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, 2001

                                       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                 (I.R.S. 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. [X]

                                   ----------

    The aggregate market value of Common Stock held by non-affiliates of the
  registrant as of July 10, 2001 was approximately $7,355,274. Such aggregate
 market value is computed by reference to the closing sale price of the Common
                              Stock on such date.

    As of July 12, 2001, the number of shares outstanding of the Registrant's
             Common Stock, par value $.01 per share, was 10,138,922

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      NONE


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                                Table of Contents

Item of Form 10-K                                                           Page
--------------------------------------------------------------------------------

Part I
         Item 1.    Business ..............................................  1
         Item 2.    Properties ............................................  11
         Item 3.    Legal Proceedings .....................................  11
         Item 4.    Submission of Matters to a Vote of Security Holders ...  12

Part II
         Item 5.    Market for the Registrant's Common Equity and Related
                    Stockholder Matters ...................................  12
         Item 6.    Selected Financial Data ...............................  13
         Item 7.    Management's Discussion and Analysis of Financial
                    Condition and Results of Operations ...................  14
         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 ................  20

Part III
         Item 10.   Directors and Executive Officers of the Registrant ....  20
         Item 11.   Executive Compensation ................................  22
         Item 12.   Security Ownership of Certain Beneficial Owners And
                    Management ............................................  25
         Item 13.   Certain Relationships and Related Transactions ........  27

Part IV
         Item 14.   Exhibits, Financial Statement Schedules and Reports on
                    Form 8-K ..............................................  F-1


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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 CDR(R) computed dental radiography
imaging system was introduced in March 1994 and has become a leading product in
its field. The CDR system 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. The Company is also developing other products and devices for the dental
field in addition to newer 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 digital radiography device for intended
use in various applications, including mobile medicine, orthopedics, podiatry,
veterinary medicine and industrial non-destructive testing.

     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 was originally developed by the California
Institute of Technology and licensed to Photobit Corporation; 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.

     On December 27, 1999, the Company established a strategic relationship with
Greystone Funding Corporation ("Greystone") and entered into a Loan Agreement
with Greystone which provided for the establishment of a credit facility for the
Company in an amount of up to $7.5 million. In connection with this Agreement,
as amended and restated on March 17, 2000, Greystone designees were appointed to
the Company's Board of Directors and key executive management positions. The
Company has used the Greystone line of credit to provide it with working capital
and to help facilitate future growth. On July 5, 2001, the Company repaid all
outstanding advances under the Greystone line of credit, together with all
unpaid accrued interest thereunder, and concurrently surrendered said line of
credit in its entirety. See "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations."

     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 web
site address is http://www.schicktech.com.


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PRODUCTS / INDUSTRY

     Dental 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.

     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. The first system to employ certain aspects of this technique
was Computed Radiography(TM) ("CR"), a "near real time" system, in which a laser
scanner reads the x-ray image from a specially designed cassette. While CR
allows the images to be electronically displayed and stored, it does not achieve
instant results, and employs a large, costly scanning system. Other technologies
which allow for instant acquisition of digital x-rays have been developed,
including CCD arrays and amorphous silicon panels, neither of which is well
suited for imaging large areas due, respectively, to high cost and limited
resolution.

     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 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


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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 size conventional x-ray films. 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 to take 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 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 effective 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 mainly 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 has developed 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, which is
marketed under the trade name accuDEXA(R), 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


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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 positioner 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.

     General Digital Radiography

     The Company is also developing a mobile 8"x 10" digital radiography system
for various applications. This unit is targeted primarily for peripheral x-ray
images, such as orthopedic and podiatric. The unit will also be suitable for
veterinary and non-destructive testing applications. Management currently
expects that the unit will be available for sale by the end of 2002, 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."

     Mammography

     In late 2000, the Company suspended its development of a digital
mammography device. Management determined that the Company would instead focus
its resources on core product development. The Company may resume development of
a digital mammography device in the future, but there can be no assurance that
it will do so or that, if it does, it will be successful in such endeavor.

     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.


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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 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 and 1999, a
single customer, Henry Schein, Inc., accounted for annual sales by the Company
of $2.6 and $7.2 million, or 11.7% and 15.8%, respectively, of annual sales.
During fiscal 2001, 2000 and 1999, respectively, sales of approximately $8.1
million, $6.5 million and $6.0 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 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 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 related
to complementary metal oxide semiconductor ("CMOS") active pixel sensor
technology (collectively, 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. 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.


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     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 and(v) "CDR Discovery" for its x-ray generating product. The
Company has two additional trademark applications pending before the PTO.

     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 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


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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 a PMA application will be
approved by the FDA.

     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 digital mammography sensors. 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 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.


                                        7
<PAGE>


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 the digital mammography sensors currently under development by
the Company, and other future products, including its general digital
radiography sensors. There can be no assurance that the Company will file such
510(k) applications and/or will obtain pre-market clearance for the digital
mammography 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 mammography sensors which could impede the
Company's ability to manufacture and/or market the product. There can be no
assurance that the digital mammography or general digital radiography sensors 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 has obtained 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 and implemented a quality assurance program in accordance with the
guidelines of the International Quality Standard, ISO 9001. In August of 1998,
the Company was granted ISO 9001 certification. The Company's current products
also have been awarded the "ETL" and "CSA" marks. These are North American
safety marks which indicate compliance with U.L. Standard 2601-1.

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 2001, 2000 and 1999, research and development expenses were
$2.2 million, $2.8 million and $4.4 million, respectively.


                                        8
<PAGE>


BACKLOG

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

EMPLOYEES

     As of July 12, 2001, the Company had 134 full-time employees, engaged in
the following capacities: sales and marketing (28); general and administrative
(43);operations (45); 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 1, 2001, 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 approximately 18 area sales managers located throughout
the United States to interface with and assist Patterson in its sales effort. A
sales and marketing support staff of approximately 3 individuals, based at the
Company's offices in New York, supports the sales managers and the direct sales
force 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 nearly 40 countries. A dedicated in-house
staff provides the foreign distributors with materials, technical assistance and
training, both in New York and abroad.

     The Company's goal is to utilize its leading position in the industry,
secure as many productive sales channels as possible and to rapidly 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.


                                        9
<PAGE>


     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. Digital
panoramic dental devices are manufactured by several companies, including
Sirona, Signet, Instrumentarium Imaging and Planmeca. 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 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.


                                       10
<PAGE>


ITEM 2.  PROPERTIES

     The Company presently leases approximately 57,000 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. The Company was a named  defendant in two lawsuits  instituted by Trophy
Radiologie, S.A. ('Trophy S.A.'), a subsidiary of Trex Medical Corporation.  One
lawsuit was instituted in France and the other in the United States. On or about
June 6, 2001, an agreement for the  settlement and  discontinuance  of these two
lawsuits was executed by the parties.

     The French lawsuit was filed in November 1995, in the tribunal de Grande
Instance de Bobigny, the French patent court, and originally alleged that the
Company's CDR(R)system infringes French Patent No. 2,547,495, European Patent
No. 129,451 and French Certificate of Addition No. 2,578,737. These patents, all
of which are related, are directed to a CCD-based intra-oral sensor. Subsequent
to filing its lawsuit, Trophy S.A. withdrew its allegation of infringement with
respect to the Certificate of Addition. Trophy S.A. was seeking a permanent
injunction and unspecified damages, including damages for its purported lost
profits. In October 2000, the French patent court dismissed this lawsuit. The
court dismissed all of Trophy's claims, finding no infringement of either
patent. The court also ordered Trophy to pay the sum of 65,000 French Francs to
the Company as partial reimbursement for legal fees.

     The lawsuit in the United States was filed in March 1996 by Trophy S.A.,
Trophy Radiology, Inc., a United States subsidiary of Trophy S.A. ('Trophy
Inc.') and the named inventor on the patent in suit, Francis Mouyen, a French
citizen. The suit was brought in the United States District Court for the
Eastern District of New York, and alleged that the Company's CDR(R)system
infringes United States Patent No. 4,593,400 (the '400 patent'), which is
related to the patents in the French lawsuit. Trophy S.A., Trophy Inc. and
Mouyen were seeking a permanent injunction and unspecified damages, including
damages for purported lost profits, enhanced damages for the Company's purported
willful infringement and an award of attorney fees. In this action, the Company
counter-sued Trophy S.A. and Trophy Inc. for infringement of United States
Patent No. 4,160,997, an expired patent which was exclusively licensed to the
Company by its inventor, Dr. Robert Schwartz, and for false advertising and
unfair competition.

     On September 12, 1997, after having been given permission to do so by the
Court, the Company served two motions for summary judgment seeking dismissal of
the action pending in the United States District Court for the Eastern District
of New York, on the grounds of non-infringement and patent invalidity. On
February 22, 2000, oral argument on these motions was heard by the Court. To
date, the Court has not ruled on these motions.

     On June 6, 2001, the parties executed an agreement for the settlement and
discontinuance of these two lawsuits. Under the Settlement Agreement, all claims
and counterclaims by the parties are to be dismissed with prejudice without any
admission of wrongdoing by any party and each party releases the other from all
claims. The terms of such Agreement are confidential. On June 11, 2001 the
United States District Court for the Eastern District of New York discontinued
the case without costs to any party.

     II. 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 names
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


                                       11
<PAGE>


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 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. The settlement is subject to approval by the Court.

     III. 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 has provided the SEC with the subpoenaed
materials and has cooperated fully with the SEC staff. The inquiry is in a
preliminary stage and the Company cannot predict its potential outcome.

     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, 2001.


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.

     By letter dated September 15, 1999, the Company was advised by the Nasdaq
Stock Market's Listing Qualifications Panel (the "Panel") 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.

     Since the delisting of the Company's Common Stock, there has been no
established trading market for such stock, which has been trading in the


                                       12
<PAGE>


over-the-counter market.

     The following table sets forth, for the periods indicated, the high and low
sales prices of the Company's Common Stock, as quoted on The Nasdaq National
Market through September 15, 1999, and the high and low closing bid prices of
the Company's Common Stock in the over-the-counter market, as reported on the
"pink sheets" published by Pink Sheets LLC (formerly known as National Quotation
Bureau LLC),commencing September 16, 1999.


Fiscal Year Ended March 31, 2000                       High                Low
--------------------------------                      ------              -----

First Quarter                                          5.75               2.438
Second Quarter (through 9/15/99 delisting)             2.875              1.75
Second Quarter (commencing 9/16/99)                     .625               .50
Third Quarter                                          1.50                .375
Fourth Quarter                                         2.625              1.00

Fiscal Year Ended March 31, 2001                       High                Low
--------------------------------                      ------              -----

First Quarter                                          2.625              1.25
Second Quarter                                         1.625              1.15
Third Quarter                                          1.30                .40
Fourth Quarter                                         1.15                .42

     On July 12, 2001, the closing bid and asked prices per share of the
Company's Common Stock in the over-the-counter market, as reported on the "pink
sheets" published by Pink Sheets LLC, were $0.95 and $1.05 per share,
respectively. Such prices represent quotations between dealers, without dealer
mark-up, mark-down or commission, and may not represent actual transactions. On
May 31, 2001, there were 189 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.


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.


<TABLE>
<CAPTION>
                                                            Year Ended March 31,
                                                            --------------------
                                               1997        1998       1999        2000       2001
                                               ----        ----       ----        ----       ----
                                                           (in thousands, except per share data)

<S>                                         <C>         <C>         <C>         <C>         <C>
Statement of Operations Data:
Revenue, net                                $ 16,101    $ 38,451    $ 45,605    $ 21,989    $ 21,252
                                            --------    --------    --------    --------    --------
Cost of sales                                  7,907      17,658      34,611      15,393       9,736
Excess and obsolete inventory                    114          --       5,466         898         570
                                            --------    --------    --------    --------    --------
Total cost of sales                            8,021      17,658      40,077      16,291      10,306
                                            --------    --------    --------    --------    --------
Gross profit                                   8,080      20,793       5,528       5,698      10,946
                                            --------    --------    --------    --------    --------
Operating expenses:
        Selling and marketing                  4,961      10,645      18,440       7,636       5,314
        General and administrative             2,054       3,954       7,338       7,339       4,161
        Research and development               1,418       3,852       4,354       2,830       2,220
        Bad debt expense (benefit)                34         164       5,598           -        (454)
        Abandonment of leasehold                  --          --          --          --         275
</TABLE>


                                       13
<PAGE>


<TABLE>
<S>                                         <C>         <C>         <C>         <C>         <C>
        Patent litigation settlement              --         600          --          --          --
                                            --------    --------    --------    --------    --------
        Total operating costs                  8,467      19,215      35,730      17,805      11,516
                                            --------    --------    --------    --------    --------
Income (loss) from operations                   (387)      1,578     (30,202)    (12,107)       (570)
Total other income (expense)                      35       1,111         244        (224)     (1,068)
                                            --------    --------    --------    --------    --------
Income (loss) before income taxes               (352)      2,689     (29,958)    (12,331)     (1,638)
Provision (benefit) for income taxes              --         328        (352)         --          --
                                            --------    --------    --------    --------    --------
        Net income (loss)                   $   (352)   $  2,361    $(29,606)   $(12,331)   $ (1,638)
                                            ========    ========    ========    ========    ========
        Basis earnings (loss) per share     $  (0.05)   $   0.25    $  (2.96)   $  (1.23)   $  (0.16)
                                            ========    ========    ========    ========    ========
        Diluted earnings (loss) per share   $  (0.05)   $   0.24    $  (2.96)   $  (1.23)   $  (0.16)
                                            ========    ========    ========    ========    ========
<CAPTION>
                                                     1997          1998     1999          2000        2001
                                                     ----          ----     ----          ----        ----
<S>                                               <C>           <C>         <C>         <C>        <C>
Balance Sheet Data:
Cash and cash equivalents                        $ 1,710        $ 6,217     $ 1,415     $ 1,429    $ 2,167
Working capital / (deficiency)                     5,518         33,745       2,902         841     (1,586)
Total assets                                      11,060         51,674      29,386      16,290     12,646
Total liabilities                                  4,973          9,565      16,850      14,974     12,835
Retained earnings (accumulated deficit)           (1,556)           805     (28,801)    (41,132)   (42,770)
Stockholders' equity (deficiency)                  6,087         42,109      12,536       1,316       (189)
</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 dental and medical markets. In the field of dentistry, the Company has
developed and currently manufactures and markets an intra-oral digital
radiography system. The Company has also developed a bone mineral density
assessment device to assist in the diagnosis and treatment of osteoporosis,
which was introduced in December 1997. The Company has also commenced
development of a general digital radiography device for intended use in various
applications.

     The Company's revenues during fiscal 2001 were derived primarily from sales
of its CDR(R) and accuDEXA(R) products. The Company recognizes revenue on sales
of its products at the time of shipment to its customers and when no significant
vendor obligations exist and collectibility is probable. 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 both a direct sales force and a limited number of distributors for
sales of its products within the United States. Effective May 1, 2000, the
Company entered into an exclusive distribution agreement with Patterson Dental
Company and terminated its existing domestic dealer arrangements and reduced its
direct sales force. International sales are made primarily through a network of
independent foreign distributors. In fiscal 2001, 2000 and 1999, sales to
customers within the United States were approximately 62%, 68% and 87% of total
revenues, respectively. The Company's international sales are made primarily to
distributors in Europe, Australia and South America. The Company intends to
expand its business in other international markets, including Asia. All of the
Company's sales are denominated in United States dollars.

     Costs of sales consists of raw materials and computer components,
manufacturing labor, facilities overhead, product support, warranty costs and
installation costs. The Company procures its APS and CCD semiconductor wafers, a
significant component of its products, each from a single supplier. The Company
believes that sourcing from a single supplier provides certain competitive
advantages to the Company.


                                       14
<PAGE>


     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 benefit is a result of the
recovery, in cash, of shipments previously deemed uncollectible.

     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,
                                             --------------------
                                         2001       2000        1999
                                         ----       ----        ----
Revenue, net                             100.0%     100.0%      100.0%
                                         ------     ------      ------

Cost of sales                            45.8%      70.0%       75.9%
Excess and obsolete inventory            2.7%       4.1%        12.0%
                                         ----       ----        -----
Total cost of sales                      48.5%      74.1%       87.9%
                                         -----      -----       -----

Gross profit                             51.5%      25.9%       12.1%

Operating expenses:
        Selling and marketing            25.0%      34.7%       40.4%
        General and administrative       19.6%      33.4%       16.1%
        Research and development         10.4%      12.9%       9.5%
        Bad debt expense (benefit)       (2.1)%     0.0%        12.3%
        Abandonment of leasehold         1.3%       0.0%        0.0%
                                         ----       ----        ----
        Total operating costs            54.2%      81.0%       78.3%
                                         -----      -----       -----

Operating loss                           -2.7%      -55.1%      -66.2%

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


                                       15
<PAGE>


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 is
currently reintroducing 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.

     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.

Fiscal Year Ended March 31, 2000 as Compared to Fiscal Year Ended March 31, 1999

     Net revenues decreased 51.8% to $22.0 million in fiscal 2000 from $45.6
million in fiscal 1999. The revenue decline is due to lower sales of the
Company's CDR(R) dental product and accuDEXA(R) bone mineral density assessment
device. Fiscal 2000 revenues were reduced due to a reduction of marketing
activity for the Company's products, reduction of credit granting to select
dealers, hospitals, universities and governmental agencies and, the Company
believes, by the negative perception that existed in the marketplace concerning
the Company's viability and long-term ability to upgrade and service its
products.

     The rate of return in fiscal 2000 for the Company's CDR and accuDEXA (R)
products decreased significantly to 4.3% of gross sales in fiscal 2000 from
28.6% of gross sales in fiscal 1999. The decreased return rate for the CDR is
believed to be attributable to several factors including the resolution of
certain technical problems in transitioning its CDR product line from CCD
sensors to APS sensors. Second, the Company's single user CDR System requires
minimal installation. Commencing in September 1998, the Company initiated a
program in coordination with its computer supplier, in which the supplier
installed all single-user CDR Systems. As a result of logistical problems in
implementing this program, the supplier's installations experienced significant


                                       16
<PAGE>


delays, which led to a higher than normal rate of return for single user systems
shipped in this period. Starting in January 1999, the Company resumed direct
management of its single user CDR installations.

     The Company also experienced a higher than normal rate of returns of
accuDEXA units. The Company believes that these returns are due to several
factors, including the following: First, early shipments of accuDEXA experienced
a higher than expected failure rate due to several reasons, including shipping
damage, as well as humidity and temperature sensitivity of several components
included in the initial design of the product. The Company took steps to address
these problems and believes that failure rates relating to such damage and
sensitivity have dropped significantly. In this regard, the Company currently
expects to implement a number of additional improvements to accuDEXA, to further
increase reliability, in the first half of fiscal 2001. Second, the Company
initiated a change in its sales policy that affected accuDEXA sales made from
May 1998 through November 1998. During that time, the Company waived its
customary 10% deposit, which it had charged to customers prior to shipment of
goods. In December 1998, the Company changed its credit policy, requiring
prepayment from non-dealer customers.

     Total cost of sales decreased 59.4% to $16.3 million (74.1% of net
revenues) in fiscal 2000 from $40.1 million (87.9% of net revenues) in fiscal
1999. The total cost of sales is decreased due to lower direct and indirect
labor costs, warranty expenditures, material costs, royalty costs and overhead
costs as a result of decreased revenues and a decrease in the provision for
excess and obsolete inventory. The decrease in the provision for excess and
obsolete inventory from 1999 to 2000 is primarily attributable to the
obsolescence of inventory in the third and fourth quarter of 1999 due to the
introduction of the new APS sensors. In January 1999, in an effort to streamline
operations and reduce expenses, and as a result of more efficient manufacturing
processes and a higher rate of outsourcing, the Company reduced its direct
manufacturing labor force from 101 to 64 employees and relocated the operations
of its wholly-owned subsidiary, Schick X-Ray, Corp. from its facility in
Roebling, New Jersey to the Company's headquarters in Long Island City, New
York. In August 1999, Schick X-Ray was dissolved and its operations absorbed by
the Company.

     Selling and marketing expenses decreased 58.6% to $7.6 million (34.7% of
net revenues) in fiscal 2000 from $18.4 million (40.4% of net revenues) in
fiscal 1999. This decrease is due to decreased selling expenses in the CDR and
accuDEXA product lines, trade show expenses and other marketing expenses as a
result of decreased revenues. Additionally, the Company reduced its direct sales
force and associated overhead expenses as a result of decreased revenues.

     General and administrative expenses remained at $7.3 million, 33.3% of net
revenues in fiscal 2000 and 16.1% of net revenues in fiscal 1999. However,
general and administrative expenses increased as a percent of sales primarily
due to an increase in professional services rendered in connection with the
restatement of the Company's interim financial statements for fiscal 1999. This
increase was partially offset by decreases in payroll and related costs.

     Research and development expenses decreased 35.0% to $2.8 million (12.9% of
net revenues) in fiscal 2000 from $4.4 million (9.5% of net revenues) in fiscal
1999. This decrease was largely attributable to decreased payroll and related
costs due to a reduction in personnel partially offset by an increase in test
services and supply expenses. All research and development costs are expensed as
incurred.

     Bad debt expenses were $9 thousand in fiscal 2000 compared to $5.6 million
(12.3% of net revenues) in fiscal 1999. The Company believes that the decrease
is attributable to the Company's tightened credit policy as described above.

     Interest income decreased to $.1 million in fiscal 2000 from $.5 million in
fiscal 1999 due to the utilization of cash balances and investments in
short-term interest-bearing securities in support of the Company's operating
deficiencies.

     Interest expense increased to $.9 million in fiscal 2000 from $.3 million
in fiscal 1999 due to the cost of financing provided by DVI Financial Services
Inc. under the Company's Capital Lease and term note financing arrangements and
by Greystone Funding Corporation's secured credit facility.


                                       17
<PAGE>


Liquidity and Capital Resources

     At March 31, 2001, the Company had $2.2 million in cash and cash
equivalents and working capital deficiency of $1.6 million compared to $1.4
million in cash and cash equivalents and $0.8 million in working capital at
March 31, 2000. The decrease in working capital is primarily attributable to
current maturity of long term debt, collection of accounts receivable and
reduction of inventory.

     During fiscal 2001 cash provided by operations was $1.2 million compared to
$2.1 million used in operations during fiscal 2000. Increases in cash were
primarily provided by improved operating performance. Accounts receivable
decreased to $1.0 million at March 31, 2001 compared to $1.5 million at March
31, 2000 due to improved collections and restricted credit granting to select
dealers, hospitals, universities and governmental agencies. Inventories
decreased to $3.8 million at March 31, 2001 compared to $5.6 million at March
31, 2000 due to the Company's planned reduction of inventory levels. The
Company's capital expenditures increased $0.1 million in fiscal 2001 from $0.2
million in fiscal 2000. Fiscal 2001 expenditures included leasehold
improvements, computers and production equipment.

     DVI Financial Services, Inc. ("DVI") has 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 (8% at March 31, 2001) 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 $750K of outstanding
principal during the first quarter of fiscal 2002. As of July 12, 2001, the
outstanding principal balance of the DVI loan is $5.3 million, subject to
periodic prepayment in accordance with the terms of the loan documents.

     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.
Pursuant to the Loan Agreement, and to induce Greystone to enter into said
Agreement, the Company issued to Greystone and its designees, warrants to
purchase 3,000,000 shares of the Company's Common Stock at an exercise price of
$.75 per share. The Company agreed to issue Greystone additional warrants to
purchase 2,000,000 shares at an exercise price of $.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
it founders. By letter dated February 17, 2000, counsel for Photobit informed
the Company that Photobit considers 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 17, 1999 (the "Amended loan
Agreement"), which amended and restated the 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 to enter into said Agreement, the Company issued warrants to Greystone
and its designees, consisting of those warrants previously issued under the Loan
Agreement and Photobit stock sale arrangement, to purchase 5,000,0000 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
Additional Warrants will vest and be 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 million. Any additional warrants which do not vest
prior to expiration or surrender of the line of credit will be forfeited and
canceled. In connection with the Greystone secured credit


                                       18
<PAGE>


facility, effective February 15, 2000, DVI consented to the Company's 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. 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. By
letter dated October 11, 2000, DVI directed the Company to make all remaining
payments due under the DVI Notes directly to Greystone.

     No additional funds have been advanced under the Amended Loan Agreement in
excess of the 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 said Amended Loan
Agreement. Approximately $423 representing the unamortized discount and deferred
financing costs relating to the Amended Loan Agreement will be 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 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 July 2001, a Director of the Company made a commitment to make an equity
investment in the Company in the minimum amount of $1 million, subject to the
approval and acceptance of the Company's Board of Directors.

     Effective May 1, 2000 the Company entered into an exclusive distribution
agreement with Patterson Dental Company ("Patterson"). Under the terms of this
agreement the Company discontinued all direct domestic sales of its dental
products, with the exception of those to governmental agencies and universities.
As a result of the agreement, the Company further reduced its sales force.
Remaining domestic sales representatives have become manufacturer
representatives charged with support of the Patterson sales effort. The Company
terminated all existing dealer agreements including its agreement with Henry
Schein, Inc. In fiscal 2001, the Company entered into several foreign
distributorship agreements.

     The Company believes that its cost reductions, refinancing and new sales
arrangement should permit the Company to generate sufficient working capital to
meet its obligations as they mature. The ability of the Company to meet its cash
requirements is dependent, in part, on the Company's ability to attain adequate
sales and profit levels and to satisfy its existing 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
existing capital resources 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. 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.


                                       19
<PAGE>


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

     Information responsive to this item was previously reported in the
Company's Current Reports on Form 8-K, dated September 2, 1999 and September 24,
1999.


                                    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 70, 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 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 40, 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 36, has served as the Company's President and as
                            a


                                       20
<PAGE>


                            Director since December 1999. Mr. Slovin's current
                            term on the Board expires at the Company's Annual
                            Meeting of Stockholders in 2001. Mr. Slovin is
                            currently 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 SportsLab 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.

Robert Barolak              Age 47, has served as a Director of the Company
                            since December 1999. Mr. Barolak's current term on
                            the Board expires at the Company's Annual Meeting of
                            Stockholders in 2001. Since 1989, Mr. Barolak has
                            been employed at Greystone & Co. in various
                            executive capacities and has been its Executive Vice
                            President since 1995. From 1979 to 1989, Mr. Barolak
                            was an attorney at the firm of Ballard Spahr Andrews
                            & Ingersoll, LLP in Philadelphia. Mr. Barolak holds
                            a J.D. degree from the University of Pennsylvania
                            School of Law.

Jonathan Blank, Esq.        Age 56, has served as a Director of the Company
                            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. 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.

(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.

<TABLE>
<CAPTION>
                                                                                    Officer
     Name                                   Age     Position                         Since
     ----                                   ---     --------                        -------
<S>                                         <C>  <C>                                <C>
     David B. Schick...................     40   Chairman of the Board and Chief
                                                 Executive Officer                   1992

     Jeffrey T. Slovin.................     36   President and Director              1999

     Michael Stone.....................     48   Executive Vice-President            2000

     Stan Mandelkern...................     40   Vice President of Engineering       1999

     Ari Neugroschl....................     30   Vice President of Management
                                                 Information Systems                 2000

     Zvi N. Raskin.....................     38   Secretary and General Counsel       1992

     William Rogers....................     61   Vice President of Operations        1999

     Ronald Rosner.....................     54   Director of Finance and
                                                 Administration                      2000
</TABLE>

     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 2000. From September 1993 to January 2000,
     Mr. Stone was General Manager of the Dental Division of


                                       21
<PAGE>


     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 Materials and 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.
     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.

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 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.


ITEM 11. EXECUTIVE COMPENSATION

     The following table sets forth certain information concerning  compensation
received for the fiscal years ended March 31, 2001, 2000 and 1999 by the
Company's chief executive officer and each of the current and former 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,
2001.


                                       22
<PAGE>


                           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>
                                                      2001     $ 200,000     $ 16,308          --            --        $  4,468
      David B. Schick
      Chairman of the Board and                       2000       217,500           --          --        12,251           3,980
      Chief  Executive Officer
                                                      1999       143,385       39,692          --         3,267           4,569

------------------------------------------------------------------------------------------------------------------------------------
                                                      2001       200,001       20,000          --            --           4,038
      Zvi N. Raskin, Esq
      General Counsel and                             2000       132,500           --          --        17,006           3,286
      Secretary
                                                      1999        99,539       25,000          --         2,343           3,113

------------------------------------------------------------------------------------------------------------------------------------
                                                      2001       175,000           --          --            --           2,861
      Michael Stone
      Executive Vice President                        2000        23,558           --          --            --              --

                                                      1999            --           --          --            --              --

------------------------------------------------------------------------------------------------------------------------------------
                                                      2001       135,000           --          --            --              --
     Will Rogers
     Vice President of Operations
                                                      2000       105,214           --          --            --              --

                                                      1999        62,384           --          --            --              --

------------------------------------------------------------------------------------------------------------------------------------
                                                      2001       121,878           --          --            --           3,048
      Stan Mandelkern
      Vice President of Engineering
                                                      2000       118,500           --          --            --           3,346

                                                      1999       121,962           --          --            --           2,913
</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
     1999, 2000 and 2001, 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
     1999, 2000 and 2001.

----------


Employment Agreements and Termination of Employment Arrangement

     In February 2000, the Company entered into a three-year employment
agreement with David Schick, pursuant to which 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 base
annual salary is $200,000, subject to annual increases of at least ten percent
(10%). 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
incentive compensation in the form of a bonus which is calculated using a
formula based on the Company's EBITDA as a percentage of the Company's net
revenues. Additionally, all Company stock options held by, or to be issued to,
Mr. Schick will immediately vest in the event that the Company has a change in
control or is acquired by another company or entity.

     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 $200,000. 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


                                       23
<PAGE>


$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.

     In January 2000, the Company entered into two-year employment agreement
with Michael Stone, pursuant to which Mr. Stone was employed as the Company's
Vice President of Sales and Marketing until September 2000 and is currently
employed as the Company's Executive Vice President. Mr. Stone's annual base
salary is $175,000. In addition to base salary, Mr. Stone is eligible to receive
an annual performance bonus tied to 0.5% of the Company's earnings before income
taxes, depreciation and amortization. Pursuant to the Agreement, Mr. Stone also
received 75,000 employee stock options. In the event that Mr. Stone is
terminated from employment with the Company without cause, he would receive 6
months of severance pay and immediate vesting of 50% 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 of
management control.

   In December 1999, the Company entered into a 2-year employment agreement with
William Rogers, pursuant to which Mr. Rogers serves as the Company's Vice
President of Operations. Mr. Rogers' annual base salary is $135,000. Pursuant to
the Agreement, Mr. Rogers is also to be awarded 25,000 employee stock options
which shall immediately vest in the event that the Company has a change in
control or is acquired by, merged into or consolidated with another entity.

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 2001, each
director of the Company who is not a paid-employee was eligible to receive $500
for each meeting of the Board of Directors attended and $300 for each committee
meeting attended. The Company may, 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.

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, 2001 were Robert J. Barolak
(for the entire year) and Jonathan Blank (commencing November 8, 2000). 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, 2001, 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, a 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,
2001 to each of the Named Executives.


                                       24
<PAGE>


                          Option Grants in Fiscal 2001

                                Individual Grants
                                -----------------

<TABLE>
<CAPTION>
                                   Number of      Percent of
                                   Securities    Total Options
                                   Underlying      Granted to         Exercise
                                     Options      Employees in          Price        Expiration      Grant Date
        Name                       Granted(#)    Fiscal 2001(1)       ($/Share)         Date            Value
        ----                       ----------    --------------       ---------      ----------      ----------
        <S>                        <C>           <C>                  <C>            <C>             <C>
        David B. Schick                0               --                --              --             --

        Michael Stone                25,000           17.0%              .50           1/2/11           --

        Stan Mandelkern              20,880           14.2%              .50           1/2/11           --

        Zvi N. Raskin                  0               --                --              --             --

        Will Rogers                  15,000           10.2%              .50           1/2/11           --

</TABLE>

(1)  The Company granted employees options to purchase a total of 147,442 shares
     of Common Stock in fiscal 2001.


Option Exercises and Year-End Value Table

         The following table sets forth information regarding the exercise of
stock options during fiscal 2001 and the number and value of unexercised options
held at March 31, 2001 by each Named Executive.

                   Aggregated Option Exercises in Fiscal 2001
                     and Fiscal 2001 Year-End Option Values

<TABLE>
<CAPTION>
                                                                   Number of
                                                                   Securities                Value of
                                                                   Underlying               Unexercised
                                                                   Unexercised            "In-the-Money"
                                                                   Options at               Options at
                             Shares                              March 31, 2001           March 31, 2001
                           Acquired on           Value            Exercisable/             Exercisable/
  Name                     Exercise(#)        Realized ($)        Unexercisable          Unexercisable(1)
  ----                     -----------        ------------       --------------          ----------------
<S>                        <C>                <C>                <C>                    <C>
  David B. Schick              --                  --            14,290 / 6,942              $ -- / --
------------------------------------------------------------------------------------------------------------
  Michael Stone                --                  --               0 /75,000             $0-- / 8,750--
------------------------------------------------------------------------------------------------------------
  Stan Mandelkern                                                 5,780/24,660
------------------------------------------------------------------------------------------------------------
  Zvi N. Raskin                --                  --             10,260 /9,089              $-- / --
------------------------------------------------------------------------------------------------------------
  Will Rogers                  --                  --             16,250/13,750        $1,312.50 /$3,937.50

</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 $0.85 per share, the closing price per
     share on March 29, 2001, 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 July 12, 2001 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.


                                       25
<PAGE>

<TABLE>
<CAPTION>
                                                    Number of Shares                         Percentage of
     Name                                           Beneficially Owned(1)                    Outstanding Shares
     ----                                           ---------------------                    ------------------
<S>                                                 <C>                                        <C>
     David B. Schick(2) ............................  2,198,153(3)..........................   21.6%


     Jeffrey T. Slovin(2) ..........................  867,500(12)............................   7.9%

     Michael Stone(2) ..............................  87,550(4) .............................     *

     Stan Mandelkern(2) ............................  12,750(5) .............................     *

     Zvi N. Raskin(2) ..............................  87,597(7) .............................     *

     Will Rogers ...................................  36,500 ................................     *

     Euval S. Barrekette(8) ........................  137,740(9).............................   1.3%

     Allen Schick(10) ..............................  578,624(11)............................   5.7%


     Robert Barolak (13) ...........................  20,000(14) .............................    *

     Jonathan Blank(15) ............................  120,075(16).............................  1.2%

     Greystone Funding Corp.(17) ...................  4,802,500(18)........................... 32.1

     All current executive Officers and Directors
     as a group(19) ................................  4,033,458..............................  36.1%

</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 July 12, 2001 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; 1,688 shares issuable upon the exercise of
     stock options granted to Mr. Schick in April 1998; and 5,000 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 68,800 shares held by Mr. Stone; 6,250 shares issuable upon the
     exercise of stock options granted to Mr. Stone in July 2000; 6250 shares
     issuable upon the exercise of stock options granted to Mr. Stone in January
     2001 and 6250 shares issuable upon the exercise of stock options granted to
     Mr. Stone in April 2001.

(5)  Consists of 1,000 shares held by Mr. Mandelkern;1,500 shares issuable upon
     the exercise of stock options granted to Mr. Mandelkern in April 1999;
     3,750 shares issuable upon the exercise of stock options granted to Mr.
     Mandelkern in July 1999; 1,280 shares issuable upon the exercise of stock
     options granted to Mr. Mandelkern in March 2000 and 5,220 shares issuable
     upon the exercise of stock options granted to Mr. Mandelkern in April 2001.

(6)  Consists of 24,000 shares held by Mr. Rogers;10,000 shares issuable upon
     the exercise of stock options granted to Mr. Rogers in July 2000; and 2,500
     shares issuable upon the exercise of stock options granted to Mr. Rogers in
     March 1999.

(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


                                       26
<PAGE>


     options granted to Mr. Raskin in July 1997; 1,504 shares issuable upon the
     exercise of options granted to Mr. Raskin in April 1998; 3,750 shares
     issuable upon the exercise of options granted to Mr. Raskin in July 1998;
     and 5,000 shares issuable upon the exercise of options granted to Mr.
     Raskin in October 1998, pursuant to the 1996 Employee Stock Option Plan.

(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;
     and 20,000 shares issuable upon the exercise of stock options granted to
     Dr. Barrekette in June, 2000, pursuant to the 1997 Directors Stock Option
     Plan.

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

(11) Consists of 511,324 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; and 20,000 shares issuable upon the exercise of
     stock options granted to Dr. Schick in June, 2000, 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 20,000
     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 business address is c/o Greystone & Co., 152 West 57th
     Street, New York, New York 10019.

(14) Consists of 20,000 shares issuable upon the exercise of stock options
     granted to Mr. Barolak in June, 2000, 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 100,075 shares held by Mr. Blank; and 20,000 shares issuable
     upon the exercise of stock options granted to Mr. Blank in June 2000,
     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 13 as well as
     shares subject to options held by current officers and directors.


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 serves as a
Director of the Company, as Greystone's designee.

     On July 5, 2001, the Company repaid all outstanding advances under the
Greystone Amended Loan Agreement, together with all unpaid


                                       27
<PAGE>


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 2002, the Company prepaid to Greystone
$750K of outstanding principal of the DVI loan. As of July 12, 2001, the
outstanding principal balance of that loan is $5.3 million, subject to periodic
prepayment in accordance with the terms of the loan documents.

     Messrs. Slovin and Robert Barolak, who also serves as a Director as
Greystone's designee, are executive officers of Greystone.

     In July 2001, Allen Schick, a Director of the Company and father of the
Company's Chief Executive Officer, made a commitment to make an equity
investment in the Company in the minimum amount of $1 million, subject to the
approval and acceptance of the Company's Board of Directors.






                                       28
<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, 2001 and 2000                    F2
Consolidated Statements of Operations for the years ended
  March 31, 2001, 2000 and 1999                                              F3
Consolidated Statements of Changes in Stockholders' Equity
  (Deficiency) for the years ended March 31, 2001, 2000 and 1999             F4
Consolidated Statements of Cash Flows for the years ended
  March 31, 2001, 2000 and 1999                                              F5
Notes to Consolidated Financial Statements                                   F6
Schedule II/Valuation and Qualifying Accounts                                F19



         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, 2001 and 2000,
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, 2001. 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, 2001 and 2000, and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended March 31, 2001, 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, 2001. 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 18, 2001 except for Notes 2 and 9, as to which the date is July 12, 2001 and
Note 12, as to which the date is June 22, 2001.



                                      F-1
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                 March 31,
                                                                                                 ---------
                                                                                           2001            2000
                                                                                         --------        --------
<S>                                                                                      <C>             <C>
     Assets
     Current assets
           Cash and cash equivalents                                                     $  2,167        $  1,429
           Short - term investments                                                             8               8
           Accounts receivable, net of allowance for
                        doubtful accounts of $1,818 and $2,449, respectively                  977           1,535
           Inventories                                                                      3,820           5,612
           Income taxes receivable                                                             21             127
           Prepayments and other current assets                                               176             166
                                                                                         --------        --------
                        Total current assets                                                7,169           8,877
                                                                                         --------        --------
     Equipment, net                                                                         3,489           5,206
     Investments                                                                              815             815
     Other assets                                                                           1,173           1,392
                                                                                         --------        --------
                        Total assets                                                     $ 12,646        $ 16,290
                                                                                         ========        ========
     Liabilities and Stockholders' Equity (Deficiency)
     Current liabilities
           Current maturities of long term debt                                          $  2,851        $    245
           Accounts payable and accrued expenses                                            1,801           4,285
           Accrued salaries and commissions                                                   347             848
           Deferred revenue                                                                 3,132           1,681
           Deposits from customers                                                            483             666
           Warranty obligations                                                               141             278
           Capital lease obligations                                                           --              33
                                                                                         --------        --------
                        Total current liabilities                                           8,755           8,036
                                                                                         --------        --------
     Long term debt, net                                                                    4,080           6,938
                                                                                         --------        --------
                        Total liabilities                                                  12,835          14,974
                                                                                         --------        --------
                                                                                               --              --
     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; 25,000,000 shares authorized:
                        10,137,193 and 10,134,384 shares issued and
                        outstanding at March 31, 2001 and 2000, respectively)                 101             101
           Additional paid-in capital                                                      42,480          42,347
         Accumulated deficit                                                              (42,770)        (41,132)
                                                                                         --------        --------
                        Total stockholders' equity (deficiency)                              (189)          1,316
                                                                                         --------        --------
                        Total liabilities and stockholders' equity (deficiency)          $ 12,646        $ 16,290
                                                                                         ========        ========
</TABLE>


----------
* The accompanying notes are an integral part of these 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,
                                                                                            --------------------
                                                                              2001                2000                1999
                                                                              ----                ----                ----
<S>                                                                       <C>                 <C>                 <C>
     Revenue, net                                                         $     21,252        $     21,989        $     45,605
                                                                          ------------        ------------        ------------

     Cost of sales                                                               9,736              15,393              34,611
     Excess and obsolete inventory                                                 570                 898               5,466
                                                                          ------------        ------------        ------------
     Total cost of sales                                                        10,306              16,291              40,077
                                                                          ------------        ------------        ------------

                    Gross profit                                                10,946               5,698               5,528
                                                                          ------------        ------------        ------------
     Operating expenses:
        Selling and marketing                                                    5,314               7,636              18,440
        General and administrative                                               4,161               7,330               7,338
        Research and development                                                 2,220               2,830               4,354
        Bad debt expense (benefit)                                                (454)                  9               5,598
        Abandonment of leasehold                                                   275                  --                  --
                                                                          ------------        ------------        ------------
                    Total operating costs                                       11,516              17,805              35,730
                                                                          ------------        ------------        ------------

                    Loss from operations                                          (570)            (12,107)            (30,202)
                                                                          ------------        ------------        ------------
     Other (expense) income
        Gain from sale of investment                                                --                 565                  --
        Interest income                                                             60                 101                 505
        Interest expense                                                        (1,128)               (890)               (261)
                                                                          ------------        ------------        ------------
                    Total other (expense) income                                (1,068)               (224)                244
                                                                          ------------        ------------        ------------

                    Loss before income taxes                                    (1,638)            (12,331)            (29,958)

                    Credit for income taxes                                         --                  --                (352)
                                                                          ------------        ------------        ------------

                    Net loss                                              $     (1,638)       $    (12,331)       $    (29,606)
                                                                          ============        ============        ============

                    Basic and diluted loss per share                      $      (0.16)       $      (1.23)       $      (2.96)
                                                                          ============        ============        ============

                    Weighted average common shares
                    Outstanding (basic and diluted)                         10,135,867          10,059,384          10,013,061
                                                                          ============        ============        ============
</TABLE>


----------
* The accompanying notes are an integral part of these 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
                                                                 ------       ------     -------        --------         ------
                                                                                                                      (Deficiency)
                                                                                                                      ------------
<S>                                                              <C>          <C>        <C>            <C>           <C>
     Balance at April 1, 1998                                     9,992,057    $100      $41,204        $    805         $ 42,109
          Issuance of common stock upon
               exercise of stock options                              3,848      --           32              --               32
          Issuance of common stock upon
               exercise of warrants                                  63,479       1           --              --                1
          Net loss                                                       --      --           --         (29,606)         (29,606)
                                                                 ----------    ----      -------        --------         --------
     Balance at March 31, 1999                                   10,059,384     101       41,236         (28,801)          12,536
          Issuance of warrants 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 in connection with
          refinancing activity                                                               130                              130
          Issuance of common stock upon exercise of
          stock options                                               2,809      --            3                                3
          Net loss                                                       --      --           --          (1,638)          (1,638)
                                                                 ----------    ----      -------        --------         --------
     Balance at March 31, 2001                                   10,137,193    $101      $42,480        $(42,770)        $   (189)
                                                                 ==========    ====      =======        ========         ========
</TABLE>











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


                                      F-4
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                          March 31
                                                                                                          --------
                                                                                            2001          2000          1999
                                                                                            ----          ----          ----
<S>                                                                                        <C>          <C>           <C>
     Cash flows from operating activities
           Net loss                                                                        $(1,638)     $(12,331)     $(29,606)
           Adjustments to reconcile net loss to
              net cash provided by (used in) operating activities
                  Depreciation and amortization                                              1,935         2,332         1,710
                  (Benefit of) provision for bad debts                                        (454)            9         5,598
                  Reserve for excess and obsolete inventory                                    570           898         5,466
                  Amortization of debt discount                                                189           181            --
                  Gain from sale of investment in Photobit Corporation                          --          (565)           --
                  Abandonment of leasehold improvements                                        275            --            --
                  Interest accretion                                                            48            --            --

                  Changes in operating assets and liabilities:
                       Accounts receivable                                                   1,012         2,661           370
                       Inventories                                                           1,222         4,176        (4,000)
                       Income taxes receivable                                                 106         2,443        (2,720)
                       Prepayments and other current assets                                    (10)          155           425
                       Other assets                                                            (19)          137          (148)
                       Deferred income taxes                                                    --            --           349
                       Accounts payable and accrued expenses                                (3,124)       (3,355)        1,759
                       Income taxes payable                                                     --            --          (144)
                       Deferred revenue                                                      1,451         1,117           202
                       Deposits from customers                                                (183)          153           182
                       Warranty obligations                                                   (137)         (124)          157
                                                                                           -------      --------      --------
                            Net cash provided by (used in) operating activities              1,243        (2,113)      (20,400)
                                                                                           -------      --------      --------
     Cash flows from investing activities
           Purchase of minority investment                                                      --            --          (250)
           Purchases available-for-sale investments                                             --            --       (10,588)
           Proceeds from maturities of held-to-maturity investments                                          352        24,250
           Proceeds from sale of investment in Photobit Corporation                             --         1,000            --
           Capital expenditures, net                                                          (347)         (225)       (2,847)
                                                                                           -------      --------      --------
                            Net cash (used in) provided by investing activities               (347)        1,127        10,565
                                                                                           -------      --------      --------
     Cash flows from financing activities
           Net proceeds from issuance of common stock                                            3            --            33
           Proceeds from issuance of short-term notes                                           --            --         5,000
           Proceeds from refinancing                                                            --         1,000            --
           Payment of long term debt                                                          (161)           --            --
                                                                                           -------      --------      --------
                            Net cash (used in) provided by financing activities               (158)        1,000         5,033
                                                                                           -------      --------      --------
     Net increase (decrease) in cash and cash equivalents                                      738            14        (4,802)
     Cash and cash equivalents at beginning of period                                        1,429         1,415         6,217
                                                                                           -------      --------      --------
     Cash and cash equivalents at end of period                                            $ 2,167      $  1,429      $  1,415
                                                                                           =======      ========      ========
</TABLE>


----------
* The accompanying notes are an integral part of these 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
                                        2001         2000         1999
                                        ----         ----         ----
        CDR                              97%          88%          71%
        AccuDEXA                          3%          12%          29%
                                        ----         ----         ----
                                        100%         100%         100%
                                        ====         ====         ====


     The consolidated financial statements of the Company at March 31, 2001,
include the accounts of the Company and its wholly-owned subsidiary, Schick New
York. In August 1999, Schick X-Ray Corporation was dissolved and its operations
absorbed by the Company.

2.       Liquidity

     The Company incurred net losses of $1,638, $12,331 and $29,606 in the years
ended March 31, 2001, 2000 and 1999, respectively, and has an accumulated
deficit of $42,770 and working capital deficiency of $951 at March 31, 2001.

     In response to the losses incurred, management has implemented certain
corrective actions, which include, but are not limited to, (1) reducing staff,
space and other overhead expenditures, (2) curtailing certain sales promotions,
(3) tightening credit policies and payment terms, (4) aggressively collecting
past-due balances from customers, (5) consolidating and reducing its sales
force, by entering into new distribution agreements, (6) implementing programs
to increase warranty revenue and recover warranty costs from the Company's
customers, (7) employing new senior management including an Executive Vice
President who directly oversees the Company's sales and marketing efforts, (8)
improving inventory yields and disposing of excess and obsolete inventory, and
(9) modifying and improving the Company's products to improve reliability and
reduce warranty expenditures.

     Additionally, the Company has taken the following steps to improve
operations and provide for adequate resources to fund the Company's capital
needs for the next twelve months.

         o  In April 2000, the Company entered into an exclusive distributorship
agreement with Patterson Dental Company, which grants Patterson the rights to
distribute the Company's dental products in the United States and Canada.

         o  In May 2000, the Company entered into an agreement, subject to court
approval, for the settlement of a class action lawsuit against the Company. The
Company's insurance carrier will pay the settlement amount in its entirety. (See
Note 12).

         o  In June 2000, the Company renegotiated a $ 6.2 million term note
payable increasing the principal balance to $ 6.6 (refinancing certain trade
payables on a long term basis), eliminating principal payments through January
2001 and extending the maturity date from March 2001 to April 2005.

         o In July 2001, a Director of the Company made a commitment to make an
equity investment in the Company in the minimum amount of $1 million, subject to
the approval and acceptance of the Company's Board of Directors.


                                      F-6
<PAGE>


         o  In fiscal 2001, the Company entered into several foreign
distributorship agreements.

         In view of the matters described in the preceding paragraphs,
management believes the Company has the ability to meet its financing
requirements on a continuing basis. However, if the Company's fiscal 2002
planned cash flow projections are not met, management could consider the
reduction of certain discretionary expenses and sale of certain assets. In the
event that these plans are not sufficient and the Company's credit facilities
are not available, the Company's ability to operate could be adversely affected.

3.       Summary of Significant Accounting Policies

         Basis of Consolidation

         The accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. 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.

         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 (see Note 7).

         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 goods and on the average cost method for other
inventories, each of which approximates actual cost on the first-in, first-out
method.

         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 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. During 1999, due to
various operational issues, the Company accepted product returns for products
shipped during 1999 beyond the standard return policy. The Company has
recognized allowances at March 31, 1999 for estimated returns by customers
pursuant to the extended return period. Amounts received from customers in


                                      F-7
<PAGE>


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 $851, $580, $1,494, for the years-ended March
31,2001, 2000, and 1999, 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 2001, 2000 and 1999.

         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.

         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.

         Reclassifications

         Certain prior year amounts have been reclassified to conform to the
current year presentation.

4.       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.


                                      F-8
<PAGE>


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, 2000 and 1999 as all potential shares are
antidilutive.

         At March 31, 2001, 2000 and 1999, outstanding options to purchase
1,046,807, 992,605 and 591,958 shares of common stock, respectively at exercise
prices, ranging from $0.50 to $27.72 per share in fiscal 2001, $1.00 to $27.72
in fiscal 2000 and $1.79 to $27.72 in fiscal 1999, 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. As of March 31, 2001
outstanding warrants to purchase 13 million shares of common stock with an
exercise price of $0.75 have been excluded from the computation of diluted loss
per share because conditions for vesting and exercise have not been met and are
antidilutive (see Note 9).

5.       Inventories

         Inventories at March 31, 2001 and 2000, net of provisions for excess
and obsolete inventories, are comprised of the following:

                                                  2001          2000
                                               -------       -------
                 Raw materials                  $3,046       $ 3,651
                 Work-in-process                   119            39
                 Finished goods                    655         1,922
                                               -------       -------
                 Total inventories              $3,820        $5,612
                                               =======       =======

6.       Equipment

         Equipment at March 31, 2001 and 2000 is comprised of the following:

                                                              2001         2000
                                                           -------      -------
      Production equipment                                  $5 105      $ 5,007
      Computer and communications equipment                  2,183        2,106
      Demonstration equipment                                  928          860
      Leasehold improvements                                 1,301        1,898
      Other equipment                                          122          121
                                                           -------      -------
      Total equipment                                        9,639        9,992
      Less - accumulated depreciation and amortization       6,150        4,786
                                                           -------      -------
      Equipment, net                                       $ 3,489      $ 5,206
                                                          ========     ========

         At March 31, 2001 and 2000, computer equipment included approximately
$199 of equipment acquired under capital leases. Accumulated depreciation
related to these assets approximated $171 and $83 at March 31, 2001 and 2000,
respectively.

7.       Investments in Debt Securities

         Held-to-maturity securities at March 31, 2001 and 2000 consist of
short-term U.S. Treasury and government agency debt securities of $8, on an
amortized cost basis, with maturity dates of less than one year. The gross
unrealized gains and losses at March 31, 2001 and 2000 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, 2001 and 2000:


                                      F-9
<PAGE>


                                                             2001         2000
                                                          -------      -------
               Legal and other professional fees            $ 420        $ 863
               Accounts payable and accrued expenses        1,381        3,422
                                                          -------      -------
                                                          $ 1,801      $ 4,285
                                                          =======      =======

9.       Debt

         Long-term debt is summarized as follows at March 31, 2001 and 2000:

                                                             2001         2000
                                                          -------      -------
                 Term notes                               $ 6,296      $ 6,596
                 Secured credit facility                      635          587
                                                          -------      -------
                                                            6,931        7,183
                 Less current maturities                    2,851          245
                                                          -------      -------
                                                          $ 4,080      $ 6,938
                                                          =======      =======


         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.

         Term Loan A

         The principal balance of term loan A is payable in 49 monthly payments
commencing 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 April
2001 the Company agreed to make a prepayment of $750 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
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 $176 and $170 relating to this warrants
issuance was recognized for the year ended March 31, 2001 and 2000,
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.


                                      F-10
<PAGE>


         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 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 considers 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 Additional Warrants will
vest and be 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 do not vest prior to expiration or
surrender of the line of credit, will be forfeited and canceled. In connection
with the Greystone secured credit facility, effective as of February 15, 2000,
DVI consented to the Company's 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 has been 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 is being accreted to the face
value of the $1 million using the interest method over the seven-year term of
the loan. However, in the event that the loan is paid sooner, the Company will
recognize a charge for the unamortized discount remaining in such period. The
fair value of 3 million warrants issued in connection with the agreement,
amounting to $90, is being accounted for as deferred financing cost. This cost,
included in "Other Assets" in the accompanying balance sheet, is being amortized
on a straight-line basis over the five-year life of the loan. Interest under the
credit line is due monthly at an annual rate of 10% until December 2004 when the
outstanding loan is due to be repaid.

         The secured term notes and secured credit facility are 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 will be 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


                                      F-11
<PAGE>


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.

         Principal maturities of long-term debt are as follows:


            Year ending March 31,
            ---------------------
                    2002                     $3,216
                    2003                      1,664
                    2004                      1,189
                    2005                      1,227
                                             ------
                                             $7,296
                                             ======

10.      Income Taxes

         The components of the Company's (benefit) provision for income taxes is
as follows:

                                         March 31
                                         --------
                                   2001              2000            1999
                                  -----             -----           -----
              Current:
                Federal             $--               $--          $(531)
                State                --                --           (170)
                                  -----             -----           -----
                                     --                --           (701)
                                  -----             -----           -----
              Deferred:
                Federal              --                --             282
                State                --                --              67
                                  -----             -----           -----
                                     --                --             349
                                  -----             -----           -----
                                    $--               $--          $(352)
                                  =====             =====           =====

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

<TABLE>
<CAPTION>
                                                                                         March 31

                                                                                2001         2000        1999
                                                                               -----        -----       -----
<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)       (0.2)
Non-deductible expenses                                                          0.7          0.5        16.7
Research and development tax credit                                              5.0          1.5         0.8
Net operating loss and credits generated in the current
year in which there is no benefit                                               36.4         40.1        15.6
                                                                               -----        -----       -----
Effective tax rate                                                               --%          --%      (1.1)%
                                                                               =====        =====       =====
Significant components of the Company's deferred tax assets
(liabilities) at March 31, 2001, 2000 and 1999 were as follows:

<CAPTION>
                                                                                2001           2000           1999
                                                                            --------       --------       --------
<S>                                                                          <C>          <C>         <C>
    Net operating loss carryforwards                                         $15,638       $ 11,218        $ 5,701
    Reserves and allowances for inventory                                      1,400          2,947          2,702
    Accounts receivable and warranties                                         2,182          2,360          3,488
    Tax credit carryforwards                                                   1,305            962             --
    Depreciation and other                                                       663          (192)          (445)
    Other                                                                        114            328            409
                                                                            --------       --------       --------
                                                                              21,302         17,623         11,855
    Valuation allowance                                                     (21,302)       (17,623)       (11,855)
                                                                            --------       --------       --------
    Net deferred tax asset                                                       $--            $--            $--
                                                                            ========       ========       ========
</TABLE>


                                      F-12
<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, 2001, the Company has a U.S. federal income tax net
operating loss carryforward of $37,232 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. During 1999, the
Company recorded significant charges for bad debt expense due to product
reliability issues, customer service issues and insufficient credit and
collection policies. The Company has undertaken steps to correct the
deficiencies that resulted in the bad debt charges. 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 $8,990, $6,545 and $5,961 of the Company's sales in 2001,
2000, and 1999, respectively, were to foreign customers. The majority of such
foreign sales were to customers in Europe. During 2001 sales of $7,537 were made
to two customers. During 2000 and 1999 sales of $2,570 and $7,187 were to a
single distributor.

         On April 6, 2000, the Company entered into and 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, 2001 minimum compensation obligations under these employment
agreements are as follows:

                         Year ending March 31,
                         ---------------------
                  2002                           $769
                  2003                            370
                                               ------
                                               $1,139
                                               ======


                                      F-13
<PAGE>

         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 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 and Capital Leases

         The Company leases its facilities under an operating lease agreement
expiring June 2007. Rent expense for the years ended March 31, 2001, 2000, and
1999 was $701, $1,095 and $718, respectively.

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

                                                      Operating
                                                      ---------
         2002                                             $ 419
         2003                                               445
         2004                                               467
         2005                                               486
         2006                                               506
         Thereafter                                         663
                                                         ------
         Total minimum lease payments                    $2,986
                                                         ======

         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 has provided the SEC with the subpoenaed
materials and has cooperated fully with the SEC staff. The inquiry is in a
preliminary stage and the Company cannot predict its potential outcome.

         In addition, investigators associated with the U.S. Attorney's Office
have made inquires of certain former and current employees, apparently in
connection with the same event. The inquiries are in a preliminary stage and the
Company cannot predict their 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 does 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


                                      F-14
<PAGE>


expected to have any material impact on the financial results of the Company.
The terms of the settlement are subject to approval by the Court.

         During 1996, the Company was named as defendant in patent infringement
litigation commenced by a competitor in the United States and France. The
Company filed a countersuit against the competitor for infringement of a U.S.
Patent which has been exclusively licensed to the Company. The Company has
obtained a formal opinion of intellectual property counsel that its products do
not infringe on the competitor's U.S. patent. In October 2000, the French patent
court dismissed the litigation venued in France. The court dismissed all of
Trophy's claims, finding no patent infringement. The court also ordered Trophy
to pay the sum of 65,000 French Francs to the Company as partial reimbursement
for legal fees. In September 2000, The Company filed motions for Summary
Judgment seeking the dismissal of the action in the United States. On June 6,
2001, the parties executed an agreement for the settlement and discontinuance of
these two lawsuits. Under the Settlement Agreement, the terms of which are
confidential, all claims and counterclaims by the parties are to be dismissed
with prejudice without any admission of wrongdoing by any party and each party
releases the other from all claims. On June 11, 2001 the United States District
Court for the Eastern District of New York discontinued the case without costs
to any party.

         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.

         During fiscal 1996, prior to implementation of the Plan, an employee of
the Company was granted an option to purchase 56,000 shares of the Company's
common stock at $1.79 per share, determined by the Company's Board of Directors
to be the fair market value of the Company's common stock at the date of the
option grant. This option expired in December 2000.

         During 1998, the Company adopted the Directors Plan. A total of 35,000
shares of Common Stock have been authorized for issuance under 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, 2001, 2000 and 1999, a total of
133,125, 25,000 and 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


                                      F-15
<PAGE>


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, 2001, 2000 and 1999, the Company
did not recognize compensation expense for options granted to employees. 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 loss in 2001 would have increased by approximately $590 ($0.06 per
basic share), net loss in 2000 would have been increased by approximately $626
($.05 per basic share), and net income in 1999 would have been decreased by
approximately $759 ($.08 per basic share).

         The fair value of options granted to employees and directors during
2001, 2000, and 1999 respectively 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>
                                                     2001              2000                 1999
                                                     ----              ----                 ----
<S>                                               <C>              <C>                  <C>
Dividend yield                                       None              None                 None
Risk-free interest rate on date of grant          4.70-4.87%       5.35% - 6.36%        4.13% - 5.48%
Forfeitures                                          None              None                 None
Expected life                                      5 years            5 years              5 years
Volatility                                           84%                91%                  85%
Weighted average fair value per share               $0.62             $0.065                $7.88
</TABLE>

         The following table summarizes information regarding stock options for
2001, 2000 and 1999:

<TABLE>
<CAPTION>
                                                   -------                      -------                      -------
                                                     1999                         2000                        2001
                                                   -------                      -------                      -------
                                             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                           221,903        $11.46        591,958         $10.87       992,605           $4.57
Options granted                             420,523         11.46        681,866           1.21       297,442            1.06
Options exercised                            (3,848)         7.14             --             --        (2,809)           1.00
Options forfeited                           (46,620)        20.44       (281,219)         12.30      (240,431)           4.84
                                            -------                      -------                    ---------
Options outstanding,
End of year                                 591,958        $10.87        992,605          $4.57     1,046,807           $3.53
                                            =======                      =======                    =========

<CAPTION>
                                              Options outstanding          Weighted-average remaining
            Range of exercise price            at March 31, 2001            Contractual life (years)
             ----------------------            -----------------            ------------------------
<S>                                           <C>                          <C>
                $ 0.50 to $ 2.88                       834,542                     9.0
                $ 4.91 to $ 7.86                       104,204                     7.0
                $14.81 to $22.97                        79,546                     6.9
                $25.75 to $27.72                        28,605                     7.0
</TABLE>

         At March 31, 2001, there are 2,109,169 options available for grant
pursuant to the Company's option plans. Of the 1,046,807 options outstanding at
March 31, 2001, 457,307 are exercisable at such date at a weighted-average
exercise price of $4.63.

         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


                                      F-16
<PAGE>


be made by the Company to a maximum amount of 2.5% of a plan participant's
compensation. Company contributions to the plan approximated $131, $164 and $218
in 2000,and 1999, respectively.

14.      Supplemental Cash Flow Information

         Cash payments for interest were $854, $424 and $174 in 2001, 2000 and
1999 respectively. There were no payments for income taxes in 2001, 2000 and
1999.

         During fiscal 1999, the Company acquired $199 of computer equipment of
production equipment under capital leases.

15.      Stockholders' Equity

         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 1998, warrants to purchase 24,640
shares of the Company's common stock were exercised. Exercises of 11,200 of such
warrants, for which 11,200 shares of common stock were issued, provided the
Company with net proceeds of approximately $100. The remaining 13,440 warrant
exercises were cashless exercises pursuant to which 8,647 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 expires 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 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 2001, 2000 and 1999.

         Investment in Photobit Corporation

         In September 1997, the Company purchased a minority interest of 5%, for
$1,000 in Photobit Corporation, 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. The Company carries the investment at cost. At
March 31, 2000, it is not practicable to estimate the fair value of this
investment because of the lack of quoted market prices and the inability to
estimate fair value without incurring excessive costs. No dividends were paid on
this investment. In September 1999, the Company sold 250,000 shares of Photobit
stock for $1,000 and recorded an investment gain of approximately $565.


                                      F-17
<PAGE>

17.  Unaudited selected quarterly financial data

      The following is a summary of Company's unaudited quarterly operating
results for the years ended March 31, 2001, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                      Three months ended
                               Jun 30,     Sep. 30,      Dec 31,      Mar 31,     Jun 30,      Sep. 30,      Dec 31,      Mar 31,
                                1999         1999         1999         2000         2000         2000         2000         2001
                             ----------   ----------   ----------   ----------   ----------   ----------   ----------   -----------
<S>                          <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
Revenue, net                 $    7,238   $    4,565   $    4,771   $    5,415   $    6,243   $    3,390   $    5,391   $     6,228
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
Gross profit                 $    1,476   $      137   $    1,800   $    2,285   $    3,147   $      989   $    3,058   $     3,752
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
Net income (loss)            $   (3,977)  $   (3,597)  $   (2,044)  $   (2,713)  $     (527)  $   (2,316)  $      439   $       765
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
Earnings (loss) per share:
Basic income (loss)          $    (0.40)  $    (0.36)  $    (0.20)  $    (0.27)  $    (0.05)  $    (0.23)  $     0.04   $      0.08
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
Diluted income (loss)        $    (0.40)  $    (0.36)  $    (0.20)  $    (0.27)  $    (0.05)  $    (0.23)  $     0.04   $      0.07
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
Weighted average common
stock outstanding (basic)    10,059,384   10,059,384   10,059,384   10,059,384   10,134,384   10,134,696   10,137,193    10,137,193
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========

Weighted average common
stock outstanding
(diluted)                    10,059,384   10,059,384   10,059,384   10,059,384   10,134,384   10,134,696   11,117,412    11,012,363
                             ==========   ==========   ==========   ==========   ==========   ==========   ==========   ===========
</TABLE>








                                      F-18
<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, 2001        $ 2,449          --           --      $  177 (a)      $ 1,818
                                                                                               454 (b)
             For the year ended March 31, 2000          4,512      $9,000           --       2,072 (a)        2,449
             For the year ended March 31, 1999            200       5,598           --       1,286 (a)        4,512

     RESERVE FOR OBSOLETE/SLOW MOVING INVENTORY
             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
             For the year ended March 31, 1999             --       5,466           --          --            5,466

     VALUATION ALLOWANCE -- DEFERRED TAX ASSET
             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
             For the year ended March 31, 1999             --          --       11,855          --           11,855

     PROVISION FOR WARRANTY OBLIGATIONS
             For the year ended March 31, 2001        $   278                               $  137          $   141
             For the year ended March 31, 2000            402          --           --         124              278
             For the year ended March 31, 1999            244         157           --          --              402
</TABLE>

(a) accounts receivable written off
(b) accounts receivable recovered
(c) inventory written off





                                      F-19
<PAGE>


                                                                            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, 2001 and 2000        F-2

               Consolidated Statement of Operations for the years ended     F-3
               March 31, 2001, 2000 and 1999 F-5

               Consolidated Statement of Changes in Stockholders'
               Equity for the years ended March 31, 2001, 2000 and 1999     F-4

               Consolidated Statement of Cash Flows for the year ended
               March 31, 2001, 2000 and 1999                                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-19


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.


                                       29
<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.


                                       30
<PAGE>


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

     ***** 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.

            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.


                                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 July 13, 2001.

                                             SCHICK TECHNOLOGIES, INC


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


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<PAGE>


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 July 13, 2001.

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 and President
Jeffrey Slovin


/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/ Robert Barolak
----------------------------             Director
Robert Barolak




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