Jaffe, Freedman & Hait, LLP
                           39 Hudson Street, Suite 102
                              Hackensack, NJ 07601
                               Tel: (201) 441-9377
                               Fax: (201) 441-9370

June 8, 2001


United States Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549

        RE:   LASERLOCK TECHNOLOGIES, INC.

Dear Sir:

     This letter, and the attached Second Amendment to the annual report on Form
10-KSB is in response to the staff's  letter dated May 15, 2001. We believe this
Second Amendment addresses all of the staff's concerns as follows:

Part I

Item 1: Description of Business

Anti-Counterfeiting and Anti-Diversion Technologies and Products

     1.   The disclosure has been revised to explain how "pen systems" work.

Marketing

     2.   The   discrepancy  has  been   reconciled.   Inks  are  to  be  custom
          manufactured for LaserLock by third parties.

Patents

     3.   The  material  terms of the  agreement  between  Mr.  Gardner  and the
          Company regarding the assignment of the patent application  pending in
          the United States Patent and Trademark Office have been disclosed.

     4.   Disclosure  has  been  added   regarding  the  status  of  the  patent
          application,  and what the  Company  intends  to do if a patent is not
          granted.

     5.   Disclosure has been added regarding the Company's  intent to apply for
          patent protection in other  jurisdictions,  and how the differences in
          those countries' patent applications could affect the Company.

     6.   The disclosure on the proposed patent has been elaborated on.

Product Development

     7.   The "Description of the Business" section has been amended to testing.

     8.   The disclosure regarding the "combination lock" has been revised.

Risk Factors

     9.    The disclosure on Rule 144 has been amended.

Part II

Item 4:  Recent Sales of Unregistered Securities

     10.  The disclosure has been added.


PART F/S

Accounting Comments

Response Letter Dated April 21, 2001

Note 6, Related Party Transactions

     11.  Disclosures in the financial statements have been revised accordingly.

Management's Discussion and Analysis / Plan of Operation

     12.  The MD&A section has been amended as requested.

     13.  The  effects on future  operations  if the patent  application  is not
          accepted has been added.

Financial Statements

Note 9, Subsequent Events

     14.  The Company has  recorded  compensation  expense for the  non-employee
          stock options  granted and disclosed the information in Note 5. Please
          note that the options were issued at various times during the year and
          not on  December  31,  2000.  Note 5 has been  revised to present  the
          information accurately.

Additional Comments

Dependence on Key Personnel

     15.  The Company does have a key man insurance  policy on Mr. Gardner.  The
          disclosure has been reconciled to reflect that fact.

Independent Auditor's Report

     16.  The opinion paragraph has been amended as requested.

Note 10, Subsequent Events

     17.  Note  10 has  been  revised  to  include  the  additional  information
          requested.  The  Company's  10-Q  has  been  amended  to  reflect  the
          recording of compensation expense for these options.


     Please  review this Second  Amendment  to the Form 10-KSB at your  earliest
convenience. Please contact me if you have any questions or comments.


Yours truly,


/s/ Jay J. Hait
Jay J. Hait, Esq.
Jaffe, Freedman & Hait, LLP


<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                         SECOND AMENDMENT TO FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
                   For the fiscal year ended December 31, 2000

                         Commission File Number 0-31927
                          LASERLOCK TECHNOLOGIES, INC.
                         ------------------------------
             (Exact name of registrant as specified in Its charter)

           NEVADA                                   23-3023677
      -------------------------------             -------------------
      (State or other jurisdiction of               (IRS Employer
       Incorporation or Organization)             Identification No.)

                      837 Lindy Lane, Bala Cynwyd, PA 19004
          ------------------------------------------------------------
               (Address of Principal Executive offices)     (Zip Code)


Registrant's telephone number, with area code:  (610) 909 - 1000

         Securities registered pursuant to Section 12(b) of the Act:
                                      None

         Securities registered pursuant to Section 12(g) of the Act:
                  Common stock of $0.001 par value per share

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

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

State Issuer's Revenues for its most recent fiscal year. $- -

Aggregate market value of the voting stock held by non-affiliates of registrant:
  1,158,560 as of December 31, 2000

Number of shares outstanding as of December 31, 2000: 13,289,999.

     Documents  incorporated by reference:  Exhibits  contained in the Company's
Form 10-SB submitted on November 14, 2000 and Amendments thereto.

                                   1
<PAGE>
Part I.
Item 1   DESCRIPTION OF BUSINESS


ORGANIZATION  AND  CHARTER



     LaserLock  Technologies,  Inc., (the "Company" or  "LaserLock")  was formed
under the laws of Nevada on November 10,  1999.  The Company was formed in order
to develop  technologies  which will both allow for easy  product  and  document
authentication,  and to prevent product and document counterfeiting. The initial
amount of authorized capital was $50,000. This consisted of 40,000,000 shares of
Common Stock  authorized,  $0.001 par value, and 10,000,000  shares of Preferred
Stock authorized,  $0.001 par value. A copy of the Company's initial Articles of
Incorporation is attached hereto and is incorporated by reference. See Part III,
Item 1.

     LaserLock  Technologies,  Inc.,  filed a Form  15(c)211  with the  National
Association  of Securities  Dealers (NASD) to allow its Common Stock to trade on
the OTC Pink  Sheets.  The  Company's  Common  Stock  began  trading  on the OTC
Pink Sheets in December of 2000,  under the trading symbol "LLTI."

     The  Company is  voluntarily  filing a Form 10-SB with the  Securities  and
Exchange Commission.  LaserLock is filing a Form 10-SB so that, once it is fully
reporting  under The  Securities  Exchange  Act of 1934 and any  comments by the
United  States  Securities  and  Exchange  Commission  on a Form 10-SB have been
satisfied,  LaserLock will be able to apply to trade on the OTC Bulletin  Board.
As a fully  reporting  company under The  Securities  Exchange Act of 1934,  the
Company  will be  required  to file  quarterly  and  annual  and  certain  event
triggered reports with the Securities and Exchange  Commission.  These reporting
requirements add to the expense and timeliness of certain business  transactions
which the Company may endeavor to undertake in the future -- such as a merger or
any other material business undertaking.

     The public may read and copy this  document,  and any other  materials  the
Company files with the Commission at the Commission's Public Reference Room, 450
Fifth Street,  N.W.,  Washington,  D.C.  20549.  Information is available on the
operation  of  the  Public   Reference   Room  by  calling  the   Commission  at
1-800-SEC-0330.   Additionally,   the  Commission  maintains  an  internet  site
(http://www.sec.gov)   that   contains  all  reports,   proxy  and   information
statements, and other information regarding companies which file electronically.
LaserLock currently has no internet web site.





                                        2
<PAGE>
BUSINESS OF THE COMPANY

Background


     LaserLock  Technologies,   Inc.  was  organized  to  utilize  a  technology
developed  by its founder,  Norman A.  Gardner,  which allows for  non-intrusive
document and product  authentication that can reduce losses caused by fraudulent
document  reproduction  and by  product  counterfeiting  and/or  diversion.  The
Company's  technology involves the utilization of an ink activating system which
is completely  compatible with currently used printing  systems (it is a part of
the ink and can be used in offset, flexographic,  silkscreen, gravure, and laser
ink systems) and based upon Mr.  Gardner's  experience,  the Company believes it
can be incorporated into existing manufacturing processes.

     The Company  intends to be involved in the business of product and document
authentication and security.  It plans to develop and market its technology in a
variety of applications.  The Company's  technology is a proprietary  technology
which is invisible  until viewed  under the light of a special  activator  which
activates the ink  momentarily  for the purpose of  identifying  counterfeit  or
diverted products.  Potential  applications for the Company's technology are the
use of the ink in a different types of products - e.g. tobacco, perfume, compact
disks,  pharmaceuticals,  event and  transportation  tickets,  drivers licenses,
insurance cards,  etc. Sales are intended to be made either through licensees or
directly to end-users.


Anti-Counterfeiting and Anti-Diversion Technologies and Products


     Recent developments in copying and printing  technologies have made it even
easier to counterfeit a wide variety of documents.  Currency,  lottery  tickets,
gift certificates,  event and transportation  tickets,  casino fraud, travelers'
checks  and the like are all  susceptible  to  counterfeiting,  and the  Company
believes that losses from such counterfeiting have increased  substantially with
improvements   in   technology   ("Latest   Use  for  One's   DNA  -   Thwarting
Counterfeiters",   San  Francisco  Chronicle,  page  C1,  September  11,  2000).
Counterfeiting  has long caused losses to  manufacturers of brand name products,
and the Company believes these losses have also increased as the  counterfeiting
of labeling and packaging has become easier.



     The Company's document authentication technologies are useful to businesses
desiring to authenticate a wide variety of printed materials and products. These
include a technology  with the ability to print invisibly in specific areas of a
document which can then be activated or revealed by use of an inexpensive  laser
light when  authentication  is  required.  This is intended to be  substantially
different than pen systems  currently in the marketplace.  Pen systems work by a
similar  invisible ink which is activated by a special marker. If the item is an
original and not an illegitimate copy, then the ink will be activated and show a
visible  mark.  as a different  color than on an  illegitimate  copy.  LaserLock
believes that its technology is superior to the pen system technology because it
will not result in a permanent mark on the merchandise  which generally leads to
the  disposal  of the  merchandise  or its sale as a "second"  rather  than best
quality goods.


     Other  possible  variations of the Company's  technology  involve  multiple
color  responses  from a common  laser,  visible  marks of one  color  that turn
another  color with the laser or visible  and  invisible  marks that turn into a
multicolored  image.  These  technologies  provide  users  with the  ability  to
authenticate products and detect counterfeit documents. Applications include the
authentication  of documents having intrinsic value,  such as currency,  checks,
travelers' checks,  gift certificates and event tickets,  and the authentication
of product labeling and packaging. When applied to product labels and packaging,
such  technologies can be used to detect  counterfeit  products whose labels and
packaging would not contain the  authenticating  marks invisibly  printed on the
packaging  or labels of the  legitimate  product,  as well as to combat  product
diversion   (i.e.,  the  sale  of  legitimate   products  through   unauthorized
distribution channels or in unauthorized markets).

     The Company  believes  that its  technology  could also be used in a manner
which permits  manufacturers  and distributors to track the movement of products
from production to ultimate consumption when coupled with proprietary software.

     The  Company  intends  to  initially  focus on the  widespread  problem  of
counterfeiting in the apparel  industry.  The product would be incorporated into
traditional  labels  which are then sewn into a  garment.  This is  accomplished
during the regular manufacturing process. The label can be viewed with the laser
to reveal the authenticity of the garment. This covert authenticating technology
is also  intended to be marketed to  manufacturers  of compact discs to identify
CD's produced by that  manufacturer.  The Company  believes that this technology
can  provide  CD  manufacturers  and  publishers  with  a  tool  to  combat  the
significant  losses sustained as a result of illegal pirating and counterfeiting
of data, music and video discs.

                                        3
<PAGE>

Marketing


     The marketing approach of the Company is to have sufficient  flexibility in
its products and  technologies  so as to provide  cost-effective  solutions to a
wide  variety of  counterfeiting,  diversion  and copier  fraud  problems.  As a
technology  company,  the Company  intends to  generate  revenues  primarily  by
collecting  license  fees  from  manufacturers  who  incorporate  the  Company's
technologies into their manufacturing process and their products.

     The Company has  identified a number of major markets for its  technologies
and products, including security printers, manufacturers of labels and packaging
materials  and  distributors  of brand name  products.  Within each market,  key
potential users have been identified. Within North America and Europe, sales are
intended to be effected via direct  selling by company  personnel or consultants
to create end user demand and selling through licensee sales forces with support
from company personnel.  The Company has determined that technical sales support
by its personnel will be of great  importance to increasing its licensees' sales
of products incorporating the Company's technologies and, therefore, plans to be
very committed to providing such support.  The Company  anticipates  that should
European  sales be made, the technical  support could  initially be handled from
the United  States,  and the Company could  eventually  open a European  support
division should consumer demand justify the associated costs.

     As continued improvements in color copier and desktop publishing technology
make  counterfeiting  and fraud  opportunities  less  expensive and the internet
makes  these  products  more  available,  the  Company  intends to  maintain  an
interactive  product development and enhancement program whereby it will utilize
its R&D and marketing skills in order to constantly  upgrade and improve on its
technology with the combined efforts of marketing,  applications engineering and
research  and   development.   The  Company   believes  that   utilizing   these
methodologies - whereby a product is developed by the company,  delivered to the
client,  feedback  is received  from the client,  and the product is changed and
enhanced to reflect the client feedback,  will lead to faster development cycles
for the  Company's  products.  The  Company's  objective is to  concentrate  its
efforts on developing  market-ready  products with the most beneficial ratios of
market potential to development time and cost.

     The Company  intends to utilize the  extensive  contacts of its  President,
Norman A. Gardner,  in the  counterfeit  prevention and detection  industries to
effectuate initial sales.



Manufacturing


     The Company does not have manufacturing facilities.  The Company intends to
subcontract  the  manufacture  of its  technology to third party  manufacturers.
Applications  of the  Company's  technology  are expected to be effected  mainly
through  printing and coating.  The inks are to be custom  manufactured  for the
Company by a third party. Because some of the processes that the Company intends
to use  in  its  applications  are  based  on  relatively  common  manufacturing
technologies,  there  appears  to be no  technical  or  economic  reason for the
Company to invest capital in its own manufacturing facilities at this stage.

     The Company  intends to establish a quality  control  program that includes
laboratory analysis of developed technologies. The Company intends to include as
part of this  quality  control  program the  placement  of a  specially  trained
technician  on  site  at  third  party  production  facilities  to  monitor  the
manufacturing process, when or if warranted.



Regulation

The Company is not currently  aware of any  regulations  affecting its products;
however,  the  Company's  technology  is  dependant  upon an ink based  product.
Therefore,  it is  possible  that the  Company's  products  will be  subject  to
environmental regulations in the future.

                                        4
<PAGE>

Patents


     The Company has acquired the rights to a patent  application  in the United
States via its employment  contract with its President,  Norman A. Gardner.  The
pending United States patent application was assigned to LaserLock Technologies,
Inc.  upon filing,  and the  Assignment  has been  recorded at the US Patent and
Trademark  Office.  The Assignment by its terms conveys the entire right,  title
and interest in and to the invention of the pending patent application (entitled
"Counterfeit  Detection System") and all improvements thereon which may be made,
conceived  or acquired by Norman  Gardner  during the course of his  association
with  LaserLock  Technologies,   Inc.  and  for  one  year  thereafter.   Patent
applications  for  the  Company's  technology  (including  improvements  in  the
technology)  are intended to be filed in other  jurisdictions  where  commercial
usage is foreseen,  including  countries in Europe.  There can be no  assurance,
however, that such protection will be obtained.

     The subject patent application was filed December 10, 1999 and is presently
awaiting  further official action after applicant filed a response to an initial
rejection.  The initial  rejection  applied to a number of claims but the patent
examiner  indicated  that one of the claims  would be  allowable  if amended for
matters of form.  Applicant's  response accepted that claim and sought allowance
of  additional  claims.  It is  likely  that a  patent  will be  granted  on the
application  by the end of 2001.  If no patent is  granted  on the  application,
LaserLock  Technologies  will rely  substantially  on secrecy and commitments of
confidentiality by manufacturing subcontractors and users.

     The  LaserLock  technology  for which a patent  has been  applied  for is a
process whereby  uniquely  formulated code markings are on a product and will be
activated  by an  authentication  tester  comprising  a pocket  laser  which the
company intends to have manufactured and supplied to users.


     When a new  product or  process is  developed,  the  developer  may seek to
preserve for itself the  economic  benefit of the product or process by applying
for a patent in each  jurisdiction  in which the product or process is likely to
be exploited. Generally, for a patent to be granted, the product or process must
be new and be inventively  different from what has been  previously  patented or
otherwise known anywhere in the world.  Patents  generally have a duration of 17
years from the date of grant or 20 years from the date of application  depending
on the  jurisdiction  concerned,  after which time any person is free to exploit
the  product  or  process  covered  by a patent.  A person who is the owner of a
patent  has,  within  the  jurisdiction  in which  the  patent is  granted,  the
exclusive right to exploit the patent either directly or through licensees,  and
is entitled to prevent any person from infringing on the patent.


     LaserLock Technologies,  Inc. intends to extend its patent filings to other
countries insofar as reasonably possible in view of the considerable  expense of
foreign patent applications and the increasing level of activity of the company.
Currently,  the Company  believes  that the only foreign  countries for which it
will be filing for patent protection is the European Union.  Patent applications
claiming  Paris  Convention  priority in other  countries must be filed within a
year after the initial US application, which deadline has passed for the initial
LaserLock patent  application,  but non-Convention  applications are possible up
until the invention  becomes  public.  The  invention  will become public at the
latest when the US patent is  granted,  which is expected to occur by the end of
2001.  The  Company  does not  believe  that  the  differences  in the  approval
procedure  will  affect  it,  since  the  Company  does not  intend  to have its
technology manufactured outside of the United States.


     The  granting of a patent  does not  prevent a third  party from  seeking a
judicial  determination  that the  patent is  invalid.  Such  challenges  to the
validity of a patent are not uncommon and are occasionally successful. There can
be no  assurance  that a  challenge  will  not be  filed  to one or  more of the
Company's  patents , if granted,  and that, if filed, such challenge(s) will not
be successful.

     In the United  States and  Canada,  the  details of the  product or process
which is sought to be  patented  are not  publicly  disclosed  until a patent is
granted. However, in some other countries, patent applications are automatically
published at a specified time after filing.


Research and Development

     The  Company  has been  involved  in  research  and  development  since its
inception,  and intends to continue its research and  development  activities in
three areas. First, the Company plans to continue to refine its present product.
Second,  the Company  plans to seek to expand its  technology  into new areas of
implementation.   Third,   the  Company   plans  to  develop   unique   customer
applications.  The Company intends, upon successful completion of this offering,
to hire several technicians and/or chemists.

     For the period from  inception  at November  10, 1999 to December 31, 1999,
the  Company  spent no money on  research  and  development.  For the year ended
December  31,  2000,  the  Company  spent a total of  $60,718  on  research  and
development  - all of  which  was  spent on the  enhancement  of its ink and its
activation  product.  The Company plans to spend between  $50,000 and $60,000 in
R&D over the 2001 fiscal year.


     The Company's research and development is done in Glenn Mills, Pennsylvania
at the  facilities  of its research and  development  consultant.  The Company's
quality  control  program is run in Saranac,  New York at the  facilities of its
technical  consultant.  The consulting fees paid to these people cover all costs
associated with facility and equipment usage.



Product Development


     The  Company  has not yet made any sales of its  products.  The Company has
completed  development  and has  working  prototypes  of both its inks and laser
detector.  The Company has not done independent testing.  Commercial trials have
been  completed  at  several  manufacturers  and  have  been  successful  from a
production perspective.

     The Company has also developed  what it believes to be a proprietary  trade
secret  enabling it to offer its  clients the ability to change the  combination
lock on the system to prevent any breach of security by counterfeiters.  This is
accomplished by changing the reacyion between the Company's uniquely  formulated
code markings in its  products,  and the laser which reacts with it. The changes
are made via direct  interaction  by the Company  with the client to make slight
modifications  to the Company's  products on an personalized  level.  Management
believes that the Company is the only company  offering such a protection to its
product line.


     The Company intends to establish a quality control program that entails the
placement  of  specially  trained  Company  technicians  on site at third  party
production facilities to monitor the manufacturing process, where warranted.


                                        5
<PAGE>

Description of the Industry


     Recent developments in copying and printing  technologies have made it ever
easier to  counterfeit  a wide  variety  of  documents.  Lottery  tickets,  gift
certificates,  event and transportation tickets,  travelers' checks and the like
are all susceptible to counterfeiting, and the Company believes that losses from
such counterfeiting have increased substantially with improvements in technology
("Latest Use for One's DNA - Thwarting Counterfeiters", San Francisco Chronicle,
page C1,  September  11,  2000) .  Counterfeiting  has  long  caused  losses  to
manufacturers of brand name products, and the Company believes these losses have
also increased as the counterfeiting of labeling and packaging has become easier
("China Leads in Counterfeiting", Night Ridder News Service, December, 2000).


     The Company's document authentication technologies are useful to businesses
desiring to authenticate a wide variety of printed materials and products. These
include a technology  with the ability to print  invisibly on certain areas of a
document which can be activated or revealed by use of a special laser light when
authentication  is required.  This is intended to be different  than pen systems
currently in the  marketplace  because it will not result in a permanent mark on
the merchandise, which generally leads to the disposal of the merchandise or its
sale as a "second" rather than best quality goods.

     Other  possible  variations of the Company's  technology  involve  multiple
color  responses  from a common  laser,  visible  marks of one  color  that turn
another  color with the laser or visible  and  invisible  marks that turn into a
multicolored  image.  These  technologies  provide  users  with the  ability  to
authenticate  documents and detect counterfeit  documents.  Applications include
the  authentication  of  documents  having  intrinsic  value,  such  as  checks,
travelers' checks,  gift certificates and event tickets,  and the authentication
of product labeling and packaging. When applied to product labels and packaging,
such  technologies can be used to detect  counterfeit  products whose labels and
packaging would not contain the  authenticating  marks invisibly  printed on the
packaging  or labels of the  legitimate  product,  as well as to combat  product
diversion   (i.e.,  the  sale  of  legitimate   products  through   unauthorized
distribution channels or in unauthorized markets).


     The Company  believes  that the  technology  could also be used in a manner
permitting manufacturers and distributors to track the movement of products from
production  to ultimate  consumption  when  coupled  with  proprietary  software
(Seminar  -  "Counterfeiting   Protection  Japan  2000",  October  15-19,  2000,
Yokohama,  Japan;  "Using Covert Codes",  Pharmaceutical  and Medical  Packaging
News, October 1999).

     The  Company  intends  to focus  initially  on the  widespread  problem  of
counterfeiting  in the apparel  industry.  The product  would be used to print a
reactive  label which is then sewn into a garment.  The label can be viewed with
the laser to reveal the authenticity of the garment.  This covert authenticating
technology is also intended to be marketed to  manufacturers of compact discs to
identify  CD's  produced by that  manufacturer.  The Company  believes that this
technology  can provide CD  manufacturers  and  publishers  a tool with which to
combat the  significant  losses  sustained  as a result of illegal  pirating and
counterfeiting of data, music and video discs ("China Leads in  Counterfeiting",
Night Ridder News Service, December, 2000).



Competition

     In the area of document and product  authentication and serialization,  the
Company is aware of other  technologies,  both covert and overt  surface-marking
techniques,  requiring  decoding  elements or  analytical  methods to reveal the
relevant information.  These technologies are offered by other companies for the
same  anti-counterfeiting  and  anti-diversion  purposes the Company markets its
covert  technologies.   These  include,  among  others,  biological  DNA  codes,
microtaggants,  thermochronic,  UV and infrared inks, as well as encryption,  2D
symbology and laser engraving. The Company is aware of at least twenty companies
which will be competing with it in these markets.  The Company  believes that it
has proprietary  technologies which provide a unique and cost-effective solution
to the problem of counterfeiting  and gray marketing.  The Company is aware of a
limited number of competitors which are attempting  different  approaches to the
same problems which the Company's products address.

     Other indirect  competitors are marketing  products  utilizing the hologram
and copy void  technologies.  The  hologram,  which has been  incorporated  into
credit  cards to foil  counterfeiting,  is  considerably  more  costly  than the
Company's technology. Copy void is a security device which has been developed to
indicate whether a document has been photocopied.

     The Company  has  limited  resources,  and there can be no  assurance  that
businesses with greater resources than the Company will not enter the market and
compete with the Company.

                                        6
<PAGE>


Employees


     The Company currently has a one year employment  contract in place with its
President,  Norman A. Gardner, for $75,000 per annum, which commenced January 1,
2000. On October 1, 2000,  the Company  entered into a new four year  employment
agreement  with Mr. Gardner which  commenced on January 1, 2001.  Mr.  Gardner's
compensation  will be $90,000 per year under this new  contract.  In addition to
base salary the Company will from time to time pay Mr. Gardner incentive bonuses
and  reasonable  expenses  incurred in connection  with the  performance  of his
duties.  Throughout  the term of this  employment  agreement,  the Company  will
furnish  Mr.  Gardner  with an  automobile  and  automobile  expenses  and  will
reimburse  travel on Company  business as well as  reimburse  Employees  for the
expenses incurred in connection with the Company's operation.  In addition other
Employees shall be entitled to health,  life,  accident or disability  insurance
plans, any profit sharing or retirement plans and stock option plans the Company
makes  available.  Mr.  Gardner is the Company's  only full time  employee.  The
Company has one other employee, its bookkeeper, who is a part time employee.


Outside Sales Agents / Independent Contractors


     The Company has  consulting  contracts  with nine outside  sales agents and
independent contractors who are being compensated via cash, stock options, stock
grants,  and for the sales agents,  commissions on sales to various customers of
the Company. The Company's outside sales agents and independent contractors will
also receive payment for certain expenses.


                                        7
<PAGE>
RISK FACTORS


                 STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for forward-looking statements. The Company desires to take advantage of
certain "Safe Harbor" provisions of the Reform Act and is including this special
note to enable the  Company to do so.  This  document  contains  forward-looking
statements  that reflect the views of the Company's  management  with respect to
future events and financial  performance.  These forward-looking  statements are
subject to  uncertainties  and other factors that could cause actual  results to
differ  materially from such statements.  These  uncertainties and other factors
include,  but  are  not  limited  to,  the  words   "anticipates",   "believes",
"estimates'', "expects", "plans", "projects", "targets", and similar expressions
that  identify  forward-looking  statements.  Readers are cautioned not to place
undue reliance on these  forward-looking  statements  which speak only as of the
date the statement was made.  The Company  undertakes no obligation to update or
revise any forward-looking  statements,  whether as a result of new information,
future events or otherwise.


Absence of Trading Market


     There is no trading  market for the Company's  Common Stock and there is no
assurance  that such a market will  develop  after this  offering,  or if such a
market  develops,  that  it will  be  maintained.  Holders  of the  Shares  may,
therefore,  have  difficulty  in selling their stock should they desire to do so
and should be able to withstand the risk of holding their Shares indefinitely.


Penny Stock Rules.

     The Company  believes  its Common  Stock will be subject to the Penny Stock
Rules  promulgated  under the  Securities  Exchange Act of 1934 due to its price
being less than $5.00 per share. If the Company were to meet the requirements to
exempt its securities from application of the Penny Stock Rules, there can be no
assurance  that such price will be maintained if a market  develops and thus the
Penny Stock Rules may come into effect.

     These  rules   regulate   broker-dealer   practices  in   connection   with
transactions  in "penny  stocks." Penny stocks  generally are equity  securities
with a price of less than $5.00  (other than  securities  registered  on certain
national  securities  exchanges or quoted on the NASDAQ  system,  provided  that
current  price and  volume  information  with  respect to  transactions  in such
securities is provided by the exchange or system). The Penny Stock Rules require
a  broker-dealer,  prior to a transaction in a penny stock not otherwise  exempt
from the rules, to deliver a standardized  risk disclosure  document prepared by
the Commission that provides  information  about penny stocks and the nature and
level of risks in the penny stock market.  The  broker-dealer  also must provide
the customer  with  current bid and offer  quotations  for the penny stock,  the
compensation of the  broker-dealer  and its salesperson in the transaction,  and
monthly account  statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations,  and the broker dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the  transaction and must be given to the customer in
writing before or with the customer's confirmation.

     In addition, the Penny Stock Rules require that prior to a transaction in a
penny stock not otherwise exempt from such rules, the broker-dealer  must make a
special written  determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's  written agreement to the transaction.
These  disclosure  requirements  may have the  effect of  reducing  the level of
trading activity in the secondary market for the Company's securities. While the
Company's  Common Stock remains subject to the Penny Stock Rules,  investors may
find it more difficult to sell such securities.

                                        8
<PAGE>

Need for  Subsequent  Funding;  No Assurance of Future Offering

     In order to finance  expansion  of our business  operations,  to attempt to
patent our  technologies,  and to implement our business  plans,  we may need to
raise more  capital.  Our  ability  to  continue  in  business  and  effectively
implement its plans may depend upon its ability to raise additional funds. There
is no assurance  that  additional  funding,  if required,  will be obtainable in
amounts  or on  terms  favorable  or  acceptable  to the  Company.  The  capital
resources  required to develop  each new product  are  significant.  The Company
believes combined cash on hand and cash generated from future  operations,  will
provide the Company with the financing required to conduct its business at least
through the second calendar  quarter of 2001, but there is no guarantee that the
Company is  correct,  or that it will be able to raise  additional  capital,  if
required.


Lack of Dividends

     We have not paid any cash  dividends  since our inception and do not intend
to pay dividends in the foreseeable future. We intend to retain all earnings, if
any, for use in our business operations.


Risks Associated With Our Being A New Business.

     Our  operations  are subject to all of the risks inherent in a new business
enterprise.  We currently have no revenue, no operating history,  and no salable
product. We are subject to the same types of risks that many new business face -
like  shortages  of cash,  under-capitalization,  and  expenses  of new  product
development.  We do not  anticipate  positive cash flow on a monthly basis until
early 2001 at the earliest, and even then we cannot give assurances that we will
be  operating  at  break-even  levels  at that  time or in the  future.  Various
problems,  expenses,  complications  and delays may be encountered in connection
with our  development  both in terms of our  products and our  business.  Future
growth  beyond  present  capacity  will  require  significant  expenditures  for
expansion,  marketing,  research and development.  These expenses must either be
paid out of the  proceeds of this or future  offerings  or out of our  generated
revenues and profits,  if any.  The  availability  of funds from either of these
sources cannot be assured.


General Risks Of The Counterfeit Prevention Industry

     The  industry  in which we intend to compete is subject to the  traditional
risks faced by any business of adverse changes in general  economic  conditions,
the  availability  and expense of liability  insurance,  and adverse  changes in
local markets.  However, we will also be subject to industry specific risks such
as  counterfeiters  learning how to  circumvent  new and existing  technologies;
evolving consumer  preference and health-related  concerns;  federal,  state and
local chemical processing controls;  consumer product liability claims; risks of
product tampering.


Competition In Our Industry

     In  the  area  of  document   security  and  product   authentication   and
serialization,  we are aware of other  companies  and other  technologies,  both
covert and overt surface marking techniques,  which require decoding elements or
analytical  methods to reveal the relevant  information.  These technologies are
offered by other companies for the same  anti-counterfeiting  and anti-diversion
purposes to which we plan to market our technologies.

     Other  competitors are marketing  products  utilizing the hologram and copy
void technologies.  The hologram,  which has been incorporated into credit cards
to foil  counterfeiting,  is  considerably  more costly than  our technology.
Copy void is a security  device which has been  developed to indicate  whether a
document has been photocopied.

     It is anticipated that a significant  number of companies of varying sizes,
which may ultimately include divisions or subsidiaries of larger companies, will
be vying for the same  market  segment as we are. A number of these  competitors
may have substantially  greater financial and other resources available to them.
There can be no  assurance  that we can  compete  successfully  with such  other
companies.  Competitive pressures or other factors could cause us to lose market
share if it develops at all, or result in significant  price erosion,  either of
which would have a material adverse effect on our results of operations.

                                       9
<PAGE>
Governmental Regulation Of Our Fields

     Our operations may be subject to varying degrees of federal, state or local
laws and  regulations.  Operations  such as those we  intend to  conduct  may be
subject  to  federal,  state  and local  laws and  regulations  controlling  the
development of technologies related to privacy protection,  to the protection of
the  environment  from  materials  that we may  use in our  inks,  and  advanced
algorithm  formulations or encryption tactics that we may develop. Any of these
regulations may have a materially adverse effect upon our operations.


Technology Staffing And Labor Costs

     We  anticipate  that  staffing  and labor costs will  represent  one of our
largest  expenses.   We  will  compete  with  other  copy  security   prevention
technologies  in attracting  and  retaining  qualified or skilled  personnel.  A
shortage of trained  personnel or general  economic  inflationary  pressures may
require us to enhance  our wage and  benefits  package in order to compete  with
other  employers.  There  can be no  assurance  that  our  labor  costs  will be
sustainable.  Our failure to attract and retain  qualified  employees to control
our labor costs or to match  increases in our labor expenses with  corresponding
increases in revenues could have a material adverse effect on the business.


Rapidly Changing Market.

     We believe  that the  market for our  products  is  rapidly  changing  with
evolving  industry  standards.  Our future  success will depend in part upon our
ability to enhance our existing  products  and  services  and to  introduce  new
products  and  features to meet  changing  customer  requirements  and  emerging
industry standards. There can be no assurance that we will successfully complete
the  development of future  products or that our current or future products will
achieve  market  acceptance.  Any delay or failure of these  products to achieve
market acceptance would adversely affect our business. In addition, there can be
no assurance that products or  technologies  developed by others will not render
our products or technologies non-competitive or obsolete.


Patents; Intellectual Property

     Pursuant  to an  employment  agreement  with  our  president,  Norman A.
Gardner,  we have  received  all  rights in a patent  applied  for in the United
States.  There can be no assurance that this patent,  or any other patents which
we may apply for in the future, will be granted.  Until such time as a patent is
issued, we will not have the right to bring a patent infringement action against
a third  party who makes a product or uses a process  identical  or similar to a
product or process based on our technology.  Even if patents were granted, there
is no  assurance  that such  patents  would not be attacked by third  parties or
that,  if any such  attack  were  made,  it would not be  successful.  The costs
involved in defending a patent or prosecuting a patent infringement action could
be  substantial.  At  present  we do not have the  resources  to pursue  such an
action.

     We plan to rely on confidentiality,  non-analysis and licensing  agreements
to establish and protect our rights in any  proprietary  technologies.  While we
intend to actively  protect these rights,  our  technologies  could  possibly be
compromised  through  reverse  engineering  or  other  means.  There  can  be no
assurance  that we will be able to protect  the basis of our  technologies  from
discovery by unauthorized third parties,  thus adversely  affecting our customer
and licensee relationships.


Prior Relationships Of Our President.


     Norman  A.  Gardner,  our  President,  founded  Nocopi  Technologies,  Inc.
('NoCopi'),  and  served as its  President  and  Chief  Executive  Officer  from
October,  1985,  until  October,  1997, and as its Chairman of the Board under a
Memorandum  of  Agreement  until  March,  1998.  Mr.  Gardner  then served until
September  27,  1999,  as a senior  advisor to Nocopi  under an Amendment to the
Memorandum of Agreement.  Currently, Mr. Gardner has no relationship with Nocopi
Technologies, Inc.


     We view Nocopi as one of our  competitors in our marketplace in that the we
plan to develop and sell  technology to prospects and clients that we believe is
completely different from, but competitive with, that sold by Nocopi to the same
or similar  prospects and clients.  The Agreement  with Nocopi does not impose a
post-termination  restrictive  covenant upon Mr.  Gardner,  and Mr.  Gardner has
assured us that he has not and will not, divulge, furnish, or make accessible to
anyone any confidences or secrets of Nocopi in violation of the Agreement.

                                       10
<PAGE>

Rule 144 Shares

     A majority of the shares of Common Stock presently  outstanding  (7,600,000
shares,  or 71.70%) were issued on the date of the company's  inception or later
and are considered "restricted securities".  These shares may be publicly resold
in  compliance  with Rule 144  adopted  under  the  Securities  Act of 1933,  as
amended.  Rule 144 provides,  in part, that after holding restricted  securities
for a period of one (1) year  non-affiliated  shareholders  (affiliates  include
officers,  directors,  and ten percent or greater shareholders) may sell, during
any three months,  in a brokerage  transaction,  or to a market maker, an amount
equal to the greater of one percent  (1%) of the  Company's  outstanding  Common
Stock, or the average weekly trading volume,  if any, in the Common Stock during
four  calendar  weeks  preceding the filing of a Form 144 relating to such sale.
After two (2) years  non-affiliated  shareholders (who have been  non-affiliates
for at  least  three  months)  may sell an  unlimited  amount  of the  Company's
outstanding  Common Stock. Rule 144 also provides that after holding  restricted
securities  for a period of two (2) years,  affiliates  of the  company may sell
every third month in a brokerage  transaction,  or to a market maker,  an amount
equal to the greater of one percent  (1%) of the  Company's  outstanding  Common
Stock, or the average weekly trading volume,  if any, in the Common Stock during
four  calendar  weeks  preceding the filing of a Form 144 relating to such sale.
Such sales, if made under certain circumstances,  would depress the market price
and  render  difficult  the sale of the  Company's  securities.  Certain  of the
outstanding  shares  have  been  eligible  for sale  pursuant  to Rule 144 since
November, 2000.



Dependence on Key Personnel



     We will be dependent on our current management for the foreseeable  future.
The loss of the  services of any member of these  persons  would have a material
adverse effect on our operations and prospects. Our success will be dependent to
a  substantial  degree  on our  President,  Norman  A.  Gardner,  and  other key
management  personnel.  Mr.  Gardner's  continued  involvement  is  particularly
critical  to us. In the event Mr.  Gardner  were  unavailable,  it would  have a
material adverse effect on our operations.  The Company has a "Keyman" insurance
policy on Mr. Gardner for $1,500,000.  In the event of Mr.  Gardner's death, the
Company is the  beneficiary  of one half of that amount,  or  $750,000,  and Mr.
Gardner's family is the beneficiary of the other half. At this time, we have one
employment  agreement - an agreement  with Mr. Norman A. Gardner,  our President
and Secretary.  The expansion of our business will be largely  contingent on our
ability to attract and retain a highly  qualified  management  team. There is no
assurance  that we can find suitable  management  personnel or that we will have
the financial resources to attract or retain such people if found.




Indemnification

     The Company's  By-Laws  include  provisions  that indemnify any director or
officer  made a party  to any  action,  suit or  proceeding  for  negligence  or
misconduct in the performance of his duties made in good faith, by reason of the
fact that s/he is or was a director,  officer or employee of the Company against
reasonable  expense  including legal fees,  actually or necessarily  incurred by
him/her in connection with the defense of such action, suit or proceedings or in
connection with any appeal therein.


Dependence Upon Third Parties.

     We  intend  to  pursue  a  policy  of  licensing   our   technologies   for
incorporation  into products made and distributed by third parties.  Although we
plan to negotiate  guaranteed  minimum royalties in our licensing  arrangements,
our  revenues  will  be   substantially   dependent  on  the  sale  of  products
incorporating our technologies by third parties.  We intend to provide technical
marketing support to our licensees.  However,  the successful  marketing of such
products and, therefore, our revenues and operating income, depend substantially
on the marketing efforts of such third parties,  over which we will have little,
if any, control.


Technical Obsolescence.

     The value of our  technology  and any products  derived from our technology
could be  substantially  reduced as new or  modified  techniques  for  combating
document and product  counterfeiting  and product  diversion  are  developed and
become  widely   accepted.   We  can't   guarantee  that  future   technological
developments will not result in the obsolescence of our technologies.


Dependence Upon Marketing.

     While we believe that our products  hold  unsatisfied  market  demand,  our
ability to  generate  sales will  depend  upon  developing  and  implementing  a
marketing strategy.  There can be no assurance that we can successfully develop,
promote and maintain an active market for our products.

                                       11
<PAGE>
Management Of Growth.

     If we is successful in increasing  demand for our products,  of which there
can be no assurance,  our growth could create certain  additional  risks.  Rapid
growth can be expected to place a substantial burden on our management resources
and financial controls. Our ability to manage growth effectively will require us
to continue to implement and refine our  operational,  financial and information
management systems and to train, motivate and manage our employees.  Our ability
to attract and retain qualified  personnel will have a significant effect on our
ability to establish and maintain our position in our various  markets,  and our
failure to manage our growth  effectively could have material adverse effects on
our results of operations.


Risks Associated With  The Company's Ability To Continue As A Going Concern.


     The Company has no operating  history,  nor sales,  has incurred  operating
losses  since  inception  and  requires   additional  capital  to  continue  its
operations  and to  implement  its  business  plans.  The  Company's  certifying
accountants  have issued a going concern  qualification  in their report for the
year ended  December  31,  2000.  Although  the Company  intends to raise money,
implement sales, and become profitable,  if the Company fails to achieve any one
of these goals,  then it is unlikely  that the Company will be  successful,  and
very likely that the Company will become  insolvent or otherwise forced to close
its doors. If this occurs, it will have a material adverse affect on the Company
and any results of operations.



Lack Of Diversification.

     The  Company's  proposed  operations,  even  if  successful,  will  in  all
likelihood result in the Company's  engaging in a business which is concentrated
in only one industry.  Consequently, the Company's activities will be limited to
the  anti-counterfeiting  industry.  The  Company's  inability to diversify  its
activities  into  a  number  of  areas  may  subject  the  Company  to  economic
fluctuations within a particular  business or industry and, therefore,  increase
the risks associated with the Company's operations.




                                        12
<PAGE>

Item 2.  DESCRIPTION OF PROPERTY

     The Company's offices are presently located in 1000 sq. ft. of office space
in the home of its president, Norman A. Gardner, at 837 Lindy Lane, Bala Cynwyd,
PA 19004. The Company pays no rent for the use of this space.

     The Company has been assigned the rights to a patent application  submitted
by its President,  Norman A. Gardner.  The Company believes that the granting of
its patent application will enhance the Company's successful  competition in the
market place, but that even if not granted,  the Company will be able to compete
effectively in the market place by utilizing non-competition and confidentiality
terms in contracts it will enter into with any employees, and non-disclosure and
non-analysis  agreements  given to every potential  supplier and customer of the
Company.

Item 3.  LEGAL PROCEEDINGS

     The  are no  material  legal  proceedings  pending  or,  to  the  Company's
knowledge, threatened against the Company.

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

     The Company  submitted no matters to a vote of its security  holders during
its fiscal year ended December 31, 2000.

                                   13
<PAGE>

Part II.


Item  4.     RECENT  SALES  OF  UNREGISTERED  SECURITIES

     From  inception  in November  of 1999  through  December,  1999 the Company
issued  7,600,000 common shares to its founder,  Norman Gardner;  several people
who helped Mr.  Gardner in the  formation  of the Company and its  technology  -
Michael J. Prevot, a director,  and George Hess and his children,  Eric J. Hess,
Mark A. Hess, and Brian K. Hess; its attorneys,  Jay Hait and Tom Schneider, and
several business associates and friends of Mr. Gardner's,  who are not involoved
in  the  day  to day  business  operations  of the  Company,  all  of  whom  are
accredited: Cherry Hill Inc., Dorothy Bechtel, Landcaster Capital, Inc., Melissa
Epperson,  and  Hawthorne  Capital,  Inc. in reliance  upon  section 4(2) of the
Securities Act of 1933 in exchange for assets and services valued at $62,700.

     From  April,  2000,  to  September  2000,  the  Company  issued  a total of
5,449,999  shares  of  its  common  stock  at  $0.17  per  share,  for  a  total
consideration  of  $926,500,  in an  offering  done  pursuant  to  Rule  504  as
promulgated  under Regulation D of the Securities Act of 1933, and registered in
the  State  of  New  Jersey.   No  commission  was  paid  on  these  sales.  The
determination as to whether or not the shares are restricted or free trading was
made based upon whether the purchaser a. was an accredited investor, as based on
the results of a questionnairre, and b. lived in a state in which the securities
were  registered  with a  qualitative  review,  or c.  lived in a state with the
appropriate  applicable  exemption  after the shares had been  registered with a
qualitative review in a different state.

     From July,  2000, to September,  2000 the Company  issued 240,000 shares of
Common Stock to a total of nine non-employee consultants, for services valued at
$36,550,  pursuant to Rule 701 promulgated  under Section 3(b) of the Securities
Act of 1933. The Company relied on the following facts in determining  that Rule
701 was available:  (a) the shares were issued  pursuant to a written  agreement
between the consultants and the Company,  (b) the consultants  rendered bonafide
services  not in  connection  with the offer or sale of  securities  in  capital
raising transactions,  (c) the shares were issued pursuant to a written contract
relating to the issuance of shares paid as compensation  for services  rendered,
and (d) the amount of shares  offered  and sold in  reliance on Rule 701 did not
exceed  $500,000 and all securities sold in the last 12 months have not exceeded
$5,000,000.

     In July of 2000 the Company issued options to purchase  1,135,000 shares of
the Company's  common stock to sales  employees and  consultants.  In October of
2000, the Company entered into a new employment contract with its President, and
pursuant to the new employment contract it has granted him options to purchase a
total 500,000  shares of it's common stock,  250,000  shares at $0.17 per share,
and 250,000 shares at $0.35 per share.

     In March of 2001, pursuant to Rule 506 as promulgated under Regulation D of
the  Securities  Act of 1933,  the  Company  sold an option  for  $15,000 to PFK
Acquisition Group II, LLC, a California  Limited Liability  Corporation,  and an
accredited  investor,  which gives it the right to purchase  1,500,000 shares of
the  Company's  common stock at a price of $0.16 per share by May 22, 2001.  PFK
paid to the Company $85,000 of the option  execution  price, and the Company has
extended the option until June 22, 2001.





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

(a)  The  Company's  Common  Stock is quoted on the pink sheets under the symbol
     "LLTI"  The  following  table  sets  forth  the high and low bid  prices as
     reported by the National  Association of Securities  Dealers (NASD) for the
     periods ending  December 31, 2000 (the Company  started trading in December
     of 2000).  These quotations  reflect  inter-dealer  prices,  without retail
     mark-up, mark-down or commissions, and may not reflect actual transactions.
     As of April 4, 2001 there were 74 shareholders of Common Stock, although no
     active trades have occurred.



<TABLE>
<CAPTION>
                           High              Low
                          -----              ----
<S>                       <C>               <C>
2000                     0.62                0.25
-----
First Quarter

2001
-----
First Quarter            0.55                0.25

</TABLE>


(b)  As of  December  31,  2000,  there were  approximately   74  holders of the
     Company's Common Stock.

(c)  No dividends were paid during the fiscal year ending December 31, 2000.


                                   14

<PAGE>

Item 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS OR PLAN OF OPERATION

     The following  discussion and analysis  should be read in conjunction  with
LaserLock's  financial  statements and the Notes thereto contained  elsewhere in
this   registration    statement.    This   registration    statement   contains
forward-looking  statements  that involve risks and  uncertainties.  LaserLock's
actual results may differ significantly from the result discussed in the forward
looking statements.  Factors that might cause such a difference are discussed in
"Risk Factors."

Overview


     On December 10, 1999, LaserLock has applied for a patent for its technology
for  laser  activated  ink  technologies  which  may  be  used  as  part  of  an
anti-counterfeiting  protection  process.  We  believe  that our  laser  and ink
combination  products  are  ready  for  commercial  production  and we have been
soliciting  orders for our  products  although we have not yet entered  into any
contracts. Based upon an initial rejection of the patent claims, which indicated
that at least one of the  claims  would be  accepted  if  amended  for form,  we
believe  that it is likely that a patent will be granted on the  application  by
the  end of  2001.  If no  patent  at all is  granted,  then  we  plan  to  rely
substantially  on secrecy and commitments of  confidentiality  by  manufacturing
subcontractors and users.


     From  its  inception  in 1999,  LaserLock  has been  engaged  primarily  in
activities  devoted  towards  obtaining  the  patent  rights to the  technology,
general business operations, research and development,  negotiating licenses and
agreements   with   potential   customers,   creating  a  sales  and  management
infrastructure  by  hiring  consultants  and  independent   contractors  ,  and
obtaining  financing.  The Company  intends to spend between $50,000 to $100,000
for consultant services during the 2001 fiscal year. There have been no revenues
from sales to date.

     The Company is a technology licensing Company which licenses its technology
to both third parties who incorporate it into their products for resale to their
customers,  and also directly to end users who  incorporate  the technology into
their products at their manufacturing facilities.  The Company receives per unit
royalties  on volume  usage of its  technology.  The Company  intends to require
minimum annual royalties to enter into these licensing agreements.


     The Company  believes  that its current  office  space,  which  consists of
approximately  1,000  square feet located in the home of its  President,  Norman
Gardner,  and for  which  it pays no  rent,  will be  sufficient  to  house  its
operations for the next year.

Results of Operations

     It  is  difficult  for  LaserLock  to  forecast  its  revenue  or  earnings
accurately.  We  believe  that  period-to-period  comparisons  of our  operating
results may not be meaningful.

            As a result of our extremely  limited operating  history,  we do not
have historical  financial data for a significant  number of periods on which to
base  planned  operating  expenses.  Our  expense  levels  are  based  upon  our
expectations  concerning future revenue.  Thus, quarterly revenue and results of
operation are difficult to project.

                                       15

<PAGE>

Liquidity and Capital Resources


     LaserLock  has  incurred  negative  cash  flows  from  operation  since its
inception. The Company has begun to solicit business, and expects to continue to
expend sums to market and sell its products.

     Our future capital  requirements  and the adequacy of available  funds will
depend on numerous factors,  including the successful  commercialization  of our
existing products, cost of filing, prosecuting,  defending and enforcing current
and any future patent claims and other intellectual  property rights,  competing
technological  and  market  developments,   and  the  development  of  strategic
alliances  for the  development  and  marketing  of our  products.  In the event
LaserLock's plans change or its assumptions  change or prove to be inaccurate or
the funds  available  prove to be insufficient to fund operations at the planned
level (due to further unanticipated  expenses,  delays,  problems or otherwise),
LaserLock  could be required to obtain  additional  funds through equity or debt
financing,  strategic  alliances with corporate  partners and others, or through
other  sources  in order to bring its  products  through  to  commercialization.
LaserLock does not have any material committed sources of additional  financing,
and there can be no assurance that  additional  funding,  if necessary,  will be
available on acceptable  terms,  if at all. If adequate funds are not available,
we may be required to further delay, scale-back, or eliminate certain aspects of
our   operations   or  attempt  to  obtain  funds  through   arrangements   with
collaborative  partners or others that may  require us to  relinquish  rights to
certain of our technologies, product candidates, products, or potential markets.

     Specifically,  the Company may have to delay its anticipated  marketing and
delivery dates, or scale back its third party  production  capabilities if it is
unable to consummate  sales, or to eliminate  certain areas of further  research
and  development.  If adequate  funds are not available,  LaserLock's  business,
financial condition,  and results of operations will be materially and adversely
affected.

     The actual research and development and related activities of LaserLock may
vary significantly  from current plans depending on numerous factors,  including
changes in the costs of such activities from current  estimates,  the results of
LaserLock's research and development programs,  the results of clinical studies,
the timing of regulatory submissions,  technological advances, determinations as
to commercial  potential  and the status of  competitive  products.  The Company
expects  to expend  $50,000  on its  research  and  development  program  in the
upcoming year. and The Company's  research and development plans to perform over
the next year includes the  application of its product to additional  materials,
as well as improving its existing  products in conjunction with client feedback.
The focus and direction of  LaserLock's  operations  will also be dependent upon
the establishment of collaborative  arrangements with other companies, and other
factors.

     The Company  intends to spend  $50,000 in the upcoming  year on its quality
control  program.  This will cover the  expenses  for  services  of a  specially
trained  technician on site at third party production  facilities to monitor the
manufacturing process, when or if warranted.


     The Company has no plans to change the number of employees  or  independent
contractors  it employs at this  time,  and plans to  continue  to utilize  its
current employees and contractors for at least the duration of 2001. The Company
intends to third party manufacture all of its products during 2001, and does not
believe that it will be making major plant and equipment  purchases  during this
year.

     Until  required for  operations,  LaserLock's  policy is to invest its cash
reserves in bank deposits,  certificates of deposit, commercial paper, corporate
notes,  U.S.   government   instruments  or  other   investment-grade   quality
instruments.

     There can be no assurance that LaserLock will be able to commercialize  its
technologies,  or that  profitability  will ever be achieved.  LaserLock expects
that its operating results will fluctuate  significantly from quarter to quarter
in the future and will depend on a number of factors,  most of which are outside
LaserLock's control.

                                       15
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

The financial statements are attached hereto at page 20.

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

     The Company has recently changed its independent accountants,  and has made
all relevant  disclosure  with the  Securities  and Exchange  Commission  on the
Company's  Form 8-k  submitted  on January 25, 2001,  incorporated  by reference
hereto.

Part III.

ITEM 9.  DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS  OF
         REGISTRANT

     The  Board  of  Directors  of the Company is comprised of only one class of
director.  Each director is elected to hold office until the next annual meeting
of  shareholders  and  until  his  successor  has  been  elected  and qualified.
Officers  are  elected  annually by the Board of Directors and hold office until
successors  are duly elected and qualified.  The following is a brief account of
the  business  experience of each director and executive officer of the Company.

     The position(s)  held by each Officer and Director of the Company are shown
on the following  table.  Each Director was elected in November,  1999, and will
serve  for  one  year  or  until  the  next  annual  meeting  of  the  Company's
Shareholders and until a successor is elected and has qualified.

<TABLE>
<CAPTION>
                          Age           Position
<S>                      <C>           <C>
Norman A. Gardner         58            President, Secretary, and Director
Michael J. Prevot         45            Vice- President of Sales
                                        and Marketing, Director

</TABLE>

NORMAN A. GARDNER

     Norman A. Gardner has been the President of the Company since  inception on
November 11, 1999. From 1974 to 1985 Mr. Gardner served as President of Polymark
Management, Ltd., a Canadian public relations firm. In 1982, Mr. Gardner founded
Nocopi Technologies,  Inc. of West Conshohocken,  PA, a publicly traded company.
He served as  President  and Chief  Executive  Officer of Nocopi from 1985 until
1997, and as Chairman of its board until March,  1998, and as a consultant until
September  30,  1999..  Mr.  Gardner  received  his B.A. in English  from McGill
University in 1963.


MICHAEL J. PREVOT

     Michael  Prevot has been the  Vice-President  of Sales of the Company since
inception.  From 1985 to 1999,  Mr.  Prevot  has  served as  President  of Vista
Security  Papers,  a San Francisco based company which sells security  products.
Mr.  Prevot  studied  business  at the  College  of  San  Mateo  in  San  Mateo,
California,  in 1974-1975,  and at Skyline  College in San Bruno,  California in
1975-1976.  Mr. Prevot donates 10 - 20 percent of his time  performing his tasks
for the Company. These tasks include approaching potential clients and arranging
for sales meetings and presentations.


                                       16

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth the compensation paid during the fiscal year
ended December 31, 2000, to the Company's  Chief  Executive  Officer and each of
the Company's  officers and  directors.  No other person  received  compensation
equal to or exceeding $100,000 in fiscal 2000 and no bonuses were awarded during
fiscal 2000.

<TABLE>
<CAPTION>

                                         Annual  Compensation               Awards             Payouts
                                   ------------------------------  -------------------------  ---------
                                                           Other                                            All
                                                           Annual   Restricted    Securities               Other
                                                          compen-      Stock      Underlying     LTIP     Compen-
                                                           sation    Award(s)    Options/SAR   Payouts    sation
Name and Principal Position  Year  Salary ($)  Bonus ($)    ($)         ($)          (#)          ($)        ($)
- ----------                   ----  ----------  ---------  -------  -----------  ------------  ---------  --------
<S>                          <C>   <C>         <C>        <C>       <C>          <C>           <C>       <C>
Norman Gardner(1)
President,                   2001  22,250(3)       -0-      3,900(2)(3) -25,000-        -0-      -0-         -0-
Director                     2000  75,000          -0-     15,600(2)    -25,000-        -0-      -0-         -0-
Director                     1999      -0-         -0-         -0-      -0-             -0-      -0-         -0-

Michael Prevot
Vice President of Marketing, 2001      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director                     2000      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director                     1999      -0-         -0-         -0-      -0-             -0-      -0-         -0-


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

1.   On October 1, 2000 the Company entered into a new employment agreement with
     its  President,  Norman  Gardner,  which provides  compensation  of $90,000
     annually,  commencing January 1, 2001,  expiring December 31, 2004, and the
     grant of 500,000  options to purchase the Company's  common stock,  250,000
     shares at $0.17 per share,  and 250,000  shares at $0.35 per share.  In all
     other respects,  the contract is the same as his employment  agreement from
     January 1, 2000.

2.   Company car, insurance, repairs and expenses.

3.   Computed as funds expended as of the date of this filing.

</TABLE>

                                       17

<PAGE>
Item 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS


     The  following  table sets forth certain  information  known to the Company
regarding the  beneficial  ownership of Common Stock as of December 31, 2000, by
(i) each Director of the Company,  (ii) each  executive  officer of the Company,
(iii) all  directors  and  executive  officers as a group,  and (iv) each person
known  to  the  Company  to be the  beneficial  owner  of  more  than  5% of its
outstanding shares of Common Stock.


<TABLE>
<CAPTION>
                                     Shares Beneficially Owned
                                     -------------------------
                                                   Percentage
Directors and Executive Officers      Shares Held   Owned (1)
- --------------------------------      -----------   ---------
<S>                                     <C>          <C>
Norman Gardner                           4,278,000    32.25%
President
837 Lindy Lane
Bala Cynwyd, PA 19004

Michael J. Prevot                        100,000      0.75%
419 Buena Vista Ave.
San Mateo, CA 94403

Directors and Officers as a Group         4,378,000   34.00%
<FN>
(1)  Percentage  of  ownership  is based on  13,289,999  shares of Common  Stock
     issued and outstanding as of December 31, 2000.

</FN>
</TABLE>

                                        18
<PAGE>



Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS  WITH  MANAGEMENT  AND  OTHERS

     There have been no material  transactions,  series of similar transactions,
or  currently  proposed  transactions,  to which the  Company  was or is to be a
party, in which the amount involved exceeds $60,000 and in which any director or
executive officer,  or any security holder who is known to the Company to own of
record or beneficially  more than five percent of the Company's Common Stock, or
any  member of the  immediate  family  of any of the  foregoing  persons,  had a
material interest.

CERTAIN  BUSINESS  RELATIONSHIPS

     There have been no material  transactions,  series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company was or is to be a party,  in which the amount  involved  exceeds $60,000
and in which any director or executive  officer,  or any security  holder who is
known to the Company to own of record or beneficially  more than five percent of
the Company's  Common Stock, or any member of the immediate family of any of the
foregoing persons, had a material interest.



Item 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(a)  All  required  exhibits  are  incorporated  herein  by  reference  from the
     Company's  Form 10-SB filed on November 14, 2000,  and  Amendments  thereto
     filed contemporaneously herewith.

(b)  Form 8-k reflecting the change in accountants filed on January 25, 2000.

                                       19
<PAGE>















                       THIS PAGE LEFT INTENTIONALLY BLANK


                                       20
<PAGE>
<PAGE>

                           LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                TABLE OF CONTENTS

                           DECEMBER 31, 2000 AND 1999



                                                       Page

Independent Auditor's Report                            3

Financial Statements:
     Balance Sheets                                     4
     Statements of Operations                           5
     Statements of Changes in Stockholders' Equity      6
     Statements of Cash Flows                           7

Notes to Financial Statements                           8-14




<PAGE>






                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
LaserLock Technologies, Inc.
(A Development Stage Company)
Bala Cynwyd, Pennsylvania

We have audited the accompanying balance sheets of LaserLock Technologies,  Inc.
(a development  stage company) as of December 31, 2000 and 1999, and the related
statements of operations, changes in stockholders' equity and cash flows for the
year then ended and for the period  November  10,  1999 (date of  inception)  to
December 31, 1999.  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.

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 financial  statements  referred to above present fairly, in
all material respects, the financial position of LaserLock Technologies, Inc. (a
development  stage  company) as of December 31, 2000 and 1999 and the results of
its  operations and its cash flows for the twelve months ended December 31, 2000
and for the period November 10, 1999 (date of inception) to December 31, 1999 in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company's losses from  development  stage activities
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  actions in regard to this matter are also described in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                        LARSON, ALLEN, WEISHAIR & CO., LLP

Blue Bell, Pennsylvania
April 18, 2001



                                       (3)

<PAGE>
<TABLE>
<CAPTION>

                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999




                                     ASSETS

2000     1999

Current assets:
<S>                                                                               <C>              <C>
   Cash and cash equivalents                                                      $  656,803       $  55,230
   Interest receivable                                                                 4,725
   Prepaid expenses                                                                    4,250           3,500
                                                                                 ------------     -----------

      Total assets                                                                $  665,778       $  58,730
                                                                                  ===========      ==========





                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses and
    total liabilities                                                           $        245      $    6,000
                                                                                -------------     -----------

Commitments

Stockholders' equity:
   Preferred stock, $.001 par value; 10,000,000 shares
      authorized, no shares issued and outstanding
   Common  stock,  $.001 par value;  40,000,000  shares  authorized,  13,289,999
      shares at December  31,  2000 and  7,600,000  shares at December  31, 1999
      issued
      and outstanding                                                                 13,290           7,600
   Deferred consulting fees                                                          (20,683)
   Additional paid-in capital                                                      1,094,868          99,243

   Deficit accumulated during the development stage                                 (421,942)        (54,113)
                                                                                  -----------      ----------

Total stockholders' equity                                                           665,533          52,730
                                                                                  -----------      ----------

Total liabilities and stockholders' equity                                        $  665,778       $  58,730
                                                                                  ===========      ==========
</TABLE>

                 See accompanying notes to financial statements
                                       (4)


<PAGE>

<TABLE>
<CAPTION>

                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
             FOR THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO
       DECEMBER 31, 1999, THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD
           NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2000




                                                      Cumulative         Year Ended                    November 10, 1999
                                                        Since            December 31, 2000            (date of Inception) to
                                                      Inception                                        December 31, 1999
                                                    --------------      ----------------              ---------------
<S>                                                 <C>                 <C>                           <C>
Revenues                                            $    --             $     --                      $      --
                                                    --------------      ----------------              ---------------

Costs and expenses:

    Research and development                                60,718                60,718                      --
    Patent                                                  25,000                25,000
    Legal and accounting                                    36,935                36,935
    Selling, general and administrative                    323,236               269,123                       54,113
                                                        -----------         -------------                 ------------

      Total costs and expenses                             445,889               391,776                       54,113
                                                        -----------         -------------                 ------------

Loss before other income                                  (445,889)             (391,776)                     (54,113)

Other income:
    Interest income                                         23,947                23,947                     --
                                                        -----------        --------------             ---------------

Net loss                                                 $(421,942)          $  (367,829)                  $  (54,113)
                                                         ==========          ============                  ===========

Basic and diluted weighted average common
 shares outstanding                                                           10,015,407                    6,273,654
                                                                              ===========                   ==========

Basic and diluted net loss per common share                                $          (.04)               $        (.01)
                                                                           ================               ==============
</TABLE>

                 See accompanying notes to financial statements
                                       (5)


<PAGE>
<TABLE>
<CAPTION>

                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
    FOR THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2000






                                                                                                           Deficit
                                                            Common Stock                                   Accumulated
                                                    -------------------------------           Additional   during the
                                                    Number                       Consulting   Paid-In      Development
                                                    of Shares         Amount          Fees    Capital      Stage         Total
                                                    ------------    -----------  ----------  ------------ ------------  ---------
<S>                                                   <C>          <C>                     <C>        <C>              <C>
Issuance of 4,278,000 shares on November 10, 1999      4,278,000    $  4,278                $ 16,595   $   ---          $20,873

Issuance of 1,232,000 shares of common stock
  in exchange for services                             1,232,000       1,232                   35,728       ---           36,960

Issuance of 2,090,000 shares of common stock           2,090,000       2,090                   60,610                     62,700

Stock issuance costs                                   ---            ---                     (13,690)      ---          (13,690)

Net loss                                               ---            ---                     ---           (54,113)     (54,113)
                                                   -------------   ---------                 ---------    -----------   ----------

Balance December 31, 1999                              7,600,000       7,600                   99,243       (54,113)      52,730

Issuance of 5,449,999 shares of common stock           5,449,999       5,450                  921,050       ---          926,500

Issuance of 240,000 shares of common stock
 in exchange for services                                240,000         240     $(40,800)     40,560

Stock issuance costs                                    ---           ---                     (16,335)      ---          (16,335)

Fair value of non-employee stock options grants                                                50,350                     50,350

Amortization of deferred consulting fees                                           20,117                                 20,117

Net loss                                                              ---        ---            ---        (367,829)    (367,829)
                                                   ------------- -----------   ------------ -------------  -----------  -----------

Balance, December 31, 2000                            13,289,999     $13,290     $(20,683) $1,094,868     $(421,942)    $665,533
                                                      ==========     =======     ========= ===========    ==========    =========
</TABLE>

                 See accompanying notes to financial statements
                                       (6)

<PAGE>
<TABLE>
<CAPTION>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
   FOR THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999,
        THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD NOVEMBER 10, 1999
                    (DATE OF INCEPTION) TO DECEMBER 31, 2000


                                                           Cumulative                             November 10, 1999
                                                                Since            Year Ended       (date of  Inception) to
                                                             Inception    December 31, 2000       December 31,  1999
                                                            -----------   -------------------     -------------------------

Cash flows from operating activities:
<S>                                                           <C>                <C>                     <C>
    Net loss                                                  $(421,942)         $(367,829)              $   (54,113)
    Adjustments to reconcile net loss to net
     cash used in operating activities:
       Fair value of options issued in exchange
        for service                                              50,350             50,350
       Stock issued in exchange for services                     36,960                                       36,960
       Amortization of deferred consulting fees                  20,117             20,117
       Changes in assets and liabilities:
         Increase in interest receivable                         (4,725)            (4,725)
         Increase in prepaid expenses                            (4,250)              (750)                   (3,500)
         (Decrease) increase in accounts payable                    245             (5,755)                    6,000
                                                          --------------      -------------             -------------

            Net cash used in operating activities              (323,245)          (308,592)                  (14,653)
                                                              ----------        -----------               -----------

Cash flows from financing activities:
    Proceeds from issuance of common stock                    1,010,073            926,500                    83,573
    Stock issuance costs                                        (30,025)           (16,335)                  (13,690)
                                                            ------------        -----------               -----------

            Net cash provided by financing activities           980,048            910,165                    69,883
                                                             -----------         ----------               -----------

Net increase in cash                                            656,803            601,573                    55,230

Cash at beginning of period                                                         55,230                 ---
                                                       ----------------         -----------           --------------

Cash at end of period                                         $ 656,803           $656,803                 $  55,230
                                                              ==========          =========                ==========

Supplemental disclosures for non-cash financing activities:
      Common stock issued for services                       $   77,760          $  40,800                 $  36,960
                                                             ==========          =========                 =========
</TABLE>
                 See accompanying notes to financial statements
                                       (7)

<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 1         NATURE OF ACTIVITIES AND SUMMARY OF
               SIGNIFICANT ACCOUNTING POLICIES

               Nature of Activities

               The Company is a development stage enterprise incorporated in the
               state  of  Nevada  on  November   10,  1999.   Since   inception,
               substantially all of the efforts of the Company have been devoted
               to  developing  technologies  for the  prevention  of product and
               document counterfeiting.  The Company is in the development stage
               of raising capital,  financial planning,  establishing sources of
               supply, and acquiring property,  plant and equipment. The Company
               anticipates  establishing  markets for its  technologies in North
               America and Europe.

               Use of Estimates

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and  liabilities  and  disclosure of contingent  assets and
              liabilities  at the  date  of the  financial  statements  and  the
              reported  amounts of revenues  and expenses  during the  reporting
              period. Actual results could differ from these estimates.

              Cash and Cash Equivalents

              For purposes of reporting  cash flows,  the Company  considers all
              cash accounts, which are not subject to withdrawal restrictions or
              penalties,  and  certificates of deposit and commercial paper with
              original  maturities  of 90  days  or  less  to be  cash  or  cash
              equivalents.

              Revenue Recognition

              The Company will recognize revenue from the sale of counterfeiting
              prevention  technology  when shipped.  Revenue from licensing fees
              will  be  recognized   proportionately  over  the  period  of  the
              licensing agreement.

              Earnings Per Share of Common Stock

              In 1997, the Financial  Accounting Standards Board issued SFAS No.
              128,  Earnings per Share.  SFAS No. 128  replaced  the  previously
              reported  primary and fully diluted  earnings per share with basic
              and  diluted   earnings  per  share,   respectively.   Unlike  the
              previously  reported primary earnings per share, basic earning per
              share  excludes the  dilutive  effects of stock  options.  Diluted
              earnings  per share is similar to the  previously  reported  fully
              diluted  earnings  per  share.  Loss per share  amounts  have been
              calculated in accordance  with  requirements  of SFAS No. 128. For
              the year ended December 31, 2000, the  computation of diluted loss
              per share was  antidilutive;  therefore,  the amounts reported for
              basic and dilutive loss per share were the same.

                                       (8)

<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999



NOTE 1        NATURE OF ACTIVITIES AND SUMMARY
              OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Income Taxes

               Federal  income  taxes  are  provided  for  the  tax  effects  of
               transactions  reported in the financial statements and consist of
               taxes  currently due plus deferred  taxes related to  differences
               between the bases of assets and  liabilities  for  financial  and
               income  tax  reporting.   Deferred  tax  assets  and  liabilities
               represent   the   future  tax   return   consequences   of  those
               differences,  which will either be taxable or deductible when the
               assets and liabilities  are recovered or settled.  Deferred taxes
               are also  recognized  for operating  losses that are available to
               offset future income taxes.

              Recently Issued Accounting Principles

              In June 1998,  the FASB issued FAS 133,  Accounting for Derivative
              Instruments  and  Hedging  Activities,  which will be  required to
              adopt for the year ending  December 31, 2001. FAS 133  establishes
              new methods of accounting for derivative financial instruments and
              hedging activities related to those instruments,  as well as other
              hedging   activities.   Because  we  do  not  currently  hold  any
              derivative financial  instruments and are not currently engaged in
              hedging  activities,  the  adoption of FAS 133 is not  expected to
              have a material  impact on our  financial  condition or results of
              operations.

               In March 2000,  the FASB issued FASB  Interpretation  No. 44 (FIN
               44),   Accounting  for  Certain   Transactions   Involving  Stock
               Compensation.  The Company  adopted FIN 44 effective July 1, 2000
               with  respect to certain  provisions  applicable  to new  awards,
               exchanges of awards in a business  combination,  modifications to
               outstanding  awards,  and changes in grantee status that occur on
               or after that date. FIN 44 addresses  practice  issues related to
               the application of Accounting  Practice  Bulletin Opinion No. 25,
               Accounting  for Stock  Issued  to  Employees.  The  impact on the
               Company's financial statements was not material.

              In December 1999, the  Securities  and Exchange  Commission  (SEC)
              issued  Staff  Accounting  Bulletin  No.  101 (SAB  101),  Revenue
              Recognition in Financial  Statements.  In June 2000, the SEC staff
              amended SAB 101 to provide  registrants  with  additional  time to
              implement  SAB 101.  The  Company  adopted  SAB No. 101  effective
              October 2000. The impact on the Company's financial statements was
              not material.





                                       (9)

<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999



NOTE 1        NATURE OF ACTIVITIES AND SUMMARY OF
              SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Start-Up and Organization Costs

              In accordance  with AICPA Statement of Position 98-5 "Reporting on
              the  Costs  of  Start-up   Activities,"   the  costs  of  start-up
              activities and organization costs are expensed as incurred.

               Research and Development Costs

              Research and development  costs are expensed when incurred.  Total
              amount expensed for the year ending December 31, 2000 was $60,718.

              Reclassification

              Certain  amounts  reported  for 1999  have  been  reclassified  to
              conform with the 2000 presentation.  Such reclassifications had no
              effect on reported income.

NOTE 2        REALIZATION OF ASSETS

              The accompanying  financial statements have been prepared assuming
              that the Company will continue as a going concern. The Company has
              incurred losses from activities during the development stage. This
              condition raises  substantial doubt about the Company's ability to
              continue  as a going  concern.  The  financial  statements  do not
              include any adjustments that might result from the outcome of this
              uncertainty.

              As part of its  development  stage  activities,  the Company  sold
              approximately  2.1 million shares to private investors in December
              1999   providing   net   proceeds   of   approximately    $63,000.
              Additionally,  in 2000, management raised net proceeds of $910,165
              of capital by selling  approximately  5.45  million  shares of its
              common  stock  pursuant  to  Rule  504  of  Regulation  D  of  the
              Securities Act of 1933.  Management  believes the Company can meet
              all of its  obligations  as they become due during the next twelve
              months.

NOTE 3         INCOME TAXES

              At December 31, 2000, the Company had a net operating loss ("NOL")
              that  approximated  $422,000.  Consequently,  the  Company had NOL
              carryforwards  available for federal  income tax  purposes,  which
              begin  to  expire  in 2014,  and no  provision  has been  made for
              federal income taxes in the accompanying financial statements.



                                       (10)


<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999

NOTE 3          INCOME TAXES

          The following table  reconciles the US statutory rate to the Company's
     effective rate:

           US Statutory rate                                   34%
           Creation of valuation allowance for
             NOL carryforwards                                (34)
                                                           -------

           Effective tax rate                               --
                                                           =======

     The primary  components of the  Company's  2000 deferred tax assets and the
related valuation allowance are as follows:

           Gross deferred tax asset for NOL carryforwards         $143,000

           Valuation allowance for NOL carryforwards              (143,000)
                                                                  ----------

           Net deferred tax asset                            $           0
                                                                =============

                Management  has  determined  that  the  realization  of the  NOL
                benefits is not  assured  and has created a valuation  allowance
                for the entire amount of such benefits.

NOTE 4          CAPITAL STOCK ISSUED FOR SERVICES

                In 1999, the Company issued  1,232,000 shares of common stock to
                non-employee consultants,  200,000 shares for legal services and
                1,032,000 for marketing and financial  consulting.  The value of
                the common stock, based on the selling price of the stock at the
                date of  issuance,  was  $36,960,  which  has been  included  in
                organization costs.

                In 2000,  the Company  issued  240,000 shares of common stock to
                non-employee consultants,  200,000 shares for marketing services
                rendered and 40,000  shares for research  and  development.  The
                value of the common  stock  issued for services was based on the
                most recent  selling price of the stock at the date of issuance,
                $.17 per share, totaling $40,800.

NOTE 5          STOCK OPTION PLAN

                During 1999, the Board of Directors (the "Board") of the Company
                adopted,  with the approval of the stockholders,  a Stock Option
                Plan. In 2000, the Board  superseded that plan and created a new
                Stock  Option  Plan  (the  "Plan"),  pursuant  to  which  it  is
                authorized to grant options to purchase up to 1.5 million shares
                of common stock to the Company's employees, officers, directors,
                consultants, and other agents and advisors. The Plan is intended
                to permit stock options  granted to employees  under the Plan to
                qualify as  incentive  stock  options  under  Section 422 of the
                Internal  Revenue  Code of 1986,  as amended  ("Incentive  Stock
                Options").  All options  granted  under the Plan,  which are not
                intended to qualify as Incentive Stock Options, are deemed to be
                non-qualified options ("Non-Statutory Stock Options").

                                       (11)

<PAGE>

                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


NOTE 5STOCK OPTION PLAN (Continued)

              The Plan  will be  administered  by a  committee  of the  Board of
              Directors  ("Stock  Option  Committee")  which will  determine the
              persons to whom awards will be granted, the number of awards to be
              granted  and the  specific  terms  of each  grant,  including  the
              vesting thereof, subject to the provisions of the Plan.

               In connection with Incentive Stock Options, the exercise price of
               each option may not be less than 100% of the fair market value of
               the common stock on the date of grant (or 110% of the fair market
               value  in the  case of a  grantee  holding  more  than 10% of the
               outstanding  stock of the  Company).  The  aggregate  fair market
               value (determined at the time of the grant) of stock for which an
               employee may exercise  Incentive Stock Options under all plans of
               the Company shall not exceed  $100,000 per calendar  year. If any
               employee  shall have the right to exercise  any options in excess
               of $100,000  during any calendar  year,  the options in excess of
               $100,000  shall be  deemed  to be  Non-Statutory  Stock  Options,
               including  price,  duration,  transferability  and limitations on
               exercise.

              Options granted in addition to the Plan and contractual agreements
              during  the fiscal  year 2000 were  1,135,000.  Of these  options,
              980,000 were granted to consultants,  130,000 options were granted
              for legal  counsel and 25,000 to a key employee.  Exercise  prices
              range from $.17 to $.35 per common share and vested immediately.

              Transactions are as follows:

                                                                   Weighted Avg
                                                   Exercise Price Exercise Price
                            Option       Vested      Per Vested    Per Vested
                            Shares        Share    Common Share   Common Share
                            ------       -------   ------------   --------------

 Balance, December 31, 1999         0             0

 Granted during the year    1,135,000     1,135,000   $.17-$.35          $.26
                            ---------    ----------

 Balance, December 31, 2000 1,135,000     1,135,000                      $.26
                            =========    ==========

               The Company  accounts for stock-based  compensation in accordance
               with SFAS No. 123, Accounting for Stock-Based Compensation, which
               permits  the  use of  intrinsic  value  method  described  in APB
               Opinion No. 25,  Accounting  for Stock Issued to  Employees,  and
               requires  the  Company  to  disclose  the pro  forma  effects  of
               accounting  for  stock-based  compensation  using the fair  value
               method as described in the optional  accounting  requirements  of
               SFAS No. 123. As  permitted  by SFAS No.  123,  the Company  will
               continue  to  account  for  stock-based  compensation  under  APB
               Opinion  No.  25,  under  which the  Company  has  recognized  no
               compensation  expense for employee granted options and recognized
               an  expense  for  non-employee  granted  options.  Total  expense
               recognized by the Company  during 2000 for  non-employee  granted
               options was $50,350.

                                       (12)

<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999



NOTE 5        STOCK OPTION PLAN (Continued)

              Had  compensation  cost for the  Company's  stock option plan been
              determined  based on the fair value of the Company's  common stock
              at the dates of awards  under  the fair  value  method of SFAS No.
              123,  the  Company's  net loss per  common  share  would have been
              increased to the pro forma amounts indicated below.

                                                           2000

       Net loss:
             As reported                                   $(367,829)
             Pro forma                                     $(369,329)

       Net loss per common share basic and diluted:
             As reported                                    $(.04)
             Pro forma                                      $(.04)

 Significant assumptions used to calculate the above
 fair value of the awards are as follows:
                                                            2000
                                                            ----

       Risk free interest rates of return                    6.00%
       Expected option life                                60 months
       Volatility                                               25%
       Expected dividends                                       $0


NOTE 6        RELATED PARTY TRANSACTIONS

              Effective  January 1, 2000, the Company entered into an employment
              agreement  with its  president,  providing  for a  minimum  annual
              salary  of  $75,000.  As part  of the  employment  agreement,  the
              president  conveyed  the entire  right,  title and  interest  in a
              patent application for counterfeit  technology to the Company.  No
              value was assigned to such patent.  In October  2000,  the Company
              entered  into  a  new  four-year  employment  agreement  with  its
              president  effective  January 1, 2001. The agreement  provides for
              annual  compensation  of $90,000  and  payment  of certain  fringe
              benefits,  including  use  of  an  automobile.  Additionally,  the
              agreement provides for the issuance of Non-Statutory Stock Options
              (not  covered by the Stock  Option  Plan  discussed  in Note 5) to
              purchase  250,000  shares  of  common  stock at $.17 per share and
              250,000 shares at $.35 per share.

              During 1999, the Company paid approximately  $10,000 to one of its
              stockholders  for  legal  services  rendered  in  connection  with
              issuance  of the  Company's  common  stock.  The  amount  has been
              included as a reduction of additional paid-in capital.

              The Company maintains its office at the home of its President.  No
              formal  lease  agreement  exists  and no  rent  expense  has  been
              incurred.


                                       (13)

<PAGE>


                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999



NOTE 7        COMMITMENTS

              During 2000, the Company entered into  commission  agreements with
              sales representatives.  Under the terms of the contracts, expiring
              on various dates, the  representatives are entitled to commissions
              based  on  certain   percentages  of  sales,  as  defined  in  the
              agreements  which may be renewed  annually.  The commissions  from
              sales  will be  expensed  as sales  are  generated.  However,  the
              commission  from sales will be paid over  4-year  terms at defined
              percentages.

              The Company  entered into a consulting  agreement  with one of its
              minority   stockholders   to  manage  the  Company's  sales  force
              effective  June 2000.  The  contract,  which  expires in May 2001,
              provides for monthly payments of $5,000.

NOTE 8        LEGAL PROCEEDINGS

              The Company is not a party to any pending legal proceedings.

NOTE 9        FINANCIAL INSTRUMENTS

              Concentration of Credit Risk

              Financial  instruments,  which potentially  subject the Company to
              concentration of credit risk, consist primarily of cash.

              The  Company  has   concentrated  its  credit  risk  for  cash  by
              maintaining  substantially  all of its  depository  accounts  in a
              single financial institution.  Accounts in the bank are guaranteed
              by the  Federal  Depository  Insurance  Corporation  (FDIC)  up to
              $100,000.  At various  times  throughout  the year the Company had
              cash balances that exceeded FDIC limit. The financial  institution
              has a strong  credit  rating,  and  management  believes  that the
              credit risk is minimal.

              Fair Value of Financial Instruments

              Cash and accounts payable approximate their fair values due to the
              short maturity of these instruments.

NOTE 10       SUBSEQUENT EVENTS

               On February 20, 2001, the Company entered into an agreement, with
               a unrelated third party, and issued 1,500,000 stock options for a
               price of $.01 per option.  The agreement provides each option the
               right to  purchase  one share of common  stock at $.16 per share,
               immediate vesting of options and expiration of options as of June
               15, 2001 unless mutually extended by both parties.  In accordance
               with  the  fair  value   method  as  described  in  the  optional
               accounting  requirements of SFAS No. 123 and recognition policies
               of APB No. 25, the Company will  recognize an expense of $300,000
               during the first quarter of 2001.


                                       (14)

<PAGE>

                          LASERLOCK TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


NOTE 11       PATENTS

              The Company has acquired the rights to a patent application in the
              United  States via its  employment  contract  with its  President,
              Norman A. Gardner.  The pending  United States patent  application
              was assigned to LaserLock Technologies,  Inc. upon filing, and the
              Assignment  has  been  recorded  at the US  Patent  and  Trademark
              Office.  The  Assignment  by its terms  conveys the entire  right,
              title and interest in and to the  invention of the pending  patent
              application  (entitled  "Counterfeit  Detection  System")  and all
              improvements  thereon which may be made,  conceived or acquired by
              Norman Gardner during the course of his association with LaserLock
              Technologies,   Inc.   and  for  one   year   thereafter.   Patent
              applications for the Company's technology (including  improvements
              in the technology) are intended to be filed in other jurisdictions
              where commercial usage is foreseen, including countries in Europe.
              There can be no assurance,  however,  that such protection will be
              obtained.

              The subject patent  application was filed December 10, 1999 and is
              presently awaiting further official action after applicant filed a
              response to an initial rejection. The initial rejection applied to
              a number of claims but the patent  examiner  indicated that one of
              the claims  would be  allowable  if amended  for  matters of form.
              Applicant's  response  accepted that claim and sought allowance of
              additional  claims.  It is likely that a patent will be granted on
              the application by the end of 2001. If no patent is granted on the
              application,  LaserLock  Technologies  will rely  substantially on
              secrecy  and  commitments  of   confidentiality  by  manufacturing
              subcontractors and users.

                                       (15)

                                       34

<PAGE>



<PAGE>

                                   SIGNATURES

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


DATE:  June 22, 2001               By: /S/Norman Gardner
                                            Norman Gardner
                                            President


                  Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and dates indicated.


Signature                          Title                   Date



                            President  and          June 22, 2001
 /S/Norman Gardner          a  Director
Norman Gardner



/S/Michael Prevot           Director                June 22, 2001
Michael Prevot