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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 1934for the quarterly period ended September 30, 2002
|--- | ----------------------------------------------------------------------------------------------------------------------------------

OR



|[   ] | TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934for the Transition Period from                to
|----- | ----------------------------------------------------------------------------------------------------------------------------------

Commission file number: 001-16781

MICROHELIX, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)

|                                                                              |  |                                                
|----------------------------------------------------------------------------- |  | -----------------------------------------------
|Oregon
(State or Other Jurisdiction of Incorporation or Organization)         |  | 91-1758621
(I.R.S. Employer Identification No.)
|                                                                              |  |                                                
|16125 SW 72ND Ave.; Portland, Oregon
(Address of Principal Executive Offices) |  | 97224
(Zip Code)                               

(Issuers Telephone Number, Including Area Code): 503/968-1600

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

The number of shares outstanding of each of the issuers classes of common
equity, as of September 30, 2002, was 4,659,886 shares of Common Stock,
3,136,498 Class A Warrants, and 3,136,498 Class B Warrants.

Transitional Small Business Disclosure Format (Check One): Yes [   ]; No [X]





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TABLE OF CONTENTS



|                               |                                                                                                |                                            |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENTS                                                                  
|                               |                                                                                                | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|                               | ITEM 3. CONTROLS AND PROCEDURES                                                               
|PART II  OTHER INFORMATION   
|                               | ITEM 5. OTHER INFORMATION                                                                     
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      
|SIGNATURES                    
|CERTIFICATIONS                
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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##### Table of Contents



TABLE OF CONTENTS

|                               |                                                                                               |                                                                                                       |   |      |   | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | - | ---- | - | 
|                               |                                                                                               |                                                                                                       |   | Page
|                               |                                                                                               |                                                                                                       |   |     
|PART I  FINANCIAL INFORMATION |                                                                                               |                                                                                                       | 1 |     
|                              
|                               | ITEM 1. FINANCIAL STATEMENTS  UNAUDITED                                                      |                                                                                                       |   |      |  
|                               |                                                                                               | Consolidated balance sheets as of September 30, 2002 and December 31, 2001                            |   |      | 2 | 
|                               |                                                                                               | Consolidated statements of operations for the three and nine months
ended September 30, 2002 and 2001 |   |      | 3 | 
|                               |                                                                                               | Consolidated statements of cash flows for the three and nine months
ended September 30, 2002 and 2001 |   |      | 4 | 
|                               |                                                                                               | Notes to consolidated financial statements                                                            |   |      | 5 | 
|                              
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS |                                                                                                       |   | 9    |  
|                              
|                               | ITEM 3. CONTROLS AND PROCEDURES                                                               |                                                                                                       |   | 12   |  
|                              
|PART II  OTHER INFORMATION    |                                                                                               |                                                                                                       |   |     
|                              
|                               | ITEM 5. OTHER INFORMATION                                                                     |                                                                                                       |   | 13   |  
|                              
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      |                                                                                                       |   | 13   |  
|                              
|                               | SIGNATURES                                                                                    |                                                                                                       |   | 14   |  
|                              
|                               | CERTIFICATIONS                                                                                |                                                                                                       |   | 15   |  





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PART I  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements of microHelix,
Inc. (the Company) include all adjustments (consisting only of normal
recurring accruals) which management considers necessary for fair presentation
of operating results, financial position and cash flows as of September 30,
2002 and for the three and nine month periods ended September 30, 2002 and
2001.

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MICROHELIX, INC.

CONSOLIDATED BALANCE SHEETS

|                                     |                                                                                           |                             |           |                   |            |                    |           |             |            | 
|------------------------------------ | ----------------------------------------------------------------------------------------- | --------------------------- | --------- | ----------------- | ---------- | ------------------ | --------- | ----------- | ---------- | 
|                                     |                                                                                           |                             |           | December 31, 2001 |            | September 30, 2002
|                                     |                                                                                           |                             |           |                   |            |                   
|Assets                               |                                                                                           |                             |           |                   |            |                    |           |            
|Current Assets:                      |                                                                                           |                             |           |                   |            |                    |           |            
|                                     | Cash                                                                                      |                             | $         | 7,353,316         |            |                    | $         | 1,755,607   |           
|                                     | Restricted short-term investment                                                          |                             |           |                  |            |                    |           | 636,855     |           
|                                     | Accounts receivable, net of allowance of $19,517 and
$70,427                              |                             |           | 1,048,573         |            |                    |           | 1,222,789   |           
|                                     | Inventories (Note 2)                                                                      |                             |           | 880,277           |            |                    |           | 772,173     |           
|                                     | Prepaid expenses                                                                          |                             |           | 170,566           |            |                    |           | 65,300      |           
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total current assets        |           |                   | 9,452,732  |                    |           |             | 4,452,724  | 
|Property and equipment  net         |                                                                                           |                             | 1,867,830 |                   |            |                    | 1,659,409 |            
|Intangible and other assets  net    |                                                                                           |                             | 4,926,036 |                   |            |                    | 4,916,506 |            
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total                       |           | $                 | 16,246,598 |                    |           | $           | 11,028,639 | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|Liabilities and Shareholders Equity |                                                                                           |                             |           |                   |            |                    |           |            
|Current Liabilities:                 |                                                                                           |                             |           |                   |            |                    |           |            
|                                     | Accounts payable                                                                          |                             | $         | 841,771           |            |                    | $         | 237,574     |           
|                                     | Accrued interest to shareholder                                                           |                             |           | 530,546           |            |                    |           |            |           
|                                     | Accrued liabilities                                                                       |                             |           | 377,848           |            |                    |           | 430,973     |           
|                                     | Line of credit                                                                            |                             |           | 711,000           |            |                    |           |            |           
|                                     | Current portion of notes payable (Note 3)                                                 |                             |           | 250,000           |            |                    |           | 250,000     |           
|                                     | Current portion of notes payable to shareholder                                           |                             |           | 325,830           |            |                    |           | 535,000     |           
|                                     | Deferred shareholder compensation                                                         |                             |           | 200,000           |            |                    |           |            |           
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total current liabilities   |           |                   | 3,236,995  |                    |           |             | 1,453,547  | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|Long-Term Liabilities:               |                                                                                           |                             |           |                   |            |                    |           |            
|                                     | Long-term portion of notes payable (Note 3)                                               |                             |           | 500,000           |            |                    |           | 321,003     |           
|                                     | Long-term portion of notes payable to shareholder                                         |                             |           | 1,000,000         |            |                    |           | 600,000     |           
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total long-term liabilities |           |                   | 1,500,000  |                    |           |             | 921,003    | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total liabilities           |           |                   | 4,736,995  |                    |           |             | 2,374,550  | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|Shareholders Equity:                |                                                                                           |                             |           |                   |            |                    |           |            
|                                     | Common stock, no par value, 5,519,495 shares authorized,
4,659,886 issued and outstanding |                             |           | 14,179,467        |            |                    |           | 14,179,467  |           
|                                     | Additional paid-in capital                                                                |                             |           | 6,485,312         |            |                    |           | 6,485,312   |           
|                                     | Notes receivable from shareholders for common stock                                       |                             |           | (57,940           | )          |                    |           | (57,940     | )         
|                                     | Deferred compensation expense                                                             |                             |           | (84,822           | )          |                    |           | (57,397     | )         
|                                     | Accumulated deficit                                                                       |                             |           | (9,012,414        | )          |                    |           | (11,895,353 | )         
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total shareholders equity  |           |                   | 11,509,603 |                    |           |             | 8,654,089  | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            
|                                     |                                                                                           | Total                       |           | $                 | 16,246,598 |                    |           | $           | 11,028,639 | 
|                                     |                                                                                           |                             |           |                   |            |                    |           |            

See notes to consolidated financial statements.

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MICROHELIX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |           |           |  
|--------------------------------------------- | ------------------------------- | ------------------------ | --------- | ------------------ | --------- | ----------------- | --------- | --------- | --------- | ---- | ---------- | --------- | --------- | - | ---------- | --------- | --------- | -
|                                              |                                 |                          |           | Three Months Ended |           | Nine Months Ended
|                                              |                                 |                          |           | September 30,      |           | September 30,    
|                                              |                                 |                          |           |                    |           |                  
|                                              |                                 |                          |           | 2001               |           | 2002              |           | 2001      |           | 2002
|                                              |                                 |                          |           |                    |           |                   |           |           |           |     
|Sales:                                        |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              | Wire and cable                  |                          | $         | 1,251,792          |           |                   | $         | 1,154,607 |           |      | $          | 4,032,424 |           |   | $          | 3,257,341 |          
|                                              | Government contracts            |                          |           | 131,862            |           |                   |           | 202,641   |           |      |            | 706,077   |           |   |            | 402,432   |          
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              |                                 | Total sales              |           |                    | 1,383,654 |                   |           |           | 1,357,248 |      |            |           | 4,738,501 |   |            |           | 3,659,773 |  
|Cost of Sales:                                |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              | Wire and cable                  |                          |           | 1,533,093          |           |                   |           | 1,179,969 |           |      |            | 3,703,031 |           |   |            | 3,397,260 |          
|                                              | Government contracts            |                          |           | 73,471             |           |                   |           | 164,872   |           |      |            | 386,824   |           |   |            | 356,192   |          
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              |                                 | Total cost of sales      |           |                    | 1,606,564 |                   |           |           | 1,344,841 |      |            |           | 4,089,855 |   |            |           | 3,753,452 |  
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              |                                 | Gross profit (loss)      |           |                    | (222,910  | )                 |           |           | 12,407    |      |            |           | 648,646   |   |            |           | (93,679   | )
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Operating Expenses:                           |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              | Research and development        |                          |           | 9,653              |           |                   |           | 180,306   |           |      |            | 79,624    |           |   |            | 433,888   |          
|                                              | Sales and marketing             |                          |           | 70,249             |           |                   |           | 226,239   |           |      |            | 272,530   |           |   |            | 640,698   |          
|                                              | General and administrative      |                          |           | 506,222            |           |                   |           | 518,309   |           |      |            | 1,141,117 |           |   |            | 1,646,471 |          
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              |                                 | Total operating expenses |           |                    | 586,124   |                   |           |           | 924,854   |      |            |           | 1,493,271 |   |            |           | 2,721,057 |  
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Loss from operations                          |                                 |                          | (809,034  | )                  |           |                   | (912,447  | )         |           |      | (844,625   | )         |           |   | (2,814,736 | )        
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Other Income (Expense):                       |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              | Interest income                 |                          |           | 4,304              |           |                   |           | 15,891    |           |      |            | 4,304     |           |   |            | 63,351    |          
|                                              | Interest expense                |                          |           | (132,781           | )         |                   |           | (18,889   | )         |      |            | (328,252  | )         |   |            | (60,729   | )        
|                                              | Interest expense to shareholder |                          |           | (41,879            | )         |                   |           | (21,456   | )         |      |            | (124,271  | )         |   |            | (70,825   | )        
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|                                              |                                 | Other expense  net      |           |                    | (170,356  | )                 |           |           | (24,454   | )    |            |           | (448,219  | ) |            |           | (68,203   | )
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Net loss                                      |                                 | $                        | (979,390  | )                  |           | $                 | (936,901  | )         |           | $    | (1,292,844 | )         |           | $ | (2,882,939 | )        
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Net loss per common
share 
basic and diluted |                                 | $                        | (.74      | )                  |           | $                 | (.20      | )         |           | $    | (.97       | )         |           | $ | (.62       | )        
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
|Shares used in per share
calculation          |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          
| basic and diluted                           |                                 |                          | 1,331,854 |                    |           |                   | 4,659,886 |           |           |      | 1,331,854  |           |           |   | 4,659,886  |          
|                                              |                                 |                          |           |                    |           |                   |           |           |           |      |            |           |           |   |            |          

See notes to consolidated financial statements.

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MICROHELIX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |            |         |          |            |  
|-------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------ | --------------------------------- | ----------------------------------------------- | ------- | ------------------ | ---------- | ----------------- | ------- | -------- | ---------- | ---------- | ------- | -------- | ---------- | ---------- | ------- | -------- | ---------- | -
|                                                   |                                                                         |                                            |                                   |                                                 |         | Three Months Ended |            | Nine Months Ended
|                                                   |                                                                         |                                            |                                   |                                                 |         | September 30,      |            | September 30,    
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                  
|                                                   |                                                                         |                                            |                                   |                                                 |         | 2001               |            | 2002              |         | 2001     |            | 2002      
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |           
|Cash Flows from Operating Activities:              |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   | Net loss                                                                |                                            | $                                 | (979,390                                        | )       |                    | $          | (936,901          | )       |          | $          | (1,292,844 | )       |          | $          | (2,882,939 | )      
|                                                   | Adjustments to reconcile net loss to cash used in
operating activities: |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |            |        
|                                                   |                                                                         | Depreciation and amortization              |                                   |                                                 | 160,874 |                    |            |                   | 130,938 |          |            |            | 376,349 |          |            |            | 396,312 |         
|                                                   |                                                                         | Stock compensation expense                 |                                   |                                                 | 13,218  |                    |            |                   | 9,141   |          |            |            | 41,107  |          |            |            | 27,424  |         
|                                                   |                                                                         | Amortization of deferred inventory charges |                                   |                                                 | 1,805   |                    |            |                   | 1,540   |          |            |            | 5,415   |          |            |            | 4,620   |         
|                                                   |                                                                         | Change in:                                 |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |            |         |         
|                                                   |                                                                         |                                            | Accounts receivable, net          |                                                 |         | (341,324           | )          |                   |         | (652,686 | )          |            |         | (485,877 | )          |            |         | (174,216 | )         
|                                                   |                                                                         |                                            | Inventories                       |                                                 |         | 38,154             |            |                   |         | 163,236  |            |            |         | (226,222 | )          |            |         | 103,484  |           
|                                                   |                                                                         |                                            | Due from affiliates               |                                                 |         | 76,163             |            |                   |         |         |            |            |         | 35,833   |            |            |         |         |           
|                                                   |                                                                         |                                            | Prepaid expenses                  |                                                 |         | 15,497             |            |                   |         | 29,699   |            |            |         | (45,182  | )          |            |         | 105,267  |           
|                                                   |                                                                         |                                            | Intangible and other assets       |                                                 |         | (13,344            | )          |                   |         | 999      |            |            |         | (139,164 | )          |            |         | (8,145   | )         
|                                                   |                                                                         |                                            | Accounts payable                  |                                                 |         | 574,188            |            |                   |         | (139,056 | )          |            |         | 558,728  |            |            |         | (604,197 | )         
|                                                   |                                                                         |                                            | Accrued interest                  |                                                 |         | 27,490             |            |                   |         |         |            |            |         | (12,256  | )          |            |         |         |           
|                                                   |                                                                         |                                            | Accrued interest to shareholder   |                                                 |         | (6,929             | )          |                   |         |         |            |            |         | 70,099   |            |            |         | (530,546 | )         
|                                                   |                                                                         |                                            | Accrued liabilities               |                                                 |         | 79,583             |            |                   |         | (1,697   | )          |            |         | 282,591  |            |            |         | 53,125   |           
|                                                   |                                                                         |                                            | Deferred shareholder compensation |                                                 |         |                   |            |                   |         |         |            |            |         |         |            |            |         | (200,000 | )         
|                                                   |                                                                         |                                            | Due to affiliates                 |                                                 |         | (100,456           | )          |                   |         |         |            |            |         | (18,415  | )          |            |         |         |           
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   |                                                                         |                                            |                                   | Cash used in operating activities               |         |                    | (454,471   | )                 |         |          | (1,394,787 | )          |         |          | (849,838   | )          |         |          | (3,709,811 | )
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Cash Flows from Investing Activities:              |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   | Capital expenditures                                                    |                                            |                                   | (55,229                                         | )       |                    |            | (34,410           | )       |          |            | (125,892   | )       |          |            | (170,216   | )      
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   |                                                                         |                                            |                                   | Cash used in investing activities               |         |                    | (55,229    | )                 |         |          | (34,410    | )          |         |          | (125,892   | )          |         |          | (170,216   | )
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Cash Flows from Financing Activities:              |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   | Repayment of notes receivable from shareholders                         |                                            |                                   | 26,000                                          |         |                    |            |                  |         |          |            | 26,000     |         |          |            |           |        
|                                                   | Proceeds from borrowings against notes payable and
line of credit       |                                            |                                   | 400,001                                         |         |                    |            |                  |         |          |            | 1,993,751  |         |          |            |           |        
|                                                   | Principal payments on notes payable and lines of
credit                 |                                            |                                   | (40,554                                         | )       |                    |            | (773,422          | )       |          |            | (915,644   | )       |          |            | (1,080,827 | )      
|                                                   | Restricted short-term investment                                        |                                            |                                   |                                                |         |                    |            | 707,570           |         |          |            |           |         |          |            | (636,855   | )      
|                                                   | Payments of financing costs                                             |                                            |                                   | 50,820                                          |         |                    |            |                  |         |          |            | (128,211   | )       |          |            |           |        
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|                                                   |                                                                         |                                            |                                   | Cash provided by (used in) financing activities |         |                    | 436,267    |                   |         |          | (65,852    | )          |         |          | 975,896    |            |         |          | (1,717,682 | )
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Change in cash                                     |                                                                         |                                            | (73,433                           | )                                               |         |                    | (1,495,049 | )                 |         |          | 166        |            |         |          | (5,597,709 | )         
|Cash, beginning of period                          |                                                                         |                                            | 77,153                            |                                                 |         |                    | 3,250,656  |                   |         |          | 3,554      |            |         |          | 7,353,316  |           
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Cash, end of period                                |                                                                         | $                                          | 3,720                             |                                                 |         | $                  | 1,755,607  |                   |         | $        | 3,720      |            |         | $        | 1,755,607  |           
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Supplemental
disclosure of cash flow information  |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           
|Cash paid for interest                             |                                                                         | $                                          | 154,099                           |                                                 |         | $                  | 40,345     |                   |         | $        | 394,680    |            |         | $        | 662,100    |           
|                                                   |                                                                         |                                            |                                   |                                                 |         |                    |            |                   |         |          |            |            |         |          |            |           

See notes to consolidated financial statements.

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MICROHELIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. General

The accompanying quarterly consolidated financial statements of
microHelix, Inc. and its wholly owned subsidiary, BioElectric Corporation,
(collectively, the Company) are unaudited and include all adjustments
(consisting only of normal recurring accruals) considered necessary by
management to present a fair statement of the results of operations, financial
position and cash flows. They have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB of Regulation S-B. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements.

The results of operations for the three and nine month periods ended
September 30, 2002 are not necessarily indicative of the results to be expected
for the full year. For further information, refer to the financial statements
and footnotes thereto included in the Companys Form 10-KSB for the fiscal year
ended December 31, 2001.

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 consolidated financial statements and accompanying notes. This
includes, among other things, evaluation of the remaining life and
recoverability of long-lived assets. Actual results could differ from those
estimates.

Recent
Accounting Pronouncements In July 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) No. 141, Business Combinations.The statement discontinues the use of
the pooling of interests method of accounting for business combinations. The
effects of this statement did not have a material impact on the Companys
consolidated financial statements.

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets.The statement will require discontinuing the amortization of goodwill
and other intangible assets with indefinite useful lives. Instead, these assets
will be tested periodically for impairment and written down to their fair
market values as necessary. The Company adopted this statement on January 1,
2002 and such adoption did not have a material impact on the Companys
consolidated financial statements.

In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No.144 addresses accounting
and reporting of long-lived assets, except goodwill, that are either held and
used or disposed of through sale or other means. The Company adopted this
statement on January 1, 2002, and such adoption did not have a material impact
on the Companys consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. The standard requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Costs covered by the standard include lease termination costs and certain
employee severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. This statement
is to be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The Company is evaluating the impact of adopting the
provisions of this statement and does not believe it will have a material
effect on the Companys financial positions, results of operations, or cash
flows.

2. Inventories

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Inventories are as follows:

|                   |       |   |              |         |               |   |         |         | 
|------------------ | ----- | - | ------------ | ------- | ------------- | - | ------- | ------- | 
|                   |       |   | December 31, |         | September 30,
|                   |       |   | 2001         |         | 2002         
|                   |       |   |              |         |              
|Raw materials, net |       | $ | 779,970      |         |               | $ | 767,883 |        
|Work-in-process    |       |   | 98,233       |         |               |   | 4,290   |        
|Finished goods     |       |   | 2,074        |         |               |   |        |        
|                   |       |   |              |         |               |   |         |        
|                   | Total |   | $            | 772,173 |               |   | $       | 772,173 | 
|                   |       |   |              |         |               |   |         |        

3. Line of Credit and Notes Payable

In December 2001, the Company entered into a revolving line of credit and
equipment loan agreement with a bank. The line of credit allowed the Company
to borrow up to $2.0 million at prime plus 1%. As of September 30, 2002, the
line of credit was paid in full resulting in a zero balance, and $571,000 was
outstanding on the equipment loan agreement. The Company has set up a
restricted short-term investment account so the bank has a full collateral
position against the outstanding loan balance. As a result of this change
there are no longer covenants in place.

Notes payable consisted of the following:

|                                                                                                                                                                                                              |                                    |   |              |           |               |   |          |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | - | ------------ | --------- | ------------- | - | -------- | --------- | 
|                                                                                                                                                                                                              |                                    |   | December 31, |           | September 30,
|                                                                                                                                                                                                              |                                    |   | 2001         |           | 2002         
|                                                                                                                                                                                                              |                                    |   |              |           |              
|Note payable, interest at prime plus 1.25%, 6% at December 31, 2001 and
September 30, 2002, principal and interest payable monthly, due in full on
December 30, 2004, secured by inventory                    |                                    | $ | 750,000      |           |               | $ | 571,003  |          
|Note payable to shareholder, interest at 12% at December 31, 2001 and
7.5% at September 30, 2002, interest payable monthly and principal
payments
due March 2003 and December 2004, secured by certain assets |                                    |   | 546,945      |           |               |   | 456,115  |          
|Note payable to shareholder, interest at 12% at December 31, 2001 and
7.5% at September 30, 2002, interest payable monthly and principal
payments
due March 2003 and December 2004, secured by certain assets |                                    |   | 383,885      |           |               |   | 383,885  |          
|Note payable to shareholder, interest at 12% at December 31, 2001 and
7.5% at September 30, 2002, interest payable monthly and principal payment
due December 2002, secured by certain assets                 |                                    |   | 235,000      |           |               |   | 135,000  |          
|Note payable to shareholder, interest at 12% at December 31, 2001 and
7.5% at September 30, 2002, interest payable monthly and principal
payments due March 2003 and December 2004, secured by certain assets |                                    |   | 160,000      |           |               |   | 160,000  |          
|                                                                                                                                                                                                              |                                    |   |              |           |               |   |          |          
|                                                                                                                                                                                                              | Total notes payable                |   |              | 2,075,830 |               |   |          | 1,706,003 | 
|Less current portion                                                                                                                                                                                          |                                    |   | (575,830     | )         |               |   | (785,000 | )        
|                                                                                                                                                                                                              |                                    |   |              |           |               |   |          |          
|                                                                                                                                                                                                              | Long-term portion of notes payable |   | $            | 1,500,000 |               |   | $        | 921,003   | 
|                                                                                                                                                                                                              |                                    |   |              |           |               |   |          |          

Long-term notes payable consist of a $500,000 note payable to a bank and
$1,000,000 of notes payable to shareholders as of December 31, 2001. As of
September 30, 2002, long-term notes payable consist of a $321,003 note payable
to a bank and $600,000 of notes payable to shareholder.

In February 2002, the Companys President and Chief Executive Officer (the
shareholder), along with the Board of Directors, agreed to reduce the
interest rates on notes payable to shareholder from 12% to 7.5% and extend the
terms for $400,000 of the balance from December 31, 2002 to March 31, 2003 with
the remaining $600,000 of the balance due December 31, 2004. The shareholder,
who also serves as trustee of the Sass Living Trust, along with the Board of
Directors, also agreed to reduce the interest rate on the note payable to the
Sass Living Trust from 15% to 7.5%. In connection with the revisions, the
Company repaid $90,830 of principal in 2002 in order to reduce the outstanding
principal to $1,000,000. Additionally, in 2002 the Company paid accrued
interest in full for both the notes payable to the shareholder and to the Sass
Living Trust in the amounts of approximately $460,000 and $72,000,
respectively.

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On September 30, 2002, there were no outstanding short-term borrowings.

4. Related-Party Transactions

Significant transactions and balances with shareholders are summarized
below:

|                                                    |  |              |           |               |  |   |           | 
|--------------------------------------------------- |  | ------------ | --------- | ------------- |  | - | --------- | 
|                                                    |  | December 31, |           | September 30,
|                                                    |  | 2001         |           | 2002         
|                                                    |  |              |           |              
|Notes receivable from shareholders for common stock |  | $            | 57,940    |               |  | $ | 57,940    | 
|                                                    |  |              |           |               |  |   |           | 
|Accrued interest to shareholder                     |  | $            | 530,546   |               |  | $ |          | 
|                                                    |  |              |           |               |  |   |           | 
|Notes payable to shareholder                        |  | $            | 1,325,830 |               |  | $ | 1,135,000 | 
|                                                    |  |              |           |               |  |   |           | 
|Deferred shareholder compensation                   |  | $            | 200,000   |               |  | $ |          | 
|                                                    |  |              |           |               |  |   |           | 

|                                |  |                          |        |                         |  |      |        |      |  |   |         |  |  |   |        | 
|------------------------------- |  | ------------------------ | ------ | ----------------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------ | 
|                                |  | Three Month Period Ended |        | Nine Month Period Ended
|                                |  | September 30,            |        | September 30,          
|                                |  |                          |        |                        
|                                |  | 2001                     |        | 2002                    |  | 2001 |        | 2002
|                                |  |                          |        |                         |  |      |        |     
|Interest expense to shareholder |  | $                        | 41,879 |                         |  | $    | 21,456 |      |  | $ | 124,271 |  |  | $ | 70,825 | 
|                                |  |                          |        |                         |  |      |        |      |  |   |         |  |  |   |        | 

During 1999, the shareholder agreed to defer his annual compensation of
$200,000 to future periods in order to improve the Companys cash flow. In
February 2002, the Company agreed to pay $125,000 of the deferred compensation
and the shareholder agreed to forgive the remaining $75,000.

5. Segments

The Company operates in two segments. The wire and cable segment designs
and manufactures micro cables, connectors, and assemblies for use in medical
devices. The government contracts segment performs research funded by
governmental institutions, primarily the National Institutes of Health, for
development of custom electronic interconnect systems for the human body.

The following is a summary of various financial amounts for each of the
Companys business segments. There were no intersegment sales during any of
the periods presented.

|              |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |           |           |  
|------------- | -------------------- | ----- | - | ------------------ | --------- | ----------------- | - | --------- | --------- | ---- | - | --------- | --------- |  | - | --------- | --------- | -
|              |                      |       |   | Three Months Ended |           | Nine Months Ended
|              |                      |       |   | September 30,      |           | September 30,    
|              |                      |       |   |                    |           |                  
|              |                      |       |   | 2001               |           | 2002              |   | 2001      |           | 2002
|              |                      |       |   |                    |           |                   |   |           |           |     
|Sales:        |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          
|              | Wire and cable       |       | $ | 1,251,792          |           |                   | $ | 1,154,607 |           |      | $ | 4,032,424 |           |  | $ | 3,257,341 |          
|              | Government contracts |       |   | 131,862            |           |                   |   | 202,641   |           |      |   | 706,077   |           |  |   | 402,432   |          
|              |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          
|              |                      | Total |   | $                  | 1,383,654 |                   |   | $         | 1,357,248 |      |   | $         | 4,738,501 |  |   | $         | 3,659,773 |  
|              |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          
|Gross profit: |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          
|              | Wire and cable       |       | $ | (281,301           | )         |                   | $ | (25,362   | )         |      | $ | 329,393   |           |  | $ | (139,919  | )        
|              | Government contracts |       |   | 58,391             |           |                   |   | 37,769    |           |      |   | 319,253   |           |  |   | 46,240    |          
|              |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          
|              |                      | Total |   | $                  | (222,910  | )                 |   | $         | 12,407    |      |   | $         | 648,646   |  |   | $         | (93,679   | )
|              |                      |       |   |                    |           |                   |   |           |           |      |   |           |           |  |   |          

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6. Loss Per Share

Basic net loss per share has been computed by dividing net loss by the
weighted average number of shares outstanding during each period. Diluted loss
per share has been computed by dividing net loss adjusted for interest on
convertible notes payable by the weighted average common stock and common stock
equivalent shares outstanding during each period using the treasury stock
method for employee stock option plans and warrants, and the if-converted
method for redeemable preferred stock and convertible notes payable, if the
common equivalent shares were not anti-dilutive. Common stock equivalents were
anti-dilutive for all periods presented.

* * * * * *

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

The following discussion provides information which management believes is
relevant to an assessment and understanding of the Companys operations and
financial condition. This discussion should be read in conjunction with the
unaudited consolidated financial statements and accompanying notes.

Forward-Looking Statements

Statements in this filing which are not historical facts are
forward-looking statements under the provisions of the Private Securities
Litigation Reform Act of 1995. All forward-looking statements involve risks
and uncertainties. These statements are based on numerous assumptions about
future conditions that could prove not to be accurate. Actual events,
transactions or results may materially differ from the anticipated events,
transactions or results described in such statements. The Companys ability to
consummate such transactions and achieve such events or results is subject to
certain risks and uncertainties. In addition to those specifically mentioned
above, factors that could adversely affect future events, transactions or
results include, but are not limited to, unfavorable economic conditions,
disruptions or other effects related to terrorism and acts of war, the
existence of demand for, and acceptance of, the Companys products and
services, regulatory approvals and developments, economic conditions, the
impact of competition and pricing, new product offerings by competitors,
successful completion of special engineering projects, successful completion of
long-term production contracts, and other risks and factors as are described
from time to time in the Companys Securities and Exchange Commission filings,
including but not limited to, the risks detailed in the Risk Factors section
of the Companys Annual Report on Form 10-KSB for the year ended December 31,
2001. The forward-looking statements contained in this Form 10-QSB speak only
as of the date on which they are made, and the Company undertakes no obligation
and does not intend to update or revise these forward-looking statements to
reflect events or circumstances that occur after the date of this filing.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses, and related disclosure of contingent
assets and liabilities. We evaluate our estimates on an on-going basis. We
base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances. Actual results may
differ from these estimated under different assumptions or conditions. We
believe the following critical accounting policies and related judgments and
estimates affect the preparation of our consolidated financial statements.

Revenue Recognition The Company recognizes revenue from commercial sales
of micro cables, connectors, assemblies and related supplies when title passes,
which is upon shipment. Commercial sales are made F.O.B. point of shipment.
Returns are limited to nonconforming products.

Development contracts are structured on a cost or cost plus basis.
Revenue from development contracts for non-recurring engineering is recognized
using the percentage of completion method as time and materials costs are
incurred. Revenue from contracts for the production of prototypes is
recognized when the title passes, which is upon shipment. Prototypes are
tested at the Companys facility for customer specifications prior to shipment.

Revenue on government contracts and grants is recognized as time and
material costs are incurred using the percentage of completion method. The
government generally provides grants to perform specific research and is not
the ultimate customer.

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Intangible and Other Assetsprimarily represent patent costs that are
amortized using the straight-line method over their estimated useful lives or
15 years, whichever is shorter, once the technology is completed and in use.
Management periodically evaluates the recoverability of intangibles based on
current and anticipated income and undiscounted future cash flows. The
recoverability of our intangible asset costs depends in part on the development
of additional commercial products from those technologies, the acceptance of
such products in the marketplace, and our ability to generate significant
revenues and cash flows from these products.

RESULTS OF OPERATIONS

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001

Total sales for the quarter ending September 30, 2002 were $1,357,000 compared
to total sales of $1,384,000 recorded in the quarter ending September 30, 2001.
This decline in sales of $27,000 consisted of a $97,000 decrease in wire and
cable sales offset by a $71,000 increase in government grant revenues. The
decline in wire and cable sales from the same period a year ago is primarily
attributed to the continued reduction in ultrasound demand. The increase in
government contracts is a result of the Company being awarded a new grant
during the third quarter of 2002, as well as completing significant portions of
two existing contracts.

Total sales for the nine-month period ending September 30, 2002 were $3,660,000
compared to total sales of $4,739,000 recorded during the same nine-month
period ending September 30, 2001. Of the $1,079,000 reduction in sales,
$775,000 relates to wire and cable sales and the balance of $304,000 is
associated with government contracts. Again, the reduction in the wire and
cable sales can be primarily attributed to the decreased demand in ultrasound
while the decline in government contracts as a source of sales was expected.

Gross profit margin for the quarter ending September 30, 2002 was slightly
positive compared to a negative 16% earned during the quarter ending September
30, 2001. On an absolute dollar basis, for the quarter ending September 30,
2002 gross profit was $12,000 compared to a gross loss of $223,000 earned a
year ago in the same quarter. The primary difference between the margins in
these quarters is that during the third quarter of 2001, the Company continued
to ship, under an agreed development contract, cable products at a negative
margin.

Gross margin for the nine months ending September 30, 2002 was a negative 3%
compared to a positive gross profit margin of 14% recorded for the nine months
ending September 30, 2001. On an absolute dollar basis for the nine months
ending September 30, 2002 gross loss was $94,000 compared to a gross profit of
$649,000 earned during the nine months ending September 30, 2001. The reasons
for the decline in the gross profit margin and the unfavorable comparison
between the nine-month periods can be attributed to an overall decline in our
ultrasound business and the decline in government contracts as a source of
revenue. We are beginning to see some additional orders for production for
our Mexican facility. As production at this facility increases, we anticipate
improved gross margins resulting from fixed costs being allocated over a higher
volume. Although we cannot guarantee these results, we have already
experienced improved margins during the third quarter of this year.

Research and development expenses were $180,000 in the third quarter of 2002,
compared to $10,000 in the third quarter of last year. For the nine-month
period ending September 30, 2002, research and development expenses were
$434,000 compared to $80,000 for the nine-month period ending September 30,
2001. The increases in these expenses in both referenced periods reflects the
Company building up its product development capability in order to be less
dependent on directed government grant sources. In addition, again covering
both the third quarter and the nine-month comparative time periods,
improvements have been made in the methods used to allocate cost between
research and development and cost of sales.

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Sales and marketing expenses were $226,000 in the third quarter of 2002,
compared to $70,000 in the third quarter of last year. For the nine-month
period ending September 30, 2002, sales and marketing expenses were $641,000,
compared to $273,000 for the nine-month period ending September 30, 2001.
These increases, in both comparative time periods, are almost entirely due to
adding an external sales force along with increasing the number of inside sales
representatives.

General and administrative expenses were $518,000 in the third quarter of 2002,
compared to $506,000 in the third quarter of last year. For the nine-month
period ending September 30, 2002, general and administrative expenses were
$1,647,000, compared to $1,141,000 for the nine-month period ending September
30, 2001. The major factor contributing to these increased expenses in both
the comparative third quarter and nine-month time periods are costs related to
transitioning from a privately held company to a publicly held company. Such
costs include additional legal and auditing fees; insurance premiums; investor
relations fees; and printing expenses associated with the additional financial
reporting requirements. In addition, expenses have increased this year
compared to last year due to hiring a Chief Financial Officer and other
necessary administrative personnel.

Other expense, net was $24,000 in the third quarter of 2002, compared to
$170,000 in the third quarter of last year. For the nine-month period ending
September 30, 2002, other expense, net was $68,000 compared to $448,000
incurred in the nine-month period ending September 30, 2001. This reduction in
other expense is primarily a result of the decrease in interest expense due to
the retirement of approximately $3.2 million of debt from a portion of the
proceeds from the Companys initial public offering that was completed in
November 2001.

LIQUIDITY AND CAPITAL RESOURCES

THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001

The Company completed its initial public offering on November 16, 2001 and
received net proceeds, after underwriting commissions and financing costs, of
approximately $11.4 million. The Company used approximately $3.2 million of
such net proceeds to reduce debt. The Companys cash position as of September
30, 2002 was approximately $2.4 million, of which approximately $600,000 is
held in a restricted short-term investment account.

During the third quarter ended September 30, 2002, the Company used $1,395,000
of cash for operations, compared to $454,000 used for operations in the same
quarter a year ago. This increased use of cash for operations was primarily
due to an increased operating loss of $937,000, offset by decreased accounts
receivable collections of $653,000 in the third quarter of this year compared
to the same quarter of last year.

For the nine-month period ended September 30, 2002, the Company used $3,710,000
of cash for operations compared to $850,000 used for operations during the same
nine-month period a year ago, or a net increase in cash used for operations of
$2,860,000. This increased use of cash for operations was primarily due to
increased operating losses of $1,590,000. The remaining cash used difference
of $1,270,000 is composed of several offsetting factors. The primary factors
consist of interest payments made to shareholders of $601,000, reductions in
accounts payable and accrued liabilities of $1,592,000, increased collections
of accounts receivable of $310,000 and reductions in inventory purchases of
$330,000.

During the period from December 31, 2001 to September 30, 2002, the total cash
balance changed from $7,353,000 to $1,756,000, or a net decrease of $5,597,000.
As of September 30, 2002, the Company had a cash balance of $1,756,000
compared to a cash balance of $4,000 as of September 30, 2001.

In December 2001, the Company entered into a revolving line of credit and
equipment loan agreement with a bank. The line of credit allowed the Company
to borrow up to $2.0 million at prime plus 1%. As

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of September 30, 2002, the line of credit was paid in full resulting in a zero
balance, and $571,000 was outstanding on the equipment loan agreement. The
Company has set up a restricted short-term investment account so the bank has a
full collateral position against the outstanding loan balance. As a result of
this change there are no longer covenants in place

The following table discloses the Companys contractual cash obligations as of
September 30, 2002:

|                                         |  |                        |           |                  |  |           |         |  |  |   |         | 
|---------------------------------------- |  | ---------------------- | --------- | ---------------- |  | --------- | ------- |  |  | - | ------- | 
|                                         |  | Payments Due by Period
|                                         |  |                       
|Contractual Obligations                  |  | Total                  |           | Less than 1 year |  | 1-3 years
|                                         |  |                        |           |                  |  |          
|Operating leases, net of sublease income |  | $                      | 82,729    |                  |  | $         | 58,932  |  |  | $ | 45,246  | 
|Long-term debt                           |  |                        | 571,003   |                  |  |           | 250,000 |  |  |   | 321,003 | 
|Long-term debt to shareholder            |  |                        | 1,135,000 |                  |  |           | 535,000 |  |  |   | 600,000 | 
|                                         |  |                        |           |                  |  |           |         |  |  |   |         | 
|Total contractual cash obligations       |  | $                      | 1,788,732 |                  |  | $         | 843,932 |  |  | $ | 966,249 | 
|                                         |  |                        |           |                  |  |           |         |  |  |   |         | 




ITEM 3. CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation was
carried out under the supervision and with the participation of the Companys
management, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of our disclosure controls and
procedures. Based on that evaluation, the CEO and CFO have concluded that the
Companys disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. Subsequent to the date of their
evaluation, there were no significant changes in the Companys internal
controls or in other factors that could significantly affect the disclosure
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

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PART II  OTHER INFORMATION




ITEM 5. OTHER INFORMATION

On September 9, 2002, the Company was notified by NASDAQ that it was not in
compliance with Marketplace Rule 4310(c)(8)(D) (the Marketplace Rule) of the
NASDAQ listing requirements because during the 30 consecutive trading days
preceding notification, the Companys common stock closed under the minimum
$1.00 per share requirement. The Company has been given 180 days, or until
March 10, 2003, to regain compliance. If, at anytime before March 10, 2003,
the bid price of the Companys common stock closes at $1.00 per share or more
for a minimum of 10 consecutive trading days, the Company will generally be
considered in compliance with the Marketplace Rule. If the Company does not
comply with the Marketplace Rule within the 180 day period, the Company will be
granted an additional 180 days, or until September 9, 2003, to comply, provided
that the Company has a stockholders equity of at least $5.0 million, a market
value of listed securities of $50.0 million, or net income from continuing
operations of $750,000 in the most recently completed fiscal year or in two of
the last three most recently completed fiscal years. As of September 30, 2002,
the Companys stockholders equity was $8.6 million. The Company currently
expects, but cannot guarantee or otherwise assure, that its stockholders
equity will be greater than $5.0 million as of March 10, 2003, and it therefore
will qualify for the 180-day extension, if required. If the Companys
stockholders equity is less than $5.0 million on March 10, 2003, the Companys
securities will be delisted by NASDAQ, subject to the Companys right to appeal
such delisting.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



| | (a) |  | Exhibits:
| | --- |  | ---------

| |  |              |  |                                                                                                                       
| |  | ------------ |  | ----------------------------------------------------------------------------------------------------------------------
| |  | Exhibit 99.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002
| |  |              |  |                                                                                                                       
| |  | Exhibit 99.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002



| | (b) |  | Reports on Form 8-K:
| | --- |  | --------------------

| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Current Reports on Form 8-K filed during the three months ended
September 30, 2002:                                                                                                              
|
| | Form 8-K: Financial Results for the Quarter Ended June 30, 2002 filed
on July 25, 2002                                                                                                           
|
| | Form 8-K: Promotion of Ty Pettit from Chief Operating Officer to
President and Chief Executive Officer, as well as the Companys Initiation of
a Cost-Reduction Program filed on August 27, 2002.

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##### Table of Contents






SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                                             |  |                                                                     |  |                  
|-------------------------------------------- |  | ------------------------------------------------------------------- |  | -----------------
|Signature                                    |  | Title                                                               |  | Date             
|                                             |  |                                                                     |  |                  
|                                            
|/s/   Tyram H. PettitTyram H. Pettit         |  | President,
Chief Executive Officer and
Director                     |  | November 13, 2002
|                                            
|/s/   Terrence A. RixfordTerrence A. Rixford |  | Senior Vice President-Finance,
Chief Financial Officer and
Director |  | November 13, 2002

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##### Table of Contents






CERTIFICATIONS

I, Tyram H. Pettit, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of microHelix,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
the Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|
| | b. evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c. presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        

5. The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing the
equivalent function):

| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|
| | b. any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

6. The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



|Date: November 13, 2002 | /s/   Tyram H. PettitTyram H. Pettit
President and Chief Executive Officer
|----------------------- | --------------------------------------------------------------------------

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##### Table of Contents



CERTIFICATIONS

I, Terrence A. Rixford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of microHelix,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
the Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|
| | b. evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c. presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        

5. The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing the
equivalent function):

| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|
| | b. any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

6. The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



|Date: November 13, 2002 | /s/   Terrence A. RixfordTerrence A. Rixford
Senior Vice President-Finance
and Chief Financial Officer
|----------------------- | ------------------------------------------------------------------------------------------------------

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