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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-KSB
(Mark One)
              |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2000

              |_| 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 : 1-11765

                                   MEDJET INC.
                 ( Name of Small Business Issuer in its Charter)


           Delaware                                      22-3283541
 (State or of Incorporation or              (I.R.S. Employer Identification No.)
Organization Other Jurisdiction)

                     1090 King Georges Post Road, Suite 301
                            Edison, New Jersey 08837
                    (Address of principal executive offices)

         Issuer's telephone number, including area code: (732) 738-3990

          Securities registered pursuant to Section 12(b) of the Act:
                                      None
           Securities registered pursuant to Section 12(g) of the Act:
               Units, each consisting of one share of Common Stock
                             and one Class A Warrant
                     Common Stock, par value $.001 per share
                                Class A Warrants

     Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [X].

     Issuer's revenues for the fiscal year ended December 31, 2000 were
     $525,000.

     The aggregate market value of the voting stock held by non-affiliates of
     the Issuer as of March 16, 2001 was approximately $1,564,256.

     As of December 31, 2000, 3,935,220 shares of the Issuer's Common Stock, par
     value $0.001 per share, were outstanding. Transitional Small Business
     Disclosure Format (check one): Yes___ No _X_ .


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                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
PART I
ITEM I. DESCRIPTION OF BUSINESS ...........................................  1
     Overview .............................................................  1
     Applications of Company Technology ...................................  2
           Ophthalmology ..................................................  2
           Dental .........................................................  3
     Research and Development .............................................  4
     Patents ..............................................................  4
     Regulation ...........................................................  4
           FDA Regulation .................................................  4
           Other U.S. Government Regulation ...............................  5
           Foreign Government Regulation ..................................  6
     Competition ..........................................................  6
     Employees ............................................................  7
ITEM 2. DESCRIPTION OF PROPERTY ...........................................  7
ITEM 3. LEGAL PROCEEDINGS .................................................  7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...............  8

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND
   RELATED STOCKHOLDER MATTERS ............................................  8
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
   OR PLAN OF OPERATION ...................................................  8
ITEM 7. FINANCIAL STATEMENTS .............................................. 17
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
   ON ACCOUNTING AND FINANCIAL DISCLOSURE ................................. 31

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
   PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
   EXCHANGE ACT ........................................................... 31
ITEM 10. EXECUTIVE COMPENSATION ........................................... 33
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
   BENEFICIAL OWNERS AND MANAGEMENT ....................................... 35
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................... 36
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K ................................. 36


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This report contains forward-looking statements within the meaning of the
federal securities laws. These include statements about the Company's
expectations, beliefs, intentions or strategies for the future, which and
indicated by words or phrases such as "believes", "anticipates," "expects,"
"intends," "plans," "will," "estimates"," and similar words. These
forward-looking statements are based on the Company's current expectations and
are subject to certain risks, uncertainties and assumptions, including those set
forth in the discussion under "Description of Business" and "Management's
Discussion and Analysis or Plan of Operation." The Company's actual results may
differ materially from results anticipated in these forward-looking statements.
These forward-looking statements are based on information currently available to
the Company, and we assume no obligation to update them.

                                     PART I

ITEM I. DESCRIPTION OF BUSINESS.

Overview

Medjet Inc. (the "Company") is engaged in research and development of medical
technology. The Company expects to introduce its first product during the year
2001. The plan for the Company has been to develop products based on its
platform technology and then to license these until its income is adequate to
support manufacturing and marketing activities on new products. The initial
emphasis has been on ophthalmic surgical technology and equipment. The Company
has developed a proprietary patented technology platform and derivative devices
for vision-correction surgery of the cornea. The technology is based on
small-diameter, liquid microjets moving at various speeds above supersonic,
depending on the specific application. For cutting, the beam is scanned across
the tissue to be cut. In each application, the scanned microjet beam substitutes
for lasers or conventional metal, sapphire or diamond oscillating blades.

The Company has been in the development stage and has not sold any products. To
date, the Company's research and development activities on vision correction
have been limited to constructing and testing experimental versions of
microkeratomes for eye surgery and conducting a limited number of feasibility
studies, using enucleated porcine, rabbit and human cadaver eyes and live
rabbits eyes to prove that the beam of water can smoothly incise and shape the
anterior surface of the cornea and that the cornea will heal properly after the
surgery. Human blind eye trials are anticipated to begin in the third quarter of
2001. Assuming success in these trials, the Company plans to introduce a
microkeratome product in 2002.

In July 1998, the Company entered into an agreement with Nestle S.A. ("Nestle")
pursuant to which the Company granted Nestle and its wholly owned subsidiary,
Alcon Laboratories, Inc. ("Alcon"), an exclusive, worldwide license for the use
of the Company's proprietary microjet technology for corneal refractive surgery.
The agreement was terminable on three months' notice and, on December 13, 1999,
the Company received notice of Alcon's termination of the agreement. Alcon
offered no reason for the termination. In July 2000, the Company and Alcon
settled differences relating to the termination conditions and Alcon paid Medjet
$350,000 and forgave a loan to Medjet of $175,000.

The Company has assessed its plans for ophthalmologic applications for its
microjet technology in light of the termination of the Alcon agreement. The
Company currently intends to undertake the manufacture and marketing of its
microjet products but it continues to have discussions with several potential
strategic partners and is investigating joint ventures for larger-scale
manufacturing, marketing and distribution. These discussions are in the early
stages, and no formal understanding or agreement has been reached with any
potential strategic partner. The Company has been awarded a patent on the use of
treatment of dental caries and a second patent is pending. Initial feasibility
tests have been promising and the Company believes this


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development program may yield a product with significant market potential. See
"Management's Discussion and Analysis or Plan of Operation."

The Company was incorporated under the laws of the State of Delaware on December
16, 1993. Its offices are located at 1090 King Georges Post Road, Suite 301,
Edison, New Jersey 08837;and its telephone number is (732) 738-3990.

Applications of Company Technology

The Company believes that the microjet used for tissue separation or shaping
produces less tissue trauma and is potentially more accurate than blades or
lasers. The Company also believes that such microjets will bring new surgical
capability and performance to the clinic or operating room and may become the
standard of care for the treatment of several diseases and conditions. The
Company's current focus has been on applications in ophthalmology but believes
that its proprietary microjet technology has additional surgical applications.
Although only limited studies of such other applications have been carried out
to date, specific applications currently being investigated include
ophthalmology and dentistry. The Company intends to develop additional product
applications, provided adequate funds become available.

Ophthalmology

The cornea is the clear window that, in addition to allowing light into the eye
for the purpose of vision, provides most of the focusing power of the vision
system of the eye. The anterior surface of the cornea is covered with a thin
layer called the epithelium. The epithelium is covered with a liquid tear film.
Medjet's ophthalmic products relate to surgery of the cornea.

First Potential Product; Removal of Epithelium. The Company has demonstrated
that its technology can be used to quickly and cleanly remove the epithelium, a
procedure called hydro-epithelial keratoplasty ("HEK"). HEK may be used to treat
diseases of the epithelium or damage to the epithelium that sometimes occurs.
Epithelial removal is often the first step in surgery of the cornea, and is the
first step in the laser vision correction or refractive surgery technique known
as photo-refractive keratectomy ("PRK"). This procedure has been largely
supplanted. The Company decided to postpone indefinitely the introduction of
this product because of the limited market. (See "Management's Discussion and
Analysis or Plan of Operation - General - The Past Year")

Second Potential Product; The Microjet Microkeratome. The Company's
microjet-based microkeratome is known as the HydroBlade(TM) Keratome. The
microjet microkeratome may be used to create a uniform thickness, hinged flap of
corneal tissue as the first step in the currently popular modification of the
PRK technique known as the Laser Ablation System for In-situ Keratomileusis
("LASIK"). At present, the hinged flap is made by a blade-based microkeratome,
which is generally recognized as somewhat unsafe, sometimes producing a poorly
shaped flap and is difficult to learn to use. In contrast, the HydroBlade(TM)
Keratome produces uniform, hinged flaps of precisely specified thickness. The
cut surface viewed at high-resolution shows far less damage than the cut
produced by blade devices.

Third Potential Product; Refractive Correction. A subsequent, and potentially
more commercially valuable use of the HydroBlade(TM) Keratome, is for vision
correction through refractive surgery. The procedure is known as Hydro Lamellar
Keratoplasty ("HLK"). In this procedure, the device shapes the cornea and
replaces the laser altogether. Subsequent to the permitted marketing of the
HydroBlade(TM) Keratome for making hinged flaps, the Company intends to seek FDA
clearance to advertise and market the device for HLK. Upon clearance or other
marketing approval by the FDA of the HydroBlade(TM) Keratome for HLK, the
Company intends to market the product to individual or affiliated groups of
ophthalmologists for treatment of patients in a clinical setting. The Company
expects to generate revenues by selling the basic system and disposables.


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Technical Background.

Vision disorders are currently treated primarily by eyeglasses, contact lenses
or surgery, all of which compensate for the existing vision error. Among the
surgical techniques available to treat vision disorders are radial keratotomy
("RK"), PRK/LASIK and Refractive Lamellar Keratoplasty ("RLK"). In RK, PRK/LASIK
and RLK, the object of the surgery is to change the shape of the anterior
corneal surface and to eliminate or reduce refractive error. An additional
objective is to minimize lens aberrations to improve visual acuity. This is not
possible with eyeware. PRK and LASIK are by far the dominant procedures.

In PRK or LASIK, pulsed energy from a type of ultraviolet laser, known as an
"excimer laser," is used to correct various types of refractive disorders by
photoablating corneal tissue and changing the curvature of the anterior corneal
surface. The excimer laser emits ultraviolet light in very short, high energy
pulses and thermally vaporizes part of the corneal surface according to a
prescribed pattern.

In the LASIK technique, a hinged corneal flap is cut by a microkeratome and
pulled back. Photoablation is then performed directly on the exposed stromal
surface to change its curvature. In LASIK, the hinged flap is reset as closely
as possible to its original position, where it weakly adheres to the underlying
stroma. The adherence increases over a period of many months. Cutting errors in
making the flap, occurring in a substantial fraction of the procedures, are a
significant disadvantage of LASIK. PRK and LASIK produce a similar distribution
of corrections relative to objective, typically leaving the eye within +/- 1
diopter of optimum, The corrections generally are not stable and may regress
unpredictably up to 1 diopter. This leaves the patient able to function without
eyeglasses or contact lenses but not with the best possible vision and not under
all conditions. Nighttime vision is often degraded. Visual acuity is sometimes
degraded. See "Competition." LASIK has become the preferred procedure. The
accuracy is comparable for both procedures.

Medjet's Technology for Ophthalmology. A scanned circular microjet beam is used
for separating thin, uniform thickness or shaped layers from the cornea in a
procedure known as lamellar keratoplasty or keratomileusis. The procedure may be
used to produce a hinged flap as the first step in a laser shaping procedure.
The procedure with the new microjet microkeratome also may be used to correct
vision deficiencies such as nearsightedness ("myopia"), farsightedness
("hyperopia") or astigmatism. This procedure combines the hinged flap and laser
shaping technique into a one-step procedure without the laser.

Dental

Fourth Potential Product. Based on the Company's product-development criteria,
the next area identified for development is treatment of dental caries. The
dental caries is a progressive, infected and decayed portion of a tooth. A break
in the enamel allows the dentin making up the hard portion of the tooth to be
infected. Unchecked, the decayed region enlarges, potentially leading to nerve
involvement, pain, temperature sensitivity, and ultimately loss of the
structural integrity of the tooth. The standard treatment for dental caries is
to remove all of the decayed, infected portion within the dentin and to fill the
resulting cavity. The removal process involves drilling out the affected area of
the tooth until only sound dentin remains. More recently, dental lasers have
come into use for removing the caries. Not all regions of the tooth are readily
accessed by the drill or laser.

Based on its limited experiments to date, the Company has observed that by
directing a coherent microjet of the appropriate operating parameters into the
tooth, small entry holes can be drilled through the enamel and dentin to gain
access to the caries, which can be removed without damage to the surrounding
sound dentin. The Company has observed that the microjet penetrates the caries
and washes it out. Although it has not yet been confirmed on live patients, the
Company believes that the treatment, if perfected, may require no anesthesia in
many circumstances and that the associated time and cost saving and the
perceived advantages of the microjet technique over traditional treatments are
potentially significant. An important feature is that the volume of dentin
removed is greatly reduced compared to drilling, limiting the potential for
nerve involvement. Hence, the capability may be called `microdentistry'.


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A preliminary associated handpiece and pump have been developed and constructed.
Based on its own internal market study, the Company believes that a significant
market potentially exists for this procedure and product.

Research and Development

Through December 31, 2000, the Company has spent approximately $10,200,000 in
its efforts to make products based on microjet technology commercially
available. Such expenditures include research and development costs and expenses
related to the HydroBrush(TM) Keratome and the HydroBlade(TM) Keratome. Research
and development activities have consisted of establishing the microjet
technology platform, and developing, designing and constructing experimental
versions of the Company's keratomes. Since July 1994, the Company has conducted
feasibility studies on over 4000 porcine and rabbit corneas, many dozens of
human cadaver eyes and dozens of live rabbits. The purpose of the feasibility
studies was to determine if the microjet beam could smoothly incise and shape
the anterior surface of the cornea, without erosion and roughening when only
cutting is required, and to determine if the incised eye would heal. A second
major objective has been to establish that HLK produces a full range of
refractive corrections. The Company is highly satisfied with the results of the
studies.

Patents

The Company has sought to protect its proprietary interest in the HLK
microkeratome by applying for patents in the United States and corresponding
patents abroad. The Company currently holds eleven issued patents of which seven
are distinct inventions. It also has 31 pending patents. The Company holds a
U.S. patent that covers a method and device for use of the HLK microkeratome,
including use of a template for corneal shaping and holding, during use of a
microjet microkeratome device. Although there can be no assurance, the Company
believes that this is a blocking patent on the use of waterjets for
keratomileusis procedures for refractive surgery. Corresponding international
applications have been filed, pursuant to the Patent Cooperation Treaty ("PCT"),
with designation of all member countries foreign to the United States, including
but not limited to Japan, the members of the European Patent Office, Canada,
Mexico, Australia, Russia, China and Brazil. The PCT filing was published on
October 16, 1996 and separate patent applications have been filed pursuant to
the PCT filing. Some have issued. In addition, for countries not currently part
of the PCT, patent applications have also been filed in Israel, Taiwan and South
Africa.

The Company holds a second that U.S. patent relates to topographic corneal
mapping, which has utility for surgery utilizing the HLK microkeratome. The
Company has filed other patent applications application for the HydroBrush(TM)
Keratome for HEK use has issued and for the treatment of dental caries with a
waterjet. Other patent applications are in various stages of preparation. There
is no assurance, however, that any additional patents will issue or that any
issued patents will afford significant protection from competition.

To the Company's knowledge, no other patents issued to others in this field will
hinder the Company. See "Legal Proceedings," for a discussion of a pending legal
challenge to the Company's patent position.

Regulation

FDA Regulation

The components of the Company's HLK microkeratome are medical devices.
Accordingly, the Company is subject to the relevant provisions and regulations
of the Federal Food, Drug, and Cosmetic Act (the "FD&C Act"), under which the
FDA regulates the manufacturing, labeling, distribution, and promotion of
medical devices in the United States. The FD&C Act provides that, unless
exempted by regulation, medical devices may not be commercially distributed in
the United States unless they have been approved or cleared by the FDA for
marketing. There are two review procedures by which medical devices can receive
such approval or clearance. Some products may qualify for clearance under a
510(k) notification. Pursuant to that procedure, the


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manufacturer submits to the FDA a pre-market notification that it intends to
begin marketing its product. The notification must demonstrate 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, and does not
raise different questions of safety and effectiveness than does, a legally
marketed device).

A successful 510(k) notification results in the issuance of a letter from the
FDA in which the FDA acknowledges the substantial equivalence of the reviewed
device to a legally marketed device and clears the reviewed device for marketing
to the public. The Company has received successful 510(k) notification with
respect to its device to carry out HEK procedures. Under FDA regulations, the
FDA has a 90-day period to respond to a 510(k) notification, although such
response has been known to take longer.

Under current FDA regulations, a microkeratome is defined as a device for
shaving thin layers from the cornea and is classified as a Class I device, for
which the simplest and quickest clearance process is available. Based on a
recommendation from the FDA, the Company intends to file a 510(k) notification
in 2001 in which it will seek to demonstrate that the hinged flap microkeratome
is substantially equivalent to currently available microkeratomes having metal
or diamond scalpels used for two types of lamellar keratoplasty. The Company
will seek to demonstrate that, for the purpose of making lamellar, or
substantially lamellar, corneal incisions, the microjet scalpel and template
included in the hinged flap microkeratome are substantially similar to a
microkeratome with a metal or diamond scalpel.

The FDA has recommended to the Company that it seek permission to market the HLK
microkeratome through a Section 510(k) notification together with ease-of-use
data resulting from a small clinical trial. An investigational device exemption
(IDE) will not be required. It is the Company's intention to file a notification
with the FDA at the beginning of the second half of 2001 relating to use of the
HLK microkeratome. Although there can be no assurance that this will prove to be
the case, permission granted for the 510(k) notification should enable the
commencement of marketing efforts shortly thereafter.

The Company believes that, based on two features of the HLK microkeratome, it
may also be considered for 510(k) notification by the FDA. First, based on the
preliminary experimentation conducted with microjet microkeratomes, there are no
known or anticipated physical or chemical processes that would impact on the
safety of the HLK procedure. The microjet microkeratome cuts by mechanisms
similar to that of conventional scalpels (although at speeds more than 10 times
greater), except that the Company believes that HLK would not produce certain
undesirable side effects incident to other refractive surgery procedures. The
Company believes that the FDA approval process for the HLK microkeratome should
be shorter and entail fewer clinical studies in comparison to other previously
permitted products, but there can be no assurance that this will be the case.

The second feature of the HLK microkeratome is the benign nature of the microjet
cut. While a conventional scalpel tears the lamellae (layers of the stroma) and
PRK completely or partially destroys the surface lamellae, the microjet beam has
a unique cutting action which separates the various lamellae prior to cutting
the targeted tissue, thereby preserving the integrity of the remaining lamellae
and both localizing and minimizing the damage to the lamellae generally. The
healing process following a microjet cut is expected to be less traumatic than
that following a conventional scalpel cut or a PRK cut, as observed in rabbits,
although the improved healing process has not yet been demonstrated in human
eyes.

Other U.S. Government Regulation

In addition to laws and regulations enforced by the FDA, the Company's products
may also be subject to labeling laws and regulations enforced by the Federal
Trade Commission.


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Foreign Government Regulation

Sales of medical devices outside the United States are subject to foreign
regulatory requirements that vary widely from country to country. The time
required to obtain approvals required by foreign countries may be longer or
shorter than that required for FDA approval, and requirements for licensing may
differ from FDA requirements. Export sales of investigational devices that have
not received FDA marketing clearance generally are subject to FDA export permit
requirements. Material failure to comply with any applicable regulatory
requirements could have a material adverse effect on the Company.

The Company may distribute its products internationally. Distribution of the
Company's products in countries other than the United States may be subject to
regulation in those countries. In some countries, the regulations governing such
distribution are less burdensome than in the United States and the Company may
pursue marketing its products in such countries prior to receiving permission to
market from the FDA. The Company will endeavor to obtain the necessary
government approvals in those foreign countries where it decides to manufacture,
market and sell its products.

Competition

If permitted or otherwise approved by the FDA and other regulatory authorities,
HLK, using the Company's HydroBlade(TM) Keratome, will compete with other
corrective means for refractive problems, including eyeglasses, contact lenses,
other refractive surgery procedures (such as RK, PRK, LASIK and ALK), and other
technologies under development, such as refractive intraocular lenses (lenses
which are inserted into the eye behind the cornea), intrastromal lenses (lenses
which are inserted into the stroma), corneal rings (transparent circles of
acrylic which are inserted within the cornea outside the vision zone in order to
correct the curvature of the corneal surface) and injection of hydrogel
materials into layers of corneal tissue to change the curvature of the cornea.

Other companies are engaged in refractive surgery research. Many of these
companies have substantially greater financial, technical and human resources
than the Company and may be better equipped to develop, manufacture and market
their technologies. In addition, many of these companies have extensive
experience in preclinical testing and human clinical studies. Certain of these
companies may develop and introduce products or processes competitive with or
superior to those of the Company.

Furthermore, with respect to any other products the Company may, in the future,
be permitted to commercially sell, it will also be competing with respect to
manufacturing efficiency and marketing capabilities, areas in which the Company
has no experience.

The Company's competition will be determined in part by those refractive surgery
technologies that are ultimately approved for sale by regulatory authorities.
The relative speed at which the Company is able to develop the HLK
microkeratome, complete the necessary governmental and regulatory approval
processes, and manufacture and market commercial quantities thereof will be
important competitive factors. The Company is aware of ongoing research at
certain companies and institutions into a variety of procedures for corneal
adjustment, as noted above, and refractive surgery, including the microjet
technology patented by Medjet. The microjet technology is under development by
Visijet Inc. It is possible that other companies will bring products to market
prior to such time, if ever, that the Company is able to economically market
commercial quantities of products.

Although the HLK microkeratome is still in development and has neither been
tested on live human eyes nor received the regulatory approval necessary for
sale, the Company believes that it has the potential to effectively compete with
other refractive surgical techniques because of its relative simplicity, safety,
efficacy and reduced risk of significant pain. In addition, HLK is expected to
be less costly than PRK/LASIK, because of the high costs of the laser equipment
and laser facility necessary for PRK/LASIK, and to be competitively priced with,
or less costly than, other refractive surgery procedures.


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Employees

As of December 31, 2000, the Company had six full-time employees and one
part-time employee, the majority of whom were engaged in research and
development activities. As of such date, the Company also had consulting
arrangements with two medical consultants, one marketing consultant, one
strategic planning consultant, one FDA consultant, and a business development
consultant. None of the Company's employees are represented by a union. The
Company believes that its relations with its employees are satisfactory.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company leases approximately 4,982 square feet of research and development
and office space in Edison, New Jersey. The base rent under this lease, which
will expire December 31, 2004, is $75,380 per year.

The Company believes the space currently available to it will be sufficient to
meet the Company's requirements for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

New Jersey Institute of Technology

The history of the litigation with New Jersey Institute of Technology ("NJIT")
has been described in previous annual reports.

During October 1998, the lawsuit brought in U.S. District Court by NJIT was
dismissed on jurisdictional grounds. Without appealing the first dismissal, on
April 26, 1999, NJIT commenced a second action in U.S. District Court. NJIT
alleged that the defendants failed to name a NJIT professor and/or a NJIT
research associate as co-inventors of the Company's patent on the Lamellar
surgical device and procedure and breached fiduciary duties and contractual
obligations owed to NJIT. As in the first federal court action, NJIT sought
monetary damages, an order directing that this patent, related foreign patents
and patent applications be assigned and transferred to NJIT, a declaratory
judgment that all of the claims of the Company's Patent are invalid and
unenforceable against NJIT and an order amending the named inventors of the
Company's Patent to include the NJIT professor and/or the NJIT research
associate. On June 30, 2000, the motion filed by the Company to dismiss the
action against the Company, Dr. Gordon and the former employee of the Company
was granted by the U.S. District Court. On July 13, 2000, NJIT appealed the June
30, 2000 order in the Federal Circuit Court of Appeals.


With respect to the Company's related lawsuit against NJIT, on May 22, 2000, the
Superior Court of New Jersey granted the Company's Motion for Summary Judgment,
dismissing NJIT's claims to ownership of this patent. On June 30, 2000, NJIT
filed a Motion for Reconsideration of the court's ruling. The Motion for
Reconsideration in the State court was dismissed. The Company subsequently filed
a second Motion for Summary Judgment to dismiss additional claims that the
Company, Dr. Gordon and the third party defendants, among other things, breached
fiduciary duties. This Motion was based on the ruling by the judge overturning
NJIT's claims of ownership. That Motion was heard by a new judge who decided to
await the outcome of NJIT's appeal of the US District Court's dismissal of their
appeal.

Other

On April 16, 1999, the Company was served with a complaint commencing a lawsuit
in the United States District Court for the District of New Jersey by Robert G.
Donovan, a former officer and director, seeking payment of $129,500 for services
alleged to have been performed by


                                       7
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Mr. Donovan as a temporary Co-President for the Company. Mr. Donovan had
rejected a compensation package approved by the Company's Board of Directors and
offered by the Company previously. On November 28, 2000, an agreement was
reached for $30,000 in settlement of the lawsuit, which will be paid in two
installments.

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

None

                                     PART II

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

The following table sets forth the range of high and low bid quotations per
share of the Common Stock (symbol MDJT) for the periods indicated as reported by
the OTC Bulletin Board. These quotations reflect interdealer prices, without
retail mark-up, markdown or commission, and may not represent actual
transactions.

                                     Range of High and Low Bid Prices
                                     --------------------------------
                                       2000                    1999
                                       ----                    ----
      COMMON STOCK

      First Quarter               $2.25-$.75             $1.3125 - $.5625
      Second Quarter              $1.3125-$.75           $3.1875 - $.78125
      Third Quarter               $.82813-$.64063        $2.00 - $1.03125
      Fourth Quarter              $.78125-$.39063        $2.25 - $.625

As of December 31, 2000, there were approximately 52 holders of record of the
Common Stock.

The Company has never paid a cash dividend on its Common Stock and does not
presently anticipate doing so in the foreseeable future, but expects to retain
earnings, if any, to finance operations.

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

General

The Company is engaged in research and development for manufacture of medical
technology, with a current emphasis on ophthalmic surgical technology and
equipment and has developed a proprietary technology and derivative devices for
corneal surgery based on microjets. The Company expects, during 2001, assuming
the appropriate regulatory clearances are obtained, to continue its research and
development activities focusing principally on ophthalmic surgical technology
and equipment and to offer for sale its first microjet microkeratome product. It
also expects to commence early exploratory work on dental applications of
microjet technology. The Company is a development-stage company.

Overview. Since its inception in December 1993, the Company has been engaged in
developing a technology suitable for surgery of the eye, in particular, vision
correction surgery. The cost of entry into this market with a medical device is
typically large and, being a fledgling company, the Company initially focused on
developing the technology to a point that it could license it. Using the
technology already developed for ophthalmic applications, the Company believed
that microjets could be used in a variety of other medical markets. Hence,
management believed that it might be possible, using the income resulting from
royalties on its initial products, to develop


                                       8
<PAGE>


new devices, and potentially to manufacture and market these devices. A decision
to license or manufacture would be made in each case.

The Past Year. Due to the Company's limited working capital, the year 2000 was
difficult. The Company has sought to minimize operating costs. The overriding
constraint has been cash flow. The current rate of expenditures for staff and
direct expenses, with the Company's current cash balances and cash flow
projections, is expected to allow the Company to continue operating in its
present manner until April 2001.

Results Of Operations

The Company has not yet initiated sales of its products and, consequently, had
no sales revenues during the years ended December 31, 2000 and 1999. Under the
terms of the Alcon Agreement (as described under "Description of Business"), a
total of $525,000 was paid to the Company during the year ended December 31,
2000. This amount has been reflected as license fee income and deferred revenues
in the accompanying financial statements.

Total expenses during the year ended December 31, 2000 increased by $12,262 (1%)
to $1,422,780 from $1,410,518 for the prior year. This was primarily due to the
increase in salary expense with the turnover of employees, consultant fees, and
the deferred tax asset being adjusted off the balance sheet. Total expenses for
the year ended December 31, 2000 also included approximately $228,809 in legal
fees, primarily related to the NJIT litigation. See "Legal Proceedings."

Other income/expense consists of interest income, interest expense and finance
charges. For the year ended December 31, 2000, net interest income amounted to
$11,119 compared with net interest expense of $2,310 for 1999. This overall
increase in net interest income principally resulted from income earned on the
Company's short-term investments, which were higher in 2000 reflecting the
monies received from the Private Placement in December 1999.

Liquidity and Capital Resources

As of December 31, 2000, the Company's working capital was $183,665.

In December 1999, the Company commenced a private placement of its Series B
Convertible Preferred Stock at a price of $125 per share. The Series B Preferred
is convertible into 100 shares of Common Stock for each share of Series B
Preferred, subject to adjustment for any stock splits, stock dividends,
recapitalizations, reclassifications and similar events. At the closing for this
private placement, held on December 6, 1999, the Company sold and issued 16,000
shares of Series B Preferred for an aggregate price of $2,000,000. In addition,
the investors received 1.6 million five-year warrants to purchase Common Stock,
each at an exercise price of $3.50 per share. The Company also entered into an
investment banking agreement with a New York firm affiliated with certain of the
investors, and issued the firm 500,000 warrants with the same terms.

On January 28, 2000, the Company returned $700,000 of the $2,000,000 aggregate
price received from the sale of the Series B Preferred, in exchange for the
surrender of a corresponding number of shares of Series B Preferred and Series B
Warrants.

In January 1998, the State of New Jersey enacted legislation allowing emerging
technology and/or biotechnology companies to sell their unused New Jersey Net
Operating Loss ("NOL") Carryover and Research and Development Tax Credits ("R&D
Credits") to corporate taxpayers in New Jersey. During 1999, the Company entered
into an agreement under which it retained a third party broker to identify a
buyer for the Company's NOL Carryover and R&D Credits. The total anticipated net
proceeds of this transaction ($594,209) were recorded as a non-current deferred
tax asset in the accompanying financial statements. Due to limitations placed by
the State of New Jersey on the total amount of NOL Carryover and R&D Credits
eligible to be sold in any one year, the sale of only a portion of the Company's
NOL Carryover and R&D Credits ($327,000)


                                       9
<PAGE>


was completed in 1999. The receipt of $229,427 on December 7, 2000, was recorded
as a reduction to the non-current deferred tax asset in the accompanying
financial statements. The sale of the remaining balance of the Company's NOL
Carryover and R&D Credits is anticipated by the end of the third quarter of
2001. Since there can be no assurances that this proposed sale will occur, the
deferred tax asset has been removed from the financial statements. Depending on
the Company's financial status at the time of filing for 2001, the Company will
make a determination on whether future sales will occur. To the extent that the
NOL Carryover and R&D Credits are sold, they will be unavailable to the Company
to offset future New Jersey State taxes.

During March 1999, Dr. Gordon agreed to make available to the Company a loan of
up to $250,000. Under the terms of this agreement, the Company issued to Dr.
Gordon warrants to purchase up to 50,000 shares of the Company's Common Stock
and pays a market interest rate on amounts borrowed. During 2000, amounts
advanced under this agreement totaled $129,000. At December 31, 2000, none of
this amount had been repaid. The Company plans to use the remainder of the loan
in 1st quarter 2001 for working capital.

The Company anticipates that its cash on hand, plus the loan available from Dr.
Gordon, will be sufficient to meet the Company's 2001 working capital and
planned capital expenditure requirements to April 2001. If, however, the Company
incurs unexpected expenses, or it can not find additional funding, the Company
may require additional financing prior to the end of 2001 in order to maintain
its current operations. The Company currently has no commitment or arrangement
for any capital, and there can be no assurance whether or on what terms it will
be able to obtain any needed capital. If additional financing is not available,
the Company would be materially adversely affected and be required to further
curtail or cease altogether its current operations.

During 2001, the Company intends to seek additional funding in order to
accelerate its product development efforts and to augment its working capital.
The Company is also currently evaluating other financial and strategic options
to increase stockholder value.

Additional Factors That May Affect Future Results

No Revenues; Uncertain Profitability; Development Stage Company; Qualified
Auditors/ Report History of Losses. Since its inception, the Company has been
principally engaged in developmental and organizational activities. To date, the
Company has not yet initiated sales of its products and, consequently, has had
no sales revenues. The Company's Agreement with Alcon, under which payments
totaling $1,200,000 were made by Alcon to the Company, was terminated by Alcon,
and the Company has no other agreements with respect to the license, manufacture
or distribution of its products.

No sales revenues are expected until, and only if, the Company begins commercial
marketing of the Company's microkeratome or other products. Commercial marketing
of the Company's products in the U.S. will be contingent upon obtaining FDA
permission or approval and possibly the approval of other governmental agencies.
To date, only the Company's HydroBrush(TM) Keratome has been granted 510(k)
notification from the FDA and is the Company's only product which has received
the regulatory approvals required prior to the commencement of commercial
marketing. The Company is currently discussing sale of this product on an OEM
basis. The Company is also currently planning to seek FDA clearance of the
HydroBlade(TM) Keratome device in 2001. Regulatory clearance procedures are
often extremely time consuming, expensive and uncertain. Accordingly, there can
be no assurance that the Company will be successful in obtaining marketing
clearance of the HydroBlade(TM) Keratome or other devices or that, if such
devices are cleared, it will be able to generate sufficient revenues to operate
on a profitable basis.

The Company, , is in the development stage, and its business is subject to all
of the risks inherent in the establishment of a new business enterprise. The
likelihood of success of the Company must be considered in light of the
problems, expenses, complications and delays frequently encountered in
connection with the formation of a new business, the development of new
products, the competitive and regulatory environment in which the Company is
operating and the possibility that its activities will not result in the
development of any commercially viable


                                       10
<PAGE>


products. There can be no assurance that the Company's activities will
ultimately result in the development of commercially saleable or useful
products.

12-A.

The independent auditors' report on the Company's financial statements for the
year ended December 31, 2000 contains an explanatory paragraph stating there is
substantial doubt as to the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of that uncertainty other than an adjustment to the deferred tax
asset in the Company's balance sheet.

The Company has experienced annual operating losses and negative operating cash
flow since inception. At December 31, 2000, the Company had an accumulated
deficit of approximately $8,657,731, excluding approximately $1,500,000 which
was applied to additional paid-in capital when the Company converted from a
subchapter S corporation to a C corporation for federal income tax purposes in
connection with its initial public offering during August 1996. Unless and until
the Company's product development and marketing activities are successful and
its products are sold, of which there can be no assurance, the Company will not
have any revenues to apply to operating expenses and the Company will continue
to incur losses.

Need for Future Financing. The Company currently is focusing on its efforts to
undertake the limited manufacture and marketing of its products. To proceed with
its planned research and development and marketing activities, the Company will
require additional capital before, if ever, it reaches profitability and
positive cash flow. As a result, the Company will be required to raise
additional funds through public or private financing including grants that may
be available for its research and development. There can be no assurance however
that the Company will be able to obtain additional financing on terms favorable
to it, if at all. If adequate funds are not available to satisfy short-term or
long-term capital requirements, the Company may be required to reduce
substantially, or eliminate, certain areas of its product development
activities, limit its operations significantly, or otherwise modify its business
strategy. The failure of the Company to obtain any other acceptable financing
would have a material adverse effect on the plans and operations of the Company.
Without additional financing or the exercise of the Company's outstanding
options and warrants or otherwise, the Company would become unable to maintain
its current operations and would be unable to carry out its business plan. The
Company has no current understandings or commitments to obtain any additional
financing from the sale of its securities or otherwise. Additional financing
from the sale of its securities may result in dilution of the Company's then
current stockholders.

Dependence Upon A Key Officer; Attraction and Retention of Key Personnel. The
business of the Company is highly dependent upon the active participation of its
founder and Chief Executive Officer, Dr. Eugene I. Gordon, age 70. The loss or
unavailability to the Company of Dr. Gordon would have a material adverse effect
on the Company's business prospects and potential earning capacity. The
recruitment of skilled scientific personnel is critical to the Company's
success. There can be no assurance that it will be able to continue to attract
and retain such personnel in the future. In addition, the Company's anticipated
growth and expansion into areas and activities requiring additional expertise,
clinical testing, governmental approvals, production and marketing of the
Company's products (which would be required if the Company does not enter into
licensing arrangements) is expected to place increased demands upon the
Company's financial resources and corporate structure. The Company expects to
satisfy such demands, if they arise, through the hiring of additional management
personnel and the development of additional expertise by existing management.

No Assurance of FDA and Other Regulatory Approval. As medical devices, the
Company's microkeratomes are subject to regulation by the FDA under the FD&C Act
and implementing regulations. Pursuant to the FD&C Act, the FDA regulates, among
other things, the development, manufacture, labeling, distribution, and
promotion of microkeratomes in the United States. If the Company fails to enter
into licensing arrangements, it will be required to pursue FDA approval of or
clearance to market its products at its own cost.


                                       11
<PAGE>


The process of obtaining required regulatory clearances or approvals can be
time-consuming and expensive, and compliance with the FDA's Good Manufacturing
Practices regulations and other regulatory requirements can be burdensome.
Moreover, there can be no assurance that the required regulatory clearances will
be obtained, and such clearances, if obtained, may include significant
limitations on the uses of the product in question. In addition, changes in
existing regulations or guidelines or the adoption of new regulations or
guidelines could make regulatory compliance by the Company more difficult in the
future. The failure to comply with applicable regulations could result in fines,
delays or suspensions of clearances, seizures or recalls of products, operating
restrictions and criminal prosecutions, and would have a material adverse effect
on the Company.

Uncertainty of Market Acceptance; Reliance on Single Technology. Acceptance of
the Company's products is difficult to predict and will require substantial
marketing efforts and the expenditure of significant funds by the Company. There
can be no assurance that the products will be accepted by the medical community
once they are permitted or approved. Market acceptance of the Company's products
will depend in large part upon the Company's ability to demonstrate the
operational advantages, safety and cost-effectiveness of its products compared
to other comparable surgical techniques. Failure of the products to achieve
market acceptance will have a material adverse effect on the Company's financial
condition and results of operations.

At present, the Company's only products (although still in development stage)
are its microkeratomes, and the Company expects that its microkeratomes will be,
if and when commercially available, its sole products for an indefinite period
of time. The Company's present narrow focus on particular products makes the
Company vulnerable to the development of superior competing products and changes
in technology that could eliminate the need for the Company's products. There
can be no assurance that significant changes in the foreseeable future in the
need for the Company's products or the desirability of those products will not
occur.

Dependence on Patents and Proprietary Rights. The Company's success will depend
in part on whether it successfully obtains and maintains patent protection for
its products, preserves its trade secrets and operates without infringing the
proprietary rights of third parties.

The Company has sought to protect its proprietary interest in its products by
applying for patents in the United States and corresponding patents abroad. The
Company currently has ten issued U.S. patents and one allowed and thirty one
patents pending. The Company also has several dozen U.S. and foreign patents in
process. There can be no assurance that any other patent will be issued to the
Company, that any patents owned by or issued to the Company, or that may issue
to the Company in the future, will provide a competitive advantage or will
afford protection against competitors with similar technology, or that
competitors of the Company will not circumvent, or challenge the validity of,
any patents issued to the Company. There also can be no assurance that any
patents issued to or licensed by the Company will not be infringed upon or
designed around by others or would prevail in a legal challenge, that others
will not obtain patents that the Company will need to license or design around,
that the microkeratomes or any other potential product of the Company will not
inadvertently infringe upon the patents of others, or that others will not
manufacture the Company's patented products upon expiration of such patents.
There can be no assurance that existing or future patents of the Company will
not be invalidated. Additionally, patent applications filed in foreign countries
and patents granted in such countries are subject to laws, rules and procedures
which differ from those in the United States. Patent protection in such
countries may be different from patent protection provided by United States laws
and may not be as favorable to the Company.

Also, there can be no assurance that the Company's non-disclosure agreements and
other safeguards will protect its proprietary information and trade secrets or
provide adequate remedies for the Company in the event of unauthorized use or
disclosure of such information, or that others will not be able to independently
develop such information. As is the case with the Company's patent rights, the
enforcement by the Company of its non-disclosure agreements can be lengthy and
costly, with no guarantee of success. There can be no assurance that the
Company's program of patent protection, internal security of its proprietary
information and non-disclosure agreements will be sufficient to protect the
Company's proprietary technology from competitors.


                                       12
<PAGE>


Infringement Claims; Litigation. If any of the Company's products are found to
infringe upon the patents or proprietary rights of another party, the Company
may be required to obtain licenses under such patents or proprietary rights of
such other party. No assurance can be given that any such licenses would be made
available on terms acceptable to the Company, if at all. If required licenses
were to be unavailable, the Company could be prohibited from using, marketing or
selling certain technology and devices and such prohibition could have a
material adverse effect on the Company.

The Company is currently involved in ongoing patent litigation, as described
under "Legal Proceedings."

Competitive Technologies, Procedures and Companies. The Company is engaged in a
rapidly evolving field. There are many companies, both public and private,
universities and research laboratories engaged in research activities relating
to other vision correction alternatives. Competition from these companies,
universities and laboratories is intense and is expected to increase. The
Company's initial products will compete with other presently existing forms of
treatment for vision disorders, including eyeglasses, contact lenses, corneal
transplants, other refractive surgery procedures and other technologies under
development. There can be no assurance that persons whose vision can be
corrected with eyeglasses or contact lenses will elect to undergo the surgical
procedures with the Company's products when non-surgical vision correction
alternatives are available.

Additionally, there can be no assurance that the Company's competitors will not
succeed in developing technologies, procedures or products that are more
effective or economical than those being developed by the Company or that would
render the Company's technology and proposed products obsolete or noncompetitive
or that would allow for the bypassing of the Company's patents. Furthermore, in
connection with the commercial sale of its products, the Company will also be
competing with respect to manufacturing efficiency and marketing capabilities,
areas in which the Company has no experience.

No Manufacturing Experience; Dependence on Third Parties. Although the Company's
current strategy is to focus on the manufacture and marketing of its products,
if marketing clearance is obtained, the Company continues to have discussions
with several potential strategic partners and is investigating other possible
arrangements. To the extent the Company does not enter into such arrangements,
it will need to engage in the manufacture and marketing of its products.
Manufacturing will consist of purchasing existing parts, having parts formed by
vendors, incoming inspection, assembly, qualification testing and packaging,
i.e., virtual manufacturing. The Company has no volume manufacturing capacity or
experience in manufacturing medical devices or other products. To be successful,
the Company's proposed products must be manufactured in commercial quantities in
compliance with regulatory requirements at acceptable costs. Production in
clinical or commercial-scale quantities will involve technical challenges for
the Company. If the Company is unable or elects not to pursue collaborative
arrangements with other companies to manufacture certain of its potential
products, the Company will be required to establish manufacturing capabilities.
Establishing its own manufacturing capabilities would require significant
scale-up expenses and additions to facilities and personnel. There can be no
assurance that the Company will be able to obtain necessary regulatory approvals
on a timely basis or at all. Delays in receipt of or failure to receive such
approvals or loss of previously received approvals would have a material adverse
effect on the Company. There can be no assurance that the Company will be able
to develop clinical or commercial-scale manufacturing capabilities at acceptable
costs or enter into agreements with third parties with respect to these
activities. The Company's dependence upon third parties for the manufacture of
its products may adversely affect the Company's profit margins and the Company's
ability to develop and deliver such products on a timely basis. Moreover, there
can be no assurance that such parties will perform adequately, and any failures
by third parties may delay the submission of products for regulatory approval,
impair the Company's ability to deliver products on a timely basis, or otherwise
impair the Company's competitive position and any such failure could have a
material adverse effect on the Company.

No Marketing or Sales Experience. Unless the Company enters into licensing
arrangements, it will undertake the marketing and sale of its own products. In
such event, the Company intends to


                                       13
<PAGE>


market and sell its products in the United States and certain foreign countries,
if and when regulatory approval is obtained, through a direct sales force or a
combination of a direct sales force and distributors or other strategic
partnerships. The Company currently has no marketing organization and has never
sold a product. Establishing sufficient marketing and sales capability will
require significant resources. There can be no assurance that the Company will
be able to recruit and retain skilled sales management, direct salespersons or
distributors, or that the Company's marketing or sales efforts will be
successful. To the extent that the Company enters into distribution arrangements
for the sale of its products, the Company will be dependent on the efforts of
third parties. There can be no assurance that such efforts will be successful.

Risk of Product Liability Litigation; Potential Unavailability of Insurance. The
testing, manufacture, marketing and sale of medical devices entails the inherent
risk of liability claims or product recalls. As a result, the Company faces a
risk of exposure to product liability claims and/or product recalls in the event
that the use of its current or future potential products are alleged to have
caused injury. There can be no assurance that the Company will avoid significant
liability in spite of the precautions taken to minimize exposure to product
liability claims. Prior to the commencement of clinical testing, the Company
intends to procure product liability insurance. After any commercialization of
its products, the Company will seek to obtain an appropriate increase in its
coverage. There can, however, be no assurance that adequate insurance coverage
will be available at an acceptable cost, if at all. Consequently, a product
liability claim, product recall or other claims with respect to uninsured
liabilities or in excess of insured liabilities could have a material adverse
effect on the Company.

Surgical Risks. There can be no assurance that the Company's products will be
successful in providing reliable surgical corrections. As with all surgical
procedures, the procedures for which the Company's products are intended entail
certain inherent risks, including defective equipment or human error, infection
or other injury resulting in partial or total loss of vision. Such injury could
expose the Company to product liability or other claims. The Company believes
competing products have the same risks and have experienced a small number of
these situations without undue impact on the commercial prospects of such
products. There can be no assurance that the Company's product liability
insurance in effect from time to time will be sufficient to cover any such claim
in part or in whole. Any such claim could adversely impact the commercialization
of the Company's products and could have a material adverse effect on the
Company.


                                       14
<PAGE>


ITEM 7. FINANCIAL STATEMENTS.

                                                                        Page No.
                                                                        --------

Independent Auditors' Report ............................................. 16

Balance Sheet as of December 31, 2000 .................................... 17

Statements of Operations for the years ended December 31, 2000 and 1999,
and for the period from inception to December 31, 2000 ................... 18

Statement of Stockholders' Equity for the period from inception to
December 31, 2000 ........................................................ 19

Statements of Cash Flows for the years ended December 31, 2000
and 1999, and for the period from inception to December 31, 2000 ......... 21

Notes to the Financial Statements ........................................ 22


                                       15
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Medjet Inc. (A Development Stage Company):

We have audited the accompanying balance sheet of Medjet Inc. (A Development
Stage Company) as of December 31, 2000 and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2000 and
1999 and for the period from December 16, 1993 (inception) to December 31, 2000.
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 generally accepted auditing
standards. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Medjet Inc. (A Development
Stage Company) as of December 31, 2000 and the results of its operations and its
cash flows for the years ended December 31, 2000 and 1999 in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the notes to the
financial statements, the Company is seeking funding but has not yet secured the
necessary requirements to continue operations. These conditions raise
substantial doubts about its ability to continue as a going concern.
Management's plans regarding those matters also are described in the notes to
the financial statements. The financial statements do include any adjustments
resulting from the outcome of this uncertainty.


                                        ROSENBERG RICH BAKER BERMAN & COMPANY

                                        /s/Lawrence Simon, CPA
                                        ---------------------------------------
                                           Lawrence Simon, CPA

Bridgewater, New Jersey
April 9, 2001


                                       16
<PAGE>


                                   MEDJET INC.
                          (A Development Stage Company)
                                  Balance Sheet
                                December 31, 2000


<TABLE>
<CAPTION>
<S>                                                                                <C>
                                     Assets

Current Assets:
     Cash and cash equivalents                                                     $   183,665
     Prepaid expenses                                                                   41,002
     Current portion of note receivable                                                  3,452
                                                                                   -----------
              Total Current Assets                                                     228,119

Note Receivable, less current portion                                                    5,757
Property and Equipment - less accumulated depreciation of $380,811                     117,207
Patents and Trademarks - less accumulated amortization of $40,125                      222,921
Security deposits                                                                        6,092
                                                                                   -----------

              Total Assets                                                         $   580,096
                                                                                   ===========

                      Liabilities and Stockholders' Equity

Current Liabilities:
     Accounts payable and accrued liabilities                                      $   186,220
     Notes payable - Officer                                                           129,000
     Current Portion of Capital Lease Obligation                                        28,391
                                                                                   -----------
              Total Current Liabilities                                                343,611
     Deferred Rental Obligation                                                          8,599
     Capital Lease Obligation Less Current Portion                                      12,676
                                                                                   -----------
                                                                                       364,886
                                                                                   -----------
Stockholders' Equity:
     Preferred stock, $.01 par value, 1,000,000 shares authorized, 10,400 shares
        designated as Series B Convertible Preferred issued and outstanding                104
     Common stock, $.001 par value, 30,000,000 shares authorized,
        3,935,220 shares issued and 3,901,431 shares outstanding                         3,935
     Additional paid-in capital                                                      7,365,932
     Accumulated deficit (including deficit accumulated during development
        stage of $8,657,731 of which $1,556,204 was applied to additional
        paid-in capital upon conversion from an "S" to a "C" corporation)           (7,153,061)
     Less: Treasury stock, 33,789 shares, at cost                                       (1,700)
                                                                                   -----------
              Total Stockholders' Equity                                               215,210
                                                                                   -----------

Total Liabilities and Stockholders' Equity                                         $   580,096
                                                                                   ===========
</TABLE>


                     See notes to the financial statements.


                                       17
<PAGE>


                                   MEDJET INC.
                          (A Development Stage Company)
                            Statements of Operations


<TABLE>
<CAPTION>
                                                                             Period from
                                          Year Ended December 31,         December 16, 1993
                                      ------------------------------        (Inception) to
                                          2000              1999          December 31, 2000
                                      -----------        -----------      -----------------
<S>                                   <C>                <C>                 <C>
Revenues:
License fee income                    $   525,000        $   175,000         $  1,200,000
                                      -----------        -----------         ------------
     Total Revenues                       525,000            175,000            1,200,000
                                      -----------        -----------         ------------

Expenses:
Research, development,
   general and administrative           1,366,667          1,410,518           10,684,875
                                      -----------        -----------         ------------
     Total Expenses                     1,366,667          1,410,518           10,684,875
                                      -----------        -----------         ------------

Loss from Operations                     (841,667)        (1,235,518)          (9,484,875)
                                      -----------        -----------         ------------

Other Income/(Expense):
Net interest income/(expense)              11,119             (2,310)             275,701
                                      -----------        -----------         ------------

       Loss Before Income Tax            (830,548)        (1,237,828)          (9,209,174)

          Federal income tax                 --                 --                   --
          State income tax                 41,516                200             (551,443)
                                      -----------        -----------         ------------
    Total Income Tax                       41,516                200             (551,443)
                                      -----------        -----------         ------------

Net Loss                                 (872,064)        (1,238,028)          (8,657,731)

Dividends on Preferred Stock                 --                 --                184,923
                                      -----------        -----------         ------------

Net Loss Attributable to
 Common Shareholders                  $  (872,064)       $(1,238,028)        $ (8,842,654)
                                      ===========        ===========         ============

        Net Loss Per Share            $     (0.22)       $     (0.32)        $      (2.72)
                                      ===========        ===========         ============

      Weighted Average Common
        Shares Outstanding              3,901,431          3,894,045            3,255,493
                                      ===========        ===========         ============
</TABLE>


                     See notes to the financial statements.


                                       18
<PAGE>


                                   MEDJET INC.
                          (A Development Stage Company)
                        Statement of Stockholders' Equity
     Period From December 16, 1993 (Date of Inception) to December 31, 2000


<TABLE>
<CAPTION>
                                                                                    Total       Common      Preferred
                                             Preferred     Common       Price     Consider-     Stock         Stock        Paid-
                                               Shares      Shares        Per        ation       ($.001        ($.01         In
         Date/Description                      Issued      Issued       Share       Paid      Par Value)    Par Value)    Capital
----------------------------------------     ---------    ---------     -----     ---------   ----------   -----------   ---------
<S>                                               <C>     <C>           <C>       <C>          <C>         <C>           <C>
March 12, 1994       Share Issuance               --        800,000     $0.10     $ 80,000     $  800      $      --     $  79,200
April 21, 1994       Share Issuance               --         15,000      0.10        1,500         15             --         1,485
May 1, 1994          Share Issuance               --         63,000      0.10        6,300         63             --         6,237
May 25, 1994         Share Issuance               --         50,000      1.00       50,000         50             --        49,950
May 31, 1994         Share Issuance               --         25,000      1.00       25,000         25             --        24,975
June 6, 1994         Share Issuance               --         50,000      1.00       50,000         50             --        49,950
June 7, 1994         Share Issuance               --         50,000      1.00       50,000         50             --        49,950
June 13, 1994        Share Issuance               --         25,000      1.00       25,000         25             --        24,975
June 20, 1994        Share Issuance               --         25,000      1.00       25,000         25             --        24,975
July 28, 1994        Share Issuance               --         25,000      1.00       25,000         25             --        24,975
September 23, 1994   Share Issuance               --         45,002      6.00      270,012         45             --       269,967
October 20, 1994     Share Issuance               --         20,501      6.00      123,008         21             --       122,987
October 28, 1994     Share Issuance               --          2,500      6.00       15,000          2             --        14,998
November 10, 1994    Share Issuance               --         14,500      6.00       87,000         15             --        86,985
November 16, 1994    Share Issuance               --          2,501      6.00       15,004          2             --        15,002
Net Loss, Year Ended December 31, 1994            --           --        --           --         --               --          --
                                             ---------    ---------     =====     --------     ------      -----------   ---------

Balance, December 31, 1994                        --      1,213,004                847,824      1,213             --       846,611

August 8, 1995       Share Issuance               --          5,000     $6.00       30,000          5             --        29,995
August 28, 1995      Share Issuance               --          4,000      6.00       24,000          4             --        23,996
September 21, 1995   Share Issuance               --          5,000      6.00       30,000          5             --        29,995
September 29, 1995   Share Issuance               --          5,000      6.00       30,000          5             --        29,995
December 31, 1995    Share Issuance               --            833      6.00        5,000          1             --         4,999
      "              Stock Split:
                       1.987538926-to-1
                       Share Outstanding          --      1,217,475      --           --        1,217             --        (1,217)
Net Loss, Year Ended December 31, 1995            --           --        --           --         --               --          --
                                             ---------    ---------     =====     --------     ------      -----------   ---------

Balance, December 31, 1995                        --      2,450,312               $966,824     $2,450      $      --     $ 964,374
                                             ---------    ---------               --------     ------      -----------   ---------
</TABLE>




                                               Paid-In
                                                Capital      Accum-
                                              (Beneficial    ulated     Treasury
         Date/Description                     Conversion)    Deficit     Stock
----------------------------------------      -----------    -------    --------
March 12, 1994       Share Issuance           $    --       $    --     $   --
April 21, 1994       Share Issuance                --            --         --
May 1, 1994          Share Issuance                --            --         --
May 25, 1994         Share Issuance                --            --         --
May 31, 1994         Share Issuance                --            --         --
June 6, 1994         Share Issuance                --            --         --
June 7, 1994         Share Issuance                --            --         --
June 13, 1994        Share Issuance                --            --         --
June 20, 1994        Share Issuance                --            --         --
July 28, 1994        Share Issuance                --            --         --
September 23, 1994   Share Issuance                --            --         --
October 20, 1994     Share Issuance                --            --         --
October 28, 1994     Share Issuance                --            --         --
November 10, 1994    Share Issuance                --            --         --
November 16, 1994    Share Issuance                --            --         --
Net Loss, Year Ended December 31, 1994             --        (287,291)      --
                                              ---------     ---------   --------

Balance, December 31, 1994                         --        (287,291)      --

August 8, 1995       Share Issuance                --            --         --
August 28, 1995      Share Issuance                --            --         --
September 21, 1995   Share Issuance                --            --         --
September 29, 1995   Share Issuance                --            --         --
December 31, 1995    Share Issuance                --            --         --
      "              Stock Split:
                       1.987538926-to-1
                       Share Outstanding           --            --         --
Net Loss, Year Ended December 31, 1995             --        (677,385)      --
                                              ---------     ---------   --------

Balance, December 31, 1995                    $    --       $(964,676)  $   --
                                              ---------     ---------   --------


                     See notes to the financial statements.


                                       19
<PAGE>


                                   MEDJET INC.
                          (A Development Stage Company)
                        Statement of Stockholders' Equity
     Period From December 16, 1993 (Date of Inception) to December 31, 2000


<TABLE>
<CAPTION>
                                                                                                          Total          Common
                                                            Preferred     Common          Price         Consider-        Stock
                                                              Shares      Shares           Per            ation          ($.001
         Date/Description                                     Issued      Issued          Share           Paid         Par Value)
------------------------------------------------------      ---------    ---------       --------     -------------    ----------
<S>                                                          <C>          <C>            <C>           <C>                <C>
Balance, December 31, 1995, brought forward                      --       2,450,312                    $    966,824       $2,450

August 6, 1996       Share Issuance                              --       1,071,429      $   5.60         6,000,002        1,071
      "              Reclassification of deferred
                       offering costs                            --            --             --               --           --
      "              Reclassification of accumulated
                       deficit for change from an S to
                       a C corporation                           --            --            --                --           --
September 3, 1996    Share Issuance                              --         160,714          5.60           899,998          161
December 30, 1996    Acquisition of treasury shares              --            --            --                --           --
Net Loss, Year Ended December 31, 1996                           --            --            --                --           --
                                                             --------     ---------      ========      ------------       ------

Balance, December 31, 1996                                       --       3,682,455                       7,866,824        3,682

July 18, 1997        Share Issuance                              --          21,800      $   0.05             1,097           22
July 24, 1997        Share Issuance                              --           4,464          5.60            24,998            5
Net Loss, Year Ended December 31, 1997                           --            --            --                --           --
                                                             --------     ---------      ========      ------------       ------

Balance, December 31, 1997                                       --       3,708,719                       7,892,919        3,709

January 27, 1998     Share Issuance                              --           1,350      $   5.60             7,560            1
March 31, 1998       Share Issuance                              --          10,000          3.02            30,188           10
April 20, 1998       Share Issuance                           110,000          --           10.00         1,100,000         --
      "              Placement Agent Warrants                    --            --            --                --           --
October 9, 1998      Preferred Conversion                    (110,000)      182,724          6.02              --            183
      "              Preferred Dividend                          --          12,154          4.24            51,534           12
Net Loss, Year Ended December 31, 1998                           --            --            --                --           --
                                                             --------     ---------      ========      ------------       ------

Balance, December 31, 1998                                       --       3,914,947                       9,082,201        3,915

May 13, 1999         Share Issuance                              --          19,588      $   1.00              --             19
June 11, 1999        Share Issuance                              --             685          1.70              --              1
December 3, 1999     Share Issuance                            16,000          --          125.00         2,000,000         --
December 31, 1999    Partial Rescission of Preferred           (5,600)         --          125.00          (700,000)        --
Net Loss, Year Ended December 31, 1999                           --            --            --                --           --
                                                             --------     ---------      ========      ------------       ------

Balance, December 31, 1999                                     10,400     3,935,220                    $ 10,382,201       $3,935
                                                             --------     ---------                    ------------       ------

Net Loss, Year Ended December 31, 2000                           --            --                              --           --
                                                             --------     ---------      --------      ------------       ------
Balance, December 31, 2000                                     10,400     3,935,220                    $ 10,382,201       $3,935
                                                             ========     =========      --------      ============       ======


                                                             Preferred                       Paid-In
                                                               Stock           Paid-         Capital        Accum-
                                                               ($.01            In         (Beneficial      ulated         Treasury
         Date/Description                                    Par Value)       Capital      Conversion)      Deficit          Stock
------------------------------------------------------      -----------     -----------    -----------    -----------      --------
Balance, December 31, 1995, brought forward                 $    --         $   964,374    $      --      $  (964,676)      $  --

August 6, 1996       Share Issuance                              --           5,998,931           --             --            --
      "              Reclassification of deferred
                       offering costs                            --          (1,436,045)          --             --            --
      "              Reclassification of accumulated
                       deficit for change from an S to
                       a C corporation                           --          (1,556,204)          --        1,556,204          --
September 3, 1996    Share Issuance                              --             899,837           --             --            --
December 30, 1996    Acquisition of treasury shares              --                --             --             --          (1,700)
Net Loss, Year Ended December 31, 1996                           --                --             --       (1,273,977)         --
                                                            ---------       -----------    -----------    -----------       -------

Balance, December 31, 1996                                       --           4,870,893           --         (682,449)       (1,700)

July 18, 1997        Share Issuance                              --               1,075           --             --            --
July 24, 1997        Share Issuance                              --              24,994           --             --            --
Net Loss, Year Ended December 31, 1997                           --                --             --       (2,578,448)         --
                                                            ---------       -----------    -----------    -----------       -------

Balance, December 31, 1997                                       --           4,896,962           --       (3,260,897)       (1,700)

January 27, 1998     Share Issuance                              --               7,559           --             --            --
March 31, 1998       Share Issuance                              --              30,178           --             --            --
April 20, 1998       Share Issuance                             1,100           945,511        133,389           --            --
      "              Placement Agent Warrants                    --                  18           --             --            --
October 9, 1998      Preferred Conversion                      (1,100)          184,911       (133,389)          --            --
      "              Preferred Dividend                          --                 917           --          (51,534)         --
Net Loss, Year Ended December 31, 1998                           --                --             --       (1,730,538)         --
                                                            ---------       -----------    -----------    -----------       -------

Balance, December 31, 1998                                       --           6,066,056           --       (5,042,969)       (1,700)

May 13, 1999         Share Issuance                              --                 (19)          --             --            --
June 11, 1999        Share Issuance                              --                  (1)          --             --            --
December 3, 1999     Share Issuance                               160         1,999,840           --             --            --
December 31, 1999    Partial Rescission of Preferred              (56)         (699,944)          --             --            --
Net Loss, Year Ended December 31, 1999                           --                --             --       (1,238,028)         --
                                                            ---------       -----------    -----------    -----------       -------

Balance, December 31, 1999                                  $     104       $ 7,365,932    $      --      $(6,280,997)      $(1,700)
                                                            ---------       -----------    -----------    -----------       -------

Net Loss, Year Ended December 31, 2000                           --                --             --         (872,064)         --
                                                            ---------       -----------    -----------    -----------       -------
Balance, December 31, 2000                                  $     104       $ 7,365,932           --      $(7,153,061)      ($1,700)
                                                            =========       ===========    ===========    ===========       =======
</TABLE>

                     See notes to the financial statements.

                                       20
<PAGE>


                                   MEDJET INC.
                          (A Development Stage Company)
                            Statements of Cash Flows


<TABLE>
<CAPTION>

                                                                      For the Year Ended            Period from
                                                                         December 31,            December 16, 1993
                                                                 ----------------------------     (Inception) to
                                                                    2000              1999       December 31, 2000
                                                                 -----------      -----------    -----------------
<S>                                                              <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                         $  (872,064)     $(1,238,028)     $(8,657,731)

Adjustments to Reconcile Net Loss to
     Net Cash (Used) by Operating Activities:
          Depreciation and amortization                               67,962           81,895          469,116
          Loss on abandonment of property and equipment                 --             28,987           28,987
          (Increase) Decrease in prepaid expenses                      7,838          (26,977)         (50,211)
          (Increase) Decrease in deferred tax asset                  267,063          327,146             --
          Increase (Decrease) in accounts payable
               and accrued expenses                                   29,615          (85,338)         235,893
          Increase (Decrease) in deferred revenues                  (175,000)         175,000             --
          Increase (Decrease) in deferred rental obligation             --             (3,698)            --
                                                                 -----------      -----------      -----------

     Net Cash (Used) by Operating Activities                        (674,586)        (741,013)      (7,973,946)
                                                                 -----------      -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash redemptions of marketable securities                               --               --            320,605
Cash (purchases) of marketable securities                               --               --           (320,605)
Cash purchases of property, plant & equipment                        (62,772)          (3,650)        (537,798)
Cash purchase of organization costs                                     --               --            (37,387)
Cash payments for patents and trademarks                             (70,471)         (37,395)        (263,046)
Cash receipts (payments) for security deposits                        (1,255)           2,213           (6,092)
                                                                 -----------      -----------      -----------

     Net Cash (Used) by Investing Activities                        (134,498)         (38,832)        (844,323)
                                                                 -----------      -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock                               --          1,300,000        2,380,018
Proceeds from issuance of common stock
     and initial public offering                                        --               --          6,494,616
Purchase of treasury stock                                              --               --             (1,700)
Proceeds from officer notes payable                                     --            250,000          571,000
Repayment of officer notes payable                                   (21,000)        (100,000)        (442,000)
Proceeds from other notes payable                                       --             50,000          450,000
Repayment of other notes payable                                     (50,000)            --           (450,000)
                                                                 -----------      -----------      -----------

     Net Cash (Used) Provided by Financing Activities                (71,000)       1,500,000        9,001,934
                                                                 -----------      -----------      -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (880,084)         720,155          183,665

Cash and Cash Equivalents - Beginning of Period                    1,063,749          343,594             --
                                                                 -----------      -----------      -----------

Cash and Cash Equivalents - End of Period                        $   183,665      $ 1,063,749      $   183,665
                                                                 ===========      ===========      ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
     Income taxes                                                $      --        $       200      $       600
                                                                 ===========      ===========      ===========
     Interest expense                                            $    14,617      $    11,964      $    40,102
                                                                 ===========      ===========      ===========
</TABLE>


                     See notes to the financial statements.


                                       21
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

     Medjet Inc. (the "Company") is a development stage company incorporated in
     the State of Delaware on December 16, 1993. The Company was organized as a
     medical device company with the goal of developing, manufacturing and
     selling new cutting, drilling, layer removal and shaping tools for a
     variety of surgical procedures. The core technology is based on
     small-diameter, liquid microjets moving at high speeds. The Company
     believes that such jets will bring new surgical capability and performance
     to the clinic or operating room. The initial product area is devices for
     surgical use in ophthalmology.

     During the third quarter of 1996, the Company consummated an initial public
     offering (the "Offering") in which it issued and sold to the public a total
     of 1,232,143 Units (the "Units"), each Unit consisting of one share of
     common stock, $.001 par value, of the Company (the "Common Stock") and one
     Class A Redeemable Common Stock Purchase Warrant (the "Class A Warrants")
     to purchase one share of Common Stock at a price of $10.00 per share for a
     24-month period commencing on November 6, 1996. The Units became separable
     on that date and the Common Stock and the Class A Warrants began trading
     separately on November 8, 1996. In July 1998, in connection with a private
     placement (described in the following paragraph), the Company agreed to
     extend the exercise period of the Class A Warrants for an additional 12
     months. As a result, the Class A Warrants expired on November 6, 1999.

     In January 1998, the Company commenced a private placement of its Series A
     10% Cumulative Convertible Preferred Stock, $.01 par value (the "Series A
     Preferred"), at a price of $10 per share. At the closing for this private
     placement, which was held in April 1998, the Company sold and issued
     110,000 shares of Series A Preferred for an aggregate price of $1,100,000.
     In conjunction with this transaction, a total of 18,272 four-year warrants,
     each at an exercise price of $4.34 per share, was also issued to the
     placement agent. The net proceeds of this private placement were used to
     augment the Company's working capital.

     The private placement, which was terminated on July 31, 1998, was carried
     out pursuant to available exemptions from registration under Section 4(2)
     of the Securities Act of 1933 and rules promulgated under that section.

     On October 9, 1998, the 110,000 shares of Series A Preferred outstanding
     were converted into 182,724 shares of Common Stock. At the same time, a
     total of 12,154 shares of Common Stock was issued in payment of the
     cumulative dividends on the Series A Preferred. The dividend was computed
     at 10% per annum and totaled approximately $51,534.


                                       22
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Nature of Organization (Continued)

     In December 1999, the Company commenced a private placement of its Series B
     Convertible Preferred Stock, $.01 par value (the "Series B Preferred"), at
     a price of $125 per share. At the closing for this private placement, which
     was held on December 6, 1999, the Company sold and issued 16,000 shares of
     Series B Preferred for an aggregate price of $2,000,000. In addition, the
     investors received 1.6 million five-year warrants (the "Series B
     Warrants"), each at an exercise price of $3.50 per share. The Company also
     entered into an investment banking agreement with a New York firm
     affiliated with certain of the investors, and issued the firm 500,000
     Series B Warrants.

     The net proceeds of this private placement will be used by the Company to
     complete specific development for manufacture and to introduce its waterjet
     microkeratome for vision correction applications.

     The Series B Preferred is convertible into approximately 100 shares of
     Common Stock for each share of Series B Preferred, subject to adjustment
     for any stock splits, stock dividends, recapitalizations, reclassifications
     and similar events.

     This private placement was carried out pursuant to available exemptions
     from registration under Section 4(2) of the Securities Act of 1933 and
     rules promulgated under that section.

     In accordance with an agreement entered into on January 28, 2000, the
     Company returned $700,000 of the $2,000,000 aggregate price received from
     the sale of the Series B Preferred.

     The Company has continued to incur losses since its inception and at
     December 31, 2000 has accumulated deficits. Management has implemented a
     program to reduce costs and to reduce the break-even point necessary for
     continuing operations. Management believes that its 2001 operating plan,
     which anticipates the program to reduce costs as well as certain funding
     sources, is reasonable and attainable and will provide sufficient cash to
     sustain operations during 2001. In addition, a principal stockholder of the
     Company has committed to provide additional working capital, if necessary.

Cash and Cash Equivalents

     For the purpose of the statements of cash flows, a cash equivalent includes
     all highly liquid instruments with original maturities of three months or
     less.

Property and Equipment

     Equipment and leasehold improvements are recorded at cost. Depreciation is
     computed using primarily accelerated methods based upon the estimated
     useful lives of the assets which range from 5 to 7 years for equipment and
     39 years for leasehold improvements. Repairs and maintenance which do not
     extend the useful lives of the related assets are expensed as incurred.


                                       23
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements

Amortization

     Organization costs have been amortized over sixty months on a straight-line
     basis and were completely amortized at December 31, 1999. Total
     amortization for the years ended December 31, 2000 and 1999 was $0 and
     $2,295 respectively.

     Patents are being amortized over twenty years on a straight-line basis.
     These costs will be expensed if and when it is concluded that non-approval
     or no future economic benefits are probable. Total amortization for the
     years ended December 31, 2000 and 1999 was $40,125 and $11,237,
     respectively.

Revenue Recognition/Deferred Revenues

     The Company's revenue for 2000 and 1999 is generated from license fees and
     is recognized in accordance with the terms of the agreements reached with
     third parties.

Net Loss Per Share

     Net loss per share, in accordance with the provisions of Financial
     Accounting Standards No. 128, "Earnings Per Share," is computed by dividing
     net loss by the weighted average number of shares of Common Stock
     outstanding during the period. Common stock equivalents have not been
     included in this computation as the effect would be anti-dilutive.

Income Taxes

     In accordance with the provisions of Financial Accounting Standards No.
     109, "Accounting for Income Taxes," deferred taxes are recognized for
     operating losses that are available to offset future taxable income.
     Valuation allowances are established when necessary to reduce deferred tax
     assets to the amount expected to be realized. The Company incurred net
     operating losses for financial-reporting and tax-reporting purposes.
     Accordingly, the benefit for federal income taxes has been offset entirely
     by a valuation allowance against the related deferred tax asset for the
     year ended December 31, 2000.

Use of Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     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.

GOING CONCERN

     As shown in the accompanying financial statements, the Company incurred a
net loss of $872,064 during the year ended December 31, 2000. As of that date,
the Company's cash was only $183,665 with a loan from the Chairman of $121,000
still available. As of April 2001, the Company will have no funds to continue
operations. The Company's current liabilities exceeded its current assets by
$124,091. These factors, as well as not having a firm commitment for financing,
create and make it necessary to change the Company's status. The Company can no
longer be characterized as a going concern. Management of the Company is
developing a plan to reduce its costs and is evaluating financial and strategic
options. The ability of the Company to continue as a going concern is dependent
on successful completion of one or more of these opportunities. As a result of
the change in status, the financial statements do include adjustments to the
Deferred Tax Asset and the potential for filing future NOL's to the State of New
Jersey for


                                       24
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements


tax credit program. This adjustment was required by virtue of the Company's
change in going concern status.

CONCENTRATIONS OF CREDIT RISK

     The Company maintains cash balances in several financial institutions.
     Accounts at each institution are insured by the Federal Deposit Insurance
     Corporation up to $100,000, of which the Company's accounts may, at times,
     exceed the federally insured limits.

DEVELOPMENT STAGE OPERATIONS

The Company was formed December 16, 1993. Operations since then have consisted
primarily of raising capital, locating and acquiring equipment, obtaining
qualified staff, installing and testing equipment and experimenting, testing and
developing the procedures necessary to produce positive results and to lay the
foundation for specific development for manufacturing and various regulatory
approvals.

NOTE RECEIVABLE

In June 2000, the Company purchased a leased company automobile and tendered the
vehicle to a departing officer of the company. The former officer is repaying
the company through a note receivable as follows:

Unsecured note receivable with interest at 8.5% per annum due in monthly
Installments of $342 including interest through June 2003                 $9,209

Less current portion                                                       3,452
                                                                          ------

Note receivable, less current portion                                     $5,757
                                                                          ======

Total maturities of note receivable are as follows:

Year Ending December 31,
            2001                                                          $3,452
            2002                                                           3,757
            2003                                                           2,000
                                                                          ------
                                                                          $9,209
                                                                          ======

NOTES PAYABLE - OFFICER

     Notes payable - officer represents an unsecured loan from an officer of the
     Company with interest at 10.14% per annum, earliest occurrence of January
     28, 2009 or payments due upon agreement.

STOCKHOLDERS' EQUITY

Stock Option Plan

     On October 31, 1994, the Company adopted its 1994 Stock Option Plan (the
     "Plan"). The Plan provides that certain options to purchase the Company's
     common stock granted thereunder are intended to qualify as "incentive stock
     options" within the meaning of


                                       25
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements


     Section 422A of the United States Internal Revenue Code of 1986, while
     non-qualified options may also be granted under the Plan. The initial plan
     and subsequent amendments provide for authorization of up to 700,000 shares
     at December 31, 2000 and 1999, respectively. The option price per share of
     stock purchasable under an Incentive Stock Option shall be determined at
     the time of grant but shall not be less than 100% of the Fair Market Value
     of the stock on such date, or, in the case of a 10% Stockholder, the option
     price per share shall be no less than 110% of the Fair Market Value of the
     stock on the date an Incentive Stock Option is granted to such 10%
     Stockholder.

                                       Qualified and Non-Qualified Shares
                                        Under Option as of December 31,
                                        -------------------------------
                                              2000               1999
                                              ----               ----
Outstanding, beginning of year               348,550            377,550
Granted during the year                      225,000            210,000
Canceled during the year                    (133,000)          (218,727)
Exercised during the year:
  At $1.00 per share                            --              (19,588)
  At $1.70 per share                            --                 (685)
  At $3.02 per share                            --                 --
  At $5.60 per share                            --                 --
Outstanding, end of year                     440,550            348,550
                                            ========           ========

Eligible, end of year, for exercise          258,335            110,924
                                            --------           --------

Range of exercise price per share      $.05 to $7.63      $.05 to $7.63
                                       =============      =============

     At December 31, 2000 and 1999, the average exercise price and remaining
     contractual life were $2.81 and $2.13 per share, and 7 years 8 months and 8
     years 3 months, respectively.

     At December 31, 2000 and 1999, there were 206,027 and 298,027 shares,
     respectively, reserved for future grants.

Warrants

     The Company has issued common stock purchase warrants separately and in
     conjunction with the Offering and both of the preferred stock private
     placements (see "Nature of Organization"), as well as to consultants and to
     lenders, as follows:

Warrants

     As of December 31, 2000 & 1999:

                       Exercise
 Date of    No. of     Price Per              Exercise Term
  Grant     Shares     Share        Start       Expiration     Vesting Rights
  -----     ------     ---------   --------   -------------   ----------------
 5/20/96     97,389    $3.37       5/20/96       5/20/01      25% per year
 4/20/98     18,272     4.34       4/20/98       4/20/02      100% on 4/20/98
 7/15/99     50,000     1.00       7/15/99       7/15/04      100% on 7/15/99
 7/16/99     10,000     1.37       7/16/99       7/16/01      100% on 7/16/99
11/12/99      7,500     3.50      11/12/99      11/12/04      100% on 11/12/99
12/03/99  1,365,000     3.50       2/1/00       12/03/04      100% after 1/31/00
          ---------
          1,548,161  Outstanding at December 31, 2000
          =========


                                       26
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements

     There were no warrants exercised during 2000 and 1999. At December 31, 2000
     and 1999, there were 1,584,161 and 158,813 shares, respectively, eligible
     for exercise at prices ranging from $1.00 to $10.00 per share.

Pro Forma Information

     In 1996, the Company adopted the disclosure only provisions of Statement of
     Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock Based
     Compensation". Accordingly, no compensation expense has been recognized for
     stock options and warrants issued. Had compensation expense for the options
     and the warrants which vested in 2000 and 1999 been determined based on the
     fair value at the grant date commensurate with the provisions of SFAS No.
     123, the Company's net loss and net loss per share for 2000 and 1999,
     respectively, would have been increased to the pro forma amounts indicated
     below:


                                               2000              1999
                                               ----              ----
          Net loss:
                As reported               $   (872,064)     $ (1,238,028)
                Pro forma                 $ (4,896,571)     $ (1,589,895)

                Basic loss per share:

                As reported               $      (0.22)     $      (0.32)
                Pro forma                 $      (1.26)     $      (0.41)


     The fair value of each option and warrant grant is estimated on the date of
     grant using the Black-Scholes pricing model with the following weighted
     average assumptions for grants in 2000 and 1999, respectively: dividend
     yield of 0% and 0%; expected volatility of 156 and 182%, risk-free interest
     rate of 4.5% in both years and expected lives of 2 years 6 months and 5
     years.

RETIREMENT PLAN

     The Company sponsors a qualified 401(k) plan covering substantially all
     full time employees under which eligible employees can defer a portion of
     their annual compensation. The Company currently makes no matching
     contribution to the plan.


INCOME TAXES

     The income tax provision is comprised of the following:

                                             Year Ended December 31,

                                                 2000         1999
                                                 ----         ----
          State current provision              $ 4,820        $200
          State deferred provision             $36,676         --
                                               -------        ----
                                               $41,496        $200


In 1998, the State of New Jersey enacted legislation allowing emerging
technology and/or biotechnology companies to sell their unused New Jersey Net
Operating Loss ("NOL") Carryover and Research and Development Tax Credits ("R&D
Credits") to corporate taxpayers in New


                                       27
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements

Jersey. During 1999, the Company entered into an agreement under which it
retained a third party broker to identify a buyer for its NOL Carryover and R&D
Credits. The total anticipated net proceeds of this transaction ($594,209) were
recorded as a non-current deferred tax asset in the accompanying financial
statements. Due to limitations placed by the State of New Jersey on the total
amount of NOL Carryover and R&D Credits eligible to be sold in any one year, the
sale of only a portion of the Company's NOL Carryover and R&D Credits ($327,146)
was completed in 1999. The receipt of these funds was recorded as a reduction to
the non-current deferred tax asset in the accompanying financial statements. The
sale of the remaining balance of the Company's NOL Carryover and R&D Credits was
received on December 7, 2000 for $229,427. The Company's total deferred tax
asset (related entirely to the NOL Carryover and R&D Credits) and valuation
allowance are as follows:


                                                           December 31,
                                                           ------------
                                                       2000            1999
                                                       ----            ----
          Total deferred tax asset, noncurrent     $ 2,020,153     $ 2,037,702
          Less valuation allowance                 $(2,020,153)    $(1,763,639)
                                                   -----------     -----------
          Net deferred tax asset, noncurrent       $         0     $   267,063
                                                   -----------     -----------


     The total change in the valuation allowance amounted to $256,514 and
     $294,569 for the years ended December 31, 2000 and 1999, respectively.

     The differences between income tax benefits in the financial statements and
     the tax benefit computed at the U.S. Federal statutory rate of 34% are as
     follows:

                                 Year Ended December 31,
                                 -----------------------
                                    2000         1999
                                    ----         ----
          Tax benefit               (34%)        (34%)
          Valuation allowance        34%          34%
                                    ---          ---
          Effective tax rate         --           --
                                    ===          ===


     At December 31, 2000, the Company has available approximately $7,153,061 of
     net operating losses to carry forward and which may be used to reduce
     future federal taxable income through December 31, 2020.

     At December 31, 2000, the Company has available approximately $2,576,531 of
     net operating losses to carry forward and which may be used to reduce
     future state taxable income through December 31, 2007.

COMMITMENTS AND CONTINGENCIES

     The Company leases its building and office space and automobiles. The
companies' automobile lease ended in November 2000.


                                       28
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements

     The following is a schedule by years of future minimum lease payments as of
     December 31, 2000 under operating leases that have initial or remaining
     non-cancelable lease terms in excess of one year:

     Year Ended December 31,

                                          2001                  74,730
                                          2002                  80,210
                                          2003                  83,000
                                          2004                  83,448
                                                              --------
         Total Minimum Lease Payments Required                $321,388
                                                              --------

     Rent expense under the operating leases totaled $78,198 and $87,024 for the
     years ended December 31, 2000 and 1999, respectively.

     The Company has been leasing 4,982 square feet of research and development
     and office space. Under the terms of the new lease, which will expire
     December 31, 2004.

     Beginning in 2000, the lease for the building and office space has an
     annual escalation factor. The above rental commitments reflect the periods
     during which the actual obligations arise (per the lease agreement). Rental
     expense has been charged to operations on straight-line basis. The
     associated deferred rental obligation is presented in the balance sheet as
     a Long-term liability of $8,599 at December 31, 2000.

     The Company believes the space currently available to it will be sufficient
     to meet the Company's requirements for the foreseeable future.

CAPITAL LEASES

     The Company leases certain equipment under capital leases expiring in 2002.
     The assets and liabilities under capital leases are recorded a lower of the
     present value of the minimum lease payments or the fair value of the asset
     at the inception of the lease. The assets are amortized over the lower of
     their related lease terms or their estimated productive lives. Amortization
     of assets under capital leases is included in depreciation expense in 2000.
     Properties under capital leases are as follows:

                                                December 31,
                                                ------------
                                               2000      1999
                                               ----      ----

     3-D Profiler Equipment                   $20,784    $0.00
     Less accumulated amortization            $11,702    $0.00
                                              -------    -----
       Total                                  $ 9,082    $0.00

     The following is a schedule of minimum lease payments due under capital
     leases as of December 31, 2000

     Year Ending December 31,
           2001                                                     $31,176
           2002                                                     $12,990

           Total net minimum capital lease payments                 $44,166
               Less amounts representing interest                   $ 3,098


                                       29
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements


Present value of net minimum capital lease payments                  $41,067
Less current maturities of capital lease obligations                 $28,391
Obligations under capital leases, excluding current maturities       $12,676

Interest rates on capitalized leases is 9.848 % and is imputed based on the
lower of the Company's incremental borrowing rate at the inception of each lease
or the lessor's implicit rate of return.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Cash, accounts payable and accrued expenses:

          The carrying amount approximates fair value because of the short-term
          maturity of these instruments.

     Limitations

          Fair value estimates are made at a specific point in time, based on
          relevant information and information about the financial instrument.
          These estimates are subjective in nature and involve uncertainties and
          matters of significant judgment and therefore cannot be determined
          with precision. Changes in assumptions could significantly affect
          these estimates.

EMPLOYMENT AGREEMENTS

     In 1999, a new agreement was signed by the Chairman of the Board and Chief
     Executive Officer ("Executive"). This agreement, which expires on March 15,
     2002, provides for a base compensation of $170,000 per year, bonuses
     aggregating a maximum of $60,000 for any one year based upon the attainment
     of certain goals and other additional compensation as may be determined by
     the Board of Directors (without the executives participation) in its sole
     discretion. The Board of Directors (without the executive's participation)
     could also increase such base compensation in its sole discretion. The new
     agreement, which can be terminated for cause and contains proprietary
     information, invention and non-competition provisions which prohibit
     disclosure of any of the Company's proprietary information and preclude
     competition with the Company for two years after termination of employment,
     also provides for the payment of an amount upon the death or disability of
     the executive. The agreement also provides for the grant of an option to
     purchase up to 150,000 shares of the Company's common stock, such option to
     vest over the period of the agreement.

     The Company has procured life insurance in the amount of $1 million to
     compensate it for the loss, through death or disability, of the Company's
     Chairman and Chief Executive Officer.

RECISSION OF PREFERRED SHAREHOLDERS AGREEMENT

As explained in the "Nature of Organization" section of the "Summary of
Significant Accounting Policies" note, on December 6, 1999, the Company sold and
issued 16,000 shares of its Series B Preferred stock for an aggregate price of
$2,000,000. In addition, the investors received 1.6 million five-year warrants
to purchase one share of Common Stock, each at an exercise price of $3.50 per
share. The Company also entered into an investment banking agreement with a New
York firm affiliated with certain of the investors, and issued the firm 500,000
Series B warrants.


                                       30
<PAGE>


                                   Medjet Inc.
                          (A Development Stage Company)
                        Notes to the Financial Statements

On January 28, 2000, the Company returned $700,000 of the $2,000,000 aggregate
price received from the sale of the Series B Preferred. The original investment
was made based, in part, on the Company's exclusive worldwide refractive surgery
license agreement with Alcon which was unexpectedly terminated by Alcon on
December 13, 1999. In light of the termination of the license agreement, and in
order to resolve any possible disputes relating to the termination, the Company
and the investors reevaluated the assumptions on which the original investment
was made and determined that a return of a portion of the original investment
was appropriate. The return of funds was made pursuant to an agreement, dated
January 28, 2000, under which the Company received a return of a proportionate
share of the Series B Preferred and Series B Warrants issued in the private
placement. In connection with this agreement, the investment banking agreement
entered into by the Company at the time of the original investment also was
cancelled.

LITIGATION

The Company is a defendant in a lawsuit in which the plaintiff claims two of its
employees should be named co inventors on a Medjet patent. The lawsuit has been
dismissed and is being appealed by the plaintiff. In the opinion of management,
the disposition of the lawsuit will not have a material adverse effect on the
Company's ownership of the patent, financial position, results of operations, or
cash flows.

On April 16, 1999, the Company was served with a complaint commencing a lawsuit
in the United States District Court for the District of New Jersey by a former
officer and director, seeking payment of $129,500 for services alleged to have
been performed by the former officer and director as a temporary Co-President
for the Company. The former officer and director had rejected a compensation
package approved by the Company's Board of Directors and offered by the Company
previously. On November 28, 2000 an agreement was reached for $30,000 in
settlement of the lawsuit, in which one payment of $15,000 has been paid and the
second installment of $15,000 (part of Accrued Expenses) will be paid in May
2001.

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

None.


                                    PART III

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

The directors and executive officers of the Company as of March 8, 2001 are as
follows:

o    Eugene I. Gordon, Ph.D., age 70, is the founder and Chief Executive Officer
     of the Company and has been a Director and Chairman of the Board since the
     Company's inception in December 1993. Dr. Gordon is an inventor of the
     Company'sHEK, hydro-therapeutic keratoplasty ("HTK") and hydro-refractive


                                       31
<PAGE>


     keratoplasty ("HRK") keratome technology. From 1987 to 1988, Dr. Gordon
     served as Senior Vice President and Director of the Research Laboratories
     for Hughes Aircraft Co. He joined ATT Bell Laboratories in 1957 and retired
     in 1983 as Laboratory Director. Dr. Gordon has served as an adjunct
     professor in the department of Ophthalmology at the University of Medicine
     and Dentistry of New Jersey since 1994, and was a professor in the
     Department of Electrical and Computer Engineering at the New Jersey
     Institute of Technology from 1990 to 1994.

o    Edward E. David, Jr, Sc.D., age 76, has been a director of the Company
     since June 1998. Dr. David has been a business consultant specializing in
     research, technology and innovation management and development since 1986
     and is President of Edward E. David, Inc. and Principal and Vice President
     of The Washington Advisory Group, LLC, a consulting and advisory service
     for industry, academia, and governments. From 1977 to 1986, Dr. David
     served as President of Exxon Research and Engineering, where he directed
     research, development, engineering and technical services activities. From
     1970 to 1973, Dr. David served as the Science Advisor to the President of
     the United States and as the Director of the White House Office of Science
     and Technology. Dr. David currently serves on the boards of Aquasearch,
     Inc., Protein Polymer Technologies Inc. and Spacehab, Inc., each of which
     is publicly-traded.

o    William C. Hittinger, age 78, has been a director of the Company since July
     1999. Mr. Hittinger has been a business consultant since retiring in 1986
     as an Executive Vice President of RCA Corporation. While at RCA, Mr.
     Hittinger's responsibilities included corporate technology, patents,
     licensing, international business and marketing development, and corporate
     technology planning. Prior to joining RCA in 1970, Mr. Hittinger was
     President of General Instrument Corp. Mr. Hittinger has previously served
     as a director of UNC Inc., Biotechnic International Inc., Stabler
     Companies, Bethlehem Steel Corp., Thomas and Betts Corp. and The Allen
     Bradley Company. He has also served as Chairman of the Board of Trustees
     and Interim President of Lehigh University. Mr. Hittinger is a Fellow of
     the Institute of Electrical and Electronics Engineers, a Fellow of the
     Royal Society of Arts, and a member of the National Academy of Engineering.
     Mr. Hittinger was a member of President Reagan's National Security
     Telecommunications Advisory Committee from 1982 to 1986 and a member of the
     U.S. - Brazil Presidential Committee on Science and Technology in 1987.

o    Ronald B. Odrich, DDS, age 69, has been a director of the Company since
     July 1999. Dr. Odrich has, since 1963, been engaged in the private practice
     of dentistry, with a specialization in periodontology. Since 1997, Dr.
     Odrich has been a director of Park Avenue Periodontal Associates, P.C.,
     located in New York City. Dr. Odrich has had several teaching appointments
     and has, since 1992, served as a guest lecturer and associate professor in
     the Division of Periodontics, School of Dental and Oral Surgery, Columbia
     University. In addition to being a Diplomate of the American Academy of
     Periodontology, Dr. Odrich is a member of the Academy of Osseointegration,
     the American Academy of Implantology and the American Dental Association.

o    Elias Snitzer, Ph.D., age 76, has been a director of the Company since July
     1999. Dr. Snitzer has, since 1989, been affiliated with Rutgers University
     as a Professor of Ceramic Science and Engineering and currently as
     Professor Emeritus in the Department of Ceramics and Materials Science.
     Since 1995, Dr. Snitzer has been President of Photo Refractive Enterprises,
     Inc., a privately-held optical fiber


                                       32
<PAGE>


     waveguide equipment developer and marketer. Prior to that, Dr. Snitzer has
     held various senior industrial and research positions at Polaroid, United
     Technologies, American Optical Corporation and Honeywell. His honors and
     awards include the George Money Award of the American Ceramic Society, IEEE
     Quantum Electronics Award, the Charles Townes Award of OSA, the John
     Tyndall Award of OSA/IEEE and election to the National Academy of
     Engineering.

     Cheryl Blake, age 37, has been an officer of the Company since August 2000.
     Ms. Blake received a Bachelors Degree of Business Administration from
     Bryant College. Ten years of Ms. Blake's career was spent in banking
     handling Commercial Lending and Branch Management. She has been a
     Controller for two business with sales under $10 Million. Ms. Blake has
     served as a Director on several different Rotary Clubs Boards, the Better
     Business Bureau of Central Jersey, and Ravens Crest East Condominium
     Association. She was appointed by the Mayor of Hamilton Township to serve
     on the Economic Development Advisory Commission.

Compensation of Directors

Directors who are officers or employees of the Company receive no additional
cash compensation for service as members of the Board of Directors or any
committee of the Board. However, each outside director will be granted, in
connection with his or her election and reelection as a director, options
pursuant to the Company's Stock Option Plan, to purchase 10,000 shares of Common
Stock with an exercise price equal to the fair market value per share of the
Common Stock on the date of grant. The options will vest upon the earlier of one
year from the date of grant or the day immediately preceding the subsequent
annual meeting of stockholders, provided that such director has served as a
director of the Company through such date. Outside directors are reimbursed for
out-of-pocket expenses incurred in connection with attendance of meetings of the
Board of Directors. In 2000, Drs. David, Odrich and Snitzer and Mr. Hittinger
each received options to purchase 10,000 shares of Common Stock with an exercise
price of $0.74 per share.

Section 16 (a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's directors, certain
officers and persons holding more than 10% of a registered class of the
Company's equity securities to file reports of ownership and reports of changes
in ownership with the SEC and to furnish the Company with copies of all such
reports that they file. The Company believes that, during 2000, all such persons
complied with all reporting requirements under Section 16(a), on a timely basis.

ITEM 10. EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth information concerning compensation for services
in all capacities awarded to, earned by or paid to, the Company's Chairman of
the Board and Chief Executive Officer (the "Named Executive Officer"), with
respect to the years ended December 31, 2001,1999, and 1998. There were no other
executive officers of the Company whose cash and cash equivalent compensation
exceeded $100,000 during the last fiscal year.


                                       33
<PAGE>


                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                      Long-Term Awards
                                                          Annual Compensation            Compensation
                                                      ---------------------------  -----------------------
                                                                   Other Annual     Securities Underlying
Name and Principal Position    Year     Salary ($)    Bonus ($)  Compensation ($)        Options (#)
---------------------------    ----     ----------    ---------  ----------------  -----------------------
<S>                            <C>       <C>           <C>           <C>                   <C>
Eugene I. Gordon               2000      $170,000      $20,000       $1,174 (1)               --
Chairman of the Board and      1999      $141,667      $20,000       $1,524 (1)            150,000
 Chief Executive Officer
                               1998      $155,500         --         $1,722 (1)             42,500
</TABLE>

(1)  Consists of payment of annual life insurance premiums.

Stock Option Grants

No options to purchase Common Stock were granted by the Company to the Named
Executive during 2000.

Year-End Option Values

The following table sets forth information regarding the number and year-end
value of unexercised options held at December 31, 2000 by the Named Executive
Officer. No stock options were exercised by the Named Executive Officer during
fiscal 2000.

                               2000 Option Values
             Number of Securities            Value of Unexercised
            Underlying Unexercised            "In-the-Money" (1)
              Options at Fiscal                Options at Fiscal
                 Year-End (#)                    Year-End ($)
          Exercisable/Unexercisable        Exercisable/Unexercisable
          -------------------------        -------------------------
                125,840/66,660                      $ - /$ -

(1) Options are considered "in-the-money" if the fair market value of the
underlying securities exceeds the exercise price of the options.

Employment Agreements

In 1999, the Company and Eugene I. Gordon, its Chairman of the Board and Chief
Executive Officer, entered into an employment agreement, which expires on March
15, 2002. Provides for a base compensation of $170,000 per year, bonuses
aggregating a maximum of $60,000 per year based upon the attainment of certain
goals, and other additional compensation as may be determined by the Board of
Directors (without the participation of Dr. Gordon) in its sole discretion. The
Board of Directors (without the participation of Dr. Gordon) could also increase
such base compensation in its sole discretion. Under the agreement, Dr. Gordon
was also issued a total of 150,000 options to purchase Common Stock, pursuant to
the Company's Stock Option Plan, with an exercise price equal to the fair market
value per share of the Common Stock on the date of grant, such options vesting
ratably over the three-year term of the agreement as long as Dr. Gordon remains
an employee. The agreement also provides for payment of up to one year's total
compensation if Dr. Gordon's employment with the Company is terminated for any
reason other than for cause, death or disability.

The agreement can be terminated for cause and contains proprietary information,
invention and non-competition provisions, which prohibit disclosure of any of
the Company's proprietary


                                       34
<PAGE>


information and preclude Dr. Gordon's competition with the Company for a period
of two years after the termination of his employment with the Company.

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

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 2000 by (i) each
person known to the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each director of the Company, (iii) the Named Executive
Officer and (iv) all executive officers and directors of the Company, as a
group. All information with respect to beneficial ownership has been furnished
to the Company by the respective stockholders of the Company.

<TABLE>
<CAPTION>
                                                                  Sharesof Beneficially   Percentage of
                                                                         Owned (1)          Class (1)
                                                                         ----------         ---------
  Name and Address of Beneficial Owner

<S>                                                                  <C>                      <C>
Richard Grossman (2)..........................................       1,989,000 (3)(4)          33.8%
Orin Hirschman (2)............................................       1,983,800 (4)(5)          33.7
Eugene I. Gordon (6)..........................................       1,767,527 (7)             43.35
Adam-Jack M. Dodick, MD General Partnership (2)...............         260,000 (8)              6.3
Edward E. David, Jr. (6)......................................          35,000 (9)              *
William C. Hittinger (6)......................................          15,000 (9)              *
Ronald B. Odrich (6)..........................................          23,000 (10)             *
Elias Snitzer (6).............................................          15,000 (9)              *
All executive officers and directors as a group (6 persons)...       1,858,305 (11)           44.78%
</TABLE>

----------
*    Represents beneficial ownership of less than 1% of the Common Stock.

(1)  Beneficial ownership is determined in accordance with the rules of the SEC.
     In computing the number of shares beneficially owned by a person and the
     percentage ownership of that person, shares of Common Stock subject to
     convertible securities or options and warrants held by that person that are
     currently convertible or exercisable, or that are convertible or
     exercisable within 60 days of December 31, 2000, are deemed outstanding.
     Such shares, however, are not deemed outstanding for the purposes of
     computing the percentage ownership of any other person. Except as indicated
     in the footnotes to this table, the beneficial owner named in the table has
     sole voting and investment power with respect to the shares set forth
     opposite such beneficial owner's name.

(2)  Each such person's business address is 101 East 52nd Street, New York, New
     York 10022.

(3)  Consists of 832,000 shares issuable upon conversion of Series B Preferred
     Stock and 1,157,000 shares issuable upon exercise of Private Placement
     Warrants. Mr. Grossman, together with his wife, Ana Grossman, as joint
     tenants with right of survivorship, owns directly 104,000 of the shares
     shown, consisting of 52,000 shares issuable upon conversion of Series B
     Preferred Stock and 52,000 shares issuable upon exercise of Private
     Placement Warrants.

(4)  Mr. Grossman and Mr. Hirschman may be deemed the beneficial owners of
     1,885,000 of the shares shown by virtue of being co-owners of each of Adam
     Smith & Company, Inc.


                                       35
<PAGE>


     ("ASC"), Adam Smith Capital Management LLC ("ASCM"), and Diamond Capital
     Management, Inc. ("DCM"). DCM is the Investment Manager of Adam Smith
     Investments, Ltd., a British Virgin Islands corporation ("ASI"). ASCM is
     the sole general partner of Adam Smith Investment Partners, L.P. ("ASIP").
     Mr. Grossman and Mr. Hirschman are the sole officers and directors of ASC
     and DCM and the only member-managers of ASCM. All of such 1,885,000 shares
     are owned, directly or indirectly, by ASC, DCM, ASI and ASCM.

(5)  Includes 829,400 shares issuable upon conversion of Series B Preferred
     Stock and 1,154,400 shares issuable upon exercise of Private Placement
     Warrants. Mr. Hirschman owns directly 98,800 of the shares shown, including
     49,400 shares issuable upon conversion of Series B Preferred Stock and
     49,400 shares issuable upon exercise of Private Placement Warrants.

(6)  Each such person's business address is 1090 King Georges Post Road, Suite
     301, Edison, New Jersey 08837.

(7)  Includes 175,840 shares subject to exercisable options and warrants.

(8)  Consists of 130,000 shares issuable upon conversion of Series B Preferred
     Stock and 130,000 shares issuable upon exercise of Private Placement
     Warrants.

(9)  Consists of shares subject to exercisable options.

(10) Includes 10,000 shares subject to exercisable options.

(11) Includes 248,618 shares subject to exercisable options and warrants.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During March 1999, Dr. Gordon agreed to make available to the Company a loan of
up to $250,000. Under the terms of this agreement, the Company issued to Dr.
Gordon warrants to purchase up to 50,000 shares of the Company's Common Stock
and pays a market interest rate on amounts borrowed. During 2000, amounts
advanced under this agreement totaled $129,000. At December 31, 2000, none of
this amount had been repaid. The Company plans to use the remainder of the loan
in 1st quarter 2001 for working capital.

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

(A)  Reports on Form 8-K.

     None.

(B)  Index to Exhibits

     The following is a list of all Exhibits filed as part of this Report:


    Exhibit                         Description of
     Number                            Document
     ------                            --------

        3.1     Amended and Restated Certificate of Incorporation of the
                Registrant (incorporated herein by reference to Exhibit 3.1 to
                the Registrant's Registration Statement on Form SB-2,
                Registration No. 333-3184).


                                       36
<PAGE>

    Exhibit                         Description of
     Number                            Document
     ------                            --------

        3.2     Certificate of Amendment of Amended and Restated Certificate of
                Incorporation of the Registrant (incorporated herein by
                reference to Exhibit 3.1 to the Registrant's Report on Form 8-K
                filed on December 17, 1999).

        3.3     By-Laws of the Registrant (incorporated herein by reference to
                Exhibit 3.2 to the Registrant's Registration Statement on Form
                SB-2, Registration No. 333-3184).

        3.4     Certificate of Designations of Series B Convertible Preferred
                Stock of Medjet Inc. (incorporated herein by reference to
                Exhibit 3.2 to the Registrant's Report on Form 8-K filed on
                December 17, 1999).

        4.1     Subscription Agreement for Series B Convertible Preferred Stock
                and Warrants, dated as of December 3, 1999, by and among the
                Registrant and the "Investors" (as defined therein)
                (incorporated herein by reference to Exhibit 4.1 to the
                Registrant's Report on Form 8-K filed on December 17, 1999).

        4.2     Composite copy of Common Stock Purchase Warrant, dated December
                3, 1999, by the Registrant in favor of the Investors
                (incorporated herein by reference to Exhibit 4.2 to the
                Registrant's Report on Form 8-K filed on December 17, 1999).

        4.3     Registration Rights Agreement, dated December 3, 1999, by and
                among the Registrant and the Investors (incorporated herein by
                reference to Exhibit 4.3 to the Registrant's Report on Form 8-K
                filed on December 17, 1999).

        4.5     Investment Banking Agreement, dated December 3, 1999, between
                the Registrant and Adam Smith & Company, Inc. (incorporated
                herein by reference to Exhibit 3.2 to the Registrant's Report on
                Form 8-K filed on December 17, 1999).

        4.6     Settlement Agreement, dated January 28, 2000, by and among the
                Registrant and the Investors (incorporated herein by reference
                to the Registrant's Report on Form 10-KSB filed on December 31,
                1999).

        +10.1   Employment Agreement between the Registrant and Eugene I.
                Gordon, dated as of April 9, 1999. (incorporated herein by
                reference to the Registrant's Report on Form 10-KSB filed on
                December 31, 1999)

        +10.2   The Medjet Inc. 1994 Stock Option Plan, as amended (incorporated
                herein by reference to Exhibit 10.6 to the Registrant's
                Registration Statement on Form SB-2, Registration No. 333-3184).

        10.3    Agreement of Lease between the Registrant and Linpro Edison Land
                Limited, dated May 13, 1994 (incorporated herein by reference to
                Exhibit 10.16 to the Registrant's Registration Statement on Form
                SB-2, Registration No. 333-3184).

        10.4    First Amendment to Lease between the Registrant and BCE
                Associates, L.P., dated February 28, 1996 (incorporated herein
                by reference to Exhibit 10.17 to the Registrant's Registration
                Statement on Form SB-2, Registration No. 333-3184).

        10.5    Second Amendment to Lease between the Registrant and BCE
                Associates, L.P., dated December 13, 1996 (incorporated herein
                by reference to Exhibit 10.11 to the Registrant's Form 10-KSB
                for the year ended December 31, 1996).

        10.6    Third Amendment to Lease between the Registrant and BCE
                Associates, L.P., dated March 25, 1999. (incorporated herein by
                reference to the Registrant's Report on Form 10-KSB filed on
                December 31, 1999)

        10.17   Exclusive License Agreement, effective as of July 22, 1998,
                between the Company and Nestle S.A. (incorporated herein by
                reference to Exhibit 10 to the Registrant's Form 10-QSB for the
                quarter ended September 30, 1998).

        *11     Computation of Net (Loss) Per Common Share.

        *24.1   Power of Attorney (included on signature page).


*Filed herewith.


                                       37
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Edison,
State of New Jersey, on the 12th day of April, 2001.


                                                      MEDJET INC.

                                             By: /s/ Eugene I. Gordon
                                                 -----------------------
                                                   Eugene I. Gordon,
                                               Chairman of the Board and
                                                Chief Executive Officer


KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Eugene I. Gordon and Cheryl Blake, and each of them
individually, his true and lawful attorney-in-fact, proxy and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to act on, sign any and all amendments to this
Annual Report on Form 10-KSB, 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, proxies and agents, and each
of them individually, full power and authority to do and perform each and every
act and thing necessary and appropriate to be done in and about the premises, as
fully as he might or could do in person, hereby approving, ratifying and
confirming all that said attorneys-in-fact, proxies and agents or any of his,
her or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

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 the 12th day of April 2001.


       Signature(s)                Title(s)                       Date
       ------------                --------                       ----

    /s/ Eugene I. Gordon           Chairman of the Board and      April 12, 2001
    -----------------------        Chief Executive Officer
    Eugene I. Gordon


    /s/ Cheryl Blake               Vice President - Finance and   April 12, 2001
    -----------------              Human Resources
    Cheryl Blake

    /s/ Edward E. David, Jr.       Director                       April 12,2001
    ---------------------------
    Edward E. David, Jr.

    /s/ William C. Hittinger       Director                       April 12, 2001
    ---------------------------
    William C. Hittinger


    /s/ Ronald B. Odrich           Director                       April 12, 2001
    -----------------------
    Ronald B. Odrich

    /s/ Elias Snitzer              Director                       April 12, 2001
    ----------------------
    Elias Snitzer


                                       38
<PAGE>


CORPORATE INFORMATION

Corporate Offices

MEDJET INC.
1090 King Georges Post Road
Suite 301
Edison, New Jersey 08837
(732) 738-3990
(732) 738-3984 FAX

Directors
Eugene I. Gordon, Ph.D.
Chairman of the Board and Chief Executive Officer

Edward E. David, Jr., Sc.D.
President, Edward E. David, Inc.

William C. Hittinger
Business Consultant, formerly Executive Vice President, RCA Corporation, and
formerly Interim President, Lehigh University

Ronald B. Odrich, DDS
Director, Park Avenue Periodontal Associates

Elias Snitzer, Ph.D.
Professor Emeritus, Department of Ceramic Science and Engineering, Rutgers
University

Executive Officers
Eugene I. Gordon, Ph.D.
Chairman of the Board and Chief Executive Officer

Cheryl Blake
Vice President - Finance and Human Resources, Secretary and Treasurer

Securities Listing
The Company's Common Stock trades on the OTC Bulletin Board under the symbol
MDJT.OB

Independent Auditors
Rosenberg Rich Baker Berman and Company
Bridgewater, New Jersey

Legal Counsel
Kelley Drye & Warren LLP
New York, New York

Transfer Agent and Registrar
Continental Stock Transfer & Trust Company
New York, New York
(212) 509-4000

Annual Report on Form 10-KSB
The Company's Annual Report on Form 10-KSB contained herein for the year ended
December 31, 2000 is not accompanied by the exhibits, which were filed with the
Securities and Exchange Commission. The Company will furnish any such exhibits
to those stockholders who request the same upon payment to the Company of its
reasonable expenses in furnishing such exhibits. Requests for any such exhibits
should be made to:

         Investor Relations Department
         Medjet Inc.
         1090 King Georges Post Road
         Suite 301
         Edison, New Jersey 08837