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

                                   FORM 10-KSB

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended: December 31, 2000

                         Commission file number: 0-28154



                              SMLX TECHNOLOGIES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its Charter)



           Colorado                                        84-1337509
-------------------------------                        -----------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

                 855 SOUTH FEDERAL HIGHWAY, BOCA RATON FL. 33432
           -----------------------------------------------------------
          (Address of principal executive offices, including zip code)

                                 (561) 347-0761
                           ---------------------------
                           (Issuer's telephone number)

Securities Registered Pursuant to Section 12(b) of the Act:  None.

Securities Registered Pursuant to Section 12(g) of the Act:  Common Stock,
                                $.0001 Par Value


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 [ ]

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

The Issuer's revenues for its most recent fiscal year were $1,613,387

As of April 12, 2001,  12,104,648  shares of the Registrant's  common stock were
outstanding, and the aggregate market value of the shares held by non-affiliates
was approximately $721,000

DOCUMENTS INCORPORATED BY REFERENCE: None.

Transitional Small Business Disclosure Format (check one): Yes __   No X

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BACKGROUND

     SMLX Technologies, Inc. (the "Company") was incorporated under Colorado law
on October 26, 1987,  under the name The  Trader's  Edge Ltd. On March 28, 1996,
the name was changed to Music Tones Ltd.  The  Company  was  generally  inactive
through  December  31,  1996.  On March 28,  1997,  the  Company's  shareholders
approved  changing the Company's name to Simplex Medical  Systems,  Inc., and on
August 20, 1998, the Company's shareholders approved changing the Company's name
to SMLX Technologies, Inc.

     In  April  1996,  the  Company  filed a  registration  statement  with  the
Securities and Exchange  Commission on Form 10-SB,  which  registered its Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended.

     On March 5, 1997,  the Company  completed a reverse  acquisition of 100% of
the  outstanding  common  stock of  Simplex  Medical  Systems,  Inc.,  a Florida
corporation   ("Simplex-Florida")  in  exchange  for  3,453,000  shares  of  the
Company's  Common Stock which resulted in the  shareholders  of  Simplex-Florida
acquiring  approximately 46.04% of the shares outstanding after the transaction.
In connection with the closing of this transaction,  several shareholders agreed
to cancel a total of 31,953,000  shares of Common Stock. As a result,  after the
acquisition  of   Simplex-Florida   there  were  a  total  of  7,500,000  shares
outstanding.

     Unless the context otherwise requires,  the term "Company" herein refers to
the  Company  and  its  wholly-owned  subsidiaries,   Simplex-Florida,   Analyte
Diagnostics, Inc. ("ADI"), and IRT Management Corp. ("IRT"). Simplex-Florida was
incorporated  in Florida in September  1995, ADI was  incorporated in Florida on
June 6,  1995,  and  IRT was  incorporated  in  Florida  on  January  14,  1997.
Simplex-Florida  changed its name to SMLX  Technologies of Florida,  Inc. during
November 1998.

VECTOR MEDICAL AGREEMENT

     In April 1999, the Company  entered into an Exclusive  Licensing  Agreement
with Vector Medical  Technologies,  Inc. ("Vector") with regard to the Company's
assets and technologies involving certain drug delivery system products.  Vector
received a ten year exclusive  license for any products sold under this contract
in exchange for a royalty of 3% to 4% net  revenues.  Vector is also required to
pay the Company  non-refundable  advances  against future  royalties of at least
$900,000  per year to be used  solely for  feasibility  studies  relating to the
technologies  to be performed by the Company or its  subsidiary.  Vector has the
right to  discontinue  the payments and  terminate  its rights in the event that
adverse  reaction to the  technologies  occur in patients or should efficacy not
qualify for  submission to the FDA for subsequent  approval.  Also, in the event
that Vector  fails to make  payments,  and does not cure the default upon notice
from the  Company,  the  agreement  will  become  null and void and the  license
terminated without further obligation or liability of either company.

                                       2
<PAGE>

     The Company also granted to Vector a right to purchase  the  subsidiary  or
its assets for a four year period at a price  ranging  from $3.6 to $6.6 million
(less  amounts  paid)  depending  on the  amount of gross  sales from the assets
during  the prior 12 months.  The  purchase  price  could be paid all or part in
shares of Vector's common stock under certain  circumstances  if such shares are
traded on Nasdaq or the American or New York Stock Exchange.  However, Vector is
not currently publicly-held.

     During 2000, the Company received  $900,000 in advance  royalties under the
transdermal Delivery license agreement with Vector.

     The Company had two other  agreements  with Vector  during 2000,  one which
licenses  certain  cosmeceutical  products  to Vector on a short  term basis and
requires Vector to make payments of $25,000 per month,  and the other in respect
of certain electro-sensor  technology.  The agreement concerning  electro-sensor
technologies has been terminated.

     Vector has not make the  payment  due on April 1, 2001 under  either of its
outstanding  agreements  with the  Company,  and as a result,  the Company  sent
Vector a default letter on April 3, 2001.

AGREEMENT WITH HELVESTAR

     On May 3, 1999 the Company signed a joint venture  agreement with HelveStar
S.A., a Swiss technology  holding company.  The agreement outlined the formation
and  capitalization  of  Biostar,  S.A.  for the  purposes  of  commercializing,
manufacturing,   marketing,   and  selling  the  company's  present  and  future
technologies   and  products.   This  agreement   excluded  any  transdermal  or
cosmeceutical technology products. Biostar was to be funded by HelveStar who was
to own sixty percent, with SMLX owning forty percent.

     Upon the execution of this agreement, the Company granted HelveStar a stock
option for 900,000  shares of the Company's  stock at an exercise price of $1.58
per share.  Within 24 months of the execution of this  agreement,  HelveStar had
the right to purchase a total of 2,250,000  shares of the Company's  stock.  The
purchase  price of the shares on the date of purchase  was to have been equal to
50% of the closing price of the Company's stock on the latest price trading date
on which at least 5,000 shares were traded.

     The agreement also granted BioStar a 99-year  exclusive  worldwide  license
for the  commercialization,  marketing and  production of all the Company's core
products and technology, subject to the Company's valid existing distributorship
agreements.  In addition, the agreement called for the transfer of the Company's
non-core  technologies  to  BioStar  which  had  agreed  to  purchase  them  for
$2,400,000 payable in monthly  installments of $100,000 for 24 months commencing
in May 1999. As of December 31, 1999,  the Company had received  $300,000.,which
is included in research and development services revenue.

     During  2000,  the  Company  filed suit for  damages  and to void the joint
venture agreement.  In this lawsuit,  the Company has fraud,  misrepresentation,
and breach of  fiduciary  duty and also alleged that  defendants  induced  SMLX,
through misrepresentations,  to enter into various agreements that constituted a
joint venture.  As a result, the Company seeks damages and confirmation that the
joint  venture is null and void.  HelveStar  S.A. has  counter-claimed  alleging
breach of fiduciary duty. Discovery is ongoing.

                                       3
<PAGE>

DESCRIPTION OF BUSINESS

     GENERAL

     SMLX is engaged in the business of developing  technological  solutions for
the medical,  dental and other  industries and then bringing the technologies to
the marketplace.

     In October 1999, the Company's  quality  management system was approved for
ISO 9001, BS EN 9001,  and ANSI/ASQC  Q9001-1994  certification  for the design,
development and manufacture of dental air abrasion devices. In January 2000, the
Company also received EN 46001:1996 certification in this category.

     ISO (the  International  Organization for  Standardization)  is a worldwide
federation   of  national   standards   bodies   dealing  with  quality   system
requirements.  The mission of ISO is to create a system  that,  when adhered to,
prevents  deviations  from specific  quality  requirements at all product stages
from design to service.

     The   Company  has  also  met  all  of  the   requirements   and  has  been
self-certified  to stamp dental air abrasion  products shipped into the European
Union ("EU") with a "CE" symbol called the "CE Marking",  which  certifies  that
the products meet the  requirements of all relevant EU directives.  Products can
no longer be sold in the EU without the "CE" mark.

     THE COMPANY'S PRODUCTS

     The Company's products are as follows:

          1.   Drug Delivery Systems - Licensed to Vector Medical  Technologies,
               Inc.

          2.   Dental products.

               (a)  Airbrator(R)  for  polishing,  cleaning and  abrading  teeth
                    (cleared  for  marketing  by  FDA  and  for  "CE"  mark  for
                    marketing in EU).

               (b)  Airbrator(R) for use in cavity preparation  (510(k) approved
                    by FDA: cleared for "CE" mark for marketing In EU)

          3.   Equine products in testing.

               (a)  Bioven - anti-inflammatory drug (submitted to USDA).

               (b)  Equine infectious anemia rapid test.

          4.   Cosmetic line developed under contract with Vector


     A. DRUG  DELIVERY  SYSTEMS.  On April 13, 1999 the Company  entered into an
Exclusive Licensing Agreement and Purchase Option Agreement with Vector pursuant
to  which  the  Company  agreed  to  transfer  to a to be  formed,  wholly-owned
subsidiary,  all of its proprietary technical know-how,  patent applications and
other assets related to the technologies for the transdermal

                                       4
<PAGE>

delivery of drugs and other  natural and  synthetic  materials,  and to grant to
Vector an exclusive ten year license to these assets.  In return,  Vector agreed
to pay to the  Company  non-refundable  advances  against  future  royalties  of
$900,000  per year  payable  monthly in payments of  $75,000.  The Company  will
receive  a  royalty  of 3% to 4% of  the  net  sales  derived  from  the  assets
transferred, depending on whether or not the assets giving rise to the sales are
covered by a patent.  Vector may pay the advance  royalties for a period of four
years subject to the option to purchase the subsidiary.  Commencing on April 13,
2000  Vector has the option to  purchase  the  subsidiary  and cease  paying the
advance royalties for a purchase price ranging from $3.6 million to $6.6 million
depending  on the  amount  of gross  sales  attributable  to the  assets  in the
preceding twelve-month period. As of the date of this Report, the subsidiary has
not been  formed.  The  subsidiary  to be formed will be devoted to research and
development work on the technology transferred to the subsidiary.

     C. DENTAL AIRBRATOR(R).  The Company has developed and received patents and
FDA approval on a disposable  handpiece  which attaches to standard air abrasive
etching  devices  used by dentists  for tooth  bonding  procedures.  The product
effectively  abrades  the  surface  of  teeth,  but has no effect at all on soft
tissue.   Because  it  is  disposable   and  there  is  no  need  for  extensive
sterilization procedures, the product expedites the handling of patients.

     During  April 1997 the Company  received a letter from the FDA stating that
the FDA had  completed the  scientific  review  portion of the Company's  510(k)
pre-market  notification  regarding the  Airbrator(R),  and the Airbrator(R) was
cleared for  marketing in the United  States for the use of abrading the surface
of teeth.  Subsequently,  in response to the Company's second 510(k)  pre-market
notification  regarding  the  Airbrator(R),  the Company was  informed  that the
Airbrator(R) was cleared for use in cavity  preparation.  The Company's contract
manufacturer is currently an FDA registered manufacturing facility.

     During July 1997, the Company  entered into a  Distribution  Agreement with
Sybron  Dental  Specialties,  Inc.  ("Sybron")  which  appointed  Sybron  as the
exclusive  worldwide  distributor for the Airbrator(R).  Several of the terms of
this agreement were amended during December 1997. Sybron paid a $30,000 one-time
license  fee to the Company  during 1997 for the grant of this  distributorship.
This agreement was terminated effective December 31, 1998.

     D. BIOVEN is an injectable, anti-inflammatory drug which has been tested as
a treatment  for joint  inflammation  in horses.  These tests were  conducted at
three sites in Florida.  One of the Company's  officers  developed  BIOVEN after
fifteen  years of  extensive  research in the field of  immunology.  BIOVEN is a
result of years of experimentation, evaluation and historical study in the field
of peptide  use.  The BIOVEN mode of action is believed to function by reversing
the   chemical/immunological   imbalances   that  are  present  in  inflammatory
processes.

     E. EQUINE  INFECTIOUS  ANEMIA  RAPID  TEST.  This is a rapid serum test for
equine  infectious  anemia.  It utilizes a procedure that is simpler to run than
the other two available tests (the Coggin's test or the ELISA test), and it does
not  require  a  trained  technician  to  perform.  The  Company  has  completed
development  of this test and is currently  working with a distributor in Brazil
which has applied for approval from Brazilian  regulatory  authorities to market
the product in Brazil.  The Company has submitted  this test product to the U.S.
Department of Agriculture  for its approval.  A patent has been applied for with
respect to this technology.

                                       5
<PAGE>

     RESEARCH AND DEVELOPMENT

     The Company spent $223,858 and $177,712 on research and  development of new
products  during the years  ended  December  31,  2000 and  December  31,  1999,
respectively,  and it expects to spend an increased amount in the current fiscal
year on development of the products described above in addition to others.

     MARKET

     The Company is starting to market its dental airbrator through distributors
on both an exclusive and  non-exclusive  basis  depending on the  quantities and
territory desired.  The Company will continue to seek license agreements for its
other technologies as they are perfected.

     GOVERNMENT REGULATION

     The  development,  manufacture,  testing  and  marketing  of the  Company's
diagnostic  products and the  Airbrator(R)  are subject to regulation by the FDA
and  other  federal,  state and  foreign  agencies.  Under the FDC Act,  the FDA
regulates almost all aspects of development,  marketing and sale,  including the
introduction,   clinical   trials,   advertising,    manufacturing,    labeling,
distribution of and record keeping for the products in the United States.

     Other than the dental  products,  no FDA approval has yet been received for
any of the Company's  products and there can be no assurance  that such approval
will ultimately be obtained.

     During  April 1997 the Company  received a letter from the FDA stating that
the FDA had  completed the  scientific  review  portion of the  Company's  first
510(k)  Pre-market  Notification  regarding  the  Airbrator(R),   and  that  the
Airbrator(R)  was  released for  marketing  in the United  States for the use of
abrading, polishing and cleaning the surface of teeth. Subsequently, in response
to  the  Company's   second  510(k)   Pre-market   Notification   regarding  the
Airbrator(R),  the Company  was  informed  verbally  that the  Airbrator(R)  was
technically cleared for use in cavity preparation,  and management expects it to
be cleared for marketing once the FDA has inspected the  manufacturing  site and
determined that it complies with the FDA's requirements.  The Company's contract
manufacturer is currently an FDA registered manufacturing facility.

     FOREIGN REGULATION

     Agencies  similar  to the FDA  regulate  medical  devices  in some  foreign
countries,  whereas other countries allow unregulated marketing of such devices.
The Company's products will be required to meet the regulations,  if any, of the
foreign countries in which they are marketed. Once a product has been registered
in a foreign  country,  the  Company  is  required  to obtain a  certificate  of
exportability  from the FDA before the product  can be shipped  from the U.S. to
that country.

     MANUFACTURING

     The Airbrator(R) is manufactured by East Coast Plastics, a contract molding
company and these and other  components are then filled,  assembled and packaged
and shipped by East Coast Plastics.

                                       6
<PAGE>

     The Company  believes that most  components  used in the manufacture of its
current and proposed  products are currently  available from numerous  suppliers
located in the United States,  Europe and Asia. However,  certain components are
available only from a limited number of suppliers. Although the Company believes
that it will not encounter difficulties in obtaining these components, there can
be no  assurance  that  the  Company  will be able to  enter  into  satisfactory
agreements or  arrangements  for the purchase of  commercial  quantities of such
components.

     The  Company   anticipates  that  it  will  not  be  required  to  maintain
significant inventory levels of products until the Company's products are deemed
acceptable for sale.  The Company does not currently have any material  backlog.
Until the Company is able to market its products on a broad  basis,  it does not
anticipate that its backlog or inventory  level will be material.  At that time,
the Company  intends to cause these products to be  manufactured  for it shortly
before they are  required  for  shipment.  The Company  does not foresee that an
extensive  period of time will be  required  from the time of its  manufacturing
order to the time of final delivery of its products.

     MAJOR CUSTOMERS

     During the year ended  December  31,  2000,  the  Company's  revenues  were
primarily derived from two sources.  Vector Medical paid the Company  $1,280,800
under various agreements,  which represented 79% of the Company's revenues,  and
BioStar paid the Company  $332,587 for Dental  Airbrators  under a joint venture
agreement,  representing 21% of the Company's revenues. The Company is dependent
on these two sources of revenue.

     COMPETITION

     The markets in which the Company  participates are highly competitive.  The
Company is aware of  specialized  biotechnology  firms,  universities  and other
research  institutions  which  have  patented,   developed,  or  are  developing
technologies and products which are competitive with the Company's  products and
technologies.  These entities, most of which are established, have substantially
greater research, marketing and financial resources than the Company.

     PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION

     The Company owns the rights to U.S. Patent Number  6004191,  dated December
21, 1999,  which relates to its Airbrator(R)  product.  The Company has licensed
its rights  (which is now in  litigation)  under this  Patent to  BioStar,  S.A.
However,  as discussed  above (See  "--Agreement  with  Helvestar")  the Company
believes  that BioStar is in default of this license  agreement  and the Company
has given BioStar notice that the license agreement has been terminated.

     The Company also owns the rights to U.S.  Patent Number  5424219 dated June
13, 1995, which relates to the "Method of Performing Assays for Biomolecules and
Solid  Supports  for Use in Such  Methods."  The Company has licensed its rights
under  this  Patent  to  Polyfiltronics,   Inc.  (See  "License  Agreement  with
Polyfiltronics, Inc." below.)

     The  Company  also has pending  patent  applications  in the United  States
relating  to other  applications  for other  technologies  which the  Company is
developing.

                                       7
<PAGE>

     Much of the  technology  developed  or owned by the  Company  is subject to
trade secret  protection.  To reduce the risk of loss of trade secret protection
through disclosure, the Company generally enters into confidentiality agreements
with  its  employees.  There  can be no  assurance  that  the  Company  will  be
successful in maintaining  such trade secret  protection or that others will not
capitalize on certain of the Company's technology.

     The Company has also  registered  four  trademarks with the U.S. Patent and
Trademark   Office.   These  include  the  trademarks   "Simplex,"   "Neemodex,"
"Airbrator(R)," and "Cytech."

     LICENSE AGREEMENT WITH POLYFILTRONICS, INC.

     In June 1998, the Company  entered into an agreement  with  Polyfiltronics,
Inc. which grants  Polyfiltronics  an exclusive  license of the Company's rights
under a patent  owned by the  Company  relating to a micro  titer  filter  plate
technology  and an opaque  wall  micro  strip  system.  Polyfiltronics  paid the
Company  $40,000 for the license and certain  related tools and molds,  and will
pay a royalty to the Company  based on a percentage  of sales of products  using
the  technology.  The term of the license is for twenty years or the life of the
patent, whichever is shorter.

     Polyfiltronics  is a U.S.  subsidiary  of Whatman PLC, an English  company,
with a worldwide  presence  in  research  laboratories,  academic  and  teaching
facilities and industrial laboratories.  Polyfiltronics is a technical leader in
filter plate technology. Filter plates are commonly used in medical diagnostics,
forensic medicine, DNA research,  drug discovery and other scientific fields for
the analysis of small quantities of chemical or biological components.

     ACQUISITION OF MINORITY INTEREST IN AUTOMATED HEALTH TECHNOLOGIES, INC.

     During May 1998,  the Company  acquired a 19% interest in Automated  Health
Technologies,  Inc.  ("AHT") in  exchange  for 500,000  shares of the  Company's
Common  Stock.  The  shares  were  exchanged  pursuant  to the  terms of a Share
Exchange  Agreement  dated May 20, 1998,  between the Company and AHT. The Share
Exchange  Agreement  provides  that AHT has the right to require  the Company to
exchange an additional 1,000,000 shares of Common Stock for all of the remaining
outstanding shares of AHT under certain conditions.  AHT may exercise this right
prior to May 20, 2003,  if, at the time of  exercise,  AHT has a net worth of at
least  $200,000,  no debt  other  than up to  $25,000  in  trade  payables,  and
year-to-date positive cash flow. In addition,  AHT may exercise this right if it
sells the business of its subsidiary - Rx Automation  Incorporated,  and escrows
$1,000,000 from the proceeds of such a sale. In the event that AHT exercises its
right,  the  Company  and AHT will in good  faith  negotiate  a merger  or other
exchange  agreement  necessary  to effect the  additional  exchange,  and file a
registration statement on Form S-4 to register the transaction.

     AHT is a medical services  company that processes  pharmacy and retail drug
store expired drug returns.

FLORIDA INTERNATIONAL UNIVERSITY

     The  Company  has  entered  into  a  contract  with  Florida  International
University for it to provide certain advance research  services  relating to the
Company's Airbrator[TM] technology.

                                       8
<PAGE>

     EMPLOYEES

     The Company  currently  has 6 employees.  The Company is not subject to any
collective  bargaining  agreement and believes that its  relationships  with its
employees are good.

ITEM 2.  DESCRIPTION OF PROPERTY.

     The Company  presently  maintains  its  corporate  offices  855 S.  Federal
Highway,  Boca Raton, Fl. and its laboratory  warehouse  facilities at 376 Ansin
Boulevard,  Hallandale,  Florida  33009.  The five  year  lease  on  Ansin  Ave.
facilities  commenced  April 1, 1998, and requires  monthly  rental  payments of
$4,900  plus  tax.  The  Company  has the  option  to renew  the  lease for five
additional  years. The Executive  offices in Boca Raton require monthly payments
of $420 per month without a lease.

ITEM 3.  LEGAL PROCEEDINGS.

     The law suits  described  below are the pending legal  proceedings in which
the  Company is a party,  and the  Company is not aware of any other  threatened
legal proceedings involving the Company.

     American   Diagnostics,   Inc.,  Americare  Health  Scan,  Inc.,  Americare
Transtech,  Inc.  International Medical Associates,  Inc., Joseph P. D'Angelo v.
Technical   Chemicals  and  Products,   SMLX   Technologies,   Inc.,   Case  No.
97-3654-CIV-Huck  (Southern District of Florida, Miami Division). The suit seeks
damages in excess of $75,000 against the defendants in connection with a glucose
monitoring system that the plaintiffs allege they have exclusive rights to. SMLX
has been  named  as a party  only  because  it  employed  certain  of the  other
defendants,  as  SMLX  does  not  sell  any  products  relating  to the  glucose
monitoring  system.  One  of  the  other  defendants,  Technical  Chemicals  and
Products,  Inc., has settled with the plaintiffs.  The nature of that settlement
is unknown to SMLX.  A  preliminary  hearing on certain  patent  issues is being
scheduled for May 2001. SMLX denies any wrong doing,  and intends  vigorously to
defend against the action.  What damages, if any, SMLX may suffer as a result of
the action are too uncertain at this time to project.

     C&O Trading  Corp.  v. Analyte  Diagnostics,  Inc.,  SMLX  Technologies  of
Florida,  Inc. f/k/a/ Simplex Medical  Systems,  Inc.,  Giant Export  Management
Corp. (arbitration proceeding). The demand seeks damages against the Company for
the alleged breach of an exclusive  distribution  agreement for the marketing of
HIV saliva test kits in certain South American  countries.  The amount sought is
in excess  of  $60,000.  Discovery  will be  commencing.  At this time it is not
possible to assess what damages, if any, the Company may be held liable for.

     Joseph P. D'Angelo,  Americare Transtech, Inc., American Biologicals,  Inc.
v. Henry B. Schur, Nicholas G. Levandoski, SMLX Technologies. Case No. 99-010263
(Circuit  Court,  Broward  County).  The  plaintiffs  have  filed a  declaratory
judgment  seeking   indemnification   against  the  Company  in  the  amount  of
approximately  $3,000,000  to pay  judgments  in  that  approximate  amount  the
plaintiffs  have  against  two  judgment  debtors,  one  present  and one former
employees of the Company.  The plaintiffs  alleged  indemnification  is required
based on written  employment  agreements  between the  Company and the  judgment
debtors. The Company denies any liability and plans to vigorously defend against
the action. The Court recently denied the Company's motion for summary judgment.
The matter is scheduled for trial in April 2001.

                                       9
<PAGE>

     John Faro v. Simplex Medical Systems,  Inc., Nicholas Levandoski,  Henry B.
Schur,  John Trafton,  Debra Ross.  Case No.  98-19091 CA (04)  (Circuit  Court,
Miami-Dade  County).  Third  amended  complaint  filed,  answer and  affirmative
defense to as been filed.  Complaint alleges breach of share transfer  agreement
for failure to timely transfer shares of Simplex,  securities  fraud,  breach of
consulting agreement, and civil theft (only against Schur, Trafton, and Ross)and
tortuous interference (only against Schur, Trafton, and Ross).

     SMLX  Technologies,  Inc. v. Reuben Hertz. Case No. 99-016538 (13) (Circuit
Court,  Broward  County).  This claim by the Company was  voluntarily  dismissed
based on a  reasoned  assessment  of lack of  sufficient  economic  value of the
claim.  A  counterclaim  brought by Hertz  against  SMLX is still  pending in an
arbitration proceeding.

     SMLX  Technologies,  Inc.  v.  H.E.  Khundkar  Khalid  Ahmed  Hossain,  and
Helvestar S.A.. Case No.00-01429 (09) (Circuit Court,  Broward County).  Suit by
the Company against the defendants for fraud,  misrepresentation,  and breach of
fiduciary duty based on defendant  Hossain's  representation as authorized agent
of   Helvestar,    and   alleges   that   defendants   induced   SMLX,   through
misrepresentations,  to enter into various  agreements that  constituted a joint
venture.  As a result, the Company seeks damages and confirmation that the joint
venture is null and void.  The defendant  company has  counter-claimed  alleging
breach of fiduciary duty. Discovery is ongoing.

     Superior Wholesale  Products,  Inc. v. Simplex Medical Systems,  Inc., Case
No. 98-17352 CA (03) (Circuit Court,  Miami-Dade County).  The plaintiff filed a
complaint   alleging   breach  of  contract  and   interference   with  business
relationships,   seeking  $2.5  million  in  damages.  The  Company  denies  the
allegations of the complaint and filed a  counter-claim  for  interference  with
business  relationships  and for  defamation.  The Company intends to vigorously
defend against the action. At this time discovery is ongoing, it is premature to
determine what damages, if any, the Company may be subject liability.

     During  2000,  the  government  of the  United  States of  America  filed a
complaint concerning a former product of the Company. The Simplex Rapid HIV Test
Kit, and whether the Kit was manufactured in accordance with good  manufacturing
practices and received FDA approval and clearances.  The Company, in cooperation
with the  government,  agreed to enter a guilty plea to a FDA  violation  in the
sale of the Kits. The government has  recommended  payment of a fine of $150,000
and restitution of $197,500.  The Company is currently  awaiting  sentencing and
has accrued a liability of $347,500 at December 31, 2000 based on the government
recommendation.

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

     No matters were  submitted to a vote of security  holders during the fiscal
year ended December 31, 2000


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a)  MARKET   INFORMATION.   The  Company's  Common  Stock  trades  in  the
over-the-counter  market,  under the symbol  "SMLX".  Other than a few  sporadic
trades during  November 1996, the trading  commenced  during  February 1997. The
following table sets forth the high and low bid prices for the Company's

                                       10
<PAGE>

Common Stock for the periods  indicated  as reported by the OTC Bulletin  Board.
These  prices are  believed  to be  inter-dealer  quotations  and do not include
retail  mark-ups,  mark-downs,  or  other  fees  or  commissions,  and  may  not
necessarily represent actual transactions.

             QUARTER ENDED                 HIGH BID     LOW BID

             March 31, 1999                $1.88        $0.81
             June 30, 1999                 $2.25        $1.06
             September 30, 1999            $1.31        $0.81
             December 31, 1999             $1.00        $0.50

             March 31, 2000                $1.00        $0.56
             June 30, 2000                 $0.53        $0.34
             September 30, 2000            $0.50        $0.33
             December 30, 2000             $0.19        $0.03


     (b)  HOLDERS.  As of  April 7,  2000,  the  Company  had  approximately  76
shareholders  of record.  This does not include  shareholders  who hold stock in
their accounts at broker/dealers.

     (c)  DIVIDENDS.  The Company  has never paid a cash  dividend on its common
stock and does not expect to pay a cash dividend in the foreseeable future.

     (d) RECENT SALES OF UNREGISTERED  SECURITIES.  The Company did not sell any
securities that were not registered  under the Securities Act of 1933 during the
fourth quarter of the fiscal year ended December 31, 2000.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

     RESULTS OF OPERATIONS

     During the year  ended  December  31,  2000,  the  Company  had  revenue of
$1,613,387  as compared to $962,836 in the prior year.  The increase in revenues
is a result of revenues  received  under  license and joint  venture  agreements
entered into during 1999.  The improved  gross profit  margin is a reflection of
the new license and joint venture agreements.

     Operating expenses during 2000 were $1,296,341 as compared to $1,099,671 in
1999. The increase was primarily in selling, general and administrative expenses
which increased due to legal expenses incurring during 2000.

     The net loss for 2000 was  $564,646  as  compared to a net loss of $386,548
during  1999.  The  increase  in the net loss was  primarily  due to the Federal
fines, investment valuation adjustment, and legal expenses.

     LIQUIDITY AND CAPITAL RESOURCES

     As of December  31,  2000,  the Company  had a working  capital  deficit of
$(239,886)  as compared to $(14,124)  at December 31, 1999.  The increase in the
working capital deficit was primarily due to one time charges and an increase in
legal fees.

     The report of the Company's  auditors in the financial  statements  for the
year ended  December 31, 2000,  contains an explanatory  paragraph  disclosing a
going  concern  uncertainty.   Since  inception,  the  Company  has  experienced
substantial net losses aggregating  $2,625,214 and has been dependent upon loans
from stockholders and other third parties in order to fund operations to

                                       11
<PAGE>

date.  Management  believes that the revenues generated from licensing and joint
venture  agreements in place will provide the Company with  sufficient cash flow
resources to fund the operations of the Company through the current year.

     The Company currently has no material commitments for capital expenditures.

ITEM 7.  FINANCIAL STATEMENTS.

     The financial statements are set forth on pages F-1 through F-18 hereto.

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

     No response required.

                                       12
<PAGE>

                                    PART III

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

     The directors and  executive  officers of the Company and its  wholly-owned
subsidiary, their ages and positions held in the Company are as follows:

       NAME                      AGE   POSITIONS HELD AND TENURE

Kenneth H. Robertson             65    Chairman & President

Gerald M. Wochna                 58    Vice President, legal counsel & Director

Joel Marcus                      59    Chief Financial Officer and Director

Sherman O. Jones                 71    Director

     There is no family  relationship  between any Director or Executive Officer
of the Company.

     The Company has audit, compensation, executive and insurance committees.

     The Audit  Committee  currently  consists of Kenneth  Robertson  and Gerald
Wochna.  The primary  functions of the Audit  Committee  are: to  recommend  the
selection  of  independent  auditors;  review the scope and  results of the last
audit with the independent auditors;  review with management and the independent
auditors  the  Company's  last year end audit;  and make  recommendations  as to
changes needed in the Company's internal accounting and audit procedures.

     The Compensation  Committee currently consists of Sherman Jones and Kenneth
Robertson. The primary functions of the Compensation Committee are to: recommend
compensation  packages for each Executive  Officer and recommend  and/or approve
the  granting  of stock  options,  cash  bonuses  and  other  benefit  plans for
employees in accordance with the Company's stock option plan.

     The Executive  Committee currently consists of Kenneth Robertson and Gerald
Wochna.  The primary  function of the Executive  Committee is to review  certain
issues  relating  to  SMLX's  business  between  meetings  of the full  Board of
Directors.

     The  Insurance  Committee  currently  consists  of Joel  Marcus  and Gerald
Wochna. The primary functions of the Insurance  Committee are to: review current
insurance policy coverage;  recommend additional coverage and/or additional type
of insurance,  needed to properly  protect the Company's  assets;  and recommend
changes in organizational  structure that will serve to give further  protection
to the Company's assets.

     Set forth below are the names of all directors  and  executive  officers of
the  Company,  all  positions  and offices  with the  Company  held by each such
person,  the  period  during  which he has  served  as such,  and the  principal
occupations and employment of such persons during at least the last five years:

                                       13
<PAGE>

     JOEL MARCUS has served as of the Company's  Chief  Financial  Officer since
July 1999,  and as a Director of the Company  since  December  1997. He has been
self-employed  as a certified  public  accountant  in Florida since 1974 when he
became a licensed  CPA.  Mr.  Marcus  received a Bachelor  of Science  Degree in
Business  Administration  from  Hofstra  University  in New  York  in  1960  and
completed graduate studies at CW Post Tax Institute in 1963.

     KENNETH H.  ROBERTSON has been  President and Chairman of the Company since
October 1, 2000 and a Director of the Company since August 1998.  Mr.  Robertson
was   President   and  CEO  of   Conference-Call   USA,   Inc.,   a   successful
teleconferencing  company  which he co-founded in 1987 and sold in December 1996
to Citizens Utilities,  Inc. Following the sale, he has continued as CEO of that
entity, until his contract expired on Dec. 31, 1999. Mr. Robertson has extensive
experience in a diverse range of business  activities  with special  emphasis on
sales and financial management. In 1981 he moved to Florida as President and CEO
of Alo-Scherer Healthcare (now Scherer Healthcare,  Inc.) and held that position
until  1983 at which  time he  resigned  and has  remained  a  director  of this
NASDAQ-listed company.

     GERALD M. WOCHNA has been Vice president and General  Counsel since October
1, 2000 and a Director of the Company since August 1998. Since 1984, he has been
involved  in  the  formation,   financing  and   development  of  several  small
businesses,  both  individually and as a member/manager of Robertson & Partners,
L.L.C.  Since 1984,  Mr.  Wochna has been involved in land  development  and the
development, construction, leasing and financing of retail, warehouse and office
properties.  From 1973 to 1984, he practiced law with a law firm he  established
in Boca Raton,  Florida. Mr. Wochna continued to practice law on an "of counsel"
basis  from 1984 to 1989,  when he  retired  from that  profession.  Mr.  Wochna
received his Bachelor's Degree from John Carroll University,  Cleveland, Ohio in
1964, and he graduated from Cleveland State University Law School in 1968.

     SHERMAN O. JONES has been a Director of the Company  since January 2000. He
is owner of Camelback  Clearing Company,  a divesting company that purchases and
sells large quantities of grocery products throughout the Western U.S., which he
founded  in 1990.  Mr.  Jones  was  previously  employed  by IBM for 17 years in
various  sales  positions  and  as  President  of  Kansas  City  Securities,  an
institutional  brokerage firm. Mr. Jones is also a director of Automated  Health
Technologies,  Inc. He received a Bachelor's Degree in Accounting/Business  from
the University of Buffalo in 1951.

     The Company's  executive officers hold office until the next annual meeting
of the Directors of the Company.  Except as described below,  there are no known
arrangements or understandings between any director or executive officer and any
other  person  pursuant to which any of the  above-named  executive  officers or
directors  or  nominees  was  selected  as an officer or director or nominee for
director of the Company.

     Gerald M. Wochna,  Kenneth R. Robertson and Sherman O. Jones were nominated
for  election  as  directors  of  the  Company   pursuant  to  the  terms  of  a
Stockholders'  Agreement  dated May 15,  1998,  among the  Company  and  certain
shareholders of the Company.

                                       14
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Based solely on a review of Forms 3 and 4 and amendments  thereto furnished
to the Company  during its most recent fiscal year,  and Forms 5 and  amendments
thereto furnished to the Company with respect to its most recent fiscal year and
certain written representations,  no persons who were either a Director, Officer
or beneficial  owner of more than 10% of the Company's  Common Stock,  failed to
file on a timely  basis  reports  required by Section  16(a) of the Exchange Act
during the most recent  fiscal year  except as follows:  Khalid  Hossain did not
file a Form 3 or a Form 5 late.

ITEM 10.  EXECUTIVE COMPENSATION.

     The  following  table  sets  forth  information   regarding  the  executive
compensation for the Company's  President for the years ended December 31, 2000,
1999, and 1998. No executive officer had total annual salary and bonus in excess
of $100,000 during such years.

<TABLE>
<CAPTION>
                                  SUMMARY COMPENSATION TABLE

                                                           LONG-TERM COMPENSATION
                                                   -----------------------------------
                           ANNUAL COMPENSATION               AWARDS           PAYOUTS
                          -----------------------  -------------------------- -------
                                                            SECURI-
                                                             TIES
                                                            UNDERLY-
                                           OTHER     RE-      ING               ALL
                                           ANNUAL  STRICTED OPTIONS/           OTHER
NAME AND PRINCIPAL                         COMPEN-  STOCK     SARs     LTIP    COMPEN-
     POSITION       YEAR  SALARY   BONUS   SATION  AWARD(S) (NUMBER)  PAYOUTS  SATION
------------------  ----  -------  -----   ------  -------- --------  -------  ------
<S>                 <C>   <C>        <C>   <C>        <C>    <C>         <C>     <C>
Kenneth H. Robertson
  President - Oct. 2000

Gerald M. Wochna
  Vice Pres. - Oct 2000

Colin N. Jones,     1999  $80,000    --      --       --     100,000     --      --
 Ex-President<FN1>  1998  $57,231    --      --       --        --       --      --

Nicholas G.         1998  $75,615    --      --       --        --       --      --
 Levandoski, Ph.D.  1997  $43,500    --    $19,400    --     250,000     --      --
------------------
<FN>
<FN1>
Colin Jones served as President until October 2000.
</FN>
</TABLE>

                    AGGREGATE OPTION EXERCISES IN YEAR ENDED
              DECEMBER 31, 1999 AND DECEMBER 31, 1999 OPTION VALUES

                                         SECURITIES UNDER-   VALUE OF UNEXER-
                     SHARES              LYING UNEXERCISED    CISED IN-THE
                    ACQUIRED                   OPTIONS        MONEY OPTIONS/
                       ON                   AT 12/31/99        AT 12/31/99
                    EXERCISE     VALUE      EXERCISABLE/      EXERCISABLE/
    NAME            (NUMBER)    REALIZED   UNEXERCISABLE      UNEXERCISABLE
    ----            --------    --------  ----------------   ----------------

Colin Jones           -0-         -0-      300,000 / 0           $0 / $0

                                       15
<PAGE>

                         OPTIONS GRANTS IN LAST FISCAL YEAR
                                 Individual Grants

                    NUMBER OF       % OF TOTAL
                    SECURITIES       OPTIONS
                    UNDERLYING      GRANTED TO     EXERCISE OR
                     OPTIONS       EMPLOYEES IN    BASE PRICE     EXPIRATION
      NAME          GRANTED(#)      FISCAL YEAR      ($/SH)          DATE
      ----         ------------    ------------    -----------    ----------

Colin Jones          100,000           31%          $0.875          1/4/04

EMPLOYMENT AGREEMENTS

     As of Dec. 31, 2000 there were no employment agreements

(1)  No bonus pool will be created  unless the audited  pre-tax profit (loss) is
     equal to or better than the achievement level for that year.

STOCK OPTION PLAN

     During March 1997, the Board of Directors  adopted a Stock Option Plan (the
"Plan"),  and on March 28, 1997,  the  Corporation's  shareholders  approved the
Plan.  The Plan  authorizes  the issuance of options to purchase up to 2,000,000
shares of the Company's Common Stock.

     The Plan  allows  the  Board to grant  stock  options  from time to time to
employees, officers, directors and consultants of the Company. The Board has the
power to  determine  at the time that the option is granted  whether  the option
will be an Incentive  Stock Option (an option which  qualifies under Section 422
of the  Internal  Revenue  Code of 1986) or an option  which is not an Incentive
Stock Option. Vesting provisions are determined by the Board at the time options
are  granted.  The  option  price for any  option  will be no less than the fair
market  value of the Common  Stock on the date the option is granted  and unless
otherwise stated on the option, each option is exercisable for 10 years.

     Since all options  granted  under the Plan must have an  exercise  price no
less than the fair  market  value on the date of  grant,  the  Company  will not
record any expense upon the grant of options,  regardless of whether or not they
are incentive  stock  options.  Generally,  there will be no federal  income tax
consequences  to the Company in connection  with Incentive Stock Options granted
under the Plan. With regard to options that are not Incentive Stock Options, the
Company will ordinarily be entitled to deductions for income tax purposes of the
amount that option holders  report as ordinary  income upon the exercise of such
options, in the year such income is reported.

     The Company has outstanding options to purchase a total of 1,276,000 shares
of common stock at prices ranging from $0.875 to $3.26 per share under the Plan.

                                       16
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following  table sets forth,  as of April 15, 1999, the stock ownership
of each person known by the Company to be the  beneficial  owner of five percent
or more of the Company's Common Stock,  each officer and director  individually,
and all  officers  and  directors  as a group.  Each  person has sole voting and
investment power over the shares except as noted:

                                     AMOUNT AND
  NAME AND ADDRESS                 NATURE OF BENE-          PERCENT
OF BENEFICIAL OWNERS               FICIAL OWNERSHIP         OF CLASS
-------------------------          ----------------         --------

Henry B. Schur                      1,252,500 (1)            10.2%
376 Ansin Boulevard
Hallandale, FL  33009

Debra L. Ross                       1,252,500 (2)            10.2%
376 Ansin Boulevard
Hallandale, FL  33009

Joel Marcus                           290,000 (4)             2.4%
676 West Prospect Road
Fort Lauderdale, FL  33309

Kenneth H. Robertson                3,094,444 (5)            21.8%
No. 206
855 S. Federal Highway
Boca Raton, FL 33432

Gerald M. Wochna                    3,094,444 (6)            21.8%
No. 206
855 S. Federal Highway
Boca Raton, FL 33432

Khalid Hossain                      2,774,796 (7)            18.6%
56 Grande Rue
CH-1700 Friburg
Switzerland

Sherman O. Jones                      104,500 (8)             0.9%
12026 N. 81st Street
Scottsdale, AZ  85206

Software & Healthcare               1,000,000                 8.3%
 Technology Fund, LLC
No. 206
855 S. Federal Highway
Boca Raton, FL 33432

Robertson & Partners, LLC           1,600,000                13.2%
855 S. Federal Highway,
Boca Raton, FL 33432

R & P Venture Fund II, LLC            444,444
855 S. Federal Highway
Boca Raton, Fl. 33432

                                       17
<PAGE>

International Technologies            700,000                 5.8%
 Ltd.
c/o William Smith
P.O. Box F-40729
Freeport, Bahamas

All Directors and Executive         7,451,796                47.5%
Officers as a Group
(7 Persons)

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

(1)  Includes  862,500  shares held of record by Mr.  Schur's wife,  Debra Ross,
     80,000 shares held by Mr.  Schur's  daughter,  100,000 shares held in trust
     for Mr. Schur's  daughter,  200,000 shares  underlying  options held by Mr.
     Schur, and 10,000 shares underlying options held by Mr. Schur's wife.

(2)  Includes  862,500 shares held directly by Mrs. Ross,  80,000 shares held by
     Mrs. Ross' daughter,  100,000 shares held in trust for Mrs. Ross' daughter,
     200,000 shares  underlying  options held by Mrs. Ross' husband,  and 10,000
     shares underlying options held by Mrs. Ross.

(3)  Includes 30,000 shares held directly and 300,000 underlying options held by
     Mr. Jones.

(4)  Includes  90,000 shares held directly and 200,000 shares  underlying  stock
     options held by Mr Marcus.

(5)  Represents  50,000  shares  underlying   options  held  by  Mr.  Robertson;
     1,600,000 shares held by Robertson & Partners, L.L.C. ("R&P") and 1,000,000
     shares held by Software & Healthcare Technology Fund, L.L.C. 444,444 shares
     held by R&P Venture Fund II, LLC. Mr.  Robertson is a majority  owner and a
     manager of Software & Healthcare Tech. Fund,  Robertson & Partners LLC. and
     R&P Venture Fund II. Mr.  Robertson  therefore has shared voting and shared
     investment control over the 3,144,444 shares.

(6)  Represents  50,000 shares underlying  options held by Mr.  Wochna;1,600,000
     shares  held by  Robertson  & Partners,  L.L.C.,  1,000,000  shares held by
     Software & Healthcare  Technology Fund, LLC.  ("SHTF"),  and 444,444 shares
     held by R&P Venture Fund II, LLC.  Mr.Wochna,  therefore  has shared voting
     and Investment control over the 3,144,444 shares.

(7)  Represents shares  underlying  options held by HelveStar S.A., of which Mr.
     Hossain is Chairman.

(8)  Includes 102,500 shares held directly by Mr. Jones and 2,000 shares held by
     Mr. Jones Wife.

Robertson  & Partners  L.L.C.  ("R&P") is  affiliated  with the  Company in that
Kenneth  H.  Robertson,  who is a  manager  and a  majority  owner of R&P,  is a
Director of the  Company.  Gerald M.  Wochna,  who is a manager and 20% owner of
R&P, is also a Director of the Company.  Software & Healthcare  Technology Fund,
LLC ("SHTF") is managed by R&P and Kenneth H. Robertson is an investor in SHTF.

     SHTF, R&P, Automated Health  Technologies,  Inc.,  Jennifer J. Schur Trust,
Joel Marcus, Debra L. Ross, Jennifer J. Schur, and the Joel Marcus Irrevocable

                                       18
<PAGE>

Trust have  agreed to vote the  shares  which  they hold on the  conditions  and
subject to the terms of a Stockholders' Agreement dated May 15, 1998.

     There are no known  agreements,  the operation of which may at a subsequent
date result in a change in control of the Company.

     The Company  knows of no  arrangement  or  understanding,  the operation of
which may at a subsequent date result in a change of control of the Company.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     ACQUISITION OF SIMPLEX-FLORIDA

     On March 5, 1997,  the Company  completed  the  acquisition  of 100% of the
outstanding common stock of Simplex Medical Systems, Inc. ("Simplex-Florida") in
exchange for  3,453,000  shares of the  Company's  Common  Stock  (approximately
46.04% of the shares now outstanding). The shares were exchanged on the basis of
one share of the Company's common stock for one share of Simplex-Florida  common
stock.  In  connection  with the closing of this  transaction,  several  current
shareholders  submitted for cancellation a total of 31,953,000  shares of common
stock. As a result, after the acquisition of Simplex-Florida,  there are a total
of 7,500,000 shares outstanding.

     The  stock  issuances  were made  pursuant  to an  Agreement  ("Agreement")
between the Company and  Simplex-Florida.  The terms of the  Agreement  were the
result  of   negotiations   between   the   management   of  the   Company   and
Simplex-Florida.  However, the Board of Directors did not obtain any independent
"fairness" opinion or other evaluation regarding the terms of the Agreement, due
to the cost of obtaining such opinions or evaluations.

     TRANSACTIONS INVOLVING THE COMPANY

     On March 20,  1996,  the  Company  issued to each of  Mesdames  Colleen  E.
Schmidt,  a  Director  of the  Company,  and a Company  Director,  and Sandra S.
Steinberg, a Director of the Company,  15,000,000 shares of the Company's common
stock,  $.0001  par  value  per  share (a total of  30,000,000  shares of common
stock), in  consideration,  in each case, for the sum of $5,000 in cash (a total
of  $10,000 in cash).  These  shares  collateralized  two  non-interest  bearing
promissory  notes in the  principal  amount of $2,500  each (an  aggregate  face
amount of $5,000),  due and payable on May 31,  1996,  of which each of Mesdames
Schmidt and Steinberg are the makers and the Company is the holder.

     During the year ended December 31, 1997,  the Company  entered into several
short term notes payable with Joel Marcus,  a director of the Company,  totaling
$294,990,  bearing interest at 10% per annum. Joel Marcus subsequently  assigned
these notes to International Technologies Ltd., a shareholder.  As a of December
31, 1997,  $284,990 of these notes payable had expired terms.  On April 2, 1998,
the Company entered into an agreement with  International  Technologies  Ltd. to
extend the terms of the notes for a three year period  with  interest at 10% per
annum. These notes will be amortized over the three year period with payments on
principal to be made only if the Company records  pre-tax  earnings in excess of
the principal amount due. If an additional extension of time is necessary,  this
agreement  grants an extension until such time as pre-tax profits are sufficient
to amortize the loans over the three year period.  Interest incurred under these
notes totaled  $30,928 and $34,170  during the years ended December 31, 2000 and
1999, respectively.

                                       19
<PAGE>

     STOCK SALES IN MAY AND JUNE 1998 AND STOCKHOLDERS' AGREEMENT

     On May 15,  1998,  the Company  sold  1,000,000  shares of Common  Stock to
Software & Healthcare  Technology Fund, L.L.C. ("SHTF") for $400,000 in cash and
on June 30, 1998, the Company sold 1,600,000 shares of Common Stock to Robertson
& Partners,  L.L.C. ("R&P") for $600,000 in cash. These sales were made pursuant
to  subscription  agreements  dated May 15, 1998. R&P is the managing  member of
SHTF.  The Company also granted SHTF a 20-day right of first refusal with regard
to any offerings of the Company's securities.

     In  connection  with  these  stock  sales,   SHTF,  R&P,  Automated  Health
Technologies,  Inc.  ("AHT"),  Jennifer  Schur,  the Jennifer Schur Trust,  Joel
Marcus, The Joel Marcus Irrevocable Trust and Debra L. Ross, shareholders of the
Company,  entered  into a  Stockholders'  Agreement  dated May 15,  1998,  which
provides,  among  other  things,  that the  shareholders  who are parties to the
Shareholders'  Agreement  will vote their shares for certain  director  nominees
selected by SHTF, R&P and AHT, and in such a manner as is necessary to carry out
the  intent  of  the  Stockholders'   Agreement.   For  the  Annual  Meeting  of
Shareholders  held on August 20,  1998,  the  nominees  selected  were Gerald M.
Wochna,  Kenneth H. Robertson and Colin N. Jones.  (Colin Jones was added to the
Board on April 10, 1998.) The Stockholders'  Agreement also provides that during
the term of that agreement none of the shareholders who are parties thereto will
transfer their shares except in accordance with the terms of the agreement.

     The Company is also a party to the  Stockholders'  Agreement and has agreed
that it will  not sell  any of its  securities  in any  transactions  unless  it
provides  the  shareholders  who are  parties to the  Stockholders'  Agreement a
preemptive  right to purchase a pro rata portion of such  securities on the same
terms and conditions.  This preemptive right will not apply to securities issued
to any  officer,  director  or  employee  of the  Company  under  a  benefit  or
compensation plan, or for services or assets (other than cash or notes).

     The Company also granted  "piggy-back"  registration rights to SHTF and R&P
with respect to their shares of Common Stock under certain conditions.

     Certain provisions of the Stockholders' Agreement,  including those related
to the preemptive rights and piggyback registration rights will terminate on the
later of May 15, 2000, or on the 90th  consecutive day on which the bid price of
the Company's  Common Stock exceeds  $4.00 per share.  The remaining  provisions
will terminate on May 15, 2005.

                                       20
<PAGE>

                                     PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  3. EXHIBITS.

EXHIBIT
NUMBER      DESCRIPTION                   LOCATION

  3.1       Articles of Incorporation,    Incorporated by reference to
            as Amended                    Exhibits 2.1, 2.2 and 2.3 to
                                          the Registrant's Form 10-SB
                                          Registration Statement filed
                                          on April 4, 1996

  3.2       Bylaws                        Incorporated by reference to
                                          Exhibit 2.4 to the Registrant's
                                          Form 10-SB Registration State-
                                          ment filed on April 4, 1996

  3.3       Articles of Amendment to      Incorporated by reference to
            Articles of Incorporation     Exhibit 3.3 to Registrant's
            dated March 28, 1997          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

  3.4       Articles of Amendment to      Incorporated by reference to
            Articles of Incorporation     Exhibit 3.4 to Registrant's
            dated August 20, 1998         Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.1       1997 Stock Option Plan        Incorporated by reference to
                                          Exhibit 10.1 to Registrant's
                                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.2       Share Exchange Agreement      Incorporated by reference to
            with Automated Health         Exhibit 10.2 to Registrant's
            Technologies, Inc.            Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.3       Employment Agreement with     Incorporated by reference to
            Colin N. Jones                Exhibit 10.3 to Registrant's
                                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.4       Employment Agreement with     Incorporated by reference to
            Nicholas Levandoski           Exhibit 10.4 to Registrant's
                                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.5       Employment Agreement with     Incorporated by reference to
            Henry Schur                   Exhibit 10.5 to Registrant's
                                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

                                       21
<PAGE>

 10.6       Software Agreement with       Incorporated by reference to
            Software & Healthcare         Exhibit 10.6 to Registrant's
            Technology Fund, L.L.C.,      Form SB-2 Registration Statement
            et al.                        (SEC File No. 333-67087)

 10.7       Business Lease with           Incorporated by reference to
            Wedgewood Properties, FL,     Exhibit 10.7 to Registrant's
            Inc.                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.8       Distribution Agreement with   Incorporated by reference to
            Sybron Dental Specialties,    Exhibit 10.8 to Registrant's
            Inc., as amended              Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 10.9       Exclusive Licensing Agree-    Incorporated by reference to
            ment with Vector Medical      Exhibit 10.9 to Registrant's
            Technologies, Inc. dated      Annual Report on Form 10-KSB
            April 13, 1999                for the year ended December 31,
                                          1998

 10.10      Joint Venture Agreement       Incorporated by reference to
            with HelveStar, S.A.          Exhibit 10.1 to the Registrant's
                                          Report on Form 8-K dated May 10, 1999.

 21         Subsidiaries of the           Incorporated by reference to
            Registrant                    Exhibit 21 to Registrant's
                                          Form SB-2 Registration Statement
                                          (SEC File No. 333-67087)

 23         Consent of Schmidt, Raines,   Filed herewith electronically
            Trieste, Dickenson & Adams,
            P.L.

 27         Financial Data Schedule       Filed herewith electronically

     (b)  REPORTS ON FORM 8-K.  No  Reports  on Form 8-K were  filed  during the
fourth quarter of the Company's fiscal year ended December 31, 1999.

                                       22
<PAGE>

                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

                                TABLE OF CONTENTS
                                                                  Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT                  F-1

FINANCIAL STATEMENTS:

     CONSOLIDATED BALANCE SHEETS                                   F-2 - F-3

     CONSOLIDATED STATEMENTS OF OPERATIONS                         F-4

     CONSOLIDATED STATEMENTS OF CHANGES
         IN STOCKHOLDERS' EQUITY                                   F-5

     CONSOLIDATED STATEMENTS OF CASH FLOWS                         F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                         F-7 - F-21

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


Board of Directors and Stockholders
SMLX Technologies, Inc. and Subsidiaries
Boca Raton, Florida

We  have  audited  the   accompanying   consolidated   balance  sheets  of  SMLX
Technologies,  Inc. and  Subsidiaries  as of December 31, 2000 and 1999, and the
related consolidated  statements of operations,  changes in stockholders' equity
(deficit) and cash flows for the years then ended. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of SMLX Technologies,
Inc. and  Subsidiaries as of December 31, 2000 and 1999 and the results of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As shown in the consolidated
financial  statements,  the Company  incurred a net loss of $564,646  during the
year ended December 31, 2000, and has incurred  substantial  net losses for each
year since its inception.  These  conditions raise  substantial  doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
these matters are described in Note 2. The consolidated  financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

                                       /s/ Schmidt & Co.

                                       SCHMIDT, RAINES, TRIESTE,
                                       DICKENSON & ADAMS, P. L.

March 7, 2001
Boca Raton, Florida

                                       F-1
<PAGE>

                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

ASSETS
                                                   2000                 1999
Current assets:
 Cash                                           $   8,799           $  215,026
 Accounts receivable, net of allowance for
  uncollectible accounts of 2000 $0;
  1999 $2,786                                       6,164                6,071
 Prepaid expenses                                  17,918               23,299
 Inventory                                        150,092              129,398
                                                  ----------------------------

         Total current assets                     182,973              373,794
                                                  ----------------------------
Equipment and leasehold improvements,
 net of accumulated depreciation of
 2000 $300,199; 1999 $197,336                     333,762              418,547
                                                  ----------------------------
Other assets:
 Patents and trademarks, net of accumulated
 Amortization of 2000 $2,479; 1999 $969           135,914               88,309
 Deposits                                          10,862                8,192
 Other intangible assets, net of
 accumulated amortization of 2000 $1,614;
 1999 $1,076                                          276                 814
 Investment in common stock                       100,000              200,000
                                                  ----------------------------
                                                  247,052              297,315
                                                  ----------------------------
                                                $ 763,787           $1,089,656
                                                ==============================


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

                                       F-2
<PAGE>

                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                  2000                   1999
Current liabilities:
 Accounts payable and accrued expenses            261,113           $   190,164
 Current portion of accrued fine and
  Restitution                                     130,000                 - 0 -
 Current portion of notes payable                  15,646                16,913
 Customer and other deposits                       16,100               180,841
                                                  -----------------------------
Total current liabilities                         422,859               387,918
                                                  -----------------------------
Accrued fine and restitution, net of
 current portion                                  217,500                 - 0 -
Notes payable, net of current portion             309,281               310,636
                                                  -----------------------------
                                                  526,781               310,636
                                                  -----------------------------
Commitments and contingencies

Stockholders' equity (deficit):
Common stock, $.0001 par value, 100,000,000
 shares authorized, 12,004,648 and 11,544,648
 shares issued and outstanding at December 31,
 2000 and 1999, respectively                        1,154                 1,154
Preferred stock, $.0001 par value, 10,000,000
 shares authorized, no shares issued or
 outstanding                                        - 0 -                 - 0 -
Additional paid-in capital                      2,438,207             2,450,516
Accumulated deficit                            (2,625,214)           (2,060,568)
                                               --------------------------------
                                                 (185,853)              391,102
                                               --------------------------------
                                               $  763,787           $ 1,089,656

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

                                       F-3
<PAGE>

                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                     2000           1999
                                                 -----------    -----------
Operating revenues:
 Vector - transdermal services                   $   900,000    $   675,000
 Vector - cosmeceutical technology                   300,000          -0-
 Vector - electro-sensor technology                   80,800          -0-
 Other                                                 -0-        225,985
 Product sales                                       332,587         62,851
                                                 -----------    -----------
   Total operating revenues                        1,613,387        962,836

Cost of research and development services
 and product sales:
  Research and development services                  223,858        177,712
  Product sales                                      202,889        110,550
                                                 -----------    -----------
     Total cost of research and development
      services and product sales                     426,747        288,262
                                                 -----------    -----------
Gross profit (loss)                                1,186,640        674,574
                                                 -----------    -----------
Operating expenses:
 Legal fees                                          632,698        438,856
 Consulting and compliance fees                       99,204         37,082
 Other selling, general and administrative
   expenses                                          457,833        521,995
 Depreciation and amortization expense               106,606        101,739
                                                 -----------    -----------
     Total operating expenses                      1,296,341      1,099,672
                                                 -----------    -----------

Net loss from operations                            (109,701)      (425,098)

Other income (expense):
 Forfeiture of customer deposits                       -0-           73,285
 Investment valuation adjustment                    (100,000)           478
 Loss on disposal of assets                           (1,115)         -0-
 Interest expense                                    (35,152)       (35,213)
 Fine and restitution                               (347,500)         -0-
 Other income                                         28,822          -0-
                                                 -----------    -----------
     Total other income (expense)                   (454,945)        38,550
                                                 -----------    -----------

Net loss before income taxes                        (546,646)      (386,548)
Income taxes                                           -0-          -0-
                                                 -----------    -----------
  Net loss                                         $(546,646)   $  (386,548)
                                                 ===========    ===========

Loss per common share                            $     (0.05)   $     (0.03)
                                                 ===========    ===========
Weighted average number of shares                 11,920,210     11,291,705
                                                 ===========    ===========

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

                                       F-4
<PAGE>

                   SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
                                                                                             Total
                                                                                         Stockholders'
                                       Common stock       Paid-in       Accumulated         Equity
                                   Issued      Amount     Capital         Deficit          (Deficit)
                                 ----------    ------    ----------     -----------      -------------
<S>                              <C>           <C>       <C>            <C>              <C>
Balance, December 31, 1998       10,600,000   $ 1,060   $ 1,846,084     $ (1,674,021)     $  173,123

Shares issued for cash in
 March 1999                         444,444        44       199,956           -0-            200,000
Shares issued for cash in
 connection with the Joint
 Venture Agreement with
 HelveStar, S.A. in May 1999        375,204        37       283,063           -0-            283,100
Conversion of note payable in
 May 1999                            25,000         3        24,997           -0-             25,000
Conversion of note payable in
 May 1999                            50,000         5        49,995           -0-             50,000
Conversion of note payable in
 May 1999                            50,000         5        49,995           -0-             50,000
Stock issuance costs                  -0-         -0-        (3,574)          -0-             (3,574)
Net loss                              -0-         -0-         -0-          (386,547)        (386,547)
                                 ----------    ------     ---------      ----------        ----------

Balance, December 31, 1999       11,544,648     1,154     2,450,516      (2,060,568)         391,102

Shares issued pursuant to a writ
 of mandamus issued by the
 Circuit Court of Miami-Dade
 County in connection with a
 Lawsuit filed against the
 Company                            460,000      -0-         -0-              -0-              -0-
Stock issuance costs                  -0-        -0-        (12,309)          -0-           (12,309)
Net loss                              -0-        -0-         -0-           (564,646)        (564,646)
                                 ----------    ------    ----------      -----------       ----------

Balance, December 31, 2000       12,004,648    $1,154    $2,438,207     $(2,625,214)       $(185,853)
                                 ==========    ======    ==========      ===========       ==========
</TABLE>

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

                                       F-5
<PAGE>

                  SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                    2000            1999
                                                 -----------    -----------

OPERATING ACTIVITIES
 Net loss                                        $  (546,646)   $  (386,547)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
   Depreciation and amortization                     106,606        101,739
   Loss on sale of assets                              1,115          -0-
   Provision for bad debts                             -0-          (13,947)
   Valuation reduction of investment in Common
     Stock                                           100,000          -0-
   Forfeiture of customer deposits                     -0-          (73,285)
   (Increase) decrease in:
     Accounts receivable                                 (93)         8,989
     Prepaid expenses                                  5,381         (3,888)
     Inventory                                       (20,694)        12,174
     Deposits                                         (2,670)         -0-
   Increase (decrease) in:
     Accounts payable and accrued expenses           432,740         25,559
     Customer and other deposits                    (164,741)       145,428
                                                 -----------    -----------
     Net cash used in operating activities          (107,002)      (183,778)
                                                 -----------    -----------
INVESTING ACTIVITIES
 Advances to employees                                 -0-            1,229
 Proceeds from sale of fixed assets                    2,840          -0-
 Acquisition of fixed assets and patents             (72,843)      (110,355)
                                                 -----------    -----------
     Net cash used in investing activities           (70,003)      (109,126)
                                                 -----------    -----------
FINANCING ACTIVITIES
 Proceeds from sale of stock                           -0-          483,100
 Payments for stock issuance costs                   (12,309)        (3,224)
 Payments on notes payable                           (16,913)       (19,540)
                                                 -----------    -----------
     Net cash provided by (used in)
       financing activities                          (29,222)       460,336
                                                 -----------    -----------
Net increase (decrease) in cash                     (206,227)       167,432
Cash - beginning of year                             215,026         47,594
                                                 -----------    -----------
Cash - end of year                               $     8,799    $   215,026
                                                 ===========    ===========


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

                                       F-6
<PAGE>

                  SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31, 2000 AND 1999


NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Nature of Operations

     SMLX Technologies, Inc. (f/k/a Simplex Medical Systems, Inc.) was formed on
     June 6, 1995 and was in the  development  stage through  December 31, 1997.
     The year ended  December  31, 1998 was the first year  during  which it was
     considered an operating company.

     Since inception,  SMLX Technologies,  Inc. (the "Company") has been engaged
     in research and  development  activities.  The Company's  primary focus has
     been on the development,  acquisition, marketing and manufacture of medical
     diagnostic and dental products. In addition, the Company pursues regulatory
     clearance and patent  protection for many of its products.  The Company has
     patented and  proprietary  technology in the fields of point of use medical
     and veterinary  diagnostics,  dental  therapeutic  devices,  pharmaceutical
     products and consumer products.  The Company utilizes its own manufacturing
     facilities for the production of proprietary or quality sensitive materials
     and contracts out the other products and final  packaging to third parties.
     Within the United States,  the Company has received FDA registration on one
     of its major  products.  The Company's  major source of revenue  during the
     years  ended  December  31,  2000 and 1999 was derived  from  research  and
     development contracts with outside third parties.

     The financial statements include the accounts of the Company's wholly-owned
     subsidiaries, SMLX Technologies of Florida, Inc., Analyte Diagnostics, Inc.
     and IRT  Management  Corp.  Analyte  Diagnostics,  Inc.  was a  predecessor
     corporation  to SMLX  Technologies,  Inc. which was formed on September 15,
     1995.  The two  companies  were merged  into SMLX  Technologies,  Inc.,  on
     October 31, 1995, with all account balances  recorded at cost. At the time,
     the Company had a 1 to 200 reverse stock split.  Subsequently,  the Company
     had a 2 for 1 stock  split.  All share  references  give effect to the post
     split plans. IRT Management Corp. was incorporated on January 14, 1997 with
     the sole purpose of obtaining FDA approval on the Company's products.

   Summary of Significant Accounting Policies

     Principles of Consolidation

          The  consolidated  financial  statements  include the accounts of SMLX
          Technologies,   Inc.,   and   its   wholly-owned   subsidiaries   SMLX
          Technologies  of Florida,  Inc.,  Analyte  Diagnostics,  Inc., and IRT
          Management Corp. All intercompany  accounts and transactions have been
          eliminated in consolidation.

     Inventory

          Inventory  consists of raw  materials as of December 31, 2000 and 1999
          and is stated at the lower of cost  (first-in,  first-out  method)  or
          market.

                                       F-7
<PAGE>

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (CONTINUED)

     Equipment

          Equipment is stated at cost and is depreciated using the straight-line
          method  over the  estimated  useful  lives of the  respective  assets.
          Expenditures   for   maintenance   and  repairs  are  charged  against
          operations as incurred.

     Estimates

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States requires management
          to make estimates and assumptions that affect certain reported amounts
          and disclosures.  Accordingly,  actual results could differ from those
          estimates.

     Patents and Trademarks

          The cost of patents and trademarks  acquired are being  amortized on a
          straight-line basis over their estimated useful lives, ranging from 10
          to 17 years, beginning when the trademarks and patents are approved.

     Other Intangible Assets

          The  cost  of  other  intangible  assets  are  being  amortized  on  a
          straight-line basis over three years.

     Investment in Common Stock

          Investment in common stock represents the Company's  investment in 19%
          of the common  stock of a  privately  held  company  in May 1998.  The
          Company does not exercise significant influence over the operating and
          financial activities of this privately held company. The investment in
          common stock is stated at cost at December 31, 1999.  During 2000, the
          Company reduced the investment to its estimated net realizable  value.
          The amount of the valuation allowance,  $100,000, is reported as other
          expense in 2000.

     Impairment of Long-Lived Assets

          The Company  periodically  reviews its  long-lived  assets and certain
          identifiable  intangibles  in order to  determine  if such  assets are
          impaired.  When an asset is determined  to be impaired,  it is written
          down to its estimated fair market value.

                                       F-8
<PAGE>

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (CONTINUED)

     Revenue Recognition

          Revenue from research and  development  services is deemed earned when
          received.  Revenue from product sales is  recognized  upon shipment of
          goods to the customer. License fee revenue is recognized upon receipt.

          Revenue is recognized  from the forfeiture of customer  deposits based
          upon the individual terms contained in the International  Distribution
          agreements with each customer.  These deposits are  non-refundable and
          are considered  forfeited  when the customer fails to perform  certain
          requirements as described in their contract.

     Research and Development Costs

          Research and development costs are charged to operations when incurred
          and are included in cost of research and development services.

     Advertising Costs

          Advertising costs are charged to operations when incurred.

     Stock Based Compensation

          The Company  accounts for its stock based  compensation  in accordance
          with  Statement of  Financial  Accounting  Standards  ("SFAS") No. 123
          which  allows the Company to account for all stock based  compensation
          arrangements  under which  employees  receive  shares of the Company's
          stock under  Accounting  Principles  Board ("APB")  Opinion No. 25 and
          make  the  related  disclosures  under  SFAS  123.   Accordingly,   no
          compensation  cost has been recognized in the  accompanying  financial
          statements related to stock options.

     Earnings per Share

          The Company adopted SFAS No. 128,  "Earnings Per Share", in 1997. SFAS
          128   establishes    accounting   standards   for   the   computation,
          presentation,  and  disclosure of earnings per share  information  for
          entities with publicly held common stock or potential common stock.

          Net loss per share is  computed on the basis of the  weighted  average
          number of shares actually  outstanding during the years ended December
          31, 2000 and 1999.  Options to purchase 1,326,000 and 1,276,000 shares
          of common  stock  during the years ended  December  31, 2000 and 1999,
          respectively,  were not  included  in  computing  net  loss per  share
          because the effect of such inclusion would be to decrease the reported
          net loss per share.

                                       F-9
<PAGE>

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

     Income Taxes

          The Company  accounts for income taxes under the  liability  method in
          accordance  with Statement of Financial  Accounting  Standards No. 109
          "Accounting  for Income Taxes".  Deferred  income taxes are determined
          based upon the  difference  between the financial  statement  carrying
          amount  and the tax basis of assets  and  liabilities  using tax rates
          expected  to be in effect in the  years in which the  differences  are
          expected to reverse.

     Expense Reclassification

          The Company has  retroactively  reclassified  certain  expenses in the
          Consolidated  Statements of Operations for the year ended December 31,
          1999 to  conform  to the  classifications  adopted  for the year ended
          December 31, 2000. The Company believes the new  classifications  more
          accurately  reflect the results of operations.  The  reclassifications
          have no  effect  on gross  profit  or net  income  for the year  ended
          December 31, 1999.

     Comprehensive Income or Loss

          The Company has no components of other  comprehensive  income or loss,
          accordingly,  net  loss  equals  comprehensive  loss  for all  periods
          presented.

     Recent Accounting Pronouncement

          In December 1999, the Securities and Exchange  Commission issued Staff
          Accounting   Bulletin  No.  101  (SAB  101),  Revenue  Recognition  in
          Financial Statements.  SAB 101 was adopted during the Company's fiscal
          year ended December 31, 2000.

NOTE 2 - BASIS OF PRESENTATION AND CONTINUED EXISTENCE

     The accompanying  financial statements have been prepared assuming that the
     Company will continue as a going concern. Since inception,  the Company has
     experienced  significant  losses  and has been  dependent  upon  loans from
     stockholders and other third parties, as well as sale of stock, in order to
     fund operations to date.

     Management  believes that the funds raised  through its  exclusive  license
     agreement  with  Vector  Medical  Technologies,  Inc.  (Note 8) and  income
     generated from the sale of dental and industrial air abrasion  devices will
     provide  sufficient  cash  flow  resources  to fund the  operations  of the
     Company.

     The  financial  statements  do not include any  adjustments  to reflect the
     possible future effects on the  recoverability and classification of assets
     or the amounts and  classifications of liabilities that may result from the
     possible inability of the Company to continue as a going concern.

                                      F-10
<PAGE>

NOTE 3 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     Equipment and leasehold  improvements consists of the following at December
     31, 2000 and 1999:

                                           Useful Life
                                           (in Years)       2000         1999
                                         -------------    ---------   ----------

        Computer equipment                     5          $ 39,536    $  39,270
        Office furniture and equipment        5-7           21,680       27,330
        Shop equipment                        5-7          273,805      268,843
        Computer software                      3             5,779        5,779
        Molds                                  5           104,355       85,855
        Leasehold improvements                 9           188,806      188,806
                                                          ---------   ----------
                                                           633,961      615,883

        Less: accumulated depreciation                    (300,199)     197,336)
                                                          ---------   ----------
                                                          $ 333,762   $ 418,547
                                                          =========   ==========

     Depreciation  expense  totaled  $104,558  and  $100,736 for the years ended
December 31, 2000 and 1999, respectively.

NOTE 4 - NOTES PAYABLE

     During the year ended December 31, 1997,  the Company  entered into several
     short term notes  payable with a  director/shareholder  totaling  $294,990,
     bearing interest at 10% per annum.  These notes were subsequently  assigned
     to another  shareholder.  On April 2, 1998,  the  Company  entered  into an
     agreement with the shareholder to extend the terms of the notes for a three
     year period with interest at 10% per annum.  These notes shall be amortized
     over the three year period with  payments on  principal  to be made only if
     the Company records pre-tax earnings in excess of the principal amount due.
     If an additional  extension of time is necessary,  this agreement grants an
     extension  until such a time as pre-tax  profits are sufficient to amortize
     the loans over the three  year  period.  On  January  1,  2000,  $14,291 of
     accrued interest was converted to loan principal, increasing the balance of
     these notes payable to $309,281.  Due to the fact that the Company does not
     anticipate pre-tax earnings  sufficient to require repayment of these loans
     in the year 2001,  these notes  payable have been  classified  as long-term
     debt as of December 31, 2000.

                                      F-11
<PAGE>

NOTE 4 - NOTES PAYABLE (CONTINUED)

     Notes payable as of December 31, 2000 and 1999 consisted of the following:


                                                       2000           1999
                                                  ------------   ------------
        Note payable, third party, due in
        monthly payments of $1,648, including
        interest which is calculated at 11.46%
        per annum, final payment due October,
        2001; collateralized by equipment with
        a net book value of $41,748 as of
        December 31, 2000.                        $    15,646    $    32,559

        Notes payable, shareholder, interest
        payable at 10% per annum; payable as
        described above.                              309,281        294,990
                                                  ------------   ------------
                                                      324,927        327,549

        Less: current maturities                      (15,646)       (16,913)
                                                  ------------   ------------
                                                  $   309,281    $   310,636
                                                  ============   ============

     Aggregate  annual  maturities of the notes payable at December 31, 2000 are
     as follows:

        During the year ending
        December 31,
        ---------------------------

                   2001                $  15,646
                   2002                  309,281
                                       ---------
                                       $ 324,927
                                       =========

     Interest  expense  totaled  $31,102  and  $35,213  during  the years  ended
     December 31, 2000 and 1999, respectively.

NOTE 5 - CUSTOMER AND OTHER DEPOSITS

     Included in customer  and other  deposits at December  31, 2000 and 1999 is
     $16,100  received  from an individual as a deposit on stock to be issued at
     $1.00 per share.

NOTE 6 - ADVERTISING COSTS

     The Company employs the services of a public  relations  consulting firm to
     assist them in their  advertising  efforts.  Advertising  expense  incurred
     during the years ended December 31, 2000 and 1999 totaled $880 and $29,449,
     respectively.

                                      F-12
<PAGE>

NOTE 7 - LEASES

     The Company is currently  renting office and warehouse space in Hallandale,
     Florida  pursuant to a five-year lease agreement which began April 1, 1998.
     This five-year lease agreement  requires  monthly rental payments of $4,000
     plus sales tax.  The Company has the option at the end of the lease term to
     renew the lease for an additional five years.

     Minimum annual rental payments are as follows:

        During the year ending
        December 31,
        ---------------------------

                   2001                $  48,000
                   2002                   48,000
                   2003                   12,000
                                       ---------
                                       $ 108,000
                                       =========

     Rent  expense for the years ended  December  31, 2000 and December 31, 1999
     amounted to $55,832 and $53,159 respectively.

NOTE 8 - EXCLUSIVE LICENSING AGREEMENT

     On  April  13,  1999,  the  Company  entered  into an  exclusive  licensing
     agreement with Vector Medical Technologies, Inc. ("Vector"). This agreement
     grants Vector exclusive  license,  subject to the payment of royalties,  to
     certain  transdermal  drug  delivery  systems,   including  intangible  and
     tangible assets. In exchange for this exclusive license,  Vector has agreed
     to pay the Company  royalties as follows:  4% of its net sales or other net
     revenues derived from assets in which the Company holds the patent;  and 3%
     of its net sales or other net  revenues  derived from the portion of assets
     that  are not  covered  by a  patent  held by the  Company.  These  royalty
     payments  are due  quarterly  within 45 days from the end of each  calendar
     quarter for which royalties are payable.  Vector has also agreed to pay the
     Company  non-refundable  advances  against future royalties for a period of
     four years from the date of the  agreement.  These payments shall amount to
     at least  $900,000 per year,  payable in monthly  installments  of at least
     $75,000. In regard to these advances,  the companies have agreed to meet at
     least 90 days prior to the  beginning of each calendar year to consider the
     ongoing  feasibility of the  relationship  and to determine the appropriate
     amount of  non-refundable  advances  to be made by  Vector to the  Company.
     Notwithstanding  any agreement to the contrary,  this agreement shall be in
     existence for 10 years. In the event that Vector fails to make its payments
     on the transdermal  delivery system, the agreement shall be deemed null and
     void and the  exclusive  license and option  granted  under this  agreement
     shall be  terminated  without  further  obligation  or  liability of either
     company.  Furthermore,  this license  agreement  gives Vector the option to
     purchase 100% of certain SMLX assets within four years from the date of the
     agreement,  with any royalty payments  credited towards the purchase price.
     The  total  purchase  price  will  vary  based on gross  sales  during  the
     preceding twelve month period attributable to the assets and ranges between
     $3.6 and $6.6 million.

     The Company is  currently  in  negotiations  to sell the above  transdermal
     technology and some cosmeceutical formulas to Vector.

                                      F-13
<PAGE>

NOTE 8 - EXCLUSIVE LICENSING AGREEMENT (CONTINUED)

     During  2000 and 1999,  the  Company  received  $900,000  and  $600,000  in
     connection with this agreement, which is included in the Company's research
     and  development  revenue for the years ended  December  31, 2000 and 1999,
     respectively.  Revenue from this contract  comprises  approximately 56% and
     62% of the Company's  total  revenues for the years ended December 31, 2000
     and 1999, respectively.

NOTE 9 - JOINT VENTURE AGREEMENT

     On May  3,  1999,  the  Company  signed  a  joint  venture  agreement  with
     HelveStar,  S.A.,  a  Swiss  technology  commercialization,  financial  and
     holding company. The agreement outlined the formation and capitalization of
     BioStar,   S.A.  for  the  purposes  of   commercializing,   manufacturing,
     developing,   marketing  and  selling  the  Company's  present  and  future
     technologies and products. BioStar was to be funded by HelveStar who was to
     own sixty percent, with the Company owning forty percent.

     Upon the execution of this agreement, the Company granted HelveStar a stock
     option for 900,000  shares of the Company's  stock at an exercise  price of
     $1.58 per  share.  Within 24 months  of the  execution  of this  agreement,
     HelveStar  had the right to  purchase  a total of  2,250,000  shares of the
     Company's  stock.  The purchase price of the shares on the date of purchase
     was to have been equal to 50% of the closing price of the  Company's  stock
     on the  latest  price  trading  date on which at least  5,000  shares  were
     traded.

     The agreement also granted BioStar a 99-year  exclusive  worldwide  license
     for the  commercialization,  marketing and  production of all the Company's
     core  products and  technology,  subject to the  Company's  valid  existing
     distributorship  agreements.  In  addition,  the  agreement  called for the
     transfer of the Company's non-core technologies to BioStar which had agreed
     to purchase them for $2,400,000 payable in monthly installments of $100,000
     for 24 months  commencing in May 1999. As of December 31, 1999, the Company
     had  received  $300,000,  which is  included in  research  and  development
     services revenue.

     During  2000,  the  Company  filed suit for  damages  and to void the joint
     venture agreement, as described in Note 16.

NOTE 10 - RELATED PARTY TRANSACTIONS

   Revenue

     During the year ended December 31, 2000, the Company received $306,355 from
its affiliate,  BioStar, for product sales. This represents approximately 19% of
the Company's total revenue during the year ended December 31, 2000.

                                      F-14
<PAGE>

NOTE 10 - RELATED PARTY TRANSACTIONS (CONTINUED)

     During the year ended December 31, 1999, the Company received $300,000 from
its affiliate,  BioStar,  for research and development  services pursuant to the
terms of the  Joint  Venture  Agreement  described  in Note 9.  This  represents
approximately  31% of the Company's total revenue during the year ended December
31, 1999.

   Notes payable

     A director  and  shareholder  loaned  the  Company a total of  $294,990  at
     various  times during the year ended  December  31, 1997.  These notes were
     subsequently  assigned to another shareholder of the Company. On January 1,
     2000,  $14,291 of  interest  in arrears was  converted  to loan  principal,
     increasing the balance of these notes payable to $309,281. These notes were
     outstanding  as of December 31, 2000 and 1999 and are  discussed in Note 4.
     Interest  expense  incurred in connection  with these loans totaled $30,928
     and $34,170 for the years ended December 31, 2000 and 1999, respectively.

   Stockholders' agreement

     During 1998, the Company entered into a Stockholders'  Agreement with eight
     shareholders.  Among other things, this agreement provides that the Company
     will not sell any of its securities in any transactions  unless it provides
     the  shareholders  who are parties to the  agreement a preemptive  right to
     purchase  a pro rata  portion  of such  securities  on the same  terms  and
     conditions.  This preemptive  right will not apply to securities  issued to
     any  officer,  director  or  employee  of the  Company  under a benefit  or
     compensation  plan or for services or assets,  other than cash or notes. In
     addition, the Company granted "piggy-back"  registration rights to Software
     & Healthcare  Technology  Fund,  L.L.C.  ("SHTF") and Robertson & Partners,
     L.L.C.  with  respect  to  their  shares  of  common  stock  under  certain
     conditions  as  outlined  in the  agreement.  The "piggy  back"  provisions
     terminate on the later of May 15, 2000 or the ninetieth  consecutive day on
     which the bid price of the  Company's  common stock exceeds $4.00 per share
     on the  publicly  traded  market.  All other  provisions  of the  agreement
     terminate on May 15, 2005.

NOTE 11 - SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

     During the years ended  December 31, 2000 and 1999 cash paid by the Company
     for interest totaled $37,570 and $41,581, respectively.

     During the year ended December 31, 2000,  accrued interest totaling $14,291
     was converted to loan principal.

     As of December 31, 2000, stock issuance costs and capitalized  patent costs
     totaling $253 and $1,330 were included in accounts payable.

     During the year ended  December 31, 1999, the Company  purchased  equipment
     costing $50,000 with a note payable.

                                      F-15
<PAGE>

NOTE 11 - SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION (CONTINUED)

     As of December 31, 1999, stock issuance costs and capitalized  patent costs
     totaling $350 and $3,500 were included in accounts payable.

     During the year ended  December  31,  1999,  three notes  payable  totaling
     $125,000 were converted into common stock at $1.00 per share.

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following  methods and assumptions were used to estimate the fair value
     of each  class of  financial  instruments  for which it is  practicable  to
     estimate that value:

     Notes payable

         The carrying amount  approximates fair value because the same terms and
         interest rates could be obtained for similar maturities.

     Stock options

         It is not practicable to estimate the fair value of the Company's stock
         options  because  they are  subject  to trading  restrictions  and lack
         quoted market prices.

NOTE 13 - STOCK OPTIONS

     In August 1997, the Board of Directors granted certain employees, directors
     and consultants of the Company stock options pursuant to the Company's 1997
     Stock Option Plan. A total of 2,000,000  shares of the Company's stock have
     been  reserved  for the  options  to be granted  under this plan.  Eligible
     participants include any employee, officer, director or consultant that the
     Board of  Directors,  in its sole  discretion,  designates  is  eligible to
     participate in this Plan. The option exercise price is stated on the option
     grant  and shall  not be less  than  100% of the fair  market  value of the
     shares on the date of the grant or the par  value,  whichever  is  greater.
     Unless otherwise  stated on the option,  each option is exercisable for ten
     years. As of December 31, 2000, the options granted under this plan totaled
     1,326,000  shares  exercisable  between August 27, 2002 and May 26, 2004 at
     prices ranging from $0.88 to $3.26 per share.

     In addition  to the  options  outstanding  under the  Company's  1997 Stock
     Option Plan, during October 1998, the Company granted an option to purchase
     1,000  shares of the  Company's  common  stock at $1.50  per share  through
     October 2, 2003.

                                      F-16
<PAGE>

NOTE 13 - STOCK OPTIONS (CONTINUED)

     The following  summarizes the status of the Company's stock options for the
     years ended December 31, 2000 and 1999:

                                                                     Weighted-
                                                                      Average
                                                     Shares       Exercise Price
                                                   ----------     --------------
       Outstanding at January 1, 1999                 881,000         $1.82
       Granted and exercisable                        420,000         $0.88
       Exercised                                        - 0 -
       Forfeited                                    (25,000)          $2.87
                                                   ----------     --------------
       Outstanding at December 31, 1999             1,276,000         $1.49
       Granted and exercisable                         50,000         $0.88
       Exercised                                        - 0 -
       Forfeited                                        - 0 -
                                                   ----------     --------------
       Outstanding at December 31, 2000             1,326,000         $1.46
                                                   ==========     ==============

     The Company  applies APB Opinion No. 25,  "Accounting  for Stock  Issued to
     Employees",  and  related  interpretations  in  accounting  for  its  stock
     options.  Accordingly,  no  compensation  cost has been  recognized  in the
     accompanying  financial  statements related to stock options.  The weighted
     average fair value of options  granted  during the years ended December 31,
     2000 and 1999 was $0.09 and $0.59, respectively. These values were computed
     using  the   Black-Scholes   option   pricing   model  with  the  following
     assumptions: expected life of 3 years; expected volatility of 299% and 376%
     for the years ended  December 31, 2000 and 1999,  respectively;  and a risk
     free interest  rate of 6%. Had  compensation  cost for the Company's  stock
     options  been  determined  based  on the  fair  value  at the  grant  dates
     consistent  with the method of FASB No. 123,  "Accounting  for  Stock-Based
     Compensation", the Company's net loss for the years ended December 31, 2000
     and 1999 would have been $569,216 ($0.05 per share) and $635,296 ($0.06 per
     share), respectively.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
     estimating  the  fair  value  of  traded  options  which  have  no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require  the use of  highly  subjective  assumptions.  Because  the
     Company's  stock  options  have   characteristics  that  are  significantly
     different  from  traded  options  and  because  changes  in  the  valuation
     assumptions can materially affect the fair value estimate,  in management's
     opinion,  the existing models do not necessarily  provide a reliable single
     measure of the fair value of its employee stock options.

                                      F-17
<PAGE>

NOTE 14 - INCOME TAXES

     The Company has incurred tax  operating  losses and therefore has generated
     no income tax  liabilities.  As of  December  31,  2000,  the  Company  has
     generated  net tax  operating  loss  carryforwards  totaling  approximately
     $2,178,000  which are available to offset future  taxable  income,  if any.
     These loss  carryforwards  expire  beginning in 2010. Due to limitations on
     the utilization of loss carryforwards  resulting from ownership changes and
     separate return  limitations  and the uncertainty  that the Company and its
     subsidiaries  will be able to  utilize  the net  operating  losses,  a 100%
     valuation  allowance has been recorded against the associated  deferred tax
     assets.

     The following  summarizes  the  components of the net deferred tax asset at
     December 31, 2000 and 1999:

                                                     2000            1999
                                                 -----------     -----------
        Deferred tax assets:
           Net operating loss carryforward       $  740,000      $  700,593
           Valuation allowance                     (740,000)       (700,593)
                                                 -----------     -----------
        Net deferred tax asset                   $    - 0 -      $    - 0 -
                                                 ===========     ===========

NOTE 15 - STOCKHOLDERS' EQUITY (DEFICIT)

   Shares issued for cash

     On May 15, 1998, the Company sold 1,000,000  shares of common stock to SHTF
     for $400,000 in cash.  In addition,  the Company sold  1,600,000  shares of
     common stock to Robertson & Partners,  L.L.C.  for $600,000 in cash on June
     30, 1998.  These sales were made pursuant to subscription  agreements dated
     May 15, 1998. Robertson & Partners,  L.L.C. is the managing member of SHTF.
     The Company also granted SHTF a 120-day  right of first refusal with regard
     to any offerings of the Company's securities.

     During  December 1998, the Company's Board of Directors voted to accept the
     offer of  Robertson & Partners  Venture  Fund II to purchase an  additional
     444,445  shares of stock for  $200,000  ($0.45 per share).  This amount was
     received in $50,000 installments during January through April 1999.

     In May 1999, the Company issued 375,204 shares of stock for $283,100. These
shares were issued to individuals  affiliated  with HelveStar and are considered
deductions  from  HelveStar's  right,  if any, to purchase  2,250,000  shares as
described in Note 9.

                                      F-18
<PAGE>

NOTE 15 - STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)

   Share Exchange Agreement

     In  connection  with a Share  Exchange  Agreement  dated May 20, 1998,  the
     Company  acquired a 19% interest in  Automated  Health  Technologies,  Inc.
     ("AHT"),  a privately  held company,  in exchange for 500,000 shares of the
     Company's  common stock.  This agreement gives AHT shareholders a five year
     put option on an additional  1,000,000 shares of the Company's common stock
     in exchange  for the  remaining  81% of AHT's  common  stock under  certain
     conditions as outlined in the agreement.

   Convertible notes payable

     On December  18,  1997 the Company  issued an  unsecured  convertible  note
     payable to an individual in the face amount of $50,000, bearing interest at
     10% per  annum.  This note  matured  on June 18,  1999,  at which  time the
     principal  amount was converted  into 50,000 fully paid and  non-assessable
     shares of $0.0001 par value common stock at $1.00 per share.

     On January  21,  1998 the  Company  issued an  unsecured  convertible  note
payable to an individual in the face amount of $50,000,  bearing interest at 10%
per annum.  This note  matured  on July 21,  1999,  at which time the  principal
amount was converted into 50,000 fully paid and non-assessable shares of $0.0001
par value common stock at $1.00 per share.

     On January  21,  1998 the  Company  issued an  unsecured  convertible  note
     payable to an individual in the face amount of $25,000, bearing interest at
     10% per  annum.  This  note  matured  on July 21,  1999 at  which  time the
     principal  amount was converted  into 25,000 fully paid and  non-assessable
     shares of $0.0001 par value common stock at $1.00 per share.

NOTE 16 - LEGAL PROCEEDINGS

     Americare  Diagnostics,   Inc.,  Americare  Health  Scan,  Inc.,  Americare
     Transtech, Inc. International Medical Associates,  Inc., Joseph P. D'Angelo
     v.  Technical  Chemicals and Products,  Inc.,  Jack L.  Aronowitz,  Simplex
     Medical Systems,  Inc.,  Analyte  Diagnostics,  Inc., Henry B. Schur,  SMLX
     Technologies, Inc. Case No. 97-3654-CIV-HUCK (Southern District of Florida,
     Miami  Division).  The suit seeks damages in excess of $75,000  against the
     defendants  in  connection  with  a  glucose  monitoring  system  that  the
     plaintiffs  allege they have exclusive  rights to. SMLX has been named as a
     party only  because it employed  certain of the other  defendants,  as SMLX
     does not sell any products relating to the glucose  monitoring  system. One
     of the other defendants, Technical Chemicals and Products, Inc. has settled
     with the  plaintiffs.  The nature of that  settlement is unknown to SMLX. A
     preliminary  hearing on certain  patent  issues is being  scheduled for May
     2001. SMLX denies any wrong doing, and intends vigorously to defend against
     the action. What damages, if any, SMLX may suffer as a result of the action
     are too uncertain at this time to project.

                                      F-19
<PAGE>

NOTE 16 - LEGAL PROCEEDINGS (CONTINUED)

     C&O Trading  Corp.  v. Analyte  Diagnostics,  Inc.,  SMLX  Technologies  of
     Florida, Inc. f/k/a Simplex Medical Systems,  Inc., Giant Export Management
     Corp.  (arbitration  proceeding).  The demand  seeks  damages  against  the
     Company for the alleged breach of an exclusive  distribution  agreement for
     the marketing of HIV saliva test kits in certain South American  countries.
     The amount sought is in excess of $60,000. Discovery will be commencing. At
     this time it is not  possible to assess what  damages,  if any, the Company
     may be held liable for.

     Joseph P. D'Angelo, Americare Transtech, Inc., Americare Biologicals,  Inc.
     v. Henry B. Schur,  Nicholas G.  Levandoski,  SMLX  Technologies,  Case No.
     99-010263 (02) (Circuit Court, Broward County). The plaintiffs have filed a
     declaratory  judgment  seeking  indemnification  against the Company in the
     amount of  approximately  $3,000,000 to pay  judgments in that  approximate
     amount the plaintiffs  have against two judgment  debtors,  one present and
     one former employees of the Company. The plaintiffs alleged indemnification
     is required based on written employment  agreements between the Company and
     the  judgment  debtors.  The  Company  denies  any  liability  and plans to
     vigorously  defend  against  the  action.  The Court  recently  denied  the
     Company's motion for summary judgment. The matter is scheduled for trial in
     April 2001.

     John Faro v. Simplex Medical Systems,  Inc., Nicholas Levandoski,  Henry B.
     Schur, John Trafton,  Debra Ross, Case No. 98-19091 CA (04) (Circuit Court,
     Miami-Dade  County).  Third amended complaint filed, answer and affirmative
     defenses to it has been filed.  Complaint  alleges breach of share transfer
     agreement  for failure to timely  transfer  shares of  Simplex,  securities
     fraud, breach of consulting agreement, and civil theft (only against Schur,
     Trafton, and Ross) and tortuous  interference (only against Schur, Trafton,
     and Ross). Shares have been put into escrow awaiting outcome of claim.

     SMLX  Technologies,  Inc. v. Reuben Hertz, Case No. 99-016538 (13) (Circuit
     Court, Broward County). This claim by the Company was voluntarily dismissed
     based on a reasoned  assessment of lack of sufficient economic value of the
     claim. A counterclaim  brought by Hertz against SMLX is still pending in an
     arbitration  proceeding.  The Company intends to vigorously  defend against
     the  action  and does not  believe  it will have a  material  effect on its
     financial statements.

     SMLX  Technologies,  Inc.  v.  H.E.  Khundkar  Khalid  Ahmed  Hossain,  and
     Helvestar S.A., Case No.  00-01429 (09) (Circuit  Court,  Broward  County).
     Suit by the Company  against the defendants  for fraud,  misrepresentation,
     and breach of fiduciary duty based on defendant Hossain's representation as
     authorized  agent of Helvestar,  and alleges that defendants  induced SMLX,
     through   misrepresentations,   to  enter  into  various   agreements  that
     constituted  a joint  venture.  As a result,  the Company seeks damages and
     confirmation that the joint venture is null and void. The defendant company
     has  counter-claimed  alleging  breach  of  fiduciary  duty.  Discovery  is
     ongoing.

                                      F-20
<PAGE>

NOTE 16 - LEGAL PROCEEDINGS (CONTINUED)

     Superior Wholesale  Products,  Inc. v. Simplex Medical Systems,  Inc., Case
     No.  98-17352 CA (03) (Circuit  Court,  Miami-Dade  County).  The plaintiff
     filed a  complaint  alleging  breach  of  contract  and  interference  with
     business relationships, seeking $2.5 million in damages. The Company denies
     the allegations of the complaint and filed a counter-claim for interference
     with business  relationships  and for  defamation.  The Company  intends to
     vigorously defend against the action. At this time discovery is ongoing, it
     is premature to determine what damages,  if any, the Company may be subject
     liability.

     During  2000,  the  government  of the  United  States of  America  filed a
     complaint concerning a former product of the Company, The Simplex Rapid HIV
     Test Kit,  and whether the Kit was  manufactured  in  accordance  with good
     manufacturing  practices  and received FDA  approval  and  clearances.  The
     Company, in cooperation with the government,  agreed to enter a guilty plea
     to a FDA violation in the sale of the Kits. The government has  recommended
     payment of a fine of $150,000 and  restitution of $197,500.  The Company is
     currently  awaiting  sentencing  and has accrued a liability of $347,500 at
     December 31, 2000 based on the government recommendation.

NOTE 17 - COMMITMENTS

     On May 25,  2000,  the Company  entered  into two  agreements  with Florida
     International  University  ("FIU") in which FIU will provide  assistance in
     product  testing and  research  services  for the  Company as  specifically
     outlined  in the  contracts.  The agreed  upon fee for these  services  was
     $82,696,  of which  $53,512 had been paid through  December  31, 2000.  The
     $29,184  remaining  balance of the  agreement is expected to be paid during
     2001 as the services are completed.

NOTE 18 - VENDOR CONCENTRATION

          Three major  vendors  represented  approximately  38%  ($79,823),  28%
     ($59,785) and 32% ($68,501), respectively, of the Company's total purchases
     of inventory  during the year ended December 31, 2000. The Company believes
     that most  components  used in the  manufacture of its current and proposed
     products are currently  available  from numerous  suppliers  located in the
     United States,  Europe and Asia. However,  certain components are available
     only from a limited number of suppliers. Although the Company believes that
     it will not encounter difficulties in obtaining these components, there can
     be no assurance  that the Company  will be able to enter into  satisfactory
     agreements or  arrangements  for the purchase of  commercial  quantities of
     such components.

                                      F-21
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date: April 16, 2001                     SMLX TECHNOLOGIES, INC.


                                     By: /s/ Kenneth H. Robertson
                                             Kenneth H. Robertson, President


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

        SIGNATURE                       TITLE                   DATE


/s/ Kenneth H. Robertson       President (Chief Executive     April 16, 2001
Kenneth H. Robertson           Officer) and Director


/s/ Joel Marcus                Chief Financial Officer and    April 16, 2001
Joel Marcus                    Director


/s/ Gerald M. Wochna           Director                       April 16, 2001
Gerald M. Wochna


/s/ Sherman O. Jones           Director                       April 16, 2001
Sherman O. Jones