FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


(Mark One)
(X)     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the quarterly period ended September 29, 2002
                                               ------------------

                                       OR

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

                    For the transition period from _______to

                         Commission file number: 0-17919

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


                    Delaware                           31-1093148
           ------------------------------           -----------------
          (State or other jurisdiction of            (I.R.S. Employer
           incorporation or organization)            Identification No.)


                               147 Keystone Drive
                            Montgomeryville, PA 18936
                      -------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (215) 619-3600
              (Registrant's telephone number, including area code)


         (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes (X) No ( )


                  On November 1, 2002 the registrant had outstanding 2,327,965
                  shares of Common Stock, $.0l par value.



<PAGE>



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES



                                      INDEX
<TABLE>
<CAPTION>
<S>                                                                                                   <C>

PART I. FINANCIAL INFORMATION:                                                                       PAGE
------------------------------                                                                       ----

     ITEM 1.      Financial Statements:

     a.  Condensed Consolidated Balance Sheets
         September 29, 2002 (unaudited) and December 30, 2001                                         3

     b.  Condensed Consolidated Statements of Operations and Other Comprehensive Income
         (unaudited) for the quarters ended September 29, 2002 and September 30, 2001                 4

     c.  Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)
         (unaudited) for the nine months ended September 29, 2002 and September 30, 2001             5

     d.  Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended
         September 29, 2002 and September 30, 2001                                                    6

     e.  Notes to Condensed Consolidated Financial Statements (unaudited)                             7

     ITEM 2.    Management's Discussion and Analysis of
                Financial Condition and Results of Operations                                        11
     ITEM 4.    Controls and Procedures                                                              16

PART II.  OTHER INFORMATION:
----------------------------

     ITEM 4.     Submission of Matters to a Vote of Security Holders                                17
     ITEM 5.     Other Information                                                                  17
     ITEM 6.   Exhibits and Reports on Form 8-K                                                     17
     SIGNATURES                                                                                     18
     CERTIFICATIONS                                                                                 19

</TABLE>

                                       2
<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except par value)
<TABLE>
<CAPTION>
<S>                                                                                       <C>               <C>

                                                                                     Sept. 29, 2002     Dec. 30, 2001
                                                                                        (unaudited)
ASSETS
Current assets:
  Cash and cash equivalents                                                                    $496              $497
  Short-term investments                                                                      1,506             1,519
  Accounts receivable, net of allowance for doubtful accounts of $431 and $482                1,882             1,824
  Inventories                                                                                 3,222             3,006
  Other                                                                                         247               414
                                                                                    ---------------- -----------------
   Total current assets                                                                       7,353             7,260

Property and equipment, net                                                                   3,037             3,151
Patents and licensed technology, net                                                            521               328
Goodwill, net                                                                                   599               599
Other assets                                                                                     85               127
                                                                                    ---------------- -----------------
   Total assets                                                                             $11,595           $11,465
                                                                                    ================ =================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                                                            $133              $173
  Note payable                                                                                   79                 -
  Accounts payable                                                                              725               851
  Accrued liabilities                                                                           825               411
                                                                                    ---------------- -----------------
   Total current liabilities                                                                  1,762             1,435
                                                                                    ---------------- -----------------

Long-term debt                                                                                2,952             2,937
Other liabilities                                                                                44                 -

Stockholders' equity:
   Common stock,  $.01 par value,  30,000 shares  authorized,  2,328 shares issued
    and outstanding                                                                              23                23
  Additional paid-in capital                                                                 33,730            33,725
  Accumulated deficit                                                                       (26,912)         (26,666)
  Accumulated other comprehensive income (loss)                                                 (4)                11
                                                                                    ---------------- -----------------
   Total stockholders' equity                                                                 6,837             7,093
                                                                                    ---------------- -----------------
   Total liabilities and stockholders' equity                                               $11,595           $11,465
                                                                                    ================ =================


The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
                                       3
<PAGE>



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
<S>                                                                                     <C>                <C>



                                                                                         For the Quarter Ended:
                                                                                    Sept. 29, 2002     Sept. 30, 2001

Net sales                                                                                   $2,891             $2,795
Cost of sales                                                                                1,549              1,471
                                                                                  ----------------- ------------------
Gross profit                                                                                 1,342              1,324
                                                                                  ----------------- ------------------

Operating expenses:
  Selling, general and administrative                                                        1,162              1,151
  Product development                                                                          137                141
  Non-recurring expenses                                                                       152                  -
                                                                                  ----------------- ------------------
                                                                                             1,451              1,292
                                                                                  ----------------- ------------------

Operating income (loss)                                                                      (109)                 32

Interest expense                                                                                39                 43
Interest income                                                                                (23)               (13)
                                                                                  ----------------- ------------------
Net income (loss)                                                                           ($125)                 $2
                                                                                  ================= ==================

Basic and diluted net income (loss) per share                                              ($0.05)              $0.00
                                                                                  ================= ==================

Shares used in calculating basic and diluted net income (loss) per share                     2,328              2,328
                                                                                  ================= ==================



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF
                  OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
                                 (In thousands)


                                                                                          For the Quarter Ended:
                                                                                    Sept. 29, 2002     Sept. 30, 2001

Net income (loss)                                                                           ($125)                 $2
Other comprehensive income:
   Unrealized securities gains arising during period                                             1                  8
   Less: reclassification for gains included in net income (loss)                              (4)                (7)
                                                                                  ----------------- ------------------
Increase (decrease) in accumulated other comprehensive income (loss)                           (3)                  1
                                                                                  ----------------- ------------------
Total comprehensive income (loss)                                                           ($128)                 $3
                                                                                  ================= ==================



The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
                                       4
<PAGE>






                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
<S>                                                                                      <C>                <C>



                                                                                      For the Nine Months Ended:
                                                                                    Sept. 29, 2002     Sept. 30, 2001

Net sales                                                                                   $8,476             $7,751
Cost of sales                                                                                4,712              3,913
                                                                                  ----------------- ------------------
Gross profit                                                                                 3,764              3,838
                                                                                  ----------------- ------------------

Operating expenses:
  Selling, general and administrative                                                        3,457              3,534
  Product development                                                                          379                444
  Non-recurring expenses                                                                       152                  -
                                                                                  ----------------- ------------------
                                                                                             3,988              3,978
                                                                                  ----------------- ------------------

Operating loss                                                                               (224)              (140)

Interest expense                                                                               107                136
Interest income                                                                               (84)               (99)
                                                                                  ----------------- ------------------
Net loss                                                                                    ($247)             ($177)
                                                                                  ================= ==================

Basic and diluted net loss per share                                                       ($0.11)            ($0.08)
                                                                                  ================= ==================

Shares used in calculating basic and diluted net loss per share                              2,328              2,328
                                                                                  ================= ==================



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF
                     OTHER COMPREHENSIVE (LOSS) (UNAUDITED)
                                 (In thousands)

                                                                                        For the Nine Months Ended:
                                                                                    Sept. 29, 2002     Sept. 30, 2001

Net loss                                                                                    ($247)             ($177)
Other comprehensive loss:
   Unrealized securities gains arising during period                                             5                 16
   Less: reclassification for gains included in net loss                                      (19)               (26)
                                                                                  ----------------- ------------------
Decrease in accumulated other comprehensive loss                                              (14)               (10)
                                                                                  ----------------- ------------------
Total comprehensive loss                                                                    ($261)             ($187)
                                                                                  ================= ==================




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

</TABLE>

                                       5
<PAGE>



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (In thousands)
<TABLE>
<CAPTION>
<S>                                                                                 <C>                <C>


                                                                                     For the Nine Months Ended:
                                                                                Sept. 29, 2002      Sept. 30, 2001
Cash Flows From Operating Activities:
  Net loss                                                                              ($247)              ($177)
  Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities:
     Depreciation and amortization                                                         615                 656
     Provision for bad debts                                                              (51)                (65)
     (Increase) decrease in assets:
      Accounts receivable                                                                  (8)               (238)
      Inventories                                                                        (348)               (909)
      Other current assets                                                                 168                (69)
      Other assets                                                                          27                (33)
     Increase (decrease) in liabilities:
      Accounts payable                                                                      50                 433
      Accrued liabilities                                                                  250               (275)
                                                                           -------------------- -------------------
        Net cash provided by (used in) operating activities                                456               (677)
                                                                           -------------------- -------------------

Cash Flows From Investing Activities:
  Purchases of short-term investments, net                                                 (2)               (159)
  Purchases of property and equipment                                                    (151)               (141)
  Patent costs                                                                            (13)                 (9)
                                                                           -------------------- -------------------
        Net cash used in investing activities                                            (166)               (309)
                                                                           -------------------- -------------------

Cash Flows From Financing Activities:
  Payments on long-term debt                                                             (169)                (96)
  Payments on notes payable                                                              (167)                 -
  Net advances on line of credit                                                            45                 599
                                                                           -------------------- -------------------
        Net cash provided by (used in) financing activities                              (291)                 503
                                                                           -------------------- -------------------

Net decrease in cash and cash equivalents                                                  (1)               (483)

Cash and Cash Equivalents, Beginning of Period                                             497                 702
                                                                           -------------------- -------------------

Cash and Cash Equivalents, End of Period                                                  $496                $219
                                                                           ==================== ===================




The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>

                                       6
<PAGE>



                        SURGICAL LASER TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1 .   Basis of Presentation:

The condensed consolidated financial statements of the Company for the quarter
and nine-month periods ended September 29, 2002 and September 30, 2001 have been
prepared by the Company without audit by the Company's independent auditors. In
the opinion of the Company's management, all adjustments necessary to present
fairly the financial position, results of operations, and cash flows of the
Company as of September 29, 2002 and September 30, 2001 and for the periods then
ended have been made. Those adjustments consist only of normal and recurring
adjustments. The condensed consolidated balance sheet of the Company as of
December 30, 2001 has been derived from the audited consolidated balance sheet
of the Company as of that date.

Certain information and note disclosures normally included in the Company's
annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. These condensed consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-K annual report for 2001 filed with the Securities and
Exchange Commission.

         Interim Financial Information:

While the Company believes that the disclosures presented are adequate to
prevent misleading information, it is suggested that the unaudited condensed
consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes included in the Company's Form 10-K
report for the fiscal year ended December 30, 2001, as filed with the Securities
and Exchange Commission. Interim results for the quarter ended September 29,
2002 are not necessarily indicative of the results to be expected for the full
year.

         Use of Estimates:

The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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. The critical estimates and judgments made by management in the
preparation of the financial statements relate to revenue recognition,
impairments of long-lived assets and adequacy of the accounts receivable
reserve.

         Merger Agreement:

On September 25, 2002, the Company entered into an agreement and plan of merger
with PhotoMedex, Inc. (PhotoMedex), whereby PhotoMedex will acquire the Company.
Under the terms of the merger agreement, a wholly-owned subsidiary of PhotoMedex
will merge with and into the Company and the Company will become a wholly-owned
subsidiary of PhotoMedex.

Before the merger can be consummated, stockholders of record as of November 8,
2002 and holding a majority of the outstanding shares of the Company's common
stock must approve and adopt the merger agreement and the plan of merger. The
Company will hold a special meeting of its stockholders on December 23, 2002 to
vote on the merger.

2.       Acquisitions:

During the quarter ended June 30, 2002, the Company acquired the CO2 laser
product line of Reliant Technologies, Inc. ("Reliant"). The Company obtained
inventory for the product line for $75,000 cash and $105,000 in a 12 month note
payable. The Company also assumed an outstanding purchase commitment of $72,000
for inventory. In addition, the Company obtained a royalty-bearing license for
the use of certain patents of Reliant in surgical and aesthetic applications.
Under the license, the Company shall, over an 18-month period, prepay royalties
of $250,000. The license is being amortized on a straight line basis over an
estimated life of 8 years.


                                       7
<PAGE>


3.   Supplemental Cash Flow Information:

There were no material income taxes paid for the nine months ended September 29,
2002 and September 30, 2001. Interest paid for the nine months ended September
29, 2002 and September 30, 2001 was $108,000 and $126,000, respectively.

For the nine months ending September 29, 2002, non-cash operating and financing
activities consisted of liquidation of an account payable for equipment by means
of a capital lease agreement in the amount of $35,000, a reclassification from
accounts payable to notes payable amounting to $141,000, and a conversion of two
operating leases into a capital lease for $24,000.

In May 2002, the Company acquired the CO2 laser product line from Reliant,
paying $75,000 cash and $105,000 in a short term note payable in exchange for
inventories and committing to prepay royalties of $250,000 over 18 months in
exchange for certain license rights.

4.    Inventories:

Inventories are stated at the lower of cost (first-in, first-out basis) or
market. Cost is determined at the latest cost for raw materials and at
production cost (materials, labor and indirect manufacturing cost) for
work-in-process and finished goods.

Inventories at September 29, 2002 and December 30, 2001 were as follows (in
thousands of dollars)
<TABLE>
<CAPTION>
<S>                                                                <C>                          <C>



                                                               Sept. 29, 2002               Dec. 30, 2001
                                                               --------------               -------------
     Raw material and work-in-process                                  $2,023                      $1,913
     Finished goods                                                     1,199                       1,093
     --------------------------------------------- --------------------------- ---------------------------
                                                                       $3,222                      $3,006
     ============================================= =========================== ===========================

</TABLE>

5.       Other Intangible Assets:

Costs to obtain or defend patents are capitalized and amortized over the shorter
of their estimated useful life or eight years. The total costs of license
agreements, including costs to obtain such agreements, are capitalized and
amortized over the shorter of the life of the agreement or eight years.

The following table reflects the components of intangible assets, excluding
goodwill (in thousands):
<TABLE>
<CAPTION>
<S>                                         <C>                    <C>               <C>               <C>

                                                  Sept. 29, 2002                     December 30, 2001
                                                  --------------                     -----------------
                                          Gross Carrying        Accumulated     Gross Carrying     Accumulated
                                            Amount             Amortization             Amount    Amortization
                                       ------------------ ------------------ ------------------ ---------------
    Amortized intangible assets:
         Patents and trademarks                   $1,079               $809             $1,066            $743
         License agreements                          298                 47                 40              35

                                       ------------------ ------------------ ------------------ ---------------
    Total other intangible assets                 $1,377               $856             $1,106            $778
                                       ================== ================== ================== ===============

</TABLE>

                                       8

<PAGE>



The following sets forth the estimated amortization expense on intangible assets
 for the fiscal years ending (in thousands):

                                                      2002             $107
                                                      2003               98
                                                      2004               84
                                                      2005               69
                                                      2006               46


6.       Accrued Liabilities:

In May 2002, the Company acquired the CO2 laser product line from Reliant, which
included a commitment to prepay royalties of $250,000 over 18 months. The
current portion of $165,000 is included in accrued liabilities and the long term
portion of $44,000 is included in other liabilities at September 29, 2002.

During the first nine months of 2002, the Company resumed direct control of
$223,000 of funds previously set aside in July 1999 for the payment of the
Company's subordinated notes and $31,000 of funds set aside to pay related,
accrued interest. These amounts are also included in accrued liabilities at
September 29, 2002.


7.       Non-recurring Expense:

The non-recurring expense represents legal and other services incurred in
relation to the pending merger with Photomedex. The merger is expected to occur
in December 2002.


8.    Basic and Diluted Income (Loss) Per Share:

Basic and diluted income (loss) per share have been computed under the
guidelines of Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings per Share" as follows (in thousands except for per share amounts):
<TABLE>
<CAPTION>
<S>                                                         <C>                                      <C>


                                                     For the Quarter Ended                 For the Nine Months Ended
                                          Sept. 29, 2002     Sept. 30, 2001      Sept. 29, 2002        Sept. 30, 2001
Basic EPS Calculation
   Net income (loss)                              ($125)                 $2              ($247)                ($177)
   Denominator:
      Common Stock Outstanding                     2,328              2,328               2,328                 2,328
                                     -------------------- ------------------ ------------------- ---------------------
   Basic EPS                                     ($0.05)              $0.00             ($0.11)               ($0.08)
                                     ==================== ================== =================== =====================

Diluted EPS Calculation
   Net income (loss)                              ($125)                 $2              ($247)                ($177)
   Denominator:
      Common Stock Outstanding                     2,328              2,328               2,328                 2,328
       Common Stock Options                            -                  -                   -                     -
                                     -------------------- ------------------ ------------------- ---------------------
       Total Shares                                2,328              2,328               2,328                 2,328
                                     -------------------- ------------------ ------------------- ---------------------
   Diluted EPS                                   ($0.05)              $0.00             ($0.11)               ($0.08)
                                     ==================== ================== =================== =====================
</TABLE>

For the quarter and the nine months ended September 29, 2002, the Company had
common stock options and warrants outstanding of 598,490 which were excluded
from the calculation of diluted earnings per share due to the net losses
incurred. The inclusion of these common share equivalents had an anti-dilutive
effect when calculating diluted loss per share under SFAS No. 128. For the
quarter and nine months ended September 30, 2001, the Company had common stock
options and warrants outstanding of 613,790. The common stock options and
warrants outstanding were excluded from the calculation of diluted earnings per
share because either those options' and warrants' exercise prices were greater
than the average market price of the common stock or their inclusion would have
had an anti-dilutive effect on earnings per share.

                                       9

<PAGE>


9.   Bank Borrowings:

The Company has a $3 million credit facility from a bank. The credit facility's
original commitment term of three years expiring June 2003 has been extended
until June 2004. The credit facility permits deferment of principal payments
until the end of the commitment term, and is secured by SLT's business assets,
including collateralization of $2 million of SLT's cash and cash equivalents and
short-term investments. The credit facility has been amended to set the interest
rate at the 30 day LIBOR plus 2.25% and is subject to certain covenants and
borrowing base certificates, as defined. At. September 29, 2002, the rate on the
credit facility was 4.07%. At September 29, 2002, SLT had $2,819,000 in
outstanding obligations and $181,000 remaining available under the credit
facility.

10.  Income Taxes:

In accordance with SFAS No. 109 "Accounting for Income Taxes", the Company has
recorded no current provision for income taxes due to the losses incurred for
the quarter and nine months ended September 29, 2002 and has recorded no net
deferred provision by reason of the losses incurred. Any benefit from such loss
has been fully reserved due to uncertainties as to the realizability of such
benefit based on the Company's historical results and the general market
conditions which the Company continues to experience.

In accordance with SFAS No. 109, the Company has recorded no current provision
for income taxes due to the availability of net operating loss carryforwards in
the quarter ended September 30, 2001 and due to the loss incurred for the nine
months ended September 30, 2001. The Company has recorded no benefit from the
net loss inasmuch as any such benefit has been fully reserved due to
uncertainties as to the realizability of such benefit based on the Company's
historical results and the general market conditions which the Company continues
to experience.

11.  Business Segment and Geographic Data:

The Company is engaged primarily in one business segment: the design,
development and manufacture of laser products and the marketing of those laser
products as well as other instruments for medical applications. The Company
markets its offering through traditional sales efforts as well as through the
provision of fee-based surgical services. The Company's customers are primarily
hospitals and surgery centers. For the quarters and nine months ended September
29, 2002 and September 30, 2001, the Company did not have material net sales to
any individual customer.

The Company reported net sales in the following categories (in thousands of
dollars):
<TABLE>
<CAPTION>
<S>                                                                     <C>                                <C>


                                                              For the Quarter Ended:           For the Nine Months Ended:
                                                   Sept. 29, 2002     Sept. 30, 2001      Sept. 29, 2002   Sept. 30, 2001
                                                   --------------     --------------      --------------   --------------
Disposables and accessories                                $1,205             $1,186              $3,506           $3,696
Laser system sales and related maintenance                    350                617               1,201            1,114
Surgical services                                           1,336                992               3,769            2,941
------------------------------------------------ ----------------- ------------------ ------------------- ----------------
Total net sales                                            $2,891             $2,795              $8,476           $7,751
================================================ ================= ================== =================== ================
</TABLE>


For the quarters and nine months ended September 29, 2002 and September 30,
2001, there were no material net sales attributed to an individual foreign
country. Net sales by geographic area were as follows (in thousands of dollars):
<TABLE>
<CAPTION>
<S>                                            <C>                                                     <C>


                                        For the Quarter Ended:                           For the Nine Months Ended:

                                 Sept. 29, 2002          Sept. 30, 2001         Sept. 29, 2002         Sept. 30, 2001
                                 --------------          --------------         --------------         --------------
Domestic                                 $2,710                  $2,415                 $7,992                 $6,598
Foreign                                     181                     380                    484                  1,153
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
                                         $2,891                  $2,795                 $8,476                 $7,751
========================= ====================== ======================= ====================== ======================
</TABLE>

                                       10
<PAGE>


12.  Recent Accounting Pronouncements:

On July 20, 2001, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 141,  "Business  Combinations,"  and SFAS No. 142,  "Goodwill and Intangible
Assets." SFAS No. 141 eliminates the use of the pooling method of accounting and
requires the use of purchase accounting for all business combinations  initiated
after June 30, 2001. It also provides guidance on purchase accounting related to
the  recognition  of  intangible  assets  separate from  goodwill.  SFAS No. 142
changes  the  accounting  for  goodwill  from  an  amortization   method  to  an
impairment-only  approach.  Under SFAS No. 142, goodwill will be tested annually
and whenever events or  circumstances  occur which indicate that goodwill may be
impaired.  SFAS  No.  141 and  SFAS  No.  142  are  effective  for all  business
combinations completed after June 30, 2001.

 As of December 31, 2001, which is the beginning of fiscal 2002, the Company no
longer amortizes the goodwill which it recognized in connection with the
acquisition of Surgical Innovations & Services, Inc. ("SIS"). During the quarter
and first nine months of 2001, the Company had goodwill amortization of $8,000
and $24,000, respectively. The Company's goodwill is subject to a transitional
impairment test as of December 31, 2001 and an annual impairment test, using a
two-step process prescribed by SFAS No. 142. The Company has completed the
transitional impairment test for SIS, the applicable reporting unit, and no
impairment of goodwill was found to exist as of the beginning of fiscal 2002.
During 2002 and in future periods, the Company will evaluate goodwill for
possible impairment at least on an annual basis. The Company has reviewed its
other intangible assets besides goodwill as of the beginning of fiscal 2002 and
has determined that no changes were necessary as to the method by which it
accounts for or amortizes such intangibles.

The following table reflects unaudited adjusted results of operations of the
Company, giving effect to SFAS No. 142 as if it had been adopted on January 1,
2001 (in thousands, except earnings per share):
<TABLE>
<CAPTION>
<S>                                                          <C>          <C>               <C>            <C>


                                                         For the Quarter Ended:         For the Nine Months Ended:
                                                     Sept. 29, 2002   Sept. 30, 2001  Sept. 29, 2002   Sept. 30, 2001
                                                     --------------   --------------  --------------   --------------
Net income (loss), as reported                               ($125)               $2          ($247)           ($177)
Add back: amortization expense,
    net of tax                                                    -                8               -             24
--------------------------------------------------- ---------------- ---------------- --------------- ----------------
Adjusted net income (loss)                                   ($125)              $10          ($247)           ($153)
=================================================== ================ ================ =============== ================

Basic and diluted net income (loss) per share:
As reported                                                 ($0.05)            $0.00         ($0.11)          ($0.08)
Adjusted                                                    ($0.05)            $0.00         ($0.11)          ($0.07)
</TABLE>


In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires that the fair value of a liability
associated with an asset retirement be recognized in the period in which it is
incurred, with the associated retirement costs capitalized as part of the
carrying amount of the long-lived asset and subsequently depreciated over its
useful life. The adoption of SFAS No. 143 did not have any impact on the
Company's financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which establishes a single accounting model,
based on the framework established in SFAS No. 121, for long-lived assets to be
disposed of and clarifies certain issues related to SFAS No. 121. SFAS No. 144
supersedes SFAS No. 121 and APB Opinion No. 30, "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The
Company was required to adopt SFAS No. 144 for fiscal year 2002. The adoption of
SFAS No. 144 did not have a material impact on the Company's financial position
or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Exit or Disposal
Activities." SFAS No. 146 addresses the recognition, measurement and reporting
of costs associated with exit and disposal activities, including restructuring
activities. SFAS No. 146 also addresses recognition of certain costs related to
terminating a contract that is not a capital lease, costs to consolidate
facilities or relocate employees and termination of benefits provided to
employees that are involuntarily terminated under the terms of a one-time
benefit arrangement that is not an ongoing benefit arrangement or an individual
deferred compensation contract. SFAS No. 146 is effective for exit or disposal
activities that are initiated after December 31, 2002. Adoption of SFAS No. 146
is not expected to have an impact on the financial position or results of
operations of the Company.

                                       11
<PAGE>



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

OVERVIEW

We are engaged in the development, manufacture and sale of proprietary laser
systems for both contact and non-contact surgery, and in the delivery of
turn-key surgical services which include the provision of technicians, capital
equipment and disposable and reusable products for specific surgical procedures.
Our surgical services are performed under contractual agreements with our
customers, or under a non-contracted arrangement. All of our surgical services
customers are charged for the services provided on a per-procedure basis. We
supplement our sales of laser systems and surgical services with certain
non-laser product offerings.

Our growth strategy includes a continued emphasis on identifying surgical
procedures that benefit from the precision and hemostatic capabilities of our
proprietary technology coupled with the development and sourcing of products
that provide the opportunity to expand our surgical service offerings.

We expanded our surgical service offerings in June 2000 through the acquisition
of SIS. SIS provides surgical services utilizing a variety of laser technologies
to its customer base located mainly in the southeastern United States.

MERGER

On September 25, 2002, we entered into an agreement and plan of merger with
PhotoMedex, Inc. (PhotoMedex), whereby PhotoMedex will acquire us. In order to
complete the merger, we must obtain the approval of our stockholders. We believe
that this merger will benefit our stockholders.

Under the terms of the merger agreement, a wholly-owned subsidiary of PhotoMedex
will merge with and into us and we will become a wholly-owned subsidiary of
PhotoMedex. In the merger, each share of our common stock outstanding
immediately prior to the effective time of the merger will be converted in 1.12
shares of PhotoMedex common stock. In addition, PhotoMedex will assume certain
of our outstanding common stock warrants. PhotoMedex common stock is traded on
the Nasdaq National Market under the symbol "PHMD," and it is a condition to
closing the merger that the PhotoMedex common stock to be issued to our
stockholders in the merger at closing (other than shares which may be issued
after the closing upon the exercise of certain warrants assumed by PhotoMedex in
the merger) be listed on the Nasdaq National Market.

After careful consideration, our board of directors has determined that the
merger and the transactions associated with it are fair to and in the best
interests of our stockholders and has approved the merger agreement.

Before the merger can be consummated, stockholders of record as of November 8,
2002 and holding a majority of the outstanding shares of our common stock must
approve and adopt the merger agreement and the plan of merger. Our directors and
officers who collectively beneficially own an aggregate of approximately 15% of
the issued and outstanding shares of our common stock, have agreed to vote all
of their common stock in favor of the merger agreement and the plan of merger.
We will hold a special meeting of our stockholders on December 23, 2002 to
consider and vote upon the proposed merger.


RESULTS OF OPERATIONS

Our net sales are generated primarily by three sources: sales of Contact Laser
Delivery Systems and related accessories; sales of Nd:YAG and CTH holmium laser
systems and related maintenance; and the provision of surgical services. The
U.S. market is serviced predominantly by a direct sales force, while sales
outside the United States are derived through a network of distributors. Net
sales for the quarter ended September 29, 2002 of $2,891,000 increased $96,000
or 3% from the comparable period in 2001. Net sales for the nine months ended
September 29, 2002 of $8,476,000 increased $725,000 or 9% from the comparable
period in 2001.

                                       12

<PAGE>


Net sales of disposables and related accessories were $1,205,000 or 42% of total
net sales for the quarter ended September 29, 2002. This represented an increase
of $19,000 or 2% compared to net sales of disposables and related accessories of
$1,186,000 for the quarter ended September 30, 2001. Net sales of disposables
and related accessories were $3,506,000 or 41% of total net sales for the nine
months ended September 29, 2002. This represented a decrease of $190,000 or 5%
compared to net sales of disposables and related accessories of $3,696,000 for
the nine months ended September 30, 2001. This decrease was due to a decline in
sales of non-laser disposable products and the lower level of disposable sales.

Net sales of laser systems and related maintenance, which comprised 12% of total
net sales for the quarter ended September 29, 2002, decreased $267,000 or 43%
from the quarter ended September 30, 2001. This decrease is due to fewer laser
units sold internationally for the quarter compared to the corresponding quarter
in 2001. Net sales of laser systems and related maintenance, which comprised 14%
of total net sales for the nine months ended September 29, 2002, increased
$87,000 or 8% from the nine months ended September 30, 2001. This increase is
due to a higher level of domestic laser sales, which have a higher average
selling price for both the Nd:YAG and the CTH holmium laser systems than
prevails in international markets.

We provide our customers per-procedure surgical services which include access to
laser systems and related disposables as well as a technician. Prior to the
acquisition of SIS in June 2000, we offered the use of our proprietary Nd:YAG
laser system in the provision of surgical services. With the acquisition of SIS,
we now have acquired several different types of lasers, significantly expanding
the types of surgical procedures that can be performed through our services.
Surgical services revenue was $1,336,000 in the third quarter of 2002 or 46% of
total net sales. This represented an increase of $344,000 or 35% compared to the
third quarter of 2001. Surgical services revenue was $3,769,000 for the nine
months ended September 29, 2002 or 44% of total net sales. This represented an
increase of $828,000 or 28% compared to the nine months ended September 30,
2001. These increases were the result of both new surgical services contracts
and the expansion of procedural volumes within our existing customer base.

Gross profit of $1,342,000 for the quarter ended September 29, 2002 increased
$18,000 or 1% from the third quarter of 2001. As a percentage of net sales,
gross profit was 46% in the quarter ended September 29, 2002 and 47% in the
quarter ended September 30, 2001. Gross profit of $3,764,000 for the nine months
ended September 29, 2002 decreased $74,000 or 2% from the nine months ended
September 30, 2001. As a percentage of net sales, gross profit of 44% for the
nine months ended September 29, 2002 declined 6% when compared to a gross profit
percentage for the nine months ended September 30, 2001 of 50%. These declines
were attributable to two main factors. A change in sales mix, primarily due to
the growth of surgical services revenue which typically has a lower profit
percentage than product sales, and an increase in surgical service expenses
related to the geographic expansion of contract services.

Operating expenses for the third quarter of 2002 of $1,451,000 increased by
$159,000 or 12% from the third quarter of 2001. Operating expenses for the first
nine months of 2002 of $3,988,000 increased by $10,000 from the first nine
months of 2001.

Selling, general and administrative expenses of $1,162,000 in the third quarter
of 2002 increased by $11,000 or 1% from the comparable prior year period.
Selling, general and administrative expenses of $3,457,000 for the nine months
ended September 29, 2002 decreased by $77,000 or 2% from the comparable prior
year period. Included in the selling, general and administrative expenses for
the quarter and nine months ended September 30, 2001 was a recovery of bad debt
of $40,000 and $125,000, respectively, related to notes receivable from former
customers. There were no similar recoveries in the comparable quarterly or nine
month periods in 2002.

Product development expenses of $137,000 in the third quarter of 2002 decreased
$4,000 or 3% from the third quarter of 2001. Product development expenses of
$379,000 for the nine months ended September 29, 2002 decreased $65,000 or 15%
from the nine months ended September 30, 2001. The higher level of expenditures
in the first nine months of 2001 related to the development of the CTH holmium
laser.

Non-recurring expenses of $152,000 for the quarter and nine months ended
September 29, 2002 were for legal and other service expenses incurred for the
pending merger with Photomedex.

                                       13
<PAGE>

Interest expense of $39,000 for the third quarter of 2002 was $4,000 or 9% lower
than in the third quarter of 2001. Interest expense of $107,000 for the nine
months ended September 29, 2002 was $29,000 or 21% lower from the comparable
prior year period. These decreases were due to lower interest rates on the
credit facility.

Interest income of $23,000 for the third quarter of 2002 increased $10,000 from
the third quarter of 2001. This increase was due to the maturity of two
corporate bonds. Interest income of $84,000 for the nine months ended September
29, 2002 was $15,000 or 15% lower than the comparable prior year period. This
decrease was due to lower levels of cash, cash equivalents and short-term
investments as well as a decline in overall interest rates. The decrease was
offset, in part, by additional interest income of $20,000 earned by funds set
aside in July 1999 for the payment of our subordinated notes.

LIQUIDITY AND CAPITAL RESOURCES

Cash, cash equivalents and short-term investments at September 29, 2002 were
$2,002,000, a decrease of $14,000 from the December 30, 2001 balance of
$2,016,000. We invest our excess cash in high-quality, liquid, short-term
investments.

Net cash provided by operating activities was $456,000 for the first nine months
of 2002 compared to cash used in operating activities of $677,000 in the
comparable period in 2001. The comparative increase was due principally to a
reduction of inventory purchases compared to the prior year period of $561,000
and to an increase in accrued liabilities of $525,000. The increase in accrued
liabilities resulted from the restoration to us of the direct control of funds
previously set aside in July 1999 for the payment of our subordinated notes.
Cash received of $223,000 was recorded as a reduction in our outstanding credit
facility obligations with a corresponding increase in accrued liabilities (See
Note 6).

Net cash used in investing activities was $166,000 for the first nine months of
2002, compared to cash used in investing activities of $309,000 in the
comparable period of 2001. The decrease in cash used in investing activities was
due principally to purchases of short-term investments of $2,000 in the first
nine months of 2002 as compared to purchases of short-term investments of
$159,000 in the first nine months of 2001.

Net cash used in financing activities was $291,000 in the first nine months of
2002 compared to cash provided by financing activities of $503,000 in the first
nine months of 2001. The decrease was due to net advances of $45,000 on the line
of credit in the first nine months of 2002 compared to net advances of $599,000
in the first nine months of 2001 and to the payments on notes payable of
$167,000 in 2002.

Our liquidity requirements arise primarily from the funding of working capital
needs and debt obligations. At September 29, 2002, we had working capital of
$5.6 million compared to $5.8 million at December 30, 2001. $2 million of this
working capital in each period was pledged in the form of cash, cash equivalents
and short-term investments as collateral for the $3 million credit facility.

We have a $3 million credit facility from a bank. The credit facility's original
commitment term of three years expiring June 2003 has been extended until June
2004. The credit facility permits deferment of principal payments until the end
of the commitment term, and is secured by our business assets, including
collateralization of $2 million of our cash, cash equivalents and short-term
investments. The credit facility has been amended to set the interest rate at
the 30 day LIBOR plus 2.25% and is subject to certain covenants and borrowing
base certificates, as defined. The interest rate on the credit facility at
September 29, 2002 was 4.07%. At September 29, 2002, we had $2,819,000 in
outstanding obligations and $181,000 was available under the credit facility.

Our primary sources of funds are our cash flows from operations, our borrowing
capacity under the credit facility and lease financing for capital expenditures.
We believe that within the range of our current projections, operating cash flow
for fiscal 2002, the available line of credit and lease financing options will
be sufficient to fund operations and/or facilitate our growth plans.

We believe that these factors, along with our current cash position, will be
sufficient to fund operations and meet our commitments for long-term debt, other
commitments and contingencies and capital expenditures.

We do not believe that inflation has had a material effect on operations for the
periods presented.

                                       14

<PAGE>


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations,"  and SFAS No. 142,  "Goodwill and Intangible  Assets."
SFAS No. 141 eliminates the use of the pooling method of accounting and requires
the use of purchase  accounting for all business  combinations  initiated  after
June 30, 2001. It also provides guidance on purchase  accounting  related to the
recognition of intangible  assets  separate from goodwill.  SFAS No. 142 changes
the accounting for goodwill from an  amortization  method to an  impairment-only
approach.  Under SFAS No. 142,  goodwill  will be tested  annually  and whenever
events or circumstances occur which indicate that goodwill may be impaired. SFAS
No. 141 and SFAS No. 142 are effective for all business  combinations  completed
after June 30, 2001.

As of December 31, 2001, which is the beginning of fiscal 2002, we no longer
amortize the goodwill which we recognized in connection with the acquisition of
Surgical Innovations & Services, Inc. ("SIS"). During the quarter and first nine
months of 2001, we had goodwill amortization of $8,000 and $24,000,
respectively. Our goodwill is subject to a transitional impairment test as of
December 31, 2001 and an annual impairment test, using a two-step process
prescribed by SFAS No. 142. We have completed the transitional impairment test
for SIS, the applicable reporting unit, and no impairment of goodwill was found
to exist as of the beginning of fiscal 2002. During 2002 and in future periods,
we will evaluate goodwill for possible impairment at least on an annual basis.
We have reviewed our other intangible assets besides goodwill as of the
beginning of fiscal 2002 and have determined that no changes were necessary as
to the method by which we account for or amortize such intangibles.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires that the fair value of a liability
associated with an asset retirement be recognized in the period in which it is
incurred, with the associated retirement costs capitalized as part of the
carrying amount of the long-lived asset and subsequently depreciated over its
useful life. The adoption of SFAS No. 143 did not have any impact on our
financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which establishes a single accounting model,
based on the framework established in SFAS No. 121, for long-lived assets to be
disposed of and clarifies certain issues related to SFAS No. 121. SFAS No. 144
supersedes SFAS No. 121 and APB Opinion No. 30, "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." We
were required to adopt SFAS No. 144 for fiscal year 2002. The adoption of SFAS
No. 144 did not have a material impact on our financial position or results of
operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Exit or Disposal
Activities." SFAS No. 146 addresses the recognition, measurement and reporting
of costs associated with exit and disposal activities, including restructuring
activities. SFAS No. 146 also addresses recognition of certain costs related to
terminating a contract that is not a capital lease, costs to consolidate
facilities or relocate employees and termination of benefits provided to
employees that are involuntarily terminated under the terms of a one-time
benefit arrangement that is not an ongoing benefit arrangement or an individual
deferred compensation contract. SFAS No. 146 is effective for exit or disposal
activities that are initiated after December 31, 2002. Adoption of SFAS No. 146
is not expected to have an impact on the financial position or results of
operations of the Company.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with generally accepted accounting principles in the United
States. The preparation of financial statements requires management to make
estimates and judgments that affect the reported amounts of assets and
liabilities, revenues and expense and disclosures at the date of the financial
statements. On an on-going basis, we evaluate our estimates, including, but not
limited to, those related to revenue recognition, accounts receivables,
inventories, warranty accruals and impairment of intangibles. We use
authoritative pronouncements, historical experience and other assumptions as the
basis for making estimates. Actual results could differ from those estimates. We
believe that the following critical accounting policies affect our more
significant judgments and estimates in the preparation of our consolidated
financial statements.

                                       15

<PAGE>


REVENUE RECOGNITION. We generate revenues primarily from three channels. The
first is through sales of recurring laser delivery systems and accessories; the
second is through the per-procedure surgical services; and the third is through
the sale of laser systems and related maintenance service agreements. We
recognize revenues from product sales, including sales to distributors, upon
shipment of the products. For per-procedure surgical services, we recognize
revenue upon the completion of the procedure. Revenue from maintenance service
agreements is deferred and recognized on a straight-line basis over the lives of
the agreements. Revenue from billable services, including repair activity, is
recognized when the service is provided.

INVENTORY. We account for inventory at the lower of cost (first-in, first-out)
or market. Cost is determined at latest cost for raw materials and at production
cost (materials, labor and indirect manufacturing cost) for work-in-process and
finished goods. Reserves for slow moving and obsolete inventories are provided
based on historical experience and product demand. We evaluate the adequacy of
these reserves periodically based on forecasted sales and market trends.

ALLOWANCE FOR DOUBTFUL ACCOUNTS. Accounts receivable are reduced by an allowance
for amounts that may become uncollectible in the future. The majority of our
receivables are due from various customers and distributors located inside the
United States. From time to time, our customers dispute the amounts due from
them to us, and, in other cases, its customers experience financial difficulties
and cannot pay on a timely basis. In certain instances, these factors ultimately
result in uncollectible accounts. The determination of the appropriate reserve
needed for uncollectible accounts involves significant judgment. A change in the
factors used to evaluate collectibility could result in a significant change in
the reserve needed. Such factors include changes in the financial condition of
our customers as a result of industry, economic or customer-specific factors.

WARRANTY ACCRUALS. We establish a liability for laser system warranty repairs
based on historical analysis of the cost for the repairs. However, future
returns on defective laser systems and related warranty liability could differ
significantly from historical patterns, which would adversely affect our
operating results.

INTANGIBLES. Our balance sheet includes goodwill and other intangible assets.
Management assesses the possible impairment of these assets whenever events or
circumstances indicate that the carrying value may not be recoverable. Factors
we consider that could trigger an impairment review include significant
underperformance of the business, significant changes in the manner of use of
acquired assets, significant changes in the strategy of the business and
significant negative industry or economic trends. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to
future undiscounted net cash flow expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured based on a discounted cash flow method using a discount rate determined
by management to be commensurate to the risk inherent in the business model. As
of September 29, 2002 and December 30, 2001, we had $1,120,000 and $927,000
respectively, of goodwill and other intangibles, accounting for 10% and 8% of
our total assets at the respective dates.

RISK FACTORS

For information regarding certain risk factors that could cause actual results
to differ materially from those suggested in forward-looking statements
contained herein or otherwise made from time to time by the Company, reference
is made to the Company's Form 10-K, Item 7, "Risk Factors," for the fiscal year
ended December 30, 2001, which is incorporated herein by reference. The risk
factors described in such report continue to be applicable at September 29,
2002.


                                       16
<PAGE>



ITEM 4.    Controls and Procedures

The management of the Company, including Michael R. Stewart as President and
Chief Executive Officer and Davis Woodward as Vice President and Chief Financial
Officer, have evaluated the Company's disclosure controls and procedures. Under
rules promulgated by the Securities and Exchange Commission, disclosure controls
and procedures are defined as those "controls or other procedures of an issuer
that are designed to ensure that information required to be disclosed by the
issuer in the reports filed or submitted by it under the [Securities Exchange]
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms." Based on the evaluation of the
Company's disclosure controls and procedures, Messrs. Stewart and Woodward
determined that such controls and procedures were effective as of November 11,
2002, the date of the conclusion of the evaluation. There were no significant
changes in the company's internal controls or in other factors that could
significantly affect these controls between November 11, 2002, the date of the
conclusion of the evaluation of disclosure controls and procedures, and the date
of this report.


                                       17
<PAGE>




                           PART II. OTHER INFORMATION


ITEM 4.  Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Stockholders on July 16, 2002. Sheldon M.
Bonovitz, Richard J. DePiano, Jay L. Federman, James Lee Stafford and Michael R.
Stewart, the director nominees set forth in the Notice of Annual Meeting, were
elected to serve as directors. The following table provides the details of the
votes cast for each director nominee.

Nominee                             Votes For                 Withhold Authority
-------                             ---------                 ------------------
Sheldon M. Bonovitz                 1,652,163                        94,033
Richard J. DePiano                  1,652,533                        93,633
Jay L. Federman                     1,652,593                        93,573
James Lee Stafford                  1,652,793                        93,373
Michael R. Stewart                  1,650,435                        95,731

The stockholders ratified the appointment of Grant Thornton LLP to serve as the
Company's independent accountants for the fiscal year ending December 29, 2002,
with 1,737,843 votes favoring ratification, 5,303 votes opposing and 3,020 votes
abstaining.

The stockholders ratified the amendment to the Company's 2000 Equity Incentive
Plan to increase the number of shares reserved for issuance thereunder from
250,000 to 350,000 with 1,566,068 votes favoring ratification, 167,427 votes
opposing and 12,671 votes abstaining.

ITEM 5.  Other Information

Proposals of stockholders of the Company which are intended to be presented by
such stockholders at the 2003 Annual Meeting of Stockholders, which is scheduled
for July 15, 2003, must be received by the Company no later than February 13,
2003 in order that they may be included, subject to compliance with applicable
federal securities laws and regulations, in the proxy statement and form of
proxy relating to that meeting.

If the merger and plan of merger are approved and adopted by a majority of the
company's stockholders at the Special Meeting planned for December 23, 2002 and
the merger thereafter closes, there will be no Annual Meeting of Stockholders in
July 2003.

ITEM 6.  Exhibits and Reports on Form 8-K

a.       Exhibits

Exhibit  99.1   Statement of Chief Executive Officer Pursuant to Section 1350
                of Title 18 of U.S. Code.

Exhibit  99.2   Statement of Chief Financial Officer Pursuant to Section 1350
                of Title 18 of U.S. Code.


b.       Reports on Form 8-K

The Company filed a report on Form 8-K dated September 25, 2002 to report the
execution of the agreement and plan of merger with PhotoMedex.


                                       18
<PAGE>




                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                               SURGICAL LASER TECHNOLOGIES, INC.


Date: November 12, 2002                        By:  /s/ Davis Woodward
                                                    --------------------

                                                    Davis Woodward
                                                    Vice President, Finance and
                                                    Chief Financial Officer

                                                    Signing on behalf of the
                                                    Company and as principal
                                                    financial officer.


                                       19
<PAGE>



                                  CERTIFICATION

I, Michael R. Stewart, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Surgical Laser
         Technologies, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a.       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b.       evaluated the  effectiveness of the registrant's  disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report
                  (the "Evaluation Date"); and

         c.       presented in this quarterly report our conclusions  about the
                  effectiveness  of the disclosure  controls and procedures
                  based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors:

         a.       all significant  deficiencies in the design or operation of
                  internal  controls which could adversely  affect the
                  registrant's ability to record,  process,  summarize and
                  report financial data and have identified for the
                  registrant's  auditors any material weaknesses in internal
                  controls; and

         b.       any  fraud,  whether  or not  material,  that  involves
                  management  or other  employees  who have a  significant role
                  in the registrant's internal controls; and

6.       The registrant's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: November 12, 2002


                                                         /s/ Michael R. Stewart

                                                             Michael R. Stewart

                                                         President and
                                                         Chief Executive Officer

                                       20

<PAGE>



                                  CERTIFICATION


I, Davis Woodward, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Surgical Laser
         Technologies, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a.       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b.       evaluated the  effectiveness of the registrant's  disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report
                  (the "Evaluation Date"); and

         c.       presented in this quarterly report our conclusions  about the
                  effectiveness  of the disclosure  controls and procedures
                  based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors:

         a.       all significant  deficiencies in the design or operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

         b.       any  fraud,  whether  or not  material,  that  involves
                  management or other  employees who have a significant  role in
                  the registrant's internal controls; and

6.       The registrant's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: November 12, 2002


                                           /s/ Davis Woodward

                                           Davis Woodward

                                           Vice President of Finance,
                                           Chief Financial Officer and Secretary


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