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


                                    FORM 10-K
(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 - FOR THE FISCAL YEAR ENDED APRIL 30, 2001

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 - For the transition period from _______ to ________

                         Commission file number: 0-8006

                             COX TECHNOLOGIES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             NORTH CAROLINA                                      86-0220617
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

          69 MCADENVILLE ROAD
        BELMONT, NORTH CAROLINA                                  28012-2434
(Address of principal executive offices)                         (Zip code)

       Registrant's telephone number, including area code: (704) 825-8146

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

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

                         COMMON STOCK, WITHOUT PAR VALUE
                         -------------------------------
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Estimated aggregate market value of the voting stock held by non-affiliates of
the registrant:

                         $7,471,447 as of July 24, 2001

Number of shares of Common Stock, no par value, as of the latest practicable
date:

                      24,904,823 shares as of July 24, 2001

Documents incorporated by reference: Portions of the proxy statement dated July
30, 2001, relating to the August 31, 2001 annual meeting of shareholders, are
incorporated by reference into Part III of this annual report.
<PAGE>
                             COX TECHNOLOGIES, INC.

                                    FORM 10-K

                                ANNUAL REPORT TO
                     THE SECURITIES AND EXCHANGE COMMISSION
                    FOR THE FISCAL YEAR ENDED APRIL 30, 2001

                                   ----------

                                TABLE OF CONTENTS

ITEM                                                                        PAGE

                                     PART I

1.   Business.............................................................     3
     Executive Officers of the Registrant.................................     9
2.   Properties...........................................................     9
3.   Legal Proceedings....................................................    10
4.   Submission of Matters to a Vote of Security Holders..................    10

                                     PART II

5.   Market for the Registrant's Common Equity and
        Related Stockholder Matters.......................................    10
6.   Selected Financial Data..............................................    10
7.   Management's Discussion and Analysis of
        Financial Condition and Results of Operations.....................    11
8.   Financial Statements and Supplementary Data .........................    18
9.   Changes in and Disagreements With Accountants on
        Accounting and Financial Disclosure...............................    38

                                    PART III

10.  Directors and Executive Officers of the Registrant...................    38
11.  Executive Compensation...............................................    38
12.  Security Ownership of Certain Beneficial Owners
        and Management....................................................    38
13.  Certain Relationships and Related Transactions.......................    38

                                     PART IV

14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K......    39
     Signatures...........................................................    40
     Exhibit Index........................................................    41

                                       2
<PAGE>
                                     PART I

ITEM 1. BUSINESS

GENERAL

     Cox Technologies, Inc. (the Company), was incorporated as Mericle Oil
Company in July 1968, under the laws of the State of Arizona. The name was
changed to Energy Reserve, Inc. in August 1975. In November 1994, Energy Reserve
acquired Twin-Chart, Inc. and altered its primary business focus from crude oil
operations to temperature recording and monitoring operations. As a result of
this change in focus, the Company changed its name to Cox Technologies, Inc. in
April 1998. The Company reincorporated in the State of North Carolina in
December 2000.

     Executive offices and manufacturing facility are located at 69 McAdenville
Road, Belmont, North Carolina 28012; telephone (704) 825-8146. Except where the
context otherwise indicates, all references to the "Company" are to Cox
Technologies, Inc., its wholly owned subsidiaries, Twin-Chart, Inc., Transit
Services, Inc., Vitsab Sweden, AB, Vitsab, Inc., Vitsab USA, Inc., Fresh Tag
Research & Manufacturing, Inc., Qualtag Engineering, Inc. and Cox Recorders
Australia, Ltd., Pty., a 95% owned Australian distribution company. During July
2001, all domestic subsidiaries were merged into the parent company, Cox
Technologies, Inc. The only remaining subsidiaries are Vitsab Sweden, AB and Cox
Recorders Australia, Ltd., Pty. Cox Technologies, Inc. will operate Cox
Recorders and Vitsab as operational divisions.

     The core business of the Company is to provide reliable temperature
monitoring products and develop new and technologically advanced monitoring
systems. The Company produces and distributes transit temperature recording
instruments, including electronic "loggers," graphic temperature recorders and
visual indicator tags, both in the United States and internationally. Transit
temperature recording instruments create a strip chart record of temperature
changes over time, or record temperatures electronically according to a present
interval ("logging"). The Company sells and manufactures both types of transit
monitoring products, and has established an international market presence and
reputation for reliable temperature recording products.

     The Company has expended funds to further the development of enzyme-based
"smart labels" that detect temperature abuse in packages of perishable goods.
The Company has introduced this new technology, known as Vitsab(R), to the food
and pharmaceutical industries as a monitoring label applied to packages of
temperature sensitive products. Initial indications for demand of this product
have been very positive.

     The Company has two current operating segments that involve the (1)
production and distribution of temperature recording and monitoring devices,
including electronic "loggers," graphic temperature recorders and visual
indicator tags (referred to as "Temperature Recorder Operations" as a group) and
(2) oilfield operations and other, which include all economic activity related
to the oil production and the holding of the oil subleases and the operation of
its Phoenix, Arizona office. The Company closed its Phoenix office effective
October 31, 2000. The activities performed in Phoenix have been transferred to
the Corporate Office in Belmont, North Carolina.

                                       3
<PAGE>
Financial information for these operating segments is summarized below:


Fiscal Years Ended April 30,            2001           2000            1999
----------------------------        -----------     -----------     -----------
Revenues:
Temperature Recorder Operations     $ 9,637,075     $ 9,700,282     $ 8,953,116
Oilfield Operations and Other       $    72,486     $    10,694     $     1,428

Operating profit (loss):
Temperature Recorder Operations     $(2,804,265)    $(1,811,304)    $   335,461
Oilfield Operations and Other       $(3,345,152)    $  (143,887)    $  (172,169)

Identifiable assets:
Temperature Recorder Operations     $ 4,377,067     $ 5,219,141     $ 4,825,654
Oilfield Operations and Other (1)   $   300,000     $ 3,519,790     $ 3,511,438

----------
(1)  The Company recognized $3,062,196 of the oilfield operations net assets as
     a loss on impairment in fiscal 2001.

TEMPERATURE RECORDER OPERATIONS

     The Company's temperature recorder activities include production and
distribution of transit temperature recording instruments, the sale and
distribution of electronic temperature recorders (sold for non-transit quality
monitoring purposes as well as for transit monitoring) and production and
distribution of visual indicator tags. The Company also performs contract
manufacturing.

     The transit temperature recording instruments, known as temperature
recorders, are self-contained, battery-powered and designed to create a
graphical "time vs. temperature" record. The electronic temperature recorders
are battery-powered devices that record temperature in a computer memory chip.
The data is later retrieved by transferring the information to a personal
computer. The Company also sells digital thermometers as adjuncts to their
primary temperature recorder activity.

     The transit recorders are marketed under the trade name Cox Recorders and
produce a record which is documentary proof of temperature conditions useful for
compliance with governmental regulations, the monitoring performance of
refrigerated carriers, and for claims in the transport of valuable perishables
such as produce, meat, pharmaceuticals, chemicals, live plants and animal
material. The electronic temperature recording products are used for the same
purpose, but also are used for internal checking of temperature conditions in
storage and processing. The visual indicator tag product determines the exposure
of a stored or shipped temperature-sensitive commodity.

     In previous years, the Company manufactured two separate graphic recorders.
The COX(1) and COBRA(R) record the air temperature in a truck or container. Both
are used primarily in transit monitoring of temperature variations. Manufacture
of the COBRA(R) design was halted during fiscal 2001 due to a declining demand
for the product.

     The COX(1) product accounts for 86% of the Company's revenues. The balance
is accounted for through the sale of electronic data loggers, probes and other
temperature monitoring products.

                                        4
<PAGE>
     The Company also manufactures (through a contract manufacturing arrangement
with a producer in New Zealand) and distributes an electronic temperature
recorder, or "data logger," designated TRACER(R). The TRACER(R) delivers its
data via a cable link to a personal computer using specialized software. This
software is used under contract issued by the New Zealand supplier. TRACER(R) is
used primarily in quality control and safety applications in the foods
industries.

     A lower cost transit or "shipping" version of the TRACER(R), the
DataSource(TM) transit temperature logger, has been introduced. This logger
product is encased in a postage-prepaid mailer sleeve and is used exclusively
for transit temperature monitoring and recording. COX(1), TRACER(R) and
DataSource(TM) are all currently selling into the markets for the Company's
recorder products.

     Digital thermometers with penetration probes are purchased wholesale and
then retailed to customers of the Company's manufactured products.

     The Company also sells the TempList(R), which is a data collection or
"listing" temperature recorder that is used for point-of-measurement recording.
The TempList(R) delivers the data via a cable link to a personal computer using
specialized software. The Company does not manufacture these probe and
electronic recorder products.

     The source and availability of raw materials are not critical or
significant factors in the temperature recorder operations of the Company. The
temperature recorder operations of the Company are non-seasonal. The Company
does and is required to carry significant amounts of inventory for its
temperature recorder operations and neither Company nor industry practices
provide extended payment terms to customers.

     The temperature recorder operations of the Company are not dependent upon a
single or a few customers, nor would the loss of any single customer have a
materially adverse effect upon earnings or the financial position of the
Company. Backlog of orders is not a major factor in the temperature recorder
operations of the Company.

     The Company is a major competitor in the temperature recording industry in
regards to its production and distribution activities. The Company encounters
significant competition from a variety of companies in all major areas of its
business activity. The Company competes primarily on product performance and
price. Reliability, technology, customer service and company reputation are also
important competitive factors.

     The Company generally does not maintain company owned distribution
entities. However, in 1999, the Company established Cox Recorders Australia,
Ltd., Pty., to retain its market share and presence in this geographic area.
Except for this subsidiary, all distributors are contracted. Major distributors
are located in Copenhagen, Denmark; Singapore; and Santiago, Chile. All other
distribution and sales operations are through individual sales persons operating
on salary, sales commission basis or salary plus incentive basis.

VITSAB(R) PRODUCT

     Vitsab(R) is a new technology which employs enzymatic color indicators
inside a transparent label to show the amount of temperature exposure of a
stored or shipped temperature-sensitive commodity. The enzyme indicator reaction
is activated at the beginning of the monitoring period by applying pressure on a
plastic bubble strip that is a structure part of the label. This strip contains
sealed packets of non-toxic liquids that are broken by pressure. These non-toxic
liquids mix to form the indicating solution.

     These tags are programmable devices that run as a "biological clock"
parallel to the biological clock of the product it is set to monitor. They
integrate both time and temperature and give a visual indication when parallel
processes with the monitored food or drug product has reached a certain
definable state. This device is known as a TTI (time-temperature integrator).

                                       5
<PAGE>
     The Company plans to produce two distinct Vitsab(R) TTI configurations: a
"three dot" indicator (for wholesale distribution of perishables) and a "one
dot" indicator (primarily for food safety and consumer packages). Each product
is produced on high-speed automated machinery. The Company has engaged the
services of a respected automation engineering and equipment development firm to
develop new machinery for accelerated Vitsab(R) production.

     The Company is in the final formative stages of the development, production
and marketing of the Vitsab(R) TTI. Final development of this technology has
required substantial effort to refine manufacturing procedures to achieve a
reliable and consistent product delivery. In addition, the chemical formulation
of the tag itself, including the specific chemical nature of the enclosure,
continues to require testing and validation.

     The Company's visual indicator tag operations also include the development,
production and distribution of FreshTag(TM) food spoilage indicators.
FreshTag(TM) is based on a licensed and patented technology developed by the
U.S. Food and Drug Administration (FDA), that enables the detection of specific
chemical compounds that signal the incipient spoilage of seafood and other food
types. The Company is currently the sole licensee for this patent from the FDA.
Research and development related to FreshTag(TM) is much less complete than the
Vitsab(R) product. The Company has not currently set a date for product
announcement for the FreshTag(TM) technology, and is pursuing a policy of
seeking new external funding for the continued research and development efforts
for the FreshTag(TM) product.

     The source and availability of certain raw materials may be a critical and
significant factor for Vitsab(R) TTI when it begins production in significant
volumes. The source and availability of raw materials for FreshTag(TM) are not
likely to be critical and significant factors in the future production of the
FreshTag(TM) product.

     The Company currently plans to manufacture the Vitsab(R) TTI at two
locations: Malmo, Sweden and Belmont, North Carolina. Preliminary production
operations have been periodically started and stopped in Malmo, Sweden as
development progresses. The preparation of solutions and product manufacturing
are currently being conducted in Belmont, North Carolina.

     The Company maintains both company owned distribution entities and certain
contract distributors associated with the Company's temperature recorder
operations. The Company plans to use these same distribution entities for
Vitsab(R) and FreshTag(TM) outlets.

     In April 2001 the Company executed an agreement with its Copenhagen
distributor ("Purchaser") for an option to purchase all of the shares and assets
of the Company's wholly owned subsidiary, Vitsab Sweden, AB. The option
agreement gives the Purchaser until November 30, 2001 to exercise the option. In
return for the option, the Purchaser will pay the Company $20,000 a month
beginning March 2001 and ending November 2001. During the option period, the
Company cannot sell, transfer, pledge, mortgage or otherwise dispose of nor
issue new shares in Vitsab Sweden, AB without the prior written approval by the
Purchaser. The stated purchase price in the agreement for all of the shares in,
and assets of, Vitsab Sweden, AB is $1.00. In addition, the Purchaser must make
monthly payments of $6,000 to the Company beginning the month after the option
is exercised and ending with the final payment in June 2004. If the Purchase
option is executed, the Purchaser will have the exclusive right for ten years to
manufacture, sell and distribute the Vitsab(R) product in certain countries
designated in the agreement. The Company will be paid a minimum annual royalty
based on the volume of Vitsab(R) products sold. If the Purchaser does not
execute the purchase option by the end of the option period, the Company will
retain ownership of all shares and assets of Vitsab Sweden, AB.

OILFIELD OPERATIONS

     The Company owns working interests in developed oil and gas properties
located in California. These developed properties contain drilled wells that are
capable of producing crude oil or natural gas. The Company's oil and gas
properties are the Mitchel and Bacon Hills subleases.

                                       6
<PAGE>
     The Mitchel subleases and the Bacon Hills sublease are located in the
Chico-Martinez field, Kern County, California. Together they comprise one entire
section of land. The Mitchel subleases were acquired in 1969 and consist of 380
acres in which the Company has interests to a depth of 2,000 feet on 320 acres
and to a depth of 2,500 feet on 60 acres. The Bacon Hills sublease was acquired
in December 1980 and consists of 260 acres, in which the Company has interests
to the depth of 2,250 feet. The Company owns all of the working interest in both
these subleases that equates to a 78.33 percent revenue interest. There are 62
completed oil wells that produce from the 500 to 1,600 foot levels on these
subleases. The oil produced is heavy crude of approximately 12.7 API gravity.
The Company has no drilling requirements under these subleases, which are held
for an indefinite term by production. The sublessor has a 21.67 percent royalty
revenue interest in these subleases.

     As previously disclosed in prior years, the sublessor had declared this
sublease in default due to the failure by the Company to meet certain well
drilling requirements. In May 2000, the Company paid the sublessor $50,000 to
cure the default. By agreement and amendment to the sublease, the sublessor
acknowledged that all drilling requirements had been fulfilled, that the Company
had no further obligation to drill any additional wells, that any and all
notices of default were cancelled, and that the sublease was in full force and
effect.

     The latest independent petroleum studies and reports for the leases were by
a respected petroleum engineer as follows: (1) Comprehensive Reservoir
Engineering Study, dated February 1986, which estimated the recoverable oil
reserves at 21,103,341 barrels, and (2) a Steam Flood Development Plan, dated
June 1987, which sets forth a plan including drilling and production costs for
recovery of the oil reserves. The Company has not filed any reports concerning
oil and gas reserve estimates with any regulatory authorities or agencies other
than the Securities and Exchange Commission. The petroleum engineer confirmed
the level of reserves in a letter issued July 2000.

     The oil subleases have not produced in any significant volume. The Company
entered into an agreement with an independent oilfield operator in April 1999.
The primary function of the operator has been to increase production by
overhauling the surface equipment, establishing steam and hot water injection
operations and improving field conditions at the property. In July 2000, the
Company entered into a new agreement with the operator that replaced the
previous agreement. Under the terms of the new agreement the Company intended to
increase production more rapidly. The new agreement would also allow the Company
to buyout the operator at any time. It was the Company's strategy that
productive activity at the field would help to increase the revenues while
establishing a greater asset value, thus making the Company's sublease holdings
more attractive to a potential buyer. In June 2000, the Company entered into an
exclusive agreement with a group in Dallas, Texas, to sell the subleases on
behalf of the Company. The group contacted and solicited potential buyers to
make purchase offers to the Company for the subleases. The Company terminated
the agreement in April 2001 after receiving no purchase offers from potential
buyers. As a result of inability of the Company to attract a potential buyer,
the high cost and difficulty in producing crude oil of the type found in the
field and losses incurred in the oilfield operations, the Company evaluated the
recoverability of the carrying amount of the oilfield net assets. In analyzing
expected future cash flows from potential offers, the Company is of the opinion
that $300,000 of net assets should be recognized as property held for sale. As a
result, the Company recognized a loss on impairment of $3,062,196 in fiscal
2001.

     For further information, reference is made to Note 5 of the notes to
consolidated financial statements.

                                       7
<PAGE>
EDS(TM)/SOFTWARE PROJECT

     The Company initiated a major new design effort to develop the EDS(TM)
temperature logger. The EDS(TM) is a slim product approximately the size of a
credit card and less than a quarter of an inch thick. A large LCD screen
displays detailed information about the temperature recording and the user can
scroll to display additional items of information. This "smart card" design
departs from the normal configuration for such products in that it is small in
size, inexpensive and displays much of the information that the users of graphic
transit temperature instruments now obtain from a visual inspection of a paper
chart.

     On February 2, 2001, the Company filed a Current Report on Form 8-K
announcing that the Company reached an agreement with Sensitech Inc. and Ryan
Instruments to settle two lawsuits relating to alleged restrictions on the
employment of two of the Company's former employees and to an alleged
infringement of certain patents. As a result of this agreement, the Company
plans to delay the market introduction of the EDS(TM) products until November
2002.

INTELLECTUAL PROPERTY

     The Company owns a number of patents, trademarks, trade secrets and other
intellectual property directly related to, and important to, the Company's
business. Although the conduct of business involves the manufacture of various
products that are covered by patents, the Company does not believe that any one
single existing patent or group of patents is material to the success of the
business as a whole.

RESEARCH AND DEVELOPMENT

     Research and development expenses are related to costs incurred for both
the EDS(TM) and Vitsab(R) products. Research and development expenses were
$345,393, $409,362 and $407,044 for the fiscal years ended 2001, 2000 and 1999,
respectively. The decrease in fiscal 2001 as compared to fiscal 2000 is due to
the Company reaching the final development stages of the Vitsab(R) product and
the halt in the development of the EDS(TM) product.

GOVERNMENT REGULATION

     The Company is not currently subject to direct regulation by any
governmental agency other than rules and regulations that apply to businesses
generally and any export controls and import controls, which may apply to our
products. Many our customers' products, however, are subject to extensive
regulation by agencies such as the FDA. The Company designs and manufactures its
products to ensure that its customers are able to satisfy a variety of
regulatory requirements and protocols established to, among other things, avoid
the spoiling of perishable goods such as produce, meat, pharmaceuticals and
chemicals.

     The regulatory environment in which customers operate is subject to changes
due to political, economic and technical factors. In particular, as use of
temperature recording and monitoring technology expands and as national
governments continue to develop regulations for this technology, customers may
need to comply with new regulatory standards. The failure to comply with current
or future regulations or changes in the interpretation of existing regulations
could result in the suspension or cessation of sales by the Company or its
customers.

EMPLOYEES

     At June 1, 2001, the Company had 117 full-time employees compared to 120 at
June 1, 2000. This 3% decrease is related to the restructuring of the Company
and consolidation of activities previously performed in other locations to the
Corporate Office in Belmont, North Carolina. None of the Company's employees are
covered by collective bargaining agreements. Relations between the Company and
its employees are generally considered good.

                                       8
<PAGE>
                      EXECUTIVE OFFICERS OF THE REGISTRANT

                                                                   Date Elected
 Name and Age (1)                 Title (1)                         An Officer
 ----------------                 ---------                         ----------
Dr. James L. Cox         Chairman, President and
     Age - 56              Chief Executive Officer                   08/01/95
David K. Caskey
     Age - 38            President - Cox Recorders                   11/01/97
Brian D. Fletcher
     Age - 39            Chief Operating Officer                     03/10/00
Jack G. Mason            Chief Financial Officer
     Age - 43              and Secretary                             07/31/00
James R. McCue
     Age - 42            President - Vitsab                          03/12/00
Kurt C. Reid
     Age - 41            Chief Operating Officer                     03/10/00
Robert L. Thornton
     Age - 41            Controller and Assistant Treasurer          11/03/00

----------
(1)  As of June 30, 2001

     The present terms of all officers extend to August 31, 2001, the date of
the next annual meeting of shareholders and the annual meeting of the Board of
Directors, or until their successors are elected and qualified.

     Dr. James L. Cox and David K. Caskey are the only executive officers that
have served in their current executive positions with the Company for the past
five years.

     Brian D. Fletcher was employed by the Company as Chief Operating Officer on
March 10, 2000. Prior to joining the Company, he was a private investor for more
than the previous four years. Prior to that, he was employed as an investment
representative for Edward Jones Co.

     Jack G. Mason was employed by the Company as Chief Financial Officer on
July 1, 2000. On November 3, 2000 he was named Chief Financial Officer and
Secretary. Prior to joining the Company, he was the Chief Financial Officer of
PSNC Energy for more than the previous four years.

     James R. McCue was employed by the Company as President of Vitsab on March
21, 2000. Prior to joining the Company, he was employed in marketing with
Hill-Rom Company, a division of Hillenbrand Industries for more than the
previous four years.

     Kurt C. Reid was employed by the Company as Chief Operating Officer on
March 10, 2000. Prior to joining the Company, he was a private investor for more
than the previous four years. Prior to that, he was employed as an investment
representative for Edward Jones Co.

     Robert L. Thornton was employed by the Company as Controller on August 21,
2000. On November 3, 2000 he was named Controller and Assistant Treasurer. Prior
to joining the Company, he was the Director - Investor Relations and Financial
Projects of PSNC Energy for more than the previous five years.

ITEM 2. PROPERTIES

     The Company has leased manufacturing facilities located in Belmont, North
Carolina and Malmo, Sweden. The facility in Belmont serves as the Corporate
Office, manufacturing and distributing of time temperature recording devices and
directing the oilfield operations. The Belmont facility also manufactures the
Vitsab(R) product. The Malmo facility is used for the limited production of the
Vitsab(R) product. The Company closed the office in Phoenix, Arizona, which was
primarily used for directing the oilfield operations. The Company also leases
office space in Upland, California, to support the sales function.

                                       9
<PAGE>
ITEM 3. LEGAL PROCEEDINGS

     The Company is involved in various legal proceedings, but the Company does
not believe these proceedings could have a material impact on the results of
operations or financial condition.

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

     No matters were submitted to a vote of the Company's security holders
during the three months ended April 30, 2001.

                                     PART II

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

     The Company's common stock is traded on the nationwide over-the-counter
market and is listed under the symbol "coxt.ob" on the electronic bulletin board
provided by the National Quotation Bureau, Inc.

     The table below presents the reported high and low common stock sale prices
for each quarter of fiscal 2001 and 2000. The Company has not declared any
dividends during the last two fiscal years.

                                 2001                        2000
                          -------------------         -------------------
                           Low          High           Low           High
                          -----         -----         -----         -----
First Quarter             $1.88         $0.69         $0.73         $0.55
Second Quarter            $1.38         $0.47         $0.73         $0.47
Third Quarter             $0.94         $0.31         $4.31         $0.48
Fourth Quarter            $0.50         $0.28         $3.38         $1.25

     At July 10, 2001, the Company had approximately 2,045 holders of record of
the Company's common stock.

     The payment of dividends by the Company is within the discretion of the
Board of Directors and depends in part upon the Company's earnings, capital
requirements, debt covenants and financial condition. Since its inception, the
Company has not paid any dividends on its common stock and does not anticipate
paying such dividends in the foreseeable future. The Company intends to use
earnings, if any, to finance a portion of its operations.

ITEM 6. SELECTED FINANCIAL DATA

     The following table sets forth selected historical consolidated financial
information as of and for each of the fiscal years, which have been derived
from, and should be read together with, the audited consolidated financial
statements and the related notes, which are included elsewhere in this report.
The information presented below should also be read together with Management's
Discussion and Analysis of Financial Condition and Results of Operations.

<TABLE>
<CAPTION>
Fiscal Years Ended April 30,            2001            2000            1999           1998           1997
----------------------------         -----------     -----------     -----------    -----------    -----------
<S>                                  <C>             <C>             <C>            <C>            <C>
Sales                                $ 9,709,561     $ 9,710,976     $ 8,954,544    $ 8,138,756    $ 7,453,817
Income (loss) from operations        $(6,149,417)    $(1,955,191)    $   163,292    $ 1,095,451    $ 1,050,219
Basic and diluted net income
  (loss) per average common share    $      (.27)    $      (.09)    $       .01    $       .15    $       .04
Weighted average number of
  common shares outstanding           24,661,104      24,222,547      21,368,188     20,041,562     20,041,562
Total assets                         $ 8,654,189     $14,369,529     $12,877,192    $ 9,766,536    $ 6,953,356
Stockholders' equity                 $ 2,528,355     $ 9,041,805     $10,025,938    $ 8,565,711    $ 5,515,997
Long-term debt (1)                   $ 3,090,044     $ 2,908,359     $   581,374    $   280,706    $   358,686
</TABLE>

----------
(1)  Excludes current maturities.

                                       10
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FISCAL 2001

     The Company has two current operating segments that involve the (1)
production and distribution of temperature recording and monitoring devices,
including graphic temperature recorders, electronic "loggers," and visual
indicator tags (referred to as "Temperature Recorder Operations" as a group) and
(2) oilfield operations and other, which include all economic activity related
to the oil production and the holding of the oil subleases and the operation of
its Phoenix, Arizona office. The Company closed its Phoenix office effective
October 31, 2000. The activities performed in Phoenix have been transferred to
the Corporate Office in Belmont, North Carolina.

<TABLE>
<CAPTION>
Fiscal Years Ended April 30,         2001            2000            2001           2000
----------------------------      -----------     -----------     -----------     ---------
                                                 Temperature
                                  Temperature      Recorder        Oilfield        Oilfield
                                   Recorder       Operations      Operations      Operations
                                  Operations     (as restated)     and Other      and Other
                                  -----------     -----------     -----------     ---------
<S>                               <C>             <C>             <C>             <C>
 Sales                            $ 9,637,075     $ 9,700,282     $    72,486     $  10,694
                                  -----------     -----------     -----------     ---------
 Cost of sales                      5,042,539       5,256,403         308,480        21,248
 General and administrative         4,508,233       3,565,514          46,962       133,333
 Selling                            1,812,052       1,649,247              --            --
 Research and development             345,393         409,362              --            --
 Depreciation and depletion           513,820         433,508              --            --
 Amortization of goodwill             219,303         197,552              --            --
 Loss on impairment                        --              --       3,062,196            --
 Income (loss) from operations     (2,804,265)     (1,811,304)     (3,345,152)     (143,887)
 Other income (expense)              (128,150)         43,396              --       (78,424)
 Interest expense                    (496,442)       (170,263)             --            --
 Income taxes                              --          41,754              --            --
                                  -----------     -----------     -----------     ---------
Net income (loss)                 $(3,428,857)    $(1,979,925)    $(3,345,152)    $(222,311)
                                  ===========     ===========     ===========     =========
</TABLE>

TEMPERATURE RECORDER OPERATIONS

     Sales decreased $63,207, or 1% in fiscal 2001 as compared to fiscal 2000,
due to a decrease in the number of units sold, lower unit selling prices and an
increase in the amount of returned units. Cost of sales for fiscal 2001
decreased $213,864, or 4% as compared to fiscal 2000 due primarily to decreased
purchases of recorder units and data loggers, partially offset by increased
labor costs, retriever fees, shipping costs and supplies used in the
manufacturing process.

     General and administrative expenses for fiscal 2001 increased $942,719, or
26% as compared to fiscal 2000. The increase is due to salaries, outside
services, insurance, payroll taxes, legal fees and rent. Also included in fiscal
2001 was approximately $288,000 of non-recurring charges and write-offs related
to a technology investment, the closing of the Phoenix office, an increase in
the allowance for bad debts and to legal fees discussed in more detail later.
Offsets to the increase include decreases in travel expenses, professional
services and office supplies. Fiscal 2000 includes a prior period adjustment of
$600,000 related to compensation expense associated with stock options, as
discussed more fully in Note 13 to the consolidated financial statements.

     Selling expenses for fiscal 2001 increased $162,805, or 10%, as compared to
fiscal 2000. The increase is due to increases in sales salaries related to the
EDS(TM) product (which is subject to the EDS(TM) settlement, as discussed on
page 6 of this annual report), commissions and travel expenses, partially offset
by decreases in trade show expenses and professional services.

                                       11
<PAGE>
     Research and development expenses are related to costs incurred for both
the EDS(TM) and Vitsab(R) products. Research and development expenses decreased
$63,969, or 16%, in fiscal 2001 as compared to fiscal 2000, due to the Company
reaching the final development stages of the Vitsab(R) product and the halt in
the development of the EDS(TM) product.

     Depreciation and depletion expense in fiscal 2001 increased $80,312, or
19%, as compared to fiscal 2000 primarily due to asset additions. Fiscal 2000
reflects the restatement of $349,713 recorded as a prior period adjustment, as
discussed more fully in Note 13 to the consolidated financial statements. All
depletion expenses associated with the oilfield operations were written off as a
loss on impairment, as discussed in Note 5 to the consolidated financial
statements.

     Amortization of goodwill increased $21,751, or 11% in fiscal 2001 as
compared to fiscal 2000. This increase is related to the increase in the amount
of goodwill resulting from the acquisition of Vitsab Sweden, AB.

     Included in costs and expenses are the costs associated with the
development of the EDS(TM) and Vitsab(R) products. During fiscal 2001, the
Company incurred $3,044,583 of costs related to the development of these new
products. Without these development costs, net loss in the Temperature Recorder
Operations for fiscal 2001 would have been $(384,274).

     Other expenses increased $171,546, or 395%, in fiscal 2001 as compared to
fiscal 2000 primarily due to a valuation adjustment related to the note due from
officer.

     Interest expense increased $326,179, or 192%, in fiscal 2001 as compared to
fiscal 2000. The primary reason for this increase is the interest cost related
to the note payable to Technology Investors, LLC dated March 10, 2000 in the
amount of $2,500,000 and interest on the revolving line of credit with, and
interest accrued on progress payments made by, Centura Bank.

     The decrease in accounts receivable is due to the lower sales during the
fiscal year and enhanced collection efforts on past due receivables.

     The increase in inventory is related to the continued production of
recorder units in order to increase on-hand inventory and to purchases of raw
material related to the production of the Vitsab(R) product.

     As discussed more fully in Note 7 to the consolidated financial statements,
the increase in deposits is related to the progress payments made on the
purchase of equipment related to the manufacturing of the Vitsab(R) product.

     The decrease in property and equipment, net of depreciation, is due to the
recognition of a loss on impairment of the oilfield assets of $3,062,196 as
discussed in Note 5 to the consolidated financial statements and the
non-recurring accounting adjustments related to accumulated depreciation.

     The decreases in notes receivable - non-current portion and accounts
payable and accrued expenses are related to accounting adjustments to reclassify
these amounts to intercompany accounts, which are eliminated in consolidation.

     The decrease in the current portion of long-term debt is related to the
retirement of bank loans with the Company's previous lender.

OILFIELD OPERATIONS AND OTHER

     There were limited oil production operations conducted during fiscal 2001.
The Company maintained certain insurance and other compliance matters pertaining
to the oilfield operations during this fiscal year. The Company recognized
$3,062,196 of the oilfield operations net assets as a loss on impairment during
fiscal 2001.

                                       12
<PAGE>
     The other expenses relate to the Phoenix, Arizona office operations, that
functioned as a management office for certain of the overall affairs of the
Company, the center for administration of oilfield activities and transactions,
and as a location for aspects of software development. Effective August 31,
2000, the Company ceased all software development in this office. The Company
wrote off this investment in software development of approximately $155,000 in
fiscal 2001. Effective October 31, 2000, the Company closed the Phoenix office
and transferred the activities of this office to the Corporate Office in
Belmont, North Carolina.

LIQUIDITY AND CAPITAL RESOURCES

     The Company derives cash from operations, equity sales and borrowing from
long- and short-term lending sources to meet its cash requirements. During
fiscal 2001, the cash flow from operations was not adequate to meet cash
requirements and commitments of the Company. The Company may enter into equity,
debt or other financing arrangements to meet its further financial needs for
expansion into food safety control products and to provide for general working
capital needs.

     The decrease in cash and cash equivalents is due primarily to the
development of, and expenses related to, the Company's EDS(TM) and Vitsab(R)
products and operations.

     On July 13, 2000 the Company entered into a five-year term loan ("Term
Loan") with its primary lender, Centura Bank ("Centura") in the amount of
$1,190,000. The Company used the proceeds of the Term Loan to retire short-term
debt of approximately $1,177,000 from its previous lender and the remainder was
used for working capital.

     Initial principal payments of $9,920, in addition to accrued interest, are
due monthly from August 2, 2000 to July 2, 2001. The rate of interest on the
Term Loan is Centura's prime rate plus .625% per annum. Thereafter, principal
payments of $22,312.50, in addition to accrued interest, are due monthly until
July 13, 2005.

     The Company has established a revolving line of credit with Centura for
working capital in the amount of up to $1,000,000 ("Revolving Loan") subject to
a maximum percentage of eligible trade accounts receivable and inventories. The
rate of interest on the Revolving Loan is Centura's prime rate plus .25% per
annum and is due monthly beginning in August 2000. The principal of the
Revolving Loan is due on September 2, 2001. The Company had borrowed $800,000
related to this line of credit at April 30, 2001.

     The Company has agreed to certain covenants with respect to both the Term
Loan and the Revolving Loan. The Company is in violation of certain covenants
related to Cash Flow Coverage Ratio and Tangible Net Worth. In a letter dated
July 24, 2001, Centura has waived the violation of these covenants as of April
30, 2001. As a result, this amount has been classified as current portion of
long-term debt.

     Centura has also agreed to finance the lease of two major pieces of
production equipment related to the manufacturing of the Vitsab(R) product. The
cost of the equipment related to the first lease is approximately $1,000,000,
with monthly lease payments of $17,040, including interest at approximately
9.35% for a period of 84 months. The cost of the equipment related to the second
lease is approximately $80,000, with monthly lease payments of $1,685, including
interest at approximately 10.4% for a period of 60 months. Both leases commence
upon the delivery of the equipment. Effective March 13, 2001, the Company and
Centura agreed to combine both leases into one lease agreement. At the end of
fiscal 2001, the Company had accrued and paid approximately $24,000 of interest
related to the progress payments made by Centura on behalf of the Company.

                                       13
<PAGE>
     The Company has advanced approximately $784,400 in progress payments on the
cost of both pieces of equipment, of which $406,500 has been advanced directly
by Centura. Pursuant to the lease agreement relating to the equipment, the
Company will receive the amount of its progress payments upon delivery and
acceptance of the equipment and the closing of the lease. If needed, Centura has
agreed to loan the Company the total amount of progress payments made by the
Company for a minimum of 90 days at an interest rate of prime plus 1% per annum.

     In April 2001 the Company executed an agreement with it Copenhagen
distributor ("Purchaser") for an option to purchase all of the shares and assets
of the Company's wholly owned subsidiary, Vitsab Sweden, AB. The option
agreement gives the Purchaser until November 30, 2001 to exercise the option. In
return for the option, the Purchaser will pay the Company $20,000 a month
beginning March 2001 and ending November 2001. During the option period, the
Company cannot sell, transfer, pledge, mortgage or otherwise dispose of nor
issue new shares in Vitsab Sweden, AB without the prior written approval by the
Purchaser. The stated purchase price in the agreement for all of the shares in,
and assets of, Vitsab Sweden, AB is $1.00. In addition, the Purchaser must make
monthly payments of $6,000 to the Company beginning the month after the option
is exercised and ending with the final payment in June 2004. If the Purchase
option is executed, the Purchaser will have the exclusive right for ten years to
manufacture, sell and distribute the Vitsab(R) product in certain countries
designated in the agreement. The Company will be paid a minimum annual royalty
based on the volume of Vitsab(R) products sold. If the Purchaser does not
execute the purchase option by the end of the option period, the Company will
retain ownership of all shares and assets of Vitsab Sweden, AB.

MANAGEMENT'S PLANS AND ACTIONS

     The Company incurred operating losses of $(6,149,417) and $(1,955,191) in
fiscal 2001 and 2000, respectively. During fiscal 2001, the Company incurred
several nonrecurring expense items totaling approximately $4,700,000 related to
the restructuring of the Company and operational efficiencies. As previously
mentioned, the Company recognized $3,062,196 of the oilfield operations net
assets as a loss on impairment. The Company also incurred approximately $600,000
of nonrecurring costs during fiscal 2001 related to the oilfield subleases and
other items. Other items totaling approximately $925,000 related to the
disposition of a technology investment, obsolete inventory and other
adjustments. Also included in fiscal 2001 are costs and expenses of $3,044,583
related to the development of the EDS(TM)and Vitsab(R)products. The Company
halted the development of the EDS(TM)product during fiscal 2001 and the
Vitsab(R)product has now advanced from its research and development phase to the
production phase. During fiscal 2001, the Company began to streamline its
operations and began a corporate reorganization. Cox Technologies was
reincorporated into North Carolina and eliminated a cumbersome subsidiary
structure by merging the domestic subsidiaries into Cox Technologies. Cox
Recorders and Vitsab will be operated as divisions. The Company has hired a
group of talented executive officers with a variety of experience to update the
accounting and financial reporting system and to develop the sales efforts
related to new products, as well as the transfer of Vitsab(R)technology from
Malmo, Sweden. The Company also brought in outside members to enhance the
effectiveness of the Board of Directors, replaced the independent public
accountants, retained the services of legal counsel, changed transfer agents and
retained the services of an investor relations firm. The Company's Executive
Management Committee, consisting of the Chief Executive Officer and the two
Chief Operating Officers, has begun to focus on technical issues related to
Company products, sales efforts, cost cutting and production efficiencies. The
Company has already implemented cost cutting efforts in the administrative and
production areas, resulting in annualized savings of approximately $1,000,000.

     During fiscal 2002, the Company will continue to focus on making the Cox
Recorders operation more efficient by updating the production efficiencies and
continued cost cutting. A major emphasis will be placed on the sales effort and
structure related to the COX(1), Tracer(R), DataSource(TM), TempList(R) and
Vitsab(R) products, selling the oilfield subleases and making other changes that
will result in operational efficiencies. The Company has access to approximately
$500,000 through its line of credit and advances on leased equipment, an
additional $100,000 from two executives of the Company and an additional
$125,000 from an investment trust, which is managed by an executive of the
Company. The impact of these changes and access to additional funds, if
necessary, should result in an improvement to positive cash flow and a return to
profitability, though this cannot be assured.

                                       14
<PAGE>
FISCAL 2000

<TABLE>
<CAPTION>
Fiscal Years Ended April 30,         2000             1999            2000           1999
----------------------------      -----------      -----------      ---------      ---------
                                  Temperature
                                   Recorder       Temperature        Oilfield       Oilfield
                                  Operations        Recorder        Operations     Operations
                                 (as restated)     Operations       and Other      and Other
                                  -----------      -----------      ---------      ---------
<S>                               <C>              <C>              <C>            <C>
Sales                             $ 9,700,282      $ 8,953,116      $  10,694      $   1,428
                                  -----------      -----------      ---------      ---------
Cost of sales                       5,256,403        4,397,078         21,248         13,130
General and administrative          3,565,514        2,307,732        133,333        160,467
Selling                             1,649,247        1,388,232             --             --
Research and development              409,362          407,044             --             --
Depreciation and depletion            433,508           80,873             --             --
Amortization of goodwill              197,552           36,696             --             --
                                  -----------      -----------      ---------      ---------
Income (loss) from operations      (1,811,304)         335,461       (143,887)      (172,169)
Other income (expense)                 43,396            7,031        (78,424)       241,322
Interest expense                     (170,263)        (150,414)            --         (2,716)
Income taxes                           41,754           42,119             --         19,491
                                  -----------      -----------      ---------      ---------
Net income (loss)                 $(1,979,925)     $   149,959      $(222,311)     $  46,946
                                  ===========      ===========      =========      =========
</TABLE>

TEMPERATURE RECORDER OPERATIONS

     Sales increased $747,166, or 8% for fiscal 2000 as compared to fiscal 1999.
Cost of sales as a percent of sales for fiscal 2000 and 1999 were 54% and 49%,
respectively. This change was primarily due to increased material and labor
costs.

     General and administrative expenses increased $1,257,782, or 55 % for
fiscal 2000 as compared to fiscal 1999. Fiscal 2000 includes the prior period
adjustments of $600,000 related to compensation expense for stock options and
$349,713 related to depreciation. Expressed as a percent of sales, the general
and administrative expenses for fiscal 2000 and 1999 were 37% and 26%,
respectively.

     Selling expenses increased $261,015, or 19% in fiscal 2000 as compared to
fiscal 1999. As a percent of sales, these expenses for fiscal 2000 and 1999 were
17% and 16%, respectively.

OILFIELD OPERATIONS AND OTHER

     There were no oil production operations conducted directly by the Company
during fiscal 2000. However, financial results from the farm-out arrangement are
reflected in the figures presented. The Company maintained certain insurance and
other compliance matters pertaining to the oilfield operations during this
period, and these expenses are reflected in the schedule above.

     Subsequent to the end of fiscal 2000, by mutual agreement, the
aforementioned farm-out arrangement was terminated and replaced by a new
agreement.

     The other expenses relate to the Phoenix, Arizona office of the Company,
which has functioned as a management office for certain of the overall affairs
of the Company, the center for administration of oilfield activities and
transactions, and as a location for aspects of software development.

                                       15
<PAGE>
FISCAL 1999

<TABLE>
<CAPTION>
Fiscal Years Ended April 30,          1999             1998            1999            1998
----------------------------       -----------      -----------      ---------      -----------
                                   Temperature      Temperature      Oilfield        Oilfield
                                    Recorder         Recorder       Operations      Operations
                                    Operations      Operations       and Other       and Other
                                   -----------      -----------      ---------      -----------
<S>                                <C>              <C>              <C>            <C>
Sales                              $ 8,953,116      $ 8,135,197      $   1,428      $     3,559
                                   -----------      -----------      ---------      -----------
Cost of sales                        4,397,078        3,676,082         13,130           28,775
General and administrative           2,307,732        1,925,715        160,467          153,492
Selling                              1,388,232        1,223,991             --               --
Research and development               407,044               --             --               --
Depreciation & amortization            117,569           34,468             --              782
                                   -----------      -----------      ---------      -----------
Income (loss) from operations          335,461        1,274,941       (172,169)        (179,490)
Other income (expense)                   7,031         (127,203)       241,322        2,221,008
Interest expense                      (150,414)         (34,938)        (2,716)         (37,250)
Income taxes                            42,119           50,500         19,491               --
                                   -----------      -----------      ---------      -----------
Net income (loss)                  $   149,959      $ 1,062,300      $  46,946      $ 2,004,268
                                   ===========      ===========      =========      ===========
</TABLE>

TEMPERATURE RECORDER OPERATIONS

     Sales increased $817,919, or 10% for fiscal 1999 as compared to fiscal
1998.

     Cost of sales increased $720,996, or 20% in fiscal 1999 as compared to
fiscal 1998. As a percent of sales, these costs for fiscal 1999 and 1998 were
49% and 45%, respectively.

     General and administrative expenses as a percent of sales increased to 26%
in fiscal 1999 as compared to 24% in fiscal 1998.

     Selling expenses for fiscal 1999 increased by a total of $164,241, or 13%
over fiscal 1998. Expressed as a percent of sales, this expense remained
constant at approximately 15% for both fiscal years.

     The increase in depreciation and amortization resulted from equipment
purchases and amortization of goodwill.

     Interest expense declined due to reduction of debt attributable to this
segment of operations.

                                       16
<PAGE>
OILFIELD OPERATIONS

     There were no crude oil sales in fiscal 1999. Income of $1,428 was derived
from other operating sources.

     Cost of sales, which represent expenditures in maintaining the field
declined $15,645 in fiscal 1999 as compared to fiscal 1998.

     The increase of $6,975 in general and administrative expense over fiscal
1998 was primarily due to professional fees.

     Interest decreased due to the reduction in interest bearing indebtedness
attributable to this business segment.

FORWARD-LOOKING STATEMENTS

     Statements contained in this document, which are not historical in nature,
are forward-looking within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements give our current expectations of
forecasts of future events. You can identify these statements by the fact that
they do not related strictly to historical or current facts. They use words such
as "estimate," "intend," "plan," and other words and terms of similar meaning in
connection with any discussion of future operating and financial performance.
Forward-looking statements are subject to risks and uncertainties that may cause
future results to differ materially from those set forth in such forward-looking
statements. Cox Technologies undertakes no obligation to update forward-looking
statements to reflect events or circumstances after the date hereof. Such risks
and uncertainties with respect to Cox Technologies include, but are not limited
to, its ability to successfully implement internal performance goals,
performance issues with suppliers, regulatory issues, competition, the effect of
weather on customers, exposure to environmental issues and liabilities,
variations in material costs and general and specific economic conditions. From
time to time, Cox Technologies may include forward-looking statements in oral
statements or other written documents.

                                       17
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
Cox Technologies, Inc.
Belmont, North Carolina

We have audited the accompanying consolidated balance sheet of Cox Technologies,
Inc. and subsidiaries as of April 30, 2001 and the related consolidated
statements of income, changes in stockholders' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cox Technologies,
Inc. and subsidiaries as of April 30, 2001 and the results of their operations
and cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.



/s/ Cherry, Bekaert & Holland, L.L.P.

Cherry, Bekaert & Holland, L.L.P.
Gastonia, North Carolina
July 24, 2001

                                       18
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

Board of Directors
Cox Technologies, Inc.
Belmont, North Carolina

We have audited the accompanying consolidated balance sheet of Cox Technologies,
Inc., as of April 30, 2000, and the related consolidated statements of
operations, stockholders' equity, and of cash flows for the years ended April
30, 2000 and 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 audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cox Technologies,
Inc., at April 30, 2000 and 1999, in conformity with generally accepted
accounting principles.



/s/ Bedinger & Company

Bedinger & Company
Certified Public Accountants
Walnut Creek, California

June 14, 2000
(Except Note O, which is July 13, 2000,
Note E, which is July 19, 2000, and
Note 13, which is July 5, 2001)

                                       19
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                April 30, 2001    April 30, 2000
                                                                --------------    --------------
                                                                                  (as restated)
<S>                                                              <C>               <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                      $     43,620      $  2,225,192
  Accounts receivable, less allowance for doubtful accounts
    of $61,810 at April 30, 2001 and $28,524 at April 30, 2000      1,141,308         1,624,733
  Other receivables                                                        --             2,868
  Inventory                                                         1,929,166         1,625,615
  Notes receivable - current portion                                   19,230            24,948
  Deposits                                                            813,305           124,129
  Prepaid expenses                                                     30,493             3,113
                                                                 ------------      ------------
      TOTAL CURRENT ASSETS                                          3,977,122         5,630,598

  Property and equipment, net                                       1,162,464         1,537,257
  Property held for sale, net                                         300,000         3,519,790
  Goodwill                                                          2,976,622         3,158,706
  Due from officer, net                                                53,566           300,000
  Notes receivable - non-current portion                                   --            19,970
  Patents                                                             184,415           203,208
                                                                 ------------      ------------
      TOTAL ASSETS                                               $  8,654,189      $ 14,369,529
                                                                 ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                          $    602,778      $    932,451
  Short-term debt                                                   1,211,452                --
  Current portion of long-term debt                                 1,221,560         1,486,914
                                                                 ------------      ------------
      TOTAL CURRENT LIABILITIES                                     3,035,790         2,419,365

  Long-term debt                                                    3,090,044         2,908,359
                                                                 ------------      ------------
     TOTAL LIABILITIES                                              6,125,834         5,327,724
                                                                 ------------      ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common stock, no par value; authorized 100,000,000 shares;
    issued and outstanding; 24,904,823 shares at April 30,
    2001 and 24,414,725 shares at April 30, 2000                   21,267,448        20,868,467
  Common stock subscribed                                                  --            58,100
  Paid in capital                                                   1,044,473         1,020,982
  Accumulated other comprehensive income (loss)                      (108,581)               --
  Accumulated deficit, as restated                                (19,643,854)      (12,869,845)

  Less - Notes receivable for common stock                             31,131            35,899
                                                                 ------------      ------------
      TOTAL STOCKHOLDERS' EQUITY                                    2,528,355         9,041,805
                                                                 ------------      ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $  8,654,189      $ 14,369,529
                                                                 ============      ============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       20
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                  Fiscal Years Ended April 30,
                                                        ----------------------------------------------
                                                            2001            2000             1999
                                                        ------------     ------------     ------------
                                                                        (as restated)
<S>                                                     <C>              <C>              <C>
REVENUE:
   Sales                                                $  9,709,561     $  9,710,976     $  8,954,544
                                                        ------------     ------------     ------------
COSTS AND EXPENSES:
   Cost of sales                                           5,351,019        5,277,651        4,410,208
   General and administrative                              4,555,195        3,698,847        2,468,199
   Selling                                                 1,812,052        1,649,247        1,388,232
   Research and development                                  345,393          409,362          407,044
   Depreciation and depletion                                513,820          433,508           80,873
   Loss on impairment                                      3,062,196               --               --
   Amortization of goodwill                                  219,303          197,552           36,696
                                                        ------------     ------------     ------------
     TOTAL COSTS AND EXPENSES                             15,858,978       11,666,167        8,791,252
                                                        ------------     ------------     ------------

INCOME (LOSS) FROM OPERATIONS                             (6,149,417)      (1,955,191)         163,292
                                                        ------------     ------------     ------------
OTHER INCOME (EXPENSE):
   Other income (expense)                                   (128,150)         (35,028)         248,353
   Interest expense                                         (496,442)        (170,263)        (153,130)
                                                        ------------     ------------     ------------
     TOTAL OTHER INCOME (EXPENSE)                           (624,592)        (205,291)          95,223
                                                        ------------     ------------     ------------

INCOME (LOSS) BEFORE INCOME TAXES                         (6,774,009)      (2,160,482)         258,515

Provision for income taxes                                        --           41,754           61,610
                                                        ------------     ------------     ------------

NET INCOME (LOSS)                                       $ (6,774,009)    $ (2,202,236)    $    196,905
                                                        ============     ============     ============
BASIC AND DILUTED:

NET INCOME (LOSS) PER SHARE                             $       (.27)    $       (.09)    $        .01

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING      24,661,104       24,222,547       21,368,188
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       21
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                 Accumulated                                             Subscribed
                                                    Other                                                  Stock
                                                Comprehensive    Retained        Common       Paid in     Less Note      Treasury
                                      Total     Income (Loss)    Earnings         Stock       Capital     Receivable       Stock
                                  ------------    ---------    ------------    -----------   ----------   -----------    --------
<S>                               <C>             <C>          <C>             <C>           <C>          <C>            <C>
Balance, April 30, 1998           $  8,299,916    $      --    $(10,864,514)   $20,041,562   $  220,872   $(1,052,084)   $(45,920)
Net income                             196,905           --         196,905             --           --            --          --
Common stock issued                  1,529,117           --              --        264,536      200,110     1,064,471          --
                                  ------------    ---------    ------------    -----------   ----------   -----------    --------
Balance April 30, 1999              10,025,938           --     (10,667,609)    20,306,098      420,982        12,387     (45,920)

Net income (loss), as restated                                 (2,202,236) -   (2,202,236) -         --            --          --
Sale of treasury stock                  45,920           --              --             --           --            --      45,920
Common stock issued                    562,369           --              --        562,369           --            --          --
Compensation related to grant
  of stock options, as restated        600,000           --              --             --      600,000            --          --
Subscribed stock issued                  9,814           --              --             --           --         9,814          --
                                  ------------    ---------    ------------    -----------   ----------   -----------    --------
Balance, April 30, 2000
  as restated                        9,041,805           --     (12,869,845)    20,868,467    1,020,982        22,201          --

Comprehensive income (loss) -
  Net income (loss)                 (6,774,009)          --      (6,774,009)            --           --            --          --
  Foreign currency
    translation adjustment            (108,581)    (108,581)             --             --           --            --          --
                                  ------------    ---------    ------------    -----------   ----------   -----------    --------
Total comprehensive income
  (loss)                            (6,882,590)          --              --             --           --            --          --
Change is subscribed stock, net        (53,332)          --              --             --           --       (53,332)         --
Common stock issued                    422,472           --              --        398,981       23,491            --          --
                                  ------------    ---------    ------------    -----------   ----------   -----------    --------
Balance, April 30, 2001           $  2,528,355    $(108,581)   $(19,643,854)   $21,267,448   $1,044,473   $   (31,131)   $     --
                                  ============    =========    ============    ===========   ==========   ===========    ========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       22
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                            Fiscal Years Ended April 30,
                                                    -------------------------------------------
                                                       2001            2000            1999
                                                    -----------     -----------     -----------
                                                                   (as restated)
<S>                                                 <C>             <C>             <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net income (loss)                                 $(6,774,009)    $(2,202,236)    $   196,905
  Adjustments to reconcile net income (loss)
    to net cash used by operating activities:
      Depreciation and depletion                        513,820         433,508          80,873
      Amortization of goodwill                          219,303         197,552          36,696
      Loss on impairment                              3,062,196              --              --
      Loss on disposal of property and equipment         22,628              --              --
      Foreign currency translation adjustment          (108,581)             --              --
      Allowance for doubtful accounts                    33,286            (140)           (863)
      Minority interest                                      --            (669)             --
      Other                                              21,783              --              --
      Allowance for valuation adjustment                211,787              --              --
                                                    -----------     -----------     -----------
                                                     (2,797,787)     (1,571,985)        313,611
  Changes in assets and liabilities:
     (Increase) decrease in current assets:
        Accounts receivable                             483,425         (28,382)        139,481
        Other receivables                                 2,868              --              --
        Inventory                                      (303,551)        (82,952)       (499,132)
        Prepaid expenses                                (27,380)         62,747         286,283
        Deposits                                       (689,176)       (100,437)        (18,402)
        Notes receivable and investments                  5,718           2,414          (7,001)
     Increase (decrease) in current liabilities:
        Accounts payable and accrued expenses          (329,673)        349,909         225,731
        Income taxes payable                                 --         (34,720)        (17,550)
                                                    -----------     -----------     -----------
CASH PROVIDED (USED) IN OPERATING ACTIVITIES         (3,655,556)     (1,403,406)        423,021
                                                    -----------     -----------     -----------
CASH FLOW FROM INVESTING ACTIVITIES:
        Purchase of property and equipment              (81,039)       (380,793)     (1,456,392)
        Acquisition of business                              --        (469,475)     (2,875,000)
        Patents                                              --        (203,208)             --
        Other                                                --          51,211         168,789
                                                    -----------     -----------     -----------
CASH USED IN INVESTING ACTIVITIES                       (81,039)     (1,002,265)     (4,162,603)
                                                    -----------     -----------     -----------
CASH FLOW FROM FINANCING ACTIVITIES:
       Issuance of common stock, net                    422,472       1,162,369         532,886
       Sale of treasury stock                                --          45,920              --
       Repayment on long-term debt                   (1,273,669)     (1,325,563)       (756,350)
       Subscriptions receivable                           4,768           9,814         362,042
       Amounts borrowed under short-term debt         1,211,452              --              --
       Amounts borrowed under long-term debt          1,190,000       3,487,513       2,275,869
                                                    -----------     -----------     -----------
CASH PROVIDED BY FINANCING ACTIVITIES                 1,555,023       3,380,053       2,414,447
                                                    -----------     -----------     -----------
NET INCREASE (DECREASE) IN CASH                      (2,181,572)        974,382      (1,325,135)
CASH AND CASH EQUIVALENTS, beginning of period        2,225,192       1,250,810       2,575,945
                                                    -----------     -----------     -----------
CASH AND CASH EQUIVALENTS, end of period            $    43,620     $ 2,225,192     $ 1,250,810
                                                    ===========     ===========     ===========
Supplemental Cash Flow Information
Interest paid                                       $   246,442     $   170,263     $   153,130
Income taxes paid                                   $     1,600     $    17,356     $    19,039
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       23
<PAGE>
                    COX TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED APRIL 30, 2001, 2000, AND 1999

1. SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

     The Company is engaged in the business of producing and distributing
transit temperature recording instruments, including electronic "loggers,"
graphic temperature recorders and visual indicator tags, both in the United
States and internationally. Transit temperature recording instruments work by
creating a strip chart record of temperature changes over time, or record
temperatures electronically according to a present interval ("logging"). The
Company has been involved in the sale and manufacture of both types of transit
monitoring products, and has established an international market presence and
reputation for reliable temperature recording products.

     In April 2001 the Company executed an agreement with its Copenhagen
distributor ("Purchaser") for an option to purchase all of the shares and assets
of the Company's wholly owned subsidiary, Vitsab Sweden, AB. The option
agreement gives the Purchaser until November 30, 2001 to exercise the option. In
return for the option, the Purchaser will pay the Company $20,000 a month
beginning March 2001 and ending November 2001. During the option period, the
Company cannot sell, transfer, pledge, mortgage or otherwise dispose of nor
issue new shares in Vitsab Sweden, AB without the prior written approval by the
Purchaser. The stated purchase price in the agreement for all of the shares in,
and assets of, Vitsab Sweden, AB is $1.00. In addition, the Purchaser must make
monthly payments of $6,000 to the Company beginning the month after the option
is exercised and ending with the final payment in June 2004. If the purchase
option is executed, the Purchaser will have the exclusive right for ten years to
manufacture, sell and distribute the Vitsab(R) product in certain countries
designated in the agreement. The Company will be paid a minimum annual royalty
based on the volume of Vitsab(R) products sold. If the Purchaser does not
execute the purchase option by the end of the option period, the Company will
retain ownership of all shares and assets of Vitsab Sweden, AB.

PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts of
Cox Technologies, Inc. (the Company) and its wholly owned subsidiary companies,
Twin-Chart, Inc., Transit Services, Inc., Vitsab Sweden, AB, Vitsab, Inc.,
Vitsab USA, Inc., Fresh Tag Research & Manufacturing, Inc., Qualtag Engineering,
Inc. and Cox Recorders Australia, Ltd., Pty., a 95% owned Australian
distribution company. In July 2001 all domestic subsidiaries were merged into
the parent company, Cox Technologies, Inc. All material intercompany
transactions and balances among the Company and its subsidiary companies have
been eliminated in the accompanying consolidated financial statements.

DEPRECIATION, DEPLETION AND AMORTIZATION

     Depreciation and depletion expense for oilfield operations was not recorded
for fiscal 2000 and fiscal 1999 as the oilfield assets were idle. Depletion
expense for fiscal 2001 was based on production. Depreciation of all other
property and equipment is provided on a combination of straight-line and
accelerated cost recovery methods over the respective estimated lives over a
range of five to twenty years.

GOODWILL

     Goodwill represents the excess of the cost of companies acquired over the
fair value of their net assets at dates of acquisition and is being amortized on
the straight-line method over a range of six to seventeen years. Amortization
expense charged to operations totaled $219,303, $197,552 and $36,696 for fiscal
2001, 2000 and 1999, respectively.

CASH AND CASH EQUIVALENTS

     For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and investments with a maturity of three months or less.

                                       24
<PAGE>
PATENTS

     The Company owns a number of patents directly related to and important to
the Company's business. The costs of obtaining patents are capitalized and
amortized over the life of the patent.

INVENTORY

     Inventories are stated at the lower of cost determined by the FIFO
(first-in, first-out) method or market. Inventory consists primarily of raw
material, work-in-process and finished goods related to the transit temperature
recording segment.

INCOME TAXES

     The Company accounts for income taxes pursuant to the Statement of
Financial Accounting Standards (SFAS) No. 109, which requires a liability method
of accounting for income taxes. Under this method, the deferred tax liability
represents the tax effect of temporary differences between the financial
statement and tax bases of assets and liabilities and is measured using current
tax rates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Financial instruments include cash and cash equivalents, accounts
receivable, notes receivable, accounts payable, accrued expenses, short-term
debt and long-term debt. The amounts reported for financial instruments other
than long-term debt are considered to be reasonable approximations of their fair
values due to their short-term nature. Based on borrowing rates currently
available to the Company for bank loans with similar terms and maturities, the
fair value of the Company's long-term debt approximates the carrying value.

COMPREHENSIVE INCOME (LOSS)

     The Company recorded a foreign currency translation adjustment in fiscal
2001 of $(108,581). As a result, total comprehensive loss was $(6,882,590) as
compared to a net loss of $(6,774,009) for fiscal 2001. There were no
significant items of comprehensive income (loss) for fiscal 2000 and 1999.

LONG-LIVED ASSETS

     The Company has implemented the requirements of SFAS No. 121 with regards
to the evaluation of the recoverability of the Company's oil and gas properties.

STOCK-BASED COMPENSATION

     The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB No. 25), and related
interpretations in accounting for its employee stock options. The Company has
adopted the disclosure-only provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation." This statement defines a fair value method of
accounting for stock options or similar equity instruments. SFAS No. 123 permits
companies to continue to account for stock-based compensation awards under APB
No. 25, but requires disclosure in a note to the financial statements of the pro
forma net income and earnings per share as if the Company had adopted the new
method of accounting.

RESEARCH AND DEVELOPMENT COSTS

     The costs of research and development activities are charged to operations
as incurred.

BASIC AND DILUTED EARNINGS PER SHARE

     Earnings per share have been calculated in conformity with SFAS No. 128,
"Earnings Per Share." The Company has a complex capital structure with
significant potential common shares. However, basic earnings per common share is
based on the weighted average number of common shares outstanding during each
year. Potential common shares from the Senior Subordinated Convertible
Promissory Note with Technology Investors, LLC and stock option grants are
anti-dilutive for fiscal 2001 and 2000 and have been excluded for the earnings
per share calculations.

                                       25
<PAGE>
RECLASSIFICATIONS

     Certain amounts previously reported on the consolidated financial
statements have been reclassified to conform with the current period's
presentation.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

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

2. INVENTORIES

     Inventory at April 30, 2001 and 2000 consists of the following:

                                               2001               2000
                                            ----------         ----------
     Raw materials                          $  377,470         $  654,238
     Work-in-process                           528,687            290,103
     Finished goods                          1,023,009            681,274
                                            ----------         ----------
          Total                             $1,929,166         $1,625,615
                                            ==========         ==========

3. INVESTMENT IN SECURITIES

     In March 1992, as part of a February 1992 agreement to acquire securities
of Pan American Energy, Inc., a public corporation, the Company traded certain
California real estate lots in exchange for 4,000,000 Series "A" common stock
warrants and the right to purchase 2,000,000 additional such warrants at ten
cents $(.10) per warrant. The Company did not recognize a gain on the exchange
and has recorded the cost of the warrants at the $30,000 recorded cost of the
lots. The loss on these securities of $30,000 was recognized during fiscal 2000.

     In February 1992, the Company entered into an agreement with O.T.S.
Holdings, Inc. (O.T.S.) a public corporation, to sell certain mining equipment.
The Company issued 50,000 shares of common stock in exchange for $10,000 cash
and 190,000 shares of 10% Cumulative Convertible Income Preferred Stock of
O.T.S. The transaction was valued at $200,000, comprised of $50,000 for the
Company's common stock at $1.00 per share and $150,000 for the mining equipment.
Because of certain litigation, the value of the O.T.S. shares was written down
to $9,500 during fiscal 1998. A valuation allowance was established reducing the
carrying amount to $.05 per share because the core business of O.T.S. was still
considered sound. However, in fiscal 1999, discussions with market makers
indicated that the value of O.T.S. had further declined, and accordingly, the
unrealized loss was written off. The loss on these available for sale securities
of $9,500 was recognized during fiscal 2000.

4. NOTES RECEIVABLE

     Notes receivable at April 30, 2001 and 2000 consists of the following:

                                                              2001         2000
                                                            -------      -------
Unsecured note receivable, due October 6, 2000
  plus accrued interest at 13%                              $    --      $ 6,395
Other                                                        19,230       38,523
                                                            -------      -------
                                                             19,230       44,918
Less: Current portion                                        19,230       24,948
                                                            -------      -------
     Total                                                  $    --      $19,970
                                                            =======      =======

                                       26
<PAGE>
5. PROPERTY AND EQUIPMENT

     The following is a summary of property and equipment at cost, by major
classification, less accumulated depreciation at April 30, 2001 and 2000:

                                                           2001          2000
                                                        ----------    ----------
Manufacturing Property and Equipment
Tooling                                                 $  474,639    $  473,139
Machinery and equipment                                  1,641,645     1,680,498
Office furniture and equipment                             162,366        84,510
Leasehold improvements                                     266,253       248,345
                                                        ----------    ----------
                                                         2,544,903     2,486,492
Less: Accumulated depreciation                           1,382,439       949,235
                                                        ----------    ----------
     Total manufacturing property and equipment          1,162,464     1,537,257
                                                        ----------    ----------
Properties Held for Sale:
Oil and Gas Properties and Equipment
Intangible drilling costs                                  883,023       883,023
Lease and well equipment                                 1,828,881     1,828,881
Leasehold improvements                                     715,891       722,630
Undeveloped leases                                          72,167        72,167
Repurchased participating units                          2,608,640     2,608,640
Other                                                       24,600       173,196
                                                        ----------    ----------
                                                         6,133,202     6,288,537
Less: Accumulated depreciation and depletion             2,771,006     2,768,747
         Allowance for loss on impairment                3,062,196            --
                                                        ----------    ----------
     Total oil and gas properties and equipment            300,000     3,519,790
                                                        ----------    ----------

          Total property and equipment                  $1,462,464    $5,057,047
                                                        ==========    ==========

     The Company holds oil subleases in California (the Chico-Martinez field),
but the field has not produced in any significant volume. The Company entered
into an agreement with an independent oilfield operator in April 1999. The
primary function of the operator has been to increase production by overhauling
the surface equipment, establishing steam and hot water injection operations and
improving field conditions at the property. In July 2000, the Company entered
into a new agreement with the operator that replaced the previous agreement.
Under the terms of the new agreement the Company intended to increase production
more rapidly. The new agreement would also allow the Company to buyout the
operator at any time. It was the Company's strategy that productive activity at
the field would help to increase the revenues while establishing a greater asset
value, thus making the Company's sublease holdings more attractive to a
potential buyer. In June 2000, the Company entered into an exclusive agreement
with a group in Dallas, Texas, to sell the subleases on behalf of the Company.
The group contacted and solicited potential buyers to make purchase offers to
the Company for the subleases. The Company terminated the agreement in April
2001 after receiving no purchase offers from potential buyers. As a result of
inability of the Company to attract a potential buyer, the high cost and
difficulty in producing crude oil of the type found in the field and losses
incurred in the oilfield operations, the Company evaluated the recoverability of
the carrying amount of the oilfield net assets. In analyzing expected future
cash flows from potential offers, the Company is of the opinion that $300,000 of
net assets should be recognized as property held for sale. As a result, the
Company recognized a loss on impairment of $3,062,196 in fiscal 2001.

                                       27
<PAGE>
6. LONG-TERM DEBT

     The following is a summary of long-term debt obligations and lease
contracts payable at April 30, 2001 and 2000:

                                                           2001          2000
                                                        ----------    ----------
Unsecured notes payable to individuals due in
monthly installments of $2,955, including
interest at 8%                                          $       --    $   19,485

10% Senior Subordinated Convertible Promissory
Note due March 2005 (principal amount of the note
and accrued interest are convertible into the
Company's no par common stock at a conversion price
of $1.25 per share)                                      2,750,000     2,500,000

Note payable to bank, secured under general security
agreement, due in monthly installments of interest
only at prime plus 1% until July 2000                           --       100,000

Note payable to bank, secured under general security
agreement, due in monthly installments of $18,352,
including interest at 11.5% through March 2002                  --       476,033

Unsecured note payable to bank, due July 2000
plus accrued interest at prime plus 1%                          --       500,000

Note payable to bank, secured under general security
agreement, due in monthly installments of $7,560,
including interest at 8.5% through January 2002                 --       144,521

Note payable to bank, secured by general business
assets, due in monthly installments of $9,920 plus
accrued interest at prime plus .625% per annum through
July, 2001 and monthly installments of $22,312.50 plus
accrued interest through July 2005                       1,090,800            --

Unsecured note payable to an individual, due in June
2000 including interest at 12%                                  --       100,000

Capital leases secured by equipment, expiring in
various years, with terms ranging from 36 months to
60 months, due in monthly installments ranging from
$496 to $5,467                                             470,804       555,234
                                                        ----------    ----------
                                                         4,311,604     4,395,273
   Less: Current maturities                              1,221,560     1,486,914
                                                        ----------    ----------
     Total long-term debt                               $3,090,044    $2,908,359
                                                        ==========    ==========

                                       28
<PAGE>
     On July 13, 2000 the Company entered into a five-year term loan ("Term
Loan") with its primary lender, Centura Bank ("Centura") in the amount of
$1,190,000. The Company used the proceeds of the Term Loan to retire short-term
debt of approximately $1,177,000 from its previous lender and the remainder was
used for working capital.

     Initial principal payments of $9,920, in addition to accrued interest, are
due monthly from August 2, 2000 to July 2, 2001. The rate of interest on the
Term Loan is Centura's prime rate plus .625% per annum. Thereafter, principal
payments of $22,312.50, in addition to accrued interest, are due monthly until
July 13, 2005.

     The Company has agreed to certain covenants with respect to the Term Loan.
The Company is in violation of certain covenants related to Cash Flow Coverage
Ratio and Tangible Net Worth. In a letter dated July 24, 2001, Centura has
waived the violation of these covenants as of April 30, 2001. As a result, this
amount has been classified as a current portion of long-term debt.

     Capital leases consist primarily of manufacturing property and equipment
with a capitalized cost of approximately $672,000 and accumulated depreciation
of approximately $269,000 as of April 30, 2001.

     Following are maturities of long-term debt for each of the next five fiscal
years ended April 30:

                   2002                        $1,221,560
                   2003                           143,130
                   2004                           158,778
                   2005                         2,788,136
                   2006                                --
                                               ----------
                     Total                     $4,311,604
                                               ==========

7. SHORT-TERM DEBT

     The Company has established a revolving line of credit with Centura for
working capital in the amount of up to $1,000,000 ("Revolving Loan") subject to
a maximum percentage of eligible trade accounts receivable and inventories. The
rate of interest on the Revolving Loan is Centura's prime rate plus .25% per
annum and is due monthly beginning in August 2000. The principal of the
Revolving Loan is due on September 2, 2001. The Company borrowed $800,000 of
this line of credit at April 30, 2001.

     Centura has also agreed to finance the lease of two major pieces of
production equipment related to the manufacturing of the Vitsab(R) product. The
cost of the equipment related to the first lease is approximately $1,000,000,
with monthly lease payments of $17,040, including interest at approximately
9.35% for a period of 84 months. The cost of the equipment related to the second
lease is approximately $80,000, with monthly lease payments of $1,685, including
interest at approximately 10.4% for a period of 60 months. Both leases were to
commence upon the delivery of the equipment. Effective March 13, 2001, the
Company and Centura agreed to combine both leases into one lease agreement. At
the end of fiscal 2001, the Company had accrued and paid approximately $24,000
of interest related to the progress payments made by Centura on behalf of the
Company.

                                       29
<PAGE>
     The Company has advanced approximately $784,400 in progress payments on the
cost of both pieces of equipment, of which $406,500 has been advanced directly
by Centura. Pursuant to the lease agreement relating to the equipment, the
Company will receive the amount of its progress payments upon delivery and
acceptance of the equipment and the closing of the lease.

     If needed, Centura has agreed to loan the Company the total amount of
progress payments made by the Company for a minimum of 90 days at an interest
rate of prime plus 1% per annum.

     The Company has agreed to certain covenants with respect to the Revolving
Loan. The Company is in violation of certain covenants related to Cash Flow
Coverage Ratio and Tangible Net Worth. In a letter dated July 24, 2001, Centura
has waived the violation of these covenants as of April 30, 2001.

8. STOCK OPTION PLANS

     In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Awards of Stock-Based Compensation to Employees." This
statement defines a fair value method of accounting for stock options or similar
equity instruments and was adopted by the Company effective May 1, 1996. SFAS
No. 123 permits companies to continue to account for stock-based compensation
awards under existing accounting rules, but requires disclosure in a note to the
financial statements of the pro forma net income and earnings per share as if
the Company had adopted the new method of accounting.

     The Company has two nonqualified stock option plans, the Stock Option
Agreements By and Between Cox Technologies, Inc. and Certain Executives
("Executive Plan") and the 2000 Stock Incentive Plan ("2000 Plan"). In
accordance with the Executive Plan, options to purchase an aggregate of up to
6,652,500 shares of the Company's common stock were granted to certain
executives of the Company. Options were granted at the fair market value of the
Company's common stock determined on the date of the grant. Certain of the
options were granted at an exercise price below fair market value, and a prior
period adjustment of $600,000 related to compensation expense was charged to
operations in fiscal 2000, as discussed in Note 13 to the consolidated financial
statements. As a result of the remaining options being granted at the fair
market value, no compensation expense is recorded. Options from the Executive
Plan are exercisable on various dates and expire on various dates. All options
under the Executive Plan have been granted. In accordance with the 2000 Plan, up
to 8,000,000 shares of the Company's common stock can be issued through the use
of stock-based incentives to employees, consultants and non-employee members of
the Board of Directors. The exercise price of options granted through the 2000
Plan cannot be less than 85% of the fair market value of the Company's common
stock on the date of the grant. All outstanding options have been granted at the
fair market value, therefore no compensation expense has been recorded. Options
from the 2000 Plan are exercisable on various dates from the date of the grant
and expire on various dates. Exceptions to the exercise date for both plans are
allowed upon the retirement, disability or death of a participant. An exception
is also allowed upon a change in control as defined in both plans.

     Options granted, exercised and canceled under both plans for the two years
ended April 30, 2001 were as follows:

                                         Options         Weighted-Average
                                       Outstanding        Exercise Price
                                       -----------        --------------
     April 30, 1999                            --                --
          Granted                         600,000             $1.25
          Exercised                            --                --
          Canceled                             --                --
                                        ---------
     April 30,2000                        600,000             $1.25
          Granted                       7,310,000             $ .58
          Exercised                            --                --
          Canceled                         (5,000)            $ .36
                                        ---------
     April 30, 2001                     7,905,000             $ .63
                                        =========

                                       30
<PAGE>
     The Company applies APB No. 25 in accounting for both Plans. Accordingly,
no compensation cost has been recognized for the 2000 Plan in fiscal 2001. For
fiscal 2000, $600,000 was recorded as a prior period adjustment. Had
compensation cost for both Plans been determined consistent with the fair value
method for compensation expense encouraged under SFAS No. 123, the Company's net
income and earnings per share (EPS) would have been the pro forma amounts shown
below for the fiscal years ended April 30. For purposes of pro forma
disclosures, the estimated fair value of options is recorded in its entirety in
the year granted.

                                                 2001             2000
                                              -----------      -----------
     Net income (loss)        As reported     $(6,774,009)     $(2,202,236)
     Net income (loss)        Pro forma       $(7,036,503)     $(2,603,635)
     Basic and diluted EPS    As reported     $      (.27)     $      (.09)
     Basic and diluted EPS    Pro forma       $      (.29)     $      (.11)

     For purposes of pro forma disclosure, the fair value of each option grant
was estimated on the date of grant using the Black-Scholes option pricing model
with the following assumptions used for nonqualified stock option grants in
fiscal 2001 and 2000, respectively:

                                                 2001               2000
                                           ----------------       --------
     Risk free interest rate(s)              4.8% to 6.0%           5.3%
     Volatility factor(s)                  98.26% to 242.8%        40.7%
     Expected life                           4 to 10 years        10 years

     The weighted average fair value of nonqualified stock options granted
during fiscal 2001 and 2000 was $.31 to $.84 and $1.67, respectively. Options
outstanding at April 30, 2001 have exercise prices ranging from $.31 to $1.25,
and a weighted average remaining contractual life of 9.5 years. The number of
shares and weighted average exercise price of those shares exercisable at the
end of each fiscal year were 2,697,501 shares at $.55 for 2001 and 600,000
shares at $1.25 for 2000.

     At April 30, 2001, there were 6,747,500 shares reserved for issuance under
the 2000 Plan.

9. RETIREMENT PLAN

     The Company maintains a 401(k) plan that covers substantially all
employees, including subsidiary companies. The Company matches 50% of employee
contributions up to 4% of gross earnings. The Company's matching amounted to
approximately $33,000 and $31,000, respectively, for fiscal 2001 and 2000.

10. INCOME TAXES

     The Company and its subsidiaries file consolidated federal income tax
returns. There is an aggregate federal net operating loss carryforward of
$11,175,436 available to reduce future federal taxable income of the parent
company. These net operating loss carryforwards will expire in various amounts
between fiscal 2001 and fiscal 2016. The Company also has available unused
investment tax credits of $154,000, which will expire in fiscal 2001.

     The provisions for income taxes consists of the following for the fiscal
years ended April 30,

                                   2001            2000             1999
                                 -------         --------         --------
     Current:
       Federal                   $    --         $     --         $ 46,500
       State                          --           14,754           25,000
                                 -------         --------         --------
                                      --           14,754           71,500
                                 -------         --------         --------
     Deferred:
       Federal                        --           27,000           (9,890)
       State                          --               --               --
                                 -------         --------         --------
                                      --           27,000           (9,890)
                                 -------         --------         --------
     Total                            --         $ 41,754         $ 61,610
                                 =======         ========         ========

                                       31
<PAGE>
     The reconciliation of income tax computed at federal and state statutory
rates to the income tax provision is as follows for the fiscal years ended April
30,

                                          2001            2000          1999
                                      -----------     -----------     ---------
Income (loss) before income taxes     $(6,774,009)    $(2,160,482)    $ 258,515
Statutory federal income tax rate:             34%             34%           34%
Expected federal income tax
  expense at statutory rate           $        --     $        --     $  88,000
Other                                          --          41,754        32,610
Utilization of net operating loss
   carryforward                                --              --       (59,000)
                                      -----------     -----------     ---------
Provision for income taxes            $        --     $    41,754     $  61,610
                                      ===========     ===========     =========

     The following is a summary of the significant components of the Company's
deferred tax assets for the fiscal years ended April 30,

                                           2001           2000           1999
                                        ----------     ----------     ----------
Deferred tax assets:
   Net operating loss carryforwards     $3,960,000     $2,890,000     $2,346,000
   Impairment on long-lived assets       1,285,000             --             --
   Other                                   149,000             --         11,000
                                        ----------     ----------     ----------
                                         5,394,000      2,890,000      2,357,000
   Less:  Valuation allowance            5,394,000      2,890,000      2,357,000
                                        ----------     ----------     ----------
Net deferred tax asset                  $       --     $       --     $       --
                                        ==========     ==========     ==========

     The valuation allowance primarily represents the tax benefits of certain
operating loss carryforwards and other deferred tax assets that may expire
without being utilized. During fiscal 2001, 2000 and 1999, the valuation
allowance increased (decreased) $2,504,000, $533,000 and $(59,000),
respectively.

     The unused net operating loss carryforwards, which may provide future tax
benefits, expire at the end of each fiscal year as follows:

              Fiscal Year                   Unused Net Operating
             of Expiration                Loss Carryforward Amount
             -------------                ------------------------
                 2001                           $   970,174
                 2002                             1,258,734
                 2003                             1,566,294
                 2004                               699,952
                 2005                               282,100
            Remaining years                       6,398,182
                                                -----------
                Total                           $11,175,436
                                                ===========

                                       32
<PAGE>
11. SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The following table presents certain financial information for each quarter
during the fiscal years ended April 30,

<TABLE>
<CAPTION>
                                                                   2001
                                      --------------------------------------------------------------
                                        Fourth            Third           Second            First
                                      -----------      -----------      -----------      -----------
<S>                                   <C>              <C>              <C>              <C>
Sales                                 $ 2,274,975      $ 2,302,426      $ 2,708,379      $ 2,423,781
Income (loss) from operations          (3,737,403)      (1,651,791)        (322,127)        (438,096)
Net income (loss)                      (4,080,927)      (1,716,913)        (426,819)        (549,350)
Basic and diluted net income (loss)
  per average common share                   (.16)            (.07)            (.02)            (.02)

                                                                   2000
                                      --------------------------------------------------------------
                                        Fourth            Third           Second            First
                                      -----------      -----------      -----------      -----------
Sales                                 $ 2,557,057      $ 2,481,773      $ 2,342,379      $ 2,329,767
Income (loss) from operations          (1,853,949)        (249,324)          82,172           65,910
Net income (loss)                      (2,005,418)        (287,039)          52,773           37,448
Basic and diluted net income (loss)
  per average common share                   (.08)            (.01)             .00              .00
</TABLE>

12. SEGMENT INFORMATION

     The Company has two current operating segments that involve the (1)
production and distribution of temperature recording and monitoring devices,
including graphic temperature recorders, electronic "loggers," and visual
indicator tags (referred to as "Temperature Recorder Operations" as a group) and
(2) oilfield operations and other, which include all economic activity related
to the oil production and the holding of the oil leases and the operation of its
Phoenix, Arizona office.

Fiscal Years Ended April 30,               2001           2000           1999
----------------------------            -----------    -----------    ----------
Revenues:
  Temperature Recorder Operations       $ 9,637,075    $ 9,700,282    $8,953,116
  Oilfield Operations and Other              72,486         10,694         1,428
                                        -----------    -----------    ----------
                                        $ 9,709,561    $ 9,710,976    $8,954,544
                                        ===========    ===========    ==========
Net income (loss):
  Temperature Recorder Operations       $(3,428,857)   $(1,979,925)   $  149,959
  Oilfield Operations and Other          (3,345,152)      (222,311)       46,946
                                        -----------    -----------    ----------
                                        $(6,774,009)   $(2,202,236)   $  196,905
                                        ===========    ===========    ==========
Identifiable assets:
  Temperature Recorder Operations       $ 4,377,067    $ 5,219,141    $3,440,853
  Oilfield Operations and Other (1)         300,000      3,519,790     4,596,239
                                        -----------    -----------    ----------
                                        $ 4,677,067    $ 8,738,931    $8,037,092
                                        ===========    ===========    ==========
Capital expenditures:
  Temperature Recorder Operations       $    84,388    $   371,554    $1,356,392
  Oilfield Operations and Other                  --          9,239       100,000
                                        -----------    -----------    ----------
                                        $    84,388    $   380,793    $1,456,392
                                        ===========    ===========    ==========
Depreciation, depletion and amortization:
  Temperature Recorder Operations       $   733,123    $   631,060    $  117,569
  Oilfield Operations and Other (1)              --             --            --
                                        -----------    -----------    ----------
                                        $   733,123    $   631,060    $  117,569
                                        ===========    ===========    ==========
Interest expense:
  Temperature Recorder Operations       $   496,442    $   170,263    $  150,414
  Oilfield Operations and Other                  --             --         2,716
                                        -----------    -----------    ----------
                                        $   496,442    $   170,263    $  153,130
                                        ===========    ===========    ==========

----------
(1)  The Company recognized $3,062,196 of the oilfield operations net assets as
     a loss on impairment in fiscal 2001.

                                       33
<PAGE>
     The only business segment with sales outside the United States is the
Temperature Recorder Operations segment. Information on the Temperature Recorder
Operations segment by domestic and international is presented in the following
table.

Fiscal Years Ended April 30,       Domestic      International     Segment Total
----------------------------     -----------     -------------     -------------
Revenues:
  2001                           $ 6,461,359      $ 3,175,716       $ 9,637,075
  2000                           $ 7,497,224      $ 2,203,058       $ 9,700,282
  1999                           $ 7,513,707      $ 1,439,409       $ 8,953,116

Net income (loss):
  2001                           $(2,298,835)     $(1,130,022)      $(3,428,857)
  2000                           $(1,530,259)     $  (449,666)      $(1,979,925)
  1999                           $   125,979      $    23,980       $   149,959

Identifiable assets:
  2001                           $ 4,377,067      $        --       $ 4,377,067
  2000                           $ 5,219,141      $        --       $ 5,219,141
  1999                           $ 4,825,654      $        --       $ 4,825,654

13. PRIOR PERIOD ADJUSTMENT

     The Company has restated its consolidated financial statements for fiscal
2000. This action was taken to recognize compensation expense related to the
issuance of stock options with an exercise price below fair market value in the
amount of $600,000. The Company also made an adjustment to increase depreciation
expense in the amount of $349,713 as a correction of an error. These adjustments
combined had an earnings per share effect of $(.04) in fiscal 2000.

14. LEASES

     The Company leases its corporate office and manufacturing facilities under
a non-cancelable operating lease. Rental expense for fiscal 2001, 2000 and 1999
were $144,826, $158,306 and $137,136, respectively. At April 30, 2001, future
minimum rental payments for non-cancelable operating leases are approximately
$100,000 for fiscal 2002 and 2003, and $8,000 for fiscal 2004.

15. BUSINESS COMBINATION

     In November 1997, the Company acquired a nominal interest in Vitsab, AG
(Vitsag), a corporation formed under the laws of the Country of Switzerland, for
$300,000. In June 1998, the Company acquired all of the outstanding shares of
Visual Indicator Tag Systems, AB (Vitsab), a corporation formed under the laws
of the Country of Sweden, and a wholly owned subsidiary of Vitsag. The
acquisition was accomplished by the issuance of 3,375,734 shares of the
Company's unregistered common stock, 950,000 shares of the common stock of
Vitsab, Inc., a wholly owned subsidiary of the Company, in the formation stage,
with 4,750,000 issued shares of common stock outstanding, and the assumption of
certain debt owed by Vitsab to an unrelated company. The transaction has been
accounted for as a purchase and the results of Vitsab's operations have been
included in the accompanying consolidated financial statements since the date of
the acquisition, which was June 30, 1998. The cost of the acquired enterprise
was approximately $2,600,000, including debt assumed of approximately
$1,750,000. At acquisition, the fair value of liabilities assumed exceeded the
fair value of assets acquired, and the excess plus the cost of acquisition were
recorded as goodwill. During fiscal 2000, the Company adjusted the initial
purchase price allocation which resulted in additional goodwill of approximately
$469,000. Goodwill is being amortized over its estimated useful life of 16
years.

                                       34
<PAGE>
16. LIQUIDITY AND MANAGEMENT'S PLANS

     The Company incurred operating losses of $(6,149,417) and $(1,955,191) in
fiscal 2001 and 2000, respectively. During fiscal 2001, the Company incurred
several nonrecurring expense items totaling approximately $4,700,000 related to
the restructuring of the Company and operational efficiencies. As previously
mentioned, the Company recognized $3,062,196 of the oilfield operations net
assets as a loss on impairment. The Company also incurred approximately $600,000
of nonrecurring costs during fiscal 2001 related to the oilfield subleases and
other items. Other items totaling approximately $925,000 related to the
disposition of a technology investment, obsolete inventory and other
adjustments. Also included in fiscal 2001 are costs and expenses of $3,044,583
related to the development of the EDS(TM) and Vitsab(R) products. The Company
halted the development of the EDS(TM) product during fiscal 2001 and the
Vitsab(R) product has now advanced from its research and development phase to
the production phase. During fiscal 2001, the Company began to streamline its
operations and began a corporate reorganization. Cox Technologies was
reincorporated into North Carolina and eliminated a cumbersome subsidiary
structure by merging the domestic subsidiaries into Cox Technologies. Cox
Recorders and Vitsab will be operated as divisions. The Company has hired a
group of talented executive officers with a variety of experience to update the
accounting and financial reporting system and to develop the sales efforts
related to new products, as well as the transfer of Vitsab(R) technology from
Malmo, Sweden. The Company also brought in outside members to enhance the
effectiveness of the Board of Directors, replaced the independent public
accountants, retained the services of legal counsel, changed transfer agents and
retained the services of an investor relations firm. The Company's Executive
Management Committee, consisting of the Chief Executive Officer and the two
Chief Operating Officers, has begun to focus on technical issues related to
Company products, sales efforts, cost cutting and production efficiencies. The
Company has already implemented cost cutting efforts in the administrative and
production areas, resulting in annualized savings of approximately $1,000,000.

     During fiscal 2002, the Company will continue to focus on making the Cox
Recorders operation more efficient by updating the production efficiencies and
continued cost cutting. A major emphasis will be placed on the sales effort and
structure related to the COX(1), Tracer(R), DataSource(TM), TempList(R) and
Vitsab(R) products, selling the oilfield subleases and making other changes that
will result in operational efficiencies. The Company has access to approximately
$500,000 through its line of credit and advances on leased equipment, an
additional $100,000 from two executives of the Company and an additional
$125,000 from an investment trust, which is managed by an executive of the
Company. The impact of these changes and access to additional funds, if
necessary, should result in an improvement to positive cash flow and a return to
profitability, though this cannot be assured.

                                       35
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
Cox Technologies, Inc.
Belmont, North Carolina

Under date of July 24, 2001, we reported on the consolidated balance sheet of
Cox Technologies, Inc. and subsidiaries as of April 30, 2001, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
year then ended, which are included in this annual report on Form 10-K. In
connection with our audit of the aforementioned consolidated financial
statements, we also audited the related accompanying consolidated financial
statement schedules. These financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statement schedules based on our audit.

In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.



/s/ Cherry, Bekaert & Holland, L.L.P.

Cherry, Bekaert & Holland, L.L.P.
Gastonia, North Carolina
July 24, 2001

                                       36
<PAGE>
                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES

                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                        Additions
                                                 -------------------------
                                                                Charged to       Other
                                  Balance at     Charged to       Other      Changes - Add     Balance
Fiscal                           Beginning of    Costs and      Accounts -     (Deduct) -     at End of
 Year         Description         Fiscal Year     Expenses      Describe(1)    Describe(2)    Fiscal Year
------        -----------         ----------     ----------     ----------     ----------     ----------
<S>       <C>                     <C>            <C>            <C>            <C>            <C>
 2001     Allowance for
            doubtful accounts     $   28,524     $   33,286     $       --     $       --     $   61,810
          Impairment loss                 --      3,062,196             --             --      3,062,196
          Deferred tax assets      2,890,000             --      2,504,000             --      5,394,000
                                  ----------     ----------     ----------     ----------     ----------
                                  $2,918,524     $3,095,482     $2,504,000     $       --     $8,518,006
                                  ==========     ==========     ==========     ==========     ==========
 2000     Allowance for
            doubtful accounts     $   28,664     $       --     $       --     $     (140)    $   28,524
          Deferred tax assets      2,357,000             --        533,000             --      2,890,000
                                  ----------     ----------     ----------     ----------     ----------
                                  $2,385,664     $       --     $  533,000     $     (140)    $2,918,524
                                  ==========     ==========     ==========     ==========     ==========
 1999     Allowance for
            doubtful accounts     $   28,664     $       --     $       --     $       --     $   28,664
          Deferred tax asset       2,416,000             --        (59,000)            --      2,357,000
                                  ----------     ----------     ----------     ----------     ----------
                                  $2,444,664     $       --     $  (59,000)    $       --     $2,385,664
                                  ==========     ==========     ==========     ==========     ==========
</TABLE>

----------
(1)  Deferred tax valuation allowance offsets gross deferred assets.
(2)  Write-off of accounts considered to be uncollectible.

                                       37
<PAGE>
SUPPLEMENTARY DATA

     The information for this item is contained in Note 11 entitled "SUMMARY OF
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) on page 33 of this annual report.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

     The information for this item is set forth in the sections entitled
"Election of Directors" and "The Board of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in Cox Technologies' proxy statement
dated July 30, 2001, relating to the August 31, 2001 annual meeting of
shareholders, which section is incorporated herein by reference.

EXECUTIVE OFFICERS

     The information for this item is set forth on page 7 of this annual report.

ITEM 11. EXECUTIVE COMPENSATION

     The information for this item is set forth in the sections entitled
"Executive Compensation," "Performance Graph" and "Report of Board of Directors
on Executive Compensation" in Cox Technologies' proxy statement dated July 30,
2001, relating to the August 31, 2001 annual meeting of shareholders, which
section is incorporated herein by reference (specifically excluding disclosures
in such sections relating to Items 402(k) and (1) of Regulation S-K).

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information for this item is set forth in the section entitled "Common
Stock Ownership by Certain Beneficial Owners and Management" in Cox
Technologies' proxy statement dated July 30, 2001, relating to the August 31,
2001 annual meeting of shareholders, which section is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information for this item is set forth in the sections entitled
"Election of Directors" and "Certain Relationships and Related Transactions" in
Cox Technologies' proxy statement dated July 30, 2001, relating to the August
31, 2001 annual meeting of shareholders, which sections are incorporated herein
by reference.

                                       38
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

                                                                            PAGE
                                                                            ----
(a)  1.   Financial statements -

          Report of Independent Public Accountants                         18-19

          Consolidated Balance Sheets at April 30, 2001 and 2000              20

          Consolidated Statements of Income for the Fiscal Years
            Ended April 30, 2001, 2000 and 1999                               21

          Consolidated Statements of Changes in Stockholders' Equity
            for the Fiscal Years Ended April 30, 2001, 2000 and 1999          22

          Consolidated Statements of Cash Flows for the Fiscal Years
            Ended April 30, 2001, 2000 and 1999                               23

          Notes to Consolidated Financial Statements for the Fiscal
            Years Ended April 30, 2001, 2000 and 1999                      24-35

     2.   Financial statement schedules -

          The following financial statement schedules are included herein:

          Supplemental Schedules:
          Report of Independent Public Accountants                            36
          Schedule II - Valuation and Qualifying Accounts for the
            Fiscal Years Ended April 30, 2001, 2000 and 1999                  37

     All other financial statement schedules are omitted as not applicable, not
required, or the required information is included in the consolidated financial
statements and notes thereto.

     3.   Exhibits -

          23.1 - Consent of Cherry, Bekaert & Holland, L.L.P.
          23.2 - Consent of Bedinger & Company

(b)  Reports on Form 8-K -

     There was one report on Form 8-K filed during the three months ended April
30, 2001.

                                       39
<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.


                                        COX TECHNOLOGIES, INC.
                                        (Registrant)

                                        /s/ James L. Cox
July 30, 2001                           ----------------------------------------
                                        James L. Cox
                                        Chairman, President and
                                        Chief Executive Officer


        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on July 30, 2001.

/s/ James L. Cox                        /s/ Jack G. Mason
-----------------------------------     ----------------------------------------
James L. Cox                            Jack G. Mason
Chairman, President and                 Chief Financial Officer
Chief Executive Officer                 and Secretary
(Principal executive officer)           (Principal financial and
                                        accounting officer)

        Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on July 30, 2001.

                                        /s/ James L. Cox
                                        ----------------------------------------
                                        James L. Cox
                                        Chairman, President and
                                        Chief Executive Officer

                                        /s/ Brian D. Fletcher
                                        ----------------------------------------
                                        Brian D. Fletcher
                                        Chief Operating Officer and Director

                                        /s/ Michael E. Fonzo
                                        ----------------------------------------
                                        Michael E. Fonzo
                                        Director

                                        /s/ George M. Pigott
                                        ----------------------------------------
                                        George M. Pigott
                                        Director

                                        /s/ Kurt C. Reid
                                        ----------------------------------------
                                        Kurt C. Reid
                                        Chief Operating Officer and Director

                                        /s/ Ben R. Rudisill, II
                                        ----------------------------------------
                                        Ben R. Rudisill, II
                                        Director

                                        /s/ Robert D. Voigt
                                        ----------------------------------------
                                        Robert D. Voigt
                                        Director

                                       40
<PAGE>
                                  EXHIBIT INDEX

        The following documents are filed as a part of this annual report on
Form 10-K for the fiscal year ended April 30, 2001.

Exhibit
Number
------
  21      -    Subsidiaries of Registrant
  23      -    Consent of Independent Public Accountants.

                                       41