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

                                   FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the quarterly period ended March 31, 2002
                                     ------------------

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from __________ to __________

      Commission file number  0-31459
                             ---------

                                   Valesc Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Delaware                                       23-3048857
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                  2300 Coit Road, Suite 300B, Plano, TX 75075
        -----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 495-3900
        -----------------------------------------------------------------
                           (Issuer's telephone number)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

    State the number of shares outstanding of each of the issuer's classes of
      common equity, as of the latest practicable date: 10,296,048 shares of
            common stock issued and outstanding as of May 10, 2002.

           Transitional Small Business Disclosure Format (check one);
           Yes......No  X


<PAGE>



                                   Valesc Inc.

                                      INDEX

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements                                                Page

     Balance Sheets .............................................             2

     Statements of Operations ...................................             3

     Statement of Shareholder's Equity (Deficiency) .............             4

     Statements of Cash Flows ...................................             5

     Notes to Financial Statements ..............................             6

Item 2. Management's Discussion and Analysis or
        Plan of Operation .......................................            16

PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds ..............            19

Item 6.  Exhibits and Reports on Form 8-K .......................            19



<PAGE>


PART I - FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                       FINANCIAL STATEMENTS AND REPORTS OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                           Valesc Inc. and Subsidiary

                           CONSOLIDATED BALANCE SHEETS

                                                                March 31, 2002  December 31,
                                                                  (unaudited)     2001
                                                                -------------- -------------
ASSETS

Current Assets

<S>                                                                <C>          <C>
Cash                                                               $  42,465    $  26,311
Accounts Receivable                                                   15,705       20,560
Prepaid Assets                                                           765         --
                                                                   ---------    ---------

Total Current Assets                                               $  58,935    $  46,871

Property and equipment, net of accumulated
  depreciation of $7,746 at December 31, 2001
  and $8,159 at March 31, 2002                                         5,960        6,553

Deferred financing costs, net of accumulated
  amortization of $7,514 at December 31, 2001
  and $10,815 at March 31, 2001                                       28,966       32,266

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

Total Assets                                                       $  93,861    $  85,690
                                                                   =========    =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities

Accounts Payable                                                   $ 271,061    $ 336,585
Current maturities of notes payable, net of debt discount            133,083       84,008
Accrued interest payable                                              21,217       14,205
Accrued expenses and other current liabilities                       233,065      228,916
Officers' salaries payable                                           130,269      105,519
                                                                   ---------    ---------

Total current liabilities                                            788,695      769,233

Notes Payable - long term, net of debt discount                        3,258       31,927
                                                                   ---------    ---------

Total Liabilities                                                    791,953      801,160

Commitments and contingencies

Shareholders' equity (deficiency)
Preferred stock; $.0001 par value;
  20,000,000shares authorized,
  none issued and outstanding                                           --           --
Common stock, $.0001 par value;
  100,000,000 shares authorized;
  10,208,548 and 9,708,548 shares issued and
  outstanding as of March 31, 2002 and
  December 31, 2001, respectively                                        106           56
Additional paid-in capital                                           156,750         --
Accumulated deficit                                                 (854,948)    (715,526)
                                                                   ---------    ---------

Total shareholders' equity (deficiency)                             (698,092)    (715,470)
                                                                   ---------    ---------

Total liabilities and shareholders' equity (deficiency)            $  93,861    $  85,690
                                                                   =========    =========

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS



                                      -2-
<PAGE>

<TABLE>
<CAPTION>


                           Valesc Inc. and Subsidiary

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                          Three Months Ended March 31,

                                                           2002           2001
                                                       -----------   ------------

<S>                                                    <C>            <C>
Commission Income                                      $    54,624    $    97,533

Selling, general and administrative expenses               164,840         50,167
                                                       -----------    -----------

Income (Loss) from Operations                             (110,216)        47,366

Interest Expense                                            29,206            154
                                                       -----------    -----------

NET INCOME (LOSS)                                      $  (139,422)   $    47,212
                                                       ===========    ===========

Basic income (loss) per shares                         $      (.01)   $       .00
                                                       -----------    -----------

Diluted income (loss) per share                        $      (.01)   $       .00
                                                       ===========    ===========

Weighted average shares outstanding used in
  Computing basic income (loss) per common share
  (as adjusted for stock split and effect of merger)     9,785,470      9,708,548


Weighted average shares outstanding used in
  Computing diluted income (loss) per common share
  (as adjusted for stock split and effect of merger)     9,785,470     10,308,547

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.





                                      -3-
<PAGE>
<TABLE>
<CAPTION>



                           Valesc Inc. and Subsidiary

           CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIENCY)

                     Year ended December 31, 2001, and three
                    months ended March 31, 2002 (unaudited)

                                 --------------------------- -- ----------------- ----------------- ----------------------------
                                        Common Stock
                                    Number of       Value         Additional        Accumulated     Total Shareholders' Equity
                                     Shares                    Paid-in Capital        Deficit              (Deficiency)
                                 ---------------- ----------- ------------------- ----------------- ----------------------------
<S>                                  <C>            <C>           <C>            <C>                        <C>
  Balance, December 31, 2000          1,000        $ 1,000            --             $ (9,145)               $ (8,145)

        Net Loss - 2001                --             --              --              (46,974)               (46,974)

 Effect of merger of OJI into       9,707,548       (944)             --             (659,407)               (660,351)
          Valesc Inc.
                                 ---------------- ----------- ------------------- ----------------- ----------------------------

   Balance December 31, 2001        9,708,548         56              --             (715,526)               (715,470)

 Issuance of shares to Century       500,000          50          $ 149,950              --                   150,000
      Goal holdings, Ltd.

   Issuance of warrants for            --             --            6,800                --                    6,800
       services rendered

 Net Loss - three months ended         --             --              --             (139,422)               (139,422)
        March 31, 2002
                                 ---------------- ----------- ------------------- ----------------- ----------------------------

    Balance, March 31, 2002        10,208,548       $ 106         $ 156,750         $ (854,948)             $ (698,092)
                                 ================ =========== =================== ================= ============================

</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.



                                      -4-
<PAGE>
<TABLE>
<CAPTION>


                           Valesc Inc. and Subsidiary

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                          Three months ended March 31,

                                                                         2002       2001
                                                                     ----------   --------
Cash flows from operating activities
<S>                                                                  <C>          <C>
     Net income (loss)                                               $(139,422)   $ 47,212
     Adjustments to reconcile net income
       (loss) to net cash provided by (used in)
     operating activities
             Depreciation and amortization                                 593       1,760
             Issuance of Warrants                                        6,800        --
             Noncash interest accretion                                  3,301        --
             Changes in assets and liabilities
                    Accounts Receivable                                  4,855      (1,682)
                    Prepaid Expenses                                      (765)      1,141
                    Accounts Payable                                   (65,524)    (16,762)
                    Accrued Expenses and other current liabilities      31,566      (2,477)
                    Accrued officers' salaries                          24,750      (3,867)
                                                                     ---------    --------

Net cash provided by (used in) operating activities                   (133,846)     25,325

Cash flows from investing activities
     Purchase of equipment                                                --        (3,385)
                                                                     ---------    --------

Net cash used in investing activities                                     --        (3,385)

Cash flows from financing activities
Repayment of loans                                                        --        (8,623)
Issuance of common stock                                               150,000        --
                                                                     ---------    --------

Net cash provided by (used in) financing activities                    150,000      (8,623)

Net increase in cash                                                    16,154      13,317

Cash at beginning of period                                             26,311       1,680
                                                                     ---------    --------

Cash at end of period                                                $  42,465    $ 14,997
                                                                     =========    ========

Supplemental disclosures of cash flow information:

Cash paid during the period for interest                             $    --      $   --
                                                                     =========    ========

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.


                                      -5-
<PAGE>



                           VALESC INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 March 31, 2002

NOTE A - DESCRIPTION OF BUSINESS AND FORMATION OF COMPANY

The accompanying financial statements present the accounts of OJI Surgical, Inc.
for the three months ended March 31, 2001 and 2002 and the effect of the
acquisition (for accounting purposes -- see Note A-3) of Valesc Inc. on December
17, 2001.

1. DESCRIPTION OF BUSINESS ENTITIES

Valesc Inc., a New Jersey corporation ("Valesc NJ") was incorporated on October
24, 2000, and at the date of inception was owned 100% by Atlas Holdings Inc.
Atlas Holdings is owned 50% by Jeremy Kraus, the Company's Chairman and Chief
Executive Officer, 25% by Samuel Cohen, the Company's President and Director
and, 12.5% by Garrett Miller, the Company's Vice President and Director. On
March 21, 2001, Valesc NJ executed a 2:1 stock split.

NetCentral Capital Fund, Inc. ("NetCentral") was incorporated in the State of
Delaware on June 2, 2000, for the specific purpose of providing a method,
through a merger or otherwise, for a foreign or domestic private company to
become a reporting company with a class of registered securities. NetCentral had
a single shareholder. It had no operating business from the date of inception
until March 22, 2001. At March 22, 2001, NetCentral had no assets. From
inception through March 22, 2001 NetCentral had no revenues, and expenses of
approximately $30,000 of professional fees relating to the formation. On March
21, 2001, NetCentral had a 1:18.04 reverse stock split, and thereafter had
277,237 shares outstanding.

Founded as an Oregon corporation in 1988, OJI Surgical, Inc. ("OJI") is a
manufacturer's representative for medical devices and health care products,
primarily in the orthopedic field. OJI serves customers in the Pacific Northwest
of the US from its Portland, Oregon base.

The accompanying consolidated financial statements include the accounts of
Valesc and OJI Surgical, Inc. from the date of the acquisition of OJI (December
17, 2001) by Valesc. All material inter-company accounts and transactions
between the Company and its subsidiary have been eliminated.

2. DESCRIPTION OF MERGER BETWEEN VALESC AND NETCENTRAL

On March 22, 2001, Valesc NJ was acquired by NetCentral (the "Merger") for
8,964,008 shares of Common Stock, which were exchanged on a 1-for-1 basis with
Valesc NJ stock. Simultaneously therewith, the Directors of NetCentral resigned,
and the Company was renamed "Valesc Inc." ("Valesc Inc."). After the Merger,
Atlas Holdings Inc. owned 8,458,548 or 90.4% of the outstanding Common Stock of
Valesc Inc.

Under generally accepted accounting principles, the Merger is considered to be a
capital transaction in substance, rather than a business combination. That is,
the acquisition is equivalent to the issuance of stock by Valesc NJ for the net
monetary assets of NetCentral, accompanied by a recapitalization, and is
accounted for as a change in capital structure. Accordingly, the accounting for
the acquisition is identical to that resulting from a reverse acquisition,
except that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (NetCentral) are those of the "accounting acquirer" (Valesc
NJ). Earnings (loss) per share ("EPS") are calculated to reflect the Company's
change in capital structure for all periods presented. Costs associated with
merger were expensed as incurred, by Valesc NJ.



                                      -6-
<PAGE>


3. DESCRIPTION OF MERGER BETWEEN VALESC AND OJI SURGICAL

On December 17, 2001 SMT Enterprises Corporation ("SMT") sold OJI to Valesc
Inc., a Delaware corporation. Valesc Inc. received 100% of the outstanding stock
of the Company in exchange for 266,000 shares of its common stock. The Chief
Executive of Valesc Inc. is Jeremy Kraus, a board member of SMT as well as the
son of SMT's President and the nephew of the Company's President. In addition,
Samuel Cohen is a member of the board of both SMT and Valesc, and serves as the
President of Valesc. Several members of the Kraus family are investors in
Valesc. Valesc and its wholly-owned subsidiary, OJI Surgical, Inc. are hereafter
referred to as "the Company."

Under generally accepted accounting principles, the acquisition is considered to
be a capital transaction in substance, rather than a business combination. That
is, the acquisition is equivalent to the issuance of stock by OJI for the net
monetary assets of Valesc, accompanied by a recapitalization, and is accounted
for as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (Valesc) are those of the "accounting acquirer" (OJI).

4. DESCRIPTION OF MERGER BETWEEN OJI SURGICAL AND SMT

In 1999, OJI was purchased from Harry Kraus, its current President, founder and
then sole shareholder, by SMT, a Delaware company. SMT was an inactive company
prior to this transaction. SMT received 100% of the outstanding stock of OJI in
exchange for 32% of its outstanding stock. Edward Kraus, the brother of Harry
Kraus, is the President of SMT and Robert Kraus, Harry Kraus's brother and
Jeremy Kraus, Harry Kraus's nephew are also members of the board of SMT.

Under generally accepted accounting principles, the acquisition is considered to
be a capital transaction in substance, rather than a business combination. That
is, the acquisition is equivalent to the issuance of stock by OJI for the net
monetary assets of SMT, accompanied by a recapitalization, and is accounted for
as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the
post-reverse-acquisition comparative historical financial statements of the
"legal acquirer" (SMT) are those of the "accounting acquirer" (OJI). Costs
associated with merger were expensed as incurred.

NOTE B - LIQUIDITY AND GOING CONCERN

The accompanying financial statements of the Company have been prepared assuming
the Company will continue as a going concern. No adjustment has been made for
this uncertainty. The Company has invested a significant amount of its effort
and cash in the development of its business plan. As of March 31, 2002, the
Company has a stockholders' deficit of approximately $698,000. For the period
ended March 31, 2002, the Company had net losses of approximately $139,400. The
Company will be required to seek external financing to continue developing its
business plan and to consummate planned acquisitions, and to cover the overhead
costs associated with Valesc. Operating losses are expected to continue in 2002.

During the next twelve months, the Company intends to devote its time and
resources to the growth of its medical device sales business. The Company
currently sells a variety of medical products, including replacement joints and
surgical implements and tools, for use in the orthopedic care and surgical area.
The Company intends to expand its sales of these products in three ways: (i)
increased penetration in market areas already covered, (ii) the addition of
sales personnel to expand geographic coverage and (iii) the addition of new
product lines.

In order for the Company's expansion to be successful, it will need to greatly
expand its administrative capabilities and its sales force. The Company intends
to invest approximately $100,000 in the purchase, customization and installation
of accounting and back-office software to enable it to manage a larger number of
transactions, customers and suppliers without substantially increasing its
administrative staff. The Company also expects to incur significant expenses for
hiring additional sales people. In addition to normal hiring costs,
manufacturers' representatives like OJI generally "sponsor" new sales people for
a period of up to one year during which the company subsidizes the employee's
wages until they have built a sufficient customer base to support themselves
solely on a commission basis. The Company cannot predict these additional costs
at this time, but they may represent a substantial increase over the Company's
current costs.



                                      -7-
<PAGE>


The Company will need significant new financing in order to fund these expansion
plans. Although the company expects additional costs to be offset by increased
revenues, it cannot be certain whether increases in revenues will occur and
whether any such increases will offset costs.

Management's plans with respect to its liquidity issues include the following:

o The Company has obtained an equity line of credit which provides a financing
vehicle for the Company - see Note E-5.
o The Company is in the process of completing the registration of its common
stock, which would allow it to apply for trading of its common stock on the
Over-the-counter Bulleting Board, a condition of closing of the equity line fo
credit. o Raise additional funding through the sale of debt and equity
instruments to fund activities.
o From April through May 2002, the Company received proceeds from the issuance
of common stock of $35,000.

To date, the Company has supported its activities through debt and equity
investments. Management plans to continue to seek the funding required to
finance operations as the Company commences its business plan and expansion
plan. Failure to find additional financing, create a public market for its
stock, and execute its expansion plan, could negatively impact the Company's
ability to continue as a going concern.

NOTE C - PRO FORMA STATEMENT OF OPERATIONS

The following Pro Forma income statement has been prepared based upon the
historical unaudited financial statements of Valesc Inc. and OJI Surgical, Inc.
period ended March 31, 2001 and gives effect to the merger of the two companies,
showing OJI as the "accounting acquirer" as if the merger occurred on January 1,
2001. The equity accounts of the combined entities have been presented to
reflect the share structure of the legal acquirer -- Valesc Inc.

The following Pro Forma Condensed financial information is not necessarily
indicative of the actual results of operations that would have been reported if
the events described above had occurred as of January 1, 2001 nor do they
purport to indicate the results of Valesc's future operations. Furthermore, the
pro forma results do not give effect to all cost savings or incremental costs
that may occur as a result of the integration and consolidation of the
companies.

                                         (Unaudited)
                                          March 31,


                                             2001
                                            ------

Revenues                                    $97,533
Cost of Revenues                              2,845
                                           --------
Gross profit                                 94,688



Operating expenses
   Merger expense                            75,000
   Equity-based compensation expense        137,640
Selling, general and administrative
        expense                             279,722
                                          ---------
Total expenses                              492,362
                                          ---------
Loss from operations                       (397,674)

   Interest expense                             601

   Income tax expense                             0
                                          ---------
Net loss                                   (398,275)
                                           ========
Net loss per common share - basic
    and diluted                               $(.04)

Weighted average shares outstanding        10,308,548




                                      -8-
<PAGE>


NOTE D - ACCOUNTING POLICIES

1. REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition," to provide guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
The Company's policies on revenue recognition are consistent with this bulletin.

Commission income as a manufacturers' representative on new product sales are
recorded in the period during which the underlying product sale occurs.

2. EARNINGS (LOSS) PER SHARE

Basic loss per share for the quarter ended March 31, 2002 is computed by
dividing the loss for the period by the weighted average number of common shares
outstanding during the period. Diluted loss per share is computed by dividing
the loss for the period by the weighted average number of common shares adjusted
for the dilutive effect of any potential common shares issuable during the
period. The amount of options or warrants not considered in the loss per share
calculation because their effect was antidilutive was 115,000 and 2,134,000 for
the periods ended March 31, 2001 and March 31, 2002, respectively. Earnings
(loss) per share are calculated to present the change in capital structure for
all periods presented. The diluted earnings per share for the three months ended
March 31, 2002 and 2001 includes the effect of 0 and 600,000 potentially
dilutive securities, respectively.

3. USE OF ESTIMATES

The preparation of 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 amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates and assumptions. Significant estimates that affect the financial
statements include, but are not limited to, the valuation of options and
warrants granted.

4. CONCENTRATIONS OF CREDIT RISK

Product sales from a relatively few suppliers account for a substantial portion
of the Company's revenues. During the period ended March 31, 2002, product sales
from two suppliers accounted for 82.5% of net sales (47% and 35.5% for each
supplier).

Financial instruments which subject the Company to concentrations of credit risk
consist primarily of cash, notes payable and trade accounts payable. The Company
considers the book values of these investments to be indicative of their
respective fair values.



                                      -9-
<PAGE>


5. CASH AND CASH EQUIVALENTS

The Company considers all highly liquid short-term investments with maturities
of 90 days or less when purchased to be cash equivalents.

6. INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes." SFAS
No. 109 is an asset and liability approach that requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences
attributable to differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases, and
for operating loss and tax credit carryforwards. A valuation allowance is
recorded if it is more likely than not that some portion or all of a deferred
tax asset will not be realized.

7. LONG-LIVED ASSETS AND IMPAIRMENT OF LONG-LIVED ASSETS

The Company records impairment losses on long-lived assets used in operations or
expected to be disposed of when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those assets. No
impairment losses were recorded during the quarter.

8. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method for financial reporting
purposes, and accelerated methods for tax purposes, over the following estimated
useful lives: Office Equipment 3-7 years

9. RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred. The Company has
incurred no research and development expenses to date.

10. STOCK-BASED COMPENSATION

As permitted by the Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), "Accounting for Stock-Based Compensation", the Company accounts for
stock-based employee compensation arrangements in accordance with provisions of
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees." Compensation expense for stock options issued to employees is
based on the difference, on the date of grant, between the fair value of the
Company's stock and the exercise price of the option. The Company accounts for
equity instruments issued to nonemployees in accordance with the provisions of
SFAS No. 123 and Emerging Issues Task Force (EITF) Issue No. 96-18, "Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction With Selling, or in Conjunction With Selling, Goods or Services."
All transactions in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. The measurement date of the fair value of
the equity instrument issued is the date on which the counterparty's performance
is complete.



                                      -10-
<PAGE>


11. MARKETING COSTS

The Company expenses marketing costs as incurred, and amounted to approximately
$110 for the quarter ended March 31, 2002.

12. RECENT ACCOUNTING PRONOUNCEMENTS

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 141, "Business Combinations",
and SFAS 142 "Goodwill and Tangible Assets". SFAS 141 is effective for all
business combinations completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001; however, certain provisions of
this Statement apply to goodwill and other intangible assets acquired between
July 1, 2001 and the effective date of SFAS 142. Major provisions of these
Statements and their effective dates for the Company are as follows:

o all business combinations initiated after June 30, 2001 must use the purchase
method of accounting. The pooling of interest method of accounting is prohibited
except for transactions initiated before July 1, 2001.

o intangible assets acquired in a business combination must be recorded
separately from goodwill if they arise from contractual or other legal rights or
are separable from the acquired entity and can be sold, transferred, licensed,
rented or exchanged, either individually or as part of a related contract, asset
or liability.

o goodwill, as well as intangible assets with indefinite lives, acquired after
June 30, 2001, will not be amortized. Effective September 1, 2002, all
previously recognized goodwill and intangible assets with indefinite lives will
no longer be subject to amortization.

o effective September 1, 2002, goodwill and intangible assets with indefinite
lives will be tested for impairment annually and whenever there is an impairment
indicator.

o all acquired goodwill must be assigned to reporting units for purposes of
impairment testing and segment reporting.

In August 2001, the FASB issued Statement of Financial Accounting Standards
No.144, "Accounting for the Impairment of Disposal of Long-Lived Assets" ("SFAS
144"). This statement is effective for fiscal years beginning after December 15,
2001. This supersedes Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," while retaining many of the requirements of such statement.

Although it is still reviewing the provisions of these Statements, management's
preliminary assessment is that these Statements will not have a material impact
on the Company's financial position or results of operations.

NOTE E - CAPITAL STOCK OF THE COMPANY

Valesc Inc. authorized capital stock consists of 100,000,000 shares of Common
Stock, $.0001 par value per share, and 20,000,000 shares of preferred stock,
$.0001 par value per share. Holders of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefore and, in the event of liquidation, to share pro rata in any
distribution of assets after payment of liabilities. The Board of Directors is
not obligated to declare a dividend and it is not anticipated that dividends
will be paid in the foreseeable future. Holders of Common Stock do not have
preemptive rights to subscribe to any of our additional shares. There are no
conversion, redemption, sinking fund or similar provisions regarding the Common
Stock. All of the outstanding shares of Common Stock are fully paid and
non-assessable and all of the shares of Common Stock offered hereby will be,
upon issuance, fully paid and non-assessable. The Company has not designated any
terms for the preferred stock.

On March 21, 2000, Valesc NJ declared a 2:1 stock split. All share and per share
references have been updated to reflect the stock split.



                                      -11-
<PAGE>


1. COMMON STOCK ISSUANCES BY VALESC INC.

During 2000, Valesc issued 370,000 shares (as adjusted for the stock split) of
common stock for aggregate net proceeds of $92,500. The shares were offered to
employees, directors, related party investors and non-related investors.

During 2001, Valesc issued 319,303 (as adjusted for the stock split) shares of
common stock for aggregate net proceeds of $94,445. The shares were offered to
employees, directors, related party investors and non-related investors.

During 2001, Valesc issued 266,000 shares of common stock to SMT in connection
with the merger of OJI into the Company, 277,237 shares of common stock in
connection with the merger of Valesc NJ into NetCentral and 70,000 shares of
common stock to consultants for services rendered (See Note E-5).

During January 2002, the Company received an aggregate of $150,000 for issuance
of 500,000 shares of common stock to a single non-related investor. The investor
also received an option to purchase an additional 500,000 shares of common stock
during a period of 3 years, to begin 6 months after the effectiveness of the
Company's registration statement at a price of 30% discount to the market price
of the common stock. Proceeds were used for working capital purposes.

2. WARRANTS

From January 1, 2001 through December 31, 2001, an aggregate of 454,000 warrants
were issued by Valesc in connection with the notes payable with a face value of
$198,000 (See Note F). Proceeds of approximately $128,000 was allocated to these
warrants. The assumptions used in determining the warrant valuation using the
Black-Scholes option pricing model are risk-free interest rate (4.72% and
2.12%), volatility factor (45%), fair value ($0.33) and term of warrants (1 -
2.5 years). Further, for purposes of this calculation the Company assumed the
maximum number of warrants would be issued or exercised at the lowest price
indicated in the terms of the warrant agreement. The terms of these warrants are
summarized as follows:

o 15,000 of these warrants are exercisable at $.25 per share through December
  31, 2003.

o 50,000 of these warrants are exercisable at $.01 per share through February 1,
  2004.

o 100,000 of these warrants are exercisable at $.10 per share through February
  2, 2004.

o The Company also issued warrants with an exercise price of $.01 through
December 19, 2003. The number of shares permitted to be exercised under these
warrants is pre-set based upon the date the note payable is repaid - 120,000 if
repaid prior to February 2, 2002, 150,000 if repaid between February 3, 2002 and
August 1, 2002, and 200,000 if repaid after August 1, 2002.

o 64,000 warrants, with an exercise price of $.01 per share, were issued in
connection with $25,000 of the notes payable. The number of shares permitted to
be exercised under these warrants is pre-set based upon the date the note
payable is repaid - 11,500 if repaid prior to February 2, 2002, 39,000 if repaid
between February 3, 2002 and August 1, 2002, and 64,000 if repaid after August
1, 2002.

o 25,000 warrants, with an exercise price of $.33 per share were issued in
connection with $25,000 of notes payable. These warrants, which will not be
registered, vest immediately and are exercisable through October 3, 2004.

In January 2002, the Company issued 50,000 warrants to a consultant of the
Company for services rendered, exercisable at $.333 per share through Janaury 1,
2007. One half of the warrants vest upon the filing of this registration
statement, the remaining half vests 10 days after shares of Company stock begins
trading.



                                      -12-
<PAGE>


3. STOCK OPTION PLAN

On April 6, 2001, the Company adopted a Stock Option Plan (the "Option Plan").
The Option Plan authorized the granting of both incentive and nonqualified stock
options to employees for up to 1,500,000 shares of common or preferred stock to
officers, directors and key employees. The objectives of the Option Plan include
attracting and retaining the best personnel, providing for additional
performance incentives, and promoting the success of the Company by providing
employees with the opportunity to acquire both Common and Preferred Stock.
Options under the company's Option Plan generally vest over a four-year period,
and generally expire ten years after the grant date.

As discussed in Note H-2, on January 1, 2001, 900,000 stock options were granted
pursuant to employment contracts. 300,000 of the granted shares become
exercisable on each of December 31, 2001, 2002 and 2003. There were no options
exercised or forfeited through March 31, 2002. The exercise price of the
first-year element of the stock option grant is below the fair value of the
company's stock, therefore a 2001 compensation charge of $75,000, computed under
the intrinsic value method, was recognized over the one-year vesting period. The
second and third-year elements contain an exercise price at or above the fair
value of the company's stock at the date of grant and therefore no compensatory
charge has been recorded.

The fair value of each option grant is estimated on the date of grant using the
Black Scholes Option pricing model with the following assumptions used: dividend
yield of 0%, expected volatility of 45%, risk-free interest rate of 4.72% and
expected life of 10 years.

4. OTHER STOCK OPTIONS

Valesc Inc. recorded expenses of $38,000 and $218,000 in the periods ended
December 31, 2000 and 2001, respectively, for expenses incurred by several
consultants, representing the estimated fair value of the services rendered. In
March 2001 the company issued equity instruments in lieu of cash for such
expenses incurred. The company initially issued 512,700 shares to such
consultants pursuant to cashless-exercise agreements entered into to discharge
the liabilities. In September 2001, the company informed the consultants that
the agreements were invalid and required revision. All but 78,000 of the
initially issued shares were rescinded or cancelled. The company continues to
carry the costs of these services in accrued expenses for those consultants
whose shares were rescinded or cancelled. The consultants who agree to retain
70,000 of the 78,000 shares were required to enter into a promissory note
(bearing interest at 3% per annum, commencing six months after issuance) to the
Company for the fair value ($.33) of the shares granted. The promissory note
requires payment of amounts due the Company upon sale of the underlying shares
by the holder. The consultant holding 8,000 of such shares paid the Company for
the shares in July 2001.

5. THE INVESTMENT AGREEMENT WITH SWARTZ

On June 7, 2001 as amended on August 29, 2001 and September 26, 2001 the Company
entered into an Investment Agreement with Swartz Private Equity, LLC ("Swartz")
under which the Company, from time to time, has the option to issue Swartz
shares of Common Stock up to a maximum aggregate offering amount of $20,000,000.
Under the Investment Agreement, shares are issued to Swartz, and Swartz pays for
the shares in transactions referred to as Puts. The Company has the right, at
its sole discretion, to put shares of its Common Stock, to Swartz, which Swartz
must purchase, for a dollar amount of up to $2.0 million in each Put, subject to
additional limitations on the timing of our exercise of Put rights and on the
number of shares Swartz is obligated to purchase. The Company's right to Put
shares to Swartz is for a period of three years beginning on the effective date
of the registration statement.

The purchase price to be paid for the Put Shares by Swartz is equal to the
lesser of (i) the Market Price (as defined below), minus $.09, or (ii) 91% of
the Market Price. The Market Price for each Put equals the average of the two
lowest volume weighted average trading prices of the shares of Common Stock
during the Pricing Period (as defined below) for the applicable Put. The Pricing
Period means, unless otherwise shortened under the terms of the Investment
Agreement, the period beginning on the business day immediately following the
Put Date (as defined below) and ending on and including the date which is 20
business days after such Put Date. The Put Date is the date that is specified in
a written notice delivered to Swartz (the Put Notice) in which the Company
notifies Swartz of our intention to commence a Put.



                                      -13-
<PAGE>


The Company has the option, on the date of notification to Swartz of a Put, to
designate a minimum price for the shares to be purchased by Swartz in the Put
which is no greater than the lesser of 80% of the closing bid price of our
Common Stock on the day preceding the notice or the closing bid price on that
day minus $.14. If the Company designates a minimum price, Swartz must pay at
least that price for our Common Stock.

As consideration for entering into the Investment Agreement, the Company granted
to Swartz a warrant to purchase 780,000 shares of our Common Stock (the
Commitment Warrants). The exercise price for the Commitment Warrants is: $1.00,
provided that on the date six months after the date of issuance of the warrants,
or October 24, 2001, and on each six month anniversary thereafter, the exercise
price is subject to adjustment based on the lowest closing price for the five
trading days preceding the adjustment.

For financial reporting purposes, the Company computed the value of the warrant
using the Black-Scholes model and assuming a $1.00 exercise price. The resultant
value is considered a deferred offering cost and will be amortized over the life
of the equity agreement. To the extent the exercise price per share is adjusted
pursuant to the formulas mentioned above, the Company will record additional
deferred offering costs.

The Put Shares have demand registration rights and the Commitment Warrants have
piggyback registration rights, semi-annual reset provisions and a 5-year term.
The Swartz agreement contains certain penalties if the Company does not execute
minimum financings under this agreement.

6. TRANSACTION WITH GARRETT MILLER

In January 2001, Valesc entered into an agreement with Garrett Miller, an
officer in the Company, whereby he would exchange purchased shares and earned
(through investment commissions and equity-based compensation) shares of Valesc
Inc. for shares of Atlas Holdings. Valesc recorded a charge to operations of
approximately $84,000 related to the equity-based compensation, during 2001,
prior to the date of the Valesc/OJI merger.

NOTE F - NOTES PAYABLE

The principal amount of the notes payable issued by Valesc Inc. mature as
follows:

$130,000 in 2002 and
$ 68,000 in 2003

1. RELATED PARTY NOTES

During the period ended December 31, 2001, the Company received advances from
related parties aggregating $78,000. These notes included detachable warrants as
summarized in Note E-2. These loans bear interest at a rate of 14% per annum,
none of which has been paid to date. Each of the notes are guaranteed by the
company's officers and directors. Of the total proceeds of this financing,
approximately $49,200 was allocated to warrants (Note E).

2. NON-RELATED PARTY NOTES

During the year ended December 30, 2001, the Company issued notes to non-related
parties aggregating $120,000. One loan ($5,000) bears interest at a rate of 10%
per annum, and the second loan ($100,000) and third loans ($15,000) bear
interest at a rate of 14% per annum, none of which has been paid to date.
$100,000 of these notes are due in December 2002, $5000 due in September 2001,
and $15,000 due May 23, 2003. Payment of these notes are guaranteed by the
company's officers and directors. These notes included detachable warrants. Of
the total proceeds of this financing, approximately $78,500 was allocated to
warrants (Note E).



                                      -14-
<PAGE>


The note due in September 2001, has not been extended, however, the Company has
received a verbal agreement from the noteholder that it will not attempt to
enforce payment.

NOTE G - INCOME TAXES

At December 31, 2001, Valesc Inc. has deferred organizational costs and net
operating loss carryforward of approximately $1,200,000. Deferred tax assets
arise from these net operating loss carryforwards, organization costs and
certain accruals are approximately $660,000. The Company has fully reserved all
deferred tax assets due to the uncertainty of realization.

Changes in ownership resulting from transactions among our stockholders and
sales of common stock by us, may limit annual realization of the tax net
operating loss carryforwards that could become available under Section 382 of
the Internal Revenue Code.

NOTE H - COMMITMENTS AND CONTINGENCIES

1. LEASES

Valesc leased office space under an operating lease that expired in June 2001.
OJI leased office space under a lease which expired in March 2001. The Company
did not lease any office space at December 31, 2001. The Company's OJI
subsidiary has entered into a lease agreement beginning March 1, 2002 which will
result in a monthly rent expense of $880 beginning in April 2002.

2. EMPLOYMENT AGREEMENTS

Effective January 1, 2001, the Company entered into employment agreements with
each of the three executive officers containing identical terms. The agreements
are summarized as follows: (A) initial term of three years, with automatic
one-year renewal terms thereafter; (B) during each year of the first three
years, each executive shall receive: (i) during the first year, an annual base
salary equal to the greater of (a) $50,000 or (b) 2.5% of the total revenue of
the Company and its subsidiaries for such year, up to a maximum of $150,000;
(ii) during the second year, an annual base salary equal to the greater of (a)
$55,000 or (b) 2.5% of the total revenue of the Company and its subsidiaries for
such year, up to a maximum of $165,000; and (iii) during the third year, an
annual base salary equal to the greater of (a) $60,500 or (b) 2.5% of the total
revenue of the Company and its subsidiaries for such year, up to a maximum of
$181,500; (C) the Board of Directors may consider one or more increases in the
salary payable to the executive in respect of any renewal term; (D) in the event
the Company is not in a position, due to our then-current financial situation,
to make any salary payment(s) to the executives, the unpaid salary shall accrue
without interest; (E) all accrued and unpaid salary shall be immediately due and
payable upon the occurrence of any change of control, defined as the sale of a
controlling interest in the Company's capital stock to one or more buyers acting
in concert, the sale of all or substantially all of our assets, or any corporate
merger or consolidation resulting in one or more parties, who did not previously
hold a controlling interest in our capital stock, owning a controlling interest
in our capital stock or our successor company; (F) the executives shall be
eligible to participate in bonuses awarded to senior management to the extent
that such bonuses are awarded or authorized by the Board of Directors from time
to time.

In addition to the foregoing, each executive will be granted the option to
purchase a total of 300,000 shares of Common Stock in equal installments of
100,000 shares at the end of each year of employment. The options shall be
exercisable for a period of three years following the date of vesting, and the
exercise price shall be as follows: (i) $.25 per share for the 100,000 shares
that vest after the first year; (ii) $.50 per share for the 100,000 shares that
vest after the second year; and (iii) $.75 per share for the 100,000 shares that
vest after the third year. In the event the executive is terminated without
cause by Company or the executive terminates his employment for good reason, any
options then outstanding that have neither vested nor been terminated as of such
date shall vest and become subject to purchase by the executive.



                                      -15-
<PAGE>


Effective January 1, 2002 and in connection with our acquisition of OJI
Surgical, Inc., OJI entered into an employment agreement with its President,
Harry Kraus. The agreement provides as follows: (A) an initial term of one year,
with automatic one-year renewal terms thereafter; (B) a monthly salary of
$10,800; (C) all accrued and unpaid salary shall be immediately due and payable
upon the occurrence of any "change of control", defined as the sale of a
controlling interest in OJI's capital stock to one or more buyers acting in
concert, the sale of all or substantially all of our assets, or any corporate
merger or consolidation resulting in one or more parties, who did not previously
hold a controlling interest in OJI's capital stock, owning a controlling
interest in OJI's capital stock; and (D) the executive shall be eligible to
participate in bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors of OJI from time to
time.

3. LITIGATION

A shareholder of a predecessor of Atlas Holdings filed a suit against the
predecessor company seeking additional stock ownership of Atlas Holdings. The
case was dismissed for failure to prosecute. Management of Atlas believes there
are valid and meritorious defenses to such claim, if the suit is re-filed.

NOTE I - SUBSEQUENT EVENTS

During April and May 2002, the Company received an aggregate of $35,000 for
issuance of 87,500 shares of common stock to two non-related investors. The
investors also received options to purchase an additional 87,500 shares of
common stock during a period of 3 years, to begin 6 months after the
effectiveness of the Company's registration statement at a price of 30% discount
to the market price of the common stock. Proceeds were used for working capital
purposes.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

              We acquired OJI Surgical, Inc. on December 17, 2001. Prior to the
acquisition, we were not yet an operating company and therefore had financial
performance driven by our expenses associated with becoming operational and
completing the acquisition. OJI Surgical was an operating company for more than
10 years prior to the acquisition.

COMBINED OPERATING RESULTS OF THE COMPANY

REVENUE

              Revenues declined from $97,533 for the quarter ended March 31,
2001 to $54,624 for the current period. This decline resulted primarily from our
decision to cease providing complementary reconditioning and repair service for
our products and the products of our competitors, and the attendant reduction in
sales staff associated with this elimination of services. These services became
less attractive because of increased competition that resulted in an increasing
administrative burden associated with processing transactions for a broader
range of products. The Company may re-enter this complementary service offering
in the future, but currently has no plans to do so. The Company did not
separately track revenues and costs relating to this service offering to its
customers.



                                      -16-
<PAGE>


 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

              The Company's operating expenses increased from $50,167 for the
quarter ended March 31, 2001 to $164,840 for the current period, primarily as a
result of the additional burden of the activities of Valesc Inc. after the
merger as well as the commencement of our expansion plan. Selling, General and
Administrative expenses for the OJI business remained relatively consistent for
both quarters. These Valesc Inc. and expansion plan activities included:
expenses associated with our reporting obligations under the Securities Exchange
Act of 1934, filings with the Securities and Exchange Commission pursuant to our
Investment Agreement with Swartz Private Equity, OJI's rental of new office
space and hiring of a new administrative staff person, and OJI's travel and
other costs associated with seeking additional product lines to represent.

NET INCOME (LOSS)

              The Company reported a net income of $47,212 for the quarter ended
March 31, 2001 as compared to net loss of ($139,422) for the current period,
primarily as a result of the inclusion of Valesc Inc.'s net losses in the
current period and the commencement of the Company's expansion plan.

SIGNIFICANT COMMITMENTS OF THE COMBINED ENTITY

              We have no significant financial commitments beyond customary
payables and employment contracts. $84,008 of our debt is categorized as
short-term as of March 31, 2002, however, we plan to request extensions of the
maturity dates for much of this debt and believe that our requests will be
granted. Our potential financial obligation to Swartz resulting from the
non-usage provisions of our Investment Agreement will not result in a liability,
if at all, until at least two years from the date of effectiveness of a
registration statement covering the Swartz stock.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

              In December 1999, the staff of the Securities and Exchange
Commission issued Staff Accounting Bulletin 101, "Revenue Recognition," to
provide guidance on the recognition, presentation, and disclosure of revenue in
financial statements. The Company's policies on revenue recognition are
consistent with this bulletin. Commission income as a manufacturers'
representative on new product sales are recorded in the period during which the
underlying product sale occurs. The Company's revenues from product sales and
service income are derived from the sale of new products distributed by the
Company, and the refurbishment of used products. Revenue is recognized as
products are delivered to its customers. As of the end of 2001 and during the
current period, the Company was not distributing any new or refurbished
products.

STOCK-BASED COMPENSATION

              As permitted by the Statement of Financial Accounting Standards
No. 123 (SFAS No. 123), Accounting for Stock-Based Compensation, the Company
accounts for stock-based employee compensation arrangements in accordance with
provisions of Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock Issued to Employees." Compensation expense for stock options issued to
employees is based on the difference, on the date of grant, between the fair
value of the Company's stock and the exercise price of the option. The Company
accounts for equity instruments issued to non-employees in accordance with the
provisions of SFAS No. 123 and Emerging Issues Task Force (EITF) Issue No.
96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction With Selling, or in Conjunction With
Selling, Goods or Services." All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. The measurement
date of the fair value of the equity instrument issued is the date on which the
counter-party's performance is complete.



                                      -17-
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES OF THE COMBINED ENTITY

              As of March 31, 2002, we had cash and cash equivalents of $42,465,
negative working capital of ($722,127) and a stockholder's equity (deficiency)
of ($698,092). We have no credit or financing facility in place at the present
time. Valesc Inc. received approximately $150,000 during the three months ended
March 31, 2002 from private placements of equity. Cash used in operating
activities of Valesc Inc. was approximately $(133,850) during the period ended
March 31, 2002. The consolidated financial statements indicate that the
profitability and operating contribution of OJI have not been sufficient to
offset the developmental and expansion expenses reflected in the Valesc
financial statements. Until we can significantly expand the business of OJI we
will be unlikely to achieve profitability. As a result of our lack of
profitability, our accountants, in their report on the our financial statements
for the period ended December 31, 2001, included an explanatory paragraph
indicating there is substantial doubt about our ability to continue as a going
concern. The time and money required before we can complete our expansion plan
and implement our growth strategy cannot be estimated with precision. We expect
significant expenditures associated with entering into the expansion plan,
including the cost of hiring and "sponsoring" new salespeople and the cost of
the upgraded software and administrative infrastructure necessary to manage
them, as well as travel and other expenses associated with acquiring new product
lines and territories. Our anticipated cash requirements for the next twelve
months are approximately $550,000, which includes $250,000 to fund the expansion
plan and an expected cash-flow deficit from regular operations of $300,000.
Because we do not expect the expansion plan to begin contributing significantly
to revenue during the next twelve months, we anticipate a negative cash-flow
from regular operations similar to the previous year. The Company has
commitments under employment agreements with each of its three executive
officers. Additionally, the Company has lease commitments totaling approximately
$32,000 through March 31, 2005.

SUBSEQUENT EVENTS

              On June 7, 2001, the Company entered into the equity line
transaction under an Investment Agreement with Swartz Private Equity, which was
amended and restated as of August 29, 2001 and September 26, 2001. The
Investment Agreement entitles us to sell up to $20 million of our common stock
to Swartz, subject to a formula based on our stock price and trading volume,
from time to time over a three year period following the effective date of a
registration statement covering the Swartz stock. We filed Amendment No. 2 of a
registration statement on Form SB-2 covering the Swartz stock on March 25, 2002,
but withdrew the registration statement on April 26, 2002 at the recommendation
of the Commission. We were informed by the Commission that a "completed private
placement" would be deemed not to have occurred in connection with an equity
line transaction in cases where no market exists for the underlying securities
at the time of registration. Because no market currently exists for our
securities, we requested withdrawal. No shares of common stock of the Company
were issued or sold under the Swartz registration statement. We expect to
terminate the Investment Agreement shortly, but may enter into another equity
line transaction with Swartz after such time as our shares are traded on the OTC
Bulletin Board.



                                      -18-
<PAGE>


PART II -- OTHER INFORMATION

   ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

           On January 1, 2002, we issued options for the purchase of 50,000
shares of our common stock to Hecht & Associates, P.C. The options are
exercisable until January 1, 2007. One half of the options vested on January 11,
2002 and the remaining one half vest 10 days after the date on which our shares
begin trading. The options are exercisable at $.333 per share, subject to
downward adjustment based upon the average trading price for the 10 days after
the date on which our shares begin trading. The issuance of the options was
accomplished in reliance upon Section 4(2) of the Securities Act. The facts
relied upon for exemption are that Hecht & Associates, P.C. was an accredited
investor, a sophisticated purchaser and had full access to the information on
the company necessary to make an informed investment decision by virtue of the
due diligence conducted by the purchaser or available to the purchaser prior to
the transaction.

           On January 28, 2002, we sold 500,000 shares of our common stock to
Century Goal Holdings Ltd. for $150,000, or $.30 per share, with options for the
purchase of 500,000 additional shares. The options are not exercisable until six
months after our registration statement with respect to the Swartz shares is
declared effective and expire on February 1, 2005. The options are exercisable
at a price equal to 70% of the average closing price of our common stock in the
ten trading days prior to the exercise date. The sale of the shares and options
was accomplished in reliance upon Regulation S promulgated under the Securities
Act. The facts relied upon for the exemption were that the beneficial owner was
a non-U.S. person as defined under the Securities Act.

           On April 29, 2002, we sold 75,000 shares of our common stock to Tim
Kain, an unrelated investor for $30,000, or $.40 per share, with options for the
purchase of 75,000 additional shares. The options are not exercisable until six
months after our registration statement with respect to the Swartz shares is
declared effective and expire on May 1, 2005. The options are exercisable at a
price equal to 70% of the average closing price of our common stock in the ten
trading days prior to the exercise date. The sale of the shares and options was
accomplished in reliance upon Section 4(2) of the Securities Act. The facts
relied upon for exemption are that Tim Kain is an accredited investor, a
sophisticated purchaser and had full access to the information on the company
necessary to make an informed investment decision by virtue of the due diligence
conducted by the purchaser or available to the purchaser prior to the
transaction.

           On May 8, 2002, we sold 12,500 shares of our common stock to Matt
Williams, an unrelated investor, for $5,000, or $.40 per share, with options for
the purchase of 12,500 additional shares. The options are not exercisable until
six months after our registration statement with respect to the Swartz shares is
declared effective and expire on May 1, 2005. The options are exercisable at a
price equal to 70% of the average closing price of our common stock in the ten
trading days prior to the exercise date. The sale of the shares and options was
accomplished in reliance upon Section 4(2) of the Securities Act. The facts
relied upon for exemption are that Matt Williams is an accredited investor, a
sophisticated purchaser and had full access to the information on the company
necessary to make an informed investment decision by virtue of the due diligence
conducted by the purchaser or available to the purchaser prior to the
transaction.


   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits: See Exhibit Index on page 21.

     (b) Reports on Form 8-K: The Company filed a report on Form 8-K/A on
January 11, 2002 to amend its report on Form 8-K dated December 21, 2001 to
amend Item 7 to include (a) Financial Statements of Business Acquired and (b)
Pro Forma Financial Information in connection with the acquisition reported in
the Form 8-K. No other items in the company's report on Form 8-K dated December
21, 2001 were amended.




                                      -19-
<PAGE>


                                   SIGNATURES

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

Date: May 15, 2002
                                        Valesc Inc.
                                        (Company)

                                         By: /s/ Samuel Cohen
                                             -----------------------------
                                               Samuel Cohen
                                               President






                                      -20-
<PAGE>


EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Index of exhibits required by Item 601 of Regulation S-B:

2.1     Merger Agreement dated as of March 21, 2001 between Valesc Inc. and
        NetCentral Capital Fund, Inc. (filed as part of the Company's Form 8-K
        filed on March 23, 2001 and incorporated herein by reference);

2.2     Share Purchase Agreement dated December 3, 2001 between Valesc Inc., SMT
        Enterprises Corporation and OJI Surgical, Inc. for the acquisition of
        OJI by Valesc (filed as part of the Company's Form 8-K filed on December
        21, 2001 and incorporated herein by reference);

3.1     Amended and Restated Certificate of Incorporation (filed as part of the
        Company's Form 8-K filed on March 23, 2001 and incorporated herein by
        reference);

3.2     Amended and Restated By-Laws (filed as part of the Company's Form 8-K
        filed on March 23, 2001 and incorporated herein by reference);

4.1     Second Amended and Restated Investment Agreement dated September 26,
        2001, between the Company and Swartz Private Equity, L.L.C. (filed as
        part of the Company's Form SB-2/A filed on September 27, 2001 and
        incorporated herein by reference);

4.2     Amended Commitment Warrant to Purchase Common Stock between Valesc Inc.
        and Swartz Private Equity, L.L.C. with an issue date of April 24, 2001
        (filed as part of the Company's Form SB-2/A filed on September 27, 2001
        and incorporated herein by reference);

4.3     Amended and Restated Registration Rights Agreement between Valesc Inc.
        and Swartz Private Equity, L.L.C., dated as of September 26, 2001 (filed
        as part of the Company's Form SB-2/A filed on September 27, 2001 and
        incorporated herein by reference);

10.1    2001 Stock Option Plan (filed as part of the Company's Form S-8 filed
        April 6, 2001 and incorporated herein by reference);

10.2    Amended and Restated Employment Agreement between Valesc Inc. and Jeremy
        Kraus dated January 1, 2002 (filed as part of the Company's Form SB-2
        filed on January 11, 2002 and incorporated herein by reference);

10.3    Amended and Restated Employment Agreement between Valesc Inc. and Samuel
        Cohen dated January 1, 2002 (filed as part of the Company's Form SB-2
        filed on January 11, 2002 and incorporated herein by reference);

10.4    Amended and Restated Employment Agreement between Valesc Inc. and
        Garrett Miller dated January 1, 2002 (filed as part of the Company's
        Form SB-2 filed on January 11, 2002 and incorporated herein by
        reference);




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10.5    Amended and Restated Employment Agreement between OJI Surgical, Inc. and
        Harry Kraus dated January 1, 2002 (filed as part of the Company's Form
        SB-2 filed on January 11, 2002 and incorporated herein by reference);

10.6    Manufacturer's Representative Agreement dated June 1, 1996, as amended,
        between OJI Surgical, Inc., and Acumed, Inc. (filed as part of the
        Company's Form SB-2 filed on January 11, 2002 and incorporated herein by
        reference);

10.7    Sales Representative Agreement dated July 1, 2000, between Harry Kraus,
        as representative, and Smith & Nephew, Inc. (filed as part of the
        Company's Form SB-2 filed on January 11, 2002 and incorporated herein by
        reference);

10.8    Sales Representative Agreement dated July 2, 2000, between Harry Kraus,
        as representative, and Smith & Nephew Orthopaedics (filed as part of the
        Company's Form SB-2 filed on January 11, 2002 and incorporated herein by
        reference);

10.9    Sales Representation Agreement dated March 1, 2002 between OJI Surgical,
        Inc./Harry Kraus and Hand Innovations, Inc.;

10.10   Lease dated as of February 13, 2002 between Harry Kraus and OJI
        Surgical, Inc., and American Property Management Corp.






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