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, 2001

                         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 $776,519

As of December 31, 2001, 12,004,648 shares of the Registrant's common stock were
outstanding, and the aggregate market value of the shares held by non-affiliates
was approximately $130,264

DOCUMENTS INCORPORATED BY REFERENCE: NONE

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


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BACKGROUND

     SMLX Technologies, Inc. (f/k/a Simplex Medical Systems, Inc.) was formed on
June 6, 1996 and was in the development state 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 field of point of use medical and veterinary
diagnostics, dental therapeutic devices, pharmaceutical products and consumer
products. The Company utilizes outside manufacturing facilities for the
production of its products and final packaging to third parties. Within the
United States, the Company has received FDA registration on one of its dental
products. The Company's major source of revenue during the years ended December
31, 2001 and 2000 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. and ARETHREE, Inc. 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. ARETHREE, Inc. was
incorporated on November 7, 2001 to develop and market cosmeceutical and
Transdermal technology and products related to them.

     On September 31, 2001, SMLX Technologies of Florida, Inc., Analyte
Diagnostics, Inc. and IRT Management Corp. were administratively dissolved and
all assets were assigned and delivered to SMLX Technologies, Inc.

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
transdermal 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
was 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 had the right to discontinue the payments and terminate its
rights in the event that an adverse reaction to the technologies occurred in
patients or if efficacy did not qualify for submission to the FDA for subsequent
approval. The agreement was to become null and void, and the license was to
terminate without further obligation or


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liability of either company, in the event that Vector failed to make payments,
and did not cure the default upon notice from the Company.

     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 were
traded on Nasdaq or the American or New York Stock Exchange. However, Vector was
not publicly-held during this period, and recently closed down its executive
offices in Boca Raton, Florida.

     On April 1, 2001 Vector defaulted on payments under a separate letter
agreement concerning the Company's cosmeceutical assets and on September 24,
2001, Vector defaulted on our Exclusive Licensing Agreement.

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 of 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, which suit was titled "SMLX Technologies, Inc. v. H.E.
Khundkar Khalid Ahmed Hossain, and Helvestar S.A.", Case No.00-01429 (09)
(Circuit Court, Broward County). The Company's suit alleges 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.

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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

     Our products can be organized as follows:

             1.  A Transdermal Drug Delivery System, Patent applied for.


             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.

                 (b)  Equine infectious anemia rapid test.

             4.   An Intradermal Cosmetic line which is being marketed in the
                  Far East by a distributor and soon to be marketed in the
                  U.S. by infomercial.

     A. DRUG DELIVERY SYSTEMS. On April 13, 1999 the Company entered into an
Exclusive Licensing Agreement and Purchase Option Agreement with Vector Medical
Technologies, Inc. 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 delivery of drugs and other natural and synthetic materials,


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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 would have received 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 were covered by a patent. Vector would pay the advance royalties for a
period of four years subject to the option to purchase the subsidiary.
Commencing on April 13, 2000 Vector had 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. The subsidiary was not formed.
During 2001 Vector defaulted on its payments on both the Cosmetic (Intradermal)
and Transdermal License Agreement.

     B. 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)
premarket 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) premarket
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.

     C. 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 former 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 inflamatory
processes.

     D. 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. It can be easily performed at the
stables. 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 submited this test product to the U.S. Department of Agriculture for their
approval. A patent has now been applied for covering this technology.


     RESEARCH AND DEVELOPMENT

     The Company spent $172,397 and $223,858 on research and development of new
products during the years ended December 31, 2001 and December 31, 2000,
respectively, and it expects to spend about the same amount in the current
fiscal year on development of the products described above in addition to
others.


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MARKET

     The Company is starting to market its Dental Airbrator through distributors
on both an exclusive and non-exclusive basis depending on the quantity and
territory desired.

     The Company is marketing its cosmeceutical technology through a
distribution agreement in the Far East and expects soon to market this
technology in the United States by informercial. 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) Premarket 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) Premarket 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.

     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 Airbrators(R) are manufactured by East Coast Plastics, a contract
molding company. These molds and other components are then filled, assembled,
packaged and shipped by East Coast Plastics.

     The Company believes that most components used in the manufacture of its
current and proposed products are currently available from numerous suppliers


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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, 2001, the Company's revenues were
primarily derived from one source. Vector Medical paid the Company $718,000
under various agreements, which represented 92% of the Company's revenues.

     As disclosed in the Company's filings with the SEC, we terminated both of
our agreements with Vector in 2001 because of non-payment by Vector thereunder.

     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 license is now in litigation) under this Patent to BioStar,
S.A. 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.

     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


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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. In September 2001 the Company sold its interest in AHT for $100,000
(its book value) to raise working capital due to the non-payment by Vector on
their cosmeceutical Agreement and transdermal license fees.

     EMPLOYEES

     The Company currently has three full-time employees and two part-time
employees. The Company is not subject to any collective bargaining agreement and
believes that its relationships with its employees are good.


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ITEM 2.  DESCRIPTION OF PROPERTY.

     The Company presently maintains its corporate offices 855 S. Federal
Highway, Boca Raton, Florida and its laboratory warehouse facilities at 376
Ansin Boulevard, Hallandale, Florida 33009. The five year lease on Ansin
Boulevard 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 legal proceedings, either pending or
determined in 2001, in which the Company is a party. We are not aware of any
other threatened legal proceedings involving the Company.


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). On September 10, 2001, after a trial of the
case, a final judgment was entered in favor of the Company holding that the
Company owed nothing to the plaintiffs. Plaintiffs have appealed the judgment
and that appeal is currently pending.

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 was filed, and an answer and affirmative
defense was filed in response. The 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 on Feb. 23,
2001. The Court awarded attorney's fees in the amount of $23,050 to be paid by
the Company.

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. The case is pending.


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Levey, Airan, Brownstein, Shevin, Friedman, Roen & Kelso, LLP V. SMLX
Technologies, Inc. Case No. 00-23254 CA 09 (Circuit Court, Miami Dade County)
Suit by the plaintiff law firm for alleged unpaid legal fees of $221,249. The
Company denies the claim and has filed a counterclaim against the law firm. The
case is pending.

Vector Medical Technologies, Inc. V. SMLX Technologies Inc., et al., Case No. CA
02-01381 AJ. The case was recently filed against the Company and the Company has
answered its response to the complaint. In its complaint, Vector seeks specific
performance, and its claims include a claim for damages in excess of $3.6
million. Vector alleges that the company breached an exclusive License and
purchase agreement as described in note 16 to the financial statements of this
annual report. The Company denies the allegations. The Company intends to
vigorously defend the suit and to assert claims for damages against Vector.

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, 2001 .


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

             March 31, 2001                $0.11        $0.06
             June 30, 2001                 $0.04        $0.04
             September 30, 2001            $0.05        $0.05
             December 31, 2001             $0.03        $0.02

     (b) HOLDERS. As of March 30,2001, the Company had approximately 86
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
fiscal year ended December 31, 2001.

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

RESULTS OF OPERATIONS

     During the year ended December 31, 2001, the Company had revenue of
$776,519 as compared to $1,613,387 in the prior year. The decrease in revenues
is a result of less revenue received under the transdermal license agreement and
the cosmeceutical agreement. The gross profit margin at 72.8% in 2001 was about
the same in 2000.

     Operating expenses during 2001 were $1,133,031 as compared to $1,296,341 in
2000. The decrease was primarily in selling, general and administrative expenses
and legal expenses.

     The net loss for 2001 was $625,642 as compared to a net loss of $564,646
during 2000. The increase in the net loss was due to the write down of Airbrator
inventory.

     The company, through its subsidiary ARETHREE, INC., entered into a
exclusive Distribution agreement with an unrelated company, effective Jan. 1,
2002, granting exclusive rights to sell certain intradermal cosmetics in Japan,
Korea, Taiwan, Hong Kong, China, Philippines, Malaysia, Thailand,


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Indonesia, Singapore, Australia, and New Zealand. This agreement runs for seven
years commencing on Jan. 1, 2002 subject to a minimum annual amount of products
to be purchased by the distributor stated in US dollars.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2001, the Company had a working capital deficit of
$(809,302) as compared to $(239,886) at December 31, 2000. The increase in the
working capital deficit was primarily due to the write down in inventory value,
and an increase in accounts payable and accrued expenses.

     The report of the Company's auditors in the financial statements for the
year ended December 31, 2001, contains a going concern qualification. Since
inception, the Company has experienced losses aggregating $(3,250,856) and has
been dependent upon loans from stockholders and other third parties in order to
fund operations to date. Management believes that the revenues generated from
new licensing, joint venture agreements and either the sale of its transdermal
or future loans should provide the Company with sufficient cash flow resources
to fund the operations of the Company through the current year.

     The Company, through its subsidiary ARETHREE, entered into a secured
revolving demand note with a related party, Robertson & Partners LLC, during
January 2002, collateralized by all of the interests of ARETHREE. The total
available principal under this note is up to one million dollars and the sums
outstanding will accrued interest at a rate of 10% per annum. Interest is
payable monthly and the principal balance is payable on demand. Cumulative
borrowings through March 22, 2002 related to this note total $133,500.

     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-20 hereto.

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

     No response required.

                                   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             66    Chairman & President

Gerald M. Wochna                 59    Vice President, legal counsel
                                       And Director

Joel Marcus                      60    Chief Financial Officer and Director

Sherman O. Jones                 72    Director


                                       12

<PAGE>


     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; to recommend additional coverage and/or additional
type of insurance, needed to properly protect the Company's assets; and to
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:

     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 &


                                       13

<PAGE>


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.

     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.

     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.

     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.

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.

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 &
2001. No executive officer had total annual salary and bonus in excess of
$100,000 during such years.


                                       14

<PAGE>


<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>
Colin Jones           2000   $33,333
Former - President    1999   $80,000
                      1998   $57,231

Kenneth H. Robertson  2001   $23,231
 President - Oct.1 *   2000  $15,000
                      1999  $   -0-

* Base annual salary for Kenneth H. Robertson was to be $60,000. Mr. Robertson
elected to take common stock in lieu of salary, in amounts of $45,962 and
$37,885. Mr. Robertson elected to take his base salary in common stock at $0.10
per share when the stock was selling at $0.03 or lower for the previous 30 days.
</TABLE>


OPTIONS GRANTED - no options were granted during 2001


<TABLE>
<CAPTION>
                    AGGREGATE OPTION EXERCISES IN YEAR ENDED
              DECEMBER 31, 2001 AND DECEMBER 31, 2001 OPTION VALUES

                                         SECURITIES UNDER-   VALUE OF UNEXER-
                     SHARES              LYING UNEXERCISED    CISED IN-THE
                    ACQUIRED                   OPTIONS        MONEY OPTIONS/
                       ON                   AT 12/31/01        AT 12/31/01
                    EXERCISE     VALUE      EXERCISABLE/      EXERCISABLE/
    NAME            (NUMBER)    REALIZED   UNEXERCISABLE      UNEXERCISABLE
    ----            --------    --------  ----------------   ----------------
<S>                   <C>         <C>      <C>                   <C>
Colin Jones                                300,000
Kenneth H. Robertson  -0-         -0-       50,000 / 0           $0 / $0
Gerald M. Wochna      -0-         -0-       50,000 / 0           $0 / $0
Sherman Jones         -0-         -0-       50,000 / 0           $0 / $0
Joel Marcus           -0-         -0-       50,000 / 0           $0 / $0
</TABLE>

                                       15

<PAGE>


EMPLOYMENT AGREEMENTS

     As of Dec. 31, 2001 there were no employment agreements

(1) No bonus pool will be created until there is an audited pre-tax profit.

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 1,351,000 shares
of common stock at prices ranging from $0.875 to $3.26 per share under the Plan.

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

     The following table sets forth, as of December 31, 2001, 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


                                       16

<PAGE>


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

Kenneth H. Robertson                3,294,444 (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

Sherman O. Jones                    104,530 (3 & 7)           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                 3.7%
855 S. Federal Highway
Boca Raton, Fl. 33432

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

All Directors and Executive         5,491,444                 45.7%
Officers as a group(6 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. Colin Jones the former president.


                                       17

<PAGE>


(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
       150,000 shares held by Robertson wife and family members 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 3,294,444 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.


                                       18

<PAGE>


(7) Includes 102,500 shares held directly by Mr. Sherman Jones and 2,000 shares
held by Mr. Sherman 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 &
R&P Venture Fund II LLC.

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

TRANSACTIONS INVOLVING THE COMPANY

     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 $34,170 and $29,499 during the years ended December 31, 1999 and
1998, respectively. On January 1,2001, $14,291 of interest in arrears was
converted to loan principle, increasing the balance of these notes payable to
$309,281. interest expense incurred in connection with these loans totaled
$30,928 for the years ended 2001 and 2000.

     The investment in common stock at Dec.31,2000 represented the Company's
investment in 19% of the common stock of a privately held company in 1998. The
Company did not exercise any influence over the operating and financial
activities of this privately held company. During 2000, the Company reduced the
carrying value of this Investment to its net realizable value. The amount of the
valuation allowance, $100,000 was reported as other expense in 2000. This stock
was sold for $100,000 in October 2001 to provide the Company with working
capital after the default of Vector on our technologies.

     The Company, through its subsidiary ARETHREE, entered into a secured
revolving demand note with a related partner, Robertson & Partners L.L.C. during
January


                                       19

<PAGE>


2002, collateralized by all of the assets of ARETHREE,Inc. The total available
principal under this note is up to $1 million and accrues interest at 10% per
annum. Interest is payable monthly and the principal balance is payable on
demand. Cumulative borrowings through March 22, 2002 related to this note total
$133,500.

     During February 2002, pursuant to the terms of the Company's 1997 Stock
Option Plan, the Company granted options to purchase 649,000 shares of the
Company's common stock at $0.10 per share through February 2007. Also, during
February 2002, the Company resolved to issue 838,461 shares of common stock to
the active operating officers and directors in satisfaction of accrued salaries
in 2001 and reported at $16,770 and included in accrued expenses at December 31,
2001.

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 terminate 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)

 10.6       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       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

 10.9      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)


                                       21

<PAGE>


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

(b)  REPORTS ON FORM 8-K,

     The Company filed a report on Form 8-K on November 1, 2001, regarding the
termination of its Exclusive Licensing Agreement with Vector Medical
Technologies, Inc.


                                       22

<PAGE>


                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000




                                TABLE OF CONTENTS


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT                      F2

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS                                       F3 - F4
     CONSOLIDATED STATEMENTS OF OPERATIONS                             F5
     CONSOLIDATED STATEMENTS OF CHANGES
         IN STOCKHOLDERS' EQUITY (DEFICIT)                             F6
     CONSOLIDATED STATEMENTS OF CASH FLOWS                             F7
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                    F8-F22




<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, 2001 and 2000, 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 of America. 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, 2001 and 2000 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 of America.

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 $625,642 during the
year ended December 31, 2001, 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.


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

March 22, 2002
Boca Raton, Florida


                                      F-2

<PAGE>

                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000


                                     ASSETS

                                                           2001             2000
                                                    --------------  ------------
Current assets:
 Cash                                               $        7,968 $       8,799
 Accounts receivable                                           344         6,164
 Prepaid expenses                                           14,496        17,918
 Inventory                                                  91,105       150,092
                                                     -------------  ------------
  Total current assets                                     113,913       182,973
                                                     -------------  ------------

Equipment and leasehold improvements,
   net of accumulated depreciation of
   2001 $391,520; 2000 $300,199                            282,102       333,762
                                                     -------------  ------------

Other assets:
 Patents and trademarks, net of
  accumulated amortization
  of 2001 $3,988; 2000 $2,479                              145,250       135,914
 Deposits                                                    6,611        10,862
 Other intangible assets, net of
  accumulated amortization                                   - 0 -           276
 Investment in common stock                                  - 0 -       100,000
                                                     -------------  ------------
                                                           151,861       247,052
                                                     -------------  ------------
                                                    $      547,876 $     763,787
                                                     =============  ============



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

                                     - F-3 -


<PAGE>


                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>

                                                                        2001                        2000
                                                              -------------------------- ---------------------------
<S>                                                         <C>                        <C>
Current liabilities:
 Accounts payable and accrued expenses                       $                  649,586 $                   261,113
 Current portion of notes payable                                               173,629                     145,646
 Customer and other deposits                                                    100,000                      16,100
                                                              -------------------------- ---------------------------
  Total current liabilities                                                     923,215                     422,859
                                                              -------------------------- ---------------------------

Notes payable, net of current portion                                           436,156                     526,781
                                                              -------------------------- ---------------------------

Commitments and contingencies

Stockholders' equity (deficit):
 Common stock, $.0001 par value, 100,000,000 shares
  authorized, 12,004,648 shares issued and outstanding
  at December 31, 2001 and 2000                                                   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                   2,438,207
 Accumulated deficit                                                        (3,250,856)                 (2,625,214)
                                                              -------------------------- ---------------------------
                                                                              (811,495)                   (185,853)
                                                              -------------------------- ---------------------------
                                                             $                 547,876   $                 763,787
                                                              ========================== ===========================
</TABLE>






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

                                     - F-4 -


<PAGE>


                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>

                                                                                 2001                      2000
                                                                         -------------------       --------------------
<S>                                                                     <C>                       <C>
Operating revenues:
 Vector - transdermal services                                           $      600,000            $      900,000
 Vector - cosmeceutical technology                                               75,000                   300,000
 Vector - electro-sensor technology                                               - 0 -                    80,800
 Vector - other                                                                  43,000                     - 0 -
 Product sales                                                                   58,519                   332,587
                                                                         -------------------       --------------------
  Total operating revenues                                                      776,519                 1,613,387

Cost of research and development services and product sales:
 Research and development services                                              172,397                   223,858
 Product sales                                                                   38,532                   202,889
                                                                         -------------------       --------------------
  Total cost of research and development services and product sales             210,929                   426,747
                                                                         -------------------       --------------------

Gross profit                                                                    565,590                 1,186,640
                                                                         -------------------       --------------------

Operating expenses:
 Provision for write down of inventory                                          146,580                     - 0 -
 Legal fees                                                                     440,957                   632,698
 Consulting and compliance fees                                                  57,672                    99,204
 Other selling, general and administrative expenses                             394,716                   457,833
 Depreciation and amortization expense                                           93,106                   106,606
                                                                         -------------------       --------------------
  Total operating expenses                                                    1,133,031                 1,296,341
                                                                         -------------------       --------------------

Net loss from operations                                                       (567,441)                 (109,701)

Other income (expense):
 Investment valuation adjustment                                                   - 0 -                 (100,000)
 Loss on disposal of assets                                                        - 0 -                   (1,115)
 Interest expense                                                               (31,374)                  (35,152)
 Attorneys fees awarded to defendant                                            (23,050)                     - 0 -
 Fine and restitution                                                              - 0 -                 (347,500)
 Other income                                                                     6,223                    28,822
 Other expense                                                                  (10,000)                     - 0 -
                                                                         -------------------       --------------------
  Total other income (expense)                                                  (58,201)                 (454,945)
                                                                         -------------------       --------------------

Net loss before income taxes                                                   (625,642)                 (564,646)
Income taxes                                                                       - 0 -                     - 0 -
                                                                         -------------------       --------------------
Net loss                                                                 $     (625,642)           $     (564,646)
                                                                         ===================       ====================

Loss per common share                                                    $        (0.05)           $         (0.05)
                                                                         ===================       =====================
Weighted average number of shares                                            12,004,648                 11,920,210
                                                                         ===================       =====================
</TABLE>


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


                                     - F-5 -



<PAGE>


                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
                                      Total


<TABLE>
<CAPTION>
                                               Common stock                                                         Stockholders'
                                        ---------------------------------       Paid-in         Accumulated            Equity
                                            Issued            Amount            Capital           Deficit            (Deficit)
                                        --------------   ----------------  -----------------  -----------------  ------------------

<S>                                     <C>             <C>               <C>                <C>                <C>
 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)

Net loss                                        - 0 -              - 0 -              - 0 -          (625,642)           (625,642)
                                        --------------   ----------------  -----------------  -----------------  ------------------

 Balance, December 31, 2001                12,004,648    $         1,154   $      2,438,207   $    (3,250,856)   $       (811,495)
                                        ==============   ================  =================  =================  ==================
</TABLE>




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

                                     - F-6 -




<PAGE>


                    SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>

                                                                      2001                      2000
                                                            ------------------------- --------------------------
<S>                                                        <C>                       <C>
OPERATING ACTIVITIES
 Net loss                                                   $     (625,642)           $      (564,646)
 Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
  Depreciation and amortization                                     93,106                    106,606
  Provision for write down of inventory                            146,580                      - 0 -
  Loss on sale of assets                                             - 0 -                      1,115
  Valuation reduction of investment in common stock                  - 0 -                    100,000
  Attorneys fees awarded to defendant                               23,050                      - 0 -
  (Increase) decrease in:
  Accounts receivable                                                5,820                        (93)
  Prepaid expenses                                                   3,422                      5,381
  Inventory                                                        (87,593)                   (20,694)
  Deposits                                                           4,251                     (2,670)
  Increase (decrease) in:
  Accounts payable and accrued expenses                            399,052                    432,740
  Customer and other deposits                                       83,900                   (164,741)
                                                            ------------------------- --------------------------
 Net cash provided by (used in) operating activities                45,946                   (107,002)
                                                            ------------------------- --------------------------

INVESTING ACTIVITIES
 Proceeds from sale of fixed assets                                  - 0 -                      2,840
 Proceeds from sale of investment in common stock                  100,000                      - 0 -
 Acquisition of fixed assets and patents                           (50,506)                   (72,843)

                                                            ------------------------- --------------------------
 Net cash provided by (used in) investing activities                49,494                    (70,003)
                                                            ------------------------- --------------------------

FINANCING ACTIVITIES
 Payments for stock issuance costs                                   - 0 -                    (12,309)
 Payments on notes payable                                         (96,271)                   (16,913)
                                                            ------------------------- --------------------------
 Net cash used in financing activities                             (96,271)                   (29,222)
                                                            ------------------------- --------------------------

Net decrease in cash                                                  (831)                  (206,227)

Cash - beginning of year                                             8,799                    215,026
                                                            ------------------------- --------------------------
Cash - end of year                                          $        7,968            $         8,799
                                                            ========================= ==========================
</TABLE>


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

                                     - F-7 -




<PAGE>


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 outside manufacturing
          facilities for the production of its products and final packaging to
          third parties. Within the United States, the Company has received FDA
          registration on one of its dental products. The Company's major source
          of revenue during the years ended December 31, 2001 and 2000 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. and ARETHREE, Inc. 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. ARETHREE,
          Inc. was incorporated on November 7, 2001 to develop and market
          cosmeceutical and transdermal technology and products related to them.

          On September 21, 2001, SMLX Technologies of Florida, Inc., Analyte
          Diagnostics, Inc. and IRT Management Corp. were administratively
          dissolved and all assets were assigned and delivered to SMLX
          Technologies, Inc.

     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., IRT
          Management Corp. and ARETHREE, Inc. All intercompany accounts and
          transactions have been eliminated in consolidation.


                                       F-8

<PAGE>


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

       Accounts Receivable

          No allowance for doubtful accounts is provided, as all receivables are
          considered collectible.

       Inventory

          Inventory consists of finished goods and raw materials as of December
          31, 2001 and 2000 and is stated at the lower of cost (first-in,
          first-out method) or market.

       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 of America 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.

       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.

       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.

       Research and Development Costs

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


                                       F-9

<PAGE>


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

       Advertising Costs

          Advertising costs are charged to operations when incurred. Advertising
          expense incurred during the years ended December 31, 2001 and 2000
          totaled $15,565 and $880, respectively.

       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, 2001 and 2000. Options to purchase 1,351,000 shares of common
          stock during the years ended December 31, 2001 and 2000, 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.

       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.

       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.


                                      F-10

<PAGE>



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 income generated from the sale of cosmeceutical
     products and dental and industrial air abrasion devices will provide
     sufficient cash flow resources to fund the operations of the Company. In
     the event that sufficient cash flow is not provided by such sales,
     management believes that the Company's agreement to borrow funds through
     ARETHREE, Inc. from a related party (Robertson & Partners, LLC), as
     described at Note 18 will provide the additional required 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.

NOTE 3 - INVENTORIES

     Inventories, which consist of finished goods and raw materials, total
     $91,105 and $150,092 at December 31, 2001 and 2000, respectively.
     Inventories at December 31, 2001 reflect a valuation allowance of $146,500,
     which reduces certain inventories to their estimated net realizable values.
     There was no valuation allowance at December 31, 2000. It is at least
     reasonably possible that, based on management's evaluations of the net
     realizable value of inventory, the Company's estimated inventory valuation
     allowance could change in 2002 and future years.

NOTE 4 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     Equipment and leasehold improvements consists of the following at December
     31, 2001 and 2000:

<TABLE>
<CAPTION>
                                           Useful Life
                                           (in Years)             2001               2000
                                         ----------------   -----------------  -----------------
<S>                                      <C>              <C>                  <C>
        Computer equipment                      5           $       41,881     $       39,536
        Office furniture and equipment         5-7                  21,680             21,680
        Shop equipment                         5-7                 276,821            273,805
        Computer software                       3                    5,779              5,779
        Molds                                   5                  138,655            104,355
        Leasehold improvements                  9                  188,806            188,806
                                                            -----------------  -----------------

                                                                   673,622            633,961

        Less: accumulated depreciation                            (391,520)          (300,199)
                                                            -----------------  -----------------

                                                            $      282,102     $      333,762
                                                            =================  =================
</TABLE>


                                      F-11

<PAGE>


NOTE 4 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS (CONTINUED)

     Depreciation expense totaled $91,321 and $104,558 for the years ended
     December 31, 2001 and 2000, respectively.

NOTE 5 - INVESTMENT IN COMMON STOCK

     Investment in common stock at December 31, 2000 represented the Company's
     investment in 19% of the common stock of a privately held company in May
     1998. The Company did not exercise significant influence over the operating
     and financial activities of this privately held company. During 2000, the
     Company reduced the carrying value of this investment to its estimated net
     realizable value. The amount of the valuation allowance, $100,000, is
     reported as other expense in 2000. During 2001 the Company sold its entire
     interest in the privately held company to a relative of the President and
     Director of the Company for $100,000 to provide working capital subsequent
     to Vector's default and non-payment of royalties related to the agreement
     described in Note 16.

NOTE 6 - 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 2002, these notes payable have been classified as long-term
     debt as of December 31, 2001.

     The Company, in cooperation with the government, agreed to enter a guilty
     plea to an FDA violation related to a former product of the Company. The
     Company was sentenced on April 30, 2001 to a fine of $150,000 and
     restitution of $197,500. Through December 31, 2001, the Company has paid
     $60,000 to the U.S. Clerk of Court related to these amounts. Additionally,
     the case styled the 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) was settled during 2001
     for $82,500 to be paid in monthly installments of $6,875. Payments to C&O
     under this settlement offset the $72,500 restitution due to C&O under the
     plea agreement. The difference of $10,000 is included in other expenses for
     the year ended December 31, 2001. Through December 31, 2001, the Company
     has paid $20,625 to C&O under this settlement. At December 31, 2000,
     $347,500 was included as accrued fine and restitution. The Company has
     retroactively reclassified the presentation of this amount as notes payable
     in the Consolidated Balance Sheet for the year ended December 31, 2000 to
     conform to the classification adopted for the year ended December 31, 2001.


                                      F-12

<PAGE>


NOTE 6 - NOTES PAYABLE (CONTINUED)

     Notes payable as of December 31, 2001 and 2000 consisted of the following:

<TABLE>
<CAPTION>

                                                                    2001                2000
                                                            ------------------   -------------------
<S>                                                        <C>                   <C>
         Notes payable, shareholder, interest
         payable at 10% per annum, payable as
         described above and in Note 9.                       $    309,281         $    309,281

         Notes payable, U.S. Clerk of Court and
         C&O Trading Corp., payable as described above.            276,875              347,500

         Note payable, to an individual,
         representing  attorney's fees plus
         interest related to SMLX Technologies,
         Inc. v. Reuben Hertz, Case No. 99-016538
         (13) (Circuit Court, Broward County)
         voluntarily dismissed by the Company,
         payable in monthly installments of
         $5,000, final payment due May 31, 2002.                    23,629                - 0 -

         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.                         - 0 -                15,646
                                                            ------------------   -------------------

                                                                   609,785              672,427

         Less: current maturities                                 (173,629)            (145,646)
                                                            ------------------   -------------------

                                                           $       436,156      $       526,781
                                                            ==================   ===================
</TABLE>


     Aggregate annual maturities of the notes payable at December 31, 2001 are
     as follows:

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

                   2002                       $   173,629
                   2003                           429,281
                   2004                             6,875
                                               ------------

                                              $   609,785
                                               ============

     Interest expense totaled $31,374 and $35,152 during the years ended
     December 31, 2001 and 2000, respectively.



                                      F-13

<PAGE>


NOTE 7 - CUSTOMER AND OTHER DEPOSITS

     Included in customer and other deposits at December 31, 2001 is $100,000
     received from a customer as a deposit towards the future sale of
     cosmeceutical products.

     Included in customer and other deposits at December 31, 2000 was $16,100
     received from an individual as a deposit on stock to be issued at $1.00 per
     share. During 2001, $10,000 was refunded to the individual. The additional
     $6,100 is reported as other income during 2001.

NOTE 8 - 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
     approximately $5,030, including sales tax. The rental payment amount is
     subject to annual increase. 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,
                 --------------------------

                          2002                         $    60,360
                          2003                              15,090
                                                        ------------

                                                       $    75,450
                                                        ============

     Rent expense for the years ended December 31, 2001 and December 31, 2000
     totaled $67,280 and $55,832 respectively.

NOTE 9 - RELATED PARTY TRANSACTIONS

     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, 2001 and 2000 and are
          discussed in Note 6. Interest expense incurred in connection with
          these loans totaled $30,928 for the years ended December 31, 2001 and
          2000. Approximately $20,580 of interest due related to these loans is
          included in accounts payable at December 31, 2001. No interest was due
          related to these loans at December 31, 2000.


                                      F-14

<PAGE>


NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)

     Sale of Investment in Common Stock

          As described in Note 5, the Company sold its interest in the common
          stock of a privately held company to a relative of the President and
          Director of the Company to provide working capital subsequent to
          Vector's default and non-payment of royalties related to the agreement
          described in Note 16.

     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.

     Revenue

          During the year ended December 31, 2000, the Company received $306,355
          from its affiliate, BioStar, S.A. for product sales. This represents
          approximately 19% of the Company's total revenue during the year ended
          December 31, 2000. As discussed in Note 15, the Company filed suit for
          damages and to void the joint venture agreement that outlined the
          formation and capitalization of BioStar, to be funded by HelveStar,
          S.A. who was to own sixty percent, with the Company owning forty
          percent.

NOTE 10 - SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

     As of December 31, 2001, capitalized patent costs totaling $5,115 were
     included in accounts payable.

     During the years ended December 31, 2001 and 2000 cash paid by the Company
     for interest totaled $10,208 and $37,570, respectively.

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

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


                                      F-15

<PAGE>


NOTE 11 - 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 12 - 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, 2001, the options granted under this plan totaled
     1,350,000 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 12 - STOCK OPTIONS (CONTINUED)

     The following summarizes the status of the Company's stock options for the
     years ended December 31, 2001 and 2000:

                                                               Weighted-Average
                                                  Shares        Exercise Price
                                               -------------   ----------------
         Outstanding at January 1, 2000          1,301,000         $1.49
         Granted and exercisable                    50,000         $0.88
         Exercised                                   - 0 -
         Forfeited                                   - 0 -
                                               -------------   ----------------

         Outstanding at December 31, 2000        1,351,000         $1.46
         Granted and exercisable                     - 0 -
         Exercised                                   - 0 -
         Forfeited                                   - 0 -
                                               -------------   ----------------

         Outstanding at December 31, 2001        1,351,000         $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 year ended December 31,
     2000 was $0.09. This value was computed using the Black-Scholes option
     pricing model with the following assumptions: expected life of 3 years;
     expected volatility of 277% and 299% for the years ended December 31, 2001
     and 2000, respectively; and a risk free interest rate of 6%. No stock
     options were granted during the year ended December 31, 2001. Had
     compensation cost for the Company's stock options granted during 2000 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 year ended December 31, 2000 would have been
     $569,216 ($0.05 per share).

     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 13 - INCOME TAXES

     The Company has incurred tax operating losses and therefore has generated
     no income tax liabilities. As of December 31, 2001, the Company has
     generated net tax operating loss carryforwards totaling approximately
     $2,750,000, 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, 2001 and 2000:

                                                2001                1999
                                          -----------------   -----------------
            Deferred tax assets:
                 Net operating loss      $      935,000      $      740,000
                 carryforward
                 Valuation allowance           (935,000)           (740,000)
                                                              -----------------

            Net deferred tax asset       $        - 0 -      $        - 0 -
                                          =================   =================

NOTE 14 - 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.

     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. The Company sold
         100% of its investment in AHT during 2001.


                                      F-18

<PAGE>



NOTE 15 - 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). All claims against SMLX, Simplex and Analyte related to
     this suit were dismissed with prejudice on September 26, 2001, with each
     party to pay its own attorney's fees and costs.

     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 case was settled for $82,500 to be paid
     in monthly installments of $6,875 per month. Through December 31, 2001, the
     Company has paid $20,625 to C&O under this settlement. Pursuant to
     settlement, all restitution amounts paid by the Company to the government
     and received by C&O in connection with United States v. SMLX Technologies,
     Inc., detailed below, will be credited to SMLX and will reduce the
     corresponding amount owed to C&O in respect of this proceeding.

     United States v. SMLX Technologies, Inc., Case No. 00-6328-Cr-Ferguson
     (Southern District Court of Florida). 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 an FDA violation in the sale
     of the Kits. The Company was sentenced on April, 30, 2001 to a fine of
     $150,000 and restitution of $197,500 and a probation period of 5 years. The
     settlement requires monthly payments of $10,000 to the U.S. Clerk of Court
     related to these amounts. The most recent payment to the U.S. Clerk of
     Court was paid on September 25, 2001. The judgement states that the
     probation officer may on the basis of the corporation's financial status,
     and with Court approval, adjust the schedule of payments to reduce or
     accelerate payments of restitution and fines. Although formal approval has
     not been received through December 31, 2001, management believes that the
     payment schedule may be adjusted to reduce or temporarily suspend the
     monthly payments currently due under the agreement. Additionally, the
     Company is required to obtain permission from the probation officer to
     incur additional debt. During 2002, the Company borrowed funds from a
     related party as described at Note 18. Formal approval from the probation
     officer is pending.

     The amounts paid to C&O pursuant to the settlement reached in the case 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) as discussed above, will offset restitution due to
     C&O.

     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). On September 10, 2001,
     after a trial of the case, a final judgment was entered in favor of the
     Company, holding that the Company owed nothing to plaintiffs. The
     plaintiffs have appealed the judgement, and that appeal is currently
     pending.


                                      F-19

<PAGE>


NOTE 15 - LEGAL PROCEEDINGS (CONTINUED)

     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). 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. Plaintiff seeks
     damages against the Company in excess of $1 million.

     SMLX Technologies, Inc. v. Reuben Hertz, Case No. 99-016538 (13) (Circuit
     Court, Broward County). This claim by the Company was voluntarily dismissed
     on February 23, 2001. The court awarded attorney's fees in the amount of
     $23,050 to be paid by the Company.

     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 has filed a counter-claim for
     interference with business relationships and for defamation. The Company
     intends to vigorously defend against the action. The case is pending.

     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 the
     Company, through misrepresentations, to enter into various agreements that
     constituted a joint venture. 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. This right
     to purchase these 2,250,000 shares, in accordance with this agreement
     expired during May 2001. 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. The case is pending.

     Levey, Airan, Brownstein, Shevin, Friedman, Roen & Kelso, LLP v. SMLX
     Technologies, Inc. Case No. 00-23254 CA 09 (Circuit Court, Miami Dade
     County). Suit by the plaintiff law firm for alleged unpaid legal fees of
     $221,249. The Company denies the claim and has filed a counterclaim against
     the law firm. The case is pending.


                                      F-20

<PAGE>


NOTE 15 - LEGAL PROCEEDINGS (CONTINUED)

     Vector Medical Technologies, Inc. v. SMLX Technologies of Florida, Inc., et
     al., Case No. Ca 02-01381 AJ. The case was recently filed against the
     Company and the Company is preparing its response to the complaint. In its
     complaint, Vector seeks specific performance, and it claims include a claim
     for damages in excess of $3.6 million. Vector alleges that the Company
     breached an exclusive license and purchase option agreement as described in
     Note 16. The Company denies the allegations. The Company intends to
     vigorously defend the suit and to assert claims for damages against Vector.

NOTE 16 - CUSTOMER CONCENTRATION AND TERMINATION OF LICENSE AGREEMENT

     On April 13, 1999, the Company entered into an exclusive licensing
     agreement with Vector Medical Technologies, Inc. ("Vector"). This agreement
     granted 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 had 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 were due quarterly within 45 days from the end of each calendar
     quarter for which royalties were payable. Vector 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 were to amount to
     at least $900,000 per year, payable in monthly installments of at least
     $75,000. The Company terminated its license agreement with Vector because
     of Vector's failure to make the license payment when due, including a grace
     period that expired on September 24, 2001. During 2001 and 2000, the
     Company received $600,000 and $900,000, in connection with this agreement,
     which is included in revenue for the years ended December 31, 2001 and
     2000, respectively. Revenue from this contract comprised approximately 82%
     and 56% of the Company's total revenues for the years ended December 31,
     2001 and 2000, respectively.

     Also, during 2001, the Company terminated a separate letter agreement with
     Vector for the Company's proprietary technologies used in cosmeceutical
     products, also because of non-payment of royalties. During 2001 and 2000,
     the Company received $75,000 and $300,000, in connection with this
     agreement, which is included in revenue for the years ended December 31,
     2001 and 2000, respectively. Revenue from this contract comprised
     approximately 10% and 19% of the Company's total revenues for the years
     ended December 31, 2001 and 2000, respectively.

NOTE 17 - VENDOR CONCENTRATION

     Two major vendors represented approximately 55% ($35,700) and 38%
     ($25,741), respectively, of the Company's total purchases of inventory
     during the year ended December 31, 2001. 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>


NOTE 18 - SUBSEQUENT EVENTS

     The Company, through its subsidiary ARETHREE, entered into an exclusive
     distribution agreement with an unrelated company, effective January 1,
     2002, granting exclusive rights to sell certain intradermal cosmetics in
     Japan, Korea, Taiwan, Hong Kong, China, Philippines, Malaysia, Thailand,
     Indonesia, Singapore, Australia and New Zealand. This agreement encompasses
     a period of seven years commencing on January 1, 2002, subject to annual
     renewal thereafter, and includes a minimum annual amount of products to be
     purchased by this unrelated company stated in U.S. dollars. Purchase orders
     are to be placed sufficiently in advance for ARETHREE to meet the required
     delivery date.

     The Company, through its subsidiary ARETHREE, entered into a secured
     revolving demand note with a related party, Robertson & Partners, LLC,
     during January 2002, collateralized by all of the assets of ARETHREE. The
     total available principal under this note is up to $1 million and accrues
     interest at 10% per annum. Interest is payable monthly and the principal
     balance is payable on demand. Cumulative borrowings through March 22, 2002
     related to this note total $133,500.

     ARETHREE is in the process of obtaining formal approval to borrow up to $1
     million.

     During February 2002, pursuant to the terms of the Company's 1997 Stock
     Option Plan, the Company granted options to purchase 649,000 shares of the
     Company's common stock at $0.10 per share through February 2007.

     Also, during February 2002, the active operating officers elected to accept
     838,461 shares of common stock, valued at approximately $16,770, in lieu
     and satisfaction of base compensation of $83,846.


                                      F-22

<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 12, 2002                    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 & Director           April 12, 2002
Kenneth H. Robertson



/s/ Gerald M. Wochna           Vice President & Sect.         April 12, 2002
Gerald M. Wochna



/s/ Joel Marcus                Chief Financial Officer and    April 12, 2002
Joel Marcus                    Director



/s/ Sherman O. Jones           Director                       April 12, 2002
Sherman O. Jones




<PAGE>


EX-23

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     We hereby consent to the incorporation of our report dated March 22, 2002,
in the Annual Report on Form 10-KSB of SMLX Technologies, Inc. for the fiscal
year ended December 31, 2001.

                                   /s/ Schmidt & Co.

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

Boca Raton, Florida
April 5, 2002