|UNITED STATES                                                                              
|-------------------------------------------------------------------------------------------
|SECURITIES AND EXCHANGE
    COMMISSION                                                     
|Washington, DC 20549                                                                       
|                                                                                           
|FORM 10-KSB/A                                                                              
|(Amendment No.
    2)                                                                      
|[X] ANNUAL REPORT UNDER
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     
|For the fiscal year ended
    December 31, 2000                                            
|                                                                                           
|[  ] TRANSITION REPORT
    UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1994
|For the transition period
    from _______ to _______                                      
|                                                                                           
|COMMISSION FILE NUMBER: 0-027565                                                           
|                                                                                           
|SKINTEK LABS, INC.                                                                         
|(Name of Small Business
    Issuer in Its Charter)                                         
|                                                                                           

|Delaware                                                          | 65-0636227                              
|----------------------------------------------------------------- | ----------------------------------------
|(State or Other Jurisdiction
    of Incorporation or Organization | (IRS Employer Identification
    Number)

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|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------
|2700 NE 29th
    Avenue, Hollywood, FL                                                                                                                                                                                                                                                                                                                                                                                                                                                | 33020     
|(Address of
    Principal Executive Offices)                                                                                                                                                                                                                                                                                                                                                                                                                                          | (Zip Code)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|954-923-4438                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(Issuer's
    telephone number)                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Securities
    registered under Section 12 (b) of the Act:                                                                                                                                                                                                                                                                                                                                                                                                                           
|NONE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(Title
    of class)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Securities
    registered under Section 12 (g) of the Exchange Act:                                                                                                                                                                                                                                                                                                                                                                                                                  
|COMMON
    STOCK, PAR VALUE $.001                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(Title
    of class)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Check whether the issuer: (i) 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 registrant was required to file such reports), and (ii) has been
    subject to the filing requirements for the past 90 days. Yes [X] 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
    the registrant's knowledge, in definitive proxy or information statements incorporated by
    reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]                                                                                                                 
|Issuers
    revenues for its most recent fiscal year: $1,032,655                                                                                                                                                                                                                                                                                                                                                                                                                    
|At July 20, 2001, there were 11,921,271 shares of the issuer's
    Common Stock issued and outstanding. Affiliates of the Issuer own 11,489,937  shares
    of the Issuers issued and outstanding common stock and the remaining 431,334 shares
    are held by non-affiliates. The market value of the shares held by non-affiliates is
    $38,820 based upon the closing bid price of $.09 on July 19, 2001. (*)                                                                 
|DOCUMENTS
    INCORPORATED BY REFERENCE:                                                                                                                                                                                                                                                                                                                                                                                                                                             
|There are no documents incorporated by reference in this
    Annual report on Form 10-KSB/A except for certain previously filed exhibits identified in
    Part III, Item 13. Reference is made to previously  filed Annual Reports and
    Quarterly Reports of the Issuer. 
    (*) Affiliates for the purposes of this Annual Report refer to the officers, directors
    and/or persons or firms owning 5% or more of Issuers common stock, both of record
    and beneficially.









TABLE OF CONTENTS

|                                                                                                   |   
|-------------------------------------------------------------------------------------------------- | --
|PART I                                                                                             |   
|Item 1. Description of
    Business.                                                               | 3 
|Item 2. Description of
    Property.                                                               | 8 
|Item 3. Legal Proceedings.                                                                         | 8 
|Item 4. Submission of Matters
    to a Vote of Security Holders.                                   | 8 
|                                                                                                   |   
|PART II                                                                                            |   
|Item 5. Market for Common
    Equity and Related Stockholder Matters.                              | 9 
|Item 6. Management's
    Discussion and Analysis of Financial Conditions and Results of Operation. | 10
|Item 7. Financial Statements.                                                                      | 12
|Item 8. Changes In and
    Disagreements With Accountants on Accounting and Financial Disclosure.  | 22
|                                                                                                   |   
|PART III                                                                                           |   
|Item 9. Directors, Executive
    Officers, Promoters and Control Persons.                          | 22
|Item 10. Executive
    Compensation.                                                               | 23
|Item 11. Security Ownership of
    Certain Beneficial Owners and Management.                       | 24
|Item 12. Certain Relationships
    and Related Transactions.                                       | 24
|Item 13. Exhibits and Reports
    on Form 8-K.                                                     | 24

























PART I

ITEM 1. DESCRIPTION OF BUSINESS

Recent Developments-Skintek Labs, Inc.

This Annual Report on Form 10-KSB/A is being filed with
the SEC by Skintek Labs, Inc., a Delaware corporation, amending the disclosure contained
in our Form 10-KSB filed March 28, 2001. Skintek Labs is also referred to as the
"SKNT", "we", "us" and "our", as the case may be.
This Form 10-KSB/A also discloses an action taken by written consent of the holders of a
majority of our outstanding voting stock relating to a Share Transfer Agreement involving
the disposition by SKNT of all shares of  Performance Brands, Inc. ("PBI"),
our former wholly owned subsidiary, to Stacy Kaufman ("Kaufman"), our former
sole executive officer and director and a principal shareholder.  As a result of the
Share Transfer Agreement, SKNT will become a public shell company with no operations or
assets. The only business activities that will be conducted by SKNT will be to seek
potential business combinations and continuing to remain current under the reporting
requirements of the Exchange Act. We have filed with the SEC an amended Information
Statement on Schedule 14C under the Exchange Act that contains information regarding our
change of management and the disposition of all of our assets and liabilities. We are
incorporating by reference our amended Information Statement for further disclosure of
events that occurred after the end of our fiscal year ended December 31, 2001. See the
discussion under "Risk Factors" in the amended Information Statement including
risks associated with any future acquisition of a non-reporting company, potential
dilution to SKNT shareholders from any reverse merger relating to any acquisition of a
non-reporting company.

The following is a summary of the material terms of the Share Transfer
Agreement and the related transactions. Reference is also made to, and this summary is
qualified in its entirety by, the more detailed information contained  in the amended
Information Statement on Schedule 14C filed with the SEC and the exhibits thereto.

|  SKNT will transfer all shares of  PBI, our former
        wholly-owned subsidiary, to Stacy Kaufman, our former president, director and control
        shareholder, pursuant to a Share Transfer Agreement attached as Exhibit 10.1 to the
        amended Schedule 14C. The reasons for entering into the Share Exchange Agreement are set
        forth under "Reasons for the PBI Share Transfer Agreement" below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  The value of net assets transferred to
    Kaufman in connection with the Share Transfer Agreement is $217,131. Reference is made to
    our pro forma financial statements filed with our amended Information Statement on
    Schedule 14C and to the List of Assets and Liabilities transferred, which is attached as
    Exhibit 10.2 thereto. These assets and liabilities transferred under the Share Transfer
    Agreement constituted all of our assets and liabilities. As a result of this Share
    Transfer Agreement we will be a non-operating company with no assets or liabilities and
    will seek to explore potential business combinations with entities which our management
    believes will have greater potential for growth and profitability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| In connection with the Share Transfer Agreement, Kaufman resigned
        as an officer and director of SKNT on March 16, 2001 and agreed to waive any rights that
        he has or may have had under his 1999 Employment Agreement, including rights to purchase
        1,000,000 option shares at $.50 per share which had already vested and contingent rights
        under the option to purchase an additional 1.5 million shares at $.50, in increments of
        500,000 shares, based upon SKNT achieving cumulative revenues of  $2,548,000,
        $3,757,000 and $5,209,120, respectively. Options to purchase 500,000 shares vested
        effective December 31, 1999 when SKNT achieved cumulative revenues of $700,000 and an
        options for additional 500,000 shares vested effective December 31, 2000 when SKNT
        achieved cumulative revenues of $1,540,000. The option with respect to the remaining 1.5
        million shares had not vested as of the date of Kaufman's resignation. The options had no
        intrinsic value, because the exercise price was in excess of the average closing bid price
        of the SKNT shares on the OTC:BB during the past thirty days, of $.17.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| Prior to Kaufman's resignation as our sole executive officer and
        director on March 16, 2001, Kaufman, as the sole director, elected Marc Baker as a
        director of SKNT. Mr. Baker had previously served as SKNT's merger consultant and had made
        net cash advances of $637,919 to SKNT during the period from March to July, 1999 as merger
        consultant. The initial net cash advances totaling $541,667 was converted into 1,083,338
        restricted shares in March 1999. Additional cash advances of $96,252 were made by Mr.
        Baker through July 1999 and Mr. Baker had a subscription payable of $392,287. The July
        1999 net cash advanced and the subscription payable was applied to the issuance to Mr.
        Baker of an additional 1,034,933 restricted shares. Prior to year end December 31, 1999,
        Mr. Baker made additional cash advances of $18,000 which reduced his subscription payable
        to SKNT. During 2000, Mr. Baker made additional payments of $72,293 toward his
        subscription payable. During the first quarter of 2001, Mr. Baker paid an additional
        $12,365 toward the subscription receivable, resulting in a subscription receivable as of
        March 31, 2001 of $289,629. During the quarter ended June 30, 2001 the subscription
        receivable of $289,629 from Mr. Baker was waived in connection with his acquisition of
        control and the divestiture of PBI. The total net cash advances made by Baker while he was
        merger consultant, from March 1999 through March 2001 was $740,577, which was effectively
        converted into 2,118,271 restricted SKNT shares that were issued from March 1999 to July
        1999. The average conversions price of Mr. Baker's net cash advances while he served as
        merger consultant was $.35 per share. After Mr. Baker's election as a director, Kaufman
        resigned as an officer and director and  Baker then became our president by his own
        appointment. On March 16, 2001, Mr. Baker also acquired voting control of SKNT by his
        purchase of 6,000,000 restricted SKNT shares for a subscription receivable of $6,000,
        which is equal to the par value of  SKNT shares.  In determining the purchase
        price paid by Baker for the 6 million restricted SKNT shares,  SKNT considered the
        net cash advances made by Baker of $740,577 during 1999, 2000 and through March 2001, that
        he converted into 2,118,271 restricted SKNT shares at an average price per share of $.35
        and that at the date of the sale of the 6 million restricted shares SKNT had no business
        operations or assets. SKNT shares have had only a limited and sporadic trading market, and
        we believe that the collective transactions including the sale of the 6 million shares at
        par value to Mr. Baker, was fair. SKNT has not sought any fairness opinion with respect to
        the Baker transactions. While there was no trading in the SKNT shares on March 16, 2001,
        the bid and asked price of the SKNT shares on that date was $.16 and $.17, respectively.
        See Part II, Item 5 "Recent Sales of Unregistered Securities" and Part III, Item
        12 "Certain Relationships and Related Transactions" below.

Background-Skintek Labs

We were incorporated under the name Biologistics, Inc.
under the laws of Colorado on December 13, 1994, to engage in clinical consulting,
contract packaging and labeling services. We never had any operations. On April 22, 1997,
we merged into a subsidiary that was organized under the name Biologistics, Inc. under the
laws of Delaware on March 19, 1997 and became a Delaware corporation. We organized PBI
Acquisition Corp. as a wholly-owned subsidiary on March 31, 1999, and on the same date
Performance Brands, which we operated as our former wholly-owned subsidiary until the
Share Exchange Agreement dated April 30, 2001, entered into a merger agreement with and
was merged into PBI Acquisition Corp. resulting in PBI becoming our wholly-owned
subsidiary. In consideration for the March 31, 1999 merger, the former PBI shareholders,
Stacy Kaufman and Cathy Kaufman, were issued 18,500,000 shares, which were adjusted for a
one for six reverse share recapitalization into 3,083,333 shares effective May 12, 1999.
Prior to the March 1999 PBI merger, Stacy Kaufman was issued 288,333 shares for services
to SKNT, adjusted for the reverse share recapitalization. The book value of PBI at the
date of the merger was $357,789.

The purpose of of the March 31, 1999 merger between SKNT
and PBI was to enable SKNT to become an operating company. Since its incorporation on
September 21, 1995 under the laws of Florida, PBI was engaged in the sale of products for
skin fitness, self-tanning, sun protection and nutrition. PBI's products were sold through
direct mail, drug chains, mass market outlets, health food stores, gyms, and tanning, nail
and hair salons, as well as private label sales. Our sole business and operations since
the merger of PBI into SKNT in March 1999 and prior to our entering into the Share
Transfer Agreement with Kaufman was the business and operations of PBI. In connection with
the merger of PBI into SKNT, we entered into a 1999 Employment Agreement with Kaufman
which is discussed below under "Obligations Under 1999 Employment Agreement".

We determined to enter into the Share Transfer Agreement
and divest PBI for the reasons set forth below under "Reasons for the PBI Share
Transfer Agreement". As part of the Share Transfer Agreement, we accepted the
resignation of Stacy Kaufman as an officer and director, on March 16, 2001. Prior to his
resignation, Kaufman elected Marc Baker as a director of SKNT. Prior to Baker's election
as a director of SKNT, he served as merger consultant to SKNT from the period prior to the
1999 merger with PBI until his acquisition of controlling interest in SKNT.

Conduct of Business Following the Share Transfer Agreement

*Business Objectives.*We seek acquisition possibilities
throughout the United States to make acquisitions or enter into other business endeavors
to the extent our limited assets and personnel will allow. Our business objective is to
effect a merger, exchange of capital stock, asset acquisition or other business
combination (a "Business Combination") with an operating business (a
"Target Business") that will have significant growth potential.

We will seek to acquire a Target Business without
limiting ourselves to a particular industry. Most likely, the Target Business will be
primarily located in the United States, although we reserve the right to acquire a Target
Business with operations and/or locations outside the United States. In seeking a Target
Business, we will consider, without limitation, businesses which (i) offer or provide
services or develop, manufacture or distribute goods in the United States or abroad; or
(ii) is engaged in wholesale or retail distribution, among other potential Target Business
opportunities. We do not intend to register as a broker-dealer, merge with or acquire a
registered broker-dealer, or otherwise become a member of the NASD. Our sole
officer/director has had only preliminary contact with representatives of other companies
regarding the possibility of a Business Combination, although none of these have resulted
in any agreements or understandings. It is possible if not likely that any Business
Combination will be consummated with any of the parties that we have been in contacted.
Our Common Stock is subject to quotation on the NASD OTC Bulletin Board under the symbol
"SKNT".

*Selection of a Target Business and structuring of a Business
Combination.*At present Marc Baker is our sole executive officer and director and is
a control shareholder, owning 68.1% of our issued and outstanding shares. As a result, Mr.
Baker will have substantial flexibility in identifying and selecting a prospective Target
Business. See  the discussion under "Business Experience of Principal" in
Part III, Item 9, Directors, Executive Officers, Promoters, and Control Persons"
below.  We will be almost entirely dependent on the judgment of Mr. Baker in
connection with the selection of a Target Business. In evaluating a prospective Target
Business, we will consider, among other factors, the following: (i) costs associated with
effecting the Business Combination; (ii) equity interest in and opportunity for control of
the Target Business; (iii) growth potential of the Target Business in its industry; (iv)
experience and skill of management and availability of additional personnel of the Target
Business; (v) capital requirements of the Target Business; (vi) competitive or comparative
position of the Target Business in its industry; (vii) stage of development of the Target
Business; (viii) degree of current or potential market acceptance of the Target Business,
products or services; (ix) proprietary features and degree of intellectual property or
other protection of the Target Business; (x) the financial statements of the Target
Business; and (xi) the regulatory environment in which the Target Business operates.

The foregoing criteria are not intended to be exhaustive
and any evaluation relating to the merits of a particular Target Business will be based,
to the extent relevant, on the above factors as well as other considerations deemed
relevant by management in connection with effecting a Business Combination consistent with
our business objectives. In connection with its evaluation of a prospective Target
Business, management, with the possible assistance of an independent investment banking
firm, or third party consultants, anticipates that we will conduct a due diligence review
which will encompass, among other things, meeting with incumbent management and inspection
of facilities, as well as a review of financial, legal and other information which will be
made available to us.

The time and costs required to select and evaluate a
Target Business (including conducting a due diligence review) and to structure and
consummate the Business Combination (including negotiating and documenting relevant
agreements and preparing requisite documents for filing pursuant to applicable securities
laws and state "blue sky" and corporation laws) cannot presently be ascertained
with any degree of certainty. Our current executive officer and director intend to devote
only a small portion of their time to the our affairs and, accordingly, consummation of a
Business Combination may require a greater period of time than if our management devoted
their full time to our affairs. However, Mr. Baker will devote such time as he deems
reasonably necessary to carry out our business objective and affairs, including the
evaluation of potential Target Businesses and the negotiation of a Business Combination
and, as a result, the amount of time devoted to our business and affairs may vary
significantly depending upon, among other things, whether we have identified a Target
Business or are engaged in active negotiation of a Business Combination. Any costs
incurred in connection with the identification and evaluation of a prospective Target
Business with which a Business Combination is not ultimately consummated will result in a
loss to us and reduce the amount of capital available to otherwise complete a Business
Combination or for the resulting entity to utilize.

We anticipate that various prospective Target Businesses
will be brought to our attention from various sources, including broker-dealers,
investment bankers, venture capitalists, bankers, and other members of the financial
community and affiliated sources, including, possibly, our executive officers, directors
and their affiliates. While we have not yet ascertained how, if at all, we will advertise
and promote ourselves, we may elect to publish advertisements in financial or trade
publications seeking potential business acquisitions. We may also engage the services of
professional firms that specialize in finding business acquisitions, in which event we may
agree to pay a finder's fee or other compensation. In no event, however, will we pay a
finder's fee or commission to our officers or directors or to any entity with which they
are affiliated directly or indirectly.

As a general rule, Federal and state tax laws and
regulations have a significant impact upon the structuring of business combinations. We
will evaluate the possible tax consequences of any prospective Business Combination and
will endeavor to structure a Business Combination so as to achieve the most favorable tax
treatment to us, the Target Business and their respective shareholders. There can be no
assurance that the Internal Revenue Service or relevant state tax authorities will
ultimately agree with our tax treatment of a particular consummated Business Combination.
To the extent the Internal Revenue Service or any relevant state tax authorities
ultimately disagree with our proposed tax treatment and in fact prevail in
recharacterizing the tax treatment of a Business Combination, there may be adverse tax
consequences to us, the Target Business and their respective shareholders. Tax
considerations as well as other relevant factors will be evaluated in determining the
precise structure of a particular Business Combination, which could be effected through
various forms of a merger, consolidation or stock or asset acquisition.

*Acquisition Restrictions.*We may acquire a company or business
by purchasing, trading or selling the securities of such company or business. However, we
do not intend to engage primarily in such activities. Specifically, we intend to conduct
our activities so as to avoid being classified as an "investment company" under
the Investment Company Act of 1940, and therefore avoid application of the costly and
restrictive registration and other provisions of the Investment Company Act of 1940 and
the regulations promulgated thereunder.

We are subject to the reporting requirements under the
Exchange Act, including the requirement to continue to file quarterly reports and annual
reports. Pursuant to Section 13 and 15(d) of the Exchange Act, in the event significant
acquisitions take place, we will also be required to file current reports with the SEC
which will include certified financial statements for the acquired company covering one or
two years depending upon the relative size of the acquisition. Consequently, acquisition
prospects that do not have or are unable to obtain the required certified financial
statements will not be appropriate for acquisition so long as the reporting requirements
of the Exchange Act are applicable.

Various impediments to an acquisition of a business or
company or a merger may arise such as appraisal rights afforded the shareholders of a
prospective Target Business under the laws of the state under which the prospective Target
Business is organized. This may prove to be deterrent to a particular Business
Combination.

Reasons for the PBI Share Transfer Agreement

We determined to divest PBI, our wholly-owned subsidiary,
pursuant to a Share Transfer Agreement dated as of April 30, 2001, for the following
reasons:

(i) *Financial Performance.* Despite
recent market growth for skin-care products, PBI had a loss from operations during both
2000 and 1999 of $100,862 and $277,239, respectively. Although the losses decreased
significantly, sales were stagnant although PBI has introduced new products. The principal
reason for the decrease in loss from operations from 1999 to 2000 was primarily from the
decrease in selling and marketing expenses, from $254,960 in 1999 to $146,365 in 2000. Our
administrative expenses were $246,428 and $266,891 in 2000 and 1999, respectively.
Approximately 30% of such administrative expenses in each year were associated with costs
of being a public company, and therefore had a material adverse impact on our operating
expenses. We did not expect PBI to be able to operate on a profit margin acceptable to our
shareholders but believe that PBI can operate successfully as a private company with
reduced operating expenses. The book value of PBI at the date of the March 1999 merger was
$357,789 and at the April 2001 Share Transfer Agreement the book value of $217,131; 
(ii) *Difficulties in Funding Operations.*SKNT had been dependent upon cash flow
from financing activities through cash advances made by  Mr. Baker, who initially
served in the capacity of a merger consultant in connection with the merger between SKNT
and PBI in 1999. During March to July 1999 Mr. Baker net cash advances of $637,919 and had
a subscription payable to SKNT of $392,287. The net cash advances and subscription payable
was converted  into 2,118,271 shares during the period of March to July 1999. During
the period from July 1999 though March 2001, Mr. Baker made additional cash payments of
$102,658 to SKNT was were applied to the subscription receivable from Mr. Baker. Mr. Baker
was unwilling to continue to make additional advances to SKNT, based upon his business
judgment and the fact that Mr. Baker did not consider the industry in which PBI operated
to be attractive to investors in public companies based upon current market conditions. As
a result of the divestiture of PBI and Mr. Baker's acquisition of voting control of SKNT,
the remaining subscription payable from Mr. Baker of $289,629 at March 31, 2001 was
waived; and(iii) *Rescission of Previous Merger Agreement.* Effective on
August 15, 2000, SKNT entered into an agreement with Ultimate Warlock, Inc., a California
corporation, engaged in the manufacture and sale of power boats, for the purpose of
acquiring Ultimate Warlock, which was announced in a Form 8-K in September 2000. This
agreement also contemplated the divestiture of PBI upon the closing of the Ultimate
Warlock transaction. However, the agreement with Ultimate Warlock was rescinded and SKNT
continued to operate PBI. The rescission of the Ultimate Warlock transaction and the lack
of improvement in PBI's operating margins led SKNT's two principal shareholders, Kaufman
and Baker, to divest PBI's operations to PBI's founder, Mr. Kaufman, who had successfully
operated PBI from its inception in 1995.

Skintek Lab's Former Business

SKNT, though its former subsidiary, Performance Brands,
Inc., was in the skin fitness, self-tanning, sun protection and nutrition business since
1995.  The skin fitness, self-tanning and sun protection business is part of the Sun
and Body Care Industry, which has been a growing industry. PBI's products were sold though
specific classes of trade: i.e. direct mail, drug chains, mass market outlets, health food
stores, gyms, and tanning, nail and hair salons, as well as private label sales.

This industry growth has been the result, in part, of the
increasing public awareness of the potential danger to skin and health from prolonged
exposure to the sun and the fact that the ozone layer will continue to erode over the next
20 years. Our former management and our principal shareholders believed that SKNT would
benefit by the trend toward products with higher SPFs (Sun Protection Factor), which is
the measure of the UVB protection in a sun care product and from the trend in the US for
the use of sunscreen products year-round.  Notwithstanding the foregoing, SKNT was
not able to successfully exploit the growth within its industry because of limited cash
flow from operations.

Commencing in 1994, the National Weather Service, in its
daily weather reports, started projecting the amount of ultraviolet intensity expected in
58 different cities in the United Stated between 11:30a.m. and 12:30p.m. the following
day. Called the UV Index, ultraviolet intensity is ranked on a scale of 1 to 15. This
program, created in cooperation with the Environmental Protection Agency and the Center
for Disease Control and Protection, relates the UV intensity with the SPF or 20 or higher
is recommended for an index over 10. We believed that this focus by Federal agencies on
the impact of the sun's intensity, and the daily reporting on television and radio and
other media of the index, would continue the trend to greater consumption of protective
sun care products. However, we were not able to benefit from this increase in public
awareness to generate any material growth in revenues.

In addition to PBI's line of sun-care products, we also
marketed a line of body washes, which we believed were enjoying increasing consumer use
and acceptance generally throughout the industry. In fact, until approximately four to
five years ago, most Americans relied upon bar soaps and wash clothes for their personal
cleansing needs but we estimate that 25% or more of the population have already changed
the way they bathe, using body washes and cleansing puffs rather than bar soap. Since
their wide introduction in 1994, body washes have become the fastest growing trend in the
personal cleansing category and we believed that this trend to liquid soaps would be of
benefit to our business.

Products in the sun and body care business consist
primarily of body lotions, oils, and gels designed either to prevent the skin from
sunburning and/or promote sun tanning. In addition, there are products designed to
moisturize the skin after sun bathing like aloe vera gels or lotions. "Body
washes" are a form of skin cleansers that are either poured or squeezed out of a
bottle, usually in a bath or shower. The appearance is of a thick liquid like substance
with a variety of different colors and fragrances. A key attribute to body washes are the
fact that they lather and rinse of easily. In addition, body washes are considered by many
persons to serve as a better moisturizer than a traditional soap bar. However, it should
be understood that bar soap is widely used and accepted by a great majority of users
historically and there can be no assurance that body washes will ever become the industry
standard. The manufacturing process of body washes allows more oil based ingredients to be
incorporated into the formula, thus providing certain moisturizing benefits to the skin.
This is not the case with bar soaps.

"Cleansing puffs" also known as poufs or sponges
are sometimes used in conjunction with body washes to maximize the amount of lather. Made
of a variety of materials, such as sea sponges, nylon or a combination of
polyurethane/nylon in a form of an oversized sponge.

Competition and Ease of Entry Into The Sun and Body Care
Industry

There are few barriers to entry into the sun and body care
industry. Further, there exists substantial competition in the sun and body care industry,
virtually of which have longer operating history, far greater financial, personal and
other resources, with substantial product lines and sales and marketing budgets and proven
records of success than PBI. Among other entities that we had to compete with include the
very large corporations such as Cheesebrough-Pond's(R), Gillette(R), Proctor &
Gamble(R) and Lever Brothers(R), and the smaller, but well-established companies such as
Tom's of Maine(R) and Freeman Cosmetics(R). These latter two companies have entered and
established themselves in the specialized body wash product market.

Major corporations as well as individual entrepreneurs and
businesses are capable of modifying existing sun care formulas on the market and, with a
reasonable investment, begin selling competitive products in a fairly quick time-frame, as
large staffs are not needed to be successful in this industry, provided that a company has
qualified sales and marketing efforts. The industry is growing in many ways domestically
and internationally, which should continue to serve to attract competition. There are many
new sun care products and many new consumers, for which we competed.

In order  to be competitive, we had to devote
substantial funds and time, including professional and management, and retain outside
marketing experts, to promote our product line, SOAPSCREEN(R), which involved relatively
  high front-end cost compared to our resources. We were not able to continue to
finance our selling and marketing expense from cash flow from operations. As noted above
and in reflected in our financial statements, theprincipal reason we were
able to experience a decrease in loss from operations from 1999 to 2000 was primarily from
the decrease in selling and marketing expenses, from $254,960 in 1999 to $146,365 in 2000.
See also the discussion under Part II, Item 6, "Management's Discussion and
Analysis" below.

Our ability to compete was also dependent upon our success
in establishing our products in the field of SPF soaps/body washes. Sunscreens have been
used as a major ingredient in face creams for several years by major manufacturers, with
which we had to compete. For our professional skin fitness line, sold in gyms and health
food stores, we had one principal competitor, Jan Tana. Notwithstanding our belief  
that we would be able to successfully compete, there was no assurance that we would
generate sufficient cash flow from operations to continue to our selling and marketing
expenses and expenses associated with being a public company reporting under the Exchange
Act. Following our year ended December 31, 2001 wee determined that SKNT on a consolidated
basis would not  be able to compete with any entities that have established presence
in sun and body care industry.

While we were required to compete with larger, more
established firms, our primary focus was to market our products into the niche markets,
for specialty products that include skin care products with sunscreens. Our professional
tanning product line, sold under the ProTan(R) name, is distributed to the professional
gym/health club and the health food markets. These are examples of the niche markets where
competition is not as intense, and where we believed that we would  be able to
successfully compete. However, there exists intense competition developing in
"niche" market. Our ProTan(R) line competes with six key producers, including
the established Australian Gold(R), California Tan(R), Swedish Beauty(R), Supre(R), Power
Tan(R) and Most products. We believed and PBI's management continues to believe that it
will be able to successfully compete on the basis of quality and price in the market for
its ProTan(R) line and PBI's other products, with the ability to operate more efficiently,
as discussed under Part II, Item 6, "Management's Discussion and Analysis" and
elsewhere in this amended Form 10-KSB/A.

Our ability to compete was also effected by our limited
number of employees, which prior to the Share Transfer Agreement, was only 5 persons
including Stacy Kaufman, our former president and sole executive officer. We were also
dependent upon continued success in accessing distribution channels and an ability to fund
increasing selling and marketing expenses from cash flow from operations. We had projected
  that the budget for selling and marketing expenses, in order to be successful,
should be approximately $1,000,000 during the next twelve months. Mr. Baker and Mr.
Kaufman concluded that financing in this amount would not be achievable through the sale
of SKNT shares.

The Bar and Liquid Soap Industry

Total 1997 sales of bar soaps for all retail outlets in the
country were $1.4 billion, a slight drop of 4% from the prior year. However, the sales of
other soaps and cleansers (body washes) increased 33% during that year to $670 million.
The current trend in the industry is to liquid soaps. Until three years ago, most
Americans relied on bar soaps and wash clothes for their personal cleansing needs. Today,
approximately one- quarter have already changed the way they bathe, using body washes and
cleansing puffs instead. Introduced in 1994, they have become the fastest growing trend in
the personal cleansing category. According to an article in the October, 1997,
Soap/Cosmetics/Chemical Specialties, "The rising popularity of the body wash can be
attributed to two things-body washes are cleaner and more convenient to use in the shower
or bath and they simplify the skin care process by combining the cleansing and
moisturizing steps."

The significant growth pattern of body washes has attracted
a variety of products from many manufacturers, including the long- established and
financially strong companies such as Cheesebrough-Pond's(TM), Gillette(R), Procter &
Gamble(R), and Lever Bros.(R). The industry also includes established smaller producers
such as Tom's of Maine(R) and Freeman Cosmetics(R), which have also entered and become
competitive in the specialized body wash products into the market.

Sources of Supply

The component ingredients for PBI's products are
manufactured by third parties and during 1999 and 2000 we were not dependent upon any
single manufacturer, and that other sources of supply would be available, if necessary.
  Cosmetic Corporation of America, located in Medley, FL ("CCA"), the prime
filler for PBI's products, is estimated to be operating with excess capacity and therefore
should be able to provide its products and services for PBI for the foreseeable future.
PBI also sourced and continues to source from other manufacturers, including Custom
Manufacturing Corporation, Medley, FL, Farmanatural, Davie, FL, Five Star Brands LLC,
Grand Rapids, MI and D'Arcy Revolutionary Skincare, Boca Raton, FL. As a result of the
Share Transfer Agreement, we have become a non-operating company and are not dependent
upon the business and development of PBI and its product lines.

Sales, Marketing and Distribution of Products

During 1999 and 2000 and prior to our divestiture of PBI,
our sun and body care products were sold through a variety of retail outlets, including
drug chains, grocery/supermarkets, health food stores, and tanning nail and hair/beauty
salons, among other outlets. We owned and PBI continues to own the following registered or
trademarked proprietary names: ProTan(R), SOAPSCREEN(R), Sunscreen Barrier System(R),
Earthen Naturals(TM), Earthen Treasures(TM), Beauty Bites(TM), and Meta Slim 2000(TM),
Slim Tan(TM), Quick Tan(TM). In addition, there is a patent pending and several PCT
patents pending for PBI's liquid body wash and sunscreen compositions. During 1999, 2000
and through the divestiture of PBI, our products were marketed and sold under the names
ProTan(R), SOAPSCREEN(R), System(R), Earthen Naturals(TM), Earthen Treasures(TM), and
there are plans to commence marketing efforts under the trade names, Beauty Bites(TM) and
Meta Slim 2000(TM). All of these assets have been transferred to PBI in connection with
the Share Transfer Agreement. Prior to the agreement we also utilized approximately fifty
wholesale distributors to market and sell our products, which distributors also
inventoried, shipped and billed our former customers directly, as part of their
distribution services.

We also generated sales via mail order, from direct mail
and Internet marketing and used the services of independent sales brokers nationwide, who
were paid commissions equal to 5% of the sales generated. These independent brokers
primarily sold the products of our former subsidiary to the drug, mass retail and
grocery/supermarket markets, and generated sales under a private label program for
products designed and marketed exclusively for a group of national direct mail order
merchants.

Government Regulations

There are no specific regulations or approvals required by
or from the Federal or state government or any agency for the products manufactured and
sold by our former subsidiary, and all the products are manufactured under GRAS
("Generally Recognized as Safe") for the cosmetic industry.

Generally Recognized as Safe is a category of food
additives established in 1958 by the Food and Drug Administration as part of a revised
Food, Drug, and Cosmetic Act of 1938. The original Generally Regarded as Safe list
included approximately 700 food additives that had "stood the test of time",
meaning that they had been subject to human use and or consumption and were believed to be
harmless. A current revision by the FDA to reevaluate and reclassify all Generally
Regarded as Safe additives is underway, with the potential for the FDA banning any
additives deemed hazardous. While the FDA governs the GRAS standards, the ongoing
revisions are specifically related to the raw materials which are additives, not to the
finished cosmetic product, which PBI's products are considered.

Also, while the skin care industry is basically
self-regulated, the FDA regulations do apply to fragranced personal care products,
perfumes and cosmetics. Since there are limitless skin care formulations recognized as
"trade secrets" the actual impact of the FDA regulation is limited. However, by
law, all the ingredients of a product must be listed on the label. These are listed in
order of predominance, which means the percentage of the make-up or composition of each
product.

At present, the FDA does not require safety testing on any
ingredient that goes into cosmetics or perfumes. Only once the product is on the market
does the FDA have any regulatory authority. The FDA must prove in court that the product
is unsafe before it can require the product to be removed from the marketplace.
Nevertheless, on many occasions, manufacturers will voluntarily recall a product that is
in question, either as a result of the manufacturer's own determination or any public
report, or otherwise. The FDA does not require companies to register with the FDA, file
the ingredients used, or even keep a record of injuries related to use of their products.
In the event of any recall of one or more of PBI's products, there existed a potential
adverse impact on our revenues from any recalled product. None of PBI's  products are
hazardous or contain any hazardous additives and therefore, we do not believe that there
could exist any claim against SKNT from consumers or any businesses that bought and used
PBI's products during the period that PBI was our wholly-owned subsidiary. In connection
with the Share Transfer Agreement, we also transferred all of the assets and liabilities
of PBI, which constituted all of our assets and liabilities.

ITEM 2. DESCRIPTION OF PROPERTY

Following the resignation of Stacy Kaufman as president and
sole director of SKNT, we moved the executive offices of SKNT into the offices of Marc
Baker and DC Capital, located at 2700 NE 29th Avenue, Hollywood, FL 33020 on a rent-free
basis. These office facilities consist of approximately 800 square feet of space which Mr.
Baker and DC Capital rent from an unaffiliated third party. We believe that these
facilities are sufficient for SKNT for the foreseeable future and we will continue to have
such space on a rent-free basis until such time as we shall conclude a Business
Combination.

Prior to the Share Exchange Agreement, we leased
approximately 5,400 square feet of executive office space at 959 Shotgun Road, Sunrise,
FL, for $3,100 per month. The condition of these leased facilities in Sunrise, FL were and
continue to be  excellent, and sufficient for PBI's use for the foreseeable future.
We also had available from third party manufacturers of the components used to manufacture
PBI's products and the manufacturer/suppliers of the packaging for its products the use of
storage space to store such components and materials at no cost. This arrangement is and
was adequate for our prior operations. Prior to our lease of the facility in Sunrise, FL,
we leased approximately 6,000 square feet of space in Plantation, FL at a monthly rate of
$3,500.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any litigation that is material.
  During the year ending December 31, 1998, prior to the merger of PBI
and SKNT, PBI contracted for $104,245 an advertising company. We believe that the
advertising company did not fulfill its obligations as contracted, and therefore we
refused to pay the amount. In January 2001, the United States District Court, Southern
District of New York, dismissed the suit, and the debt was settled for $25,000, resulting
in legal settlement income of $79,245. During the year ending December 31, 1999, a model
for a product promotion sued SKNT for compensation from a product advertisement. In
January 2001, this matter was settled for $15,000.

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

None. However, in connection with the Share Transfer Agreement, we have prepared and
are sending to our shareholders an amended Information Statement regarding the transaction
involving the disposition of our former subsidiary, and related matters.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(A) MARKET INFORMATION

Our shares of common stock are traded over-the-counter in
what is referred to as the OTC:Bulletin Board. As of July 12, 2001, there were 16 market
makers submitting quotations on the OTC:BB. However, we do not believe that there has been
any significant trading volume during the past four months and any trading that occurred
has been sporadic. The following information with respect to the high and low bid price of
our shares was obtained from the National Quotation Bureau. On May 12, 1999, our shares
were subject to a 1 for 6 reverse split, and the table below reflects such information.

|                                                                                                                                    | **High** | **Low**
|----------------------------------------------------------------------------------------------------------------------------------- | -------- | -------
|**CALENDAR 1999**                                                                                                                   |          |        
|First Quarter Ended
    March 31,                                                                                                   | $1.50    | $0.375 
|Second Quarter Ended
    June 30, (*)                                                                                               | $2.50    | $0.375 
|Third Quarter Ended
    September 30,                                                                                               | $2.25    | $1.44  
|Year Ended December 31,                                                                                                             | $1.44    | $0.56  
|****                                                                                                                                |          |        
|**CALENDAR 2000**                                                                                                                   |          |        
|First Quarter Ended
    March 31,                                                                                                   | $2.125   | $0.56  
|Second Quarter Ended
    June 30,                                                                                                   | $3.125   | $150   
|Third Quarter Ended
    September 30,                                                                                               | $3.75    | $1.625 
|Year Ended December 31,                                                                                                             | $2.56    | $0.625 
|                                                                                                                                    |          |        
|**CALENDAR 2001**                                                                                                                   |          |        
|First Quarter Ended
    March 31,                                                                                                   | $0.75    | $0.14  
|Second Quarter Ended June 30,                                                                                                       | $0.23    | $0.16  
|Period Ending July 19,                                                                                                              | $0.17    | $0.09  
|(*) On May 12,
    1999, we had a 1 for 6 reverse stock split and the price of the shares reflects this share
    recapitalization.

(B) HOLDERS

As of July 12, 2001, there were 228 holders of our shares.

(C) DIVIDENDS

We have never paid any of dividends on our
shares, have no funds from which to pay dividends and do not intend to pay dividends for
the foreseeable future. As a result of our divestiture of PBI, we have no assets or
liabilities. Payment of dividends in the future will depend, among other things, upon our
success in entering into a Business Combination and thereafter our ability to generate
earnings, and the need of such operating company, if any, for working capital and our
overall financial condition.

RECENT SALES OF UNREGISTERED SECURITIES

The following information is given with
regard to unregistered securities sold by SKNT during the past three years, including the
dates and amounts of securities sold; the persons or class of persons to whom we sold the
securities; the consideration received in connection with such sales and if the securities
were issued or sold other than for cash, the description of the transaction
and the type and amount of consideration received. The number of unregistered shares sold
reflects a 1 for 6 reverse split on May 12, 1999.

|Date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Title        | Amount of Securities
    Sold         | Persons                          | Cash or Non Cash
    Consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------------------------------------- | -------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11/10/98                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Common Stock | 164,667 Shares                        | Private Investors(1)             | $82,333 in cash at $2.00 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|11/11/98                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Common Stock | 288,333 Shares                        | Stacy Kaufman(2)                 | Services prior to SKNT prior to the merger
    valued at $104,166.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3/31/99                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Common Stock | 3,083,333 Shares                      | Stacy Kaufman (3)                | Issued in connection with PBI Merger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|03/31/99-
    7/06/99                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Common Stock | 1,083,338 Shares
    1,034,933 Shares | Marc Baker, Merger Consultant(4) | $541,667 in net cash advances in March, 1999
    was converted into 1,083,338 shares, at a price of $.50 per share; through July 1999
    additional  net cash advances of $96,252 and a $392,287 in subscription receivable
    which was converted  into 1,034,933 shares. During remainder of 1999 $18,000 was paid
    toward subscription receivable, during 2000 $72,293 was paid toward subscription
    receivable and during 2001, $12,365 was paid toward the subscription receivable and
    remaining subscription receivable of $289,629 was waived. The average conversion price for
    the entire 2,118,271 shares issued was $.35 after reflecting the waiver of the
    subscription receivable.
|12/31/99                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Common Stock | 500,000 Shares                        | Stacy Kaufman(5)                 | Vested Options at $.50 per share, never
    exercised, granted under 1999 Employment Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|12/31/00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Common Stock | 500,000 Shares                        | Stacy Kaufman(5)                 | Vested Options at $.50 per share, never
    exercised, granted under 1999 Employment Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|03/16/01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Common Stock | 6,000,000 Shares                      | Marc Baker (6)                   | $6,000 subscription receivable equal to a per
    share price of $.001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |              |                                       |                                 
|(1)
    The issuance and sale of the restricted shares to the private investors were based upon
    Section 4 (2) under the Act. The calculation of the sale price of restricted shares was
    arbitrary and was not based upon any active trading market in the Companys Common
    Stock. There was no liquidity applicable to the Companys Common and no independent
    basis to price the shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(2)
    The issuance and sale of the restricted shares to Stacy Kaufman for services prior to the
    merger with PBI was based upon Section 4 (2) under the Act. The calculation of the sale
    price of restricted shares was arbitrary and was not based upon any active trading market
    in the Companys Common Stock. There was no liquidity applicable to the
    Companys Common and no independent basis to price the shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) The issuance of the 3,083,333
    shares issued in connection with the merger of PBI into SKNT was based upon Section 4 (2)
    under the Act, in an arm's length transaction. The book value of PBI at the date of the
    merger was $357,789, which represents a price of $.11 per share. There was limited
    liquidity and only very sporadic trading in the shares at the time of the merger and the
    issuance of restricted shares to Kaufman. We believe that the terms of the merger
    transaction with PBI was at the fair value of the restricted SKNT shares on the date of
    the merger.  The 3,083,333 shares were issued to Stacy Kaufman and Cathy Kaufman as
    JTWROS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(4)
    The issuance and sale of the restricted shares to the Marc Baker, as merger consultant,
    was based upon Section 4 (2) under the Act. Mr. Baker made total net cash advances during
    1999, 2000 and 2001 of $740,577 to SKNT as of the dates set forth above. At March 31,
    2001, the subscription receivable from Mr. Baker was $289,629 and subsequent to the
    quarter ended March 31, 2001 the subscription receivable was waived. The calculation of
    the sale price of 1,083,338 restricted shares to Mr. Baker in March 1999 in consideration
    for advances of $541,667, or $.50 per share, was based upon the average closing bid price
    of the shares during March 1999. The calculation of the sale price of the 1,034,933
    restricted shares to Mr. Baker in July 1999, took into consideration the additional net
    cash advances of $96,252 and a subscription receivable of $392,287, equal to a per share
    price of $.47 per share, which per share price was based upon the funding agreement with
    merger consultant in March 1999. See Part III, Item 12, "Certain Relationships and
    Related Transactions". We believe that these restricted shares were issued at the
    fair market value of SKNT shares based upon the restrictive nature of the shares, the
    limited liquidity and sporadic trading in SKNT shares.
|(5) The 1,000,000 shares were never issued to Mr. Kaufman, but were granted under
    an option pursuant to his 1999 Employment Agreement with SKNT. A total of 2.5 million
    shares were subject to this option, exercisable at $.50 per share. 500,000 shares subject
    to the option vested at 12/31/1999 after SKNT achieved cumulative revenues in excess of
    $700,000 and an addition 500,000 shares vested at 12/31/2000 after SKNT achieved
    cumulative revenues in excess of $1,540,000. The options to purchase 1 million shares and
    options to purchase an additional 1.5 million shares that had not vested were all canceled
    upon Mr. Kaufman's resignation and as part of the consideration for the Share Transfer
    Agreement. See Part III, Item 10, "Executive Compensation".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(5) The issuance and sale of the
    restricted shares to the Company's President was based upon Section 4 (2) under the Act.
    In determining the purchase price paid by Baker for the 6 million restricted SKNT
    shares,  SKNT considered the total net cash advances made by Baker of $740,577
    through March 31, 2001  and that at the date of the sale of the 6 million restricted
    shares to Mr. Baker, SKNT had no business operations or assets. SKNT shares have had only
    a limited and sporadic trading market, and we believe that the collective transactions
    including the sale of the 6 million shares at par value to Mr. Baker, was fair. SKNT has
    not sought any fairness opinion with respect to the Baker transactions. While there was no
    trading in the SKNT shares on March 16, 2001, the bid and asked price of the SKNT shares
    on that date was $.16 and $.17, respectively. See Part III, Item 12, "Certain
    Relationships and Related Transactions".                                                                                                                                                                                                                                                                                                                                                                       

ITEM 6. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION

Results of Operations

During the Company's fiscal years ended December 31, 2000
and 1999, respectively, we generated sales of $1,032,655 and $1,014,997, respectively. The
reason for the stagnation in sales from fiscal 1999 to 2000 was principally due to efforts
of the management to control operating expenses which included a reduction in selling and
marketing expenses. This resulted in declining expenditures for advertising which decrease
from $118,513 in 1999 to 33,920 in 2000. We believe this may have had a negative impact on
our sales during the year 2000.

Reference is made to Note 10-Going Concern, to the Notes to
Consolidated Financial Statements. As shown in the accompanying financial statements, we
incurred a net loss from operations of $100,862 during the year ended December 31, 2000
after a net loss of $227,239 during the year ended December 31, 1999. The accounts payable
exceed the accounts receivable by $76,890, and the sales were basically flat from 1999 to
2000. Those factors as well as the uncertain conditions of future capital contributions to
the Company, created an uncertainty about our ability to continue as a going concern. The
Company had been actively seeking funding during 2000 and through the first quarter of
2001. Our inability to generate additional funding and questions by principal shareholders
resulted in our determination to divest PBI. The financial statements for our year ended
December 31, 2000 did not include any adjustments that might be necessary if the Company
is unable to continue as a going concern. However, we make reference to our amended
Schedule 14C Information Statement that reflects our disposition of PBI and the fact that
we have no assets or liabilities as of the date of filing our Form 10-KSB/A.

We had commenced marketing of our new product,
SOAPSCREEN(R), following the completion of clinical testing, patent registration and
packaging. The SOAPSCREEN(R) product accounted for approximately 25% of our sales in 2000
compared to 15% of our sales in 1999. We also generated sales of our new Slim Tan(R)
product and increased sales of its existing Pro-Tan(R) product line. In addition, we had
developed and introduced several private label products for key customers that generated
orders during the 1999 fiscal to increase sales. Private label sales accounted for
approximately 20% of our sales in 2000 or approximately the same level as in 1999. We also
experienced additional sales in 2000 from its ProTan(R) and SlimTan(R) products.

Notwithstanding to our stagnating sales during the year
2000 from SOAPSCREEN(R) and from private label products, we did not believe that we were
or would have been dependent upon any single product for a material percentage of our
sales during the year 2001. However, we decided because of the above mentions reason to
divest PBI.

We had also experienced delays in the introduction of these
new products because of negative cash flow from operations and decreasing cash flow from
financing activities, which decreased from $450,265 during 1999 to $68,219 during 2000.

We incurred a net loss of $34,047 ($0.01 per Share) during
2000 compared to a net loss of $185,822 ($0.04 per Share) during 1999. The Company's net
loss for the year ended December 31, 2000 decreased by 82% from the prior year principally
as a result of declining operating expenses.

Our selling, general and administrative expenses were
$544,674 in 2000 compared to $657,528 in 1999. Our selling expense declined from $254,960
in 1999 to and $146,365 in 1998 and our administrative expense declined from $266,891 in
1999 to $246,428 in 2000.

We were able to keep our selling, general and
administrative expenses from increasing significantly by: using outside personnel for
selling efforts; by eliminating the need for temporary personnel, which in prior periods
were used to office and warehouse operations; and from increased experience of our staff
and employees. Prior to the Share Transfer Agreement disposing of PBI, we had considered
increasing the number of personnel during 2001.

Our general expense increased from $135,677 in 1999 to
$151,881 in 2000. This increase resulted primarily from the costs associated with being a
public company and fees related to compliance with SEC reporting requirements under the
Securities Exchange Act of 1934. We estimate that approximately 30% of our total
administrative expenses were associated with being a public company.

Liquidity and Capital Resources

At December 31, 2000, we had current assets of $300,157,
compared to current assets of $355,276 at December 31, 1999. The decrease in current
assets is the result of decreased accounts receivable, from $47,679 in 1999 to $24,861 in
2000, decreased inventory from $192,539 in 1999 to $169,256, decreased amount due from
stockholder from $107,311 in 1999 to $87,430 in 2000. Our accounts receivable were
considered current and collectible, with no return privileges, and the inventory is all
ready for sale. As a result of the sale of PBI, we have no assets or liabilities. Our
total assets at year end 2000 decreased to $373,290 from $411,533 at year end 1999.

Our stock subscriptions receivable in the amount of
$301,994 at December 31, 2000 and $374,287 at December 31, 1999 were deemed fully
collectible but in connection with the Share Transfer Agreement and the disposition of
PBI, the subscriptions receivable, which equaled $289, 629 from Mr. Baker were waived.

Our current liabilities declined from $241,202 at December
31, 1999 to $158,231 at December 31, 2000 because we reduced our accounts payable by
$123,103. We settled two suits and made a provision for settlement payments in the amount
of $40,000. See Note 3 to the Notes to Consolidated Financial Statements).

There are no trends that we were aware of that would have
adversely impacted our liquidity and we had no plans for any large capital expenditures.

The season for our sun protection products was from January
through August. We believed that as we had broadened our product line, we would have been
able to increase the use of our products year round. Material events that would have
effected our financial condition were related directly to the market acceptance for
existing and new products. Any decline in acceptance would have had an adverse effect on
our ability to increase our distribution, which in turn would have increased our sales.
Our liquidity and future success would have been dependent upon the market acceptance of
our proprietary liquid body wash with sunscreen, which we believed is the only product of
its kind on the market. We had also introduced the Beauty Bites snack bar into the
professional salon arena, which had received initial market acceptance as the product's
quality and uniqueness. Initial sales had begun and we had expected to continue at a
steady pace.

Except for the historical information herein, the matters
discussed in this Annual Report includes forward-looking statements that may involve a
number of risks and uncertainties. Actual results may vary based upon a number of factors,
including, but not limited to, risks in product and product development, market acceptance
of new products and continuing demand, the impact of competitive products and pricing,
changing economic conditions and other risk factors contained in the Company's Form
10-SB/12g/A which was filed with the Securities and Exchange Commission on February 1,
2000.

ITEM 7. FINANCIAL STATEMENTS

Set forth below are the audited financial statements for the Company
for the year ended December 31, 2000 and 1999.

|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                               |   
|---------------------------------------------------------------------------------------- | --
|                                                                                         |   
|REPORTS
    OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                                  | 13
|CONSOLIDATED
    FINANCIAL STATEMENTS                                                    |   
|CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2000
    AND DECEMBER 31, 1999                  | 13
|CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
    YEARS ENDED DECEMBER 31, 2000 AND 1999 | 14
|CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY YEARS ENDED DECEMBER 31, 2000 AND 1999    | 15
|CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS
    ENDED DECEMBER 31, 2000 AND 1999         | 16
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                               | 17

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

|To the Board of Directors and Stockholders of
|---------------------------------------------
|Skintek Labs, Inc.                           
|Sunrise, Florida                             

We have audited the accompanying consolidated balance
sheets of Skintek Labs, Inc. and Subsidiary (the Company) as of December 31, 2000 and
December 31, 1999, and the related consolidated statements of operations,
stockholders equity, and cash flows for the years then ended. 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 audit. The consolidated
financial statements give retroactive effect to the merger of Skintek Labs, Inc. and
Performance Brands, Inc. (the Subsidiary), which has been accounted for as a reverse
purchase as described in Note 1 of the accompanying notes to consolidated financial
statements.

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

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial position of
Skintek Labs, Inc. and Subsidiary at December 31, 2000 and 1999, and the results of
its operations and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company has suffered significant losses from operations during
the last two years that raises substantial doubt about its ability to continue as a going
concern.

|/s/ GRASSANO ACCOUNTING, P. A.                                                          
|----------------------------------------------------------------------------------------
|Boca Raton, Florida                                                                     
|February 28, 2001, except with respect to Note 9 to which the date is
    July 18, 2001.





|SKINTEK LABS, INC. AND
    SUBSIDIARY                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------
|CONSOLIDATED BALANCE
    SHEETS DECEMBER 31, 2000 AND 1999                                                                       
|                                                                                                                                 
|ASSETS                                                                                                                           
|CURRENT ASSETS                                                                                                                   
|Cash                                                                                                                             
|Accounts receivable                                                                                                              
|Inventory                                                                                                                        
|Due from Stockholders                                                                                                            
|TOTAL CURRENT
    ASSETS                                                                                                         
|                                                                                                                                 
|Machinery and Equipment                                                                                                          
|Furniture and Fixtures                                                                                                           
|Office Equipment                                                                                                                 
|Website                                                                                                                          
|Leasehold Improvements                                                                                                           
|                                                                                                                                 
|Less Accumulated Depreciation                                                                                                    
|NET PROPERTY AND
    EQUIPMENT                                                                                                   
|                                                                                                                                 
|OTHER ASSETS                                                                                                                     
|Security Deposits                                                                                                                
|Patent and Trademarks (Less:
    Accumulated Amortization of                                                                     
|$1,895 in 2000 and $385
    in 1999)                                                                                             
|TOTAL OTHER ASSETS                                                                                                               
|                                                                                                                                 
|TOTAL
    ASSETS                                                                                                                 
|                                                                                                                                 
|LIABILITIES AND
    STOCKHOLDERS' EQUITY                                                                                         
|                                                                                                                                 
|CURRENT LIABILITIES                                                                                                              
|Accounts payable                                                                                                                 
|Payroll Taxes Payable                                                                                                            
|Settlements Payable                                                                                                              
|Current Portion of Long-Term
    Debt                                                                                            
|Note Payable                                                                                                                     
|TOTAL CURRENT
    LIABILITIES                                                                                                    
|                                                                                                                                 
|LONG TERM LIABILITIES                                                                                                            
|Long-Term Liabilities                                                                                                            
|TOTAL
    LIABILITIES                                                                                                            
|STOCKHOLDERS' EQUITY                                                                                                             
|Preferred Stock, $.001 Par
    Value, Non-Voting, 1,000,000 Shares                                                               
|Authorized; None Issued and
    Outstanding                                                                                      
|Common Stock, $.001 Par Value;
    50,000,000 Shares                                                                             
|Authorized; 5,921,271
    Shares Issued and Outstanding                                                                          
|Additional paid-in capital                                                                                                       
|Less: Stock Subscriptions
    Receivable                                                                                         
|Retained earnings (accumulated
    deficit)                                                                                      
|TOTAL
    STOCKHOLDERS' EQUITY                                                                                                   
|TOTAL
    STOCKHOLDERS' EQUITY AND LIABILITIES                                                                                   
|The
    accompanying Notes to Consolidated Financial Statements are integral part of these
    Consolidated Financial Statements.



|SKINTEK LABS, INC. AND SUBSIDIARY                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                        
|FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999                                                                               
|                                                                                                                             
|                                                                                                                             
|                                                                                                                             
|SALES                                                                                                                        
|COST OF
    GOODS SOLD                                                                                                       
|                                                                                                                             
|GROSS PROFIT                                                                                                                 
|                                                                                                                             
|OPERATING
    EXPENSES                                                                                                       
|Selling                                                                                                                      
|General                                                                                                                      
|Administrative                                                                                                               
|TOTAL OPERATING EXPENSES                                                                                                     
|                                                                                                                             
|INCOME (LOSS) FROM OPERATIONS                                                                                                
|                                                                                                                             
|OTHER
    INCOME AND EXPENSES                                                                                                
|Legal Settlements                                                                                                            
|Miscellaneous Income                                                                                                         
|Interest Income                                                                                                              
|Interest Expense                                                                                                             
|TOTAL OTHER INCOME (EXPENSE)                                                                                                 
|                                                                                                                             
|NET INCOME (LOSS) BEFORE PROVISION FOR                                                                                       
|(BENEFIT FROM) INCOME TAXES                                                                                                  
|                                                                                                                             
|Provision
    for (Benefit from) Income Taxes                                                                                
|                                                                                                                             
|NET INCOME (LOSS)                                                                                                            
|NET
    INCOME (LOSS) COMMON STOCK:                                                                                          
|Basic                                                                                                                        
|Diluted                                                                                                                      
|                                                                                                                             
|SHARES
    USED IN COMPUTING NET INCOME (LOSS) PER COMMON SHARE                                                              
|Basic                                                                                                                        
|Diluted                                                                                                                      
|The accompanying Notes to Consolidated Financial
    Statements are integral part of these Consolidated Financial Statements.



|SKINTEK LABS, INC. AND SUBSIDIARY                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------
|CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)                                                                    
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|Balance, January 1, 1999                                                                                                         
|March 31, 1999 converted
    $541,667 of merger consultant's note into                                                           
|1,083,338 shares of common
    stock                                                                                             
|Additional Merger Costs                                                                                                          
|July 6, 1999 issued 1,034,933
    shares of common stock to merger consultant for $96,252 of consultant's                        
|note and $392,287 cash due                                                                                                       
|Advances from merger consultant                                                                                                  
|Net loss                                                                                                                         
|Balance, December 31, 1999                                                                                                       
|Advances from merger consultant                                                                                                  
|Net Loss                                                                                                                         
|Balance, December 31, 2000                                                                                                       
|The
    accompanying Notes to Consolidated Financial Statements are integral part of these
    Consolidated Financial Statements.



|SKINTEK LABS, INC. AND SUBSIDIARY                                                                                                                                                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2000 AND 1999                                                                                                                                        
|                                                                                                                                                                                                                    
|                                                                                                                                                                                                                    
|CASH
    FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                                           
|Net Income (Loss)                                                                                                                                                                                                   
|Adjustments to Reconcile Net Income (Loss)                                                                                                                                                                          
|to Net Cash Used in Operating Activities:                                                                                                                                                                           
|Depreciation and Amortization                                                                                                                                                                                       
|Decrease (Increase) in Accounts Receivable                                                                                                                                                                          
|Decrease (Increase) in Inventory                                                                                                                                                                                    
|Decrease (Increase) in Income Taxes Receivable                                                                                                                                                                      
|Decrease (Increase) in Security Deposits                                                                                                                                                                            
|Increase (Decrease) in Accounts payable                                                                                                                                                                             
|Increase (Decrease) in Payroll Taxes Payable                                                                                                                                                                        
|Decrease in Income Taxes Payable                                                                                                                                                                                    
|Increase in Settlements Payable                                                                                                                                                                                     
|NET CASH (USED) PROVIDED IN OPERATING ACTIVITIES                                                                                                                                                                    
|CASH FLOW
    FROM INVESTING ACTIVITIES:                                                                                                                                                                            
|Loan Repayment from (Advances to) Stockholders (Net)                                                                                                                                                                
|Purchases of Property and Equipment                                                                                                                                                                                 
|Purchase of Intangible Assets                                                                                                                                                                                       
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:                                                                                                                                                                
|CASH
    FLOWS FROM FINANCING ACTIVITIES:                                                                                                                                                                           
|Proceeds from Note Payable                                                                                                                                                                                          
|Principal payments on Long-Term Debt                                                                                                                                                                                
|NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                                                                                                                                                 
|NET
    INCREASE (DECREASE) IN CASH                                                                                                                                                                                 
|CASH,
    BEGINNING OF PERIOD                                                                                                                                                                                       
|CASH, END
    OF PERIOD                                                                                                                                                                                             
|SUPPLEMENTAL
    DISCLOSURE OF CASH FLOW INFORMATION:                                                                                                                                                               
|Cash paid during the period for:                                                                                                                                                                                    
|Interest                                                                                                                                                                                                            
|Income Taxes                                                                                                                                                                                                        
|                                                                                                                                                                                                                    
|SUPPLEMENTARY DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:                                                                                                                                                          
|On March 31, 1999, $541,667 of merger consultants cash advances was
    converted into 1,083,338 shares of common stock.                                                                                           
|On July 6, 1999, $96,252
    of merger consultants cash advances and a subscription receivable of $392,287 from
    the merger consultant was converted into 1,034,933 restricted  shares of common
    stock.     
|On February 1, 2000, PBI, a wholly-owned subsidiary, financed the excess
    build-out of $14,606 on the new leased office and warehouse space with an unsecured
    promissory note with the landlord.  See Note 5.
|The accompanying Notes to Consolidated Financial
    Statements are integral part of these Consolidated Financial Statements.                                                                                       



|SKINTEK LABS, INC. AND SUBSIDIARY             
|----------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

On December 13, 1994, Skintek Labs, Inc. (the
"Company") under the name of Biologistics, Inc. was incorporated under the laws
of Colorado, to engage in the business of clinical consulting, contract packaging and
labeling services for clinical studies. The Company issued stock but never had any
operations. On April 22, 1997, the Company became a Delaware corporation when it merged
itself into its subsidiary, also called Biologistics, Inc., which was incorporated under
the laws of Delaware on March 19, 1997.

Performance Brands, Inc. ("PBI" or the
"Subsidiary") was incorporated September 21, 1995 under the laws of the State of
Florida. On March 31, 1999, the Company incorporated a wholly-owned subsidiary, PBI
Acquisition Corp. On the same day PBI merged with PBI Acquisition Corp. when the sole
stockholder exchanged his stock in PBI for 18,500,000 shares of Skintek Labs, Inc. Then
PBI Acquisition Corp. was dissolved, leaving PBI as the surviving subsidiary of Skintek
Labs, Inc. This stock-for-stock transfer was accounted for as a reverse purchase. Since
the share exchange between the Company and PBI, the Company has been engaged in the
wholesale and retail distribution and sale of various products in the skin-care market,
which products have been manufactured, to the Companys specifications, in South
Florida by several independent fillers and by the Company.

Basis of Presentation and Consolidation

The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and include the accounts of
Skintek Labs, Inc. and its wholly-owned subsidiary Performance Brands, Inc. All material
intercompany transactions and balances have been eliminated in consolidation.

As described in Organization above, effective March 31,
1999, the Company acquired all of the common stock of Performance Brands, Inc. The
business combination was accounted for as a purchase and accordingly, the Companys
financial statements have been presented to include the results of Performance Brands,
Inc. as though the business combination occurred as of January 1, 1998. The May 12, 1999
of one for six reverse stock split (Note 4) was also presented as though it occurred on
January 1, 1998.

Accounts Receivable

All accounts receivable are due from unaffiliated third
parties. The Company considers all accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required. If amounts become
uncollectible, they will be charged to operations when that determination is made.

Inventory

Inventory is stated at the lower of cost or market, using
the first-in, first-out (FIFO) method and consists of bottles of product, empty bottles,
displays, and boxes. The raw materials are expensed as purchased because their inventoried
value would be immaterial.

Property, Equipment and Depreciation

Property additions, major renewals and betterments are
included in the assets accounts at cost. Maintenance, repairs and minor renewals are
charged to earnings when incurred.

Depreciation is computed using the modified accelerated
cost recovery system and the straight-line method over the estimated useful lives of the
assets. The Company has elected to expense, rather than depreciate, the cost of certain
depreciable personal property under Section 179 of the Internal Revenue Code. Although,
these methods are not generally accepted accounting principles, the difference between
them and any other acceptable method is immaterial to the current financial statements.

Patent & Trademarks

During the year ending December 31, 1999, the Company paid
$17,149 in patent fees and expenses and $7,290 for trademark fees and expenses. During the
year ending December 31, 2000, the Company paid $605 in patent fees and expenses and
$1,668 for trademark fees and expenses. Patents and trademarks are being amortized over
seventeen years.

Long-Lived Assets

The Company periodically reviews the values assigned to
long-lived assets, such as property and equipment and acquired customer bases, to
determine whether any impairments are other than temporary. Management believes that the
long-lived assets in the accompanying balance sheets are appropriately valued.

Revenue Recognition

Revenue from sales is recognized in the period in which the
products are shipped and invoiced to the customer. Sales are final upon the shipment of
the goods to customers. The customers are generally the fifty independent distributors
throughout the world and an additional approximately eighteen hundred wholesale accounts,
principally in the U.S.A.

Advertising

Costs associated with advertising are expensed in the year
incurred. Advertising expenses, which are comprised primarily of print media, were $33,920
and $118,513 for the years ending on December 31, 2000 and 1999, respectively.

Income Taxes

Since inception, the Company has maintained a fiscal year
ending on each 31st day of December. Provisions for income taxes have not been presented
as there is no taxable income after consideration of net operating losses, and there are
no timing differences.

Earnings Per Common Share

The Company adopted Statement of Financial Accounting
Standard No. 128 ("FAS 128"), Earnings Per Share for the period of these
financial statements. Basic earning per common share is computed using the weighted
average number of common shares outstanding. Diluted earnings per common share is computed
using the weighted average number of shares outstanding adjusted for the incremental
shares attributed to the potential officers stock option of 500,000 shares of common
stock as of August 31, 1999 and 500,000 shares as of May 31, 2000. The shares were also
numbered as though the May 12, 1999 reverse stock split occurred on January 1, 1998.

Recent Accounting Pronouncements

In 1999, the Company was subject to the provisions of
Statement of Financial Accounting Standards No. 130 ("SFAS 130"),
"Reporting Comprehensive Income" and Statement of Financial Accounting Standards
No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and
Related Information." Neither statement had any impact on the Companys
financial statements as the Company does not have any "comprehensive income"
type earnings (losses) and its financial statements reflect how the "key operating
decisions maker" views the business. The Company will continue to review these
statements over time, in particular SFAS 131, to determine if any additional disclosures
are necessary based on evolving circumstances.

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.

Fair Value of Financial Instruments

The carrying amounts of financial instruments including
cash, accounts receivable, accounts payable and accrued expenses approximated fair value
because of the immediate or short-term maturity of these instruments.

NOTE 2  DUE FROM STOCKHOLDERS

As of December 31, 1998, the stockholders owed the Company
$60,767. During the year ending December 31, 1999, the stockholders repaid $42,000 and
borrowed an additional $83,264. Interest of $5,280 was accrued, resulting in a balance of
$107,311 and evidenced by an unsecured promissory note at an interest rate of 6%,
principal and accrued interest due on demand or on December 31, 2000.

During the year ended December 31, 2000, the stockholders
repaid $50,000 and borrowed an additional $24,609. Interest of $5,510 was accrued,
resulting in a balance of $87,430 and evidenced by an unsecured promissory note at an
interest rate of 6% principal and accrued interest due on demand or on December 31,
2001.

NOTE 3  SETTLEMENTS PAYABLE

During the year ending December 31, 1998, the Company
contracted for $104,245 of advertising from a company. The advertising was not effective
as contracted, and the Company refused to pay the amount. In January 2001, the United
States District Court, Southern District of New York, dismissed the suit, and the debt was
settled for $25,000, resulting in legal settlement income of $79,245.

During the year ending December 31, 1999, a model for a
Company promotion sued the company for compensation from the product line advertised. In
January 2001, this matter was settled for $15,000.

Both balances due, totaling $40,000, are being paid in
installments in 2001. The net legal settlement income is $64,245.

NOTE 4  NOTES PAYABLE

On September 1, 1996, the Subsidiary purchased a forklift
for $12,954, financing $11,654 of the balance owed with a note secured by the forklift at
an interest rate of 12%. The monthly installments are $338 through December 1, 1999. No
payments have ever been made; consequently, the note is in default, although no demands
for payment have ever been made.

During 1998 and 1999, a merger consultant advanced the
Subsidiary $657,000 and paid an additional $118,095 in merger expenses for the Company. As
of December 31, 1999, the Company had converted all of the consultants advances into
common stock and had issued additional common stock to the consultant resulting in stock
subscriptions receivable of $374,287. During the year ending December 31, 2000, the
merger consultant paid $72,293, reducing the stock subscriptions receivable to $301,994.

NOTE 5  LONG TERM DEBT

On August 25, 1999, the Subsidiary entered into a new lease
agreement for office and warehouse space from February 1, 2000 through April 30, 2003. As
part of the agreement, the Subsidiary agreed to repay the landlord $14,606 for leasehold
improvements which exceeded the landlords obligation. The Subsidiary financed this
repayment with an unsecured promissory note with thirty-nine payments of principal and
interest at a rate of 8.5% per annum. The following shows the principal due for the years
ending December 31:

|2001 | $ 4,050
|---- | -------
|2002 | 4,792  
|2003 | 1,690  
|     | $10,532

NOTE 6  STOCK TRANSACTIONS AND OPTIONS

Common Stock

The Company initially authorized 50,000 shares of $0.001
par value common stock. On April 22, 1997 the Company re-incorporated in Delaware through
a merger with its wholly owned Delaware subsidiary. The Company changed its authorized
capital to 30,000,000 shares of $0.001 par value. As of December 31, 1998, the Company had
issued 4,318,000 shares of common stock. On March 31, 1999, 18,500,000 shares (pre-split)
were issued to effect the merger with Performance Brands, Inc., which had a book value of
$357,789 at the date of the merger, and 6,500,000 shares (pre-split) were issued in
conversion of cash advances of $541,667 from the merger consultant. On May 12, 1999, the
Company declared a 6 to 1 reverse stock split, leaving par at $.001, and changing the
number of shares authorized to 50,000,000. On July 6, 1999, the Company issued an
additional 1,034,933 shares of its common stock to the merger consultant for approximately
$.50 per share including a subscription receivable of $392,287. As of December 31, 1999
and 2000, the Company had issued 5,921,271 shares of its common stock.

Preferred Stock

The Company has authorized 1,000,000 preferred shares
$0.001 par value, non-voting, the rights and preferences of which to be determined by the
Board of Directors at the time of issuance. Currently, there are no preferred shares
outstanding.

The Company has declared no dividends through December 31,
2000.

Stock Options

On March 30, 1999, the Company entered into an employment
agreement with the president and majority stockholder,  which was included an
incentive compensation stock option grant, entitling the president to purchase up to
2,500,000 shares of common stock at $.50 per share, expiring March 29, 2009. The grant
provided for vesting when certain cumulative revenue levels are reached. For the year
ending December 31, 1999, the first level of cumulative revenues of $700,000 was reached
  and 500,000 shares were included in the diluted shares for the earnings per share
calculation. The second level of cumulative revenues of $1,540,000 was reached and as of
December 31, 2000, and an additional 500,000 shares were included in the diluted shares
for the earnings per share calculation. None of the additional options vested and no
options were exercised.

NOTE 7  PROVISION FOR (BENEFIT FROM) INCOME TAXES

As a result of the net losses for the years ended December
31, 2000 and 1999, provisions for income taxes are not required. As of December 31, 2000,
the Companys Federal and State NOL carryovers are as follows:

|Federal                     | State    |  |         
|--------------------------- | -------- |  | --------
|NOL Carryover Expiring 2013 | $268,332 |  | $447,428
|NOL Carryover Expiring 2014 | 186,449  |  | 186,449 
|NOL Carryover Expiring 2020 | 29,883   |  | 29,883  
|                            | $484,664 |  | $663,760

NOTE 8  COMMITMENTS

The Subsidiary is obligated for an automobile lease which
is properly treated as non-cancelable operating lease. The term of the lease is 36 months
with monthly payments of $511. The amounts due under this operating lease are as follows
for the years ending December 31:

|2001 | $6,132 
|---- | -------
|2002 | 6,132  
|2003 | 2,044  
|     | $14,308

The Subsidiary leased new office and warehouse space
beginning on February 1, 2000. The amounts due under this lease are as follows for
the years ending December 31:

|2001 | $ 22,817
|---- | --------
|2002 | 24,095  
|2003 | 8,804   
|     | $ 55,716

NOTE 9  SUBSEQUENT EVENT

On or about February 21, 2001, the Company rescinded its
acquisition of Ultimate Warlock, Inc., ab initio, which was reported on the Form 8-K filed
September 22, 2000. The Company has not reflected any effect from this transaction in its
current financial statements, as no costs were incurred, and no information is relevant to
the past or future operating results of the Company.

Effective March 16, 2001, the Company's president and sole
director resigned as an officer and director of the Company, in contemplation of the
Company divesting itself of PBI in a share transfer agreement with such individual. Prior
to his resignation, the Company's president and sole director elected Marc Baker, who had
been the Company's merger consultant, as director.

NOTE 10  GOING CONCERN

As
shown in the accompanying financial statements, the Company incurred a net loss from
operations of $100,862 during the year ended December 31, 2000 after a net loss of
$227,239 during the year ended December 31, 1999. Currently, the accounts payable exceed
the accounts receivable by $76,890, and the sales were basically flat from 1999 to 2000.
Those factors as well as the uncertain conditions of future capital contributions to the
Company create an uncertainty about its ability to continue as a going concern. The
Company is actively seeking funding. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a going
concern.

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

None.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

At present we have one executive officer and director. We
contemplate that we will elect one or more additional directors and appoint additional
officers in connection with a Business Combination transaction. Our director(s) are
elected to serve until the next annual meeting of shareholders and until his (their)
respective successors will have been elected and will have qualified.

The following table sets forth as the name, age and position held with respect to our
directors and executive officers:

|Name          | Age | Positions                                                                                
|------------- | --- | -----------------------------------------------------------------------------------------
|Stacy Kaufman | 36  | President, Chief Executive
    Officer and Director (until resignation on March 16, 2001)
|Marc Baker    | 40  | President and Director (commencing March 16,
    2001)                                   

*Business Experience of Principal.*Our present management commencing March 16,
2001, consists of Marc Baker, who serves as our president, sole executive officer,
director and a control shareholder, owning 68.1% of our issued and outstanding shares. Mr.
Baker is a certified public accountant licensed in the State of Florida. During the past
five years, Mr. Baker has had experiences in negotiating mergers, acquisitions and stock
purchase agreements involving several different private operating companies with public
non-operating companies. Some of these public non-reporting companies involved in these
transactions continued to be non-reporting companies under the Exchange Act after the
transactions or became reporting companies and then ceased to report under the Exchange
Act. However, Mr. Baker was not part of the post-transaction management in these
non-reporting companies. Mr. Baker has also provided consulting services to 
independent public accounting firms and attorneys in several transactions which services
have facilitated other companies in becoming operating companies. Mr. Baker has also
worked closely with the professionals engaged by the entities seeking to enter into
Business Combinations, similar to those that we may pursue for the purpose of due
diligence and evaluation of Target Businesses and conducting negotiations for Business
Combinations.

During the past five years, Mr. Baker served as an officer and director
of the following public non-operating companies each of which entered into a Business
Combination during the years stated: (i) Life Industries Inc. - Mr. Baker served as
president of Life Industries Inc., a public non-operating company, that filed its Form 10
in 1995, prior to Mr. Baker's involvement, but never filed any Exchange Act reports. Mr.
Baker after becoming president of Life Industries caused Life Industries to engage an
accounting firm and legal representation so that it could enter into a business
combination with Quill Industries, an operating company, in 1997. At the date of the
transaction with Quill, Mr. Baker resigned his position as an officer and director and
disposed of his share interest in Life Industries to an unaffiliated party. Prior to the
business combination between Life and with Quill, and as a result of Mr. Baker's efforts,
Life Industries had available current information required by Rule 15c-2-11, which
permitted a market maker to enter quotes for the Life shares on the pink sheets. However,
while Quill Industries on August 21, 1998 filed a Form 10-SB under the Exchange Act to
become a reporting company, which was after Mr. Baker's resignation, the Form 10-SB was
withdrawn on June 4, 1999 and Life Industries never filed any reports under the Exchange
Act; (ii) Stetson Oil Exchange Inc. - Mr. Baker was an officer and director of Stetson Oil
Exchange Inc., a public non-operating company that entered into a business combination
transaction with Telecom Wireless Corp., an operating company, in 1998, and resigned his
positions and disposed of his share interest in Stetson when it entered into a business
combination with Telecom Wireless. Telecom Wireless became a reporting company under the
Exchange Act and its shares were traded on the OTC:BB until the shares were delisted for
failure to continue to remain current under the Exchange Act; (iii) Skintek Labs, Inc. -
Mr. Baker was an officer and director of  Biologistics Inc., a public non-operating
company, and when it entered into a merger agreement with Skintek Labs Inc., an operating
company, in 1999, Mr. Baker resigned as an officer and director.  Skintek Labs has
continued to be an operating and reporting company under the Exchange Act and its shares
are subject to quotation on the OTC:BB; (iv) Union Chemical Corp. -  Mr. Baker was
president of  Union Chemical Corp., a public non-operating company that was never a
reporting company under the Exchange Act. Mr. Baker sold his interest in Union Chemical
and resigned as president  prior to Union Chemical entering into a merger agreement
with HotYellow 98.com, an operating company, in 1999 and Mr. Baker had no involvement in
the merger transaction. HotYellow filed a registration statement on Form 10-SB on August
23, 1999 but never filed any required Exchange Act reports and is not current under the
reporting requirements under the Exchange Act; (v) National Venture Capital Fund, Inc. -
Mr. Baker is the secretary-treasurer and a director of  National Venture Capital
Fund, Inc., a non-operating company that filed its Form 10-SB/12g on May 6, 1999 and filed
its annual report for its year ended April 30, 2000 and its quarterly report for the first
quarter ended July 31, 2000 but has failed to file the required quarterly reports under
the Exchange Act  and is therefor not current in its reporting requirements. Mr.
Baker is also serving as President and director of BSD Healthcare, Inc., a
non-operating company, which is current under its reporting requirements under the
Exchange Act; and (vi) Combined Professional Services, Inc., a current reporting company
that had no operations through its year ended December 31, 2000. Mr. Baker was elected as
director on February 27, 2001 following which former officers and directors resigned. Mr.
Baker appointed himself as president and as sole officer and director is pursuing
acquisitions for Combined Professional Services. It has recently concluded an acquisition
of a 5% interest in an operating company.

Officers serve at the discretion of the Board of Directors.
The Company effective March 30, 1999 entered into a five year employment agreement with
Stacy Kaufman. See Item 10. Executive Compensation below. The disclosure hereunder relates
to the management of the Company and does not reflect the transaction with Ultimate
Warlock, Inc. in September 2000 which was rescinded effective February 21, 2001, as if the
transaction did not occur.

Stacy Kaufman served as our full-time President, Chief
Executive Officer and sole director from the 1999 merger between SKNT and PBI until his
resignation dated March 16, 2001. Mr. Kaufman was the founder of PBI and its chief
executive officer, director and principal shareholder from PBI's inception in September,
1995. Mr. Kaufman has worked for SKNT  and its predecessor, PBI, for more than the
past five years. Effective March 30, 1999, the Company entered into a five (5) year
executive employment agreement with Stacy Kaufman. This Employment Agreement was
terminated in connection with the Share Transfer Agreement dated as of April 30, 2001,
which was executed after Mr. Kaufman's resignation on March 16, 2001. See Part III, Item
10, "Executive Compensation" below.

Section 16(a) Beneficial Ownership Reporting Compliance:

Compliance with Section 16(a) of the Exchange Act. We
became subject to the requirements of the Exchange Act in 1999. Our former and present
officers, directors and 10% shareholders have informed us that they have filed the
required Forms 3, 4 and 5 although these were filed late.

ITEM 10. EXECUTIVE COMPENSATION

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      |                         |        |                               | Long
    Term Compensation    |                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------- | ----------------------- | ------ | ----------------------------- | ----------------------------- | -------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      | Annual
    Compensation | Awards | Payouts                       |                              
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (b)                  | (c)                     | (d)    | (e)                           | (f)                           | (g)                                  
|Name
    and Principal Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Year                 | Salary                  | Bonus  | Other
    Annual Compensation | Restricted
    Stock Award(1) | Securities
    Underlying Options/SAR
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      | ($)                     | ($)    | ($)                           | ($)                           | (#)                                  
|Marc Baker,
    President and Chairman                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Since
    March 2001 | 0                       | 0      | 0                             | 0                             | 0                                    
|Stacy
    Kaufman, President and Chairman                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2000                 | 112,115                 | 0      | 0                             | 0                             | 500,000(1)                           
|Stacy Kaufman,
    President and Chairman                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1999                 | 101,923                 | 0      | 0                             | 0                             | 500,000(1)                           
|Stacy Kaufman,
    President and Chairman                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1998                 | 65,942                  | 0      | 80,000                        | 0                             | 0                                    
|Cathy Kaufman
    Secretary, Treasurer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2000                 | 16,000                  | 0      | 0                             | 0                             | 0                                    
|Cathy Kaufman
    Secretary, Treasurer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 1999                 | 6,350                   | 0      | 0                             | 0                             | 0                                    
|Cathy Kaufman
    Secretary, Treasurer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 1998                 | 0                       | 0      | 0                             | 0                             | 0                                    
|(1) Based upon
    the Company's 1999 Employment Agreement with Mr. Kaufman, options to purchase 2.5 million
    shares were granted, subject to vesting upon certain levels of cumulative revenues,
    discussed below. All options were exercisable at $.50 per share and no options were ever
    exercised. In connection with Mr. Kaufman's resignation effective March 16, 2001, all
    options, including the 500,000 that vested in each of 1999 and 2000 and the 1.5 million
    unvested unvested options were canceled and any and all rights of and obligations to Mr.
    Kaufman under the 1999 Employment Agreement terminated.

Stacy Kaufman has served as SKNT's chief executive officer
and president during the respective years set forth above. On March 30 ,1999, SKNT entered
into the 1999 Employment Agreement, a five year executive employment agreement, with Mr.
Kaufman, which provided for annual base salary of $100,100, subject to an annual increase
of 10%, a bonus based upon performance determined by the board of directors, which
consisted of Mr. Kaufman. The 1999 Employment Agreement also included incentive
compensation in the form of stock options, granting Mr. Kaufman the right to purchase
2,500,000 shares exercisable at $.50 per share, which expired March 29, 2009. The right to
exercise the options was contingent upon the the receipt of cumulative revenues, as
follows: if and when the cumulative revenues reached $700,000, the option to exercise
500,000 shares vested; at $1,540,000 in cumulative revenues options to purchase an
additional 500,000 shares vested; and at $2,548,000, $3,757,600 and $5,209,120 in
cumulative revenues, respectively, options to purchase additional increments of 500,000
shares were to vest. The options to purchase a total of 1,000,000 shares had vested based
upon cumulative revenues in 1999 and 2000. None of the options were ever exercised and all
of the vested and unvested options were canceled upon Mr. Kaufman's resignation effective
March 16, 2001 and in connection with the Share Transfer Agreement between SKNT, PBI and
Mr. Kaufman. Cathy Kaufman has served as Secretary and Treasurer during the respective
years set forth above and resigned on February 21, 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information
regarding the beneficial ownership of the Common Stock of SKNT as of July  15, 2001,
beneficially by each person owning more than 5% of such common shares and the directors
and executive officers, and by all officers and directors, as a group.

|Title of Class                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Name and Address of Beneficial Owner                                                        | Amount and Nature of Beneficial Ownership | Percent of Class Outstanding (1)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ----------------------------------------- | --------------------------------
|Common                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Stacy
    Kaufman 1750 NW 65th Avenue Plantation, FL 33313                                  | 3,371,666 (2)                             | 28.3%                           
|Common                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Cathy
    Kaufman 1750 NW 65th Avenue Plantation, FL 33313                                  | 3,083,333 (2)                             | 25.9%                           
|Common                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Marc
    Baker, 2700 North 29th Avenue, Suite 305, Hollywood, FL 33020, President, Director | 8,118,271(3)                              | 68.1%                           
|Common                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | All
    Officers and Directors as a Group (one person)                                      | 8,118,271(3)                              | 68.1%                           
|_________________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                             |                                           |                                 
|(1) Based upon 11,921,271 shares at July 15,
    2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(2) Includes 3,083,333 shares jointly owned of record and beneficially by Stacy
    Kaufman and his wife, Cathy Kaufman, as JTWROS, issued in connection with the merger of
    PBI in 1999 and 288,333 shares solely owned of record and beneficially by Stacy Kaufman,
    with respect to which Cathy Kaufman disclaims any beneficial interest, issued to Mr.
    Kaufman in November 1998 prior to the merger. Mr. Kaufman resigned as SKNT's sole
    executive officer and director on March 16, 2001.
|(3) Mr. Baker was elected as director effective March 16, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                              

Reference is made to the discussion under Item 10,
"Executive Compensation" regarding Mr. Kaufman's 1999 Employment Agreement. On
March 16, 2001, Mr. Baker was appointed a board member and was subsequently elected
president of SKNT and on the same date, Mr. Kaufman resigned as president and director of
SKNT.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During fiscal 2000 and 1999, SKNT engaged in certain
transactions with related parties as disclosed below.

In November 1998 as consideration for services to SKNT
valued at $104,166 prior to the merger with PBI, Mr. Kaufman was issued 288,333 shares. As
of December 31, 1998, and as reflected in Note 2 to the Notes to Consolidated Financial
Statements, Stacy Kaufman, our former president and sole director, owed the Company
$60,767. In March 1999 SKNT entered into a merger with PBI pursuant to which Stacy Kaufman
was issued 3,083,333 shares in consideration for all of the shares of PBI, which had a
book value of $357,789 at the date of the merger. During the year ending December 31,
1999, Mr. Kaufman repaid $42,000 and borrowed an additional $83,264. Interest of $5,280
was accrued, resulting in a balance of $107,311. This item was reflected in current assets
in SKNT's consolidated balance sheet as due from stockholders at December 31, 1999, which
was evidenced by an unsecured promissory note at an interest rate of 6%, principal and
accrued interest due on demand or on December 31, 2000.

During the year ended December 31, 2000, Mr. Kaufman repaid
$50,000 and borrowed an additional $24,609. Interest of $5,510 was accrued, resulting in a
balance of $87,430 and evidenced by an unsecured promissory note at an interest rate of 6%
principal and accrued interest due on demand or on December 31, 2001. At December 31,
2000 SKNT's current assets in the consolidated balance sheet  reflected $87,430 due
from stockholders, related to the transactions with Mr. Kaufman.

Reference is made to the discussion under Item 1, Description of Business and
specifically to the discussion under "Recent Developments-Skintek Labs, Inc."
related to SKNT's divestiture of PBI and the Share Transfer Agreement between SKNT, PBI
and Kaufman, dated as of April 30, 2001, which is attached as Exhibit 10.1 to the amended
Information Statement on Schedule 14C being filed by SKNT with the SEC. A summary of the
material terms of the Share Transfer Agreement is disclosed in Item 1 above and in the
Schedule 14C, which is incorporated by reference herein. As a result of the Share Transfer
Agreement, SKNT has no assets and no liabilities and the amount formerly due from Kaufman
at December 31, 2000 has been transferred to PBI as have all other assets and liabilities.
The book value of the assets transferred was $217,131.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

|EXHIBIT NO. | DESCRIPTION                                                                                                                                                      
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         | Articles of Incorporation (filed as Exhibits 3.1, 3.2 and 3.3 to the Company's
    Registration Statement on Form 10-SB/12g and incorporated herein by reference)
|3.2         | Bylaws (filed as Exhibit 3.4 to the Company's Registration Statement on Form
    10-SB/12g and incorporated herein by reference)                                 
|19          | Reports
    Furnished to Security Holders-Amendment to Schedule 14C and Exhibit 10.1 thereto
    (incorporated herein by reference)                              
|23          | Consent of independent public accountant                                                                                                                         

DESCRIPTION OF EXHIBITS

EXHIBIT 23

Consent of Accountants

|SKINTEK LABS, INC.               
|---------------------------------
|2700 North 29th Avenue, Suite 305
|Hollywood, FL 33020              
|July 18, 2001                    

Re: Consent to include audit report in Form 10-KSB

Gentlemen:

We consent to the inclusion of our Independent Auditor's
Report dated February 28, 2001, covering the financial statements for the years ended
December 31, 2000 and December 31, 1999 contained in Form 10-KSB for Skintek Labs, Inc.

Yours truly,

|GRASSANO ACCOUNTING, P.A.     
|------------------------------
|/s/  Grassano Accounting, P.A.

(B) REPORTS ON FORM 8-K

The Company filed a Form 8-K on March 7, 2001 disclosing
that the contemplated changes in control of the Company in connection with the transaction
with Ultimate Warlock, Inc., was rescinded effective February 21, 2001, ab initio, as if
the transaction did not occur. See Note 9 to the Notes to Consolidated Financial
Statements.  The transaction which was to take the form of a share exchange, was as
reported in our Form 8-K dated September 22, 2000. We also filed a Form 8-K/A on November
15, 2000 in connection with the proposed transaction with Ultimate Warlock, Inc. Pursuant
to the rescission, the interim management appointed by Ultimate Warlock resigned and the
board of directors of the Company was reconstituted.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

|Skintek Labs, Inc.                               
|-------------------------------------------------
|                                                 
|Marc L. Baker, President, Chief Executive Officer
|By: /s/ Marc L. Baker                            
|Hollywood, FL                                    
|Dated: July 20, 2001                             

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