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

                                  FORM 10-KSB/A

(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, 2001

              |_| 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:
                     COMMON STOCK, PAR VALUE $.001 PER SHARE

     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 [ ].


     Issuer's revenues for the fiscal year ended December 31, 2001 were
$1,032,500.


     The aggregate market value of the voting stock held by non-affiliates of
the Issuer as of March 29, 2002 was approximately $1,984,967.


     As of March 29, 2002, 3,901,431 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 1.  DESCRIPTION OF BUSINESS...............................................1

         Overview..............................................................1

         Applications of Company Technology....................................2

         Research and Development..............................................4

         Patents...............................................................4

         Regulation............................................................4

         Competition...........................................................6

         Employees.............................................................6

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.................................................16

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.................................................34

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT....................34

ITEM 10. EXECUTIVE COMPENSATION...............................................36

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......38

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................39

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.....................................39

SIGNATURE.....................................................................41

                                      -i-

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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 ARE
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 ITEM 1, "DESCRIPTION OF BUSINESS" AND ITEM 7,
"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 THE COMPANY ASSUMES NO
OBLIGATION TO UPDATE THEM, EXCEPT AS OTHERWISE REQUIRED BY LAW.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

OVERVIEW

Medjet Inc. (the "Company") is engaged in research and development of medical
technology. The plan for the Company has been to develop products based on its
platform technology and then to license these products 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,
particularly microkeratomes, which are medical devices used to produce thin
layers of tissue in the cornea. 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 waterjet
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.

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, in December 1999, the
Company received notice of Alcon's termination of the agreement. Alcon offered,
and the Company knew of, 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 Nestle license agreement.
The current status of the economy, the NJIT lawsuit, and the evolution of the
vision correction market have altered the Company's view of the best means to
exploit its technology. The Company has entered into a research agreement with
VISX, Inc., the foremost provider of equipment for the vision correction
procedure known as the Laser Ablation System for In-situ Keratomileusis
("LASIK"). Together the two companies are developing a microjet microkeratome
for producing the thin circular layer of tissue from the front surface of the
cornea, or hinged flap, required in

<PAGE>


the LASIK procedure. Human blind eye trials are anticipated to begin in the
second half of 2002. Assuming success in these trials, VISX plans to demonstrate
a microkeratome product in late 2002.

On August 17, 2001, the Company, VISX and Orion Acquisition Corp., a
wholly-owned subsidiary of VISX, entered into an Agreement and Plan of Merger
and Reorganization, which provides, among other things, for the potential merger
of Orion Acquisition Corp. with and into the Company, at VISX's option. Under
the terms of the merger agreement, if VISX chooses to go forward with the merger
and subject to other customary conditions to closing, each outstanding share of
common stock of the Company would be canceled and extinguished and would be
converted automatically into the right to receive $2.00 in cash at the effective
time of the merger. Upon consummation of the merger, the Company would become a
wholly-owned subsidiary of VISX.

VISX may terminate the merger agreement at any time prior to the effective time
of the merger for any or no reason. In consideration for such termination right,
VISX paid the Company $500,000 concurrently with the execution of the merger
agreement. The Company also issued to VISX a three-year warrant to purchase
1,320,000 shares of the Company's common stock, at an exercise price per share
of $0.75.

The closing of this transaction is contingent upon, among other things, the
receipt of any necessary third party consents and other customary closing
conditions. Notwithstanding the foregoing, VISX may elect not to consummate the
merger even if all of the other conditions set forth in the merger agreement are
satisfied by the Company. The merger agreement also provides for termination
fees of $500,000 payable by one party to the other under various conditions of
termination.

Many of the Company's forward-looking statements and plans in this annual report
are based on the assumption that VISX will exercise its option to complete the
merger. If VISX elects not to proceed with the merger by August 2002, the
termination fee payable by VISX to the Company is expected to provide the
Company with the opportunity to evaluate its position and alternatives for
future operations.

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 the
Company believes that its proprietary microjet technology has additional
surgical applications, including dentistry. The Company intends to develop
additional product applications pending the VISX acquisition and provided
adequate funds become available.

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.

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
technique known as LASIK. At present, the necessary hinged flap is made by a
blade-based microkeratome, which has some limitations. In contrast to the
blade-based microkeratome,

                                       2
<PAGE>

the HydroBlade(TM) Keratome produces uniform, hinged flaps of precisely
specified thickness. The cut surface viewed at high-resolution is far smoother
than the cut produced by blade devices.

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"), Photo Refractive Keratectomy ("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. LASIK is 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 ablates part of the corneal surface according to a prescribed spatial
pattern.

In the current LASIK technique, a hinged corneal flap is cut by a blade
microkeratome and folded 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 initially weakly
adheres to the underlying stroma. The adherence increases over a period of many
months and adherence is not a problem. The precision of blades microkeratomes is
less than desired and diminishes the otherwise high effectiveness and broad
utility of the LASIK procedure. For example, the uncertainty of the achieved
flap thickness with a blade cut limits the safe range of correction possible.
The goal of the microjet microkeratome is to achieve a device that produces
flaps with a precisely defined thickness and shape and, if achieved, is expected
to improve the accuracy and safety of the procedure.

With input from VISX, the Company is continuing to develop and refine its
prototype of a microjet microkeratome. As a result of modifications to the
device that are being made at the request of VISX, the final form of the product
for which the Company hopes to obtain regulatory clearance to market has not
been completed. The Company currently expects to commence experiments using its
microjet microkeratome on live rabbit and pig eyes in April 2002 and to commence
a clinical trial on blind human eyes in May 2002.

Based on the Company's product-development criteria, the next area identified
for development is treatment of dental caries. VISX shares this view.
Development of such treatment has not begun. 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 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 with a prototype device, 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

                                       3
<PAGE>

compared to drilling, limiting the potential for nerve involvement and
preserving as much as possible the integrity of the tooth. Hence, the capability
may be called "microdentistry."

Although a preliminary associated handpiece and pump have been developed and
constructed, the Company has not yet constructed a complete working prototype of
a microjet dental device. 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, 2001, 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. The Company
is highly satisfied with the results of the studies.

PATENTS

The Company has sought to protect its proprietary interest in the microjet
microkeratome by applying for patents in the United States and corresponding
patents abroad. As of March 31, 2002, the Company held eight issued U.S. patents
and had 8 pending U.S. patents. The Company's U.S. patents expire between 2014
and 2020. The Company holds a U.S. patent that covers a method and device for
use of the microjet microkeratome, including use of a template for corneal
shaping and holding during use of a microjet microkeratome device. This patent
expires in 2014. Although there can be no assurance, the Company believes that
its ownership of this patent and other pending patents will inhibit other
companies from commercializing the use of microjets for making hinged flaps as
part of the LASIK procedure. The Company also holds corresponding international
patents for this method and device in Australia, South Africa, Poland and
Israel, and has filed corresponding patent applications in Canada, China,
Europe, Japan and South Korea.

To the Company's knowledge, no other patents issued to others in this field will
hinder the ability of the Company to commercialize its microjet microkeratome.
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 microjet 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 manufacturer submits to the FDA a pre-market
notification

                                       4
<PAGE>

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 epithelial removal procedurefor the first
step in the procedure known as Photo Refractive Keratectomy, or PRK. 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.

The Company believes that the FDA approval process for the microjet
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. 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 2002 in which it will seek to demonstrate that its waterjet
microkeratome is substantially equivalent to a previous microkeratome which has
received market clearance from the FDA pursuant to a 510(k) notification.

The FDA has recommended to the Company that it seek permission to market the
microjet microkeratome through a Section 510(k) notification together with
ease-of-use data resulting from a 10-patient clinical trial. An investigational
device exemption will not be required. Depending on the completion of the
proposed merger with VISX, the Company intends to file a notification with the
FDA in the second half of 2002 relating to use of the microjet 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 two features of the microjet microkeratome provide
further support 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 microjet procedure. The microjet microkeratome cuts by mechanisms
that allow enhanced control of the dimensions and shape of the flap. This also
improves safety.

The second feature of the microjet 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 that separates the various lamellae
prior to cutting the targeted tissue, thereby preserving the integrity of the
remaining lamellae and both localizing and minimizing the disruption of 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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<PAGE>

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

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.

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. For example, Visijet Inc. is also developing microjet
technology and has received market clearance from the FDA for a microjet based
microkeratome for general surgical use. To the Company's knowledge, the Visijet
devise has not yet received market clearance for use in LASIK surgery. Although
Visijet has not commercially introduced a microjet microkeratome, Visijet has
announced its intention to introduce and market its device for use in LASIK
surgery. The Company, however, believes that Visijet's microjet microkeratome,
if introduced, will infringe upon the Company's patented technology and Medjet
intends to pursue available remedies to protect its proprietary technology if
and when necessary.

Although the Company's microjet microkeratome is still in development and has
neither been tested on live human eyes nor received the regulatory approval or
clearance necessary for sale, the Company believes that it has the potential to
effectively compete with other surgical techniques because of its relative
simplicity, safety, efficacy and reduced risk of significant pain.

EMPLOYEES

As of December 31, 2001, the Company had eleven full-time employees and one
part-time employee, the majority of whom were engaged in research and
development activities. None of the Company's employees are represented by a
union. The Company believes that its relations with its employees are
satisfactory.

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<PAGE>


ITEM 2.  DESCRIPTION OF PROPERTY.

The Company leases approximately 4,982 square feet of research and development
and office space in Edison, New Jersey pursuant to a lease which expires
December 31, 2004. In November 2001, the Company entered into a one-year lease
to lease an additional 1,434 square feet of the office space at the same
location. The total base rent under these leases 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

On April 21, 1998, the Company was served with a complaint by the New Jersey
Institute of Technology ("NJIT") commencing a lawsuit in the United States
District Court for the District of New Jersey ("U.S. District Court"). Each of
the Company, Eugene I. Gordon, Ph.D. (the Company's Chairman and Chief Executive
Officer), a former employee of the Company, certain patent law firms and an
individual patent attorney were named as defendants. The complaint alleged that
the defendants, with deceptive intent, failed to name an NJIT professor and/or
NJIT research associate as a co-inventor on the Company's U.S. Patent No.
5,556,406 on the "Lamellar Surgical Device and Procedure" (the "Patent") and
breached fiduciary duties and contractual obligations owed to NJIT. The
complaint sought unspecified monetary damages from the Company and an order
directing that the Company's Patent (and corresponding foreign patents and
patent applications) be assigned and transferred to NJIT. It further sought an
order that NJIT has not infringed any claims of such Patent and a declaratory
judgment that all of the Company's claims under such Patent are invalid and
unenforceable against NJIT.

NJIT's patent application relating to a refractive corrective procedure based on
the use of an isotonic waterjet had previously been denied by the Patent and
Trademark Office as inoperable. NJIT also learned that a similar invention had
been made and disclosed publicly prior to the NJIT invention. NJIT did not
contest the ruling and did not pursue a U.S. patent until October 1996. That
patent has been allowed. The three inventors of the subject of such patent
application, one of which was Dr. Gordon, had assigned such patent application
to NJIT as part of a dispute settlement in which NJIT agreed to grant an
exclusive license to the Company of the patent rights under such patent
application. That license was terminated by the Company because the Company
believed that the device did not operate as claimed and could be harmful to the
patent. NJIT then claimed, without being specific, that the Company's Patent
emanated from the earlier invention. Prior to being served with the complaint by
NJIT, the Company and Dr. Gordon had filed a complaint, on March 27, 1998,
against NJIT in the Superior Court of the State of New Jersey, Middlesex County,
seeking a declaratory judgment that NJIT had no ownership or other interest in
the patent rights to the Company's Patent and seeking unspecified monetary
damages. NJIT removed the Company's lawsuit to the U.S. District Court, seeking
to have it consolidated with its lawsuit. The Company moved to have its suit
remanded to state court and to have the NJIT lawsuit dismissed on the basis that
the federal court lacked jurisdiction over either action and that NJIT had not
been harmed by the Company's Patent and therefore could not challenge its
validity.

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
again alleged that the defendants failed to name a NJIT professor and/or a NJIT
research associate as co-inventors of the Company's Patent 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

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<PAGE>


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. The appeal is still
pending.

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.

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.OB) 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
                                                    2001                2000
                                                    ----                ----

                  First Quarter                 $1.00 - $.44        $2.25 - $.75
                  Second Quarter                $1.00 - $.20       $1.319 - $.75
                  Third Quarter                 $1.07 - $.51         $.83 - $.64
                  Fourth Quarter                 $.64 - $.51         $.78 - $.39

As of December 31, 2001, there were approximately 55 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

                                       8
<PAGE>

2002, to continue its research and development activities focusing principally
on ophthalmic surgical technology and equipment. 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 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 2001 was
difficult. The Company has sought to minimize operating costs. The overriding
constraint has been cash flow.

RESULTS OF OPERATIONS

The Company has not yet initiated sales of its products. For the year ended
December 31, 2001, the Company generated total revenues of $1,032,500, primarily
resulting from payments from VISX pursuant to research and development
agreements. For the year ended December 31, 2000, the Company generated total
revenues of $525,000, resulting from payments pursuant to the Nestle license
agreement.

Total expenses for 2001 increased by $295,355 (22%) to $1,662,022 from
$1,366,667 in 2000. This increase was primarily due to an increase in legal
fees, principally related to the negotiation and execution of an Agreement and
Plan of Merger and Reorganization between the Company and VISX, increased
purchases for materials, testing and analysis and other costs associated with
continuing development activities and patent abandonment costs of $46,633 in
2001 resulting from the abandonment of two foreign issued patents, three U.S.
pending patents and four foreign pending patents by the Company during 2001.

Other income (expense) for the year ended December 31, 2001 included a $500,000
payment by VISX to the Company made concurrently with the execution of the
merger agreement in August 2001. This payment was made in consideration for the
Company granting VISX the right to terminate the merger agreement at any time
prior to the effective time of the merger for any or no reason.

Net interest expense for 2001 was $(19,128) compared to net interest income of
$11,119 for 2000. This decrease resulted principally from increased interest
expense associated with borrowings under a loan provided by the Company's Chief
Executive Officer and reduced income from the Company's short-term investments.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2001, the Company's working capital was ($28,373).

During March 1999, Eugene I. Gordon, Ph.D., the Company's Chairman and Chief
Executive Officer, 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
agreed to pay a market interest rate on amounts borrowed. Through December 31,
2001, amounts advanced under this agreement totaled $250,000. At December 31,
2001, the amount owed to Dr. Gordon is $160,000, with interest paid monthly.
Principal amounts outstanding under this loan are due and payable on January 26,
2009.

                                       9
<PAGE>

In connection with the execution of the merger agreement with VISX, the Company
and VISX also entered into a one-year research and development agreement in
August 2001 pursuant to which VISX has agreed to provide monthly funding to the
Company in order to finance costs to support research, development and
experimental work incurred to develop microjet related technology and products,
including a microjet microkeratome. This agreement provides for minimum monthly
payments of $150,000 for the first six months and $100,000 for the second six
months.

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 carryover ("NOLs") and research and development tax credits ("R&D
Credits") to corporate taxpayers in New Jersey. Under this program, the New
Jersey Department of Taxation certifies annual NOLs and R&D Credits which may be
sold to third parties. Generally, corporations operating in New Jersey are
subject to a 9% tax on net operating profits. Companies meeting certain criteria
and that had NOLs may apply for certificates for 9% of their cumulative state
certified NOLs and 3% of their R&D Credits. The total value of the certificates
for all companies applying is limited to a fixed amount, as established by
statute. As a result, the value of the certificates issued is usually less than
the total NOLs and R&D Credit amounts for which applications are submitted,
depending on the number of companies applying for such certificates and the
amounts claimed. Any remaining amounts of NOLs and R&D Credits exceeding the
face value of the certificates issued can be carried over into subsequent years.
Whatever certificates are received may be sold for a percentage of their face
value, typically between 80% and 85%. The buyers of these certificates are then
entitled to use these certificates at 100 % of their face value to reduce their
own New Jersey state income tax payments. The Company is permitted to apply for
such certificates beginning in June with respect to NOLs and R&D Credits
relating to prior fiscal years. The New Jersey Department of Taxation generally
takes about six months to process these applications and issue the certificates.
As a result, the Company generally does not sell its eligible NOLs and R&D
Credits relating to a given year until near the end of the following year. To
the extent that the NOLs and R&D Credits are sold, they will be unavailable to
the Company to offset future New Jersey state income taxes.

For the years ended December 31, 2000 and 2001, the Company received net
proceeds of $229,427 and $210,928 respectively, from the sale of its tax
certificates relating to tax benefits from prior years. In 2002, the Company
intends to apply for certificates totaling approximately $57,000 which consists
of tax benefits of approximately $47,000 for the year ended December 31, 2001
and $9,269 in tax benefits carried over from the prior year. Assuming the
Company receives a certificate for the entire amount for which it applies, and
assuming the Company sells such certificate for 84% of its face value, the
Company expects to receive net proceeds of approximately $47,900 in late 2002
from the sale of its certificates.

The Company anticipates that its cash on hand, the monthly research and
development funding from VISX, and, to a lesser extent, the sale of its NOLs and
R&D Credits, will be sufficient to meet the Company's working capital and
planned capital expenditure requirements through 2002. If, however, the Company
incurs unexpected expenses or if the proposed merger with VISX is not completed,
the Company may require additional financing prior to the end of 2002 in order
to maintain its current operations. The Company has no current arrangements with
respect to any additional financing and, pursuant to the terms of the merger
agreement with VISX, is currently precluded from seeking such additional
financing. Consequently, there can be no assurance that any additional financing
will be available to the Company, on commercially reasonable terms, or at all.
The failure to obtain any needed financing would have a material adverse effect
on the Company, including causing a reduction in the Company's operations.

                                       10

<PAGE>



SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

GENERAL

The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosure of contingent
assets and liabilities. On an ongoing basis, the Company evaluates its
estimates, including those related to intangible assets, income taxes,
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

PATENTS

Costs incurred in connection with patent applications, principally legal and
consulting fees, are capitalized. Once a patent is granted, these costs are
amortized over the lesser of the life of the patent, generally 20 years, or the
estimated future economic life of the technology underlying the patent. Once the
amortization period begins, management continues to evaluate the estimated
future economic life of the patents. Should it be determined that a shorter life
is estimated than the original estimated future life, the amortization period is
adjusted accordingly. Should a patent application be abandoned or not approved,
the costs incurred in connection with the application are expensed.

At December 31, 2001 unamortized patent costs amounted to $239,186 and are
included in the balance sheet under the caption Patents and Trademarks
(trademark costs are $1,540). Patent abandonment costs included in operating
expense were $46,683 in 2001 and $0 in 2000.

REVENUE RECOGNITION

The Company's revenue for 2001 was generated from the research and development
agreement entered into with VISX in August 2001. This agreement provides that
VISX will fund the Company's research and development activities through August
2002. On a monthly basis, the Company prepares a budget of planned expenditures
for approval by VISX. The research and development activities are then performed
during the month with expenditures made against the approved budget. At the end
of the month, any unexpended budget amounts are reflected as deferred revenue
until such time as the expenditures are made. While this agreement provides for
the full funding of all of the Company's operating activities, it does not
provide for a profit margin to the Company.

At December 31, 2001, there was no deferred revenue in connection with the
research and development agreement. Research and development revenue recognized
from the VISX agreement included in the statement of operations was $1,032,000
in 2001.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

NO SALES REVENUES; UNCERTAIN PROFITABILITY; DEVELOPMENT STAGE COMPANY. 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. Assuming the
transaction with VISX is not consummated, no sales revenues are expected until,
and only

                                       11
<PAGE>

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 also currently
planning to seek FDA clearance of the HydroBlade(TM) Keratome device in 2002.
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 products. There can be no assurance that
the Company's activities will ultimately result in the development of
commercially saleable or useful products.

NEED FOR FUTURE FINANCING. The Company currently is focusing on its efforts in
completing development of the microjet microkeratome. If the proposed merger
with VISX is not completed, 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 71. 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 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 proposed merger with VISX is not completed and
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 OR CLEARANCE. As medical
devices, the Company's microkeratomes are subject to regulation by the FDA under
the FD&C Act and implementing

                                       12
<PAGE>

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.

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 eight issued U.S. patents and 21 U.S. patents pending.
There can be no assurance that any other patents 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.

                                       13
<PAGE>

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.

INFRINGEMENT CLAIMS; LITIGATION. The Company's competitors and potential
competitors may intentionally infringe the Company's patents. Third parties may
also assert infringement claims against the Company in the future. The defense
and prosecution of patent suits are both costly and time-consuming, even if the
outcome is favorable to the Company. 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 Item 3. "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 for support of the LASIK procedure 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 LASIK procedures 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. If the proposed merger
with VISX is not completed, the Company intends to undertake the manufacture and
marketing of its microjet products on a limited scale. However, it would need to
pursue other possible arrangements for larger-scale manufacturing, marketing and
distribution. 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,

                                       14
<PAGE>

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. If the Company does not enter into license or
distribution agreements with respect to its products, it may undertake the
marketing and sale of its own products. In such event, the Company intends to
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 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 supporting 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.

                                       15
<PAGE>



ITEM 7.  FINANCIAL STATEMENTS.

                                                                        PAGE NO.
                                                                        --------

Independent Auditors' Report........................................       17

Balance Sheet as of December 31, 2001...............................       18

Statements of Operations for the years ended December 31, 2001 and
2000, and for the period from inception to December 31, 2001........       19

Statement of Stockholders' Equity for the period from inception to
December 31, 2001...................................................       20

Statements of Cash Flows for the years ended December 31, 2001 and
2000, and for the period from inception to December 31, 2001........       22

Notes to the Financial Statements...................................       23

                                       16

<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, 2001 and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2001 and
2000 and for the period from December 16, 1993 (inception) to December 31, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the 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, 2001 and the results of its operations and its
cash flows for the years ended December 31, 2001 and 2000 and for the period
from December 16, 1993 (inception) to December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.


                                        ROSENBERG RICH BAKER BERMAN & COMPANY


Bridgewater, New Jersey
January 29, 2002

                                       17

<PAGE>




                                   MEDJET INC.
                          (A Development Stage Company)
                                  Balance Sheet
                                December 31, 2001


<TABLE>
<CAPTION>

                                                      Assets
<S>                                                                              <C>
     Current Assets:
         Cash and cash equivalents                                               $    213,477
         Prepaid expenses                                                              81,719
                                                                                -------------
                  Total Current Assets                                                295,196
                                                                                -------------


     Property and Equipment - less accumulated depreciation of $357,182                73,024
     Patents and Trademarks - less accumulated amortization of $50,511                240,726
     Security deposits                                                                  8,661
                                                                                -------------

                  Total Assets                                                   $    617,607
                                                                                =============


                                        Liabilities and Stockholders' Equity



     Current Liabilities:
         Accounts payable and accrued liabilities                                $    150,893
         Notes payable - Officer                                                      160,000
         Current Portion of Capital Lease Obligation                                   12,676
                                                                                -------------
                 Total Current Liabilities                                            323,569
         Deferred Rental Obligation                                                    12,065
                                                                                -------------
                                                                                      335,634
                                                                                -------------
     Commitments and Contingencies                                                          -
     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 $8,590,933 of which $1,556,204 was applied to additional
              paid-in capital upon conversion from an "S" to a "C" corporation)    (7,086,298)
         Less: Treasury stock, 33,789 shares, at cost                                  (1,700)
                                                                                -------------

                  Total Stockholders' Equity                                          281,973
                                                                                -------------

     Total Liabilities and Stockholders' Equity                                  $    617,607
                                                                                =============

</TABLE>


                               See notes to the financial statements.


                                       18
<PAGE>



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

<TABLE>
<CAPTION>

                                                                                                        Period from
                                                                   Year Ended December 31,           December 16, 1993
                                                                -------------------------------       (Inception) to
                                                                   2001               2000           December 31, 2001
                                                                ------------       ------------    --------------------

<S>                                                           <C>                <C>                 <C>
      Revenues:
      Revenues                                               $     1,032,500    $      525,000      $        2,232,500
                                                                -------------      ------------        ----------------
            Total Revenues                                          1,032,500           525,000               2,232,500
                                                                -------------      ------------        ----------------

       Expenses:
       Research, development,
          general and administrative                                1,662,022         1,366,667              12,346,897
                                                                -------------      ------------        ----------------
            Total Expenses                                          1,662,022         1,366,667              12,346,897
                                                                -------------      ------------        ----------------

       Loss from Operations                                         (629,522)         (841,667)            (10,114,397)
                                                                -------------      ------------        ----------------

       Other Income (Expense):
          Merger Option                                               500,000                 -                 500,000
          Other Income                                                  5,285                 -                   5,285
          Interest Income                                               4,077            25,736                 346,371
          Interest Expense                                           (23,205)          (14,617)                (89,799)
                                                                -------------      ------------        ----------------
                                                                      486,157            11,119                 756,572
                                                                -------------      ------------        ----------------

            Income (Loss) Before Income Tax                         (143,365)         (830,538)             (9,352,540)

                   State Income Tax (Benefit)                       (210,128)            41,516               (761,571)
                                                                -------------      ------------        ----------------
                   Total Income Tax                                 (210,128)            41,516               (761,571)
                                                                -------------      ------------        ----------------

       Net Income (Loss)                                               66,763         (872,064)             (8,590,969)

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

       Net Income (Loss) Attributable to Common
             Shareholders                                     $        66,763    $    (872,064)      $      (8,775,892)
                                                                =============      ============        ================
       Earnings (Loss) Per Share:
             Basic                                            $          0.02    $       (0.22)      $           (2.69)
                                                                =============      ============        ================
             Diluted                                          $          0.01    $       (0.22)      $           (2.69)
                                                                =============      ============        ================
       Weighted average common shares outstanding:
             Basic                                                  3,901,431         3,901,431               3,267,845
                                                                =============      ============        ================
             Diluted                                                5,019,524         3,901,431               3,267,845
                                                                =============      ============        ================

</TABLE>

                     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, 2001
<TABLE>
<CAPTION>
                                                                     Total      Common       Preferred                Paid-In
                                       Preferred  Common    Price   Consider-    Stock         Stock      Paid-       Capital
                                        Shares    Shares    Per       ation     ($.001         ($.01       In       (Beneficial
         Date/Description               Issued    Issued    Share     Paid      Par Value)  Par Value)   Capital     Conversion)
-------------------------------------  --------  -------  --------  ----------  ----------  ----------  ----------   -----------
<S>                 <C>                   <C>  <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      15,000        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>


                                         Accumulated    Treasury
         Date/Description                  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.

                                     20
<PAGE>




                                   MEDJET INC.
                          (A Development Stage Company)
                        Statement of Stockholders' Equity
     Period From December 16, 1993 (Date of Inception) to December 31, 2001

<TABLE>
<CAPTION>

                                                    Preferred      Common         Price          Total        Common
                                                    Shares         Shares          Per       Consideration   Stock ($.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    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

Net Income, Year Ended December 31, 2001                     -           -                -               -            -
                                                    -----------------------------------------------------------------------
Balance, December 31, 2001                              10,400    3,935,220                      $10,382,201   $   3,935
                                                    =======================================================================
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                    Preferred                      Paid-In
                                                      Stock          Paid-         Capital
                                                     ($.01            In         (Beneficial     Accumulated     Treasury
                Date/Description                    Par Value)      Capital      Conversion)       Deficit         Stock
-------------------------------------------------- -----------   ------------   -------------   --------------  ----------
<S>                                                  <C>           <C>               <C>        <C>                <C>
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)
                                                    -----------   ------------   -------------   --------------  ---------
Net Income, Year Ended December 31, 2001                  -                  -             -           66,763          -
                                                    ----------------------------------------------------------------------
Balance, December 31, 2001                           $  104         $7,365,932       $     0      $(7,086,298)   $(1,700)
                                                    ======================================================================
</TABLE>

                     See notes to the financial statements.


                                       21


<PAGE>




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

<TABLE>
<CAPTION>
                                                                                                      Period from
                                                                    For the Year Ended             December 16, 1993
                                                                       December 31,                 (Inception) to
                                                               -----------------------------
                                                                  2001              2000           December 31, 2001
                                                               -----------       -----------      ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                          <C>               <C>                  <C>
Net Income (Loss)                                            $       66,763    $     (872,064)      $  (8,590,968)

Adjustments to Reconcile Net Income (Loss) to
 Net Cash Provided by (Used in) Operating Activities:
    Depreciation and amortization                                    60,367            67,962             529,483
    Loss on abandonment of Patents                                   46,683                 -              46,683
    Loss on abandonment of property and equipment                     2,843                 -              31,830
    (Increase) Decrease in prepaid expenses                         (40,717)            7,838             (90,928)
    (Increase) Decrease in deferred tax asset                             -           267,063                   -
    Increase (Decrease) in accounts payable
       and accrued expenses                                         (35,328)           29,615             200,565
    Decrease in deferred revenues                                         -          (175,000)                  -
    Increase in deferred rental obligation                            3,467                 -               3,467
                                                                -----------       -----------         -----------

 Net Cash Provided by (Used in) Operating Activities                104,078          (674,586)         (7,869,868)
                                                                -----------       -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Note Receivable                                         9,209                 -               9,209
Cash redemptions of marketable securities                                 -                 -             320,605
Cash purchases of marketable securities                                   -                 -            (320,605)
Cash purchases of property, plant & equipment                        (8,641)          (62,772)           (546,439)
Cash purchase of organization costs                                       -                 -             (37,387)
Cash payments for patents and trademarks                            (74,874)          (70,471)           (337,920)
Cash payments for security deposits                                  (2,569)           (1,255)             (8,661)
                                                                -----------       -----------         -----------

 Net Cash Used in Investing Activities                              (76,875)         (134,498)           (921,198)
                                                                -----------       -----------         -----------
 CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of preferred stock                                 -                 -           2,380,018
Repayments of Capital Lease Obligation                              (28,391)                -             (28,391)
Proceeds from issuance of common stock                                    -                 -                   6
  and initial public offering                                                                           6,494,61
Purchase of treasury stock                                                -                 -              (1,700)
Proceeds from officer notes payable                                  31,000           (21,000)            602,000
Repayment of officer notes payable                                        -                 -            (442,000)
Proceeds from other notes payable                                         -                 -             450,000
Repayment of other notes payable                                          -           (50,000)           (450,000)
                                                                -----------       -----------         -----------

 Net Cash Provided by (Used in) Financing Activities                  2,609           (71,000)          9,004,543
                                                                -----------       -----------         -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 29,812          (880,084)            213,477
Cash and Cash Equivalents - Beginning of Period                     183,665         1,063,749                   -
                                                                -----------       -----------         -----------
Cash and Cash Equivalents - End of Period                     $     213,477     $     183,665       $     213,477
                                                                ===========       ===========         ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
  Income taxes                                               $            -     $           -       $         600
                                                                ===========       ===========         ===========
  Interest expense                                           $       23,206     $      14,617       $      63,308
                                                                ===========       ===========         ===========
</TABLE>
                     See notes to the financial statements.

                                       22
<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.

         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.


                                       23
<PAGE>



                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS


         The net proceeds of this private placement were used by the Company to
         continue development of the Company's microjet 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. In January 2000, pursuant to a
         written agreement with the purchasers of the Series B Preferred, the
         Company returned $700,000 of the $2,000,000 aggregate price received
         from the sale of the Series B Preferred in exchange for a proportionate
         share of the Series B Preferred and Series B Warrants issued in the
         private placement. The original investment was made based, in part, on
         the existence of Medjet's license agreement with Nestle S.A. and its
         wholly owned subsidiary, Alcon Laboratories, Inc. ("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 legal disputes with the investors relating to the termination
         of the license agreement, Medjet determined that a return of a portion
         of the original investment was prudent.

         In August 2001, the Company entered into an agreement and plan of
         merger and reorganization with VISX, Incorporated (VISX). Under the
         terms of the agreement, the Company received a one-time non-refundable
         payment of $500,000 upon execution of the agreement in consideration
         for VISX's right to terminate the merger agreement for any or no reason
         during the one-year period following the date of its execution. That
         payment is reflected as merger option income in the financial
         statements. Under additional terms of the agreement, the Company issued
         and delivered to VISX three year warrants to purchase 1,320,000 shares
         of the Company's Common Stock at an exercise price of $0.75 per share.
         In addition, VISX purchased 10,400 shares of the Company's Series B
         Convertible Preferred Stock, which represents all the of the Company's
         outstanding shares of Preferred Stock, and warrants to purchase a total
         of 1,365,000 shares of the Company's common stock from a third party.
         Should VISX terminate the merger agreement prior to August 17, 2002, an
         escalating termination fee of no less than $200,000 and no more
         $500,000 will be paid to the Company under certain circumstances.
         Should the Company terminate the agreement, the Company would pay a
         $500,000 termination fee to VISX under certain circumstances.

         Under a separate agreement, VISX engaged the Company to perform
         research and development functions for one year. This agreement
         provides for minimum payments of $150,000 per month for the first six
         months and $100,000 for the second six months. VISX, at its discretion,
         may provide funding in excess of the minimums. Payments under this
         agreement totaling $1,032,000 have been included in revenues. VISX has
         also purchased capital equipment directly for the Company. VISX and the
         Company will jointly own all intellectual property and any resulting
         patents developed by either party under the agreement. The agreement
         expires August 17, 2002, with no stated terms for renewal.

                                       24

<PAGE>



                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS



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.

Amortization

         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, 2001 and 2000 was $10,386
         and $10,953, respectively.

Revenue Recognition

         The Company's revenues for 2001 were generated from the research and
         development agreement with VISX. This revenue was recognized as the
         research and development costs are incurred. The Company's revenues for
         2000 were generated from licensing fees and were recognized in
         accordance with the terms of the licensing agreement.

Research and Development

         Research and Development costs related to both future and present
         products are charged to operations as incurred. Research and
         Development costs approximated $895,000 and $599,000 in 2001 and 2000,
         respectively.

Advertising Costs

         Advertising cost are charged to operations when incurred. Advertising
         expense was $1,390 and $1,495 for the years ended December 31, 2001 and
         2000, respectively.

Earnings (Loss) Per Share

         Earnings (loss) per share, in accordance with the provisions of
         Financial Accounting Standards No. 128, "Earnings Per Share," is
         computed by dividing net income (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 for 2000 and for
         the period December 16, 1993 (inception) to December 31, 2001 as the
         effect would be anti-dilutive.

                                       25

<PAGE>



                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS



Patents and Trademarks

         Patents and trademarks at cost, less accumulated amortization, consists
of the following at December 31, 2001:

                Trademarks                                        $    1,540
                Patents                                              289,697
                                                                     -------
                                                                     291,237
                Less accumulated amortization                         50,511
                                                                     -------
                    Total                                           $240,726
                                                                    --------


         Amortization expense charged to operations was $10,386 and $10,953 in
         2001 and 2000, respectively. In connection with management's evaluation
         of the future economic life of patents, $46,683 and $0 of unamortized
         patent cost was charged to operations in 2001 and 2000, respectively.

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, 2001.

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.

CONCENTRATIONS OF BUSINESS AND 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.

         The Company received 100% of its revenue from one customer in 2001 and
         100% from a different customer in 2000.

                                       26

<PAGE>



                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS



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:

<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                      ----------------
                                                                                        2001     2000
                                                                                        ----     ----
         <S>                                                                            <C>      <C>
         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
                                                                                        -----    ------
</TABLE>

The note was paid in full in April 2001.

NOTES PAYABLE - OFFICER

         Notes payable - officer represents an unsecured loan from an officer of
         the Company with interest at prime +(prime X 6.7%), currently 5.07% per
         annum, due the earliest occurrence of January 26, 2009 or payments 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 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, 2001 and 2000, 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.

                                       27
<PAGE>



                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                     Qualified and Non-Qualified Shares
                                                                      Under Option as of December 31,
                                                                      -------------------------------
                                                                         2001                  2000
                                                                         ----                  ----
         <S>                                                             <C>                  <C>
         Outstanding, beginning of year                                  440,550               348,550
         Granted during the year                                         200,993               225,000
         Canceled during the year                                        132,547              (133,000)
         Exercised during the year                                             -                     -
                                                                     -----------         -------------
         Outstanding, end of year                                        508,996               440,550
                                                                     ===========         =============
         Eligible, end of year, for exercise                             353,959               258,335
                                                                     -----------         -------------
         Range of exercise price per share                          $.25 to $7.15        $.05-to $7.63
                                                                    =============        =============

</TABLE>

         At December 31, 2001 and 2000, the average exercise price and remaining
         contractual life were $1.04 and $2.81 per share, and 8 years 4 months
         and 7 years 8 months, respectively.

         At December 31, 2001 and 2000, there were 137,581 and 206,027 shares,
         respectively, reserved for future grants.

Warrants

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

         As of December 31, 2001:

<TABLE>
<CAPTION>

                                     Exercise              Exercise Term
   Date of                           Price Per    --------------------------------
    Grant         No. of Shares        Share         Start         Expiration          Vesting Rights
    -----         -------------        -----         -----         ----------          --------------
<S>                 <C>                <C>        <C>           <C>                <C>
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
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
8/17/01             1,320,000          0.75       8/17/01       8/17/04            100% on 8/17/01
                    ---------
                    2,760,772      Outstanding at December 31, 2001
</TABLE>

                                       28


<PAGE>


                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS


         As of December 31, 2000:

<TABLE>
<CAPTION>

                                     Exercise              Exercise Term
   Date of                           Price Per    --------------------------------
    Grant         No. of Shares        Share         Start         Expiration          Vesting Rights
    -----         -------------        -----         -----         ----------          --------------
<S>                 <C>               <C>         <C>           <C>                <C>
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

</TABLE>

         There were no warrants exercised during 2001 and 2000. At December 31,
         2001 and 2000, there were 2,760,772 and 1,584,161 shares, respectively,
         eligible for exercise at prices ranging from $.75 to $4.34 per share.

         The warrants to purchase an aggregate of 1,320,000 shares of Common
         Stock issued to VISX on August 17, 2001 pursuant to the terms of the
         merger agreement are accounted for as a conditional transfer under
         Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting
         for Stock-Based Compensation." Pursuant to the terms of the merger
         agreement, if the proposed merger is completed VISX will acquire 100%
         of the Company, at which time these warrants will be of no substance. A
         measurement date for establishing fair value of these warrants,
         therefore, will be established only if the merger agreement is
         terminated.

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 issued. Had compensation expense for
         the options which vested in 2001 and 2000 been determined based on the
         fair value at the grant date commensurate with the provisions of SFAS
         No. 123, the Company's net income (loss) and net income (loss) per
         share for 2001 and 2000, respectively, would have been reflected as to
         the pro forma amounts indicated below:

                                                  2001                    2000
                                                  ----                    ----
Net income (loss):
         As reported                             $66,763              $(872,064)
         Pro forma                               $16,178              $(992,743)
 Basic income (loss) per share:
         As reported                               $0.02                 $(0.22)
         Pro forma                                 $0.00                 $(0.25)

         The fair value of each option grant is estimated on the date of grant
         using the Black-Scholes pricing model with the following weighted
         average assumptions for grants in 2001 and 2000, respectively: dividend
         yield of 0% and 0%; expected volatility of 190% and 156%; risk-free
         interest rate of 3.6% and 4.5%; and expected lives of 2 years 6 months
         in both years.

                                       29

<PAGE>


                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS


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 (benefit) provision is comprised of the following:

                                                    Year Ended December 31,
                                               ---------------------------------
                                                  2001                     2000
                                                  ----                     ----
             State current provision               $800                   $4,840
             State deferred provision         ($210,928)                 $36,676
                                              ----------                 -------
                                              ($210,128)                 $41,516
                                              ----------                 -------

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 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. Proceeds from additional sales of the
Company's NOL Carryover and R&D Credits were received in 2001 ($210,928) and in
2000 ($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,
                                                   -----------------------------
                                                        2001            2000
                                                        ----            ----
             Total deferred tax asset, noncurrent  $  2,223,366    $  2,020,153
             Less valuation allowance              $ (2,223,366)   $ (2,020,153)
                                                   ------------    ------------
             Net deferred tax asset, noncurrent    $          -    $          -
                                                   ============    ============

         The total change in the valuation allowance amounted to $203,213 and
         $256,514 for the years ended December 31, 2001 and 2000, 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,
                                                    -----------------------
                                                    2001               2000
                                                    ----               ----
             Federal Income Tax (Benefit)           (34)%             (34)%
             State Taxes (Benefits)              (146.6)%              5.0%
             Valuation allowance                      34%               34%
                                                 --------              ----
             Effective tax rate                  (146.6)%              5.0%
                                                  -------              ----

                                       30
<PAGE>


                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS



         At December 31, 2001, the Company has available approximately
         $6,529,934 of net operating losses to carry forward and which may be
         used to reduce future federal taxable income through December 31, 2016.

         At December 31, 2001, the Company has available approximately $35,426
         of net operating losses to carry forward and which may be used to
         reduce future state taxable income through December 31, 2008.

COMMITMENTS AND CONTINGENCIES

         The Company leases approximately 4,982 square feet of research and
         development and office space in Edison, New Jersey pursuant to a lease
         which expires December 31, 2004. In November 2001, the Company entered
         into a one-year lease to lease an additional 1,434 square feet of the
         office space at the same location.

         The following is a schedule by years of future minimum lease payments
         as of December 31, 2001 under operating leases that have initial or
         remaining non-cancelable lease terms in excess of one year:


             Year Ended December 31,
             2002                                               $101,242
             2003                                                 83,000
             2004                                                 83,448
                                                                --------
             Total Minimum Lease Payments Required              $267,690
                                                                --------

         Rent expense under the operating leases totaled $81,621 and $78,198 for
         the years ended December 31, 2001 and 2000, respectively.

         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 $12,065 at
         December 31, 2001.

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

                                       31
<PAGE>


                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS


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 2001. Properties under capital
         leases are as follows:

                                                            December 31,
                                                     --------------------------

                                                       2001               2000
                                                       ----               ----
             3-D Profiler Equipment                   $50,586           $50,586
             Less accumulated amortization            $18,722           $11,702
                                                      -------           -------
                    Total                             $31,864           $46,804
                                                       -------           -------

          The following is a schedule of minimum lease payments due under
          capital leases as of December 31, 2001:

         Year Ending December 31, 2002
         -----------------------------

           Total net minimum capital lease payments                     $ 12,990
                 Less amounts representing interest                     $    314
                 Present value of net minimum capital lease payments    $ 12,676
                 Obligations under capital leases, excluding current
                 maturities                                             $      -

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 AGREEMENT

         In 1999, the Company and its Chairman of the Board and Chief Executive
         Officer (the "Executive") entered into an employment agreement. 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

                                       32
<PAGE>


                                   MEDJET INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        NOTES TO THE FINANCIAL STATEMENTS


          Executive's participation) in its sole discretion. The Board of
          Directors (without the Executive's participation) may also increase
          such base compensation in its sole discretion. The 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 $500,000 to
         compensate it for the loss, through death or disability, of the
         Company's Chairman and Chief Executive Officer.

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.

                                       33

<PAGE>


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 31, 2002 are as
follows:

     o    EUGENE I. GORDON, PH.D., age 71, 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's hydro-epithelial keratoplasty ("HEK"),
          hydro-therapeutic keratoplasty ("HTK") and hydro-refractive
          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 77, 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 Protein Polymer Technologies
          Inc. and Spacehab, Inc., each of which is publicly-traded.

     o    WILLIAM C. HITTINGER, age 79, 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.

                                       34
<PAGE>


     o    RONALD B. ODRICH, DDS, age 70, 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 77, 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 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.

     o    TIMOTHY R. MAIER, age 53, has served as a director of the Company
          since August 2001. Mr. Maier has been Executive Vice President, Chief
          Financial Officer and Treasurer of VISX since December 1999, prior to
          which he had been Vice President, Chief Financial Officer and
          Treasurer since June 1995. From 1991 to June 1995, he served as Vice
          President and Chief Financial Officer of GenPharm International, Inc.,
          a privately held international biotechnology company.

     o    CHERYL BLAKE, age 38, has served as Vice President Finance and Human
          Resources of the Company since August 2000. Ms. Blake also served as
          Manager of Human Resources and Facilities of the Company from February
          1998 to April 1999. From May 1999 to March 2000, Ms. Blake served as
          Assistant Vice President of 1st Constitution Bank and, from 1995 to
          1997, she served as Controller of Cooper Pest Control, Inc. 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. Ms.
          Blake received a Bachelors Degree of Business Administration from
          Bryant College.

There are no family relationships among any of the Company's directors or
officers. However, Dr. Ronald B. Odrich, one of the Company's directors, is the
father of Dr. Marc Odrich, the Medical Director of VISX. Mr. Timothy Maier was
appointed to the Company's Board of Directors pursuant to an agreement entered
into between the Company and VISX in connection with the execution of the merger
agreement. There are no other arrangements between any director and any other
person pursuant to which the director was selected.

                                       35
<PAGE>


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. Each director who is not an employee of the Company or
VISX generally receives an annual grant of non-qualified stock options to
purchase 10,000 shares of Common Stock. Each option is granted at an exercise
price equal to the fair market value per share of Common Stock on the date of
grant, expires ten years from the date of grant, and vests upon the earlier of
one year from the date of grant or the day immediately preceding the subsequent
annual meeting of stockholders, provided that the director has served on the
Board of Directors through that date. Non-employee directors are also reimbursed
for out-of-pocket expenses incurred in connection with attendance of meetings of
the Board. In 2000, Drs. David, Odrich and Snitzer and Mr. Hittinger each
received options to purchase 10,000 shares of Common Stock at an exercise price
of $0.74 per share. In 2001, Drs. David, Odrich and Snitzer and Mr. Hittinger
each received options to purchase 10,000 shares of Common Stock with an exercise
price of $0.25 per share.

SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who beneficially own more than 10% of
the Company's Common Stock to file reports of ownership and changes in ownership
with the SEC and to furnish the Company with copies of all such reports they
file. Based on the Company's review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company believes
that during 2001 all such reports were timely filed, except that a Form 3 for
Cheryl Blake was filed late, the grant of an option in each of 1999 and 2000, as
well as the repricing of an option in 2000, to Edward David were reported late,
the grant of an option in each of 1999 and 2000 to William Hittinger were
reported late, the grant of an option in 2000 to Ronald Odrich was reported late
and the grant of an option in 2000 to Elias Snitzer was reported late.

ITEM 10. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning compensation 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, 2000,
and 1999. There were no other executive officers of the Company whose salary and
bonus compensation exceeded $100,000 during the last fiscal year.


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                    Long Term
                                                                                   Compensation
                                                                                   ------------
                                                                                      Awards
                                                                                      ------
                                                        Annual Compensation          Securities       All Other
                                                   -----------------------------     Underlying      Compensation
Name and Principal Position               Year       Salary ($)      Bonus ($)      Options/(#)         ($)(1)
---------------------------               ----     -------------  --------------  ----------------   ------------
<S>                                       <C>          <C>                                              <C>
Eugene I. Gordon, Ph.D.                   2001         171,963        -                  -              1,174
  Chairman of the Board and               2000         170,000       20,000              -              1,174
  Chief Executive Officer                 1999         141,667       20,000           150,000           1,524

</TABLE>

-------------
(1)   Represents premiums paid for life insurance polices.


                                       36
<PAGE>

STOCK OPTION GRANTS

No options to purchase shares of Common Stock were granted by the Company to the
Named Executive Officer during 2001.

YEAR-END OPTION VALUES

The following table sets forth information regarding options held at December
31, 2001 by the Named Executive Officer.


                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>

                                                           Number of Securities          Value of Unexercised
                              Shares                      Underlying Unexercised         In-the-money Options
                             Acquired                     Options At Fy-end (#)                    At Fy-end
                               On            Value     -----------------------------  --------------------------
           Name            Exercise(#)    Realized($)   Exercisable   Unexercisable   Exercisable  Unexercisable
           ----            -----------    -----------   -----------   -------------   -----------  -------------
<S>                             <C>          <C>        <C>             <C>                <C>           <C>
Eugene I. Gordon, Ph.D.         -             -         175,844         16,656             -             -

</TABLE>


EMPLOYMENT AGREEMENTS

In March 1999, the Company and Eugene I. Gordon, its Chairman of the Board and
Chief Executive Officer, entered into a three-year employment agreement, which
was subsequently amended in March 2002 to extend the term of the agreement
through March 15, 2003. The agreement provides for 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) may increase such base compensation in its sole discretion. Under the
original agreement, the Company issued to Dr. Gordon options to purchase 150,000
shares of Common Stock, pursuant to the Company's Stock Option Plan, at an
exercise price of $0.89 per share, which was the fair market value per share of
the Common Stock on the date of grant. The options vested ratably over the
initial three-year term of the agreement. In addition, in consideration for
extending the term of the agreement, Dr. Gordon will be paid an inducement bonus
of $60,000, payable no later than ten days after the proposed merger with VISX
is either completed or terminated. VISX has agreed to pay this inducement bonus
to Dr. Gordon. 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 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.

                                       37

<PAGE>



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

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of February 28, 2002 by (i) each person known
by us to own beneficially more than 5% of our common stock, (ii) each of our
directors, (iii) our Chairman of the Board and Chief Executive Officer, and (iv)
all of our directors and executive officers as a group. Except as indicated in
the footnotes to this table, each beneficial owner named in the table has sole
voting and investment power with respect to the shares set forth opposite the
beneficial owner's name.

<TABLE>
<CAPTION>

                                                                        SHARES BENEFICIALLY        PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER                                           OWNED                  CLASS
------------------------------------                                           ------                 -----
<S>                                                                        <C>                        <C>
VISX, Incorporated............................................             3,725,000 (1)              48.8%
   3400 Central Expressway
   Santa Clara, CA 95051
Eugene I. Gordon..............................................             1,839,287 (2)              44.0%
   1090 King Georges Post Road
   Suite 301
   Edison, NJ 08837
Edward E. David, Jr...........................................               40,000 (3)                 *
William C. Hittinger..........................................               20,000 (4)                 *
Ronald B. Odrich..............................................               48,000 (5)                 *
Elias Snitzer.................................................               31,000 (5)                 *
Timothy R. Maier..............................................                   -                      -
All directors and executive officers as a group (7 persons)                2,003,426 (6)              46.7%

</TABLE>


---------------

*        Less than 1% of our common stock.

(1)      Consists of 1,040,000 shares of our common stock issuable upon
         conversion of 10,400 shares of our series B convertible preferred stock
         and 2,685,000 shares issuable upon exercise of currently exercisable
         warrants. Does not include an aggregate of 1,805,963 shares
         beneficially owned by Dr. Gordon that are subject to a voting and stock
         option agreement between VISX and Dr. Gordon.

(2)      Includes 242,500 shares issuable upon exercise of options and
         warrants excercisable within 60 days of February 28, 2002. Dr. Gordon
         has entered into a voting and stock option agreement with VISX pursuant
         to which, among other things, Dr. Gordon has agreed to vote his shares
         of common stock in favor of the approval and adoption of the merger
         agreement and has granted VISX a proxy to vote his shares in this
         manner.

(3)      Includes 30,000 shares issuable upon exercise of currently exercisable
         options.

(4)      Consists of shares issuable upon exercise of currently exercisable
         options.

(5)      Includes 20,000 shares issuable upon exercise of currently exercisable
         options.

(6)      Includes 357,630 shares issuable upon exercise of options and warrants
         exercisable within 60 days of February 28, 2002.

                                       38
<PAGE>


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 December 31, 2001,
amounts advanced under this agreement totaled $250,000 plus interest. At
December 31, 2001, $90,000 of this loan had been repaid. Principal amounts
outstanding under this loan are due and payable on January 26, 2009.

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).

       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, File No. 1-11765).

      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 the Registrant (incorporated herein by reference to
               Exhibit 3.2 to the Registrant's Report on Form 8-K filed on
               December 17, 1999, File No. 1-11765).

      10.1     Employment Agreement between the Registrant and Eugene
               I. Gordon, dated as of April 9, 1999. (incorporated herein by
               reference to Exhibit 10 to the Registrant's Report on Form 10-QSB
               for the quarter ended June 30, 1999, File No. 1-11765)

     *10.2     Amendment No. 1 to Employment Agreement between the Registrant
               and Eugene I. Gordon, dated as of March 13, 2002.

      10.3     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).

                                       39
<PAGE>


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


      10.4     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).

      10.5     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).

      10.6     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, File No. 1-11765).

      10.7     Third Amendment to Lease between the Registrant and BCE
               Associates, L.P., dated March 25, 1999 (incorporated herein by
               reference to Exhibit 10.6 to the Registrant's Report on Form
               10-KSB for the year ended December 31, 1999, File No. 1-11765).

     *10.8     Lease between the Registrant and BCE Associates, L.P. dated as of
               November 9, 2001.

     *10.9     Research, Development and Experimental Cost Sharing Agreement,
               dated as of August 17, 2001, by and between the Registrant and
               VISX, Incorporated.

     *11.1     Computation of Net Income (Loss) Per Common Share.

    **23.1     Consent of Independent Auditors.

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

-------------------
 * Previously filed.
** Filed herewith.

                                       40
<PAGE>



                                    SIGNATURE

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 2nd day of May 2002.

                                                 MEDJET INC.

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



                                       41

<PAGE>