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


                                   Form 10-QSB


[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

           For the quarterly period ended         June 30, 2001         .
                                          ------------------------------

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

For the transition period from                to               .
                               --------------    --------------

                         Commission file number  0-19827
                                                ---------

                                  HYMEDIX, INC.
             -------------------------------------------------------
             (Exact name of registrant, as specified in its charter)

                 Delaware                                    22-3279252
      -------------------------------                     ----------------
      (State or other jurisdiction of                     (I.R.S. Employer
       incorporation or organization)                    Identification No.)

                    2245 Route 130, Dayton, New Jersey 08810
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code:  (732) 274-2288
                                                          -------------------



Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

                                Yes [X]  No [ ]


State the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

          Class                              Outstanding as of July 31, 2001
          -----                              -------------------------------

         Common                                         6,143,781

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

<PAGE>

                          HYMEDIX, INC. AND SUBSIDIARY

                                      INDEX
                                      -----


                                                                        Page No.
                                                                        --------


PART I -  FINANCIAL INFORMATION

          Item 1.  Financial Statements

                   Consolidated Balance Sheets as of June 30, 2001
                   and December 31, 2000                                    3

                   Consolidated Statements of Operations for the Three
                   and Six Months Ended June 30, 2001 and June 30, 2000     4

                   Consolidated Statements of Cash Flows for the Six
                   Months Ended June 30, 2001 and June 30, 2000             5

                   Notes to Interim Consolidated Financial Statements       6

          Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                      8

PART II - OTHER INFORMATION

          Item 6.  Exhibits and Reports on Form 8-K                        13


SIGNATURES                                                                 14

                                      -2-
<PAGE>

PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements
<TABLE>
<CAPTION>
                                 HYMEDIX, INC. AND SUBSIDIARY

                                 Consolidated Balance Sheets

                                            ASSETS
                                            ------
                                                                   June 30,      December 31,
                                                                     2001            2000
                                                                 ------------    ------------
                                                                  (Unaudited)
CURRENT ASSETS:
<S>                                                              <C>             <C>
     Cash and cash equivalents                                   $     11,402    $    181,282
     Accounts receivable                                              501,607          56,885
     Note receivable from related party                                     0          20,000
     Inventories, net                                                  25,023          67,097
     Other current assets                                              39,817          50,520
                                                                 ------------    ------------
         Total current assets                                         577,849         375,784
PROPERTY AND EQUIPMENT, NET                                            52,931          59,658
SECURITY DEPOSIT                                                       59,040          59,040
                                                                 ------------    ------------
         Total assets                                            $    689,820    $    494,482
                                                                 ============    ============

                            LIABILITIES AND STOCKHOLDERS' DEFICIT
                            -------------------------------------
CURRENT LIABILITIES:
     Notes payable                                               $  3,946,979    $  3,946,979
     Accounts payable and accrued expenses                          4,899,717       4,703,262
     Accrued legal judgment and settlement                             75,000          75,000
                                                                 ------------    ------------
              Total current liabilities                             8,921,696       8,725,241
                                                                 ------------    ------------
ACCRUED LEGAL JUDGMENT AND SETTLEMENT                                  92,500         137,500
                                                                 ------------    ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
     8% Senior Convertible Preferred Stock, $3.00 par value,
         800,000 shares authorized, 7,390 shares issued and
         outstanding                                                   22,170          22,170
     Preferred Stock, $.01 par value, 3,000 shares authorized,
         150 shares issued and outstanding                                  2               2
     Common Stock, $.001 par value, 20,000,000 shares
         authorized, 6,143,781 shares issued and outstanding            6,144           6,144
     Additional paid-in capital                                    15,658,743      15,658,743
     Accumulated deficit                                          (22,511,435)    (22,555,318)
     Subscription receivable                                       (1,500,000)     (1,500,000)
                                                                 ------------    ------------
         Total stockholders' deficit                               (8,324,376)     (8,368,259)
                                                                 ------------    ------------
         Total liabilities and stockholders' deficit             $    689,820    $    494,482
                                                                 ============    ============
</TABLE>

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

                                      -3-
<PAGE>
<TABLE>
<CAPTION>

                                        HYMEDIX, INC. AND SUBSIDIARY

                                   Consolidated Statements of Operations
                                                (Unaudited)


                                                      Three Months Ended              Six Months Ended
                                                            June 30,                      June 30,
                                                   --------------------------    --------------------------
                                                       2001           2000           2001           2000
                                                   -----------    -----------    -----------    -----------

REVENUES:
<S>                                                <C>            <C>            <C>            <C>
     Net product sales                             $   189,304    $   213,664    $   375,081    $   367,387
     Right, license, royalty & distribution fees       396,502            834        458,173          3,125
     Research and development contracts                 10,750         16,250         21,500         67,500
                                                   -----------    -----------    -----------    -----------
         Total revenues                                596,556        230,748        854,754        438,012
                                                   -----------    -----------    -----------    -----------

COSTS AND EXPENSES:

     Cost of sales                                      64,195         47,168        104,529         87,436
     Selling, general and administrative               237,027        239,123        447,580        509,589
     Research and development                           73,556        104,859        149,799        219,268
                                                   -----------    -----------    -----------    -----------
         Total costs and expenses                      374,778        391,150        701,908        816,293
                                                   -----------    -----------    -----------    -----------
         Income (loss) from operations                 221,778       (160,402)       152,846       (378,281)
                                                   -----------    -----------    -----------    -----------

OTHER (EXPENSE) INCOME:
     Loss on sale of assets                                  0        (12,460)             0        (12,460)
     Interest expense                                  (69,638)       (71,044)      (139,363)      (143,608)
     Other income                                       30,400        164,000         30,400        165,400
                                                   -----------    -----------    -----------    -----------
         Total other (expense) income, net             (39,238)        80,496       (108,963)         9,332
                                                   -----------    -----------    -----------    -----------
         Net income(loss)                          $   182,540    $   (79,906)   $    43,883    $  (368,949)
                                                   ===========    ===========    ===========    ===========

BASIC INCOME (LOSS) PER
 COMMON SHARE:                                     $      0.02    $     (0.02)   $      0.00    $     (0.07)
                                                   ===========    ===========    ===========    ===========

DILUTED INCOME (LOSS) PER
 COMMON SHARE:                                     $      0.02    $     (0.02)   $      0.00    $     (0.07)
                                                   ===========    ===========    ===========    ===========


WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                                6,143,781      6,143,781      6,143,781      6,143,781
                                                   ===========    ===========    ===========    ===========


DILUTED WEIGHTED AVERAGE
   COMMON SHARES OUTSTANDING                         6,143,781      6,143,781      6,143,781      6,143,781
                                                   ===========    ===========    ===========    ===========
</TABLE>

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

                                      -4-

<PAGE>
<TABLE>
<CAPTION>

                                     HYMEDIX, INC. AND SUBSIDIARY

                                 Consolidated Statements of Cash Flows
                                              (Unaudited)

                                                                                  Six Months Ended
                                                                                       June 30,
                                                                                ----------------------
                                                                                   2001         2000
                                                                                ---------    ---------
<S>                                                                             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
               Net income (loss)                                                $  43,883    $(368,949)
                                                                                ---------    ---------

               Adjustments to reconcile net income (loss) to net cash used in
                    operating activities:
                        Depreciation and amortization                               6,727       16,992
                        Loss on sale of assets                                         -        12,460

                        (Increase) decrease in:
                             Accounts receivable                                 (444,722)       7,833
                             Note receivable from related party                    20,000       34,600
                             Inventories, net                                      42,074       (7,870)
                             Receivable from net operating loss sale                   -       317,482
                             Other current assets                                  10,703        8,240

                        Increase (decrease) in:
                             Accounts payable and accrued expenses                171,455        5,293
                             Accrued legal judgement                              (45,000)    (245,000)
                             Deferred revenue                                      25,000      (31,100)
                                                                                ---------    ---------
                                 Total adjustments                               (213,763)     118,930
                                                                                ---------    ---------
                                 Net cash used in
                                  operating activities                           (169,880)    (250,019)
                                                                                ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
               Purchase of property and equipment                                      -       (31,369)
               Proceeds from sale of equipment                                         -         5,015
                                                                                ---------    ---------

                    Net cash used in investing activities                              -       (26,354)
                                                                                ---------    ---------

                    Net decrease in cash and cash equivalents                    (169,880)    (276,373)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    181,282      356,003
                                                                                ---------    ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $  11,402    $  79,630
                                                                                =========    =========
</TABLE>

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

                                       -5-
<PAGE>

                          HYMEDIX, INC. AND SUBSIDIARY

               Notes to Interim Consolidated Financial Statements


1.       INTERIM FINANCIAL STATEMENTS

               The unaudited consolidated financial statements have been
         prepared based upon financial statements of HYMEDIX, Inc. and its
         wholly owned subsidiary, HYMEDIX International, Inc. collectively ("the
         Company").

               In the opinion of management, the accompanying interim
         consolidated financial statements of the Company reflect all
         adjustments, consisting of normal recurring accruals, necessary to
         present fairly, in all material respects, the Company's financial
         position as of June 30, 2001 and December 31, 2000 and the results of
         operations and cash flows for the six months ended June 30, 2001 and
         2000. The results of operations for interim periods are not necessarily
         indicative of the results to be expected for an entire fiscal year.

2.       RIGHT, LICENSE, ROYALTY AND DISTRIBUTION FEES

               During the second quarter of 2001, for cash needed in order to
         continue the Company's operation an agreement was signed between the
         Company and the sole distributor of the Company's hydrogel in cosmetics
         and personal care products for the buy out of the marketing and
         distribution agreement signed previously (the "Buy Out Agreement").
         According to the Buy Out Agreement, the Company will no longer have
         sales related to the above-mentioned products in the future. Sales
         related to the manufacture right sold under the agreement amounted to
         $225,800 and $162,750 for six months ended June 30, 2001 and 2000,
         respectively.

               Pursuant to the agreement, the ex-distributor received a
         perpetual global and exclusive license for the manufacture and sale of
         all grades of HYPAN(R) in the cosmetics and personal care industries
         and a complete technology transfer. The Company also has to assign to
         the ex-distributor its HYPAN(R) trademarks for use in the cosmetics and
         personal care industries. In addition, the Company has to transfer all
         existing hydrogel inventories related to the agreement.

               In exchange for giving up the manufacturing rights and royalties,
         the Company shall receive $500,000 in three (3) payments, which was
         recorded in "accounts receivable" as of June 30, 2001.

3.       OTHER INCOME

               Substantially all of the other income recorded in 2001 and 2000
         related to the collection of a receivable previously written off by the
         Company in a prior year.

                                      -6-
<PAGE>

4.       INCOME (LOSS) PER SHARE

               The Company has adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share," (SFAS 128), which requires presentation
in the consolidated statements of operations of both basic and diluted earnings
per share. The computation of both basic and diluted earnings per share were as
follows:
<TABLE>
<CAPTION>

                                                     Three Months Ended             Six Months Ended
                                                           June 30,                     June 30,
                                                  -------------------------    --------------------------
                                                      2001          2000           2001           2000
                                                  -----------   -----------    -----------    -----------
<S>                                               <C>           <C>            <C>            <C>
Numerator:
     Net income (loss) less preferred dividends
       of $34,193 for the three month periods
       and $68,386 for the six month periods
       ended June 30, 2001 and
       June 30, 2000 respectively                 $   148,347   $  (114,099)   $   (24,503)   $  (437,335)
                                                  -----------   -----------    -----------    -----------

Denominator:
     Weighted average common
       shares outstanding                           6,143,781     6,143,781      6,143,781      6,143,781
                                                  -----------   -----------    -----------    -----------
BASIC INCOME (LOSS) PER
  COMMON SHARE                                    $      0.02   $     (0.02)   $      0.00    $     (0.07)
                                                  ===========   ===========    ===========    ===========


Numerator:
     Net income (loss) less preferred dividends
       of $34,193 for the three month periods
       and $68,386 for the six month periods
       ended June 30, 2001 and
       June 30, 2000 respectively                 $   148,347   $  (114,099)   $   (24,503)   $  (437,335)
                                                  -----------   -----------    -----------    -----------

     Interest on Convertible Bonds for the
       period (A)                                         (A)           (A)            (A)            (A)
                                                  -----------   -----------    -----------    -----------

              Subtotal                            $   148,347   $  (114,099)   $   (24,503)   $  (437,335)
                                                  -----------   -----------    -----------    -----------

Denominator:
     Weighted average common
       shares outstanding                           6,143,781     6,143,781      6,143,781      6,143,781
                                                  -----------   -----------    -----------    -----------

     Common shares that would be issued
       in exchange for the Convertible Bonds
       assuming conversion at the beginning
       of the period                                      (A)           (A)            (A)            (A)
                                                  -----------   -----------    -----------    -----------

              Subtotal                              6,143,781     6,143,781      6,143,781      6,143,781
                                                  -----------   -----------    -----------    -----------

DILUTED INCOME (LOSS) PER
  COMMON SHARE                                    $      0.02   $     (0.02)   $      0.00    $     (0.07)
                                                  ===========   ===========    ===========    ===========
</TABLE>

(A) None of the common shares issuable under the Company's stock option plan of
159,784 outstanding share or common shares issuable upon conversion of the
preferred stock and convertible bonds were included in the above earnings per
share calculations because their inclusion would be anti-dilutive for both the
three and six months ended June 30, 2001 and June 30, 2000.

                                      -7-
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

               This report contains forward-looking statements within the
         meaning of Section 27A of the Securities Act of 1933 and Section 21E of
         the Securities Exchange Act of 1934. Actual results could differ
         materially from those projected in the forward-looking statements as a
         result of the risk factors set forth below. The industry in which the
         Company competes is characterized by rapid changes in technology and
         frequent new product introductions. The Company believes that its
         long-term growth depends largely on its ability to continue to enhance
         existing products and to introduce new products and technologies that
         meet the continually changing requirements of customers. While the
         Company has devoted significant resources to the development of new
         products and technologies, there can be no assurance that it can
         continue to introduce new products and technologies on a timely basis
         or that certain of its products and technologies will not be rendered
         noncompetitive or obsolete by its competitors.


         Overview

         HYMEDIX, Inc. ("HYMEDIX") was incorporated in Delaware on December 20,
1993 as a wholly-owned subsidiary of Servtex International Inc. (the
"Predecessor"). On February 23, 1994, the Predecessor merged with and into
HYMEDIX, Inc. and, concurrently, a wholly-owned subsidiary of the Predecessor
was merged with and into HYMEDIX International, Inc. ("HYMEDIX International")
which resulted in HYMEDIX International becoming a wholly-owned subsidiary of
HYMEDIX. As used in this Form 10-QSB, unless the context otherwise requires, the
term "Company" collectively means HYMEDIX, HYMEDIX International and their
respective predecessors.


Results of Operations

         Revenues

         The Company's total revenues for the three months and six months ended
June 30, 2001 were $596,556 and $854,754, respectively, versus $230,748 and
$438,012 for the same periods in 2000; an increase of 158.5% and 95.1%,
respectively. The revenue decrease in net product sales resulted from a $32,950
decrease in BIONIQ export sales and a $542 decrease in BIONIQ domestic sales,
offset by a $9,132 increase in net sales of hydrogels during the three months
ended June 30, 2001 compared to the same period of 2000. The increase in net
product sales of $7,694 for the six months ended June 30, 2001 compared to the
same period of the previous year was due to an increase of $22,147 in sales of
hydrogels (primarily occurring in the last three months of the period due to the
inventories transfer pursuant to the Buy Out Agreement), offset by a
$13,340 decrease in BIONIQ export sales, and a $1,113 decrease in domestic sales
of BIONIQ products.

         Right, license, royalty and distributions fees increased $395,668 and
$455,048, respectively for the three months and six months ended June 30, 2001,
compared to the prior year period. The increase was primarily resulted from the
buy out agreement the Company signed with the ex-distributor mentioned earlier.
Revenue from research and development contracts decreased $5,500 and $46,000,
respectively for the three months and six months ended June 30, 2001, from the
same period of 2000.

         Costs and Expenses

         Cost of sales for the three months and six months ended June 30, 2001
were $64,195 and $104,529, respectively, versus $47,168 and $87,436 for the same
periods in 2000, an increase of 36.1% and 19.5%, respectively. The increase for
the three and six months ended June 30, 2001 was resulted mainly from the lower
sales price of hydrogels which was transferred to the ex-distributor per the Buy
Out Agreement. Selling, general and administrative expenses

                                      -8-
<PAGE>

decreased 0.9% and 12.2% to $237,027 and $447,580 respectively, for the three
months and six months ended June 30, 2001 from the same period of 2000. The
decrease was principally due to lower employee related expenses. The research
and development costs for the three months and six months ended June 30, 2001
were $73,556 and $149,799, respectively, as compared to $104,859 and $219,268
for the same periods in 2000, a decrease of 29.9% and 31.7%, respectively,
resulting from decreased costs of the research and development staff.

         Other (Expense) Income

         Total other (expense) income, for the three months and six months ended
June 30, 2001 was an expense of $39,238 and $108,963, respectively, versus an
income of $80,496 and $9,332 for the same periods in 2000, decrease of $119,734
and $118,295, respectively. The decrease in other income for the three months
ended June 30, 2001 was mainly attributable to a decrease of $133,600 collection
of a receivable previously written off by the Company in a prior year, offset by
a loss of $12,460 on sales of equipment occurred in 2000 and a $1,406 decrease
in interest expense from the previous year, which primarily resulted from the
payment of legal judgment and settlement whereas the decrease for the six months
ended June 30, 2001 from the same period of the prior year was attributable to a
decrease of $135,000 collection of a receivable mentioned above, offset by a
loss of $12,460 on sales of equipment in 2000 mentioned above and a $4,245
decrease in interest expense.

         As a result of the increased revenues and decreased expenses and other
income described above for the three months ended June 30, 2001 as compared to
the same period of the prior year, the Company recorded an income of $182,540
for the three months ended June 30, 2001, versus a net loss of $80,496 for the
same period of 2000. As a result of the increased revenues described above,
decreased costs and expenses and decreased other income for the six months ended
June 30, 2001 as compared to the same period of the prior year, the Company
recorded a net income of $43,883 for the six months ended June 30, 2001 as
compared to the net loss of $368,949 for the same period in 2000.


Liquidity, Capital Resources and Changes in Financial Condition

         The Company had $11,402 in cash and cash equivalents on hand on June
30, 2001 versus $181,282 on December 31, 2000. The working capital deficit of
$(8,343,847) on June 30, 2001 represents a decrease of $5,610 from the previous
year-end deficit level of $(8,349,457). The decrease in working capital deficit
was primarily attributable to the net income recorded in the six-month period
ended June 30, 2001.

         The Company's two term loans, advanced to the Company by licensees
pursuant to license agreements, in the principal amounts of $1,500,000 and
$900,000, respectively, each have been classified as current liabilities as they
are in technical default as a result of certain interest payments that have not
been made.

         During the first quarter of 1996, the Company issued a convertible bond
in the principal amount of $150,000 (the "September Bond") pursuant to a
Convertible Bond Purchase Agreement effective March 5, 1996, by and among the
Company, HYMEDIX International and Su Chen Huang. The September Bond bears
interest at a rate of 7% per annum and matured (after being extended) on March
31, 1998. The Company is currently in default and there is no change in the
status of the bond. The September Bond is convertible in whole at any time prior
to payment or prepayment into one hundred fifty thousand (150,000) shares of
common stock of the Company. Interest on the September Bond is payable at
maturity or upon prepayment or conversion thereof.

         In April of 1996, the Company issued convertible bonds in the aggregate
principal amount of approximately $981,000 (the "June Bonds") pursuant to a
Convertible Bond Purchase Agreement effective February 27, 1996, by and among
the Company, HYMEDIX International, First Taiwan Investment and Development,
Inc. and the Purchasers (as defined therein). The June Bonds bear interest at a
rate of 7% per annum and matured (after being extended) on March 31, 1998. The
Company is currently in default and there is no change in the status of the

                                      -9-
<PAGE>

bonds. The June Bonds are convertible in whole or in part at any time prior to
payment or prepayment into one thousand (1,000) shares of common stock for the
Company for each one thousand dollars ($1,000) of principal amount outstanding.
Interest on the June Bonds is payable at maturity or upon prepayment or
conversion thereof.

         Both the June Bonds and the September Bond are structured in such a way
as to permit the Company, subject to certain terms and conditions, including
approval of the Bondholders (as thereinafter defined), to make withdrawals from
a special account (the "Special Account") up to the principal amount of the
bonds on a periodic basis and to require the Company to reduce the amount
withdrawn with respect to the Special Account by making payments into the
Special Account. As of June 30, 2001, the Company had made various withdrawals
from and repayments to the Special Account.

         Pursuant to a Security Agreement dated as of August 8, 1996, by and
among the Company and the Bondholder Representative (as defined therein), in
order to induce the Purchasers and Su Chen Huang (collectively, the
"Bondholders") to approve future withdrawals by the Company from the special
account, the Company granted to the Bondholder Representative, for the ratable
benefit of the Bondholders, a security interest in all of the Company's assets
and properties.

         In June of 1997, the Company received a payment of a $100,000
refundable deposit from a potential distributor with whom the Company has
reached an agreement in principle regarding certain aspects of the Company's
consumer skin care business. The Company has agreed to grant the distributor an
option to negotiate an agreement with the Company with respect to the Company's
skin care product in certain territories or to match the terms of any such
agreement that the Company may negotiate with a third party, on a right-of-first
refusal basis. The $100,000 deposit would be refundable to the distributor in
the event any such third party agreement is consummated or creditable against
amounts payable under any definitive agreement between the Company and this
distributor. This option is subject to negotiation and execution of a definitive
agreement regarding this matter.

         A judgement in the amount of $367,500 has been rendered against the
Company. In July 1999, the Company reached an agreement to make monthly
installments over the next four years. As of June 30, 2001, $200,000 was paid.
Financing the judgement as well as the Company's operations will be difficult.
Management is not certain that the Company will have adequate resources to
finance its operations for the remainder of 2001. In the event that cash flow
from operations and the anticipated proceeds from the financing, if any, are not
sufficient to fund the Company's operations and obligations in 2001, there is no
assurance that other sources of funds will be available to the Company.

Risk Factors and Cautionary Statements

         When used in this Form 10-QSB and in future filings by the Company with
the Securities and Exchange Commission, the Company's press releases and in oral
statements made with the approval of an authorized executive officer, the words
or phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project", or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain

                                      -10-
<PAGE>

risks and uncertainties, including those discussed under this caption "Risk
Factors and Cautionary Statements," that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made, and
wishes to advise readers that the factors listed below could cause the Company's
actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements.

         The Company will NOT undertake and specifically declines any obligation
to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

         o   The Company had a net working deficit at June 30, 2001 of
$(8,343,847). The Company has experienced ongoing losses from operations. The
Company has a limited cash balance and is in technical default on it's loans.
There can be no assurance that the Company's revenues will grow sufficiently to
fund its operations and achieve profitability. In the event that cash flow from
operations and the anticipated proceeds from a financing, if any, are not
sufficient to fund the Company's operations for the remainder of 2001, there can
be no assurance that other sources of funds will be available to the Company.

         o   The Company's revenues and income are derived primarily from the
development and commercialization of medical and skin care products. The medical
and skin care products industry is highly competitive. Such competition could
negatively impact the Company's market share and therefore reduce the Company's
revenues and income. Competition may also result in a reduction of average unit
prices paid for the Company's products. This, in turn, could reduce the
percentage of profit margin available to the Company for its product sales.

         o   The Company's future operating results are dependent on its ability
to develop, produce and market new and innovative products and technologies, and
to successfully enter into favorable licensing and distribution relationships.
There are numerous risks inherent in this complex process, including rapid
technological change and the requirement that the Company develop procedures to
bring to market in a timely fashion new products and services that meet
customers' needs. There can be no assurance that the Company will be able to
successfully develop and commercialize any new products or technologies.

                                      -11-
<PAGE>

         o   Historically, the Company's operating results have varied from
fiscal period to fiscal period; accordingly, the Company's financial results in
any particular fiscal period are not necessarily indicative of results for
future periods.

         o   The Company may offer a broad variety of products and technologies
to customers around the world. Changes in the mix of products and technologies
comprising revenues could cause actual operating results to vary from those
expected.

         o   The Company's success is partly dependent on its ability to
successfully predict and adjust production capacity to meet demand, which is
partly dependent upon the ability of external suppliers to deliver components
and materials at reasonable prices and in a timely manner; capacity or supply
constraints, as well as purchase commitments, could adversely affect future
operating results.

         o   The Company offers its products and technologies directly and
through indirect distribution channels. Changes in the financial condition of,
or the Company's relationship with, distributors, licensees and other indirect
channel partners, could cause actual operating results to vary from those
expected.

         o   The Company does business and continues to seek to develop business
on a worldwide basis. Global and/or regional economic factors and potential
changes in laws and regulations affecting the Company's business, including
without limitation, currency exchange rate fluctuations, changes in monetary
policy and tariffs, and federal, state and international laws regulating its
products, could impact the Company's financial condition or future results of
operations.

         o   The market price of the Company's securities could be subject to
fluctuations in response to quarter to quarter variations in operating results,
market conditions in the medical and skin care products industry, as well as
general economic conditions and other factors external to the Company.

                                      -12-
<PAGE>

PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.

                  The information regarding the default of certain senior
                  securities of the Company is stated in Item 2. Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations -- Liquidity and Capital Resources and is
                  incorporated herein by reference.


Item 6.  Exhibits and Reports on Form 8-K.

         (a)   Exhibits.
               --------

               None

         (b)   Reports on Form 8-K.
               -------------------

               None

                                      -13-
<PAGE>

                                   SIGNATURES


         In accordance with the requirements 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.


                                        HYMEDIX, INC.
                                        (Registrant)



Date:  August 14, 2001                  By: /s/ GEORGE P. STOY
                                            ------------------------------------
                                            George P. Stoy
                                            Acting President (Acting Principal
                                             Executive Officer)





Date:  August 14, 2001                  By: /s/ WILLIAM G. GRIDLEY, JR.
                                            ------------------------------------
                                            William G. Gridley, jr.
                                            Chairman, Chief Financial Officer,
                                             (Secretary, Treasurer, Principal
                                             Financial Officer and Principal
                                             Accounting Officer), Director

                                      -14-