SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D. C. 20549

                                   FORM 10-K

                                   (Mark One)

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

                    For the fiscal year ended March 31, 2002

                                       OR

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

                  For the Transition period from       to

                        Commission file number 000-22673

                            SCHICK TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                                 11-3374812
      (State or other jurisdiction of                 (IRS Employer
       incorporation or organization)                 Identification No.)

                  30-00 47th Avenue, Long Island City, NY 11101
              (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (718) 937-5765

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

           Securities registered pursuant to Section 12(g) of the Act:
                     Common stock, par value $.01 per share

     Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
    1934 during the preceding 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 |_|

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
    405 of Regulation S-K is not contained herein, and will not be contained,
  to the best of the registrant's knowledge, in definitive proxy or information
    statements incorporated by reference in Part III of this Form 10-K or any
                        amendment to this Form 10-K. |_|

                                   ----------

    The aggregate market value of Common Stock held by non-affiliates of the
   registrant as of June 6, 2002 was approximately $20,685,491. Such aggregate
  market value is computed by reference to the closing sale price of the Common
                              Stock on such date.

    As of June 6, 2002, the number of shares outstanding of the Registrant's
             Common Stock, par value $.01 per share, was 10,144,520

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      NONE

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                                Table of Contents

Item of Form 10-K                                                           Page
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Part I
         Item 1.  Business ...............................................     1
         Item 2.  Properties .............................................    10
         Item 3.  Legal Proceedings ......................................    10
         Item 4.  Submission of Matters to a Vote of Security Holders ....    11

Part II
         Item 5.  Market for the Registrant's Common Equity and Related
                  Stockholder Matters ....................................    11
         Item 6.  Selected Financial Data ................................    12
         Item 7.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations ....................    13
         Item 7A. Quantitative and Qualitative  Disclosures About Market
                  Risk ...................................................    19
         Item 8.  Financial Statements and Supplementary Data ............    19
         Item 9.  Changes in and Disagreements with Accountants
                  On Accounting and Financial Disclosure .................    19

Part III
         Item 10. Directors and Executive Officers of the Registrant .....    19
         Item 11. Executive Compensation .................................    23
         Item 12. Security Ownership of Certain Beneficial Owners And
                  Management .............................................    26
         Item 13. Certain Relationships and Related Transactions .........    28

Part IV
         Item 14. Exhibits, Financial Statement Schedules and Reports on
                  Form 8-K ...............................................    F1

<PAGE>

PART I

ITEM 1. BUSINESS

      Schick Technologies, Inc. (the "Company") designs, develops and
manufactures innovative digital radiographic imaging systems and devices for the
dental and medical markets. The Company's products, which are based on
proprietary digital imaging technologies, create instant high-resolution
radiographs with reduced levels of radiation.

      In the field of dentistry, the Company's products include the CDR(R)
computed dental radiography imaging system, introduced in March 1994. The CDR
system, a leading product in its field, uses an intra-oral sensor to produce
instant, full size, high-resolution dental x-ray images on a color computer
monitor without film or the need for chemical development, while reducing the
radiation dose by up to 80% or more as compared with conventional x-ray film.
The Company also manufactures and sells the CDRCam(R) 2000, an intra-oral camera
which fully integrates with the CDR system, and the CDRPan(TM), a digital
panoramic imaging device. In addition, the Company is developing other products
and devices for the dental field, as well as updated versions of its current
products.

      In the field of medical radiography, the Company manufactures and sells
the accuDEXA(R) bone densitometer, a low-cost and easy-to-operate device for the
assessment of bone mineral density and fracture risk. Additionally, the Company
has commenced development of a general purpose digital radiography device for
various intended uses, including cephalometric imaging.

      The Company's core products are based primarily on its proprietary
active-pixel sensor ("APS") imaging technology. In addition, certain of the
Company's products are based upon its proprietary enhanced
charged-coupled-device ("CCD") imaging technology. APS allows the fabrication of
large-area imaging devices with high resolution at a fraction of the cost of
traditional technologies. APS technology, developed by the California Institute
of Technology and initially licensed to Photobit Corporation, is licensed to
Micron Technology, Inc.; it is sublicensed to the Company for a broad range of
health care applications.

      The Company's objective is to be the leading provider of high resolution,
low-cost digital radiography products. The Company plans to leverage its
technological advantage in the digital imaging field to penetrate a broad range
of diagnostic imaging markets. The Company believes that its proprietary
technologies and expertise in electronics, imaging software and advanced
packaging may enable it to compete successfully in these markets. Key elements
of the Company's strategy include (i) expanding market leadership in dental
digital radiography through expanded sales channels, further product
enhancements and strategic distribution agreements; (ii) broadening the
marketing of accuDEXA(R) to the medical market through increased marketing
activities; (iii) introducing new products based on patented and proprietary APS
technology for other medical and industrial applications; and (iv) enhancing
international distribution channels for existing and new products.

      The Company's business was founded in 1992 and it was incorporated in
Delaware in 1997. On July 7, 1997, the Company completed an initial public
offering of its Common Stock. Proceeds to the Company after expenses of the
offering were approximately $33,508,000.

      The Company's offices are located at 30-00 47th Avenue, Long Island City,
New York 11101. The Company's telephone number is (718) 937-5765, and its
website address is http://www.schicktech.com.

PRODUCTS/INDUSTRY

      Digital Imaging

      X-ray imaging, or radiography, is widely used as a basic diagnostic
technique in a broad range of medical applications. To produce a conventional
radiograph, a film cassette is placed behind the anatomy to be imaged. A
generator, which produces high-energy photons known as x-rays, is positioned
opposite the film cassette. The transmitted x-rays pass through soft tissue,
such as skin and muscle, and are absorbed by harder substances, such as bone.
These x-rays then form a latent image upon the film. After exposure, the film is
passed through a series of chemicals and then dried.


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      Film, however, has certain inherent limitations, including the time,
operating expense, inconvenience and uncertainty associated with film
processing, as well as the cost of disposal of waste chemicals and the need for
compliance with environmental regulations. Furthermore, the radiation dosage
levels required to assure adequate image quality in conventional film raise
concerns regarding the health risks associated with exposure to radiation. Also,
conventional film images cannot be electronically retrieved from patient records
or electronically transmitted to health care providers or insurance carriers at
remote locations, a capability which has become increasingly important in
today's managed care environment. While x-ray scanning systems convert x-rays
into digital form, they add to the time and expense associated with the use of
conventional film and do not eliminate the drawbacks of film processing.

      Digital radiography products have been developed to overcome the
limitations of conventional film. These systems replace the conventional film
cassette with an electronic receptor which directly converts the incident x-rays
to digital images.

      Dental Imaging

      Dentists, who typically perform their own radiology work, represent the
single largest group of radiologists in the world and the dental industry is, in
terms of unit volume, the largest consumer of radiographic products and
equipment.

      The Company believes that there is a potential market for approximately
1.1 million digital dental radiography devices worldwide. According to the
American Dental Association, there are approximately 150,000 practicing dentists
in the United States. The Company believes that each of them, on average,
operates 2.5 radiological units, creating a potential market of 375,000 digital
dental radiography devices in the United States. In addition, the Company
believes that there are approximately 600,000 practicing dentists in the world's
major healthcare markets outside of the United States and, the Company believes
that each of them, on average, operates 1.25 radiological units, creating a
potential market of 750,000 additional devices.

      The Company believes that dentists have a particularly strong motivation
to adopt digital radiography. Radiographic examinations are an integral part of
routine dental checkups and the dentist is directly involved in the film
development process. The use of digital radiography eliminates delays in film
processing, thus increasing the dentist's potential revenue stream and
efficiency, and reduces overhead expenses. The use of digital radiography also
allows dentists to more effectively communicate diagnosis and treatment plans to
patients, which the Company believes has the potential to increase the rate of
patients' treatment acceptance and resulting revenues. Finally, the radiation
dosage required to produce an intra-oral dental x-ray, which is high when
compared with other medical radiographs, can be reduced by up to 80% or more
through the use of digital radiography.

      The Company's principal revenue-generating product is its CDR(R) computed
dental radiography imaging system. The Company's CDR(R) system is easy to
operate and can be used with any dental x-ray generator. To produce a digital
x-ray image using CDR(R), the dentist selects an intra-oral sensor of suitable
size and places it in the patient's mouth. The sensor converts the x-rays into a
digital image that is displayed on the computer monitor within five seconds and
automatically stored as part of the patient's clinical records. CDR(R) system
software allows the dentist to perform a variety of advanced diagnostic
operations on the image. The sensor can then be repositioned for the next x-ray.
As the x-ray dose is significantly lower than that required for conventional
x-ray film, concern over the potential health risk posed by multiple x-rays is
greatly diminished. The process is easy and intuitive, enabling nearly any
member of the dental staff to operate the CDR(R) system with minimal training.

      The Company manufactures digital sensors in three sizes which correspond
to the three standard sizes of conventional dental x-ray film. Size 0 measures
31 x 22 x 5mm and is designed for pediatric use; size 1 measures 37 x 24 x 5mm
and is designed for taking anterior dental images; and size 2 measures 43 x 30 x
5mm and is designed for taking bitewing images. All of the Company's CDR(R)
sensors can be sterilized using cold solutions or gas. The typical CDR(R)
configuration includes a computer, display monitor and size 2 digital sensor.

      The Company began selling its intra-oral camera, the CDRCam(R), in early
1997 and introduced the CDRCam(R) 2000, a redesigned version of the product, in
November 1999. CDRCam(R) fully integrates with the CDR(R) system to provide
color video images of the structures of the mouth. Since their introduction in
1991, intra-oral cameras have become


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<PAGE>

widely accepted as a dental communication and presentation tool. CDRCam(R) is
"ETL Listed". "ETL" is a North American Safety Mark indicating compliance with
safety standard UL-2601-1.

      In March 1999, the Company commenced the sale of its digital panoramic
imaging device, the CDRPan(TM). This device, which is designed to be retrofitted
into conventional panoramic dental x-ray machines, replaces film with electronic
sensors and a computer. This obviates the need for film and provides
instantaneous images, thus offering substantial savings in terms of time and
costs. Additionally, the CDRPan (TM) easily integrates with practice management
and other computer software applications.

      Bone Mineral Density / Fracture Risk Assessment

      Assessment of bone mineral density ("BMD") is an essential component in
the diagnosis and monitoring of osteoporosis. Osteoporosis is a disease that
causes progressive loss of bone mass which, in serious cases, may result in bone
fractures and even death. Osteoporosis can develop over the course of many years
without apparent symptoms, until bone is sufficiently degenerated and fractures
occur. The National Osteoporosis Foundation has estimated that approximately 200
million people suffer from the disease worldwide, which affects one out of three
postmenopausal women and one out of ten men over the age of 70. In the United
States, an estimated 28 million people suffer from the disease or have low bone
mass, placing them at increased risk for osteoporosis. The total estimated
health care cost of osteoporosis in the United States, including indirect costs,
is approximately $14 billion annually.

      Until recently, osteoporosis was considered neither treatable nor
preventable. Because recognized treatments are now available and because
osteoporosis may be preventable if detected in its early stages, the demand for
BMD diagnostic equipment has significantly increased. Because of the large
population segment which could benefit from BMD testing, the Company believes
that there is a need for a practical, instant, cost effective, precise, compact
and easy-to-use BMD testing device for the primary care physician. Primary care
physicians consist of internal medicine, family, geriatric and OB/GYN practices.
These practices represent approximately 172,000 potential testing sites in the
United States alone. Traditional BMD assessment devices have been large, costly
and difficult to operate, and are primarily found in large hospitals and
diagnostic imaging centers. It is estimated that in 2000, there were
approximately 7,500 such BMD assessment devices in use in the United States.

      The Company's accuDEXA(R) device is an innovative BMD assessment device to
assist doctors in the diagnosis of low bone density and prediction of fracture
risk. The Company believes that this low-cost and precise diagnostic tool
assesses BMD more quickly, accurately and easily than any comparable product
currently on the market, while using a minimal radiation dosage. It is a
point-of-treatment tool, designed for use by primary care physicians as an
integral part of a patient's regular physical examination. In December 1997, the
Company received clearance from the United States Food and Drug Administration
("FDA") for the general use and marketing of the accuDEXA(R) as a BMD assessment
device; in June, 1998, the FDA granted the Company additional clearance for its
marketing of the accuDEXA(R) as a predictor of fracture risk.

      Based on APS technology, accuDEXA(R) is a small self-contained unit
capable of instantly assessing the BMD of a specific portion of the patient's
hand, a relative indicator of BMD elsewhere in the body. This device is the
first BMD assessment instrument that is virtually automatic, requiring little
operator intervention or interfacing other than the entry of relevant patient
data into a built-in touch sensitive LCD screen. The device requires no external
x-ray generator or computer and it exposes the patient to less than 1% of the
radiation of a single conventional chest x-ray. To perform a test using the
accuDEXA(R), the patient places his or her hand into a position and, upon
activation by the operator, the device automatically emits two low-dosage x-ray
pulses. The patient's bone density and fracture risk information is displayed on
the screen in less than 30 seconds. The accuDEXA(R) is "ETL Listed". "ETL" is a
North American Safety Mark indicating compliance with safety standard UL-2601-1.

      Cephalometric Digital Radiography

      The Company is also developing an 8"x 10" general-purpose digital
radiography sensor for various intended uses, including cephalometric (i.e.,
skull) imaging. Management currently believes that the unit will be available
for sale by mid-2003 pending clearance by the FDA. There can be no assurance
that the Company will file for such clearance or that the FDA will grant such
clearance. See "Business -- Government Regulation."


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<PAGE>

      Schick X-Ray Corporation

      On September 24, 1997, the Company completed the acquisition of certain
assets of Keystone Dental X-Ray, Inc., a manufacturer of x-ray equipment for the
medical and dental radiology field, for $1.5 million in cash. The acquired
assets were integrated into the Company's former subsidiary, Schick X-Ray
Corporation ("Schick X-Ray"). In August 1999, Schick X-Ray was dissolved and its
operations absorbed by the Company.

MANUFACTURING

      The Company's products are manufactured at its facility in Long Island
City, New York, which includes a controlled environment sensor production
facility. This facility is subject to periodic inspection by the FDA. The
Company has invested in automated and semi-automated equipment for the
fabrication and machining of parts and assemblies incorporated in its products.
The Company's quality assurance program includes various quality control
measures from inspection of raw materials, purchased parts and assemblies
through in-process and final inspection and conforms to the guidelines of the
International Quality Standard, ISO 9001. In August 1998, the Company was
granted ISO 9001 certification and, since that time, has been subject to
semi-annual audits to ensure the maintenance of such certification.

      The Company manufactures most of its custom components itself in order to
minimize dependence on suppliers, for quality control purposes and to help
maintain process propriety. While the Company does procure certain components
from outside sources which are sole suppliers, it believes that those components
could be obtained from additional sources without substantial difficulty,
although the need to change suppliers or to alternate between suppliers might
cause significant delays in delivery or significantly increase the Company's
costs. The Company procures its APS and CCD semiconductor wafers, a significant
component of its products, each from a single supplier. Extended interruptions
of this supply could have a material adverse effect on the Company's ability to
produce its products and its results of operations. The Company's manufacturing
processes are, for the most part, vertically integrated, although selective
outsourcing is employed to take advantage of economies of scale at outside
manufacturing facilities and to alleviate manufacturing bottlenecks. Certain
components used in existing products of the Company, as well as products under
development, may be purchased from single sources.

DEPENDENCE ON CUSTOMERS

      During fiscal 2002, Patterson Dental Company accounted for annual sales by
the Company of $9.9 million or 41% of annual sales. During fiscal 2001,
Patterson Dental Company and RoSCH AG Medizintechnik accounted for annual sales
by the Company of $4.5 million and $3.0 million, or 21% and 14%, respectively,
of annual sales. During fiscal 2000, a single customer, Henry Schein, Inc.,
accounted for annual sales by the Company of $2.6 or 12% of annual sales. During
fiscal 2002, 2001 and 2000, respectively, sales of approximately $6.2 million,
$8.1 million and $6.5 million were made to foreign customers.

PATENTS, TRADE SECRETS AND PROPRIETARY RIGHTS

      The Company seeks to protect its intellectual property through a
combination of patent, trademark and trade secret protection. The Company's
future success will depend in part on its ability to obtain and enforce patents
for its products and processes, preserve its trade secrets and operate without
infringing the proprietary rights of others.

      Patents

      The Company has an active corporate patent program, the goal of which is
to secure patent protection for its technology. The Company currently has issued
United States patents for an 'Intra-Oral Sensor For Computer Aided Radiography',
U.S. Patent No. 5,434,418, which expires on October 16, 2012; a 'Large Area
Image Detector', U.S. Patent No. 5,834,782, which expires on November 20, 2016;
a 'Method and Apparatus for Measuring Bone Density', U.S. Patent No. 5,852,647,
which expires on September 24, 2017; an 'Apparatus for Measuring Bone Density
Using Active Pixel Sensors', U.S. Patent No. 5,898,753, which expires on June 6,
2017; a 'Dental Imaging System with Lamps and Method', U.S. Patent No.
5,908,294, which expires on June 12, 2017; an 'X-ray Detection System Using
Active Pixel Sensors', U.S. Patent No. 5,912,942, which expires on June 6, 2017;
a 'Dental Imaging System with White Balance Compensation', U.S. Patent No.
6,002,424, which expires on June 12, 2017; 'Dental Radiography Using an
Intraoral Linear Array Sensor,' U.S. Patent No. 5,995,583, which expires on
November


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13, 2016; a 'Method for Reading Out Data from an X-Ray Detector,' U.S. Patent
No. 6,069,935, which expires on June 6, 2017; and a 'Filmless Dental radiography
System Using Universal Serial Bus Port', U.S. Patent No. 6,134,298, which
expires on August 7, 2018. In addition, the Company is the licensee of U.S.
Patent No. 5,179,579, for a 'Radiograph Display System with Anatomical Icon for
Selecting Digitized Stored Images', under a worldwide, non-exclusive, fully paid
license. The Company also has U.S. and foreign patent applications currently
pending.

      The Company is the exclusive sub-licensee for use in medical radiography
applications of certain patents, patent applications and other know-how
(collectively, the "Intellectual Property") related to complementary metal oxide
semiconductor ("CMOS") active pixel sensor technology (the "APS Technology"),
which was developed by the California Institute of Technology and licensed to
Photobit Corp. from which the Company obtained its sub-license. Photobit was
subsequently acquired by Micron Technology, Inc., which continues to sublicense
the CMOS Intellectual Property to the Company. The Company's exclusive rights to
such technology are subject to government rights to use, noncommercial
educational and research rights to use by California Institute of Technology and
the Jet Propulsion Laboratory, and the right of a third party to obtain a
nonexclusive license from the California Institute of Technology with respect to
such technology. The Company believes that, as of the date of this filing,
except for such third party's exercise of its right to obtain a nonexclusive
license to use APS Technology in a field other than medical radiography, none of
the foregoing parties have given notice of their exercise of any of their
respective rights to the APS Technology. There can be no assurance that this
will continue to be the case, and any such exercise could have a material
adverse effect on the Company. Additionally, the agreement between the Company
and Photobit Corp. requires, among other things, that the Company use all
commercially reasonable efforts to timely introduce, improve and market and
distribute licensed products. There can be no assurance that the Company will
comply with its obligations under its agreement with Photobit Corp. Any such
failure to comply could have a material adverse effect on the Company.

      Trademarks

      The Company has obtained trademark registrations from the United States
Patent and Trademark Office for the marks (i) "CDR" for its digital dental
radiography product; (ii) "CDRCam" (both textual and stylized) for its
intra-oral camera (iii) "QuickZoom" (both textual and stylized) for a viewing
feature in its digital dental radiography product; (iv) "accuDEXA" for its BMD
assessment product; v) "CDR Discovery" for its x-ray generating product and (vi)
"CDRPan" for its panoramic digital dental radiography product. In addition, the
Company has common-law trademark rights in several other names it uses
commercially in connection with its products.

      Trade Secrets

      In addition to patent protection, the Company owns trade secrets and
proprietary know-how which it seeks to protect, in part, through appropriate
Non-Disclosure, Non-Solicitation, Non-Competition and Inventions Agreements,
and, to a limited degree, employment agreements with appropriate individuals.
These agreements generally provide that all confidential information developed
by or made known to the individual by the Company during the course of the
individual's relationship with the Company is the property of the Company, and
is to be kept confidential and not disclosed to third parties, except in
specific limited circumstances. The agreements also generally provide that all
inventions conceived by the individual in the course of rendering services to
the Company shall be the exclusive property of the Company. However, there can
be no assurances that these agreements will not be breached, that the Company
would have adequate remedies available for any breach or that the Company's
trade secrets will not otherwise become known to, or independently developed by,
its competitors.

      GOVERNMENT REGULATION

      Products that the Company is currently developing or may develop in the
future are likely to require certain forms of governmental clearance, including
marketing clearance by the United States Food and Drug Administration (the
"FDA"). The FDA review process typically requires extended proceedings
pertaining to product safety and efficacy. The Company believes that its future
success will depend to a large degree upon commercial sales of improved versions
of its current products and sales of new products; the Company will not be able
to market such products in the United States without FDA marketing clearance.
There can be no assurance that any products developed by the Company in the
future will be given clearance by


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applicable governmental authorities or that additional regulations will not be
adopted or current regulations amended in such a manner as to adversely affect
the Company.

      Pursuant to the Federal Food, Drug and Cosmetic Act, as amended (the "FD&C
Act"), the FDA classifies medical devices intended for human use into three
classes: Class I, Class II, and Class III. In general, Class I devices are
products for which the FDA determines that safety and effectiveness can be
reasonably assured by general controls under the FD&C Act relating to such
matters as adulteration, misbranding, registration, notification, records and
reports. The CDRCam(R) is a Class I device.

      Class II devices are products for which the FDA determines that general
controls are insufficient to provide a reasonable assurance of safety and
effectiveness, and that require special controls such as promulgation of
performance standards, post-market surveillance, patient registries or such
other actions as the FDA deems necessary. The CDR(R) system, CDRPan(TM) and
accuDEXA(R) have been classified as Class II devices.

      Class III devices are devices for which the FDA has insufficient
information to conclude that either general controls or special controls would
be sufficient to assure safety and effectiveness, and which are life-supporting,
life-sustaining, of substantial importance in preventing impairment of human
health, or present a potential unreasonable risk of illness or injury. Devices
in this case require pre-market approval, as described below. None of the
Company's existing products are in the Class III category.

      The FD&C Act further provides that, unless exempted by regulation, medical
devices may not be commercially distributed in the United States unless they
have been cleared by the FDA. There are two review procedures by which medical
devices can receive such clearance. Some products may qualify for clearance
under a Section 510(k) procedure, in which the manufacturer submits to the FDA a
pre-market notification that it intends to begin marketing the product, and
shows that the product is substantially equivalent to another legally marketed
product (i.e., that it has the same intended use and that it is as safe and
effective as a legally marketed device, and does not raise different questions
of safety and effectiveness than does a legally marketed device). In some cases,
the 510(k) notification must include data from human clinical studies.

      Marketing may commence once the FDA issues a clearance letter finding such
substantial equivalence. According to FDA regulations, the agency has 90 days in
which to respond to a 510(k) notification. There can be no assurance, however,
that the FDA will provide a timely response, or that it will reach a finding of
substantial equivalence.

      If a product does not qualify for the 510(k) procedure (either because it
is not substantially equivalent to a legally marketed device or because it is a
Class III device), the FDA must approve a Pre-Market Approval ("PMA")
application before marketing can begin. PMA applications must demonstrate, among
other things, that the medical device is safe and effective. A PMA application
is typically a complex submission that includes the results of clinical studies.
Preparation of such an application is a detailed and time-consuming process.
Once a PMA application has been submitted, the FDA's review process may be
lengthy and include requests for additional data. By statute and regulation, the
FDA may take 180 days to review a PMA application, although such time may be
extended. Furthermore, there can be no assurance that the FDA will approve a PMA
application.

      In February 1994, the FDA cleared the Company's 510(k) application for
general use and marketing of the CDR(R) system. In November 1996, the FDA
cleared the Company's 510(k) application for general use and marketing of the
CDRCam(R). In December 1997, the FDA cleared the Company's 510(k) application
for general use and marketing of accuDEXA(R). On June 4, 1998, the FDA granted
the Company additional clearance to market accuDEXA(R) as a predictor of
fracture risk. In December 1998, the FDA cleared the Company's 510(k)
application for CDRPan(TM). The Company has not yet submitted a 510(k)
application for its general-purpose digital radiography sensor. There can be no
assurance that the Company will submit such application or that it will obtain
FDA clearance for such products.

      In addition to the requirements described above, the FD&C Act requires
that all medical device manufacturers and distributors register with the FDA
annually and provide the FDA with a list of those medical devices which they
distribute commercially. The FD&C Act also requires that all manufacturers of
medical devices comply with labeling requirements and manufacture their products
and maintain their documents in a prescribed manner with respect to
manufacturing, testing, and quality control activities. The FDA's Medical Device
Reporting regulation subjects medical devices to post-market reporting
requirements for death or serious


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injury, and for certain malfunctions that would be likely to cause or contribute
to a death or serious injury if malfunction were to recur. In addition, the FDA
prohibits a device which has received marketing clearance from being marketed
for applications for which marketing clearance has not been obtained.
Furthermore, the FDA generally requires that medical devices not cleared for
marketing in the United States receive FDA marketing clearance before they are
exported, unless an export certification has been granted.

      The Company must obtain certain approvals by and marketing clearances from
governmental authorities, including the FDA and similar health authorities in
foreign countries, to market and sell its products in those countries. The FDA
regulates the marketing, manufacturing, labeling, packaging, advertising, sale
and distribution of "medical devices", as do various foreign authorities in
their respective jurisdictions. The FDA enforces additional regulations
regarding the safety of equipment utilizing x-rays. Various states also impose
similar regulations.

      The FDA review process typically requires extended proceedings pertaining
to the safety and efficacy of new products. A 510(k) application is required in
order to market a new or modified medical device. If specifically required by
the FDA, a pre-market approval ("PMA") may be necessary. Such proceedings, which
must be completed prior to marketing a new medical device, are potentially
expensive and time consuming. They may delay or hinder a product's timely entry
into the marketplace. Moreover, there can be no assurance that the review or
approval process for these products by the FDA or any other applicable
governmental authorities will occur in a timely fashion, if at all, or that
additional regulations will not be adopted or current regulations amended in
such a manner as will adversely affect the Company. The FDA also regulates the
content of advertising and marketing materials relating to medical devices.
Failure to comply with such regulations may result in a delay in obtaining
approval for the marketing of such products or the withdrawal of such approval
if previously obtained.

      The Company is currently developing new products for the dental and
medical markets. The Company expects to file 510(k) applications with the FDA in
connection with its future products. There can be no assurance that the Company
will file such 510(k) applications and/or will obtain pre-market clearance for
the digital radiography sensors or any other future products, or that in order
to obtain 510(k) clearance, the Company will not be required to submit
additional data or meet additional FDA requirements that may substantially delay
the 510(k) process and result in substantial additional expense. Moreover, such
pre-market clearance, if obtained, may be subject to conditions on the marketing
or manufacturing of the digital radiography sensors which could impede the
Company's ability to manufacture and/or market the product. There can be no
assurance that the general-purpose digital radiography sensor or any other
products which may be developed by the Company will be approved by or receive
marketing clearance from applicable governmental authorities. If the Company is
unable to obtain regulatory approval for and market new products and
enhancements to existing products, it will have a material adverse effect on the
Company.

      Failure to comply with applicable regulatory requirements can, among other
consequences, result in fines, injunctions, civil penalties, suspensions or loss
of regulatory approvals, product recalls, seizure of products, operating
restrictions and criminal prosecution. In addition, governmental regulations may
be established that could prevent or delay regulatory clearance of the Company's
products. Delays in receipt of clearance, failure to receive clearance or the
loss of previously received clearance would have a material adverse effect on
the Company's business, financial condition and results of operations.

      In addition to laws and regulations enforced by the FDA, the Company is
subject to government regulations applicable to all businesses, including, among
others, regulations related to occupational health and safety, workers' benefits
and environmental protection. The extent of government regulation that might
result from any future legislation or administrative action cannot be accurately
predicted. Failure to comply with regulatory requirements could have a material
adverse effect on the Company's business, financial condition and results of
operations.

      Distribution of the Company's products in countries other than the United
States may be subject to regulations in those countries. These regulations vary
significantly from country to country; the Company typically relies on its
independent distributors in such foreign countries to obtain the requisite
regulatory approvals. The Company's products bear the "CE mark", necessary for
the marketing of its products in the member countries of the European Union. The
"CE mark" is a European Union symbol of adherence to quality assurance standards
and compliance with the European Union's Medical Device Directives. The Company
has developed


                                       7
<PAGE>

and implemented a quality assurance program in accordance with the guidelines of
the International Quality Standard, ISO 9001. In August 1998, the Company was
granted ISO 9001 certification. The Company's current products also comply with
the requirements for the "U.L." 2601-1 (U.S.A.) and "CSA" (Canada) standards and
bear the "ETL" mark indicating such compliance.

PRODUCT LIABILITY INSURANCE

      The Company is subject to the risk of product liability and other
liability claims in the event that the use of its products results in personal
injury or other claims. Although the Company has not experienced any product
liability claims to date, any such claims could have an adverse impact on the
Company. The Company maintains insurance coverage related to product liability
claims, but there can be no assurance that product liability or other claims
will not exceed its insurance coverage limits, or that such insurance will
continue to be maintained or that it will be available on commercially
acceptable terms, or at all.

RESEARCH AND DEVELOPMENT

      During fiscal 2002, 2001 and 2000, research and development expenses were
$2.2 million, $2.2 million, and $2.8 million, respectively.

BACKLOG

      The backlog of orders was approximately 0.5 million, $0.5 million and $2.0
million at June 1, 2002, 2001 and 2000, respectively. Such figures include
approximately 0.4 million, $0.1 million and $0.6 million of orders on hold
pending credit approval at June 1, 2002, 2001 and 2000, respectively. Orders
included in backlog may generally be cancelled or rescheduled by customers
without significant penalty.

EMPLOYEES

      As of June 7, 2002, the Company had 127 full-time employees, engaged in
the following capacities: sales and marketing (29); general and administrative
(25); operations (55); and research and development (18). The Company believes
that its relations with its employees are good. No Company employees are
represented by a labor union or are subject to a collective bargaining
agreement, nor has the Company experienced any work stoppages due to labor
disputes.

SALES AND MARKETING

      Dental Products

      In April 2000, the Company and Patterson Dental Company ("Patterson")
entered into an exclusive distribution agreement and, as of May 1, 2000, the
Company began marketing and selling its CDR(R) dental products in the United
States and Canada through Patterson. The Company believes that Patterson is one
of the largest distributors of dental products in North America, with more than
1,000 field sales personnel in the U.S. and Canada. In addition, the Company has
an in-house sales program which focuses on universities and continuing education
programs. As of March 31, 2002, CDR(R) had been sold to 47 of the 54 dental
schools in the United States. The Company also employs a government sales
program to sell directly to the Armed Services, Veterans Administration
hospitals, United States Public Health Service and other government-sponsored
health institutions.

      The Company employs 19 area sales managers ("ASM"s) located throughout the
United States and one in Canada to interface with and assist Patterson in its
sales effort. Two individuals, based at the Company's corporate offices in New
York, manage the ASM staff. In addition, a sales and marketing support staff of
3 individuals, also based at the Company's offices in New York, supports the
sales managers and the ASM's by planning events and developing promotional and
marketing materials.

      In the international market, the Company sells the CDR(R) system via
independent regional distributors. There are currently approximately 30
independent CDR(R) dealers, covering about 40 countries. A dedicated in-house
staff, as well as 3 individuals based in Europe, Latin America and Canada,
provide the foreign distributors with materials, sales support, technical
assistance and training, both in New York and abroad.


                                       8
<PAGE>

      The Company's goal is to utilize its leading position in the industry,
secure as many productive sales channels as possible and to penetrate additional
segments of the international market.

      BMD/Fracture Risk Assessment

      The Company currently sells the accuDEXA(R) primarily through a network of
manufacturer representatives. To date, accuDEXA(R) sales have taken place
primarily within the United States, with a relatively small number of sales
abroad. The primary end-users for accuDEXA(R) are primary care physicians,
including OB/GYN practices, and osteopathic and geriatric specialists.

      Pharmaceutical companies are currently involved in wide-scale osteoporosis
education and awareness programs targeted at physicians. A number of such
companies, including Novartis Pharma AG, Wyeth-Ayerst Laboratories, Eli Lilly
Co., Merck & Co. and Procter & Gamble, currently have FDA-approved therapies for
the treatment of osteoporosis. The Company believes that several other
companies, including Boehringer-Mannheim GmbH, Sanofi-Synthelabo, Inc. and
Pfizer Inc., have additional products that are currently in clinical trials. The
Company expects that the efforts of pharmaceutical companies to develop
medicines and treatment programs will result in the expansion of doctors'
involvement in initial screening and routine management of osteoporosis, thereby
increasing the market for BMD assessment devices. The Company intends to
capitalize on these efforts both in the United States and abroad.

      The Company has successfully completed a number of research studies and
has collected normative reference data for the accuDEXA(R) databases. These
research studies addressed issues of long-term importance such as the detection
of osteoporosis and patient risk for bone fracture. The Company has established
normative reference databases for Asian female, African-American female,
Hispanic female, Caucasian female and Caucasian male populations. The Company
will utilize these databases to address the needs of healthcare markets in
different countries and regions and expects them to positively impact upon sales
of accuDEXA(R) abroad. The Company is currently conducting research studies to
investigate the accuDEXA's ability to successfully monitor a course of therapy
over a period of time.

      COMPETITION

      Competition relating to the Company's current products is intense and
includes various companies, both within and outside of the United States. Many
of the Company's competitors are large companies with financial, sales and
marketing, and other resources which are substantially greater than those of the
Company. In addition, they may have substantially greater experience in
obtaining regulatory approvals than that of the Company. In addition, there can
be no assurance that the Company's competitors are not currently developing, or
will not attempt to develop, technologies and products that are more effective
than those of the Company or that would otherwise render the Company's products
obsolete or uncompetitive. No assurance can be given that the Company will be
able to compete successfully.

      Dental Products

      A number of companies currently sell intra-oral digital dental sensors.
These include Provisions Dental Systems, Inc., Sirona Dental Systems and Cygnus
Imaging, Inc. In addition, Dentsply International and Soredex Corporation sell a
storage-phosphor based intra-oral dental system. The Company believes that the
CDR(R) system has thus far competed successfully against other products. If
other companies enter the digital radiography field, it may result in a
significantly more competitive market in the future. Several companies are
involved in the manufacture and sale of intra-oral cameras, including Dentsply
International Inc., Henry Schein Co., Ultra-Cam and Air Technics. Several
companies, including Sirona, Signet, Instrumentarium Imaging and Planmeca
manufacture digital panoramic dental devices. Of those, only the device
manufactured by Signet is designed to be incorporated into existing conventional
panoramic devices.

      BMD/Fracture Risk Assessment

      Two other companies, GE Lunar Corporation and Norland Medical Systems,
Inc., are currently marketing peripheral dual-X-Ray-absorptiometry (DXA) BMD
densitometers. Several companies including GE Lunar, Hologic, Inc. and Norland
are marketing peripheral ultrasound devices. A number of other companies market
other devices including ones which assess hand densitometry. Two companies,
Ostex International Inc. and Quidel Corp., Inc., have developed


                                       9
<PAGE>

biochemical markers which indicate the rate at which the body is resorbing
(i.e., breaking down) bone.

FORWARD-LOOKING STATEMENTS

      This Form 10-K Annual Report contains forward-looking statements that
involve risk and uncertainties. All statements, other than statements of
historical facts, included in this Annual Report regarding the Company, its
financial position, business strategy and plans and objectives of management of
the Company for future operations, are forward-looking statements. When used in
this Annual Report, words such as "anticipate," "believe," "estimate," "expect,"
"intend," "objectives," "plans" and similar expressions, or the negatives
thereof or variations thereon or comparable terminology as they relate to the
Company, its products or its management, identify forward-looking statements.
Such forward-looking statements are based on the beliefs of the Company's
management, as well as assumptions made by and information currently available
to the Company's management. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of various factors,
including, but not limited to, those contained in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in this Annual Report
and the "Risk Factors" set forth in Exhibit 99 to this Annual Report. All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by this paragraph.

ITEM 2. PROPERTIES

      The Company presently leases approximately 50,000 square feet of space in
Long Island City, New York. This space houses the Company's executive offices,
sales and marketing headquarters, research and development laboratories and
production and shipping facilities. The Company believes that such space will be
adequate for its needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

      The Company and/or certain of its officers and former officers, are
involved in the proceedings described below:

      I. In late 1998 through early 1999, nine shareholder complaints purporting
to be class action lawsuits were filed in the United States District Court for
the Eastern District of New York. Plaintiffs filed a Consolidated and Amended
Complaint on or about May 27, 1999 and, on or about November 24, 1999 filed a
Second Amended and Consolidated Complaint (the "Complaint"). The Complaint named
as defendants the Company, David B. Schick, Thomas E. Rutenberg, and David
Spector (collectively, the "Individual Defendants"), as well as
PricewaterhouseCoopers LLP. The Complaint alleged, inter alia, that certain
defendants issued false and misleading statements concerning the Company's
publicly reported earnings in violation of the federal securities laws. The
Complaint sought certification of a class of persons who purchased the Company's
Common Stock between July 1, 1997 and February 19, 1999, inclusive, and did not
specify the amount of damages sought.

      On May 23, 2000, the Company entered into an agreement in principle with
the plaintiffs for the settlement of the class action lawsuit, as reflected in a
Memorandum of Understanding. On June 5, 2001, a Stipulation of Settlement was
executed, under which all claims against the Company and the Individual
Defendants were to be dismissed without presumption or admission of any
liability or wrongdoing. The principal terms of the settlement agreement called
for payment to the Plaintiffs, for the benefit of the class, of the sum of $3.4
million. The settlement amount will be paid in its entirety by the Company's
insurance carrier and is not expected to have any material impact on the
financial results of the Company.

      In an Order and Final Judgment entered by the Court on February 12, 2002,
the terms of the settlement were approved by the Court and the Complaint was
dismissed with prejudice.

      II. In August 1999, the Company, through its outside counsel, contacted
the Division of Enforcement of the Securities and Exchange Commission ("SEC") to
advise it of certain matters related to the Company's restatement of earnings
for interim periods of fiscal 1999. Subsequent thereto, the SEC requested the
voluntary production of certain documents and the Company provided the SEC with
the requested materials. On August 17, 2000, the SEC served a subpoena upon the
Company, pursuant to a formal order of investigation, requiring the production
of certain documents. The Company provided the SEC with the subpoenaed
materials.


                                       10
<PAGE>

The Company has been informed that since January 2002 the SEC and the United
States Attorney's Office for the Southern District of New York have served
subpoenas upon and/or contacted certain individuals, including current and
former officers and employees of the Company, and a current Director, in
connection with this matter. On June 13, 2002, the Company was advised by
counsel to David Schick, the Company's Chief Executive Officer, that the United
States Attorney's Office for the Southern District of New York had recently
notified such counsel that Mr. Schick was a target of the United States
Attorney's investigation of this matter. The Company has cooperated fully with
the SEC staff and U.S. Attorney's Office, and intends to continue such
cooperation. The Company cannot predict the potential outcome of the inquiry.

      The Company could become a party to a variety of legal actions (in
addition to those referred to above), such as employment and employment
discrimination-related suits, employee benefit claims, breach of contract
actions, tort claims, shareholder suits, including securities fraud, and
intellectual property related litigation. In addition, because of the nature of
its business, the Company is subject to a variety of legal actions relating to
its business operations. Recent court decisions and legislative activity may
increase the Company's exposure for any of these types of claims. In some cases,
substantial punitive damages could be sought. The Company currently has
insurance coverage for some of these potential liabilities. Other potential
liabilities may not be covered by insurance, insurers may dispute coverage, or
the amount of insurance may not be sufficient to cover the damages awarded. In
addition, certain types of damages, such as punitive damages, may not be covered
by insurance and insurance coverage for all or certain forms of liability may
become unavailable or prohibitively expensive in the future.

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

      No matters were submitted to a vote of security holders during the quarter
ended March 31, 2002.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER MATTERS

      The Company's Common Stock began trading on The Nasdaq National Market
under the symbol "SCHK" on July 1, 1997. Prior to such date, there was no
established public trading market for the Company's Common Stock. From September
15, 1999, following the Company's delisting from the Nasdaq National Market, as
described below, to January 29, 2002, there was no established trading market
for the Company's stock, which traded in the over-the-counter market. Since
January 30, 2002, the Company's Common Stock has been traded on the
over-the-counter Bulletin Board.

      By letter dated September 15, 1999, the Nasdaq Stock Market's Listing
Qualifications Panel (the Panel") advised the Company that the Company's Common
Stock would no longer be listed on the Nasdaq National Market effective with the
close of business on September 15, 1999. The Panel's action was based on the
Company's inability to timely file its Annual Report on Form 10-K for the fiscal
year ended March 31, 1999 and Form 10-Q for the quarter ended June 30, 1999, as
well as the revenue recognition and sales practices which had been the subject
of an investigation by the Audit Committee of the Company's Board of Directors
and had led to the filing delays and the need for the restatement of the
Company's financial reports. The Company timely requested a review of this
decision and, on May 25, 2000, the Nasdaq Listing and Hearing Review Council
informed the Company of its determination to affirm the Panel's decision.

      The following table sets forth, for the periods indicated, the high and
low closing bid prices of the Company's Common Stock in the over-the-counter
market through January 29, 2002, as reported on the "pink sheets" published by
Pink Sheets LLC (formerly known as National Quotation Bureau LLC), and the high
and low bid prices of the Company's Common Stock as quoted on the
over-the-counter Bulletin Board commencing January 30, 2002.

      Fiscal Year Ended March 31, 2001                  High                Low
      --------------------------------                 ------              -----
      First Quarter                                    $2.625              $1.25
      Second Quarter                                    1.625               1.15
      Third Quarter                                      1.30               0.40
      Fourth Quarter                                     1.15               0.42

      Fiscal Year Ended March 31, 2002                  High                Low
      --------------------------------                 ------              -----
      First Quarter                                      1.05               0.70
      Second Quarter                                     1.05               0.55
      Third Quarter                                      1.06               0.51
      Fourth Quarter (through January 29, 2002)          2.15               1.07
      Fourth Quarter (commencing January 30,2002)        2.40               1.50


                                       11
<PAGE>

      On June 6, 2002, the closing bid and asked prices per share of the
Company's Common Stock, as quoted on the over-the-counter Bulletin Board, were
$2.80 and $3.00 per share, respectively. Such prices represent quotations
between dealers, without dealer mark-up, markdown or commission, and may not
represent actual transactions. On June 4, 2002, there were 192 holders of record
of the Company's Common Stock. However, the Company believes that the number of
beneficial owners of such stock is substantially higher.

      To date, the Company has not paid any dividends on its Common Stock. The
Company currently intends to retain future earnings to finance the growth and
development of the Company's business and does not anticipate paying any
dividends in the foreseeable future. The payment of dividends is within the
discretion of the Board of Directors and will depend upon the Company's
earnings, its capital requirements, financial condition and other relevant
factors.

      The following table sets forth the following information, as of March 31,
2002, with respect to compensation plans (including individual compensation
arrangements) under which equity securities of the Company are authorized for
issuance: the number of securities to be issued upon the exercise of outstanding
options, warrants and rights; the weighted-average exercise price of such
options, warrants and rights; and, other than the securities to be issued upon
the exercise of such options, warrants and rights, the number of securities
remaining available for future issuance under the plan.

<TABLE>
<CAPTION>
      -------------------------------------------------------------------------------------------
                                     (a)                  (b)                (c)
      -------------------------------------------------------------------------------------------
      Plan category                  Number of                               Number of securities
                                     securities to be                        remaining available
                                     issued upon          Weighted-average   for future issuance
                                     exercise of          exercise price     under equity
                                     outstanding          of outstanding     compensation
                                     options,             options,           (excluding
                                     warrants and         warrants and       securities reflected
                                     rights               rights             in column (a)
      -------------------------------------------------------------------------------------------
<S>                                      <C>                   <C>                 <C>
      Equity compensation
      plans approved by
      security holders                   1,840,435             $2.47               1,459,656
      -------------------------------------------------------------------------------------------
      Equity compensation
      plans not approved
      by security holders                       --                --                      --
      -------------------------------------------------------------------------------------------
      Total                              1,840,435             $2.47               1,459,656
      -------------------------------------------------------------------------------------------
</TABLE>

ITEM 6. SELECTED FINANCIAL DATA

      The following selected financial data are derived from, and are qualified
by reference to, the audited financial statements of the Company for the period
indicated. The information presented below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in ITEM 7 and the Financial Statements included in ITEM 8 of this
Report.


                                       12
<PAGE>

Schick Technologies, Inc.
Selected Financial Data

<TABLE>
<CAPTION>
                                                                 Year Ended March 31,
                                                                 --------------------
                                                 2002        2001        2000        1999       1998
                                                 ----        ----        ----        ----       ----
                                                        (in thousands, except per share data)
<S>                                            <C>         <C>         <C>         <C>         <C>
Statement of Operations Data:

Revenue, net                                   $ 24,399    $ 21,252    $ 21,989    $ 45,605    $38,451
                                               --------    --------    --------    --------    -------
Cost of sales                                     8,540       9,736      15,393      34,611     17,658
Excess and obsolete inventory                       292         570         898       5,466         --
                                               --------    --------    --------    --------    -------
Total cost of sales                               8,832      10,306      16,291      40,077     17,658
                                               --------    --------    --------    --------    -------

Gross profit                                     15,567      10,946       5,698       5,528     20,793
                                               --------    --------    --------    --------    -------

Operating expenses:
           Selling and marketing                  5,291       5,314       7,636      18,440     10,645
           General and administrative             4,148       4,161       7,339       7,338      3,954
           Research and development               2,176       2,220       2,830       4,354      3,852
           Bad debt expense (recovery)              (93)       (454)         --       5,598        164
           Abandonment of leasehold                 118         275          --          --         --
           Patent litigation settlement              --          --          --          --        600
                                               --------    --------    --------    --------    -------
           Total operating costs                 11,640      11,516      17,805      35,730     19,215
                                               --------    --------    --------    --------    -------

Income (loss) from operations                     3,927        (570)    (12,107)    (30,202)     1,578

Total other income (expense)                       (839)     (1,068)       (224)        244      1,111
                                               --------    --------    --------    --------    -------

Income (loss) before income taxes                 3,088      (1,638)    (12,331)    (29,958)     2,689

Provision (benefit) for income taxes                 --          --          --        (352)       328

           Net income (loss)                   $  3,088    $ (1,638)   $(12,331)   $(29,606)   $ 2,361
                                               ========    ========    ========    ========    =======

           Basic earnings (loss) per share     $   0.30    $  (0.16)   $  (1.23)   $  (2.96)   $  0.25
                                               ========    ========    ========    ========    =======
           Diluted earnings (loss) per share   $   0.26    $  (0.16)   $  (1.23)   $  (2.96)   $  0.24
                                               ========    ========    ========    ========    =======

<CAPTION>
                                                 2002        2001        2000        1999       1998
                                                 ----        ----        ----        ----       ----
<S>                                            <C>         <C>         <C>         <C>         <C>
Balance Sheet Data:
Cash and cash equivalents                      $  1,622    $  2,167    $  1,429    $  1,415    $ 6,217
Working capital/(deficiency)                      1,133      (1,586)        841       2,902     33,745
Total assets                                     11,957      12,646      16,290      29,386     51,674
Total liabilities                                 9,057      12,835      14,974      16,850      9,565
Retained earnings (accumulated deficit)         (39,682)    (42,770)    (41,132)    (28,801)       805
Stockholders' equity                              2,900        (189)      1,316      12,536     42,109
</TABLE>

      ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

      The following discussion should be read in conjunction with the
Consolidated Financial Statements included elsewhere in this Report. This
discussion contains forward-looking statements based on current expectations
that involve risks and uncertainties. Actual results and the timing of certain
events may differ significantly from those projected in such forward-looking
statements due to a number of factors, including those set forth in "Results of
Operations" in this Item and elsewhere in this Report. See "ITEM 1 - Business --
Forward-Looking Statements" and Exhibit 99 to this Report.

      Overview

      The Company designs, develops and manufactures digital imaging systems for
the worldwide dental and medical markets. In the field of dentistry, the Company
currently manufactures and markets a variety of digital imaging products
including an intra-oral digital radiography system (CDR) a digital panoramic
radiography sensor (CDRPAN) and an intra-oral camera system (CDRCam). The
Company has also developed a bone mineral density assessment device (accuDEXA)
to assist in the diagnosis and treatment of osteoporosis, which was introduced
in December 1997. In addition, the Company has commenced development of a
general-purpose digital radiography device for various intended uses, including
cephalometric imaging. All of the Company's products are CE marked and are sold
worldwide.


                                       13
<PAGE>

      The Company's revenues during fiscal 2002 were derived primarily from
sales of its CDR(R) and accuDEXA(R) products. The Company records sales revenue
upon shipment to international dealers and to end-users in the U.S. In the case
of sales made by Patterson, revenue arising from inventory in Patterson's
possession is recorded in deferred revenue, and revenue is recognized upon
shipment from Patterson's warehouses to end-users. Revenues from the sales of
extended warranties are recognized on a straight-line basis over the life of the
extended warranty, which is generally a one-year period. The Company utilizes
Patterson Dental Company as the exclusive distributor for sales of its dental
products within North America. The Company's accuDEXA product is sold through a
network of independent sales representatives in the United States. International
sales are made primarily through a network of independent foreign distributors.
In fiscal 2002, 2001 and 2000, sales to customers within the United States were
approximately 75%, 62%, and 68% of total revenues, respectively. The Company's
international sales are made primarily to distributors in Europe. All of the
Company's sales are denominated in United States dollars.

      Costs of sales consists of raw materials manufacturing labor, facilities
overhead, product support, warranty costs and installation costs. Excess and
obsolete inventory expense relates to the overstocking or obsolescence of
various dies and/or obsolete X-Ray inventory that the Company may not use or
otherwise salvage.

      Operating expenses include selling and marketing expenses, general and
administrative expenses and research and development expenses, and bad debt
expense. Selling and marketing expenses consist of salaries and commissions,
advertising, promotional and sales events and travel. General and administrative
expenses include executive salaries, professional fees, facilities, overhead,
accounting, human resources, and general office administration expenses.
Research and development expenses are comprised of salaries, consulting fees,
facilities overhead and testing materials used for basic scientific research and
the development of new and improved products and their uses. Research and
development costs are expensed as incurred. Development costs are expensed as
incurred. Bad debt expense is a result of product shipments that were determined
to be uncollectible or not collected. Bad debt recovery is a result of the
receipt, in cash, for shipments previously deemed uncollectible.

Critical Accounting Policies

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the Company to make
estimates and assumptions that affect amounts reported in the accompanying
consolidated financial statements and related footnotes. These estimates and
assumptions are evaluated on an ongoing basis based on historical developments,
market conditions, industry trends and other information the Company believes to
be reasonable under the circumstances. There can be no assurance that actual
results will conform to the Company's estimates and assumptions, and that
reported results of operations will not be materially adversely affected by the
need to make accounting adjustments to reflect changes in these estimates and
assumptions from time to time. The following policies are those that the Company
believes to be the most sensitive to estimates and judgments. The Company's
significant accounting policies are more fully described in Note 1 to the
consolidated statements.

Revenue recognition

      The Company recognizes revenue when each of the following four criteria
are met: 1) a contract or sales arrangement exists; 2) products have been
shipped and title has been transferred or services have been rendered; 3) the
price of the products or services is fixed or determinable; and 4)
collectibility is reasonably assured. The Company records sales revenue upon
shipment to international dealers and to end-users in the U.S. In the case of
sales made by Patterson, revenue is recognized upon shipment from Patterson's
warehouses to end-users. Revenue arising from inventory in Patterson's
possession is recorded in deferred revenue. The Company records warranty renewal
revenue over the warranty renewal period (generally one-year). The unamortized
portion of warranty revenue is recorded in deferred revenue.

Accounts receivable

      The Company primarily sells on open credit terms to Patterson and to the
US Government, hospitals and universities based upon signed purchase orders. The
Company's international sales are generally prepaid, guaranteed by irrevocable
letter of credit or underwritten by credit insurance. In a limited number of
cases, international dealers are granted limited open credit terms. Warranty
shipments are prepaid. The Company's estimate of doubtful


                                       14
<PAGE>

accounts relates, primarily to shipments made before fiscal 2000, when credit
policies were less restrictive. Revenue from customers is subject to agreements
allowing limited rights of return. Accordingly, the Company reduces revenue
recognized for estimated future returns. The estimate of future returns is
adjusted periodically based upon historical rates of return.

Inventories

      Inventories are stated at the lower of cost or market. The cost of
inventories is determined principally on the standard cost method for
manufactured goods and on the average cost method for other inventories, each of
which approximates actual cost on the first-in, first-out ("FIFO") method. The
Company establishes reserves for inventory estimated to be obsolete,
unmarketable or slow moving inventory equal to the difference between the cost
of inventory and estimated market value based upon assumptions about future
demand and market conditions. If actual market conditions are less favorable
than those anticipated or if changes in technology affect the Company's products
additional inventory reserves may be required.

Goodwill and other long-lived assets

      Effective April 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142 ("SFAS 142"), "Goodwill and other Intangible
Assets". This statement requires that the amortization of goodwill be
discontinued and instead an annual impairment approach be applied. The
impairment tests will be performed upon adoption and annually thereafter (or
more often if adverse events occur) and will be based upon a fair value approach
rather than an evaluation of the undiscounted cash flows. If impaired, the
resulting charge reflects the excess of the asset's carrying value to the extent
it exceeds the recalculated goodwill.

      Other long-lived assets such as patent and property and equipment are
amortized or depreciated over their estimated useful lives. These assets are
reviewed for impairment whenever events or circumstances provide evidence that
suggest that the carrying amount of the asset may not be recoverable with
impairment being based upon an evaluation of the identifiable undiscounted cash
flows. If impaired, the resulting charge reflects the excess of the asset's
carrying cost over its fair value.

      If market conditions become less favorable, future cash flows, the key
variable in assessing the impairment of these assets, may decrease and as a
result the Company may be required to recognize impairment charges.

Income taxes

      Income taxes are determined in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), which requires recognition of
deferred income tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred income liabilities and assets are
determined based on the difference between financial statements and tax bases of
liabilities and assets using enacted tax rates in effect for the year in which
the differences are expected to reverse. SFAS 109 also provides for the
recognition of deferred tax assets if it is more likely than not that the assets
will be realized in future years. A valuation allowance has been established for
deferred tax assets for which realization is not likely. At March 31, 2002 the
deferred tax asset ($19.8 million) has been fully reserved. In assessing the
valuation allowance, the Company has considered future taxable income and
ongoing tax planning strategies. Changes in these circumstances, such as a
decline in future taxable income, may result in the continuation of a full
valuation allowance being required.

Warranty obligations

      Products sold are generally covered by a warranty against defects in
material and workmanship for a period of one year. The Company accrues a
warranty reserve for estimated costs to provide warranty services. The Company
estimates costs to service warranty obligations based on historical experience
and expectation of future conditions. To the extent the Company experiences
increased warranty claim activity or increased costs associated with servicing
those claims, warranty accrual will increase, resulting in decreased gross
profit.


                                       15
<PAGE>

Litigation and contingencies

      The Company and its subsidiary are from time to time parties to lawsuits
and regulatory administrative proceedings arising out of their respective
operations. The Company records liabilities when a loss is probable and can be
reasonably estimated. These estimates are based on an analysis made by internal
and external legal counsel who consider information known at the time. The
Company believes it has estimated well in the past; however court decisions
could cause liabilities to be incurred in excess of estimates.

Contractual Obligations and Commercial Commitments

      The following table summarizes contractual obligations and commercial
commitments at March 31, 2002:

                                             PAYMENTS DUE BY PERIOD
                                  ----------------------------------------------

                                            Less
                                           than 1      1-3       4-5     After 5
        CONTRACTUAL OBLIGATIONS    Total    year      years     years     years
        Long-Term Debt            $3,854   $1,815    $1,961    $   78     $ --
        Operating leases           2,567      445       953     1,032      137
        Employment agreements      1,827      857       970        --       --
                                  ------   ------    ------    ------     ----
        Total Contractual
        Cash Obligations          $8,248   $3,117    $3,884    $1,110     $137
                                  ======   ======    ======    ======     ====

Results Of Operations

      The following table sets forth, for the fiscal years indicated, certain
items from the Statement of Operations expressed as a percentage of net
revenues:

                                                Year ended March 31,
                                                --------------------
                                            2002        2001        2000
                                            ----        ----        ----
Revenue, net                               100.0%      100.0%      100.0%
                                           -----       -----       -----

Cost of sales                               35.0%       45.8%       70.0%
Excess and obsolete inventory                1.2%        2.7%        4.1%
                                           -----       -----       -----
Total cost of sales                         36.2%       48.5%       74.1%
                                           -----       -----       -----

Gross profit                                63.8%       51.5%       25.9%

Operating expenses:
          Selling and marketing             21.7%       25.0%       34.7%
          General and administrative        17.0%       19.6%       33.3%
          Research and development           8.9%       10.4%       12.9%
          Bad debt expense (recovery)       -0.4%       -2.1%        0.0%
          Abandonment of leasehold           0.5%        1.3%        0.0%
                                           -----       -----       -----
          Total operating costs             47.7%       54.2%       80.9%
                                           -----       -----       -----

Operating income (loss)                     16.1%       -2.7%      -55.0%
                                           =====       =====       =====

Fiscal Year Ended March 31, 2002 as Compared to Fiscal Year Ended March 31, 2001

      Net revenues increased $3.1 million (14.8%) to $24.4 million in fiscal
2002 from $21.3 million in fiscal 2001. The revenue increase is due to higher
sales of both CDR(R) dental radiography product and accuDEXA(R) bone mineral
density assessment device. Domestic revenues increased $5.1 million (38.8%) to
$18.3 million (74.9% of net revenue) from $13.2 million (61.2% of net revenue)
in fiscal 2001. International sales declined $2.0 million (24.2%) to $6.1
million (25.1% of net revenue) from $8.1 million (38.8% of net revenue in fiscal
2001.

      CDR(R) product sales increased $2.7 million (17.2%) to $18.4 million
during fiscal 2002 from $15.7 million during fiscal 2001. AccuDEXA(R) product
sales increased $0.1 million (14.3%) to $0.8 million during fiscal 2002 from
$0.7 million during fiscal 2001. Warranty


                                       16
<PAGE>

revenues increased $0.8 million (18.2%) to $5.2 million during fiscal 2002 from
$4.4 million during fiscal 2001. This increase is the result of the expansion of
the Company's warranty program.

      Domestic sales increased due to higher sales to Patterson and higher
warranty revenue. International sales declined due to lower sales to certain
distributors in Europe. Overall sales returns have fallen to 0.2% of revenue in
fiscal 2002 from 2.0% in fiscal 2001. The Company believes this improvement is
the result of its continuing product improvement.

      Total cost of sales for fiscal 2002 decreased $1.5 million (14.3%) to $8.8
million (36.2% of net revenue) from $10.3 million (48.5% of net revenue) in
fiscal 2001. Total cost of sales declined due to improved operating efficiency
as the Company reduced overhead 10% as a result of the consolidation of its
facilities into a single location after fiscal 2001. Additionally product
improvements resulted in reduced expense in support of its warranty program. The
Company's reserve for excess and obsolete inventory decreased to 1.2% of net
revenue in fiscal 2002 from 2.7% in fiscal 2001 as a result of improved
inventory management.

      Selling and marketing expense remained unchanged at $5.3 million (21.7%
and 25.0% of net revenue in fiscal 2002 and 2001, respectively). Increases in
payroll and creative development expenses were offset by reduced advertising and
occupancy costs. General and administrative expense remained unchanged at $4.2
million (17.0% and 19.6% of net revenue in fiscal 2002 and 2001, respectively).
Research and development expense remained unchanged at $2.2 million (8.9% and
10.4% of net revenue in fiscal 2002 and 2001, respectively).

      Bad debt recoveries declined $0.4 million to $0.1 million from $0.5
million in fiscal 2001. Recoveries are related to receipt of prior fiscal year
reserved receivables which declined during fiscal 2002.

      Interest expense increased $0.1 million in fiscal 2002 due to the
Company's July 2001 prepayment in full of $1 million it had borrowed from
Greystone Funding Corporation. The prepayment resulted in the write off of $0.4
million of deferred interest expense. This increase was offset by declines in
the level of borrowing and the prime interest rate during fiscal 2002.

Fiscal Year Ended March 31, 2001 as Compared to Fiscal Year Ended March 31, 2000

      Net revenues decreased $0.7 million (3.4%) to $21.3 million in fiscal 2001
from $22.0 million in fiscal 2000. The revenue decline is due to lower sales of
the CDR(R) dental radiography product and accuDEXA (R) bone mineral density
assessment device, offset in part by higher sales of CDR(R) warranties.

      CDR(R) sales declined $1.7 million (9.8%) to $15.7 million from $17.4
million during fiscal 2000. The Company believes that this decline was due to
the Company's consolidation of its sales channels in North America in May 2000.
At that time, the Company ceased selling the CDR(R) product line through a
combination of its direct sales force and non-exclusive-dealer network and
entered into an exclusive distribution agreement with Patterson Dental Company
("Patterson"). This agreement grants Patterson exclusive rights to distribute
the Company's dental products in the United States and Canada, with the Company
retaining direct relationships for hospitals, universities and governmental
agencies. The Company believes that the establishment and phasing-in of this new
distribution channel resulted in lower CDR(R) sales as the Patterson sales force
became familiar with the CDR(R) product line. CDR(R) warranty revenue increased
$2.9 million (200.5%) to $4.4 million from $1.5 million during fiscal 2000. The
Company believes that this increase was due primarily to improvements made in
the implementation of its product warranty programs, including policy
enforcement and timely notification of warranty-coverage expirations.

      AccuDEXA(R) sales declined $1.9 million (73.7%) to $0.7 million from $2.6
million during fiscal 2000. The Company believes that this decline resulted from
its discontinuing direct accuDEXA(R) sales during fiscal 2001. The Company
reintroduced accuDEXA(R) via a network of manufacturer's representatives.

      Total cost of sales decreased $6.0 million (36.6%) to $10.3 million (48.6%
of net revenues) in fiscal 2001 from $16.3 million (74.1% of net revenues) in
fiscal 2000. The total cost of sales decreased due to lower direct and indirect
labor costs, warranty expenditures, material costs and overhead costs as a
result of lower levels of product discounting, decreased provision for excess
and obsolete inventory, increased manufacturing efficiency and an improved rate
of recovery of warranty replacement inventory from customers.


                                       17
<PAGE>

      Selling and marketing expenses decreased $2.3 million (30.4%) to $5.3
million (25.0% of net revenues) in fiscal 2001 from $7.6 million (34.7% of net
revenues) in fiscal 2000. This decrease is principally due to a reduction in the
Company's direct sales force and reduction in other promotional and trade show
expenses principally as a result of the Patterson distribution agreement.

      General and administrative expenses decreased $3.1 million (43.2%) to $4.2
million (19.6% of net revenues) in fiscal 2001 from $7.3 million (33.4% of net
revenues) in fiscal 2000. The decrease in general and administrative expenses
was primarily attributable to a decrease in payroll and professional fees.

      Research and development expenses decreased $0.6 million (21.6%) to $2.2
million (10.4% of net revenues) in fiscal 2001 from $2.8 million (12.9% of net
revenues) in fiscal 2000. This decrease was principally attributable to
decreased payroll and a decrease in related costs due to a reduction in
materials purchased. All research and development costs are expensed as
incurred.

      In March 2001 the lease for a portion of the Company's premises expired.
The cost of leasehold improvements for the remaining premises, approximately
$0.5 million, will be amortized over the remaining six-year life of the lease.
The unamortized cost of leasehold improvements associated with the portion of
the former premises ($0.3 million) has been charged to operations.

      Interest expense increased $0.2 million in fiscal 2001 from $0.9 million
in fiscal 2000 due to the cost of increased borrowing provided by DVI Financial
Services Inc. and term note financing arrangements provided by Greystone Funding
Corporation's secured credit facility.

      As a result of the above items, the loss for the year ended March 31, 2001
was $1.6 million as compared to a loss of $12.3 million for the period ending
March 31, 2000.

Liquidity and Capital Resources

      At March 31, 2002, the Company had $1.6 million in cash and cash
equivalents and working capital of $1.1 million compared to $2.2 million in cash
and cash equivalents and $1.0 million in working capital deficiency at March 31,
2001. In addition, The Company had short-term investments of 0.5 million as of
March 31, 2002. The increase in working capital is primarily attributable to
operating profit during fiscal 2002.

      During fiscal 2002 cash provided by operations was $3.5 million compared
to $1.2 million provided by operations during fiscal 2001. Accounts receivable
increased to $2.8 million at March 31, 2002 compared to $1.0 million at March
31, 2001 due to increased sales activity. Inventories decreased to $2.8 million
at March 31, 2002 compared to $3.8 million at March 31, 2001 due to the
Company's planned reduction of inventory levels. The Company's capital
expenditures increased to $0.8 million in fiscal 2002 from $0.3 million in
fiscal 2001. Fiscal 2002 capital expenditures were primarily related to the
Company's consolidation into a portion of its premises during the first quarter.

      In January 1999, DVI Financial Services, Inc. ("DVI") provided the Company
with financing evidenced by notes payable for $6.6 million which are secured by
first priority liens on substantially all of the Company's assets. The Company
issued promissory notes (amended in June 2000)(the "DVI Notes") and security
agreements that provide, in part, that the Company may not permit the creation
of any additional lien or encumbrance on the Company's property or assets. The
DVI Notes are due in varying installments through fiscal 2006. Interest is paid
monthly at the prime rate (4 3/4% at March 31, 2002) plus 2.5%. In connection
with the DVI Notes, the Company granted DVI 650,000 warrants at an exercise
price of $2.19 per share. In connection with the amended DVI Notes, the
warrants' exercise price was reduced to $.75 and the expiration date extended to
December 2006.

      In connection with the DVI loan, the Company prepaid $236 and $750 of
outstanding principal during the first quarter of fiscal 2003 and 2002,
respectively. As of June 10, 2002, the outstanding principal balance of the DVI
loan is $3.5 million.

      Effective August 28, 2000, DVI sold all its right, title and interest in,
to and under the warrants and DVI Notes, as described above, to Greystone
Funding Corporation ("Greystone"). By letter dated October 11, 2000, DVI
directed the Company to make all remaining payments due under the DVI Notes
directly to Greystone.


                                       18
<PAGE>

      Effective as of December 17, 1999 (as amended on March 17, 2000), the
Company entered into a Loan Agreement (the "Amended Loan Agreement") with
Greystone to provide up to $7.5 million of subordinated debt in the form of a
secured credit facility. No funds were advanced under the Amended Loan Agreement
in excess of an initial draw of $1 million. On July 5, 2001, the Company
remitted payment to Greystone in the amount of $1.05 million, repaying all
outstanding advances under the Greystone Amended Loan Agreement, together with
all unpaid accrued interest thereunder, and concurrently terminated the Amended
Loan Agreement. Approximately $423 representing the unamortized discount and
deferred financing costs relating to the Amended Loan Agreement was charged to
expense in July 2001.

      On July 12, 2001, the Company and Greystone entered into a Termination
Agreement effective as of March 31, 2001, acknowledging the repayment and
termination of the Amended Loan Agreement and agreeing that all of the Company's
obligations thereunder have been fully satisfied. The Company and Greystone
further agreed, among other matters, that: (i) five million warrants held by
Greystone and its assigns to purchase Common Stock of the Company for 0.75 per
share remain in full force and effect; (ii) the Registration Rights Agreement
between Greystone and the Company dated as of December 27, 1999 remains in full
force and effect; and (iii) for so long as Jeffrey Slovin (who was seconded by
Greystone) holds the office of President of the Company, the Company would
reimburse Greystone in the amount of $17 thousand monthly. Effective November 1,
2001 Mr. Slovin joined the Company on a full-time basis as President and Chief
Operating Officer, thereby canceling this reimbursement provision of the
agreement.

      Based upon the Company's present operating conditions, management
anticipates that it will be able to meet its financing requirements on a
continuing basis. The ability of the Company to meet its cash requirements is
dependent, in part, on the Company's ability to maintain adequate sales and
profit levels, to satisfy warranty obligations without incurring expenses
substantially in excess of related warranty revenue and to collect its accounts
receivable on a timely basis. Management believes that its existing capital
resources and other potential sources of credit are adequate to meet its current
cash requirements. However, if the Company's cash needs are greater than
anticipated the Company will be required to seek additional or alternative
financing sources and could consider the reduction of certain discretionary
expenses and the sale of certain assets. There can be no assurance that such
financing will be available or available on terms acceptable to the Company

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The DVI Notes bear an annual interest rate based on the prime rate plus
2.5%, provided however, that if any payments to DVI are past due for more than
60 days, interest will thereafter accrue at the prime rate plus 5.5%. Because
the interest rate is variable, the Company's cash flow may be adversely affected
by increases in interest rates. Management does not, however, believe that any
risk inherent in the variable-rate nature of the loan is likely to have a
material effect on the Company's interest expense or available cash.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The response to this item is included as a separate section of this Annual
Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DATA

      None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) The Directors of the Company are as follows:

Euval Barrekette, Ph.D.       Age 71, has served as a Director of the Company
                              since April 1992. Dr. Barrekette's current term on
                              the Board expires at the Company's Annual Meeting
                              of Stockholders in 2002. Dr. Barrekette


                                       19
<PAGE>

                              is a licensed Professional Engineer in New York
                              State. Since 1986 Dr. Barrekette has been a
                              consulting engineer and physicist. From 1984 to
                              1986 Dr. Barrekette was Group Director of Optical
                              Technologies of the IBM Large Systems Group. From
                              1960 to 1984 Dr. Barrekette was employed at IBM's
                              T.J. Watson Research Center in various capacities,
                              including Assistant Director of Applied Research,
                              Assistant Director of Computer Science, Manager of
                              Input/Output Technologies and Manager of Optics
                              and Electrooptics. Dr. Barrekette holds an A.B.
                              degree from Columbia College, a B.S. degree from
                              Columbia University School of Engineering, an M.S.
                              degree from its Institute of Flight Structures and
                              a Ph.D. from the Columbia University Graduate
                              Faculties. Dr. Barrekette is a fellow of the
                              American Society of Civil Engineers, a Senior
                              Member of the Institute of Electronic & Electrical
                              Engineers, and a member of The National Society of
                              Professional Engineers, The New York State Society
                              of Professional Engineers, The Optical Society of
                              America and The New York Academy of Science. Dr.
                              Barrekette is the uncle of David B. Schick and the
                              brother-in-law of Dr. Allen Schick.

David B. Schick               Age 41, is a founder of the Company and, since its
                              inception in April 1992, has served as the
                              Company's Chief Executive Officer and Chairman of
                              the Board of Directors. From the Company's
                              inception to December 1999, Mr. Schick also served
                              as the Company's President. Mr. Schick's current
                              term on the Board expires at the Company's Annual
                              Meeting of Stockholders in 2003. Mr. Schick is
                              also a member of the Board of Directors of
                              Photobit Corporation. From September 1991 to April
                              1992, Mr. Schick was employed by Philips N.V.
                              Laboratories, where he served as a consulting
                              engineer designing high-definition television
                              equipment. From February 1987 to August 1991, Mr.
                              Schick was employed as a senior engineer at Cox
                              and Company, an engineering firm in New York City.
                              From January 1985 to January 1987, Mr. Schick was
                              employed as an electrical engineer at Grumman
                              Aerospace Co. Mr. Schick holds a B.S. degree in
                              electrical engineering from the University of
                              Pennsylvania's Moore School of Engineering. Mr.
                              Schick is the son of Dr. Allen Schick and the
                              nephew of Dr. Barrekette.

Allen Schick, Ph.D.           Age 67, has served as a Director of the Company
                              since April 1992. Dr. Schick's current term on the
                              Board expires at the Company's Annual Meeting of
                              Stockholders in 2003. Since 1981, Dr. Schick has
                              been a professor at the University of Maryland and
                              since 1988 has been a Visiting Fellow at the
                              Brookings Institution. Dr. Schick holds a Ph.D.
                              degree from Yale University. Dr. Schick is David
                              B. Schick's father and the brother-in-law of Dr.
                              Barrekette.

Jeffrey T. Slovin             Age 37, has served as the Company's President and
                              as a Director since December 1999. Mr. Slovin's
                              current term on the Board expires at the Company's
                              Annual Meeting of Stockholders in 2004. From 1999
                              to November 2001, Mr. Slovin was a Managing
                              Director of Greystone & Co., Inc. From 1996 to
                              1999, Mr. Slovin served in various executive
                              capacities at Sommerset Investment Capital LLC,
                              including Managing Director, and as President of
                              Sommerset Realty Investment Corp. During 1995, Mr.
                              Slovin was a Manager at Fidelity Investments Co.
                              From 1991 to 1994, Mr. Slovin was Chief Financial
                              Officer of Sports Lab USA Corp. and, from 1993 to
                              1994, was also President of Sports and
                              Entertainment Inc. From 1987 to 1991, Mr. Slovin
                              was an associate at Bear Stearns & Co., Inc.,
                              specializing in mergers and acquisitions and
                              corporate finance. Mr. Slovin holds an MBA degree
                              from Harvard Business School.

Jonathan Blank, Esq.          Age 57, has served as a Director of the Company
                              and as a member of the Audit Committee of the
                              Board of Directors since April 2000. Mr. Blank's
                              current term on the Board expires at the Company's
                              Annual Meeting of Stockholders in 2002. Since
                              1979, Mr.


                                       20
<PAGE>

                              Blank has been a member of the law firm of Preston
                              Gates Ellis & Rouvelas Meeds LLP, a managing
                              partner of the firm since 1995 and a member of the
                              Executive Committee of Preston Gates Ellis LLP
                              since 1995.

William Hood                  Age 78, has served as a Director of the Company
                              and as a member of the Audit Committee of the
                              Board of Directors since February 2002. Mr. Hood's
                              current term on the Board expires at the Company's
                              Annual Meeting of Stockholders in 2004. Mr. Hood
                              is also a member of the Board of Directors of
                              Photobit Corporation. From 1972 to 1980, Mr. Hood
                              was President and Chief Executive Officer of
                              Hunt-Wesson Foods, Inc. From 1981 to 1983, he
                              served as Dean of the Chapman University School of
                              Business Management. From 1983 to 1988, Mr. Hood
                              was Senior Vice-President of American Bakeries
                              Company. From 1989 to 1996, he served as a
                              consultant to Harlyn Products, Inc. and as a
                              member of its Board of Directors. Mr. Hood is a
                              Trustee of Chapman University, a Director of the
                              Orange County Council Boy Scouts of America and a
                              consultant to E Com Technologies Inc.

Curtis M. Rocca III           Age 39, has served as a Director of the Company
                              and as a member of the Audit Committee of the
                              Board of Directors since May 30, 2002. Mr. Rocca's
                              current term on the Board expires at the Company's
                              Annual Meeting of Stockholders in 2004. Mr. Rocca
                              is also a member of the Board of Directors of
                              Zila, Inc. Since 2000, Mr. Rocca has been the
                              Chief Executive Officer of Douglas, Curtis &
                              Allyn, LLC. From 1998 to 2000, he served as Chief
                              Executive Officer of Dental Partners, Inc. From
                              1990 to 1998, Mr. Rocca was Chairman and Chief
                              Executive Officer of Bio-Dental Technologies Corp.

(b) The following table shows the names and ages of all executive officers of
the Company, the positions and offices held by such persons and the period
during which each such person served as an officer. The term of office of each
person is generally not fixed since each person serves at the discretion of the
Board of Directors of the Company.

                                                                         Officer
     Name                    Age     Position                             Since
     ----                    ---     --------                            -------

     David B. Schick.......  41   Chairman of the Board and Chief
                                  Executive Officer                       1992

     Jeffrey T. Slovin.....  37   President, Chief Operating Officer
                                  and Director                            1999

     Michael Stone.........  49   Executive Vice-President                2000

     Stan Mandelkern.......  42   Vice President of Engineering           1999

     Ari Neugroschl........  31   Vice President of Management
                                  Information Systems                     2000

     Zvi N. Raskin.........  39   Secretary and General Counsel           1992

     William Rogers........  62   Vice President of Operations            1999

     Ronald Rosner.........  55   Director of Finance and
                                  Administration                          2000

      The business experience of each of the executive officers who is not a
      Director is set forth below.

      MICHAEL STONE has served as the Company's Executive Vice President since
      September 2000 and as the Company's Vice President of Sales and Marketing
      from January 2000 to September


                                       21
<PAGE>

      2000. From September 1993 to January 2000, Mr. Stone was General Manager
      of the Dental Division of Welch-Allyn Company, and from October 1989 to
      September 1993 was Director of Marketing for Welch-Allyn. Mr. Stone holds
      an MBA degree from the University of Rochester.

      STAN MANDELKERN has served as the Company's Vice President of Engineering
      since November 1999. From 1998 to 1999, Mr. Mandelkern was the Company's
      Director of Electrical Engineering, and was a Senior Electrical Engineer
      at the Company from 1997 to 1998. From 1996 to 1997 Mr. Mandelkern was at
      Satellite Transmission Systems as Project Leader for the Digital Video
      Products Group. From 1989 to 1996 Mr. Mandelkern held various design and
      management positions at Loral Corp. Mr. Mandelkern holds a M.S. Degree in
      electrical engineering from Syracuse University.

      ARI NEUGROSCHL has served as the Company's Vice President of Management
      Information Systems since July 2000. From November 1997 to July 2000, Mr.
      Neugroschl was the Company's Director of Management Information Systems,
      and from February 1996 to November 1997 he served as the Company's
      Director of Customer Service and Support. Mr. Neugroschl holds a B.S. in
      Economics from Yeshiva University.

      ZVI N. RASKIN has served as Secretary of the Company since April 1992 and
      as General Counsel of the Company since September 1995. From April 1992 to
      May 1996, Mr. Raskin was a Director of the Company. Mr. Raskin is admitted
      to practice law before the Bars of the State of New York, the United
      States District Courts for the Southern and Eastern Districts of New York
      and the United States Court of Appeals for the Second Circuit. From 1992
      to 1995, Mr. Raskin was a senior associate at the New York law firm of
      Townley & Updike. Mr. Raskin holds a J.D. degree from Yale Law School.

      WILLIAM ROGERS has served as the Company's Vice President of Operations
      since January 2000. From August 1998 to January 2000, Mr. Rogers was the
      Company's Director of Manufacturing Engineering. From June 1995 to August
      1998, Mr. Rogers was Director of Operations at Veeco Instruments Co., and
      from May 1993 to February 1995 was Director of Manufacturing for Scully
      Signal Company. Mr. Rogers holds a B.S. Degree in electrical engineering
      from Northeastern University.

      RONALD ROSNER has served as the Company's Director of Finance and
      Administration since August 2000. From March 1999 to August 2000, Mr.
      Rosner served the Company in several senior accounting and financial
      capacities. From October 1998 to February 1999, Mr. Rosner was a
      Consultant at Mercantile Ship Corporation, and from April 1997 to October
      1998 was the CFO at Coast MFG. Mr. Rosner holds a B.S. degree in
      Accounting from Brooklyn College and has been a Certified Public
      Accountant in the State of New York since May 1972. Prior to 1999, for a
      period of approximately four years, Mr. Rosner was an audit manager with
      the predecessor to Ernst & Young LLP.

(d) Family Relationships

      See Item 10(a).

(e) Business Experience

      See Items 10(a) and 10(b).

(f) Involvement in Certain Legal Proceedings

      There are no legal proceedings involving any of Company's Directors or
Officers which are reportable hereunder, with the following exception: Mr. Hood
served as a member of the Board of Directors of Harlyn Products, Inc. from May
1989 until November 1996. On March 21, 1997, Harlyn Products filed for
bankruptcy in the United States Bankruptcy Court, Central District of
California, under Chapter 11, and emerged from bankruptcy on April 25, 2000
under Chapter 7 with no remaining assets or liabilities.

Section 16(A) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership with the Commission. Such executive officers and
directors and greater than 10% beneficial owners are


                                       22
<PAGE>

required by the regulations of the Commission to furnish the Company with copies
of all Section 16(a) reports they file.

      Based solely on a review of the copies of such reports furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers and directors and greater than 10% beneficial owners were
complied with, except that a Form 3 for Mr. Rosner was not filed following his
appointment as the Company's Director of Finance and Administration.
Subsequently, a Form 5 has been filed for Mr. Rosner.

ITEM 11. EXECUTIVE COMPENSATION

      The following table sets forth certain information concerning compensation
received for the fiscal years ended March 31, 2002, 2001 and 2000 by the
Company's chief executive officer and each of the four most highly compensated
executive officers of the Company whose total salary and other compensation
exceeded $100,000 (the "Named Executives") for services rendered in all
capacities (including service as a director of the Company) during the year
ended March 31, 2002.

Summary Compensation Table

<TABLE>
<CAPTION>
                                                                              Long-Term
                                           Annual                            Compensation
                                        Compensation                            Awards
                                        ------------                            ------

                                                                   Other
                                                                   Annual      Securities      All Other
    Name and Principal         Fiscal                             Compensa     Underlying       Compensa
         Position               Year     Salary($)      Bonus($)   Tion(1)    Options(#)(2)    tion($)(3)
         --------               ----     ---------      --------   -------    -------------    ----------
---------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>           <C>          <C>         <C>              <C>
                                2002      $225,246      $50,000      --          160,709          4,362
David B. Schick
Chairman of the Board and       2001       200,000       16,308      --               --          4,468
Chief Executive Officer
                                2000       217,500           --      --           12,251          3,980
---------------------------------------------------------------------------------------------------------

Michael Stone                   2002       193,577       48,154      --          135,207          4,491
Executive Vice President
                                2001       175,000           --      --               --          2,861

                                2000        23,558           --      --               --             --
---------------------------------------------------------------------------------------------------------

                                2002       204,154       20,000      --           36,018          4,527
Zvi N. Raskin, Esq.
General Counsel and             2001       200,001       20,000      --               --          4,038
Secretary
                                2000       132,500           --      --           17,006          3,286
---------------------------------------------------------------------------------------------------------

Will Rogers                     2002       136,651        7,500      --           33,089             --
Vice President of
Operations                      2001       135,000           --      --               --             --

                                2000       105,214           --      --               --             --
---------------------------------------------------------------------------------------------------------

Stan Mandelkern                 2002       154,615           --      --           30,108          3,865
Vice President of
Engineering                     2001       121,878           --      --               --          3,048

                                2000       118,500           --      --               --          3,346
---------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Does not include compensation if the aggregate amount thereof does not
      exceed the lesser of $50,000 or 10% of the total annual salary and bonus
      for the named officer.

(2)   Represents options to purchase shares of Common Stock granted during
      fiscal 2002, 2001, and 2000 pursuant to the Company's 1996 Employee Stock
      Option Plan.

(3)   Reflects amounts contributed by the Company in the form of matching
      contributions to the Named Executive's Savings Plan account during fiscal
      2002, 2001 and 2000.


                                       23
<PAGE>

Employment Agreements and Termination of Employment Arrangement

      In January 2002, the Company entered into two-year employment agreement
with Michael Stone, pursuant to which Mr. Stone is employed as the Company's
Executive Vice President. Mr. Stone's annual base salary is $210,000. In
addition to base salary, Mr. Stone is eligible to receive annual merit and/or
cost-of-living increases as may be determined by the Executive Compensation
Committee of the Board of Directors. Mr. Stone is also eligible to receive a
performance bonus by August 1, 2003 equal to 0.5% of the Company's earnings
before income taxes, depreciation and amortization for the 2003 fiscal year in
the event that the Company's net revenue for fiscal 2003 exceeds $28 million.
Pursuant to the Agreement, Mr. Stone also received 75,000 employee stock options
which vest as follows: 12,500 options upon grant, an additional 25,000 options
on January 14, 2003, an additional 25,000 options on January 14, 2004, and the
final 12,500 options on January 14, 2005. In the event that Mr. Stone is
terminated from employment with the Company without cause, he would receive 6
months of severance pay, a pro-rated performance bonus and immediate vesting of
all unvested Company stock options. Additionally, all unvested Company stock
options held by Mr. Stone will immediately vest in the event that the Company
has a change in control or is acquired by another entity.

      In December 2001, the Company entered into a three-year employment
agreement with David Schick, replacing the previous employment agreement between
the Company and Mr. Schick, entered into in February 2000. Pursuant thereto, Mr.
Schick is employed as Chief Executive Officer of the Company. The term of the
agreement is renewable thereafter on a year-to-year basis unless either party
gives 60-day written notice of termination before the end of the then-current
term. Mr. Schick's initial base annual salary under the Agreement is $242,000.
In addition to base salary, Mr. Schick is eligible to receive annual merit or
cost-of-living increases as may be determined by the Executive Compensation
Committee of the Board of Directors. Mr. Schick will also receive an increase in
base salary as well as incentive compensation in the form of a bonus based on
the Company's EBITDA. Such incentive compensation is capped at $100,000 per
fiscal year. Pursuant to the Agreement, as amended by a letter agreement dated
March 4, 2002, Mr. Schick also received 150,000 employee stock options which
vest as follows: 50,000 options on December 20,2002, an additional 50,000
options on December 20, 2003, and the final 50,000 options on December 20, 2004.
Additionally, all Company stock options held by, or to be issued to, Mr. Schick
will immediately be granted and vest in the event that the Company has a change
in control or is acquired by another company or entity. In the event that Mr.
Schick is terminated from employment with the Company without cause, he would
receive severance pay for two years or the remainder of the term of the
Agreement, whichever time period is shorter. Under certain circumstances, where
the Company effects a change in Mr. Schick's title or diminishes, in any
significant manner, his duties or responsibilities of employment, Mr. Schick may
unilaterally resign from employment. In this instance, he would act as a
consultant to the Company for a period of one year following his resignation and
receive severance pay for one year.

      In February 2000, the Company entered into a three-year employment
agreement with Zvi Raskin, effective January 1, 2000, pursuant to which Mr.
Raskin is employed as General Counsel of the Company. Mr. Raskin's annual base
annual salary is currently $220,000. In addition to base salary, Mr. Raskin will
receive a minimum bonus of $20,000 per calendar year and is eligible to receive
additional performance bonuses at the sole discretion of the Executive
Compensation Committee of the Board of Directors. Mr. Raskin was also awarded
75,000 shares of the Company's Common Stock, subject to a risk of forfeiture
which expires as to 25,000 shares on each of December 31, 2000, 2001 and 2002.
Upon the sale of any such vested shares, Mr. Raskin is required to pay the
Company the sum of $1.32 per share sold within 30 days following such sale. In
the event that Mr. Raskin is terminated from employment with the Company without
cause, he would receive 12 months of severance pay.


                                       24
<PAGE>

Compensation of Directors

      Directors who are also paid-employees of the Company are not separately
compensated for any services they provide as directors. In fiscal 2002, each
director of the Company who is not a paid-employee received $500 for each
meeting of the Board of Directors attended and $300 for each committee meeting
attended. The Company was permitted to, but did not, pay such fees in Common
Stock. In addition, directors who are not paid-employees of the Company are
eligible to receive annual grants of stock options under the Company's Directors
Stock Option Plan. On April 30, 2002, the Board of Directors modified the
Board's compensation as follows: each Director of the Company who is not a paid
employee thereof shall receive $1000 for each meeting of the Board of Directors
attended in person and $1000 for each Committee meeting attended in person. No
fees are to be paid for meetings attended telephonically.

Compensation Committee Interlocks and Insider Participation

      The Executive Compensation Committee reviews and makes recommendations
regarding the compensation for top management and key employees of the Company,
including salaries and bonuses. The members of the Executive Compensation
Committee during the fiscal year ended March 31, 2002 were Jonathan Blank (for
the entire year) and Robert J. Barolak (until December 20, 2001). None of such
persons is an officer or employee, or former officer or employee, of the Company
or any of its subsidiaries. No interlocking relationship existed during the
fiscal year ended March 31, 2002, between the members of the Company's Board of
Directors or Compensation Committee and the board of directors or compensation
committee of any other company, nor had any such interlocking relationship
existed in the past. Mr. Barolak is an executive officer of Greystone Funding
Corporation, a former lender to the Company under the Amended and Restated Loan
Agreement between the Company and Greystone. See "Item 7 -- Management's
Discussion and Analysis - Liquidity and Capital Resources" and "Item 13 -
Certain Relationships and Related Transactions."

Stock Option Grants

      The following table sets forth information regarding grants of options to
purchase Common Stock made by the Company during the year ended March 31, 2002
to each of the Named Executives.

                          Option Grants in Fiscal 2002

<TABLE>
<CAPTION>
                          Individual Grants
                      Number of      Percent of
                     Securities    Total Options
                     Underlying      Granted to      Exercise
                      Options       Employees in       Price      Expiration    Grant Date
Name                 Granted(#)    Fiscal 2002(1)    ($/Share)       Date         Value
----                 ----------    --------------    ---------       ----         -----
<S>                   <C>               <C>            <C>         <C>              <C>
David B. Schick        50,000            6.0%          $1.05       12/20/06
                      100,000           11.9            2.37        2/19/06
                       10,709            1.3            0.66        10/1/06         --

Michael Stone          10,207            1.2            0.90        10/1/11
                       75,000            8.9            1.11        1/14/12
                       25,000            3.0            0.95       12/12/11         --

Stan Mandelkern         9,228            1.1            0.90        10/1/11         --

Zvi N. Raskin          11,018            1.3            0.90        10/1/11
                       25,000            3.0            0.96       12/20/11         --

William Rogers         10,000            1.2            0.95       12/12/11         --
</TABLE>

(1)   The Company granted employees options to purchase a total of 859,739
      shares of Common Stock in fiscal 2002.

Option Exercises and Year-End Value Table

The following table sets forth information regarding the exercise of stock
options during fiscal 2002 and the number and value of unexercised options held
at March 31, 2002 by each Named Executive.


                                       25
<PAGE>

      Aggregated Option Exercises in Fiscal 2002 and Fiscal 2002 Year-End Option
Values

<TABLE>
<CAPTION>
                                                 Number of
                                                 Securities            Value of
                                                 Underlying           Unexercised
                                                 Unexercised         "In-the-Money"
                                                 Options at            Options at
                       Shares                  March 31, 2002        March 31, 2002
                  Acquired on         Value     Exercisable/          Exercisable/
Name              Exercise(#)  Realized ($)     Unexercisable       Unexercisable(1)
----              -----------  ------------     -------------       ----------------
<S>                        <C>           <C>   <C>               <C>
David B. Schick            --            --    12,455/163,772        $--/67,422.44
Michael Stone              --            --    37,500/122,707    $40,937.50/141,321.30
Stan Mandelkern            --            --     31,900/36,888    $31,049.50/48,425.50
Zvi N. Raskin              --            --     21,347/33,890       $7437.50/36,085
Will Rogers                --            --     30,450/17,639    $38,102.50/20,258.75
</TABLE>

(1)   Options are "in-the-money" if the fair market value of the underlying
      securities exceeds the exercise price of the options. The amounts set
      forth represent the difference between $2.15 per share, the closing price
      per share on March 28, 2002, and the exercise price of the option,
      multiplied by the applicable number of options.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of June 6, 2002 by (i) each person
who is known by the Company to own beneficially more than 5% of the Common
Stock, (ii) each director, (iii) each Named Executive of the Company and (iv)
all directors and executive officers of the Company as a group. Unless otherwise
noted, the stockholders listed in the table have sole voting and investment
powers with respect to the shares of Common Stock owned by them.

<TABLE>
<CAPTION>
                                                   Number of Shares         Percentage of
            Name                              Beneficially Owned(1)    Outstanding Shares
            ----                              ---------------------    ------------------
<S>                                                   <C>                           <C>
            David B. Schick(2)                        2,205,499(3)                  21.7%
            Jeffrey T. Slovin(2)                        877,500(12)                  8.0%
            Michael Stone(2)                            127,300(4)                   1.2%
            Stan Mandelkern(2)                           20,360(5)                     *
            Zvi N. Raskin(2)                             98,099(7)                   1.0%
            Will Rogers(2)                               73,100(6)                     *
            Euval S. Barrekette(8)                      162,740(9)                   1.6%
            Allen Schick(10)                            618,124(11)                  6.0%
            William K. Hood (13)                         25,000(14)                    *
            Jonathan Blank(15)                          160,075(16)                  1.6%
            Curtis M. Rocca(20)                               0                        *
            Greystone Funding Corp.(17)               4,802,500(18)                 32.1%
            All current executive Officers
             and Directors as a group(19)             4,405,889                     38.7%
</TABLE>

*     Less than 1%

(1)   Beneficial ownership is determined in accordance with rules of the
      Securities and Exchange Commission and includes voting power and/or
      investment power with respect to securities. Shares of Common Stock
      subject to options or warrants currently exercisable or exercisable within
      60 days of June 6, 2002 are deemed outstanding for computing the number
      and the percentage of outstanding shares beneficially owned by the person
      holding such options but are not deemed outstanding for computing the
      percentage beneficially owned by any other person.

(2)   Such person's business address is c/o Schick Technologies, Inc., 30-00
      47th Avenue, Long Island City, New York 11101.

(3)   Consists of 2,183,300 shares held jointly by Mr. Schick and his wife;
      5,715 shares issuable upon the exercise of stock options granted to Mr.
      Schick in July 1996; 2,450 shares issuable upon the exercise of stock
      options granted to Mr. Schick in July 1997; 2251 shares issuable upon the
      exercise of stock options granted to Mr. Schick in April 1998; 4283 shares
      issuable upon the exercise of stock options granted to Mr. Schick in


                                       26
<PAGE>

      October 2001 and 7,500 shares issuable upon the exercise of stock options
      granted to Mr. Schick in October 1998, pursuant to the 1996 Employee Stock
      Option Plan.

(4)   Consists of 71,050 shares held by Mr. Stone; 12,500 shares issuable upon
      the exercise of stock options granted to Mr. Stone in July 2000; 12,500
      shares issuable upon the exercise of stock options granted to Mr. Stone in
      January 2001; 12,500 shares issuable upon the exercise of stock options
      granted to Mr. Stone in April 2001; 6250 shares issuable upon the exercise
      of stock options granted to Mr. Stone in December 2001 and 12,500 shares
      issuable upon the exercise of stock options granted to Mr. Stone in
      January 2002.

(5)   Consists of 1,000 shares held by Mr. Mandelkern; 2,000 shares issuable
      upon the exercise of stock options granted to Mr. Mandelkern in April
      1999; 5,000 shares issuable upon the exercise of stock options granted to
      Mr. Mandelkern in July 1999; 1,920 shares issuable upon the exercise of
      stock options granted to Mr. Mandelkern in March 2000 and 10,440 shares
      issuable upon the exercise of stock options granted to Mr. Mandelkern in
      April 2001.

(6)   Consists of 36,000 shares held by Mr. Rogers;10,000 shares issuable upon
      the exercise of stock options granted to Mr. Rogers in July 2000; 3,750
      shares issuable upon the exercise of stock options granted to Mr. Rogers
      in March 1999; 8350 shares issuable upon the exercise of stock options
      granted to Mr. Rogers in December 2001 and 15,000 shares issuable upon the
      exercise of stock options granted to Mr. Rogers in April 2001.

(7)   Consists of 75,000 shares (the "Shares") issued by the Company to Mr.
      Raskin on February 6, 2000, which are subject to the following
      restrictions on their sale or transfer: (i) none of the Shares may be sold
      or transferred prior to December 31, 2000, (ii) one-third (i.e., 25,000)
      of the Shares may be sold or transferred on or after December 31, 2000,
      (iii) an additional one-third (i.e., an additional 25,000) of the Shares
      may be sold or transferred on or after December 31, 2001, and (iv) the
      final one-third i.e., the final 25,000) of the Shares may be sold or
      transferred on or after December 31, 2002. The aforementioned 75,000
      shares are subject to a risk of forfeiture which expires as to 25,000
      shares on each of December 31, 2000, 2001 and 2002; 2,343 shares issuable
      upon the exercise of stock options granted to Mr. Raskin in July 1997;
      2006 shares issuable upon the exercise of options granted to Mr. Raskin in
      April 1998; 5,000 shares issuable upon the exercise of options granted to
      Mr. Raskin in July 1998; 7,500 shares issuable upon the exercise of
      options granted to Mr. Raskin in October 1998, and 6250 shares issuable
      upon the exercise of stock options granted to Mr. Raskin in December 2001.

(8)   Such person's address is 90 Riverside Drive, New York, New York 10024.

(9)   Consists of 115,240 shares held by Dr. Barrekette; 2,500 shares issuable
      upon the exercise of stock options granted to Dr. Barrekette in July,
      1998; 30,000 shares issuable upon the exercise of stock options granted to
      Dr. Barrekette in June, 2000, pursuant to the 1997 Directors Stock Option
      Plan and 15,000 shares issuable upon the exercise of stock options granted
      to Mr. Barrekette in December 2001, pursuant to the 1997 Directors Stock
      Option Plan.

(10)  Such person's address is 1222 Woodside Parkway, Silver Spring, Maryland
      20910.

(11)  Consists of 525,824 shares held jointly by Dr. Schick and his wife; 44,800
      shares held by Dr. Schick as custodian for the minor children of David
      Schick; 2,500 shares issuable upon the exercise of stock options granted
      to Dr. Schick in July 1998; 30,000 shares issuable upon the exercise of
      stock options granted to Dr. Schick in June, 2000, pursuant to the 1997
      Directors Stock Option Plan and 15,000 shares issuable upon the exercise
      of stock options granted to Dr. Schick in December 2001, pursuant to the
      1997 Directors Stock Option Plan. Dr. Schick disclaims beneficial
      ownership of the 44,800 shares held as custodian.

(12)  Consists of 847,500 shares issuable upon the exercise of warrants held by
      Mr. Slovin (which Mr. Slovin received as designee of Greystone) and 30,000
      shares issuable upon the exercise of stock options granted to Mr. Slovin
      in June, 2000, pursuant to the 1997 Directors Stock Option Plan.

(13)  Such person's address is 444 Via Lido Nord, Newport Beach, CA 92663.


                                       27
<PAGE>

(14)  Consists of 10,000 shares held by Mr. Hood and 15,000 shares issuable upon
      the exercise of stock options granted to Mr. Hood in February 2002,
      pursuant to the 1997 Directors Stock Option Plan.

(15)  Such person's business address is c/o Preston Gates Ellis & Rouvelas Meeds
      LLP, 1735 New York Avenue, N.W., Washington, D.C. 20006.

(16)  Consists of 115,075 shares held by Mr. Blank; 30,000 shares issuable upon
      the exercise of stock options granted to Mr. Blank in June 2000, pursuant
      to the 1997 Directors Stock Option Plan and 15,000 shares issuable upon
      the exercise of stock options granted to Mr. Blank in December 2001,
      pursuant to the 1997 Directors Stock Option Plan.

(17)  Greystone's address is 152 West 57th Street, New York, New York 10019.

(18)  Consists of 4,802,500 shares issuable upon the exercise of warrants held
      by Greystone and does not include the 13,000,000 shares issuable upon
      exercise of warrants held by Greystone which vest as, and only in the
      event that, additional amounts are advanced under the Greystone Loan
      Agreement. See "Item 7 - Management's Discussion and Analysis -- Liquidity
      and Capital Resources."

(19)  Includes the shares underlying warrants described in Note 12 as well as
      shares subject to options held by current officers and directors.

(20)  Such person's business address is c/o Douglas, Curtis & Allyn, LLC, 2998
      Douglas Boulevard, Suite 300, Roseville, CA 95661

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In connection with the Loan Agreement with Greystone, the Company issued
to Greystone 4,250,000 warrants to purchase the Company's Common Stock, and to
Jeffrey Slovin, as Greystone's designee, 750,000 warrants to purchase the
Company's Common Stock. Mr. Slovin is the Company's President and Chief
Operating Officer and serves as a Director of the Company.

      On July 5, 2001, the Company repaid all outstanding advances under the
Greystone Amended Loan Agreement, together with all unpaid accrued interest
thereunder, and concurrently terminated said Amended Loan Agreement. On July 12,
2001, the Company and Greystone entered into a Termination Agreement, effective
as of March 31, 2001, acknowledging the repayment and termination of the Amended
Loan Agreement and agreeing that all the Company's obligations thereunder have
been fully satisfied. The Company and Greystone further agreed, among other
matters, that: (i) five million warrants held by Greystone and its assigns to
purchase Common Stock of the Company remain in full force and effect; (ii) the
Registration Rights Agreement between Greystone and the Company dated as of
December 27, 1999 remains in full force and effect; and (iii) for so long as
Jeffrey Slovin holds the office of President of the Company, the Company shall
reimburse Greystone in the amount of $17 thousand monthly.

      In addition, DVI Financial Services, Inc. ("DVI") has provided the Company
with notes payable for $6.6 million which are secured by first priority liens on
substantially all of the Company's assets. See "Item 7 -- Management's
Discussion and Analysis - Liquidity and Capital Resources."

      Effective August 28, 2000, DVI transferred its rights, title and interest
in, to, and under the DVI Notes payable and related loan documents to Greystone.
In connection with such transfer, DVI directed the Company to make all remaining
payments due under the loan documents to Greystone. Concurrently, DVI
transferred 650,000 warrants to purchase the Company's Common Stock to
Greystone, of which 97,500 warrants were transferred to Mr. Slovin, as
Greystone's designee.

      During the first quarter of fiscal 2003, the Company prepaid to Greystone
$236K of outstanding principal of the DVI loan. As of June 10, 2002, the
outstanding principal balance of that loan is $3.5 million, subject to periodic
prepayment in accordance with the terms of the loan documents.

      In November 2001, the Company entered into a three-year employment
agreement with Jeffrey T. Slovin. Pursuant to the Agreement, Mr. Slovin is
employed as President and Chief Operating Officer of the Company. Mr. Slovin's
initial base annual salary under the Agreement is $240,000. In addition to base
salary, Mr. Slovin is eligible to receive annual merit or


                                       28
<PAGE>

cost-of-living increases as may be determined by the Executive Compensation
Committee of the Board of Directors. Mr. Slovin will also receive an increase in
base salary as well as incentive compensation in the form of a bonus based on
the Company's EBITDA. Such incentive compensation is capped at $100,000 per
fiscal year. Pursuant to the Agreement, Mr. Slovin also received 150,000
employee stock options which vest as follows: 50,000 options on October 31,
2002, an additional 50,000 options on October 31, 2003, and the final 50,000
options on October 31, 2004. Additionally, all Company stock options held by, or
issued to, Mr. Slovin will immediately vest in the event that the Company has a
change in control or is acquired by another company or entity. In the event that
Mr. Slovin is terminated from employment with the Company without cause, he
would receive severance pay for two years or the remainder of the term of the
Agreement, whichever time period is shorter. Under certain circumstances, where
the Company effects a change in Mr. Slovin's title or diminishes, in any
significant manner, his duties or responsibilities of employment, Mr. Slovin may
unilaterally resign from employment. In this instance, he would act as a
consultant to the Company for a period of one year following his resignation and
receive severance pay for one year.


                                       29
<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND SCHEDULES

SCHICK TECHNOLOGIES, INC.

      Index to Consolidated Financial Statements                             F1

      Report of Independent Certified Public Accountants                     F1
      Consolidated Balance Sheets as of March 31, 2002 and 2001              F2
      Consolidated Statements of Operations for the years ended
        March 31, 2002, 2001 and 2000                                        F3
      Consolidated Statements of Changes in Stockholders' Equity
        (Deficiency) for the years ended March 31, 2002, 2001 and 2000       F4
      Consolidated Statements of Cash Flows for the years ended
        March 31, 2002, 2001 and 2000                                        F5
      Notes to Consolidated Financial Statements                             F6
      Schedule II/Valuation and Qualifying Accounts                         F17

      Report of Independent Certified Public Accountants

To the Board of Directors
and Stockholders of Schick Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Schick
Technologies, Inc. and subsidiary (the "Company") as of March 31, 2002 and 2001,
and the related consolidated statements of operations, changes in stockholders'
equity (deficiency) and cash flows for each of the three years in the period
ended March 31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
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 audit 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 consolidated financial position of Schick
Technologies, Inc. and subsidiary as of March 31, 2002 and 2001, and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended March 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.

We have also audited Schedule II - Valuation and Qualifying Accounts of Schick
Technologies, Inc. and subsidiary for each of the three years in the period
ended March 31, 2002. In our opinion, this schedule presents fairly, in all
material respects, the information required to be set forth therein.


/s/ GRANT THORNTON LLP
New York, New York
May 29, 2002, except for the second paragraph of Note 12, under the subheading
"SEC Investigation and other," as to which the date is June 13, 2002


                                      F 1
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Balance Sheet
(In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                    March 31,
                                                                                                    ---------
                                                                                                2002         2001
                                                                                                ----         ----
<S>                                                                                           <C>          <C>
Assets
Current assets
          Cash and cash equivalents                                                           $  1,622     $  2,167
          Short - term investments                                                                 472            8
          Accounts receivable, net of allowance for
                      doubtful accounts of $717 and  $1,818 respectively                         2,812          977
          Inventories                                                                            2,805        3,820
          Income taxes receivable                                                                   13           21
          Prepayments and other current assets                                                     427          176
                                                                                              --------     --------
                                   Total current assets                                          8,151        7,169
                                                                                              --------     --------
Equipment, net                                                                                   2,939        3,489
Investment                                                                                          --          815
Other assets                                                                                       867        1,173
                                                                                              --------     --------
                                   Total assets                                               $ 11,957     $ 12,646
                                                                                              ========     ========

Liabilities and Stockholders' Equity (Deficiency)
Current liabilities
          Current maturity of long term debt                                                  $  1,815     $  2,851
          Accounts payable and accrued expenses                                                    957        1,801
          Accrued salaries and commissions                                                         565          347
          Deposits from customers                                                                   30          483
          Warranty obligations                                                                      72          141
          Deferred revenue                                                                       3,579        3,132
                                                                                              --------     --------
                                   Total current liabilities                                     7,018        8,755
                                                                                              --------     --------
Long term debt                                                                                   2,039        4,080
                                                                                              --------     --------

                                   Total liabilities                                             9,057       12,835
                                                                                              --------     --------

Commitments and contingencies                                                                       --           --
Stockholders' equity (deficiency)
          Preferred stock ($0.01 par value; 2,500,000
                      shares authorized; none issued and outstanding)                               --           --
          Common stock ($0.01 par value; 50,000,000 shares  authorized:
                      10,138,360 shares issued and outstanding)                                    101          101
          Additional paid-in capital                                                            42,481       42,480
          Accumulated deficit                                                                  (39,682)     (42,770)
                                                                                              --------     --------
                                   Total stockholders' equity  (deficiency)                      2,900         (189)
                                                                                              --------     --------
                                   Total liabilities and stockholders' equity (deficiency)    $ 11,957     $ 12,646
                                                                                              ========     ========
</TABLE>

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


                                      F 2
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statements of Operations
(In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                            Year ended March, 31
                                                                            --------------------
                                                                   2002             2001             2000
                                                                   ----             ----             ----
<S>                                                            <C>              <C>              <C>
Revenue, net                                                   $     24,399     $     21,252     $     21,989
                                                               ------------     ------------     ------------

Cost of sales                                                         8,540            9,736           15,393
Excess and obsolete inventory                                           292              570              898
                                                               ------------     ------------     ------------
Total cost of sales                                                   8,832           10,306           16,291
                                                               ------------     ------------     ------------

                  Gross profit                                       15,567           10,946            5,698
                                                               ------------     ------------     ------------

Operating expenses:
          Selling and marketing                                       5,291            5,314            7,636
          General and administrative                                  4,148            4,161            7,330
          Research and development                                    2,176            2,220            2,830
          Bad debt (recovery) expense                                   (93)            (454)               9
          Lease termination                                             118              275               --
                                                               ------------     ------------     ------------
                  Total operating costs                              11,640           11,516           17,805
                                                               ------------     ------------     ------------

                  Income (loss) from operations                       3,927             (570)         (12,107)
                                                               ------------     ------------     ------------

Other income (expense)
          Other income                                                  140               --               --
          Gain on sale of investment                                     --               --              565
          Interest income                                                33               60              101
          Interest expense                                           (1,012)          (1,128)            (890)
                                                               ------------     ------------     ------------
                  Total interest and other income (expense)            (839)          (1,068)            (224)
                                                               ------------     ------------     ------------

                  Net income (loss)                            $      3,088     $     (1,638)    $    (12,331)
                                                               ============     ============     ============

                  Basic earnings (loss) per share              $       0.30     $      (0.16)    $      (1.23)
                                                               ============     ============     ============
                  Diluted earnings (loss) per share            $       0.26     $      (0.16)    $      (1.23)
                                                               ============     ============     ============
                  Weighted average common shares (basic)         10,137,209       10,135,867       10,059,384
                                                               ============     ============     ============
                  Weighted average common shares (diluted)       11,915,351       10,135,867       10,059,384
                                                               ============     ============     ============
</TABLE>

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


                                      F 3
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statements of  Changes in Stockholders' Equity (Deficiency)
(In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                         (Accumulated
                                                       Common Stock         Additional      Deficit)        Total
                                                       ------------          Paid-in        Retained     Stockholders'
                                                     Shares       Amount     Capital        Earnings        Equity
                                                     ------       ------     -------        --------        ------

<S>                                                <C>             <C>       <C>            <C>            <C>
Balance at March 31, 1999                          10,059,384      $101      $41,236        $(28,801)      $ 12,536
      Issuance of warrants upon in connection
          with financing activity                          --        --        1,111              --          1,111
      Issuance of common stock in connection
          with employment agreement                    75,000        --           --                             --
      Net loss                                             --        --           --         (12,331)       (12,331)
                                                   ----------      ----      -------        --------       --------
Balance at March 31, 2000                          10,134,384       101       42,347         (41,132)         1,316
      Issuance of warrants                                                       130                            130
      Issuance of common stock                          2,809        --            3                              3
      Net loss                                             --        --           --          (1,638)        (1,638)
                                                   ----------      ----      -------        --------       --------
Balance at March 31, 2001                          10,137,193       101       42,480         (42,770)          (189)
      Issuance of common stock                          1,167        --            1                              1
      Net profit                                           --        --           --           3,088          3,088
                                                   ----------      ----      -------        --------       --------
Balance at March 31, 2002                          10,138,360      $101      $42,481        $(39,682)      $  2,900
                                                   ==========      ====      =======        ========       ========
</TABLE>

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


                                      F 4
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(In thousands)

<TABLE>
<CAPTION>
                                                                                                     Year ended
                                                                                                      March 31
                                                                                                      --------
                                                                                            2002        2001        2000
                                                                                            ----        ----        ----
<S>                                                                                       <C>         <C>         <C>
Cash flows from operating activities
       Net income (loss)                                                                  $ 3,088     $(1,638)    $(12,331)
       Adjustments to reconcile net loss to
            Net cash provide by operating activities
                  Depreciation and amortization                                             1,527       1,935        2,332
                  Bad debt (recovery) expense                                                 (93)       (454)           9
                  Provision for excess and obsolete inventory                                 292         570          898
                  Amortization of deferred financing charges                                  169         189          181
                  Abandonment of leasehold                                                     --         275           --
                  Gain from sale of investment in Photobit Corporation                         --          --         (565)
                  Interest accretion                                                          365          48           --
                  Other                                                                       (51)         --           --
                  Changes in assets and liabilities:
                        Accounts receivable                                                (1,742)      1,012        2,661
                        Inventories                                                           723       1,222        4,176
                        Income taxes receivable                                                 8         106        2,443
                        Prepayments and other current assets                                  (99)        (10)         155
                        Other assets                                                          (15)        (19)         137
                        Account payable and accrued expenses                                 (626)     (3,124)      (3,355)
                        Deposits from customers                                              (453)       (183)         153
                        Warranty obligations                                                  (69)       (137)        (124)
                        Deferred revenue                                                      447       1,451        1,117
                                                                                          -------     -------     --------
                                   Net cash provided by (used in) operating activities      3,471       1,243       (2,113)
                                                                                          -------     -------     --------
Cash flows from investing activities
       Investment in held to maturity investment                                             (417)         --           --
       Proceeds of held to maturity investment                                                  5          --          352
       Proceeds of sale of investment                                                         662          --        1,000
       Capital expenditures                                                                  (825)       (347)        (225)
                                                                                          -------     -------     --------
                                   Net cash (used in) provided by investing activities       (575)       (347)       1,127
                                                                                          -------     -------     --------
Cash flows from financing activities
       Net proceeds from issuance of common stock                                               1           3           --
       Proceeds from refinancing                                                               --          --        1,000
       Payment of long term debt                                                           (3,442)       (161)          --
                                                                                          -------     -------     --------
                                   Net cash used in financing activities                   (3,441)       (158)       1,000
                                                                                          -------     -------     --------

Net (decrease) increase in cash and cash equivalents                                         (545)        738           14
Cash and cash equivalents at beginning of period                                            2,167       1,429        1,415
                                                                                          -------     -------     --------

Cash and cash equivalents at end of period                                                $ 1,622     $ 2,167     $  1,429
                                                                                          =======     =======     ========
</TABLE>

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


                                      F 5
<PAGE>

Schick Technologies, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(Amounts In thousands, except share and per share amounts)

1.    Organization and Business

      Schick Technologies, Inc. (the "Company") designs, develops, manufactures
and markets innovative digital radiographic imaging systems and devices for the
dental and medical markets that utilize low dosage radiation to produce instant
computer generated, high-resolution, electronic x-ray images. The Company's
products are sold worldwide.

      The Company operates in one reportable segment - digital radiographic
imaging systems. The Company's principal products include the CDR (R) computed
digital radiography imaging system and the accuDEXA (R) bone densitometer.

      The following is a summary of the Company's revenues from its principal
products:

                                                % Of Total Revenue
                                          2002          2001          2000
                                          ----          ----          ----
      CDR                                  97%           97%           88%
      AccuDEXA                              3%            3%           12%
                                          ---           ---           ---
                                          100%          100%          100%
                                          ===           ===           ===

      The consolidated financial statements of the Company at March 31, 2002
include the accounts of the Company and its wholly owned subsidiary, Schick New
York.

2.    Summary of Significant Accounting Policies

      Basis of Consolidation

      The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary. All material intercompany accounts
and transactions have been eliminated in consolidation.

      Use of Estimates

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. These estimates and assumptions relate to the allowance for doubtful
accounts, allowances for estimated sales returns, estimated costs of initial
warranties, and valuation allowance on deferred tax assets. Management has
exercised reasonable judgement in deriving these estimates, however, actual
results could differ from these estimates. Consequently, an adverse change in
conditions could affect the Company's estimates.

      Cash equivalents

      Cash equivalents consist of short-term, highly liquid investments, with
original maturities of less than three months when purchased and are stated at
cost.

      Short-Term Investments

      Investments with original maturities greater than three months and less
than one year when purchased are classified as short-term investments.
Investments are categorized as held-to-maturity and are carried at amortized
cost, without recognition of gains or losses that are deemed to be temporary, as
the Company has both the intent and the ability to hold these investments until
they mature.

      Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out
basis) or market value. Cost is determined principally on the standard cost
method for manufactured


                                      F 6
<PAGE>

goods and on the average cost method for other inventories, each of which
approximates actual cost on the first-in, first-out method. The Company
establishes reserves for inventory estimated to be obsolete, unmarketable or
slow moving inventory equal to the difference between the cost of inventory and
estimated market value based upon assumptions about future demand and market
conditions. If actual market conditions are less favorable than those
anticipated or if changes in technology affect the Company's products additional
inventory reserves may be required.

      Equipment

      Equipment is stated at cost. Depreciation and amortization are provided on
the straight-line method over the lesser of the estimated useful lives of the
related assets ranging from five to ten years or, where appropriate, the lease
term.

      Revenue Recognition

      Revenues from sales of the Company's hardware and software products are
recognized at the time of shipment to customers, and when no significant
obligations exist and collectibility is probable. The Company provides its
customers with a 30-day return policy but allows for an additional 15 days, and,
accordingly, recognizes allowances for estimated returns by customers pursuant
to such policy at the time of shipment. The Company defers revenue shipped to
its exclusive domestic distributor, Patterson Dental Company, ("Patterson")
until Patterson delivers such inventory to its customer. Amounts received from
customers' advance of product shipment are classified as deposits from
customers. Revenues from the sale of extended warranties on the Company's
products are recognized on a straight-line basis over the life of the extended
warranty, which is generally for a one-year period. Deferred revenues relate to
extended warranty fees, which have been paid by customers prior to the
performance of extended warranty services, and to certain shipments to Patterson
described above.

      Advertising Costs

      Advertising costs included in selling and marketing expenses are expensed
as incurred and were $492, $851 and $580, for the years ended March 31, 2002,
2001, and 2000, respectively.

      Warranties

      The Company provides its customers with a limited product warranty for a
period of one year subsequent to the sale of its products. The Company
recognizes estimated costs associated with the limited warranty at the time of
sale of its products.

      Research and Development

      Research and development costs consist of expenditures covering basic
scientific research and the application of scientific advances to the
development of new and improved products and their uses. Research and
development costs are expensed as incurred. Software development costs for
external use software incurred after the establishment of technological
feasibility are capitalized and amortized to cost of revenues on a straight-line
basis over the expected useful life of the software. Software development costs
incurred prior to the attainment of technological feasibility are considered
research and development and are expensed as incurred. Costs of software
developed for internal use incurred during the development of the application
are capitalized and amortized to operating expense on a straight-line basis over
the expected useful life of the software. The Company did not capitalize any
software development costs during 2002, 2001 and 2000.

      Income Taxes

      Income taxes are accounted for under the asset and liability method.
Deferred income taxes are recorded for temporary differences between financial
statement carrying amounts and the tax basis of assets and liabilities. Deferred
tax assets and liabilities reflect the tax rates expected to be in effect for
the years in which the differences are expected to reverse. A valuation
allowance is provided if it is more likely than not that some or the entire
deferred tax asset will not be realized.


                                      F 7
<PAGE>

      Fair Value of Financial Instruments

      The carrying value of cash and cash equivalents, accounts receivable,
accounts payable and debt approximates fair value due to the relatively short
maturity associated with its cash, accounts receivable and accounts payable and
the interest rates associated with its debt.

      Long-lived Assets

      Long-lived assets and intangibles are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of the assets to the future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

3.    Recently Issued Accounting Standards

      In July 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations" and SFAS 142, "Goodwill and Other Intangible
Assets". The new standards require that all business combinations initiated
after June 30, 2001 must be accounted for under the purchase method. In
addition, all intangible assets acquired that are obtained through contractual
or legal right, or are capable of being separately sold, transferred, licensed,
rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to
amortization, but will be subject to at least an annual assessment for
impairment by applying a fair value based test.

      The Company continued to amortize under its current method until March 31,
2002. Thereafter, annual goodwill amortization of $107 will no longer be
recognized. By September 30, 2002, the Company will perform a transitional fair
value based impairment test and if the fair value is less than the recorded
value at April 1, 2002, the Company will record an impairment loss in the June
30, 2002 quarter, as a cumulative effect of a change in accounting principle.

      In August 2001, the FASB issued statement of Financial Accounting Standard
No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets," ("SFAS
144"). This statement is effective for the fiscal years beginning after December
15, 2001. This supercedes SFAS 121, "Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to be Disposed of", while retaining many of the
requirements of such statement. The Company is currently evaluating the impact
of the statement but does not believe it will have a material effect.

4.    Income (Loss) Per Share

      Basic earnings per share ("Basic EPS") are computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings per share ("Diluted EPS") gives
effect to all dilutive potential common shares outstanding during the period.
The computation of Diluted EPS does not assume conversion, exercise or
contingent exercise of securities that would have an antidilutive effect on
earnings. The computations of basic and diluted loss per share are equal for the
years ended March 31, 2001 and 2000, as all potential shares are antidilutive.

      At March 31, 2002, 2001 and 2000, outstanding options to purchase
1,840,435, 1,046,807 and 992,605 shares of common stock, respectively, at
exercise prices ranging from $0.50 to $27.72 per share in fiscal 2002 and 2001,
and from $1.00 to $27.72 in fiscal 2000, have been excluded from the computation
of diluted loss per share as they are antidilutive. Outstanding warrants to
purchase 5,650,000 shares of common stock with exercise prices of $0.75 per
share were also antidilutive and excluded from the computation of diluted loss
per share at March 31, 2001 and 2000.

5.    Inventories

      Inventories at March 31, 2002 and 2001, net of provisions for excess and
obsolete inventories, are comprised of the following:

                                                  2002          2001
                                                  ----          ----
            Raw materials                       $2,141        $3,046
            Work-in-process                         16           119
            Finished goods                         648           655
                                                ------        ------
            Total inventories                   $2,805        $3,820
                                                ======        ======


                                      F 8
<PAGE>

6.    Equipment

      Equipment at March 31, 2002 and 2001 is comprised of the following:

                                                             2002      2001
                                                             ----      ----
      Production equipment                                $ 5,257    $5,105
      Computer and communications equipment                 2,283     2,183
      Demonstration equipment                                 944       928
      Leasehold improvements                                1,857     1,301
      Other equipment                                         123       122
                                                          -------    ------
      Total equipment                                      10,464     9,639
      Less - accumulated depreciation and amortization      7,525     6,150
                                                          -------    ------
      Equipment, net                                      $ 2,939    $3,489
                                                          =======    ======

      At March 31, 2002 and 2001, computer equipment included approximately $199
of equipment acquired under capital leases. Accumulated depreciation related to
these assets approximated $199 and $171 at March 31, 2002 and 2001,
respectively.

7.    Short-term investments

      Held-to-maturity securities at March 31, 2002 and 2001 include short-term
U.S. Treasury and government agency debt securities of $417 and $8, respectively
on an amortized cost basis, with maturity dates of less than one year. The gross
unrealized gains and losses at March 31, 2002 and 2001 on held-to-maturity
securities were insignificant.

8.    Accounts payable and accrued expenses

      Accounts payable and accrued expenses is summarized as follows at March
31, 2002 and 2001:

                                                       2002      2001
                                                       ----      ----
            Legal and other professional fees        $   --    $  420
            Accounts payable and accrued expenses       957     1,381
                                                     ------    ------
                                                     $  957    $1,801
                                                     ======    ======

9.    Debt

      Long-term debt is summarized as follows at March 31, 2002 and 2001:

                                                       2002      2001
                                                       ----      ----
            Term notes                               $3,854    $6,296
            Secured credit facility                      --       635
                                                     ------    ------
                                                      3,854     6,931
            Less current maturities                   1,815     2,851
                                                     ------    ------
                                                     $2,039    $4,080
                                                     ======    ======

      Secured Term Notes

      In June 2000, the Company amended its secured term note with DVI Financial
Services, Inc. ("DVI") increasing its principal balance to $6,596 ("the amended
note"). The term note was originally issued in March 1999 for $5,000 and renewed
in July 1999 for $6,222 (the "renewed note"). The increase in the principal
amounts resulted from the conversion of certain trade payables owed to the
lender into the principal balance of the notes.

      The amended note is segregated into two term loans; Term Loan A amounting
to $5,000 and Term Loan B amounting to $1,596.


                                      F 9
<PAGE>

      Term Loan A

      The principal balance of term loan A is payable in 49 monthly payments
which commenced April 15, 2001, with interest payable monthly at the prime rate
plus 2.5%.

      Term Loan B

      The principal balance of term loan B is payable in 27 monthly payments
which commenced January 15, 2001 with interest payable monthly at the prime rate
plus 2.5%.

      The Company is also required to make additional principal payments equal
to fifty percent of the "positive actual cash flow", as defined. In May 2002 and
April 2001 the Company made prepayments of $236 and $750, respectively, in
satisfaction of this provision. Such payment is classified in current loan
maturities. The tangible and intangible assets of the Company, as defined,
collateralize the term loans.

      In connection with the renewed note, the Company granted the lender
650,000 warrants at an exercise price of $2.19 expiring on November 15, 2004.
The fair value of the warrants amounted to $596, and is being accounted for as
deferred financing costs. The costs are, included in "Other Assets" in the
accompanying balance sheet and are being amortized on a straight-line basis over
the life of the renewed note (17 months). In connection with the amended note,
the warrants' exercise price was reduced to $.75 and the expiration date was
extended to December 2006. Additional deferred financing costs of $130 were
incurred and are being amortized over the five-year life of the amended note.
Interest expense of approximately $95 and $176 relating to this warrants
issuance was recognized for the year ended March 31, 2002 and 2001,
respectively.

      Effective August 28, 2000, the lender sold all its rights, title and
interest in, to and under the warrants, notes payable and security agreement as
described above, to the Company's other secured creditor (Greystone). By letter
dated October 11, 2000, the lender directed the Company to make all remaining
payments due for the notes payable directly to Greystone.

      Secured Credit Facility

      In December 1999, the Company entered into a Loan Agreement (the "Loan
Agreement") with Greystone Funding Corporation ("Greystone") to provide up to
$7.5 million of subordinated debt in the form of a secured credit facility.
Under the Loan Agreement, the Company appointed two of Greystone's executive
officers, one as President of the Company and both as Directors. Pursuant to the
Loan Agreement, and to induce Greystone to enter into said Agreement, the
Company issued to Greystone, or its designees, warrants to purchase 3,000,000
shares of the Company's Common Stock at an exercise price of $0.75 per share.
The President of the Company has been issued 750,000 of these warrants as a
Greystone designee. The Company agreed to issue to Greystone or its designees
warrants to purchase an additional 2,000,000 shares at an exercise price of
$0.75 per share in connection with a cash payment of $1 million by Greystone to
the Company in consideration of a sale of Photobit stock by the Company to
Greystone. The sale of the Photobit stock was made subject to a right of first
refusal held by Photobit and its founders. By letter dated February 17, 2000,
counsel for Photobit informed the Company that Photobit considered the Company's
sale of its shares to Greystone to be void on the basis of the Company's
purported failure to properly comply with Photobit's right of first refusal.

      On March 17, 2000, the Company and Greystone entered into an Amended and
Restated Loan Agreement effective as of December 27, 1999 (the "Amended Loan
Agreement") pursuant to which Greystone agreed to provide up to $7.5 million of
subordinated debt in the form of a secured credit facility. The $1 million cash
payment to the Company was converted as of December 27, 1999 into an initial
advance of $1 million under the Amended Loan Agreement. Pursuant to the Amended
Loan Agreement, and to induce Greystone, and its designees, to enter into said
Agreement, the Company issued warrants to Greystone or its designees, consisting
of those warrants previously issued under the Loan Agreement, to purchase
5,000,000 shares of the Company's Common Stock at an exercise price of $0.75 per
share, exercisable at any time after December 27, 1999.

      Under the Amended Loan Agreement, the Company also issued to Greystone (or
its designees) warrants (the "Additional Warrants") to purchase an additional
13,000,000 shares of common stock, which were to vest and become exercisable at
a rate of two shares of Common Stock for each dollar advanced under the Amended
Loan Agreement in excess of the initial draw of $1,000,000. Any Additional
Warrants which did not vest prior to expiration or surrender of the line of
credit, were to be forfeited and canceled. In connection with the Greystone
secured credit facility, effective as of February 15, 2000, DVI consented to the
Company's


                                      F10
<PAGE>

grant to Greystone of a second priority lien encumbering the Company's assets,
under and subject in priority and right of payment to all liens granted by the
Company to DVI.

      The $1 million proceeds of the initial draw was allocated to the loan and
15 million warrants issued, based upon their relative fair values at issuance.
The carrying value of the note of $575 was being accreted to the face value of
the $1 million using the interest method over the seven-year term of the loan.
The fair value of 3 million warrants issued in connection with the agreement,
amounting to $90, was accounted for as deferred financing cost.

      The secured term notes and secured credit facility were subject to various
financial and restrictive covenants including, among others, interest coverage,
current ratio, and EBITDA. On July 5, 2001, the Company repaid all outstanding
advances under the Greystone Amended Loan Agreement, together with all unpaid
accrued interest thereunder ($1.05 million), and concurrently terminated said
Amended Loan Agreement. Approximately $423 representing the unamortized discount
and deferred financing costs relating to the Amended Loan Agreement was charged
to expense in July 2001.

      On July 12, 2001, the Company and Greystone entered into a Termination
agreement effective as of March 31, 2001, acknowledging the repayment and
surrender of the line of credit and agreeing that all the Company's obligations
thereunder have been fully satisfied. The Company and Greystone further agreed,
among other matters, that: (i) five million warrants held by Greystone and its
assigns to purchase Common Stock of the Company remain in full force and effect;
(ii) the Registration Rights Agreement between Greystone and the Company dated
as of December 27, 1999 remains in full force and effect; and (iii) for so long
as Jeffrey Slovin holds the office of President of the Company, the Company
shall reimburse Greystone in the amount of $17 monthly. Effective November 1,
2001 Mr. Slovin joined the Company on a full-time basis thereby canceling this
reimbursement provision of the agreement.

      Principal maturities of long-term debt are as follows:

                 Year ending March 31,
                 ---------------------
                          2003                                    $1,815
                          2004                                     1,270
                          2005                                       691
                          2006                                        78
                                                                  ------
                                                                  $3,854
                                                                  ======

10.   Income Taxes

      The reconciliation between the U.S. federal statutory rate and the
Company's effective tax rate is as follows:

<TABLE>
<CAPTION>
                                                                         March 31,
                                                                         ---------
                                                              2002          2001          2000
                                                              ----          ----          ----
<S>                                                         <C>           <C>           <C>
      Tax benefit at Federal statutory rate                  34.0%        -34.0%        -34.0%
      State income tax expense (benefit), net of
              Federal tax                                    -8.1%         -8.1%         -8.1%
      Non-deductible expenses                                 0.9%          0.7%          0.5%
      Research and development tax credit                     2.2%          5.0%          1.5%
      Net operating loss and credits (used) in the
      current  year or generated in the year in which
        there is no benefit                                 -29.0%         36.4%         40.1%
                                                            -----         -----         -----
      Effective tax rate                                        0%           .0%          0.0%
                                                            =====         =====         =====
</TABLE>

      Significant components of the Company's deferred tax assets (liabilities)
at March 31, 2002, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                                        March 31,
                                                                       ----------
                                                             2002          2001          2000
                                                             ----          ----          ----
<S>                                                      <C>           <C>           <C>
      Net operating loss carryforwards                   $ 14,636      $ 15,638      $ 11,218
      Reserves and allowances for inventory                 1,257         1,400         2,947
      Accounts receivable and warranties                    1,862         2,182         2,360
      Tax credit and carryforwards                          1,421         1,305           962
      Depreciation and other                                  575           663          (192)
      Other                                                    65           114           328
                                                         --------      --------      --------
                                                           19,816        21,302        17,623
      Valuation allowance                                 (19,816)      (21,302)      (17,623)
                                                         --------      --------      --------
      Net deferred tax asset                             $     --      $     --      $     --
                                                         ========      ========      ========
</TABLE>


                                      F11
<PAGE>

      Management has established a full valuation allowance for the amount of
the deferred tax asset based on uncertainties with respect to the Company's
ability to generate future taxable income. Management will continue to assess
the realizability of the deferred tax asset at the interim and annual balance
date based upon actual and forecasted operating results.

      At March 31, 2002, the Company has a U.S. federal income tax net operating
loss carryforward of $34,849 available to offset future taxable income. The
carryforward has various expiration dates beginning in 2018.

      Under current tax law, the utilization of the Company's tax attributes
will be restricted if an ownership change, as defined, were to occur. Section
382 of the Internal Revenue Code provides, in general, that if an "ownership
change" occurs with respect to a corporation with net operating and other loss
carryforwards, such carryforwards will be available to offset taxable income in
each taxable year after the ownership change only up to the "Section 382
Limitation" for each year (generally, the product of the fair market value of
the corporation's stock at the time of the ownership change, with certain
adjustments, and a specified long-term tax-exempt bond rate at such time). The
Company's ability to use its loss carryforwards would probably be limited in the
event of an ownership change.

11.   Concentration of Risks and Customer Information

      Substantially all of the Company's sales are to domestic and foreign
dentists, doctors, and distributors of dental and medical supplies and
equipment. Financial instruments that potentially subject the Company to
concentrations of credit risks are primarily accounts receivable and cash
equivalents. The Company generally does not require collateral and the majority
of its trade receivables are unsecured. The Company is directly affected by the
financial well being of the dental and medical industries. The Company places
its cash equivalents in short-term money market instruments.

      The Company currently purchases each of its primary raw materials, the
active-pixel sensor ("APS") and the charged coupled device ("CCD") semiconductor
wafers from single suppliers. During the fourth quarter of fiscal 1998, the
Company experienced a delay in the supply flow from its CCD vendor, which
resulted in manufacturing, and product shipment delays. Although there are a
number of manufacturers capable of supplying these materials, which the Company
believes could provide for its semiconductor requirements on comparable terms,
such delays could occur again.

      Approximately $6.2 million, $8.1 million and $6.5 million of the Company's
sales in 2002, 2001, and 2000, respectively, were to foreign customers. The
majority of such foreign sales were to customers in Europe. During 2002 and
2000, sales of $9.9 million and $2.6 million, respectively were made to single
customers. During 2001, sales of $7.5 were made to two customers.

      On April 6, 2000, the Company entered into an agreement with Patterson
Dental Company which granted Patterson exclusive rights to distribute the
Company's dental products in the United States and Canada effective May 1, 2000.

12.   Commitments and Contingencies

      Employment Agreements

      The Company has employment agreements with certain executive officers. As
of March 31, 2002 minimum compensation obligations under these employment
agreements are as follows:

                   March 31
                     2003                    $  857
                     2004                       648
                     2005                       322
                                             ------
                                             $1,827
                                             ======

      In addition, certain of the Company's agreements provide for the issuance
of common stock and/or common stock options to the executives, which generally
vest ratably over the


                                      F12
<PAGE>

term of the agreements (2-3 years). Additionally, certain executives may earn
bonus compensation based upon the specific terms of the respective agreements,
as defined.

      Operating Leases

      The Company leases its facilities under an operating lease agreement
expiring June 2007. Rent expense for the years ended March 31, 2002, 2001, and
2000 was $470, $701, and $1,095, respectively.

      Future minimum payments on a fiscal year basis under non-cancelable
operating leases are as follows:

                         2003                                    $  445
                         2004                                       467
                         2005                                       486
                         2006                                       506
                         2007                                       526
                      Thereafter                                    137
                                                                 ------
                                                                 $2,567
                                                                 ======

      Product Liability

      The Company is subject to the risk of product liability and other
liability claims in the event that the use of its products results in personal
injury or other claims. Although the Company has not experienced any product
liability claims to date, any such claims could have an adverse impact on the
Company. The Company maintains insurance coverage related to product liability
claims, but there can be no assurance that product or other claims will not
exceed its insurance coverage limits, or that such insurance will continue to be
maintained or to be available on commercially acceptable terms, or at all.

      SEC Investigation and other

      In August 1999, the Company, through its outside counsel, contacted the
Division of Enforcement of the Securities and Exchange Commission ("SEC") to
advise it of certain matters related to the Company's restatement of earnings
for interim periods of fiscal 1999. Subsequent thereto, the SEC requested the
voluntary production of certain documents and the Company provided the SEC with
the requested materials. On August 17, 2000, the SEC served a subpoena upon the
Company, pursuant to a formal order of investigation, requiring the production
of certain documents. The Company provided the SEC with the subpoenaed
materials. The Company has been informed that since January 2002 the SEC has
served subpoenas upon and/or contacted certain former and current officers and
employees of the Company, in connection with this matter. The Company has
cooperated fully with the SEC staff, and intends to continue such cooperation.
The Company cannot predict the potential outcome of the inquiry.

      In addition, the Company has been informed that since January 2002
investigators associated with the U.S. Attorney's Office have served subpoenas
on and/or contacted certain former and current employees, and a current
Director, apparently in connection with the same event. On June 13, 2002, the
Company was advised by coursel to David Schick, the Company's Chief Exective
Officer, that the United States Attorney's Office for the Southern District of
New York had recently notified such counsel that Mr. Schick was a target of the
United States Attorney's investigation of this matter. The Company cannot
predict the potential outcome.

      Litigation

      In May 2000, the Company entered into an agreement for the settlement of
the class action lawsuit naming the Company, certain of its officers and former
officers and various third parties as defendants. The complaint alleged that
certain defendants issued false and misleading statements concerning the
Company's publicly reported earnings in violation of the federal securities
laws. The complaint sought certification of a class of persons who purchased the
Company's common stock between July 1, 1997 and February 19, 1999, inclusive,
and did not specify the amount of damages sought. Under the settlement
agreement, reflected in a memorandum of understanding and Stipulation of
Settlement, all claims against the Company and other defendants are to be
dismissed without presumption or admission of any liability or wrongdoing. The
principal terms of the settlement agreement call for payment to the plaintiffs,
for the benefit of the class, of the sum of $3.4 million. The settlement amount
will be paid in its entirety by the Company's insurance carrier and is not
expected to have any material impact on the financial results of the Company. On
February 12, 2002, the Court entered an Order and Final Judgment in this matter,
pursuant to which the terms of the settlement agreement were approved and the
complaint was dismissed with prejudice.


                                      F13
<PAGE>

      The Company may be a party to a variety of legal actions (in addition to
those referred to above), such as employment and employment
discrimination-related suits, employee benefit claims, breach of contract
actions, tort claims, shareholder suits, including securities fraud, and
intellectual property related litigation. In addition, because of the nature of
its business, the Company is subject to a variety of legal actions relating to
its business operations. Recent court decisions and legislative activity may
increase the Company's exposure for any of these types of claims. In some cases,
substantial punitive damages may be sought. The Company currently has insurance
coverage for some of these potential liabilities. Other potential liabilities
may not be covered by insurance, insurers may dispute coverage, or the amount of
insurance may not be sufficient to cover the damages awarded. In addition,
certain types of damages, such as punitive damages, may not be covered by
insurance and insurance coverage for all or certain forms of liability may
become unavailable or prohibitively expensive in the future.

13.   Stock Option Plan, Stock Grants and Defined Contribution Plan

      Stock Option Plan and Stock Grants

      In April 1996, the Company implemented its 1996 Stock Option Plan (the
"Plan") whereby incentive and non-qualified options to purchase shares of the
Company's common stock may be granted to employees, directors and consultants.
In September 1998, the Plan was amended to increase the number of shares of
Common Stock issuable under the Plan from 470,400 to 1,000,000 and further
amended in November 2000 to increase the number of shares of Common Stock
issuable under the plan to 3,000,000. The Board of Directors determines exercise
and vesting periods and the exercise price options granted under the Plan. The
Plan stipulates that the exercise price of non-qualified options granted under
the Plan must have an exercise price equal to or exceeding 85% of the fair
market value of the Company's common stock as of the date of grant of the option
and no option may be exercisable after ten years from the date of grant. Options
granted under the plan generally vest over a period of four years.

      In 1998, the Company adopted the Directors Plan. In November 2000 the Plan
was amended to increase the number of shares of Common Stock issuable to
300,000. At March 31, 2002, 2001 and 2000, a total of 266,875, 133,125, 25,000
options to purchase Common Stock pursuant to the Directors Plan were
outstanding, respectively. The plan stipulates that the exercise price of
non-qualified options granted under the Plan must have an exercise price equal
to or exceeding 85% of the fair market value of the Company's common stock as of
the date of grant of the option and no option may be exercisable after ten years
from the date of grant. Options granted under the plan generally vest over a
period of four years.

      The Company applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its plans and other stock-based compensation issued to employees
and directors. During the years ended March 31, 2002, 2001 and 2000, the Company
did not recognize compensation expense for options granted to employees and
Directors. Had compensation cost for option grants to employees and Directors
been determined based upon the fair value at the grant date for awards under the
Plan consistent with the methodology prescribed under Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation," ("SFAS
123") the Company's net profit in 2002 would have decreased by $474 ($0.05 per
basic share and $0.04 per diluted share) and the loss in 2001 and 2000 would
have increased approximately $590 ($0.06 per basic share) and $626 ($.05 per
basic share), respectively.

      The fair value of options granted to employees and directors during 2002,
2001, and 2000 has been determined on the date of the respective grant using the
Black-Scholes option-pricing model based on the following weighted-average
assumptions:

<TABLE>
<CAPTION>
                                                       2002              2001              2000
                                                       ----              ----              ----
<S>                                                <C>               <C>               <C>
      Dividend yield                                   None              None              None
      Risk-free interest rate on date of grant     2.81%-3.56%       4.70%-4.87%       5.35%-6.36%
      Forfeitures                                      None              None              None
      Expected life                                  5 years           5 years           5 years
      Volatility                                        84%               84%               91%
      Weighted average fair value per share            $0.55             $0.62             $0.07
</TABLE>


                                      F14
<PAGE>

      The following table summarizes information regarding stock options for
2002, 2001 and 2000:

<TABLE>
<CAPTION>
                             2002                        2001                    2000
                             ----                        ----                    ----
                            Shares      Weighted        Shares     Weighted     Shares      Weighted
                             Under       Average         Under      Average      Under       Average
                            Option      Exercise        Option     Exercise     Option      Exercise
                             Price        Price          Price       Price       Price        Price
                             -----        -----          -----       -----       -----        -----
<S>                       <C>            <C>         <C>            <C>        <C>           <C>
Options outstanding,
Beginning of year         1,046,807      $ 3.53        992,605      $ 4.57      591,958      $10.87
Options granted             859,739        1.31        297,442        1.06      681,866        1.21
Options exercised            (1,167)       1.00         (2,809)       1.00           --          --
Options forfeited           (64,944)       4.14       (240,431)       4.84     (281,219)      12.30
                          ---------                  ---------                  -------
Options outstanding,
End of year               1,840,435      $ 2.47      1,046,807      $ 3.53      992,605      $ 4.57
                          =========                  =========                  =======
</TABLE>

                                Options outstanding   Weighted average remaining
      Range of exercise price    At March 31, 2002     Contractual life (years)
      -----------------------    -----------------     ------------------------
         $ 0.50 to $ 2.88            1,649,421                    9
         $ 4.91 to $ 7.86               89,712                    6
         $14.81 to $22.97               75,753                    6
         $25.75 to $27.72               25,549                    6

      At March 31, 2002, there are 1,459,565 options available for grant
pursuant to the Company's option plans. Of the 1,840,435 options outstanding at
March 31, 2002, 754,343 are exercisable at such date at a weighted-average
exercise price of $3.88.

      Defined Contribution Plan

      The Company has a defined contribution savings plan, which qualifies under
Section 401(k) of the Internal Revenue Code, for employees meeting certain
service requirements. Participants may contribute up to 15% of their gross wages
not to exceed, in any given year, a limitation set by the Internal Revenue
Service regulations. The plan provides for mandatory matching contributions to
be made by the Company to a maximum amount of 2.5% of a plan participant's
compensation. Company contributions to the plan approximated $135, $131, and
$164 in 2002, 2001 and 2000, respectively.

14.   Supplemental Cash Flow Information

      Cash payments for interest were $955, $854, and $424 in 2002, 2001 and
2000 respectively. There were no payments for income taxes in 2002, 2001 and
2000.

15.   Stockholders' Equity (Deficiency)

      In December 2001 the stockholders of the Company voted to increase the
authorized Common Stock to 50,000,000 shares from 25,000,000 shares.

      During 1999, warrants to purchase 204,680 shares of common stock were
exercised using cashless exercises pursuant to which 63,479 shares of the
Company's common stock were issued. During the year ended March 31, 2000, the
balance of unexercised warrants, issued by the Company in connection with its
May 1996 private placement, expired.

      In February 2000, an executive was awarded 75,000 shares of the Company's
Common Stock, subject to a risk of forfeiture, which vests as to 25,000 shares
on each of December 31, 2000, 2001 and 2002. Upon the sale of any such vested
shares, the employee is required to pay the Company $1.32 per share sold within
30 days following such sale. The Company recorded a note receivable, which is
presented as a reduction of Paid in Capital amounting to $99, relating to the
stock issuance. The charge to operations relating to this stock award is not
material to the financial statements.

16.   Acquisition and Investment

      Keystone Acquisition

      On September 24, 1997, the Company acquired certain assets of Keystone
Dental X-Ray Inc. ("Keystone"), a manufacturer of x-ray equipment for the
medical and dental radiology


                                      F15
<PAGE>

field, for $1,450. The acquisition had been accounted for using the purchase
method, and the Company had recorded goodwill in the amount of $750, which is
included in other assets and is being amortized on a straight-line basis over 7
years. The Company recognized $107 for amortization of goodwill in 2002, 2001
and 2000.

      Investment in Photobit Corporation

      In September 1997, the Company purchased a minority interest of 5%, for
$1,000 in Photobit Corporation ("Photobit"), a developer of complementary
metal-oxide semiconductor ("CMOS"), APS imaging technology. In July 1998, the
Company invested an additional $250 in Photobit Corporation, bringing its total
investment in Photobit to $1,250. The Company is the exclusive licensee of the
APS technology for medical applications and utilizes the technology in its
bone-mineral density assessment device and certain components of its computed
dental x-ray imaging system. In September 1999, the Company sold 250,000 shares
of Photobit stock for $1,000 and recorded an investment gain of approximately
$565.

      In November 2001 Photobit Corporation was acquired by Micron Technologies,
Inc. and subsequently adopted a plan of dissolution, to wind up and liquidate
Photobit. The Company received $662, the initial proceeds of the liquidation of
its investment. A second distribution of $29 was paid in April 2002 and a final
distribution is scheduled to be paid in November 2002. The Company deferred
recognition of gain (as much as $42) until such payment is received and has
classified the balance of its investment ($153) in prepayments and other current
assets.

17.   Unaudited selected quarterly financial data

      The following is a summary of the Company's unaudited quarterly operating
results for the years ended March 31, 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                      Mar 31,        Dec 31,         Sep 30,          Jun 30,          Mar 31,         Dec 31,
                                        2002            2001            2001             2001             2001            2000
                                        ----            ----            ----             ----             ----            ----
<S>                             <C>              <C>            <C>              <C>              <C>              <C>
Statement of Operations Data:

Revenue, net                    $      6,736     $     7,003    $      4,819     $      5,841     $      6,228     $     5,391

Total cost of sales                    2,494           2,288           1,752            2,298            2,476           2,333
                                ------------     -----------    ------------     ------------     ------------     -----------

Gross profit                           4,242           4,715           3,067            3,543            3,752           3,058
                                ------------     -----------    ------------     ------------     ------------     -----------

Gross profit margin                     63.0%           67.3%           63.6%            60.7%            60.2%           56.7%

Operating expense:

Selling and  marketing                 1,287           1,390           1,312            1,302            1,162           1,303

General and administrative             1,231           1,012             925              980              858             863

Research and development                 566             548             532              530              572             544
Bad debt recovery                        (50)             --              --              (43)            (100)           (354)

Abandonment of leasehold                  --             117              --               --              275              --
                                ------------     -----------    ------------     ------------     ------------     -----------
Operating expense                      3,034           3,067           2,769            2,769            2,767           2,356
                                ------------     -----------    ------------     ------------     ------------     -----------

Income (loss) from operations          1,208           1,648             298              774              985             702
                                ------------     -----------    ------------     ------------     ------------     -----------
Net income (loss)               $      1,167     $     1,544    $       (250)    $        627     $        766     $       439
                                ============     ===========    ============     ============     ============     ===========

Earnings (loss) per share:

Basic income (loss)             $       0.12     $      0.15    $      (0.02)    $       0.06     $       0.08           %0.04
                                ============     ===========    ============     ============     ============     ===========
Diluted income (loss)           $       0.08     $      0.14    $      (0.02)    $       0.05     $       0.07     $      0.04
                                ============     ===========    ============     ============     ============     ===========
Weighted average common stock
outstanding (basic)               10,137,257      10,137,193      10,137,193       10,137,193       10,137,193      10,137,193
                                ============     ===========    ============     ============     ============     ===========
Weighted average common stock
outstanding (diluted)             14,115,104      10,894,495      10,137,193       11,470,010       11,012.363      11,117,412
                                ============     ===========    ============     ============     ============     ===========

<CAPTION>
                                     Sep 30,          Jun 30,          Mar 31,          Dec 31,          Sep 30,          Jun 30,
                                        2000             2000             2000             1999             1999             1999
                                        ----             ----             ----             ----             ----             ----
<S>                             <C>              <C>              <C>              <C>              <C>              <C>
Statement of Operations Data:

Revenue, net                    $      3,390     $      6,243     $      5,415     $      4,771     $      4,565     $      7,238

Total cost of sales                    2,401            3,096            3,130            2,971            4,428            5,762
                                ------------     ------------     ------------     ------------     ------------     ------------

Gross profit                             989            3,147            2,285            1,800              137            1,476
                                ------------     ------------     ------------     ------------     ------------     ------------

Gross profit margin                     29.2%            50.4%            42.2%            37.7%             3.0%            20.4%

Operating expense:

Selling and  marketing                 1,235            1,614            1,635            1,590            1,633            2,778

General and administrative             1,279            1,161            2,214            1,601            1,814            1,710

Research and development                 550              554              666              595              685              884
Bad debt recovery

Abandonment of leasehold                  --               --               --               --               --               --
                                ------------     ------------     ------------     ------------     ------------     ------------
Operating expense                      3,064            3,329            4,515            3,786            4,132            5,372
                                ------------     ------------     ------------     ------------     ------------     ------------

Income (loss) from operations         (2,075)            (182)          (2,230)          (1,986)          (3,995)          (3,896)
                                ------------     ------------     ------------     ------------     ------------     ------------
Net income (loss)               $     (2,316)    $       (527)    $     (2,713)    $     (2,044)    $     (3,597)    $     (3,977)
                                ============     ============     ============     ============     ============     ============

Earnings (loss) per share:

Basic income (loss)             $      (0.23)    $      (0.05)    $      (0.27)    $      (0.20)    $      (0.36)    $      (0.40)
                                ============     ============     ============     ============     ============     ============
Diluted income (loss)           $      (0.23)    $      (0.05)    $      (0.27)    $      (0.20)    $      (0.36)    $      (0.40)
                                ============     ============     ============     ============     ============     ============
Weighted average common stock
outstanding (basic)               10,134,696       10,134,384       10,059,384       10,059,384       10,059,384       10,059,384
                                ============     ============     ============     ============     ============     ============
Weighted average common stock
outstanding (diluted)             10,134,696       10,134,384       10,059,384       10,059,384       10,059,384       10,059,384
                                ============     ============     ============     ============     ============     ============
</TABLE>


                                      F16
<PAGE>

Schedule II

                    Schick Technologies, Inc. and Subsidiary
                        Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                                                           Additions
                                                                           ---------
                                                         Balance at  Charged to   Charged to                  Balance at
                                                         Beginning    Cost and       Other                        End
                                                         Of Period    Expenses     Accounts    Deductions      of Period
                                                         ---------    --------     --------    ----------      ---------
<S>                                                       <C>           <C>         <C>         <C>             <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS
       For the year ended March 31, 2002                  $ 1,818                               $1,008(a)       $   717
                                                                                                    93(b)
       For the year ended March 31, 2001                    2,449          --          --          177(a)         1,818
                                                                                                   454(b)
       For the year ended March 31, 2000                    4,512           9          --        2,072(a)         2,449

RESERVE FOR OBSOLETE/SLOW MOVING INVENTORY
       For the year ended March 31, 2002                  $ 3,195       $ 292                   $  588(c)       $ 2,899
       For the year ended March 31, 2001                    6,332         754                    3,891(c)         3,195
       For the year ended March 31, 2000                    5,466         898          --           32(c)         6,332

VALUATION ALLOWANCE - DEFERRED TAX ASSET
       For the year ended March 31, 2002                  $21,302                               $1,486          $19,816
       For the year ended March 31, 2001                   17,623                   3,679                        21,302
       For the year ended March 31, 2000                   11,855          --       5,768           --           17,623

PROVISION FOR WARRANTY OBLIGATIONS
       For the year ended March 31, 2002                  $   141                               $   69          $    72
       For the year ended March 31, 2001                      278                                  137              141
       For the year ended March 31, 2000                      402          --          --          124              278
</TABLE>

(a)   accounts receivable written off

(b)   accounts receivable recovered

(c)   inventory disposed of


                                      F17
<PAGE>

      (a)   Documents filed as a part of this Report

      (1)   Consolidated Financial Statements filed as part of this Report:

            Index to the Financial Statements                               F-1

            Report of Independent Certified Public Accountants              F-1

            Consolidated Balance Sheet at March 31, 2002 and 2001           F-2

            Consolidated Statement of Operations for the years ended        F-3
            March 31, 2002, 2001 and 2000                                   F-5

            Consolidated Statement of Changes in Stockholders'
            Equity for the years ended March 31, 2002, 2001 and 2000        F-4

            Consolidated Statement of Cash Flows for the year ended
            March 31, 2002, 2001 and 2000                                   F-5

            Notes to Consolidated Financial Statements                      F-6

      (2)   Financial statement schedules filed as part of this Report

Schedule II  Valuation and Qualifying Accounts                              F-18

      Schedules other than that mentioned above are omitted because the
conditions requiring their filing do not exist, or because the information is
provided in the financial statements filed herewith, including the notes
thereto.

      (b)   Reports on Form 8-K

      None.

      (c)   The following Exhibits are included in this report:

      Number      Description

           *3.1   Amended and Restated Certificate of Incorporation of the
                  Company.

      ******3.2   Bylaws of the Company, as amended.

           *4.1   Form of Common Stock certificate of the Company.

           *4.2   Form of private-placement Warrant of the Company.

           *4.3   Agreement and Plan of Merger dated as of May 15, 1997 among
                  Schick Technologies, Inc., a New York corporation, Schick
                  Technologies Inc., a Delaware corporation and STI Acquisition
                  Corp, a Delaware corporation.

     ******10.1   Schick Technologies, Inc. 1996 Employee Stock Option Plan, as
                  amended.

     ******10.2   Schick Technologies, Inc. 1997 Stock Option Plan for Non
                  Employee Directors, as amended.

          *10.3   Form of Non-Disclosure, Solicitation, Solicitation,
                  Non-Competition and Inventions Agreements between Schick
                  Technologies, Inc. and Named Executives of Schick
                  Technologies, Inc.

          *10.5   Service and License Agreement between Photobit, LLC and Schick
                  Technologies, Inc. dated as of June 24, 1996.

        ***10.10  Secured Promissory Note between Schick Technologies, Inc. and
                  DVI Financial Services, Inc., dated as of January 25, 1999.


                                       30
<PAGE>

        ***10.11  Allonge to Secured Promissory Note by and between Schick
                  Technologies, Inc. and DVI Financial Services, Inc., dated as
                  of March 4, 1999.

        ***10.13  Security Agreement between Schick Technologies, Inc. and DVI
                  Affiliated Capital, dated January 25, 1999.

        ***10.15  Employment Agreement between Schick Technologies Inc. and
                  David Schick, dated February 29, 2000.

        ***10.16  Employment Letter Agreement between Schick Technologies Inc.
                  and Zvi Raskin, dated February 6, 2000.

        ***10.17  Employment Letter Agreement between Schick Technologies Inc.
                  and Michael Stone, dated January 12, 2000.

        ***10.18  Employment Letter Agreement between Schick Technologies Inc.
                  and William F. Rogers, dated December 31, 1999.

        ***10.19  Separation, Severance and General Release Agreement between
                  Schick Technologies Inc. and Fred Levine, dated August 27,
                  1999.

        ***10.20  Separation, Severance and General Release Agreement between
                  Schick Technologies Inc. and Avi Itzhakov, dated August 20,
                  1999.

     ******10.21  Loan Agreement, dated December 27, 1999, by and between Schick
                  Technologies, Inc., a Delaware corporation, Schick
                  Technologies, Inc., a New York corporation, and Greystone
                  Funding Corporation ("Greystone"), a Virginia corporation.
                  (Incorporated by reference to Exhibit 1 to the Company's
                  Report on Form 8-K dated December 27, 1999.)

     ******10.22  Stockholders' Agreement, dated December 27, 1999, by and
                  between Schick Technologies, Inc., a Delaware corporation,
                  David B. Schick, Allen Schick and Greystone. (Filed as Exhibit
                  2 to the Company's Report on Form 8-K dated December 27,
                  1999.)

     ******10.23  Stock Purchase Agreement, dated December 27, 1999, by and
                  between Schick Technologies, Inc., a Delaware Corporation, and
                  Greystone. (Filed as Exhibit 3 to the Company's Report on Form
                  8-K dated December 27, 1999.)

     ******10.24  Form of Warrant Certificate Issued to Greystone to Purchase
                  Shares of Common Stock of Schick Technologies, Inc., a
                  Delaware Corporation. (Filed as Exhibit 4 to the Company's
                  Report on Form 8-K dated December 27, 1999.)

       ****10.25  Amended and Restated Loan Agreement, dated March 17, 2000 and
                  made effective as of December 27, 1999, by and between Schick
                  Technologies, Inc., a Delaware corporation, Schick
                  Technologies, Inc., a New York corporation, and Greystone
                  Funding Corporation, a Virginia corporation.

      *****10.26  Agreement to Rescind Stock Purchase, dated March 17, 2000 and
                  made effective as of December 27, 1999, by and between
                  Greystone Finding Corp., a Virginia corporation, and Schick
                  Technologies, Inc., a Delaware corporation.

      *****10.27  Registration Rights Agreement between Schick Technologies,
                  Inc. and Greystone, dated as of December 27, 1999.

      *****10.28  Second Amended and Restated Secured Promissory Note between
                  Schick Technologies, Inc. and DVI Financial Services, Inc., in
                  the principal amount of $5,000,000,dated as of March 15, 2000.

      *****10.29  Second Amended and Restated Secured Promissory Note between
                  Schick Technologies, Inc. and DVI Financial Services, Inc., in
                  the principal amount of $1,596,189, dated as of March 15,
                  2000.

      *****10.30  Security Agreement between Schick Technologies, Inc. and DVI
                  Financial Services, Inc., dated as of March 15, 2000.


                                       31
<PAGE>

      *****10.31  Amended and Restated Security Agreement between Schick
                  Technologies, Inc. and DVI Financial Services, Inc., dated as
                  of March 15, 2000.

      *****10.32  Form of Warrant Certificate Issued to DVI Financial Services,
                  Inc. to Purchase Shares of Schick Technologies, Inc.

      *****10.33  Registration Rights Agreement between Schick Technologies,
                  Inc. and DVI Financial Services, Inc., dated as of March 15,
                  2000.

      *****10.34  Distributorship Agreement, dated April 6, 2000, by and between
                  Schick Technologies, Inc. and Patterson Dental Company.

     ******10.35  Termination Agreement between Greystone Funding Corporation
                  and Schick Technologies, Inc. entered into as of March 30,
                  2001.

           10.36  Employment Agreement between Schick Technologies, Inc. and
                  Jeffrey T. Slovin, dated November 9, 2001

           10.37  Employment Agreement between Schick Technologies, Inc. and
                  David Schick, dated December 20, 2001

           10.38  Employment Agreement between Schick Technologies, Inc. and
                  Michael Stone, dated as of January 14, 2002

           10.39  Letter Agreement between Schick Technologies, Inc. and David
                  Schick, dated March 4, 2002, amending, in part, the Employment
                  Agreement between Schick Technologies, Inc. and David Schick,
                  dated December 20, 2001

           21     List of Subsidiaries of Schick Technologies, Inc.

           23.1   Consent of Grant Thornton LLP.

           24     Powers of Attorney (included on signature page of this
                  Report).

           99     Cautionary Statement for Purposes of the "Safe Harbor"
                  Provisions of the Private Securities Litigation Reform Act of
                  1995

*          Filed as the same exhibit number as part of the registrant's
           Registration Statement on Form S-1 (File No. 333-33731) declared
           effective by the Securities and Exchange Commission on June 30, 1997
           and incorporated by reference herein.

**         Filed as the same exhibit number as part of the registrant's Annual
           Report on Form 10-K for the year ended March 31, 1998, filed with
           the Securities and Exchange Commission on June 29, 1998.

***        Filed as the same exhibit number as part of the registrant's Annual
           Report on Form 10-K for the year ended March 31, 1999, filed with
           the Securities and Exchange Commission on March 21, 2000.

****       Filed as the same exhibit number as part of the registrant's
           Quarterly Report on Form 10-Q for the quarter ended December 31,
           1999, filed with the Securities and Exchange Commission on March 24,
           2000.

*****      Filed as the same exhibit number as part of the registrant's Annual
           Report on Form 10-K for the year ended March 31, 2000, filed with
           the Securities and Exchange Commission on June 29,2000.

******     Filed as the same exhibit number as part of the registrant's Annual
           Report on Form 10-K for the year ended March 31, 2001, filed with
           the Securities and Exchange Commission on July 13, 2001.


                                       32
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the 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, in the City of Long
Island City, State of New York, on June 11, 2002.

                                        SCHICK TECHNOLOGIES, INC

                                        By: /s/ David Schick
                                        ----------------------------------------
                                        David Schick
                                        Chairman of the Board and
                                        Chief Executive Officer

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 indicated on June 11, 2002.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David B. Schick, Jeffrey Slovin and Zvi N. Raskin
(with full power to act alone), as his true and lawful attorneys-in-fact and
agents, with full powers of substitution and resubstitution, for him in his
name, place and stead to sign an Annual Report on Form 10-K of Schick
Technologies, Inc, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, lawfully do or
cause to be done by virtue hereof.

Signature                                        Title


/s/ David Schick
------------------------------       Chairman of the Board
David Schick                         and Chief Executive Officer


/s/ Jeffrey Slovin
------------------------------       Director, President and Chief Operating
Jeffrey Slovin                       Officer


/s/ Ronald Rosner
------------------------------       Director of Finance and Administration
Ronald Rosner


/s/ Allen Schick
------------------------------       Director
Allen Schick


/s/ Euval Barrekette
------------------------------       Director
Euval Barrekette


/s/ Jonathan Blank
------------------------------       Director
Jonathan Blank


/s/ William Hood
------------------------------       Director
William Hood


/s/ Curtis M. Rocca III
------------------------------       Director
Curtis M. Rocca III


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