The Company has the option to pay the
interest in cash or restricted stock. If the option exercised by the Company to
pay the interest in stock, the number of shares to be delivered to the lender
will be determined by multiplying (i) the average closing bid price of the stock
for the five trading days prior to the maturity date by (ii) 85% and dividing
the interest due by the resulting multiple. In addition, the lender received
410,000 shares of the Company's common stock as an incentive to make this loan.
In addition, the Company granted the lender piggyback registration rights for
the shares for a period of five years from the date of the loan. The Company
utilized $220,000 of the funds from this loan to repay a portion of the note
offering which came due on April 1, 2001. On July 30, 2001, the Company executed
an agreement with the lender to convert loans in the principal amount of
$240,000, plus $7,200 in interest, into an aggregate amount of 775,285 shares of
the Company's common stock.

During May 2001, the Company borrowed $100,000 from an individual and issued a
promissory note which provides that the loan is due in three months and provides
for interest at the rate 1% per month. The Company issued 100,000 shares of its
common stock to the lender as an incentive to make that loan. In addition, the
Company granted the lender piggyback registration rights for the shares for a
period of five years from the date of the loan. The loan's maturity date was
extended to June 1, 2002 and as consideration for entering into this agreement,
the individual received an additional 100,000 shares of the Company's common
stock.

During June 2001, the Company borrowed $260,000 from an individual and issued a
promissory note which provides that the loan is due in six months and provides
for interest at the rate of 1% per month. The Company issued 260,000 shares of
its common stock to the lender. The note's due date was subsequently extended to
June 30, 2002.

On July 13, 2001, the Company borrowed $15,000 from an individual and issued a
promissory note which provides that the loan is due in three months and provides
for interest at the rate of 1% per month. The Company issued 15,000 shares of
its common stock to the lender as an incentive to make that loan.

Also on July 13, 2001, an officer of the Company advanced $10,000 pursuant to a
promissory note which provides that the loan is due in three months and provides
for interest at the rate of 1% per month. The Company issued 10,000 shares of
its common stock to the lender as an incentive to make that loan. Subsequent to
December 31, 2001, the officer has agreed to extend the due date to June 1,
2002.

On July 30, 2001, the Company borrowed $330,000 from an individual and issued a
promissory note which provides that the loan is due in six months and provides
for interest at the rate of 1% per month. The Company issued 330,000 shares of
its common stock to the lender as an incentive to make that loan. In addition,
the Company granted the lender piggyback registration rights for the shares for
a period of five years from the date of the loan. The noteholder has agreed
subsequent to year-end to extend the maturity date to June 1, 2002.

Effective September 10, 2001, the Company borrowed $560,000 from an individual
and issued a promissory note which provides that the loan is due January 31,
2002 and provides for interest at the rate of 1% per month. The Company issued
1,270,000 shares of its common stock to the lender as an incentive to make that
loan. The note was extended to June 1, 2002.

On November 27, 2001, the Company borrowed $10,000 from an individual and issued
a promissory note which provides that the loan is due in 90 days and provides
for interest at the rate of 1% per month. The Company issued 10,000 shares of
its common stock to the lender as an incentive to make that loan. the loan's
maturity date was extended subsequent to year-end for another 90 days and as
consideration for entering into this agreement, the individual received an
additional 10,000 shares of the Company's common stock.

The Company entered into an agreement during February 2001 in which it pledged
216,300 shares of its Eurotech stock for a loan in the amount of $293,012,
excluding costs and commissions. The loan is due June 28, 2002 and provided for
interest at the rate of 12.73% per annum.


<PAGE>

ITEM 7. FINANCIAL STATEMENTS

Our financial statements for the year ended December 31, 2001 are attached
hereto as pages F-1 through F-41.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         Our previous accountants were Tabb, Conigliaro & MCCann, P.C. located
in New York, New York. Effective January 1, 2001 Tabb, Congiliaro & McCann, P.C.
merged with Grassi & Co. P.C. located in New York and that firm remains as our
accountants.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

DIRECTORS AND OFFICERS

As of December 31, 2001, our officers and Directors were:


NAME                          AGE           TITLE
----                          ---           -----

Hans-Joachim Skrobanek        51        President and Director

Peter Goerke                  41        Vice President

James Samuelson               32        Vice President, Chief Financial Officer,
Secretary

Jacques Saunder               80        Director

Hans-Joachim Schuerholz       75        Director

         All directors hold office until the next annual meeting of stockholders
and until their successor have been elected and qualified. The Board of
Directors elects the officers annually.

<PAGE>

         Hans-Joachim Skrobanek has been our President since October 27, 1999
and a Director since December, 1999. Mr. Skrobanek was previously engaged in
project financing and technology transfers from Russia and the Ukraine to the
West. From 1995 to 1999, Mr. Skrobanek was employed as a consultant to Eurotech,
Ltd. and was directly involved in technology transfers from Russia and Israel to
Western markets. Mr. Skrobanek graduated from the University of Frankfurt in
1976 with a Bachelor of Commerce degree.

         Peter Goerke joined us as a Vice President in March of 2000. Prior to
this he served as the Chief of Department of Intracamion, an international
transportation company. He also served as a consultant to the Treuhandanstalt.
Mr. Goerke has a Masters Degree in Politics from the Institute of International
Relations, Moscow, Russia. He is fluent in German, Russian, English and French.

         James Samuelson joined us as Vice President, Chief Financial Officer in
February 2000. Mr. Samuelson has also served as the Chief Operating Officer and
Chief Financial Officer of our wholly-owned subsidiary Cetoni. From February
1998 to January 2000, Mr. Samuelson served as a Vice President of Corporate
Finance for Eastbrokers AG/WMP Bank AG in Vienna, Austria. In 1997, Mr.
Samuelson was employed as a Vice President from Grammont, Ltd., a boutique
investment banking firm in Paris, France. Prior to 1997, Mr. Samuelson was
engaged in graduate studies. Mr. Samuelson received a Master of Business
Administration Degree in 1996, and a Bachelor of Science in Business
Administration degree in 1992, both from Creighton University.

         Jacques J. Saunder joined us as a Director in March, 1999. Mr. Saunder
also has served, at various times, as our Vice President and Secretary. For the
past five years, Mr. Saunder has been the President of Advanced Technologies
Industries and from inception until January 2000, President of that company. Mr.
Saunder graduated from College Royale Francais in Berlin, Germany in 1938 with a
degree in business, from the Haute Etude Commercial in Paris, France in 1949 and
from City College of New York in 1965.

         Hans-Joachim Schuerholz has served as one of our directors since May
1999. From 1995 to present, Mr. Schuerholz has served as a managing director and
consultant for a real estate company in Saxony, Germany. From 1993 to 1995, Mr.
Schuerholz was employed as a legal consultant to the City of Dresden, Germany,
in the area of restitution and priority investment law. He graduated from the
University of Menster I 1953 with a legal degree.

COMPLIANCE WITH SECTION 16(a) OF THE Exchange ACT

         No officer, director of 10% shareholder was delinquent in filing
required Form 3 or 4 with the Securities and Exchange Commission.

         To the best of our knowledge Cetoni Holdings Ltd. has not filed a Form
3 reflecting its ownership of 5,000,000 shares of common stock acquired as a
result of our acquisition of Cetoni Unwelttechnologies-Entwicklhungs, GmbH. To
the best of our knowledge Cetoni Holdings, Ltd. has not acquired or disposed of
any of our securities during 2001.

ITEM 10. EXECUTIVE COMPENSATION

         The following table presents, for each of the last three fiscal years
ending December 31, 2001 the annual compensation earned by our chief executive
officer and our most highly compensated executive officers.

<PAGE>


<PAGE>
<TABLE>
<CAPTION>
=========================================================================================================
                                                               LONG TERM COMPENSATION
---------------------------------------------------------------------------------------------------------
                                ANNUAL COMPENSATION                  Awards          Payouts
                            --------------------------------  ---------------------  ---------

                                                   Other                  Securities              All
                                                   Annual     Restricted  Underlying    LTIP     Other
                                          Bonus    Compen-    Stock       Options/    Payouts   Compen-
                     Year    Salary ($)    ($)     sation($)  Awards($)   SARs(#)       ($)     sation($)
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
<S>                  <C>    <C>          <C>       <C>        <C>         <C>         <C>       <C>
Hans Skrobanek,
President            2001   $110,000
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
                     2000    110,000
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
                     1999
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
James Samuelson,
Vice President,
Chief Financial
Officer, Secretary   2001   $120,000(1)    $0.00
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
                     2000   $120,000(2)  $10,000
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------
                     1999
-------------------  -----  -----------  --------  ---------  ----------  ----------  --------  ---------

=========================================================================================================
</TABLE>

(1)      Includes 252,845 shares of common stock as salary for the period
         between January and April, 2001.
(2)      Includes 63,212 shares of common stock as salary for the month of
         December 2000.
<TABLE>
<CAPTION>
===============================================================================================
                           OPTIONS/SAR GRANTS IN THE FISCAL YEAR 2001
-----------------------------------------------------------------------------------------------
                                      INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------------------
                                     Number of     % of Total
                                     Securities    Options/SARs
                                     Underlying    Granted to
                                     Option/SARs   Employees in   Exercise or Base   Expiration
Name                         Year    Granted (#)   Fiscal Year    Price ($/Share)    Date
---------------------------  -----   -----------   ------------   ----------------   ----------
<S>                          <C>        <C>              <C>               <C>        <C>
Hans-Joachim Skrobnek,
President                    2001             0
---------------------------  -----   -----------   ------------   ----------------   ----------
                             2000       150,000          31.91%            $0.343     10/25/10
---------------------------  -----   -----------   ------------   ----------------   ----------
                             1999
---------------------------  -----   -----------   ------------   ----------------   ----------
James Samuelson, Vice
President, Chief Financial
Officer, Secretary           2001             0
---------------------------  -----   -----------   ------------   ----------------   ----------
                             2000       100,000          21.28%            $0.343     10/25/10
---------------------------  -----   -----------   ------------   ----------------   ----------
                             1999
===============================================================================================
</TABLE>
INCENTIVE STOCK OPTION PLAN.

         In 1996, we adopted an Incentive Stock Option Plan whereby we reserved
500,000 shares of common stock for issuance to our employees. No options had
been issued under this plan. On October 22, 2000 our Board of Directors
cancelled this plan and adopted a new stock option entitled the Advanced
Technology Industries, Inc. 2000 Stock Option Plan ("Plan"). Under the Plan
options may be issued to directors, officers, key employees, consultants,
agents, advisors, and independent contractors who are in a position to

<PAGE>

contribute materially to the prosperity of the company. The Plan provides for
the issuance of both Incentive Stock Options ("ISO"s") and Non-Qualified Stock
Options ("NQSO's"). ISO's are issued to employees and NQSO's are generally
issued to non-employees. The number of shares that are subject to ISO's is
limited to 3,000,000 under the Plan. The number of NQSO's that may be issued is
subject to the discretion of the Board of Directors.

         Our Board of Directors administers the Plan but may delegate such
administration to a committee, which shall consist of at least two members of
the Board. The Board or the Committee has the authority to determine the number
of options to be granted, when the options may be exercised and the exercise
price of the options, provided that the exercise price may never be less than
the fair market value of the shares of the Common Stock on the date the option
is granted (110% in the case of any employee who owns more than 10% of the
combined voting power or value of all classes of stock). Options may be granted
for terms not exceeding ten years from the date of the grant, except for options
granted to person holding in excess of 10% of the common stock, in which case
the options may not be granted for a term not to exceed five years from the date
of the grant.

         The Plan must be approved by the shareholders within one year from the
date of adoption of the Board. The shareholders approved the Plan on May 18,
2001.

         In 2000 our Board approved the issuance of ISO options to purchase
470,000 shares of common stock and NQSO's to purchase 615,000 shares. All of
said options were issued with an exercise price of $.343 per share.

COMPENSATION OF DIRECTORS

There is no standard or individual compensation package for any of the
directors.

EMPLOYMENT CONTRACTS

         There are no employment contracts with the executive officers listed in
the Summary Compensation Table.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as of December 31, 2001 as
to each person who is known to ATI to be the beneficial owner of more than 5% of
ATI's outstanding common stock (giving effect to all warrants and options
exerciseable within 60 days) and as to the security and percentage ownership of
each executive officer and director of ATI and all officers and directors of ATI
as a group. Except where specifically noted, each person listed in the table has
sole voting and investment power with respect to the shares listed.

<PAGE>
<TABLE>
<CAPTION>
------------------- ------------------------------------ -------------------------- -------------------------
                             Name and Address               Security Ownership             Percentage
     Title of                       Of                       Amount and Nature                 Of
      Class                  Beneficial Owners            Of Beneficial Ownership            Class
------------------- ------------------------------------ -------------------------- -------------------------
      <S>           <C>                                       <C>                            <C>
      Common        Kurt Seifman
                    5 West 86th Street                        21,488,578 (1)                 46.44%
                    New York, NY  10024
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Glenn A. Cramer
                    3134 Bel Air Drive                         3,875,385 (2)                  8.38%
                    Los Vegas, NV
------------------- ------------------------------------ -------------------------- -------------------------
      Common         Hans Joachim Skrobanek
                    Taubenstrasse 20                             1,073,359                    2.32%
                    Berlin, Germany D-10117
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Jacques J. Saunder                            25,000
                    Taubenstrasse 20                                                             0%
                    Berlin, Germany D-10117
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Hans Joachim Schuerholz                       15,000
                    Taubenstrasse 20                                                             0%
                    Berlin, Germany D-10117
------------------- ------------------------------------ -------------------------- -------------------------
      Common        James Samuelson                               366,056
                    Taubenstrasse 20                                                             0%
                    Berlin, Germany D-10117
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Peter Goerke                                  50,000
                    Taubenstrasse 20                                                             0%
                    Berlin, Germany D-10117
------------------- ------------------------------------ -------------------------- -------------------------
      Common        Cetoni Holdings, Ltd. (3)                    5,000,000
                                                                                             10.81%
------------------- ------------------------------------ -------------------------- -------------------------
                    Officers and Directors as a group
                    (5 persons)                                                               3.33%
------------------- ------------------------------------ -------------------------- -------------------------
</TABLE>
(1)      2,677,440 of these shares are held directly by Mr. Seifman. 15,341,138
         of these shares are held indirectly through ERBC Holdings, Ltd., for
         which Mr. Seifman is the sole beneficial holder. 3,500,000 of these
         shares represent Mr. Seifman's sole voting power as Proxy Holder
         pursuant to an Irrevocable Proxy for the Adrian Joseph Separate
         Property Trust and the Dianna Joseph Separate Property Trust, as well
         as presently exercisable options to purchase 125,000 shares at $0.343
         per share.

(2)      These shares are held indirectly by Mr. Cramer as Trustee of the Glenn
         A. Cramer Separate Property Trust dated September 1, 1987.

(3)      Cetoni Holdings, Ltd. is beneficially owned by A. Schlattl.


<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         By letter agreement dated June 1, 1996 we engaged ERBC to provide
consulting services for one year. That agreement has been renewed annually.
During 2001, we incurred consulting fees of $240,000 for services provided under
the contract. At December 31, 2001, we owed ERBC $655,175 under the agreement.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

2.1      Agreement and Plan of Reorganization between Kurchatov Research
         Holdings, Ltd. and Aberdeen Acquisition Corporation filed as exhibit to
         Form 8-K filed January 14, 2000. (1)

3.1      Articles of Incorporation of Advanced Technology Industries, Inc. (2)

3.2      By-Laws of Advanced Technology Industries, Inc. (2)

4.1      Form of Common Stock Certificate. (2)

4.2      Form of Warrant Certificate issued in connection with offerings of
         debentures. (2)

10.1     Agreement with Eurotech, Ltd. to Acquire Resealable Can Technology. (2)

10.2     Flexitech, Ltd. Acquisition Agreement. (2)

10.3     Pirocat, Ltd. Acquisition Agreement. (2)

10.4     Agreement with the Holder of All Outstanding Equity of Cetoni
         Umwelttechnologies-Entwicklungs. (2)

10.5     Agreement with Eurotech, Ltd. relating to Silicon (EKOR) Compound. (2)

10.6     Lease Agreement for Office Space in Berlin, Germany. (2)

10.7     [INCLUDE ALL MATERIAL CONTRACTS DISCUSSED IN BUSINESS, MD&A, AND
         RELATED PARTY SECTIONS, OR INCLUDE AND INDICATE WHERE ORIGINALLY FILED]

10.8     Letter Agreement with Eurotech dated June 20, 2000 concerning Eurotech
         Repurchase of Stock. (3)

10.9     Distribution Agreement with Fackelmann GmbH & Co. dated May 11, 2000
         (Butter dispenser Dish). (4)

10.10    Distribution Agreement with Fackelmann GmbH & Co. dated May 11, 2000
         (Fruit Stripper). (4)

10.11    Investment Agreement between Nurescell, Inc. and Nurescell AG. (5)

10.12    License Agreement between Nurescell, Inc. and Nurescell AG. (5)

<PAGE>

10.13    Agreement For Purchase Of Stock of Nurescell, Inc. by Company. (5)

10.14    Advanced Technology Industries, Inc. 2000 Stock Option Plan. (6)

10.15    Loan Agreement. (7)

10.16    Conversion Agreement between ERBC Holdings Limited and Company. (8)

21.      List of Subsidiaries. (9)

27.      Financial Data Schedule.

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

(1)      Filed as same numbered Exhibit to registrant's Current Report on 8-K,
         filed January 14, 2000.

(2)      Filed as same numbered Exhibit to registrant's Amended Current Report
         on 8-K, filed May 15, 2000.

(3)      Filed as same numbered Exhibit to registrant's Amended Current Report
         on 8-K, filed July 5, 2000.

(4)      Filed as same numbered Exhibit to registrant's Quarterly Report for
         quarter ended June 30, 2000, filed August 21, 2000.

(5)      Filed as same numbered Exhibit to registrant's Current Report on Form
         8-K, filed September 7, 2000.

(6)      Filed as same numbered Exhibit to registrant's Current Report on Form
         8-K, filed November 8, 2000.

(7)      Filed as same numbered Exhibit to registrant's Current Report on Form
         8-K, filed January 22, 2001

(8)      Filed as same numbered Exhibit to registrant's Current Report on Form
         8-K, filed December 14, 2000

(9)      Filed as same numbered Exhibit to registrant's Form 10QSB Quarterly
         Report for the First Quarter of 2000, filed May 23, 2000

         (b)      (b) Reports on 8-K

The following Current Reports on Form 8-K were filed in the last quarter of
2002:

None


<PAGE>

SIGNATURES

         In accordance with Section 13 of 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
hereunto duly authorized.


                      ADVANCED TECHNOLOGY INDUSTRIES, INC.


Date: April 19, 2001                 By   /s/ Hans Joachim Skrobanek
                                          --------------------------------------
                                              President

Date: April 19, 2001                 By   /s/ James Samuelson
                                          --------------------------------------
                                              Chief Financial Officer



Name                                Title               Date
----                                -----               ----

/s/ Hans Joachim Skrobanek         Director            April 16, 2002
--------------------------

/s/ Hans Joachim Schuerholz        Director            April 16, 2002
---------------------------


<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                       Page Nos.
                                                                       --------

INDEPENDENT AUDITORS' REPORT                                              F-1


CONSOLIDATED BALANCE SHEET                                                F-2
  December 31, 2001


CONSOLIDATED STATEMENTS OF OPERATIONS                                     F-3
  For the Years Ended December 31, 2001 and 2000
  For the Period from Inception (October 25, 1995) to
    December 31, 2001


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)            F-4 - 10
  For the Period from Inception (October 25, 1995) to
    December 31, 2001


CONSOLIDATED STATEMENTS OF CASH FLOWS                                  F-11 - 12
  For the Years Ended December 31, 2001 and 2000
  For the Period from Inception (October 25, 1995) to
    December 31, 2001


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                             F-13 - 41


SELECTED FINANCIAL DATA
  For the Five Years Ended December 31, 2001

(*) Included in Part II, Item 6 of the Form.


<PAGE>


To the Board of Directors
Advanced Technology Industries, Inc. and Subsidiaries
Berlin, Germany


                            INDEPENDENT AUDITORS' REPORT
                            ----------------------------

We have audited the accompanying consolidated balance sheet of Advanced
Technology Industries, Inc. and Subsidiaries, (the "Company") (a development
stage company) as of December 31, 2001 and the related consolidated statements
of operations, stockholders' equity (deficiency), and cash flows for the years
ended December 31, 2001 and 2000 and for the period from inception (October 25,
1995) to December 31, 2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Advanced Technology
Industries, Inc. and Subsidiaries (a development stage company) at December 31,
2001 and the consolidated results of their operations and their cash flows for
the years ended December 31, 2001 and 2000 and for the period from inception
(October 25, 1995) to December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company incurred losses
from operations since inception and, as of December 31, 2001, had a deficit
accumulated during the development stage of $14,695,600 and has a working
capital deficit of approximately $4,310,000. As discussed further in Note 1 to
the consolidated financial statements, these factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.




/s/ Grassi & Co., CPAs, P.C.

GRASSI & CO., CPAs, P.C.




New York, New York
April 11, 2002

                                      F-1
<PAGE>

<TABLE>
                     ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                 (A Development Stage Company)

                                  CONSOLIDATED BALANCE SHEET

                                       DECEMBER 31, 2001



<CAPTION>


                                            ASSETS
                                            ------
<S>                                                                             <C>
Current Assets:
  Cash                                                                          $     53,540
  Securities available-for-sale (pledged)                                            202,914
  Prepaid expenses and other current assets                                          152,389
                                                                                -------------
        Total Current Assets                                                         408,843

Property, plant and equipment, net                                                   126,565
License fee, net of accumulated amortization                                         716,667
Due from related parties                                                             304,327
Security deposit                                                                      12,404
                                                                                -------------
        Total Assets                                                            $  1,568,806
                                                                                =============
                           LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                           ----------------------------------------


Current Liabilities:
  Notes payable                                                                 $  1,728,012
  Accrued liabilities including $881,220 due to related parties                    2,946,574
  Obligations under capital leases                                                     6,159
  Due to related parties                                                              37,650
                                                                                -------------
      Total Current Liabilities                                                    4,718,395
                                                                                -------------
Commitments and Other Matters (Notes 1,3,4,7,9,12,13,15 and 17)

Stockholders' Deficiency:
  Preferred stock - $0.001 par value; 1,000,000 shares
    authorized; -0- shares issued and outstanding
  Common stock - $0.0001 par value; 50,000,000 shares
    authorized; 45,143,794 shares issued and outstanding                               4,515
  Additional paid-in capital                                                      11,768,425
  Accumulated other comprehensive income                                             110,275
  Deficit accumulated during the development stage                               (14,695,600)
  Unearned financing costs                                                          (292,204)
  Receivable on sale of stock                                                        (45,000)
                                                                                -------------
      Total Stockholders' Deficiency                                              (3,149,589)
                                                                                -------------
      Total Liabilities and Stockholders' Deficiency                            $  1,568,806
                                                                                =============



   The accompanying notes are an integral part of these consolidated financial statements.

                                             F-2
</TABLE>
<PAGE>

<TABLE>

                  ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                              (A Development Stage Company)

                          CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>


                                              For the Years Ended
                                                  December 31,             For the Period
                                          -----------------------------    from Inception
                                              2001            2000        (October 25, 1995)
                                          -------------   -------------  to December 31, 2001
                                                                         --------------------
<S>                                       <C>             <C>             <C>
Revenues                                  $         --    $         --    $         --
                                          -------------   -------------   -------------
Costs and Expenses:
  Research and development                     868,878       1,347,075       3,886,327
  Stock-based compensation                     654,523         825,208       3,605,142
  Consulting fees                              853,934         524,648       2,305,358
  Other general and administrative
    expenses                                 1,667,868       1,490,802       4,119,567
  Depreciation and amortization
    expense                                    291,685         124,555         525,719
  Interest and amortization of debt
    issuance costs                           1,590,891         195,946       3,040,928
                                          -------------   -------------   -------------
    Total Costs and Expenses                 5,927,779       4,508,234      17,483,041
                                          -------------   -------------   -------------
Other Income/(Expenses):
  (Gain) loss on sale of marketable
     securities                                (41,287)        815,625         774,338

Equity loss and amortization of
  goodwill of unconsolidated affiliate-
  Nurescell Inc.                              (850,431)             --        (850,431)

Writedown of equity investment in
  Nurescell Inc.                              (810,119)             --        (810,119)

Minority interest in loss of
  consolidated subsidiary                           --         323,965         323,965
                                          -------------   -------------   -------------
Loss before extraordinary item              (7,629,616)     (3,368,644)    (18,045,288)

Extraordinary item - gain on sale of
  technology interest to former
  affiliate, net of income taxes of
  $-0-                                              --              --       3,349,688
                                          -------------   -------------   -------------
Net Loss                                  $ (7,629,616)   $ (3,368,644)   $ 14,695,600
                                          =============   =============   =============

Basic and diluted loss per share:
  Before extraordinary item               $       (.20)   $       (.21)
  Extraordinary item                                --              --
                                          -------------   -------------
     Net Loss                             $       (.20)           (.21)
                                          =============   =============
Weighted average shares used in
  basic and diluted loss per share          38,805,309      15,866,790
                                          =============   =============



The accompanying notes are an integral part of these consolidated financial statements.

                                          F-3
</TABLE>

<PAGE>
<TABLE>

                                 ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                             (A Development Stage Company)

                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                         FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001

<CAPTION>


                                                                              Common Stock                  Additional
                                                       Date of          -------------------------            Paid-in
                                                     Transaction          Shares         Amount              Capital
                                                     -----------        ----------     ----------           ----------
<S>                                                  <C>                <C>            <C>                  <C>

Period from Inception (October 25, 1995)
through December 31, 1997:
----------------------------------------

Issuance of common stock to founders for
  subscriptions ($0.0001 per share)                   10/25/95          12,300,000       $    1,230         $    -
Issuance of stock for legal fees
  ($0.04 per share)                                   10/25/95             500,000               50             19,950
Issuance of stock under consulting
  agreement ($0.04 per share)                         10/25/95           1,375,000              138             54,862
Issuance of stock under consulting
  agreements ($1.00 per share)                        12/02/96             230,000               23            229,977
Net loss - 1996                                                              -                -                  -
Issuance of stock under consulting
  agreements ($1.00 per share)                        01/10/97             750,000               75            749,925
Issuance of stock for cash pursuant to
  offering ($2.00 per share)                         04/97-09/97           306,500               30            612,970
Offering costs                                          04/97                -                -                (50,000)
Comprehensive income:
  Net loss - 1997                                                            -                -                  -
                                                                        ----------       ----------         ----------
Balance - December 31, 1997                                             15,461,500       $    1,546         $1,617,684
                                                                        ==========       ==========         ==========

                                                                          Deficit
                                                      Accumulated       Accumulated         Total
                                                        Other            During the      Stockholders'
                                                     Comprehensive      Development         Equity          Comprehensive
                                                     Income (Loss)         Stage         (Deficiency)       Income (Loss)
                                                     -------------      -----------      ------------       -------------

Period from Inception (October 25, 1995)
through December 31, 1997:
----------------------------------------

Issuance of common stock to founders for
  subscriptions ($0.0001 per share)                   $    -            $    -           $    1,230
Issuance of stock for legal fees
  ($0.04 per share)                                        -                 -               20,000
Issuance of stock under consulting
  agreement ($0.04 per share)                              -                 -               55,000
Issuance of stock under consulting
  agreements ($1.00 per share)                             -                 -              230,000
Net loss - 1996                                            -              (372,500)       (372,500)
Issuance of stock under consulting
  agreements ($1.00 per share)                             -                 -              750,000
Issuance of stock for cash pursuant to
  offering ($2.00 per share)                               -                 -              613,000
Offering costs                                             -                 -              (50,000)
Comprehensive income:
  Net loss - 1997                                          -            (1,267,567)      (1,267,567)       $(1,267,567)
                                                      ----------       -----------      -----------        -----------
Balance - December 31, 1997                           $    -           $(1,640,067)     $   (20,837)       $(1,267,567)
                                                      ==========       ===========      ===========        ===========



The accompanying notes are an integral part of these consolidated financial statements.

                                                          F-4
<PAGE>


                                 ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                             (A Development Stage Company)

                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                         FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001



                                                                               Common Stock                 Additional
                                                       Date of          -------------------------            Paid-in
                                                     Transaction          Shares         Amount              Capital
                                                     -----------        ----------     ----------           ----------

Year Ended December 31, 1998:
----------------------------

Balance - December 31, 1997, as
 previously reported                                                    15,461,500       $    1,546         $1,617,684
Effect of Cetoni pooling-of-interests                                    5,000,000              500             27,245
                                                                        ----------       ----------         ----------
Balance - December 31, 1997, restated                                   20,461,500            2,046          1,644,929

Comprehensive income:
  Net loss, restated for Cetoni
    pooling-of-interests                                                     -                -                  -
  Other comprehensive income, net of
    tax:
      Translation adjustments                                                -                -                  -
      Unrealized gains                                                       -                -                  -
                                                                        ----------       ----------         ----------
Balance - December 31, 1998, Restated                                   20,461,500       $    2,046         $1,644,929
                                                                        ==========       ==========         ==========

                                                                          Deficit
                                                      Accumulated       Accumulated         Total
                                                         Other           During the      Stockholders'
                                                     Comprehensive      Development         Equity          Comprehensive
                                                     Income (Loss)         Stage         (Deficiency)       Income/(Loss)
                                                     -------------      -----------      ------------       -------------

Year Ended December 31, 1998:
----------------------------

Balance - December 31, 1997, as
 previously reported                                  $    -           $(1,640,067)     $   (20,837)
Effect of Cetoni pooling-of-interests                     36,122          (512,769)        (448,902)
                                                      ----------       -----------      -----------
Balance - December 31, 1997, restated                     36,122        (2,152,836)        (469,739)
Comprehensive income:
   Net loss, restated for Cetoni
     pooling-of-interests                                  -              (795,568)        (795,568)        $ (795,568)
   Other comprehensive income, net of
     tax:
       Translation adjustments                           (54,137)            -              (54,137)           (54,137)
       Unrealized gains                                    -                 -                 -                  -
                                                      ----------       -----------      -----------         ----------
Balance - December 31, 1998, Restated                 $  (18,015)      $(2,948,404)     $(1,319,444)        $ (849,705)
                                                      ==========       ===========      ===========         ==========



                The accompanying notes are an integral part of these consolidated financial statements.

                                                          F-5
<PAGE>

                                 ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                             (A Development Stage Company)

                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                         FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001




                                                                              Common Stock                  Additional
                                                        Date of         -------------------------            Paid-in
                                                      Transaction         Shares         Amount              Capital
                                                      -----------       ----------     ----------           ----------

Year Ended December 31, 1999:
----------------------------

Balance - December 31, 1998, Restated                                   20,461,500       $    2,046         $1,644,929

Cancellation of shares issued to founders                11/99          (6,795,000)            (679)               679
Stock issued pursuant to employment and
  consulting agreements                                  01/99           1,009,411              101          1,009,310
Value assigned to stock options issued in
  connection with consulting agreement                   01/99               -                -                 61,000
Value assigned to 770,000 warrants issued
  in connection with convertible debt                    03/99               -                -                531,000
Comprehensive income:
   Net loss                                                                  -                -                  -
   Other comprehensive income, net of
     tax:
       Foreign currency translation
         adjustments                                                         -                -                  -
       Unrealized gains                                                      -                -                  -
                                                                        ----------       ----------         ----------
Balance - December 31, 1999                                             14,675,911       $    1,468         $3,246,918
                                                                        ==========       ==========         ==========

                                                                          Deficit
                                                      Accumulated       Accumulated         Total
                                                         Other          During the       Stockholders'
                                                     Comprehensive      Development         Equity          Comprehensive
                                                     Income (Loss)         Stage         (Deficiency)       Income/(Loss)
                                                     -------------      -----------      ------------       -------------

Year Ended December 31, 1999:
----------------------------

Balance - December 31, 1998, Restated                 $  (18,015)      $(2,948,404)     $(1,319,444)

Cancellation of shares issued to
  founders                                                 -                 -                 -
Stock issued pursuant to employment and
  consulting agreements                                    -                 -            1,009,411
Value assigned to stock options issued
  in connection with consulting
  agreement                                                -                 -               61,000
Value assigned to 770,000 warrants
  issued in connection with convertible
  debt                                                     -                 -              531,000
Comprehensive income, net of tax:
  Net loss                                                 -              (748,936)        (748,936)       $  (748,936)
  Other comprehensive income, net of
    tax:
     Foreign currency translation
       adjustments                                        92,899             -               92,899             92,899
     Unrealized gains on securities                    1,117,500             -            1,117,500          1,117,500
                                                      ----------       -----------      -----------        -----------
Balance - December 31, 1999                           $1,192,384       $(3,697,340)     $   743,430        $   461,463
                                                      ==========       ===========      ===========        ===========


                The accompanying notes are an integral part of these consolidated financial statements.

                                                          F-6
</TABLE>
<PAGE>
<TABLE>


                                  ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                              (A Development Stage Company)

                               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                          FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001


<CAPTION>


                                                                                                              Accumulated
                                                                    Common Stock             Additional          Other
                                                Date of        -----------------------        Paid-in        Comprehensive
                                              Transaction        Shares       Amount          Capital        Income (Loss)
                                              -----------      ----------   ----------       ----------      -------------
<S>                                           <C>              <C>          <C>              <C>             <C>
Year Ended December 31, 2000:
----------------------------

Balance - December 31, 1999                                    14,675,911     $    1,468     $3,246,918      $ 1,192,384

Stock options exercised                          01/00             30,000              3         14,997           -
Shares issued for acquisition of
  Aberdeen                                       01/00            400,000             40        499,960           -
Compensatory issuance of stock                   04/00             30,000              3         44,997           -
Value assigned to stock options
  issued in connection with
  consulting agreements                          04/00              -              -            472,500           -
Stock options exercised                          06/00             90,000              9         44,991           -
Compensatory issuance of stock                   06/00             60,000              6         89,994           -
Compensatory issuance of stock                   12/00            128,000             13        152,495           -
Value assigned to stock as
  additional consideration for
  financing activities                           11/00            713,571             71        222,788           -
Issuance of stock to retire debt
  from related party                             12/00         13,054,393          1,305      1,558,695           -
Issuance of stock to officers for
  bonus                                          12/00            100,000             10         20,190           -
Amortization of unearned financing
  costs                                                             -              -              -
Comprehensive income:
  Net loss                                                          -              -              -
  Other comprehensive income
    (loss), net of tax:
      Foreign currency translation
       adjustments                                                  -              -              -               69,578
      Unrealized holding losses
       arising during the year, net
       of taxes of $453,000                                         -              -              -             (687,825)
      Less: Reclassification
             adjustments for
             gains included in net
             loss, net of taxes of
             $151,000                                               -              -              -             (279,375)
                                                               ----------     ----------     ----------      -----------
Balance - December 31, 2000                                    29,281,875     $    2,928     $6,368,525      $   294,762
                                                               ==========     ==========     ==========      ===========




                 The accompanying notes are an integral part of these consolidated financial statements.

                                                           F-7
</TABLE>

<PAGE>
<TABLE>

                                    ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                                (A Development Stage Company)

                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                            FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001


<CAPTION>

                                                Deficit
                                              Accumulated                                        Total
                                              During the         Unearned      Receivable     Stockholders'
                                              Development       Financing      on Sale of        Equity          Comprehensive
                                                Stage             Costs          Stock        (Deficiency)       Income/(Loss)
                                              -----------       ----------     ----------     ------------       -------------
<S>                                           <C>               <C>            <C>            <C>                <C>
Year Ended December 31, 2000:
----------------------------

Balance - December 31, 1999                   $(3,697,340)      $   -          $   -          $   743,430

Stock options exercised                            -                -              -               15,000
Shares issued for acquisition of
  Aberdeen                                         -                -              -              500,000
Compensatory issuance of stock                     -                -              -               45,000
Value assigned to stock options
  issued in connection with
  consulting agreements                            -                -              -              472,500
Stock options exercised                            -                -            (45,000)          -
Compensatory issuance of stock                     -                -              -               90,000
Compensatory issuance of stock                     -                -              -              152,508
Value assigned to stock as
  additional consideration for
  financing activities                             -             (222,859)         -               -
Issuance of stock to retire debt
  from related party                               -                -              -            1,560,000
Issuance of stock to officers for
  bonus                                            -                -              -               20,200
Amortization of unearned financing
  costs                                            -               54,603          -               54,603
Comprehensive income:
  Net loss                                    (3,368,644)           -              -           (3,368,644)       $(3,368,644)
  Other comprehensive income
   (loss), net of tax:
     Foreign currency translation
       adjustments                                 -                -              -               69,578             69,578
     Unrealized holding losses
       arising during the year,
       net of taxes of $453,000                    -                -              -             (687,825)          (687,825)
     Less: Reclassification
            adjustments for gains
            included in net loss,
            net of taxes of
            $151,000                               -                -              -             (279,375)          (279,375)
                                              -----------       ---------      ---------      -----------        -----------
Balance - December 31, 2000                   $(7,065,984)      $(168,256)     $ (45,000)     $  (613,025)       $(4,266,266)
                                              ===========       =========      =========      ===========        ===========




                   The accompanying notes are an integral part of these consolidated financial statements.

                                                             F-8
</TABLE>

<PAGE>
<TABLE>

                                        ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                                    (A Development Stage Company)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                                FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001

<CAPTION>

                                                                                                                      Accumulated
                                                                         Common Stock               Additional           Other
                                                      Date of       ------------------------         Paid-in          Comprehensive
                                                    Transaction       Shares       Amount            Capital          Income (Loss)
                                                    -----------     -----------   ----------        -----------       -------------
<S>                                                 <C>             <C>           <C>               <C>               <C>
Year Ended December 31, 2001:
----------------------------

Balance - December 31, 2000                                          29,281,875      $    2,928     $ 6,368,525        $   294,762

Value assigned to stock as additional
  consideration for financing
  activities                                           01/01            100,000              10          31,240              -
Issuance of stock for 3,500,000
  shares of Nurescell Inc.                             01/01          3,500,000             350       1,093,400              -
Issuance of stock for 1,090,000
  shares of Nurescell Inc.                             04/01          1,090,000             109         566,691              -
Issuance of stock to retire debt from
  related party                                        04/01          3,336,745             334         527,539              -
Issuance of stock on conversion of loan                04/01            501,812              50         179,950              -
Issuance of stock on conversion of loan                04/01            418,177              42         149,958              -
Compensatory issuance of stock                         04/01            500,000              50         168,700              -
Issuance of stock on conversion of loan
  from officer                                         04/01            344,788              34          54,511              -
Value assigned to stock as additional
  consideration for financing
  activities                                        04/01-06/01         770,000              77         610,023              -
Issuance of stock for accrued expenses                 04/01            316,056              32          49,968              -
Value assigned to stock options issued
  in connection with consulting
  agreement                                            04/01             -                -              37,500              -
Cashless exercise of warrants                          07/01            67,857                7              (7)             -
Value assigned to stock as additional
  consideration for financing
  activities                                        07/01-09/01      1,046,696              105         489,495              -
Issuance of stock on conversion of loan
  and accrued interest                                 07/01           775,385               78         247,122              -
Issuance of stock for accrued interest
  on promissory notes                                  12/01            61,844                6          22,178              -
Compensatory issuance of stock                      10/01-12/01      1,381,826              139         356,885              -
Value assigned to stock as additional
  consideration for financing
  activities                                        10/01-12/01      1,098,304              109         398,290              -
Issuance of stock to employees as a
  sign-on bonus                                     11/01-12/01         75,000                8          18,743              -
Issuance of stock for legal fees                       12/01           477,429               47         112,714              -
Proceeds from sale of minority interest
  in Reseal, Ltd.                                      12/01             -                -             275,000              -
Value assigned to stock options issued
  in connection with consulting
  agreement                                            12/01             -                -              10,000              -
Amortization of unearned financing
  costs                                                                  -                -              -                   -
Comprehensive income:
  Net loss                                                               -                -              -                   -
  Other comprehensive income (loss),
    Net of tax:
      Foreign currency transaction
        adjustment                                                       -                -              -                 (5,824)
      Unrealized holding losses
        arising during the year, net
        of taxes of $-0-                                                 -                -              -               (178,663)
                                                                    ----------       ----------     -----------       -----------
Balance - December 31, 2001                                         45,143,794       $    4,515     $11,768,425       $   110,275
                                                                    ==========       ==========     ===========       ===========


                      The accompanying notes are an integral part of these consolidated financial statements.

                                                                F-9
</TABLE>
<PAGE>
<TABLE>


                                        ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                                    (A Development Stage Company)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                                FOR THE PERIOD FROM INCEPTION (OCTOBER 25, 1995) TO DECEMBER 31, 2001
<CAPTION>


                                                     Deficit
                                                   Accumulated                                           Total
                                                   During the         Unearned        Receivable      Stockholders'
                                                   Development        Financing       on Sale of         Equity        Comprehensive
                                                     Stage              Costs           Stock         (Deficiency)     Income/(Loss)
                                                   -----------       ----------       ----------      ------------     -------------
<S>                                                <C>               <C>              <C>             <C>              <C>

Year Ended December 31, 2001:
----------------------------

Balance - December 31, 2000                        $(7,065,984)      $ (168,256)      $  (45,000)     $  (613,025)

Value assigned to stock as additional
  consideration for financing
  activities                                             -              (31,250)            -               -
Issuance of stock for 3,500,000
  shares of Nurescell Inc.                               -                 -                -           1,093,750
Issuance of stock for 1,090,000
  shares of Nurescell Inc.                               -                 -                -             566,800
Issuance of stock to retire debt
  from related party                                     -                 -                -             527,873
Issuance of stock on conversion of
  loan                                                   -                 -                -             180,000
Issuance of stock on conversion of
  loan                                                   -                 -                -             150,000
Compensatory issuance of stock                           -                 -                -             168,750
Issuance of stock on conversion of
  loan from officer                                      -                 -                -              54,545
Value assigned to stock as additional
  consideration for financing
  activities                                             -             (610,100)            -               -
Issuance of stock for accrued expenses                   -                 -                -              50,000
Value assigned to stock options issued
  in connection with consulting
  agreement                                              -                 -                -              37,500
Cashless exercise of warrants                            -                 -                -               -
Value assigned to stock as additional
  consideration for financing
  activities                                             -             (489,600)            -               -
Issuance of stock on conversion of
  loan and accrued interest                              -                 -                -             247,200
Issuance of stock for accrued interest
  on promissory notes                                    -                 -                -              22,184
Compensatory issuance of stock                           -                 -                -             357,023
Value assigned to stock as additional
  consideration for financing
  activities                                             -             (398,400)            -               -
Issuance of stock to employees as a
  sign-on bonus                                          -                 -                -              18,750
Issuance of stock for legal fees                         -                 -                -             112,762
Proceeds from sale of minority
  interest in Reseal, Ltd.                               -                 -                -             275,000
Value assigned to stock options issued
  in connection with consulting
  agreement                                              -                 -                -              10,000
Amortization of unearned financing
  costs                                                  -            1,405,402             -           1,405,402
Comprehensive income:
  Net loss                                          (7,629,616)            -                -          (7,629,616)      $(7,629,616)
  Other comprehensive income (loss),
    net of tax:
      Foreign currency transaction
        adjustment                                       -                 -                -              (5,824)           (5,824)
      Unrealized holding losses
        arising during the year, net
        of taxes of $-0-                                 -                 -                -            (178,663)         (178,663)
                                                   ------------      ----------       ----------      -----------       -----------
Balance - December 31, 2001                        $(14,695,600)     $ (292,204)      $  (45,000)     $(3,149,589)      $(7,814,103)
                                                   ============      ==========       ==========      ===========       ===========

                      The accompanying notes are an integral part of these consolidated financial statements.


                                                                F-10
</TABLE>
<PAGE>
<TABLE>

                                    ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                                (A Development Stage Company)

                                            CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                                                                          For the Period
                                                                       For the Years Ended                from Inception
                                                                           December 31,                 (October 25, 1995)
                                                                   ---------------------------            to December 31,
                                                                       2001            2000                   2001
                                                                   ------------    -----------          -------------------
<S>                                                                <C>             <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                         $(7,629,616)      $(3,368,644)           $(14,695,600)
  Adjustments to reconcile net loss to net cash used
    in operating activities:
      Equity loss and amortization of goodwill of
        unconsolidated affiliate - Nurescell Inc.                      850,431             -                     850,431
      Writedown of equity investment in Nurescell
        Inc.                                                           810,119             -                     810,119
      Expenses incurred on behalf of consolidated
        affiliate applied to the purchase of license                   (79,493)         (325,939)               (405,432)
      Acquisition of Aberdeen                                            -               650,000                 650,000
      Loss (gain) on sale of marketable securities                      41,287          (815,625)               (774,338)
      Extraordinary gain                                                 -                 -                  (3,349,688)
      Stock-based compensation                                         654,523           825,208               3,605,142
      Interest and amortization of debt issuance
        costs                                                        1,405,402            54,603               2,528,196
      Research and development costs                                     -                 -                     437,368
      Depreciation and amortization                                    291,685           124,555                 525,720
  Changes in assets (increase) decrease:
     Prepaid expenses and other assets                                (111,020)          (26,993)               (164,793)
     Cumulative translation adjustment                                  (5,824)           69,578                 138,638
  Changes in liabilities increase (decrease):
     Accrued liabilities                                             1,475,299            77,052               3,063,467
                                                                   -----------       -----------            ------------
    Net Cash Used in Operating Activities                           (2,297,207)       (2,736,205)             (6,780,770)
                                                                   -----------       -----------            ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                 (85,126)         (109,175)               (331,647)
  Proceeds from sale of marketable securities                        1,330,561         1,350,000               2,680,561
                                                                   -----------       -----------            ------------
    Net Cash Provided by Investing Activities                        1,245,435         1,240,825               2,348,914
                                                                   -----------       -----------            ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from exercise of options                                      -                15,000                  15,000
  Proceeds from issuance of common stock                                 -                 -                     641,975
  Offering costs                                                         -                 -                     (50,000)
  Proceeds from loans                                                1,918,986           713,571               2,632,557
  Repayment of loans                                                  (220,000)            -                    (220,000)
  Proceeds from convertible debentures                                   -                 -                     750,000
  Financing costs                                                        -                 -                     (75,000)
  Advances (repayments) from related parties                          (800,703)        1,406,095               1,141,578
  Payments under capital lease obligations                             (11,782)          (13,011)                (31,146)
  Repayment of license fee payable                                    (155,956)         (438,612)               (594,568)
  Proceeds from sale of minority interest in
    Reseal, Ltd.                                                       275,000             -                     275,000
                                                                   -----------       -----------            ------------
    Net Cash Provided by Financing Activities                        1,005,545         1,683,043               4,485,396
                                                                   -----------       -----------            ------------
(Decrease) Increase in Cash                                            (46,227)          187,663                 553,540

Cash Overdraft - Beginning of Year                                      99,767           (87,896)                 -
                                                                   -----------       -----------            ------------
Cash - End of Year                                                 $    53,540       $    99,767            $     53,540
                                                                   ===========       ===========            ============




                  The accompanying notes are an integral part of these consolidated financial statements.

                                                            F-11
</TABLE>
<PAGE>

<TABLE>

                                  ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                                              (A Development Stage Company)

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>


                                                                                                          For the Period
                                                                       For the Years Ended                from Inception
                                                                           December 31,                 (October 25, 1995)
                                                                   ---------------------------            to December 31,
                                                                       2001            2000                   2001
                                                                   ------------    -----------          -------------------
<S>                                                                <C>             <C>                  <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
-------------------------------------------------
  Cash paid during the year for:
    Interest                                                       $    40,404       $    28,775            $   142,077
                                                                   ===========       ===========            ===========
    Income taxes                                                   $     -           $     -                $     -
                                                                   ===========       ===========            ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH AND FINANCING
-----------------------------------------------
  ACTIVITIES:
  ----------

  Equipment purchased under capital lease
    obligations                                                    $     -            $    -                $    37,305
                                                                   ===========       ===========            ===========
  Convertible debentures and interest assumed by
    Eurotech                                                       $     -           $     -                $ 1,212,188
                                                                   ===========       ===========            ===========
  Debt converted to equity                                         $   684,545       $ 1,560,000            $ 2,244,545
                                                                   ===========       ===========            ===========
  Accrued expenses converted to equity                             $   129,646       $     -                $   129,646
                                                                   ===========       ===========            ===========
  Loans from related parties converted to equity                   $   467,873       $     -                $   467,873
                                                                   ===========       ===========            ===========






                The accompanying notes are an integral part of these consolidated financial statements.

                                                          F-12
</TABLE>
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  1 -  BUSINESS AND CONTINUED OPERATIONS

Description of Business
-----------------------

The accompanying consolidated financial statements include the accounts of
Advanced Technology Industries, Inc. ("ATI"), formerly Kurchatov Research
Holdings, Ltd. and its Subsidiaries, Cetoni Umwelttechnologie Entwicklungs GmbH
("Cetoni"), ATI Nuklear AG ("ATI Nuklear"), formerly Nurescell AG and Reseal,
Ltd. ("Reseal"), collectively referred to as "the Company".

Cetoni and ATI Nuklear are 100% owned subsidiary and Reseal is a 97.25% owned
subsidiary.

Advanced Technology Industries, Inc. was incorporated under the laws of the
State of Delaware on October 25, 1995. On February 1, 2000, the Company changed
its name from Kurchatov Research Holdings, Ltd. to Advanced Technology
Industries, Inc. The Company was organized to identify, assess and commercialize
technologies introduced and developed by scientists throughout the world with
particular emphasis on technologies originating in Russia, Germany and Israel.
ATI is a development-stage company and as such has no revenue or earnings from
operations.

Pursuant to an agreement and plan of Reorganization, effective January 14, 2000,
the Company acquired all the outstanding shares of common stock of Aberdeen
Acquisition Corporation ("Aberdeen"), a Delaware corporation, from the
shareholders thereof, in an exchange for cash of $150,000, plus 400,000 shares
of common stock of the Company valued at $500,000. As a result of this
transaction, Aberdeen has become a wholly-owned subsidiary of ATI effective on
January 14, 2000. The costs of this transaction were charged to operations
during the year ended December 31, 2000.

Cetoni Umwelttechnologie Entwicklungs GmbH entered in the commercial register of
the local court of Passau, Germany under Commercial Register No. 5321. During
December of 1999, ATI acquired all of the outstanding capital stock of Cetoni, a
German-based design and engineering firm focused on developing and patenting
technologies and products for the consumer market. Cetoni is a development-stage
company and as such has no revenue or earnings from operations.

ATI Nuklear was formed on June 19, 2000 in Frankfurt, Germany under the
corporate name "Anta 14, Gesellschaft Mit Beschraenkter Haftung" ("Anta 14") and
was entered in the commercial register of Frankfurt AM Main under 72 Commercial
Register No. 49690. On August 22, 2000, the Company entered into a joint
agreement with Nurescell US, a Nevada corporation, to form a German company
named Nurescell AG. At the time of this agreement, ATI Nuklear AG was owned 51%
by Nurescell US and 49% by ATI. During August 2000, Anta 14 was renamed to
Nurescell AG. During June 2001, ATI acquired the remaining 51% interest in
Nurescell AG. During July 2001, Nurescell AG changed its name to ATI Nuklear AG
and was accepted by the German authorities on November 7, 2001. ATI Nuklear is a
development stage company and as such has no revenues or earnings from
operations.

On June 8, 2001, ATI formed a new entity, Reseal, Ltd., which was incorporated
under the laws of the State of Delaware. Reseal was organized to commercialize
its proprietary "reseal-able" packaging systems technology. This patented system
for re-sealing "pop-top" cans for both soft drinks and beer has been developed
and Reseal believes it is ready for commercial introduction.


                                      F-13

<PAGE>

              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1 -  BUSINESS AND CONTINUED OPERATIONS (Continued)

Continued Existence
-------------------

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, as shown in the
accompanying consolidated financial statements, the Company has incurred losses
from operations since inception. Management anticipates incurring substantial
additional losses in 2002. Further, the Company may incur additional losses
thereafter, depending on its ability to generate revenues from the licensing or
sale of its technologies and products, or enter into any or a sufficient number
of joint ventures. The Company has no significant revenue to date. There is no
assurance that the Company can successfully commercialize any of its
technologies and products and realize any revenues therefrom. The Company's
technologies and products have never been utilized on a large-scale commercial
basis and there is no assurance that any of its technologies or products will
receive market acceptance. There is no assurance that the Company can continue
to identify and acquire new technologies. As of December 31, 2001, the Company
had an accumulated deficit since inception of $14,695,600.

Management's business plan will require additional financing. To support its
operations during 2001, the Company borrowed monies from individual investors
and certain stockholder in the amount of $1,918,986 and sold minority interest
in its subsidiary for $275,000 (see Note 9).

While no assurance can be given, management believes the Company can raise
adequate capital to keep the Company functioning during 2002. No assurance can
be given that the Company can continue to obtain any working capital or sell all
or any of its Eurotech securities, or obtain a loan against its Eurotech
securities, or if obtained, that such funding will not cause substantial
dilution to shareholders of the Company. If the Company is unable to raise
additional funds, it may be forced to change or delay its contemplated marketing
and business plans.

Being a start-up stage entity, the Company is subject to all the risks inherent
in the establishment of a new enterprise and the marketing and manufacturing of
a new product, many of which risks are beyond the control of the Company. All of
the factors discussed above raise substantial doubt about the Company's ability
to continue as a going concern.

These consolidated financial statements do not include any adjustments relating
to the recoverability of recorded asset amounts that might be necessary as a
result of the above uncertainty.


                                      F-14

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of ATI and all of its
wholly-owned and majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. Investments in
unconsolidated affiliates are accounted for using the equity method when the
Company owns at least 20%, but no more than 50% of such affiliates. Under the
equity method, the Company records its proportionate shares of profits and
losses based on its percentage interest in earnings of companies 50% or less.

Use of Estimates
----------------

The preparation of consolidated financial statements, in conformity with
accounting principles generally accepted in the United States of America,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Equity Method of Accounting for Unconsolidated Affiliates
---------------------------------------------------------

Investments in companies in which the Company has a 20% to 50% interest and has
the ability to exercise significant influence over operating and financial
policies are accounted for on the equity method.

At December 31, 2001, investments in companies accounted for under the equity
method consist of the following foreign development-stage technology companies:

                                                     %            Country of
                                                   Owned          Operations
                                                  -------         ----------

       Flexitech, Ltd. ("Flexitech")               20.00%           Israel
       Pirocat, Ltd. ("Pirocat")                   20.00%           Israel
       Nurescell Inc.                              29.27%           USA
       Sibconvers                                  50.00%           Russia
       Container Engineering, Ltd.                 50.00%           Russia

The Company does not have sufficient control in order to consolidate such
entities. The above companies do not have any revenue nor any significant
assets, liabilities, commitments and contingencies.

                                      F-15

<PAGE>

              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments
-----------------------------------

The consolidated financial statements include various estimated fair value
information at December 31, 2001, as required by Statement of Financial
Accounting Standards 107, "Disclosures about Fair Value of Financial
Instruments." Such information, which pertains to the Company's financial
instruments, is based on the requirements set forth in that Statement and does
not purport to represent the aggregate net fair value to the Company. The
following methods and assumptions were used to estimate the fair value of each
class of financial instruments for which it is practicable to estimate that
value:

Cash and cash equivalents: The carrying amount approximates fair value because
of the short-term maturity of those instruments.

Investment in marketable securities: The fair value of investments in marketable
securities is based on quoted prices.

Receivables and payables: The carrying amounts approximate fair value because of
the short maturity of those instruments.

Notes and loans payable: The carrying amounts of notes payable approximate fair
value due to the length of the maturities. The interest rates being tied to
market indices and/or due to the interest rates not being significantly
different from the current market rates available to the Company.

All of the Company's financial instruments are held for purposes other than
trading.

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid investments with original maturity dates
of three months or less to be cash equivalents.

Concentration of Credit Risk
----------------------------

The Company places its cash in what it believes to be creditworthy financial
institutions. However, cash balances may exceed FDIC insured levels at various
times during the year.


                                      F-16
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investments in Marketable Securities
-----------------------------------

The Company accounts for its investments using Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in debt and Equity
Securities" ("SFAS No. 115"). This standard requires that certain debt and
equity securities be adjusted to market value at the end of each accounting
period. Unrealized market value gains and losses are charged to earnings if the
securities are traded for short-term profit. Otherwise, such unrealized gains
and losses are charged or credited to comprehensive income.

Management determines the proper classifications of investments in obligations
with fixed maturities and marketable equity securities at the time of purchase
and reevaluates such designations as of each balance sheet date. At December 31,
2001, all securities covered by SFAS No. 115 were designated as available for
sale. Accordingly, these securities are stated at fair value, with unrealized
gains and losses reported in comprehensive income. Realized gains and losses on
sales of investments are determined on a specific identification basis.

Property, Plant and Equipment
-----------------------------

Property, plant and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the related assets,
less residual value where appropriate as follows:

              Machinery and equipment             4-10 years
              Transportation equipment            2-10 years
              Office furniture and fixtures       5-10 years
              Software                               3 years

Major repairs or replacements of property, plant and equipment are capitalized.
Maintenance, repairs and minor replacements are charged to operations as
incurred.

Licensing Fees
--------------

Licenses for exclusive marketing rights to various products have been acquired
from a related party.

Licensing fees are being amortized on a straight-line basis over 5 years.

Impairment of Assets
--------------------

The Company reviews long-lived assets and identifiable intangibles whenever
events or circumstances indicate that the carrying amounts of such assets may
not be fully recoverable. The Company evaluates the recoverability of long-lived
assets by measuring the carrying amounts of the assets against the estimated
undiscounted cash flows associated with these assets. At the time such
evaluation indicates that the future undiscounted cash flows of certain
long-lived assets are not sufficient to recover the assets' carrying value, the
assets are adjusted to their fair values (based upon discounted cash flows).
During the year ended December 31, 2001, the Company recorded an impairment loss
of $810,119 related to the equity investment in Nurescell USA. The Company
recorded the loss because it had determined that the investment in Nurescell
Inc. had become impaired due to the decline in the value of the security.


                                      F-17
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Advertising Expenses
--------------------

Advertising expenses are charged to operations when incurred. There were no
advertising expenses for the years ended December 31, 2001 and 2000.

Income Taxes
------------

The Company recognizes deferred income taxes for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year end, based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
necessary to reduce deferred tax assets to the amount that is "more likely than
not" to be realized. Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
due plus deferred taxes for operating losses that are available to offset future
taxable income.

Revenue Recognition
-------------------

The Company expects that it will derive substantially all of its revenue from
the sale, licensing and sub-licensing of its technologies and products. Revenue
from the sale of technology will be recognized in the year of sale. Revenue from
licensing and sub-licensing will be recognized in the periods when the fees have
been earned.

Research and Development
------------------------

In accordance with Statement of Financial Accounting Standards No. 2 (SFAS 2),
"Accounting for Research and Development Costs," all research and development
(R&D) costs are expensed when they are incurred, unless they are reimbursed
under specific contracts. Assets used in R&D activity, such as machinery,
equipment, facilities and patents that have alternative future use either in R&D
activities or otherwise are capitalized.

Stock-Based Compensation
------------------------

The Company has adopted the intrinsic value method of accounting for stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. The
Company has adopted only the disclosure provisions for SFAS No. 123, "Accounting
for Stock-Based Compensation," for equity instruments issued to employees. The
Company applies all the provisions of SFAS No. 123 to equity instruments issued
to other than employees.


                                      F-18

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Translation of Foreign Currencies
---------------------------------

The U.S. dollar is the functional currency for all of the Company's businesses,
except its operations in Germany and Russia. Foreign currency denominated assets
and liabilities for these units are translated into U.S. dollars based on
exchange rates prevailing at the end of each year, and revenues and expenses are
translated at average exchange rates during the year. The effects of foreign
exchange gains and losses arising from these translations of assets and
liabilities are included as a component of other comprehensive income.

Loss Per Share of Common Stock
------------------------------

Basic net loss per share of common stock has been computed by dividing losses
available to common stockholders by the weighted average number of common shares
outstanding during the periods presented.

Diluted loss per share reflects per share amounts that would have resulted if
dilutive common stock equivalents had been converted to common stock.

Common stock equivalents, consisting of options and warrants, discussed in Note
14, were not included in the calculation of diluted loss per share because their
inclusion would have had the effect of decreasing the loss per share otherwise
computed.

Deferred and Unearned Financing Costs
-------------------------------------

Financing costs in connection with the Company's debt offerings are being
amortized over the expected life of the obligations. The expected life was
determined to be the conversion date that was most beneficial to the
noteholders.

Segment Information
-------------------

Effective January 1, 1998, the Company adopted the provisions of SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." SFAS No.
131 establishes standards for the way public enterprises report information
about operating segments in annual consolidated financial statements and
requires those enterprises to report selected information about operating
segments in interim financial reports issued to stockholders. Adoption of SFAS
No. 131 did not have a material effect on the Company's financial position or
results of operations, but did affect the disclosure of segment information, as
presented in Note 16.

Gains on Issuance of Stock by Subsidiaries
------------------------------------------

At the time a subsidiary sells its stock to unrelated parties at a price in
excess of its book value, the Company's net investment in that subsidiary
increases. If at that time, the subsidiary is not a newly-formed, non-operating
entity, nor a research and development, start-up or development stage company,
nor is there a question as to the subsidiary's ability to continue in existence,
the Company records the increase in its consolidated statements of income.
Otherwise, the increase is reflected in additional paid-in capital in the
Company's consolidated statements of stockholders' equity.

                                      F-19

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income
--------------------

The Company has adopted SFAS No. 130, "Accounting for Comprehensive Income".
This statement establishes standards for reporting and disclosing of
comprehensive income and its components (including revenues, expenses, gains and
losses) in a full set of general-purpose financial statements. The items of
other comprehensive income that are typically required to be disclosed are
foreign currency items, minimum pension liability adjustments, and unrealized
gains and losses on certain investments in debt and equity securities.

Accumulated other comprehensive income, at December 31, 2001, consists of the
following:


      Foreign currency translation adjustments              $  138,638
      Unrealized losses on investments                         (28,363)
                                                            ----------
                                                            $  110,275
                                                            ==========

Reclassifications
-----------------

Certain reclassifications have been made to the prior years' consolidated
financial statements to conform to the presentation used for the year ended
December 31, 2001.

Impact of Recently Issued Accounting Standards
----------------------------------------------
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations,"
which supercedes Accounting Principles Board ("APB") Opinion No. 16, "Business
Combinations." SFAS No. 141 requires the purchase method of accounting for
business combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The provisions of SFAS 141 have been adopted as of
July 1, 2001. The adoption of SFAS 141 has not changed the method of accounting
used in previous business combinations initiated prior to July 1, 2001.

In July 2001, the FASB also issued Statement of Financial Accounting Standards
No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets," which is effective
for fiscal years beginning after December 15, 2001. Certain provisions shall
also be applied to acquisitions initiated subsequent to June 30, 2001. SFAS 142
supercedes APB Opinion No. 17, "Intangible Assets," and requires, among other
things, the discontinuance of amortization related to goodwill and indefinite
lived intangible assets. These assets will then be subject to an impairment test
at least annually. Management believes that the implementation of this standard
will have no impact on the Company's results of operations and financial
position.



                                      F-20
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impact of Recently Issued Accounting Standards (Continued)
----------------------------------------------

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets," which supercedes Statement of Financial Accounting Standards No. 121
("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" and certain provisions of APB Opinion No.
30, "Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." SFAS 144 requires that long-lived assets to be
disposed of by sale, including discontinued operations, be measured at the lower
of carrying amount or fair value, less cost to sell, whether reported in
continuing operations or in discontinued operations. SFAS 144 also broadens the
reporting requirements of discontinued operations to include all components of
an entity that have operations and cash flows that can be clearly distinguished,
operationally and for financial reporting purposes, from the rest of the entity.
The provisions of SFAS 144 are effective for fiscal years beginning after
December 15, 2001. Management believes that the implementation of this standard
will have no impact on the Company's results of operations and financial
position.

NOTE  3 -  RESEARCH AND DEVELOPMENT AGREEMENT

In 1996, the Company executed an agreement with Eurotech, a former affiliate,
pursuant to which Eurotech will remit to the Company 50% of the net profits
derived from the commercialization of, or other income generated from, any
technologies furnished to Eurotech by the Company's technical advisory board.
Under this agreement, the Company's technical advisory board will identify
technologies and forward such technologies to Eurotech which will seek avenues
for their commercialization.

Under the agreement with Eurotech, the Company has identified and introduced to
Eurotech a certain technology known as "EKOR" with potential uses in connection
with containing both solid and liquid radioactive materials, suppressing
radioactive dust and preventing such materials and dust from escaping into the
atmosphere and from leaching into and contaminating ground/water supplies. There
can be no assurance that this technology will be commercially saleable or
profitable.

On November 30, 1999, the Company sold its profit interest in the EKOR
technology to Eurotech.


                                      F-21
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  4 - ACQUISITIONS

Investments in Israeli Technology Companies
-------------------------------------------

During April of 1999, pursuant to agreements with Ofek Le-Oleh Foundation, Ltd.
(the "Foundation"), an Israeli incubator with authority from the Israeli
government, the Company has invested in two Israeli technology companies:
Flexitech, Ltd. and Pirocat, Ltd. Under those agreements, the Company received
20% of each Israeli technology company's common equity in exchange for its
investment of $60,000 in each company.

The investment is payable in installments of $15,000, to each company, due in
April of 1999, October of 1999, April of 2000 and October of 2000. In connection
with these investments, the Company also has obtained an option to purchase an
additional 20% to 25% of the common equity for a sum to be determined in the
future, which options are exercisable for a period of 90 days commencing after
the first year of the development period (generally two years from registration
as an Israeli corporation). During the development period, the sale or other
transfer of 25% or more of the inventor's equity of each of Flexitech and
Pirocat requires the consent of the Chief Scientist of the Israeli Ministry of
Commerce and Technology. The Company's options to acquire additional common
equity of the Israeli technology companies are exercisable within such two-year
periods and any acquisition of the common equity purchasable thereunder will,
therefore, require the Chief Scientist's consent. The agreements require the
Company to pay royalties on future revenue generated from the commercialization
of the technologies developed by these Israeli companies.

The Company's share of losses incurred from these research companies has been
accounted for on the equity basis and is included in research and development
expenses. The amount charged to research and development expenses for each of
the years ended December 31, 2001 and 2000 was $-0- and $60,000, respectively,
which reduced the Company's investment in these two companies to zero.

There can be no assurance that these development projects will result in useful
technologies or that the same will be commercially saleable or profitable.

Cetoni Umwelttechnologie-Entwicklungs GmbH - Pooling-of-Interests
-----------------------------------------------------------------

On December 6, 1999, the Company completed the acquisition of all of the
outstanding shares of the capital stock of Cetoni, a development-stage company,
for 5,000,000 shares of the Company's restricted common stock. Cetoni is a
German-based design and engineering firm focused on developing and patenting
technologies and products for the consumer market. Since 1995, Cetoni has
designed and patented products for the beverage, automotive accessory, sport,
healthcare, household, office and general consumer markets. Cetoni has not
generated any revenues from operations to date.

                                      F-22

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  4 - ACQUISITIONS (Continued)

Cetoni Umwelttechnologie-Entwicklungs GmbH - Pooling-of-Interests (Continued)
-----------------------------------------------------------------

The acquisition has been accounted for as a pooling-of-interests. Accordingly,
the Company's consolidated financial statements have been restated for all
periods prior to the business combination to include the combined results of ATI
and Cetoni.

The conforming of the accounting practices of ATI and Cetoni resulted in no
adjustments to net loss or shareholders' equity. There have been no significant
intercompany transactions between ATI and Cetoni other than loans by ATI to
Cetoni.

ATI Nuklear AG (Formerly known as Nurescell AG)
----------------------------------------------

On August 22, 2000, the Company entered into a joint agreement with Nurescell
US, a Nevada corporation, to form a German company named Nurescell AG. At the
time of this agreement, ATI Nuklear AG was owned 51% by Nurescell US and 49% by
ATI.

In addition, Nurescell AG and Nurescell US executed a license agreement granting
an exclusive license to Nurescell AG in the countries of the former Soviet
Union, the continent of Europe and the British Isles to manufacture and market a
proprietary technology owned by Nurescell US. The technology being licensed is
defined in the license agreement by Nurescell US as a material for shielding and
internment of radioactive materials, radioactive waste, as well as providing
attenuation of x-ray energy. (The license term is until August 15, 2020, or when
certain patents expire, which have been applied for by Nurescell US, whichever
occurs later.)

The license agreement provides for the payment of a license fee of $1,000,000 to
Nurescell US, which sum is to be paid in four installments of $250,000,
commencing upon execution of the agreement and continuing each quarter
thereafter, provided however, that the entire $1,000,000 will be due at the time
that a minimum of $4,000,000 in capital is raised by Nurescell AG. ATI has
agreed to advance the sum of $1,000,000 to Nurescell AG in consideration for its
49% interest therein. As of December 31, 2001, ATI has advanced payments of
$594,568 against the license fee directly to Nurescell US. ATI funded $1,068,163
of expenses on behalf of Nurescell AG, which was used to fund the operating
expenses of Nurescell AG. Nurescell AG reduced the monies due Nurescell US by
$405,432, representing Nurescell US' share of the funding as of December 31,
2001.

On June 11, 2001, ATI entered into a new agreement to modify its above license
agreement with Nurescell US. Under the terms of this new agreement, ATI has an
exclusive and transferable right to Nurescell US proprietary technology in
certain countries in Europe and Asia. The Company is required to pay Nurescell
US a royalty for the utilization of the technology and products in the amount of
8% of the net sales of the Nurescell US technology. Net sales are defined as
gross sales, less discounts, rebates, credits and freight.


                                      F-23
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  4 - ACQUISITIONS (Continued)

ATI Nuklear AG (Formerly known as Nurescell AG) (Continued)
----------------------------------------------

In addition, under the terms of this modified agreement, Nurescell US has agreed
to assign to ATI all ownership in Nurescell AG, which has been renamed to ATI
Nuklear AG. Nurescell US has agreed to repay to ATI all monies that ATI has
previously paid to, or on behalf of, Nurescell US for its acquisition of a 49%
interest in Nurescell AG. As part of the agreement, the Company agreed to
continue to finance certain amounts of Nurescell US' continued monthly
operations on a non-interest bearing basis, advancing a total of $99,946 through
September 30, 2001. Nurescell US has executed a convertible promissory note for
the above monies due to ATI. Principal and interest on this note shall be all
due and payable on demand. The principal and interest may be converted by ATI
into shares of the $.001 par value common stock of Nurescell US. Interest is
payable at the rate of 10% per annum.

As of December 31, 2001, the Company, Nurescell US and ATI Nuklear AG entered
into another agreement pursuant to which, among other things, (i) Nurescell US
was released from any and all past, present, and future obligations, whether
past due or otherwise, with respect to the funding of ATI Nuklear AG, (ii)
Nurescell US agreed that all payments required of ATI Nuklear AG pursuant to the
License Agreement (other than 8% royalty payments) were deemed paid in full, and
(iii) Nurescell US executed a $1 million convertible promissory note payable to
ATI Nuklear AG. The note is secured by (i) 15,000,000 shares of Nurescell US'
common stock, (ii) a first priority security interest in Nurescell US'
technology and (iii) all royalties from ATI Nuklear AG.

The $1,000,000 convertible note was recorded net of a valuation allowance of
$1,000,000.

Nurescell US Common Stock
-------------------------

On August 23, 2000, ATI had entered into an Agreement for Purchase of Stock
("Agreement") with Adrian Joseph and his wife, Dianna Joseph (the "Josephs") to
purchase 3,500,000 shares of the $.0001 par value common stock of Nurescell US
owned by them in consideration for the issuance to the Josephs of 3,500,000
shares of common stock of ATI valued at $1,093,750. In addition, the Agreement
provides that the Josephs may receive up to an additional 2,000,000 shares of
the common stock of ATI in the event that Nurescell AG achieves certain gross
revenue numbers over a period of five years. Adrian Joseph was the Chief
Executive Office of Nurescell, Inc. until December 4, 2000. The transaction was
effective on January 11, 2001.

The ATI shares received by the Josephs are restricted shares. In addition, the
Agreement prohibits the Josephs from selling or otherwise transferring in excess
of 600,000 shares per year. However, the Agreement provides for the execution of
a Registration Rights Agreement giving the Josephs the right to have up to
600,000 shares per year registered over a six-year period. The Josephs have the
right to demand registration of their shares each year at their expense, or, if
ATI is filing a registration statement to register other shares during that
time, to require that their shares be registered at the expense of ATI. In lieu
of registering the shares, ATI has the right to purchase the shares at 80% of
the average bid price at determined times.


                                      F-24
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  4 - ACQUISITIONS (Continued)

Nurescell US Common Stock (Continued)
-------------------------

On April 16, 2001, the Company entered into an agreement to purchase 1,090,000
shares of Nurescell US common stock from one of its shareholders in exchange of
1,090,000 shares of the Company's common stock valued at $566,800.

As of December 31, 2001, the Company owns 4,590,000 shares of Nurescell US
constituting approximately 29.27% of the outstanding shares of Nurescell US.

During December 2001, the Company records an impairment loss of $810,119 in
connection with Nurescell Inc. common stock.

Sibconvers
----------

The Company entered into an agreement with a Russian group to form a company
called Sibconvers under Russian law, in which each have a 50% interest. The
Company and the Russian group are to initially fund Sibconvers with 50,000
roubles each payable in cash within one year. This company will pursue programs
offered by various governmental agencies of Russia, the United States, and
European Union countries for the conversion of Russian nuclear defense
industries into high tech non-defense and nuclear remediation enterprises and to
re-train nuclear and military researchers, technicians and engineers employed in
these industries. These industries are primarily located in the closed "Nuclear
Cities" situated in Siberia.

Reseal, Ltd.
-----------

During 1999, the Company's German subsidiary acquired from Eurotech the rights
to a certain resealable can technology for $150,000 in cash and $345,000 due on
September 30, 2000. This product was originally developed by Cetoni. The
purchase price of $495,000 was charged to research and development expenses
during the year ended December 31, 1999. The purchase price was paid in full in
July of 2000. On June 8, 2001, ATI formed a new entity, Reseal, Ltd., to
commercialize its "Reseal-able" packaging systems technology. On August 3, 2001,
the Company entered into an agreement with Styner & Bienz for the production of
samples of the resealable beverage can and conducting certain tests required for
commercialization of the product. In December 2001, the Company entered into an
agreement, whereby it sold a 2.75% equity stake in Reseal to an accredited
investor for $275,000.

Container Engineering, Ltd.
---------------------------

During March 2001, the Company entered into an agreement with a Russian group to
form a joint-stock company called Container Engineering, Ltd., in which the
Company has a 50% interest. Container Engineering, Ltd. was incorporated in
accordance to Russian law. Container Engineering, Ltd. was formed to exploit and
manufacture silicon carbide technologies developed by Russian scientists.


                                      F-25

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE  5 - SECURITIES AVAILABLE-FOR-SALE

Securities available-for-sale consist of 216,700 shares of Eurotech restricted
common stock, which trade in the over-the-counter market and are quoted through
the NASD OTC Bulletin Board. The fair value of such equity securities at
December 31, 2001 was $202,914. The amortized cost basis was $231,700 and the
unrealized loss was $28,363 at December 31, 2001. The Company pledged these
remaining shares for a loan in the amount of $293,012, excluding costs and
commissions during February 2001.

NOTE  6 - EQUIPMENT

Equipment at December 31, 2001 consisted of the following:

       Machinery and equipment                             $ 151,569
       Transportation equipment                              100,030
       Office furniture and fixtures                         150,946
       Software                                               13,615
                                                           ---------
                                                             416,160
       Less: Accumulated depreciation                        289,595
                                                           ---------
                                                           $ 126,565
                                                           =========

Depreciation expense for the years ended December 31, 2001 and 2000 amounted to
$91,685 and $41,222, respectively.

NOTE 7 - LICENSING FEES

Licensing fees at December 31, 2001 consisted of the following:

      Licensing fee - discussed in Note 4                 $1,000,000
      Less: Accumulated amortization                         283,333
                                                          ----------
                                                          $  716,667
                                                          ==========

Amortization expense for the years ended December 31, 2001 and 2000 amounted to
$200,000 and $83,333, respectively.

NOTE 8 - CONVERTIBLE DEBENTURES

During March and April 1999, the Company completed a private placement of
$750,000 of 9% convertible debenture notes, due in March and April of 2001.

On November 30, 1999, as part of the sale of the Company's rights to the EKOR
technology, all outstanding principal, interest and other fees related to the
convertible debentures were assumed by Eurotech. The Company accounted for the
assumption of the debt by Eurotech as if the Company had redeemed the debt.


                                      F-26


<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9 - NOTES PAYABLE

During the year ended December 31, 2000, the Company's Board of Directors
approved a private placement of its debt securities in an amount up to
$1,500,000. Interest on such debt securities is at the rate of 1% per month
cumulative. The Company has the option to pay the interest in cash or restricted
stock. If the option is exercised by the Company to pay the interest in stock,
the number of shares to be delivered to the lender will be determined by
multiplying (i) the average closing bid price of the stock for the five trading
days prior to the maturity date by (ii) 85% and dividing the interest due by the
resulting multiple. In addition, each lender shall receive one share of the
common stock for each $1.00 loaned to the Company. As of December 31, 2000, the
Company has received an aggregate amount of $713,571 from four investors.
Accordingly, the Company issued 713,571 shares of its common stock to such
investors valued at $222,859. The Company is amortizing the $222,859 as interest
expense over the six-month period ending April 2001 and has been fully amortized
as of December 31, 2001.

During April 2001, various obligations on the above notes payable, totalling
$343,571 of principal were satisfied by the issuance of 1,365,259 shares of
common stock. On May 1, 2001, the Company repaid $220,000 of principal to an
investor. The maturity date of the remaining promissory notes, totalling
$150,000, was extended to March 1, 2002. As consideration for entering into this
agreement, the investor received one share of the Company's common stock for
each $1.00 loaned to the Company (150,000 shares). In addition, the investor may
be repaid in cash or in the Company's common stock. The price per principal
share for purposes of computing the conversion ratio shall be $0.25 per
principal share.

During January 2001, the Company borrowed $100,000 from an individual and issued
a promissory note which provides that the loan is due in three months and
provides for interest at the rate of 1% per month. The Company issued 100,000
shares of its common stock to the lender as an incentive to make that loan. In
addition, the Company granted the lender piggyback registration rights for the
shares for a period of five years from the date of the loan. On April 30, 2001,
the principal amount of $100,000 was converted into 278,884 shares of the
Company's common stock.

On April 30, 2001, the Company, in order to provide working capital, issued a
promissory note for $240,000, with a maturity date of three months. Interest is
payable at the rate of 1% per month. The Company has the option to pay the
interest in cash or restricted stock. If the option exercised by the Company to
pay the interest in stock, the number of shares to be delivered to the lender
will be determined by multiplying (i) the average closing bid price of the stock
for the five trading days prior to the maturity date by (ii) 85% and dividing
the interest due by the resulting multiple. In addition, the lender received
410,000 shares of the Company's common stock as an incentive to make this loan.
In addition, the Company granted the lender piggyback registration rights for
the shares for a period of five years from the date of the loan. The Company
utilized $220,000 of the funds from this loan to repay a portion of the note
offering which came due on April 1, 2001. On July 30, 2001, the Company executed
an agreement with the lender to convert loans in the principal amount of
$240,000, plus $7,200 in interest, into an aggregate amount of 775,285 shares of
the Company's common stock.


                                      F-27

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9 - NOTES PAYABLE (Continued)

During May 2001, the Company borrowed $100,000 from an individual and issued a
promissory note which provides that the loan is due in three months and provides
for interest at the rate 1% per month. The Company issued 100,000 shares of its
common stock to the lender as an incentive to make that loan. In addition, the
Company granted the lender piggyback registration rights for the shares for a
period of five years from the date of the loan. The loan's maturity date was
extended to June 1, 2002 and as consideration for entering into this agreement,
the individual received an additional 100,000 shares of the Company's common
stock.

During June 2001, the Company borrowed $260,000 from an individual and issued a
promissory note which provides that the loan is due in six months and provides
for interest at the rate of 1% per month. The Company issued 260,000 shares of
its common stock to the lender. The note's due date was subsequently extended to
June 30, 2002.

On July 13, 2001, the Company borrowed $15,000 from an individual and issued a
promissory note which provides that the loan is due in three months and provides
for interest at the rate of 1% per month. The Company issued 15,000 shares of
its common stock to the lender as an incentive to make that loan.

Also on July 13, 2001, an officer of the Company advanced $10,000 pursuant to a
promissory note which provides that the loan is due in three months and provides
for interest at the rate of 1% per month. The Company issued 10,000 shares of
its common stock to the lender as an incentive to make that loan. Subsequent to
December 31, 2001, the officer has agreed to extend the due date to June 1,
2002.

On July 30, 2001, the Company borrowed $330,000 from an individual and issued a
promissory note which provides that the loan is due in six months and provides
for interest at the rate of 1% per month. The Company issued 330,000 shares of
its common stock to the lender as an incentive to make that loan. In addition,
the Company granted the lender piggyback registration rights for the shares for
a period of five years from the date of the loan. The noteholder has agreed
subsequent to year-end to extend the maturity date to June 1, 2002.

Effective September 10, 2001, the Company borrowed $560,000 from an individual
and issued a promissory note which provides that the loan is due January 31,
2002 and provides for interest at the rate of 1% per month. The Company issued
1,270,000 shares of its common stock to the lender as an incentive to make that
loan. The note was extended to June 1, 2002.

On November 27, 2001, the Company borrowed $10,000 from an individual and issued
a promissory note which provides that the loan is due in 90 days and provides
for interest at the rate of 1% per month. The Company issued 10,000 shares of
its common stock to the lender as an incentive to make that loan. the loan's
maturity date was extended subsequent to year-end for another 90 days and as
consideration for entering into this agreement, the individual received an
additional 10,000 shares of the Company's common stock.

The Company entered into an agreement during February 2001 in which it pledged
216,300 shares of its Eurotech stock for a loan in the amount of $293,012,
excluding costs and commissions. The loan is due June 28, 2002 and provided for
interest at the rate of 12.73% per annum.


                                      F-28
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 10 - INCOME TAXES

The Company was not required to provide for a provision for income taxes for the
years ended December 31, 2001 and 2000, as a result of net operating losses
incurred during those years.

The components of deferred tax assets and liabilities at December 31, 2001 are
as follows:


      Deferred Tax Assets:
        Net operating loss carryforwards                         $1,330,000
        Compensatory element of stock issuances                   1,000,000
                                                                 ----------
          Total Gross Deferred Tax Assets                         2,330,000

        Less:  Valuation allowance                                2,330,000
                                                                 ----------
          Net Deferred Tax Assets                                $    -
                                                                 ==========

The net change in the valuation allowance for deferred tax assets was an
increase of approximately $391,000 during the year ended December 31, 2001.

As of December 31, 2001, the Company had available approximately $3,325,000 of
net operating losses ("NOL") for income tax purposes that may be carried forward
to offset future taxable income, if any. The NOL carryforwards from December 31,
1999, 2000 and 2001 expire in the years 2019, 2020 and 2021, respectively.
Pursuant to Section 382 of the Internal Revenue Code, substantial restrictions
are imposed on the utilization of NOL carryforwards in the event of an ownership
change. The Company's foreign subsidiary has a net operating loss carryforward
of approximately $7,307,000. Utilization of this carryover is dependent upon
future income earned by its foreign subsidiary.

A reconciliation between the statutory federal income tax rate (34%) and the
Company's effective rate is as follows:


                                                         For the Years Ended
                                                             December 31,
                                                         --------------------
                                                           2001        2000
                                                         --------    --------

        Federal statutory rate                            (34.0)%      (34.0)%
        Non-deductible expenses and
          unutilized foreign losses                        33.0         46.0
        Change in valuation allowance                       1.0        (12.0)
                                                          -----        -----
          Effective rate                                   -0- %        -0- %
                                                          =====        =====



                                      F-29


<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11 -  ACCRUED LIABILITIES

Accrued liabilities at December 31, 2001 consist of the following:


      Professional fees                                  $  812,287
      Consulting fees (including related parties
        of $655,175)                                      1,120,217
      Payroll and other taxes                               255,205
      Interest (including related
        parties of $266,045)                                375,041
      Other                                                 383,824
                                                         ----------
            Total                                        $2,946,574
                                                         ==========

NOTE 12 - OBLIGATIONS UNDER CAPITAL LEASES

The Company is the lessee of transportation equipment under capital leases
expiring in 2002. The assets and liabilities under capital leases are recorded
at the lower of the present value of the minimum lease payments or the fair
market value of the asset.

The assets are depreciated over their estimated productive lives. Depreciation
of assets under capital leases is included in depreciation expense for the years
ended December 31, 2001 and 2000.

As of December 31, 2001, property held under capital leases was as follows:


      Transportation equipment                            $  50,849
      Less: Accumulated depreciation                         37,611
                                                          ---------
                                                          $  13,238
                                                          =========

Minimum future lease payments under capital leases are as follows:


      As of December 31,
      -----------------

           2002                                            $  6,339
                                                           --------
      Total minimum lease payments                            6,339
      Less: Amount representing interest                        180
                                                           --------
      Obligations Under Capital Leases                     $  6,159
                                                           ========


                                      F-30
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 12 - OBLIGATIONS UNDER CAPITAL LEASES (Continued)

Interest rates on capitalized leases vary from 6.868% to 7.502%, based upon the
lower of the Company's incremental borrowing rate at the inception of the lease
or the lessors' implicit rate of return.


      Current portion of obligations under
        capital leases                                     $  6,159
      Long-term portion of obligations
        under capital leases                                      -
                                                           --------
                                                           $  6,159
                                                           ========

NOTE 13 - RELATED PARTY TRANSACTIONS

Amounts due to related parties represent various demand notes, including
interest at 10%, payable to certain shareholders, relatives of shareholders and
companies affiliated with shareholders. Interest expense accrued on these demand
notes totalled $266,045 in 2001 and $185,418 in 2000. In addition, the Company
has a consulting agreement with ERBC (see Note 15). The Company also has a
receivable from a shareholder of $304,327, which has subsequently been repaid in
full during April 2002.

NOTE 14 -  STOCKHOLDERS' EQUITY

Preferred stock
---------------

The Company has authorized 1,000,000 shares of preferred stock, par value -
$.001 per share. The Board of Directors of the Company has broad discretion to
create one or more series of preferred stock and to determine the rights,
preferences and privileges of any such series.

Common Stock
------------

In connection with the organization of the Company, in October 1995, the Company
issued 12,300,000 shares to its founders, CIS Development Corp. ("CIS") and
ERBC, for subscriptions totalling $1,230.

For the period from inception (October 25, 1995) through December 31, 1996, the
Company issued 2,105,000 shares of common stock as consideration for legal and
consulting services performed by various consultants, including related parties,
through December 31, 1996. Shares issued under these arrangements were valued at
$305,000, which was charged to operations for the year ended December 31, 1996.

During the year ended December 31, 1997, the Company issued 750,000 shares of
common stock pursuant to consulting arrangements with various consultants,
including related parties. Shares issued under these arrangements were valued at
$750,000, which was charged to operations during 1997.

Pursuant to an offering under Rule 504 of Regulation D of the Securities Act of
1933, the Company offered for sale 487,500 shares of its common stock at $2.00
per share. During 1997, the Company sold 306,500 shares of its common stock
under this offering, and derived aggregate proceeds of $613,000. Costs in
connection with this offering approximated $50,000 and were charged against
paid-in capital during the year ended December 31, 1997.


                                      F-31
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)

Common Stock (Continued)
------------

In January of 1999, the Company issued 1,009,411 shares of its common stock
pursuant to one-year consulting agreements with various consultants, including
related parties. Shares issued under these agreements were valued at $1,009,411,
which was charged to operations during 1999.

In December of 1999, in connection with the acquisition of the capital stock of
Cetoni, the Company issued 5,000,000 shares of its common stock to the
shareholders of Cetoni (Note 4).

In January of 2000, the Company issued 400,000 shares of common stock to the
shareholders of Aberdeen in connection with the acquisition of Aberdeen (see
Note 1).

On December 4, 2000, the Company entered into an agreement that provided for
$1,560,000 of the outstanding loan from a related party and significant
shareholder, exclusive of interest, to be converted to 13,054,393 shares of the
common stock of the Company. The agreement prohibits the related party from
transferring or conveying the shares for a period of two years from the date of
the agreement. The related party had loaned the Company money from time to time
for the operations of the Company and to provide the Company with working
capital.

During the year ended December 31, 2000, the Company issued 218,000 shares of
common stock pursuant to consulting arrangements with various consultants.
Shares issued under these arrangements were valued at $287,508, which was
charged to operations during 2000.

During January and June of 2000, a consultant exercised options and purchased
120,000 shares of the Company's stock for $60,000.

In connection with a private placement of debt during 2000, the Company issued
713,571 shares of common stock as additional consideration to the purchasers.

In December of 2000, the Company issued 100,000 shares of common stock to two
officers of the Company as a bonus, which was valued at $20,200, and charged to
operations during 2000.

During January 2001, the Company issued in connection with a private placement
of debt 100,000 shares of common stock as additional consideration to the
purchaser.

During January 2001, the Company issued 3,500,000 shares of common stock to
purchase 3,500,000 shares of the $.0001 par value common stock of Nurescell US
from Adrian and Dianna Joseph.

During April 2001, the Company issued 1,090,000 shares of common stock to
purchase 1,090,000 shares of the $.0001 par value common stock of Nurescell US
from the Glenn A. Cramer Separate Property Trust.

During April 2001, the Company issued 3,336,745 shares of common stock to a
related party for accrued consulting fees of $467,873 and conversion of a
$54,545 promissory note payable.


                                      F-32

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)

Common Stock (Continued)
------------

During April 2001, the Company issued 501,812 and 418,177 shares of common stock
in settlement of two promissory notes totalling $180,000 and $150,000,
respectively. In addition during November 2001, the Company issued 61,844 shares
of common stock in settlement of interest on one of the note holders valued at
$22,184.

On April 18, 2001, the Company issued 500,000 shares of common stock to its
President for consulting services performed. Shares issued under this agreement
were valued at $168,750, which was all charged to operations during the six
months ended June 30, 2001.

During April 2001, the Company issued 344,788 shares of common stock to its
President for the settlement of a promissory note totalling $60,000.

During April 2001, the Company issued in connection with a private placement of
debt 770,000 shares of common stock as additional consideration to the
purchaser.

During April 2001, the Company issued 316,056 shares of common stock to an
officer for the settlement of accrued wages of $50,000.

During July 2001, the Company issued 775,385 shares of common stock in
settlement of a promissory note with respect to $240,000 of principal and $7,200
of interest.

During July 2001, the Company issued in connection with a private placement of
debt 355,000 shares of common stock as additional consideration to the
purchaser.

During July 2001, the Company issued 67,857 of its common stock due to a
cashless exercise of 112,500 warrants.

During December 2001, the Company issued in connection with a private placement
of debt 691,696 shares of common stock as additional consideration to the
purchaser.

During October and November 2001, the Company issued in connection with a
private placement of debt 578,304 shares of common stock as additional
consideration to the purchaser. The shares were valued at $255,000, of which
167,044 was charged to operations during 2001.

During October 2001, the Company issued 17,000 shares of common stock pursuant
to consulting arrangements with two consultants. Shares issued under these
arrangements were valued at $9,890, which was charged to operations during 2001.

During December 2001, the Company issued 1,328,000 shares of common stock
pursuant to consulting arrangements with various consultants. Shares issued
under these arrangements were valued at $332,000, which was charged to
operations during 2001.

During November 2001, the Company issued 36,826 shares of its common stock as
consideration for consulting services performed by two consultants totalling
$15,133.

In November and December 2001, the Company issued 75,000 shares of common stock
to two employees of the Company as a sign-on bonus, which was valued at $18,751,
and charged to operations during 2001.

                                      F-33

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)

Common Stock (Continued)
------------

In December 2001, the Company issued 477,429 shares of common stock as
consideration for legal services performed by its attorneys. Shares issued under
these arrangements were valued at $112,761, which was charged to operations
during 2001.

During November 2001, the Company issued in connection with a private placement
of debt 10,000 shares of common stock as additional consideration to the
purchaser. The shares were valued at $3,200, of which $1,209 was charged to
operations during 2001.

During December 2001, the Company had to issue an additional 510,000 shares of
its common stock as additional consideration for extending the due date on
promissory notes related to private placement of debt. The shares were valued at
$140,200, of which $36,927 was charged to operations during 2001, with the
remaining balance being amortized over the new term of the notes.

Warrants
--------

At December 31, 2001, there were warrants outstanding to purchase 657,500 shares
of the Company's common stock at $0.65 per share, which expire on April 14,
2004. The warrants were valued at $531,000 and were charged to financing costs
in 1999 using the Black-Scholes pricing model with the following assumptions:

                      Risk-free interest rate                 5.0%
                      Expected life                           2 years
                      Expected volatility                     65.0%
                      Dividend yield                          0%

During July 2001, the Company issued 67,857 shares of common stock for the
cashless exercise of 112,500 warrants.

Options - Outside the Stock Option Plan
---------------------------------------

In February 2000, the Company entered into an agreement with a consultant,
providing for 90,000 options, to be granted on April 1, July 1 and on October 1,
2000 90,000 options, with an exercise price of $0.50 per share. These options
expire on October 31, 2000. These options were valued at $1.75 each on the grant
date.

The Company entered into a one year consulting agreement on April 6, 2001 with a
public relations company for various consulting and financial professional
relations services in connection with the Company's interactions with
broker-dealers, financial professionals and analysts. The Company agrees to
issue to the consultant options to purchase 150,000 shares of the Company's
common stock. Of the options granted, there are 5 blocks of 30,000 warrants at
exercise prices of $.50, $.75, $1.00, $1.25 and $1.50. The consultant has the
right to convert the options into the Company's common stock on a cashless
basis. These options were valued at $.25 each on the grant date.


                                      F-34

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)

Options - Outside the Stock Option Plan (Continued)
---------------------------------------

In May 2001, the Company entered into an agreement with a consultant for
managing and updating all aspects of the Company's website and internet. The
Company agreed to grant an option to purchase 24,000 shares of the Company's
restricted common stock at $.70 per share. The options expire on May 1, 2005.
The options were valued at $.61 per share on the grant date.

The above options were valued using the Black-Scholes option pricing model with
the following assumptions:

                  Risk-free interest rate           5.0% - 5.5%
                  Expected life                  90 days - 5 years
                  Expected volatility                 65.0%
                  Dividend yield                         0%

Compensation costs charged to operations was $47,500 in 2001 and $472,500 in
2000.

In June 2000, a consultant exercised 90,000 options and the Company recorded a
receivable for $45,000.

Stock Option Plans
------------------

On October 26, 2000, the Board of Directors adopted the Advanced Technology
Industries, Inc. 2000 Stock Option Plan ("Plan"). On that date, the Board, which
is the Plan Administration under the Plan, awarded employees and officers
incentive stock options to purchase 470,000 shares of common stock. In addition,
consultants and advisors were awarded non-qualified stock options to purchase a
total of 615,000 shares. All of the options have an exercise price of $.343 per
share, which was the closing price of the stock on October 25, 2000.


                                      F-35

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)
<TABLE>

Stock Option Plans (Continued)
------------------

<CAPTION>

                                                                                                       Weighted
                                                                Weighted                               Average
                                            Incentive           Average          Non-Qualified         Exercise
                                          Stock Options      Exercise Price      Stock Options          Price
                                          -------------      --------------      -------------        ----------
<S>                                       <C>                     <C>              <C>                   <C>
Options granted - 2000:
  In the plan                                 470,000             $.34              615,000              $.34
Options granted - 2000:
  Outside the option plan                       -                  -                270,000               .50
Options expired/cancelled:
  Outside the plan                              -                  -               (150,000)              .50
Options exercised
  Outside the plan                              -                  -               (120,000)              .50
                                           ----------             ----             --------              ----
Outstanding - 12/31/00                        470,000              .34              615,000               .34

Options granted - 01/01-12/31/01:
  In the plan                                   -                  -                   -                  -
Options granted - 01/01-12/31/01:
  Outside the option plan                       -                  -                174,000               .96
Options expired/cancelled:
  Outside the plan                              -                  -                   -                  -
Options exercised:
  Outside the plan                              -                  -                   -                  -
                                           ----------             ----             --------              ----
Outstanding - 12/31/01                        470,000             $.34              789,000              $.48
                                           ==========             ====             ========              ====
Composition at 12/31/01:
-----------------------
2000 stock option plan
  ($.34/share)                                470,000             $.34              615,000              $.34
Options granted outside the plan
  ($.96 per share)                              -                  -                174,000               .96
                                           ----------             ----             --------              ----
Outstanding - 12/31/01                        470,000             $.34              789,000              $.48
                                           ==========             ====             ========              ====


Total Value at Option Price                          $  161,210                            $  375,900
                                                     ==========                            ==========
Total Exercisable Value at Option Price              $  161,210                            $  375,900
                                                     ==========                            ==========


</TABLE>

                                      F-36
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 -  STOCKHOLDERS' EQUITY (Continued)

Earnings Per Share
------------------

Securities that could potentially dilute basic earnings per share ("EPS") in the
future that were not included in the computation of diluted EPS because to do so
would have been anti-dilutive for the periods presented consist of the
following:


      Options to purchase common stock                                 1,259,000
      Warrants to purchase common stock                                  657,500
                                                                       ---------
      Total as of December 31, 2001                                    1,916,500
                                                                       =========
      Substantial issuances after December 31, 2001 through April
        11, 2002:
          Cashless exercise of warrants                                   16,374
                                                                       =========
          Shares issued as an incentive to extend
            maturity date on loans                                        10,000
                                                                       =========

NOTE 15 -  COMMITMENTS AND OTHER MATTERS

Consulting Agreement - ERBC
---------------------------

By letter dated June 1, 1996, the Company engaged ERBC, an affiliate of the
Company by virtue of common shareholders, as a consultant for a one-year period
to undertake all aspects of the Company's operations in Russia. Pursuant to the
letter agreement, the Company agreed to pay ERBC a fee of $115,000 for the year
during which it has been engaged. During June 1997, the Company renewed the
agreement with ERBC for an additional one year period on like terms. During June
1998, the Company renewed the agreement with ERBC for an additional one year
term and agreed to pay ERBC a fee of $168,577 for the year during which it has
been engaged. Commencing in 2001, fees under the consulting agreement are
$240,000 per year. During April 2001, ERBC entered into an agreement to convert
$467,873 of accrued consulting fees into the Company's common stock. Included in
accrued liabilities as of December 31, 2001 is $655,175 related to this
agreement.

International Operations
------------------------

The Company has strategic alliances, collaboration agreements, licensing
agreements with entities which are based and/or have operations in Russia and
Ukraine. Both of these countries have experienced volatile and frequently
unfavorable economic, political and social conditions. The Russian economy and
the Ukrainian economy are characterized by declining gross domestic production,
significant inflation, increasing rates of unemployment and underemployment,
unstable currencies, and high levels of governmental debt as compared to gross
domestic production. The prospects of wide-spread insolvencies and the collapse
of various economic sectors exist in both countries.


                                      F-37

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 15 -  COMMITMENTS AND OTHER MATTERS (Continued)

International Operations (Continued)
------------------------

In view of the foregoing, the Company's business, earnings, asset values and
prospects may be materially and adversely affected by developments with respect
to inflation, interest rates, currency fluctuations, government policies, price
and wage controls, exchange control regulations, taxation, expropriation, social
instability, and other political, economic or diplomatic developments in or
affecting Russia and Ukraine. The Company has no control over such conditions
and developments, and can provide no assurance that such conditions and
developments will not adversely affect the Company's operations.

Lease Obligations
-----------------

On February 28, 2000, the Company entered into a lease agreement for office
space in Berlin, Germany for a period of five years with a five-year option.
Under the lease agreement, annual rent will amount to approximately $47,275, or
$3,939, per month commencing March 1, 2000, subject to certain escalation
adjustments.

During September 2001, ATI Nuklear entered into a lease for office space in
Berlin, Germany for a period of five years. Under the lease agreement, annual
rent will amount to approximately $35,047 for each year, commencing October 1,
2001, subject to certain escalation adjustments.

Minimum lease payments to be received as of December 31, 2001 for each of the
next 5 years are:

               Year Ended
              December 31,                            Amount
              ------------                           --------

                  2002                               $  82,322
                  2003                                  82,322
                  2004                                  82,322
                  2005                                  42,925
                  2006                                  26,285

Rent expense for all premise operating leases was approximately $109,000 and
$88,030 for the years ended December 31, 2001 and 2000, respectively.


                                      F-38
<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 16 - SEGMENT REPORTING

The Company's business is organized on a geographic basis, and the Company's
Chief Operating Decision Maker assesses performance and allocates resources on
this basis. The information provided in the following section is representative
of the information used by the Chief Operating Decision Maker in deciding how to
allocate resources and in assessing performance.

The Company has two geographic reportable segments: U.S.A. and Germany. The
accounting policies of the segments are the same as described in the summary of
significant accounting policies. The Company evaluates segment performance based
on income (loss) before interest and extraordinary item. Segment results for
2001 and 2000 are as follows:

<TABLE>
<CAPTION>

                                          U.S.A.             Germany          Eliminations       Consolidated
                                      -------------        -----------        ------------       ------------
<S>                                    <C>                 <C>                <C>               <C>
    2001:
    ----

    Loss before extraordinary
      item                             $ 2,698,253         $ 4,931,363        $    -             $ 7,629,616
                                       ===========         ===========        ==========         ===========
    Depreciation and
     amortization                      $     -             $   291,685        $    -             $   291,685
                                       ===========         ===========        ==========         ===========

    Identifiable Assets                $   262,860         $ 1,305,946        $    -             $ 1,568,806
                                       ===========         ===========        ==========         ===========
    2000:
    ----

    Loss before extraordinary
      item                             $(1,298,129)        $(2,070,515)       $    -             $(3,368,644)
                                       ===========         ===========        ==========         ===========
    Depreciation and
     amortization                      $    -              $   124,555        $    -             $   124,555
                                       ===========         ===========        ==========         ===========

    Identifiable Assets                $ 1,760,484         $ 2,032,959        $ (802,105)        $ 2,991,338
                                       ===========         ===========        ==========         ===========
</TABLE>

NOTE 17 - SUBSEQUENT EVENTS

Sale of Reseal, Ltd. Common Stock
---------------------------------

In January 2002, the Company entered into an agreement to sell an additional
1.25% equity stake in Reseal for $125,000.

Exercise of Warrants
--------------------

On April 12, 2002, the Company issued 16,374 of its common stock due to a
cashless exercise of 32,500 warrants.

Loan from Shareholder
---------------------

During April 2002, the Company receives a loan from a shareholder in the amount
of $400,000, which is payable on demand and accrued interest at a rate of 10%
per annum.


                                      F-39

<PAGE>


              ADVANCED TECHNOLOGY INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>

NOTE 18 - QUARTERLY RESULTS (UNAUDITED)
<CAPTION>

                                                   Quarter Ended
                               ---------------------------------------------------------
                                 March 31      June 30      September 30     December 31       Total Year
                               -----------   -----------    ------------     -----------      ------------
<S>                            <C>            <C>           <C>              <C>              <C>
2001:
----

Revenues                       $     -        $    -        $     -          $     -           $    -
Net loss                          (648,467)   (2,137,167)    (1,082,533)      (3,761,449)       (7,629,616)
Loss per share - basic
  and diluted   (a)                  $(.02)        $(.06)         $(.03)           $(.10)            $(.20)

2000:
----

Revenues                       $     -        $    -        $     -          $     -           $
Net loss                          (846,864)     (902,860)       (89,007)      (1,529,913)       (3,368,644)
Loss per share - basic
  and diluted                        $(.06)         $(.04)        $(.01)           $(.10)            $(.21)

</TABLE>


(a) Per common share amounts for the quarters and full year have been calculated
separately. Accordingly, quarterly amounts do not add to the annual amount
because of differences in the weighted average common shares outstanding during
each period due to the effect of the Company issuing shares of its common stock
during the year.




                                      F-40