SMLX Technologies Inc – ‘10KSB’ for 12/31/99

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       46    228K 
 2: EX-23       Consent of Experts or Counsel                          1      5K 
 3: EX-27       Financial Data Schedule (Pre-XBRL)                     1      7K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

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   U.S. SECURITIES AND EXCHANGE COMMISSION
   Washington, D.C.  20549

 FORM 10-KSB

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

  For the fiscal year ended: December 31, 1999

 Commission file number: 0-28154

   SMLX TECHNOLOGIES, INC.
----------------------------------------------
(Name of small business issuer in its Charter)

Colorado                                        84-1337509
-------------------------------                        -----------------        
(State or other jurisdiction of                        (I.R.S. Employer         
incorporation or organization)                         Identification No.)      

      376 Ansin Boulevard, Hallandale, Florida 33009
   -----------------------------------------------------------
    (Address of principal executive offices, including zip code)

(954) 455-0110  
--------------------------- 
(Issuer's telephone number) 

Securities Registered Pursuant to Section 12(b) of the Act:  None.              

Securities Registered Pursuant to Section 12(g) of the Act:  Common Stock,      
                                                          $.0001 Par Value

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

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation     
S-B is not contained in this form, and no disclosure will be contained, to the  
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-KSB or any amendment to   
this Form 10-KSB. [ ]                                                           

The Issuer's revenues for its most recent fiscal year were $962,836.            

As of April 6, 2000, 12,104,648 shares of the Registrant's common stock were    
outstanding, and the aggregate market value of the shares held by non-affiliates
was approximately $4,119,000.                                                   

DOCUMENTS INCORPORATED BY REFERENCE: None.                                      

Transitional Small Business Disclosure Format (check one): Yes __   No X        

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PART I

ITEM 1.  DESCRIPTION OF BUSINESS.                                               

BACKGROUND                                                                      

 SMLX Technologies, Inc. (the "Company") was incorporated under Colorado
law on October 26, 1987, under the name The Trader's Edge Ltd.  On March 28,    
1996, the name was changed to Music Tones Ltd.  The Company was generally       
inactive through December 31, 1996.  On March 28, 1997, the Company's           
shareholders approved changing the Company's name to Simplex Medical Systems,   
Inc., and on August 20, 1998, the Company's shareholders approved changing the  
Company's name to SMLX Technologies, Inc.                                       

In April 1996, the Company filed a registration statement with the    
Securities and Exchange Commission on Form 10-SB, which registered its Common   
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended.   

  On March 5, 1997, the Company completed a reverse acquisition of 100% of
the outstanding common stock of Simplex Medical Systems, Inc., a Florida        
corporation ("Simplex-Florida") in exchange for 3,453,000 shares of the         
Company's Common Stock which resulted in the shareholders of Simplex-Florida    
acquiring approximately 46.04% of the shares outstanding after the              
transaction.  In connection with the closing of this transaction, several       
shareholders agreed to cancel a total of 31,953,000 shares of Common Stock.     
As a result, after the acquisition of Simplex-Florida there were a total of     
7,500,000 shares outstanding.                                                   

 Unless the context otherwise requires, the term "Company" herein refers
to the Company and its wholly-owned subsidiaries, Simplex-Florida, Analyte      
Diagnostics, Inc. ("ADI"), and IRT Management Corp. ("IRT").  Simplex-Florida   
was incorporated in Florida in September 1995, ADI was incorporated in Florida  
on June 6, 1995, and IRT was incorporated in Florida on January 14, 1997.       
Simplex-Florida changed its name to SMLX Technologies of Florida, Inc. during   
November 1998.                                                                  

VECTOR MEDICAL AGREEMENT                                                        

  In April 1999, the Company entered into an Exclusive Licensing Agreement
with Vector Medical Technologies, Inc. ("Vector") with regard to the Company's  
assets and technologies involving certain drug delivery system products.        
Vector received a ten year exclusive license for any products sold by this      
subsidiary in exchange for a royalty of 3% to 4% net revenues.  Vector is also  
required to pay the Company non-refundable advances against future royalties    
of at least $900,000 per year to be used solely for feasibility studies         
relating to the technologies to be performed by the Company or its subsidiary.  
Vector has the right to discontinue the payments and terminate its rights in    
the event that adverse reaction to the technologies occur in patients or        
should efficacy not qualify for submission to the FDA for subsequent approval.  
Also, in the event that Vector fails to make payments, and does not cure the    
default upon notice from the Company, the agreement will become null and void   
and the license terminated without further obligation or liability of either    
company.                                                                        

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  The Company also granted to Vector a right to purchase the subsidiary or
its assets for a four year period at a price ranging from $3.6 to $6.6 million  
(less amounts paid) depending on the amount of gross sales from the assets      
during the prior 12 months.  The purchase price could be paid all or part in    
shares of Vector's common stock under certain circumstances if such shares are  
traded on Nasdaq or the American or New York Stock Exchange.  However, Vector   
is not currently publicly-held.                                                 

   During 1999, the Company received $600,000 in advance royalties under the
agreement with Vector.                                                          

AGREEMENT WITH HELVESTAR                                                        

   Effective May 3, 1999, the Company entered into a Joint Venture Agreement
with HelveStar S.A., a Swiss corporation based in Fribourg, Switzerland.        
Pursuant to the Agreement, a new Swiss corporation named "BioStar, S.A." was    
formed, owned 60% by HelveStar and 40% by the Company.  HelveStar contributed   
the initial capital of 100,000 Swiss Francs for BioStar and is advancing        
working capital to BioStar for the first 24 months or until BioStar achieves    
positive cash flow from operating revenues, whichever first occurs.  The        
Company contributed to BioStar three license agreements for its core            
technologies, namely its Bioven, Saliva Test and Airbrator products.  In        
addition, the Company agreed to sell its rights to certain non-core             
technologies to BioStar in exchange for $2,400,000 payable in monthly           
installments of $100,000.  During 1999, only $300,000 of such payments were     
made, and as of the date of this Report, no installments have been received in  
2000.                                                                           

The agreement states that in the event that BioStar fails to make its 
payments in connection with its purchase of the non-core technologies, all      
non-core technologies not paid for will revert to the Company and the           
exclusive worldwide licenses related to certain core technologies will be       
terminated.  In March 2000, the Company sent default letters to BioStar         
informing them of their non-payment under the terms of the agreement and        
giving them twenty days to cure the default.  The default was not subsequently  
cured during this twenty day period.                                            

Under the terms of the Agreement, the Company is responsible for all  
research and development, new product evaluations and new product training for  
BioStar, HelveStar and their affiliates.  The Company has ceased all marketing  
activities for products covered by the joint venture except for existing        
agreements with distributors.                                                   

HelveStar has assigned individuals to serve as officers, employees and
representatives of BioStar.  The Board of Directors of BioStar consists of six  
members, of which four have been designated by HelveStar and two have been      
designated by the Company.  In addition, the Company has agreed to allow        
HelveStar to designate two persons to become Directors of the Company and       
support their election.                                                         

In connection with the Joint Venture Agreement, the Company granted   
HelveStar options to purchase 900,000 shares of its Common Stock at $1.58 per   
share.  In addition, HelveStar or its designees has the right to purchase       
2,250,000 shares of the Company's Common Stock at 50% of the market price on    
the last day prior to purchase that at least 5,000 shares were traded until     
May 3, 2001.  During the year ended December 31, 1999, six persons designated   
by HelveStar purchased an aggregate of 375,204 shares under this option.        

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DESCRIPTION OF BUSINESS                                                         

GENERAL                                                               

   SMLX is engaged in the business of developing technological solutions for
the medical, dental and other industries and then bringing the technologies to  
the marketplace.                                                                

   In October 1999, the Company's quality management system was approved for
ISO 9001, BS EN 9001, and ANSI/ASQC Q9001-1994 certification for the design,    
development and manufacture of dental air abrasion devices.  In January 2000,   
the Company also received EN 46001:1996 certification in this category.         

 ISO (the International Organization for Standardization) is a worldwide
federation of national standards bodies dealing with quality system             
requirements.  The mission of ISO is to create a system that, when adhered to,  
prevents deviations from specific quality requirements at all product stages    
from design to service.                                                         

The Company has also met all of the requirements and has been self-   
certified to stamp dental air abrasion products shipped into the European       
Union ("EU") with a "CE" symbol called the "CE Marking", which certifies that   
the products meet the requirements of all relevant EU directives.  Products     
can no longer be sold in the EU without the "CE" mark.                          

THE COMPANY'S PRODUCTS                                                

Our products can be organized as follows:                             

1.  Medical diagnostic tests - Development completed. 

     (a)  Rapid saliva tests (cleared for use in certain
foreign countries; not in the U.S.).

2.  Medical diagnostic tests - In development.        

         (a)  Rapid saliva tests for mumps, measles and rubella.

    (b)  Blood or saliva test for periodontal disease.

3.  Drug Delivery Systems - Licensed to Vector Medical
Technologies, Inc.                            

4.  Dental products.                                  

              (a)  Airbrator(R) for polishing, cleaning and abrading teeth
               (cleared for marketing by FDA and for "CE" mark for
marketing in EU).                   

(b)  Saliva Collector (dental use).           

              (c)  Airbrator(R) for use in cavity preparation (510(k) sub-
                 mitted to FDA; cleared for "CE" mark for marketing in
EU).                                

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5.  Equine products in testing.                       

           (a)  Bioven - anti-inflammatory drug (submitted to USDA).

(b)  Equine infectious anemia rapid test.     

6.  Other miscellaneous products.                     

(a)  Flea and tick shampoo for small animals. 

(b)  Organic garden spray (in final testing). 

(c)  Flavor enhancement.                      

         (d)  Cosmetic line developed under contract with Vector
(in final testing).                 

A.  THE SALIVA COLLECTION DEVICE.  The Company's saliva collector is  
designed to replace the more traditional methods of specimen collection for     
clinical testing.  Blood collection has the obvious disadvantage of being an    
invasive procedure with associated fear and pain; but most importantly          
requires trained personnel to collect the specimen.  Urine and fecal matter     
have unsavory characteristics as well as the troublesome handling and disposal  
problems associated with these biological specimens.  All of these specimens    
have the disadvantage of being potentially infectious and are treated as bio-   
hazardous materials. Saliva collected by the Company's collector can be used    
in all routine laboratory equipment and analyzers; can be used by unskilled     
personnel; requires little training in its use; and is well tolerated by        
patients.  Literature references and data obtained by the Company indicates     
that saliva collected by its collection system provides a biological specimen   
which compares to blood in many of the routinely tested components, such as     
HIV, hepatitis, therapeutic drugs, and drugs of abuse, to name only a few.      

  Currently, outside the United States, the saliva collector, when married
to the Company's rapid testing devices, provides the user with a rapid point-of-
care test system which requires little training, is stored at room              
temperature, needs no complicated lab equipment, and provides results in ten    
to 15 minutes.  This combination provides users such as public health           
officials, prisons and the military with an effective, rapid testing system.    
In relatively undeveloped countries, the on-site saliva testing system          
provides a means of population screening and effective disease management       
through rapid definitive identification of affected individuals.                

In clinical tests, it has proven both safe and effective for the      
collection of a clinically acceptable sample of saliva from a donor's mouth,    
and the recovery thereof for constituent analysis. Because of the metabolic     
constituents of saliva, the sample collector can be used with a number of       
diagnostic tests, including analysis for antibodies which indicate certain      
diseases (such as HIV, hepatitis, measles and mumps).                           

   During April 1998 the Company received a letter from the FDA stating that
the FDA had reviewed the Company's 510(k) notification regarding the saliva     
collector and had approved marketing of the product in the United States for    
use as a saliva absorber during dental procedures.                              

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The fluid collection device to be manufactured and distributed by the 
Company may also be used with a variety of screening tests for on-site          
determination of the presence of pollutants in drinking water, waste streams    
and environmentally sensitive habitats.                                         

The countries which have approved or permitted the sale of these test 
kits include Hong Kong, Spain, Peru, Costa Rica, Italy, Kuwait, New Zealand,    
and Dominican Republic.                                                         

   B.  DRUG DELIVERY SYSTEMS.  On April 13, 1999 the Company entered into an
Exclusive Licensing Agreement and Purchase Option Agreement with Vector         
Medical Technologies, Inc. pursuant to which the Company agreed to transfer to  
a newly-formed, wholly-owned subsidiary, all of its proprietary technical       
know-how, patent applications and other assets related to the technologies for  
the delivery of drugs and other natural and synthetic materials, and to grant   
to Vector an exclusive ten year license to these assets.   In return, Vector    
agreed to pay to the Company non-refundable advances against future royalties   
of $900,000 per year payable monthly in payments of $75,000.  The Company will  
receive a royalty of 3% to 4% of the net sales derived from the assets          
transferred, depending on whether or not the assets giving rise to the sales    
are covered by a patent.  Vector may pay the advance royalties for a period of  
four years subject to the option to purchase the subsidiary.  Commencing on     
April 13, 2000 Vector has the option to purchase the subsidiary and cease       
paying the advance royalties for a purchase price ranging from $3.6 million to  
$6.6 million depending on the amount of gross sales attributable to the assets  
in the preceding twelve-month period.  As of the date of this Report, the       
subsidiary has not been formed.  The subsidiary to be formed will be devoted    
to research and development work on the technology transferred to the           
subsidiary.                                                                     

C.  DENTAL AIRBRATOR(R).  The Company has developed and applied for   
patents and FDA approval on a disposable handpiece which attaches to standard   
air abrasive etching devices used by dentists for tooth bonding procedures.     
The product effectively abrades the surface of teeth, but has no effect at all  
on soft tissue.  Because it is disposable and there is no need for extensive    
sterilization procedures, the product expedites the handling of patients.       

   During April 1997 the Company received a letter from the FDA stating that
the FDA had completed the scientific review portion of the Company's 510(k)     
premarket notification regarding the Airbrator(R), and the Airbrator(R) was     
cleared for marketing in the United States for the use of abrading the surface  
of teeth.  Subsequently, in response to the Company's second 510(k) premarket   
notification regarding the Airbrator(R), the Company was informed verbally      
that the Airbrator(R) was technically cleared for use in cavity preparation     
and management expects it to be cleared for marketing once the FDA has          
inspected the manufacturing site and determined that it complies with the       
FDA's requirements. The Company's contract manufacturer is currently an FDA     
registered manufacturing facility.                                              

  During July 1997, the Company entered into a Distribution Agreement with
Sybron Dental Specialties, Inc. ("Sybron") which appointed Sybron as the        
exclusive worldwide distributor for the Airbrator(R). Several of the terms of   
this agreement were amended during December 1997.  Sybron paid a $30,000 one-   
time license fee to the Company during 1997 for the grant of this               
distributorship.  This agreement was terminated effective December 31, 1998.    

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D.  BIOVEN is an injectable, anti-inflammatory drug which is currently
being tested as a treatment for joint inflammation in horses.  These tests are  
being conducted at three sites in Florida.  One of the Company's officers       
developed BIOVEN after fifteen years of extensive research in the field of      
immunology.  BIOVEN is a result of years of experimentation, evaluation and     
historical study in the field of peptide use. The BIOVEN mode of action is      
believed to function by reversing the chemical/immunological imbalances that    
are present in inflamatory processes.                                           

 E.  FLAVOR ENHANCEMENT. The Company has developed a proprietary process
which allows the incorporation of flavor essences into an edible support        
material using food grade materials and approved printable inks.  This process  
would allow a new form of advertising sampler which would let a consumer        
sample new food and beverages through newspaper ads, point of sale displays or  
direct mailings. The encapsulation process and method of manufacturing are      
proprietary.                                                                    

  F.  FLEA AND TICK SHAMPOO.  The Company has developed a proprietary flea
and tick shampoo for small animals, which is being marketed by the Company      
under the name Neemodex(R).  The active ingredient, Neem Oil, is an extract of  
the Neem tree, a tropical evergreen that grows in Asia.  This product is all    
natural, non-insecticidal, non-toxic and environmentally safe.  The Company is  
the manufacturer of this product and expects to expand on its formulation line  
by adding new pet grooming products in the future.                              

 G.  ORGANIC GARDEN SPRAY.  The Company has recently acquired the rights
to an organic garden spray which is in the final stages of research and         
development and field testing.  This product is an all natural insecticide and  
fungicide containing Neem Oil.  It will be sold ready to use on ornamental and  
vegetable plants.  It controls aphids, spider mites, whitefly, thrips and       
scale insects.  It is environmentally safe and can be used on indoor or         
outdoor plants.                                                                 

  H.  EQUINE INFECTIOUS ANEMIA RAPID TEST.  This is a rapid serum test for
equine infectious anemia.  It utilizes a procedure that is simpler to run than  
the other two available tests (the Coggin's test or the ELISA test), and it     
does not require a trained technician to perform.  It can be easily performed   
at the stables.  The Company has completed development of this test and is      
currently working with a distributor in Brazil which has received approval      
from Brazilian regulatory authorities to market the product in Brazil. The      
Company is planning to submit this test product to the U.S. Department of       
Agriculture for their approval.                                                 

RESEARCH AND DEVELOPMENT                                              

The Company spent $177,712 and $178,238 on research and development of
new products during the years ended December 31, 1999 and December 31, 1998,    
respectively, and it expects to spend an increased amount in the current        
fiscal year on development of the products described above in addition to       
others.                                                                         

THE MARKET                                                            

  The Company believes that the saliva diagnostic market is in its infancy
and could become an extremely large industry.  However, no market or            
feasibility study has been undertaken by the Company. Commercial development    
of immunoassays in diagnostic medicine commenced in the 1960's and has          
increased significantly since then, due to the high degree of sensitivity and   
specificity of such techniques.                                                 
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Tests for many diseases currently use blood as the source of the      
specimen. These tests, while effectively performed in the clinical setting,     
are expensive, time consuming and, at the least, painful for the patient.       
The skill and expertise of the physician or other highly trained individual     
needed to obtain the sample of blood for these tests also adds to the high      
cost of the testing.                                                            

 The saliva collection and test system tends to solve these problems and
reduces the overall cost of immunological testing and provides immediate        
results.  The Company believes that testing with saliva specimens has many      
potential advantages compared to testing with blood and urine specimens.        
Unlike blood specimens, saliva specimens can be collected at any time in any    
location.  The sampling procedure is easy to administer and monitor, and may    
be conducted on a group basis. The Company believes that, unlike blood          
collection, the use of its products will not require special training. Blood    
specimen testing requires the use of needles, which may accidentally injure or  
infect the technician collecting the specimen or the person giving the          
specimen. Saliva specimen collection does not require the use of sharp          
objects. Additionally, after collection, blood specimens remain potentially     
infectious (for example they can contain live HIV virus) whereas saliva         
specimens are believed not to be infectious. The use of saliva specimens also   
has advantages compared to the use of urine specimens since the integrity of    
the saliva specimen can be maintained, chain of custody concerns can be         
addressed and saliva collection can be used without significant invasion of     
privacy.                                                                        

 Disadvantages of saliva collection include the stability of saliva as a
specimen and the impact of the subject's diet and enzymes on saliva.            
Provisions must be made to assure that a sufficient amount of saliva is         
collected, the specimen is adequately stabilized and bacterial growth does not  
cause test interference.                                                        

   Saliva based testing has been recognized by the World Health Organization
("WHO") and the FDA as efficacious and practical. Several tests have been       
approved to be used in the clinical market based on saliva samples. Countries   
such as Thailand, Brazil, Mexico, Russia and many others have already made      
policy changes which allow for the use of saliva tests for HIV in their health  
programs.                                                                       

The market currently is divided into three major components: the      
"government" sector; the "captive audience" sector (military, criminal,         
institutional, etc.); and the "private" sector or individual patient.           

  International markets for the Company's products include both government
and private business sectors.  Subject to government approvals, the Company's   
introduction of its saliva collector will be with an HIV diagnostic screening   
test. The HIV test kit is initially planned for distribution and use by         
governmental public health agencies and by foreign military establishment. In   
certain foreign markets, the Company's HIV test kits are expected to be         
advertised for sale directly to private physicians and the consuming public.    

The Company already has products under evaluation in a number of      
countries.  Several countries have begun testing the HIV saliva test with the   
goal of introducing the product to their military to replace the currently      
used blood test.  Public health institutions in several foreign countries have  
reviewed and tested the Company's HIV saliva collectors.  Their goal is to use  
the test to screen "at risk" populations in major cities and tourist areas.     

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These include legal prostitutes, drug addicts, the homosexual population and    
the prison population. Results of this testing will be used to develop policy   
for the education programs which must be implemented along with testing to      
halt the rapid spread of this infection. Additionally, many of these countries  
will use the results of this testing and mass screening to plan for the future  
health needs of their countries.                                                

GOVERNMENT REGULATION                                                           

The development, manufacture, testing and marketing of the Company's  
diagnostic products and the Airbrator(R) are subject to regulation by the FDA   
and other federal, state and foreign agencies. Under the FDC Act, the FDA       
regulates almost all aspects of development, marketing and sale, including the  
introduction, clinical trials, advertising, manufacturing, labeling,            
distribution of and record keeping for the products in the United States.       

  Diagnostic products marketed for testing for drug abuse are regulated as
medical devices under the FDC Act for which FDA approval is required. The       
Company may attempt to obtain marketing clearance through 510(k) Premarket      
Notification for certain of its products used in connection with testing for    
drug abuse. Following submission of a 510(k) Premarket Notification, the        
manufacturer or distributor may not place the device into commercial            
distribution until an order is issued by the FDA. The FDA has no specific time  
limit by which it must respond to a 510(k) Premarket Notification. The FDA may  
declare that the device is "substantially equivalent" to another legally-       
marketed device, and allow the device to be marketed in the United States. The  
FDA may, however, determine that the proposed device is not substantially       
equivalent, or may require further information, such as additional test data,   
before it is able to make a determination.                                      

   Other than the dental products, no FDA approval has yet been received for
any of the Company's products and there can be no assurance that such approval  
will ultimately be obtained. Although the saliva collection device received     
FDA approval in April 1998 for dental use only (see "The Company's Products"    
above), the test kit which incorporates the collection device has not been      
approved by the FDA for sale within the United States. It is however, the       
Company's proposal to export the test kit in compliance with applicable laws    
and regulations administered by the FDA. Initially, because the test device     
has not been approved for use in the United States, the Company would have to   
comply with the FDC Act if it wishes to export the device in its finished       
form.  To export the completed saliva test kit from the United States, the      
Company does not only need to receive permission to export the product into     
the foreign country, it also had to submit to the FDA, basic data regarding     
the safety of the finished device in order for the agency to determine that     
export is not contrary to public health and safety.  The FDA cleared the        
export of the saliva collection device and some of the test kits, provided      
that the appropriate regulatory agency of the country to which the product is   
exported has approved the importation and use of the product.                   

   During April 1997 the Company received a letter from the FDA stating that
the FDA had completed the scientific review portion of the Company's first      
510(k) Premarket Notification regarding the Airbrator(R), and that the          
Airbrator(R) was released for marketing in the United States for the use of     
abrading, polishing and cleaning the surface of teeth.  Subsequently, in        
response to the Company's second 510(k) Premarket Notification regarding the    
Airbrator(R), the Company was informed verbally that the Airbrator(R) was       

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technically cleared for use in cavity preparation, and management expects it    
to be cleared for marketing once the FDA has inspected the manufacturing site   
and determined that it complies with the FDA's requirements.  The Company's     
contract manufacturer is currently an FDA registered manufacturing facility.    

FOREIGN REGULATION                                                    

Agencies similar to the FDA regulate medical devices in some foreign  
countries, whereas other countries allow unregulated marketing of such          
devices. The Company's products will be required to meet the regulations, if    
any, of the foreign countries in which they are marketed.  Once a product has   
been registered in a foreign country, the Company is required to obtain a       
certificate of exportability from the FDA before the product can be shipped     
from the U.S. to that country.                                                  

MANUFACTURING                                                         

  The Company will manufacture the key components of its rapid saliva test
products because of the need to maintain quality control standards coupled      
with the need to closely guard the technology.  The saliva collector is being   
manufactured by a contract manufacturer for the Company.                        

   Certain sub-assemblies of the Airbrator(R) are manufactured by East Coast
Plastics, a contract molding company and these and other components are then    
filled, assembled and packaged and shipped by East Coast Plastics.              

  The other products described above will generally be manufactured by the
Company.                                                                        

  The Company believes that most components used in the manufacture of its
current and proposed products are currently available from numerous suppliers   
located in the United States, Europe and Asia. However, certain components are  
available only from a limited number of suppliers. Although the Company         
believes that it will not encounter difficulties in obtaining these             
components, there can be no assurance that the Company will be able to enter    
into satisfactory agreements or arrangements for the purchase of commercial     
quantities of such components.                                                  

The Company anticipates that it will not be required to maintain      
significant inventory levels of products until the Company's products are       
deemed acceptable for sale. The Company does not currently have any material    
backlog. Until the Company is able to market its products on a broad basis, it  
does not anticipate that its backlog or inventory level will be material. At    
that time, the Company intends to cause these products to be manufactured for   
it shortly before they are required for shipment. The Company does not          
foresee that an extensive period of time will be required from the time of its  
manufacturing order to the time of final delivery of its products.              

MAJOR CUSTOMERS                                                       

During the year ended December 31, 1999, the Company's revenues were  
primarily derived from two sources.  Vector Medical paid the Company $600,000   
under a license agreement, which represented 62% of the Company's revenues,     
and BioStar paid the Company $300,000 under a joint venture agreement,          
representing 31% of the Company's revenues.  The Company is dependent on these  
two sources of revenue.                                                         

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COMPETITION                                                           

   The markets in which the Company participates are highly competitive. The
Company is aware of specialized biotechnology firms, universities and other     
research institutions which have patented, developed, or are developing         
technologies and products which are competitive with the Company's products     
and technologies. These entities, most of which are established, have           
substantially greater research, marketing and financial resources than the      
Company.  The Company expects that the number of products competing with its    
saliva-based test products will increase as the potential benefits of saliva-   
based testing become more widely recognized.                                    

PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION                       

   The Company owns the rights to U.S. Patent Number 6004191, dated December
21, 1999, which relates to its Airbrator(R) product.  The Company has licensed  
its rights under this Patent to BioStar, S.A.  The Company also owns the        
rights to U.S. Patent Number 5424219 dated June 13, 1995, which relates to the  
"Method of Performing Assays for Biomolecules and Solid Supports for Use in     
Such Methods."  The Company has licensed its rights under this Patent to        
Polyfiltronics, Inc.  (See "License Agreement with Polyfiltronics, Inc."        
below.)                                                                         

The Company presently has pending, two (2) patent applications in the 
United  States, on certain aspects of its saliva collection testing device.     
Since the Company plans to sell its products in foreign markets it intends to   
seek foreign patent protection on such products and technologies.  The patent   
laws of other countries may differ from those of the United States as to the    
patentability of the Company's products and technologies and the degree of      
protection afforded.                                                            

The Company also has pending patent applications in the United States 
relating to three other applications for other technologies which the Company   
is developing.                                                                  

Much of the technology developed or owned by the Company is subject to
trade secret protection. To reduce the risk of loss of trade secret protection  
through disclosure, the Company generally enters into confidentiality           
agreements with its employees. There can be no assurance that the Company will  
be successful in maintaining such trade secret protection or that others will   
not capitalize on certain of the Company's technology.                          

  The Company has also registered four trademarks with the U.S. Patent and
Trademark Office.  These include the trademarks "Simplex," "Neemodex,"          
"Airbrator(R)," and "Cytech."                                                   

LICENSE AGREEMENT WITH POLYFILTRONICS, INC.                           

  In June 1998, the Company entered into an agreement with Polyfiltronics,
Inc. which grants Polyfiltronics an exclusive license of the Company's rights   
under a patent owned by the Company relating to a micro titer filter plate      
technology and an opaque wall micro strip system.  Polyfiltronics paid the      
Company $40,000 for the license and certain related tools and molds, and will   
pay a royalty to the Company based on a percentage of sales of products using   
the technology.  The term of the license is for twenty years or the life of     
the patent, whichever is shorter.                                               

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 Polyfiltronics is a U.S. subsidiary of Whatman PLC, an English company,
with a worldwide presence in research laboratories, academic and teaching       
facilities and industrial laboratories.  Polyfiltronics is a technical leader   
in filter plate technology.  Filter plates are commonly used in medical         
diagnostics, forensic medicine, DNA research, drug discovery and other          
scientific fields for the analysis of small quantities of chemical or           
biological components.                                                          

 ACQUISITION OF MINORITY INTEREST IN AUTOMATED HEALTH TECHNOLOGIES, INC.

  During May 1998, the Company acquired a 19% interest in Automated Health
Technologies, Inc. ("AHT") in exchange for 500,000 shares of the Company's      
Common Stock.  The shares were exchanged pursuant to the terms of a Share       
Exchange Agreement dated May 20, 1998, between the Company and AHT.  The Share  
Exchange Agreement provides that AHT has the right to require the Company to    
exchange an additional 1,000,000 shares of Common Stock for all of the          
remaining outstanding shares of AHT under certain conditions.  AHT may          
exercise this right prior to May 20, 2003, if, at the time of exercise, AHT     
has a net worth of at least $200,000, no debt other than up to $25,000 in       
trade payables, and year-to-date positive cash flow.  In addition, AHT may      
exercise this right if it sells the business of its subsidiary - Rx Automation  
Incorporated, and escrows $1,000,000 from the proceeds of such a sale.  In the  
event that AHT exercises its right, the Company and AHT will in good faith      
negotiate a merger or other exchange agreement necessary to effect the          
additional exchange, and file a registration statement on Form S-4 to register  
the transaction.                                                                

   AHT is a medical services company that processes pharmacy and retail drug
store expired drug returns.                                                     

FLORIDA INTERNATIONAL UNIVERSITY FELLOWSHIP                                     

 During 1999, the Company agreed to fund a five year graduate fellowship
grant of $15,000 per year to Florida International University.                  

 The Company has also entered into a contract with Florida International
University for it to provide certain advance research services relating to the  
Company's Airbrator[TM] technology.                                             

EMPLOYEES                                                             

   The Company currently has 7 employees.  The Company is not subject to any
collective bargaining agreement and believes that its relationships with its    
employees are good.                                                             

ITEM 2.  DESCRIPTION OF PROPERTY.                                               

The Company presently maintains its corporate offices and warehouse   
facilities at 376 Ansin Boulevard, Hallandale, Florida 33009.  The five year    
lease on these facilities commenced April 1, 1998, and requires monthly rental  
payments of $4,000 plus tax.  The Company has the option to renew the lease     
for five additional years.                                                      

ITEM 3.  LEGAL PROCEEDINGS.                                                     

Other than the law suits described below, there are no pending legal  
proceedings in which the Company is a party, and the Company is not aware of    
any threatened legal proceedings involving the Company.                         

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  In June 1999, Americare Transtech, Inc. and two other parties instituted
suit in the Circuit Court of Broward County, Florida, against the Company and   
two of its employees requesting a judicial determination on whether the terms   
of the Company's corporate documents require the Company to indemnify its two   
employees for a judgment entered on December 30, 1998 for damages for           
violation of Florida's Trade Secret Act.  These damages were awarded for        
misappropriation of trade secrets and interference with business                
relationships.  The Company believes that the complaint is without merit since  
no corporate documents require the Company to indemnify anyone for judgments    
entered.  The Company intends to aggressively defend the case and seek an       
award of its costs and attorney's fees.                                         

 In October 1998, Americare Transtech, Inc. and four other parties filed
an amended complaint filed in the U.S. District Court for the Southern          
District of Florida naming the Company as one of five co-defendants.  This      
suit alleges patent infringement, misappropriation of trade secrets, breach of  
contract, breach of fiduciary duty as agent, breach of confidential relations,  
breach of trust, unfair competition, and conversion.  Americare is seeking      
damages for an undisclosed amount in excess of $75,000.  The Company intends    
to aggressively defend the suit and has filed a motion to dismiss because it    
lacks merit.  The Company is currently awaiting the court's ruling on the       
motion to dismiss.                                                              

 In July 1998, Superior Wholesale Products, Inc. ("SWP") instituted suit
against SMLX, in the Eleventh Judicial Circuit in and for Miami-Dade County,    
Florida, alleging breach of contract and interference with its relationship     
with a third party claiming damages in the amount of $2,500,000.  SWP claims    
that it had entered into a distribution agreement with SMLX for the             
distribution of HIV saliva test kits and that the Company breached this         
agreement by selling the product directly to one of SWP's clients.  The         
Company is aggressively defending their position that a distribution agreement  
was never finalized because SWP did not perform under the provisions of the     
proposed contract.  The Company has filed a counterclaim against SWP for        
interfering with their relationship with the customer and for defamation.       

 During 1999, a suit was filed in the Court of Common Pleas of Lancaster
County, Pennsylvania by Mary Burton, a purchaser of the Company's stock.  This  
suit alleges that the Company never issued the 10,000 shares of stock that she  
paid $16,100 for in October, 1997.  Mrs. Burton is seeking return of her        
investment.  The Company believes that this suit is without merit and intends   
to aggressively defend its position.                                            

In September 1998, John Faro filed a complaint against the Company and
four other co-defendants in the Circuit Court of Miami-Dade County alleging     
various causes of action and contending that Mr. Faro is entitled to 460,000    
shares of the Company's common stock.  The stock in question was to be issued   
as part of a consulting agreement between the Company and Mr. Faro.  On         
December 8, 1999, the appellate court directed the trial court to issue a writ  
of mandamus recognizing Mr. Faro's ownership of the subject stock.  Following   
the appellate court's direction, the trial court issued a writ of mandamus      
directing the stock transfer agent to issue the stock in Mr. Faro's name but    
to hold the stock in escrow until such time as various claims against Mr. Faro  
have been adjudicated.  The Company has filed a motion for rehearing with the   
appellate court requesting reversal of the order to the trial court on          
numerous grounds.  The Company intends to aggressively defend its position and  
is pursuing a counterclaim against Mr. Faro.                                    

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

   No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1999.                             

PART II 

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.              

  (a)  MARKET INFORMATION.  The Company's Common Stock trades in the over-
the-counter market, under the symbol "SMLX".  Other than a few sporadic trades  
during November 1996, the trading commenced during February 1997.  The          
following table sets forth the high and low bid prices for the Company's        
Common Stock for the periods indicated as reported by the OTC Bulletin Board.   
These prices are believed to be inter-dealer quotations and do not include      
retail mark-ups, mark-downs, or other fees or commissions, and may not          
necessarily represent actual transactions.                                      

QUARTER ENDED                 HIGH BID     LOW BID    
--------------                --------     -------    

March 31, 1998                $1.78125     $ .75      
June 30, 1998                 $4.3125      $ .625     
September  30, 1998           $3.375       $1.03125   
December 31, 1998             $1.875       $ .875     

March 31, 1999                $1.875       $ .8125    
June 30, 1999                 $2.25        $1.0625    
September 30, 1999            $1.3125      $ .8125    
December 31, 1999             $1.00        $ .50      

(b)  HOLDERS.  As of April 7, 2000, the Company had approximately 94  
shareholders of record.  This does not include shareholders who hold stock in   
their accounts at broker/dealers.                                               

   (c)  DIVIDENDS.  The Company has never paid a cash dividend on its common
stock and does not expect to pay a cash dividend in the foreseeable future.     

 (d)  RECENT SALES OF UNREGISTERED SECURITIES.  The Company did not sell
any securities that were not registered under the Securities Act of 1933        
during the fourth quarter of the fiscal year ended December 31, 1999.           

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.             

RESULTS OF OPERATIONS                                                           

During the year ended December 31, 1999, the Company had revenue of   
$962,836 as compared to $390,410 in the prior year.  The increase in revenues   
is a result of revenues received under license and joint venture agreements     
entered into during 1999.  Cost of research and development services and        
product sales represented 30% of revenues as compared to 109% of revenues in    
the prior year.  The improved gross profit margin is a reflection of the new    
license and joint venture agreements.                                           

   Operating expenses during 1999 were $1,099,671 as compared to $904,085 in
1998.  The increase was primarily in selling, general and administrative        
expenses which increased due to legal expenses incurring during 1999.           

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  The net loss for 1999 was $386,547 as compared to a net loss of $868,125
during 1998.  The reduction in the net loss was primarily due to the increased  
revenues resulting from the license and joint venture agreements entered into   
during 1999.                                                                    

During the year ended December 31, 1998, the Company had $390,410 in  
revenue compared to $71,461 in revenue during the prior year.  The increase in  
revenue was the result of international sales of saliva tests.  These revenues  
were lower than expected due to the longer than anticipated delays in getting   
the Company's registration approval in various countries for the rapid saliva   
tests, and the lack of performance on a major contract.                         

   Expenses for the year ended December 31, 1998, increased to $1,082,323 as
compared to $511,179 in the prior year due to having to pay rent in two         
locations for five months, while remodeling a new facility to move into;        
increased commissions; increased payroll due to the addition of a President, a  
lab technician and a marketing manager; hiring a public relations firm and      
gearing up for new product information.                                         

LIQUIDITY AND CAPITAL RESOURCES                                                 

As of December 31, 1999, the Company had a working capital deficit of 
$(14,124) as compared to $(243,504) at December 31, 1998.  The decrease in the  
working capital deficit was primarily due to an increase in cash.               

  The report of the Company's auditors in the financial statements for the
year ended December 31, 1999, contains a going concern qualification.  Since    
inception, the Company has experienced losses aggregating $2,060,568 and has    
been dependent upon loans from stockholders and other third parties in order    
to fund operations to date.  Management believes that the revenues generated    
from licensing and joint venture agreements in place will provide the Company   
with sufficient cash flow resources to fund the operations of the Company       
through the current year.                                                       

The Company currently has no material commitments for capital         
expenditures.                                                                   

ITEM 7.  FINANCIAL STATEMENTS.                                                  

  The financial statements are set forth on pages F-1 through F-18 hereto.

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

No response required.                                                 

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PART III  

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

  The directors and executive officers of the Company and its wholly-owned
subsidiary, their ages and positions held in the Company are as follows:        

NAME                 AGE   POSITIONS HELD AND TENURE    
----                 ---   -------------------------    

Colin N. Jones                   78    President and Chairman of the Board      

Henry B. Schur                   55    Vice President - Business Development    
                               and Director of the Company; Vice
                         President and a Director of
             Simplex-Florida

Joel Marcus                      59    Chief Financial Officer and Director     

Kenneth H. Robertson             65    Director                                 

Gerald M. Wochna                 57    Director                                 

Khalid Hossain                   43    Director                                 

Sherman O. Jones                 70    Director                                 

   There is no family relationship between any Director or Executive Officer
of the Company.                                                                 

  The Company has audit, compensation, executive and insurance committees.

The Audit Committee currently consists of Kenneth Robertson and Gerald
Wochna.  The primary functions of the Audit Committee are: to recommend the     
selection of independent auditors; review the scope and results of the last     
audit with the independent auditors; review with management and the             
independent auditors the Company's last year end audit; and make                
recommendations as to changes needed in the Company's internal accounting and   
audit procedures.                                                               

The Compensation Committee currently consists of Sherman Jones and    
Kenneth Robertson.  The primary functions of the Compensation Committee are     
to: recommend compensation packages for each Executive Officer and recommend    
and/or approve the granting of stock options, cash bonuses and other benefit    
plans for employees in accordance with the Company's stock option plan.         

The Executive Committee currently consists of Colin Jones, Kenneth    
Robertson and Henry Schur.  The primary function of the Executive Committee is  
to review certain issues relating to SMLX's business between meetings of the    
full Board of Directors.                                                        

The insurance Committee currently consists of Joel Marcus and Gerald  
Wochna.  The primary functions of the Insurance Committee are to: review        
current insurance policy coverage; recommend additional coverage and/or         
additional type of insurance, needed to properly protect the Company's assets;  
and recommend changes in organizational structure that will serve to give       
further protection to the Company's assets.                                     

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  Set forth below are the names of all directors and executive officers of
the Company, all positions and offices with the Company held by each such       
person, the period during which he has served as such, and the principal        
occupations and employment of such persons during at least the last five        
years:                                                                          

 COLIN N. JONES has served as the President and Chairman of the Board of
the Company since April 10, 1998.  Mr. Jones served as CEO and Chairman of      
Automated Health Technologies from November 1996 to April 1998 and was a        
consultant to that firm from February 1996 to November 1996.  From July 1994    
until January 1996, he served as Chairman, International of INTEC, an           
international consulting firm specializing in reengineering.  From February     
1983 until March 1988, he served as Chairman of Proximity Technologies and      
continued as Vice President, International until July 1994 for Franklin         
Electronics, which had purchased Proximity Technologies.  From June 1974 until  
February 1983, he owned and operated his own merger and acquisition firm.       
From January 1970 until June 1974, he was President and CEO of Sensormatic      
Electronics and remained a consultant until June 1984.  From September 1950     
until January 1970, he was employed by IBM in various positions with his final  
position being Manager of Sales Programs for the Office Products Division.      
Mr. Jones received a BSME Degree from the University of Texas in 1949.          

   HENRY SCHUR has served as the Company's Vice President of Marketing and a
Director since March 5, 1997.  He has served as President of Analyte            
Diagnostics, Inc., a wholly owned subsidiary of Simplex-Florida since June      
1995.  He is the Company's principal scientist and one of the principal         
inventors of the Company's products.  Mr. Schur has an undergraduate degree in  
Health Sciences from Florida International University and post graduate         
studies in Business Management at the University of Oklahoma.  In the course    
of Mr. Schur's professional career, he has occupied responsible positions with  
companies engaged in the manufacture of diagnostics products and biochemicals,  
including specifically, Arcade, Inc., Chattanooga, Tennessee (1986 to 1987),    
and Cordis Corporation, Miami, Florida (1966 to 1968).  Mr. Schur, in 1991,     
was formerly employed by Americare, with whom Mr. Schur is now in litigation.   
Mr. Schur is a principal inventor of a number of the Company's products and     
has a number of issued U.S. and foreign patents to his credit.                  

  JOEL MARCUS has served as of the Company's Chief Financial Officer since
July 1999, and as a Director of the Company since December 1997.  He has been   
self-employed as a certified public accountant in Florida since 1974 when he    
became a licensed CPA.  Mr. Marcus received a Bachelor of Science Degree in     
Business Administration from Hofstra University in New York in 1960 and         
completed graduate studies at CW Post Tax Institute in 1963.                    

KENNETH H. ROBERTSON has been a Director of the Company since August  
1998.  Mr Robertson is President and CEO of Conference-Call USA, Inc., a        
successful teleconferencing company which he co-founded in 1987 and sold in     
December 1996 to Citizens Utilities, Inc.  Following the sale, he has           
continued as CEO of that entity, and it has continued to grow under his         
leadership.  Mr. Robertson has extensive experience in a diverse range of       
business activities with special emphasis on sales and financial management.    
In 1981 he moved to Florida as President and CEO of Alo-Scherer Healthcare      
(now Scherer Healthcare, Inc.) and held that position until 1983 at which time  
he resigned and has remained a director of this NASDAQ-listed company.  Mr.     
Robertson received a Bachelor's Degree in Economics from Wabash College in      
1956.                                                                           

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GERALD M. WOCHNA has been a Director of the Company since August 1998.
Since 1984, he has been involved in the formation, financing and development    
of several small businesses, both individually and as a member/manager of       
Robertson & Partners, L.L.C.  Since 1984, Mr. Wochna has been involved in land  
development and the development, construction, leasing and financing of         
retail, warehouse and office properties.  From 1973 to 1984, he practiced law   
with a law firm he established in Boca Raton, Florida.  Mr. Wochna continued    
to practice law on an "of counsel" basis from 1984 to 1989, when he retired     
from that profession.  Mr. Wochna received his Bachelor's Degree from John      
Carroll University, Cleveland, Ohio in 1964, and he graduated from Cleveland    
State University Law School in 1968.                                            

   KHALID HOSSAIN has been a Director of the Company since June 1999.  He is
Chairman of HelveStar S.A., a Swiss investment holding company.  He is also     
Chairman and CEO of Asia Star Group, an industrial holding company in           
Malaysia.                                                                       

 SHERMAN O. JONES has been a Director of the Company since January 2000.
He is owner of Camelback Clearing Company, a divesting company that purchases   
and sells large quantities of grocery products throughout the Western U.S.,     
which he founded in 1990.  Mr. Jones was previously employed by IBM for 17      
years in various sales positions and as President of Kansas City Securities,    
an institutional brokerage firm.  Mr. Jones is also a director of Automated     
Health Technologies, Inc.  He received a Bachelor's Degree in                   
Accounting/Business from the University of Buffalo in 1951.                     

The Company's executive officers hold office until the next annual    
meeting of the Directors of the Company.  Except as described below, there are  
no known arrangements or understandings between any director or executive       
officer and any other person pursuant to which any of the above-named           
executive officers or directors or nominees was selected as an officer or       
director or nominee for director of the Company.                                

Colin N. Jones, Gerald M. Wochna, Kenneth R. Robertson and Sherman O. 
Jones were nominated for election as directors of the Company pursuant to the   
terms of a Stockholders' Agreement dated May 15, 1998, among the Company and    
certain shareholders of the Company.  Kahlid Hossain was nominated for          
election as a director pursuant to the terms of a Joint Venture Agreement       
between the Company and HelveStar S.A.                                          

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                               

Based solely on a review of Forms 3 and 4 and amendments thereto      
furnished to the Company during its most recent fiscal year, and Forms 5 and    
amendments thereto furnished to the Company with respect to its most recent     
fiscal year and certain written representations, no persons who were either a   
Director, Officer or beneficial owner of more than 10% of the Company's Common  
Stock, failed to file on a timely basis reports required by Section  16(a) of   
the Exchange Act during the most recent fiscal year except as follows: Khalid   
Hossain did not file a Form 3 or a Form 5 late.                                 

ITEM 10.  EXECUTIVE COMPENSATION.                                               

The following table sets forth information regarding the executive    
compensation for the Company's President for the years ended December 31,       
1999, 1998 and 1997.  No executive officer had total annual salary and bonus    
in excess of$100,000 during such years.                                         

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                                                        [Enlarge/Download Table]

                                  SUMMARY COMPENSATION TABLE                          

                                                           LONG-TERM COMPENSATION     
                                                   -----------------------------------
                           ANNUAL COMPENSATION               AWARDS           PAYOUTS 
                          -----------------------  -------------------------- ------- 
                                                            SECURI-                   
                                                             TIES                     
                                                            UNDERLY-                  
                                           OTHER     RE-      ING               ALL   
                                           ANNUAL  STRICTED OPTIONS/           OTHER  
NAME AND PRINCIPAL                         COMPEN-  STOCK     SARs     LTIP    COMPEN-
     POSITION       YEAR  SALARY   BONUS   SATION  AWARD(S) (NUMBER)  PAYOUTS  SATION 
------------------  ----  -------  -----   ------  -------- --------  -------  ------ 
                                                                                      
Colin N. Jones,     1999  $80,000    --      --       --     100,000     --      --   
 President<FN1>     1998  $57,231    --      --       --        --       --      --   

Nicholas G.         1998  $75,615    --      --       --        --       --      --   
 Levandoski, Ph.D.  1997  $43,500    --    $19,400    --     250,000     --      --   
__________________                                                                    
<FN>                                                                                  
<FN1>                                                                                 
Colin Jones has served as President since April 10, 1998.                             
</FN>                                                                                 

AGGREGATE OPTION EXERCISES IN YEAR ENDED
 DECEMBER 31, 1999 AND DECEMBER 31, 1999 OPTION VALUES

                                      SECURITIES UNDER-   VALUE OF UNEXER-
               SHARES              LYING UNEXERCISED    CISED IN-THE
                ACQUIRED                   OPTIONS        MONEY OPTIONS/
                 ON                   AT 12/31/99        AT 12/31/99
              EXERCISE     VALUE      EXERCISABLE/      EXERCISABLE/
NAME            (NUMBER)    REALIZED   UNEXERCISABLE      UNEXERCISABLE 
 ----            --------    --------  ----------------   ----------------

Colin Jones           -0-         -0-      300,000 / 0           $0 / $0        

    OPTIONS GRANTS IN LAST FISCAL YEAR
   Individual Grants

NUMBER OF       % OF TOTAL              
SECURITIES       OPTIONS                
  UNDERLYING      GRANTED TO     EXERCISE OR
                 OPTIONS       EMPLOYEES IN    BASE PRICE     EXPIRATION
NAME          GRANTED(#)      FISCAL YEAR      ($/SH)          DATE 
  ----         ------------    ------------    -----------    ----------

Colin Jones          100,000           31%          $0.875          1/4/04      

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EMPLOYMENT AGREEMENTS                                                           

Effective July 1, 1998, the Company entered into two-year employment  
agreements with Colin Jones, Nicholas Levandoski and Henry Schur, Executive     
Officers of the Company.  Nicholas Levandoski retired at the end of 1999.       
Under these agreements, each of these persons are entitled a base salary of     
$80,000 per year (which amount is to be reviewed annually) plus one-third of a  
bonus pool.  The bonus pool will be equal to a percentage of the audited pre-   
tax profit of the Company, or a minimum of $40,000, if the corporate            
achievements set forth below are met.  The determination of the bonus pool is   
summarized below:                                                               

Achievement                               
Year      Profit (Loss)(1)     Percentage      Estimated Pool     
----      ----------------     ----------      --------------     

1998        $ (300,000)            12%        $ 40,000 (minimum)  
1999        $1,200,000             10%        $120,000            
2000        $2,900,000              8%        $232,000 (2)        
______________                                                                  

(1)  No bonus pool will be created unless the audited pre-tax profit (loss)     
is equal to or better than the achievement level for that year.       

(2)  Since the employment agreements will end on June 30, 2000, any bonuses     
paid for 2000 will be one-half of the amount determined and will not  
be paid until completion of the year-end audit.                       

Each of the employment agreements provide that in the event of a      
termination of employment by the Company without cause (as defined in the       
agreements), the Company will be required to pay the terminated officer a lump  
sum equal to the base salary remaining under the agreement, up to one year,     
plus an amount equal to one years' base salary.  If such a termination occurs   
within six months of a change in control of the Company, the terminated         
officer will receive a lump sum equal to the base salary remaining under the    
agreement (without a one year limitation) plus one years' base salary.          

STOCK OPTION PLAN                                                               

During March 1997, the Board of Directors adopted a Stock Option Plan 
(the "Plan"), and on March 28, 1997, the Corporation's shareholders approved    
the Plan.  The Plan authorizes the issuance of options to purchase up to        
2,000,000 shares of the Company's Common Stock.                                 

The Plan allows the Board to grant stock options from time to time to 
employees, officers, directors and consultants of the Company.  The Board has   
the power to determine at the time that the option is granted whether the       
option will  be an Incentive Stock Option (an option which qualifies under      
Section 422 of the Internal Revenue Code of 1986) or an option which is not an  
Incentive Stock Option.  Vesting provisions are determined by the Board at the  
time options are granted.  The option price for any option will be no less      
than the fair market value of the Common Stock on the date the option is        
granted and unless otherwise stated on the option, each option is exercisable   
for 10 years.                                                                   

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 Since all options granted under the Plan must have an exercise price no
less than the fair market value on the date of grant, the Company will not      
record any expense upon the grant of options, regardless of whether or not      
they are incentive stock options.  Generally, there will be no federal income   
tax consequences to the Company in connection with Incentive Stock Options      
granted under the Plan.  With regard to options that are not Incentive Stock    
Options, the Company will ordinarily be entitled to deductions for income tax   
purposes of the amount that option holders report as ordinary income upon the   
exercise of such options, in the year such income is reported.                  

The Company has outstanding options to purchase a total of 1,276,000  
shares of common stock at prices ranging from $0.875 to $3.26 per share under   
the Plan.                                                                       

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

   The following table sets forth, as of April 15, 1999, the stock ownership
of each person known by the Company to be the beneficial owner of five percent  
or more of the Company's Common Stock, each officer and director individually,  
and all officers and directors as a group.  Each person has sole voting and     
investment power over the shares except as noted:                               

    AMOUNT AND
NAME AND ADDRESS                 NATURE OF BENE-          PERCENT           
OF BENEFICIAL OWNERS               FICIAL OWNERSHIP         OF CLASS            
-------------------------          ----------------         --------            

Henry B. Schur                      1,252,500 (1)            10.2%              
376 Ansin Boulevard                                                             
Hallandale, FL  33009                                                           

Debra L. Ross                       1,252,500 (2)            10.2%              
376 Ansin Boulevard                                                             
Hallandale, FL  33009                                                           

Colin N. Jones                        330,000 (3)             2.7%              
193 Cove Road                                                                   
West Palm Beach, FL 33413                                                       

Joel Marcus                           290,000 (4)             2.4%              
676 West Prospect Road                                                          
Fort Lauderdale, FL  33309                                                      

Kenneth H. Robertson                2,650,000 (5)            21.8%              
No. 206                                                                         
855 S. Federal Highway                                                          
Boca Raton, FL 33432                                                            

Gerald M. Wochna                    2,650,000 (6)            21.8%              
No. 206                                                                         
855 S. Federal Highway                                                          
Boca Raton, FL 33432                                                            

Khalid Hossain                      2,774,796 (7)            18.6%              
56 Grande Rue                                                                   
CH-1700 Friburg                                                                 
Switzerland                                                                     

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Sherman O. Jones                      104,500 (8)             0.9%              
12026 N. 81st Street                                                            
Scottsdale, AZ  85206                                                           

Software & Healthcare               1,000,000                 8.3%              
Technology Fund, LLC                                                          
No. 206                                                                         
855 S. Federal Highway                                                          
Boca Raton, FL 33432                                                            

Robertson & Partners, L.L.C.        1,600,000                13.2%              
No. 206                                                                         
855 S. Federal Highway,                                                         
Boca Raton, FL 33432                                                            

International Technologies            700,000                 5.8%              
Ltd.                                                                          
c/o William Smith                                                               
P.O. Box F-40729                                                                
Freeport, Bahamas                                                               

All Directors and Executive         7,451,796                47.5%              
Officers as a Group                                                             
(7 Persons)                                                                     
_______________________                                                         

(1)  Includes 862,500 shares held of record by Mr. Schur's wife, Debra Ross,    
  80,000 shares held by Mr. Schur's daughter, 100,000 shares held in trust
for Mr. Schur's daughter, 200,000 shares underlying options held by   
   Mr. Schur, and 10,000 shares underlying options held by Mr. Schur's wife.

(2)  Includes 862,500 shares held directly by Mrs. Ross, 80,000 shares held     
by Mrs. Ross' daughter, 100,000 shares held in trust for Mrs. Ross'   
 daughter, 200,000 shares underlying options held by Mrs. Ross' husband,
and 10,000 shares underlying options held by Mrs. Ross.               

(3)  Includes 30,000 shares held directly and 300,000 underlying options held   
by Mr. Jones.                                                         

(4)  Includes 90,000 shares held directly and 200,000 shares underlying stock   
options held by Mr Marcus.                                            

(5)  Represents 50,000 shares underlying options held by Mr. Robertson;         
1,600,000 shares held by Robertson & Partners, L.L.C. ("R&P") and     
1,000,000 shares held by Software & Healthcare Technology Fund, L.L.C.
   ("SHTF").  Mr. Robertson is a majority owner and a manager of R&P and R&P
  is the manager of SHTF.  Mr. Robertson is also an investor in SHTF.  Mr.
  Robertson therefore has shared voting and shared investment control over
the 2,600,000 shares.                                                 

(6)  Represents 50,000 shares underlying options held by Mr. Wochna; 1,600,000  
  shares held by Robertson & Partners, L.L.C. ("R&P") and 1,000,000 shares
held by Software & Healthcare Technology Fund, L.L.C. ("SHTF").  Mr.  
Wochna is a 20% owner and a manager of R&P and R&P is the manager of  
SHTF.  Mr. Wochna, therefore, has shared voting and shared investment 
control over the 2,600,000 shares.                                    

(7)  Represents shares underlying options held by HelveStar S.A., of which      
Mr. Hossain is Chairman.                                              

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(8)  Includes 102,500 shares held directly by Mr. Jones and 2,000 shares held   
by Mr. Jones' wife.                                                   

Robertson & Partners L.L.C. ("R&P") is affiliated with the Company in 
that Kenneth H. Robertson, who is a manager and a majority owner of R&P, is a   
Director of the Company.  Gerald M. Wochna, who is a manager and 20% owner of   
R&P, is also a Director of the Company.  Software & Healthcare Technology       
Fund, LLC ("SHTF") is managed by R&P and Kenneth H. Robertson is an investor    
in SHTF.                                                                        

  SHTF, R&P, Automated Health Technologies, Inc., Jennifer J. Schur Trust,
Joel Marcus, Debra L. Ross, Jennifer J. Schur, and the Joel Marcus Irrevocable  
Trust have agreed to vote the shares which they hold on the conditions and      
subject to the terms of a Stockholders' Agreement dated May 15, 1998.           

   There are no known agreements, the operation of which may at a subsequent
date result in a change in control of the Company.                              

The Company knows of no arrangement or understanding, the operation of
which may at a subsequent date result in a change of control of the Company.    

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                       

ACQUISITION OF SIMPLEX-FLORIDA                                                  

On March 5, 1997, the Company completed the acquisition of 100% of the
outstanding common stock of Simplex Medical Systems, Inc. ("Simplex-Florida")   
in exchange for 3,453,000 shares of the Company's Common Stock (approximately   
46.04% of the shares now outstanding).  The shares were exchanged on the basis  
of one share of the Company's common stock for one share of Simplex-Florida     
common stock.  In connection with the closing of this transaction, several      
current shareholders submitted for cancellation a total of 31,953,000 shares    
of common stock.  As a result, after the acquisition of Simplex-Florida, there  
are a total of 7,500,000 shares outstanding.                                    

The stock issuances were made pursuant to an Agreement ("Agreement")  
between the Company and Simplex-Florida.  The terms of the Agreement were the   
result of negotiations between the managements of the Company and Simplex-      
Florida.  However, the Board of Directors did not obtain any independent        
"fairness" opinion or other evaluation regarding the terms of the Agreement,    
due to the cost of obtaining such opinions or evaluations.                      

TRANSACTIONS INVOLVING THE COMPANY                                              

On March 20, 1996, the Company issued to each of Mesdames Colleen E.  
Schmidt, a Director of the Company, and a Company Director, and Sandra S.       
Steinberg, a Director of the Company, 15,000,000 shares of the Company's        
common stock, $.0001 par value per share (a total of 30,000,000 shares of       
common stock), in consideration, in each case, for the sum of $5,000 in cash    
(a total of $10,000 in cash).  These shares collateralized two non-interest     
bearing promissory notes in the principal amount of $2,500 each (an aggregate   
face amount of $5,000), due and payable on May 31, 1996, of which each of       
Mesdames Schmidt and Steinberg are the makers and the Company is the holder.    

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   During the year ended December 31, 1997, the Company entered into several
short term notes payable with Joel Marcus, a director of the Company, totaling  
$294,990, bearing interest at 10% per annum.  Joel Marcus subsequently          
assigned these notes to International Technologies Ltd., a shareholder.  As a   
of December 31, 1997, $284,990 of these notes payable had expired terms.  On    
April 2, 1998, the Company entered into an agreement with International         
Technologies Ltd. to extend the terms of the notes for a three year period      
with interest at 10% per annum.  These notes will be amortized over the three   
year period with payments on principal to be made only if the Company records   
pre-tax earnings in excess of the principal amount due.  If an additional       
extension of time is necessary, this agreement grants an extension until such   
time as pre-tax profits are sufficient to amortize the loans over the three     
year period.  Interest incurred under these notes totaled $34,170 and $29,499   
during the years ended December 31, 1999 and 1998, respectively.                

STOCK SALES IN MAY AND JUNE 1998 AND STOCKHOLDERS' AGREEMENT                    

On May 15, 1998, the Company sold 1,000,000 shares of Common Stock to 
Software & Healthcare Technology Fund, L.L.C. ("SHTF") for $400,000 in cash     
and on June 30, 1998, the Company sold 1,600,000 shares of Common Stock to      
Robertson & Partners, L.L.C. ("R&P") for $600,000 in cash.  These sales were    
made pursuant to subscription agreements dated May 15, 1998.  R&P is the        
managing member of SHTF.  The Company also granted SHTF a 20-day right of       
first refusal with regard to any offerings of the Company's securities.         

In connection with these stock sales, SHTF, R&P, Automated Health     
Technologies, Inc. ("AHT"), Jennifer Shur, the Jennifer Shur Trust, Joel        
Marcus, The Joel Marcus Irrevocable Trust and Debra L. Ross, shareholders of    
the Company, entered into a Stockholders' Agreement dated May 15, 1998, which   
provides, among other things, that the shareholders who are parties to the      
Shareholders' Agreement will vote their shares for certain director nominees    
selected by SHTF, R&P and AHT, and in such a manner as is necessary to carry    
out the intent of the Stockholders' Agreement.  For the Annual Meeting of       
Shareholders held on August 20, 1998, the nominees selected were Gerald M.      
Wochna, Kenneth H. Robertson and Colin N. Jones.  (Colin Jones was added to     
the Board on April 10, 1998.)  The Stockholders' Agreement also provides that   
during the term of that agreement none of the shareholders who are parties      
thereto will transfer their shares except in accordance with the terms of the   
agreement.                                                                      

   The Company is also a party to the Stockholders' Agreement and has agreed
that it will not sell any of its securities in any transactions unless it       
provides the shareholders who are parties to the Stockholders' Agreement a      
preemptive right to purchase a pro rata portion of such securities on the same  
terms and conditions.  This preemptive right will not apply to securities       
issued to any officer, director or employee of the Company under a benefit or   
compensation plan, or for services or assets (other than cash or notes).        

   The Company also granted "piggy-back" registration rights to SHTF and R&P
with respect to their shares of Common Stock under certain conditions.          

Certain provisions of the Stockholders' Agreement, including those    
related to the preemptive rights and piggyback registration rights will         
terminate on the later of May 15, 2000, or on the 90th consecutive day on       
which the bid price of the Company's Common Stock exceeds $4.00 per share.      
The remaining provisions will terminate on May 15, 2005.                        

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PART IV   

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

(a)  3.  EXHIBITS.                                                    

EXHIBIT                                                                         
NUMBER      DESCRIPTION                   LOCATION                              

3.1        Articles of Incorporation,    Incorporated by reference to         
  as Amended                    Exhibits 2.1, 2.2 and 2.3 to
                               the Registrant's Form 10-SB
                                Registration Statement filed
                    on April 4, 1996

3.2        Bylaws                        Incorporated by reference to         
                                   Exhibit 2.4 to the Registrant's
                                  Form 10-SB Registration State-
                               ment filed on April 4, 1996

3.3       Articles of Amendment to      Incorporated by reference to        
 Articles of Incorporation     Exhibit 3.3 to Registrant's
      dated March 28, 1997          Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

3.4       Articles of Amendment to      Incorporated by reference to        
 Articles of Incorporation     Exhibit 3.4 to Registrant's
      dated August 20, 1998         Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.1       1997 Stock Option Plan        Incorporated by reference to         
                                Exhibit 10.1 to Registrant's
                                    Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.2       Share Exchange Agreement      Incorporated by reference to         
  with Automated Health         Exhibit 10.2 to Registrant's
      Technologies, Inc.            Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.3       Employment Agreement with     Incorporated by reference to         
  Colin N. Jones                Exhibit 10.3 to Registrant's
                                    Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.4       Employment Agreement with     Incorporated by reference to         
  Nicholas Levandoski           Exhibit 10.4 to Registrant's
                                    Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.5       Employment Agreement with     Incorporated by reference to         
  Henry Schur                   Exhibit 10.5 to Registrant's
                                    Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

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10.6       Software Agreement with       Incorporated by reference to         
  Software & Healthcare         Exhibit 10.6 to Registrant's
      Technology Fund, L.L.C.,      Form SB-2 Registration Statement
et al.                        (SEC File No. 333-67087)  

10.7       Business Lease with           Incorporated by reference to         
  Wedgewood Properties, FL,     Exhibit 10.7 to Registrant's
      Inc.                          Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.8       Distribution Agreement with   Incorporated by reference to         
  Sybron Dental Specialties,    Exhibit 10.8 to Registrant's
      Inc., as amended              Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

10.9       Exclusive Licensing Agree-    Incorporated by reference to         
  ment with Vector Medical      Exhibit 10.9 to Registrant's
  Technologies, Inc. dated      Annual Report on Form 10-KSB
     April 13, 1999                for the year ended December 31,
        1998

10.10      Joint Venture Agreement       Incorporated by reference to         
      with HelveStar, S.A.          Exhibit 10.1 to the Registrant's
                                    Report on Form 8-K dated May 10,
         1999.

21         Subsidiaries of the           Incorporated by reference to         
Registrant                    Exhibit 21 to Registrant's
                                    Form SB-2 Registration Statement
                            (SEC File No. 333-67087)

23         Consent of Schmidt, Raines,   Filed herewith electronically        
Trieste, Dickenson & Adams,                             
P.L.                                                    

27         Financial Data Schedule       Filed herewith electronically        

 (b)  REPORTS ON FORM 8-K.  No Reports on Form 8-K were filed during the
fourth quarter of the Company's fiscal year ended December 31, 1999.            

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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES    
CONSOLIDATED FINANCIAL STATEMENTS     
DECEMBER 31, 1999 AND 1998    

TABLE OF CONTENTS   

                                                        PAGE

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT                  F-1          

FINANCIAL STATEMENTS:                                                           

CONSOLIDATED BALANCE SHEETS                                      F-2        

CONSOLIDATED STATEMENTS OF OPERATIONS                            F-3        

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY       F-4        

CONSOLIDATED STATEMENTS OF CASH FLOWS                            F-5        

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       F-6-F-18   

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT                               

Board of Directors and Stockholders                                             
SMLX Technologies, Inc. and Subsidiaries                                        
Hallandale, Florida                                                             

We have audited the accompanying consolidated balance sheets of SMLX            
Technologies, Inc. and Subsidiaries as of December 31, 1999 and 1998, and the   
related statements of operations, changes in stockholders' equity (deficit)     
and cash flows for the years then ended.  These consolidated financial          
statements are the responsibility of the Company's management.  Our             
responsibility is to express an opinion on these consolidated financial         
statements based on our audits.                                                 

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

In our opinion, the consolidated financial statements referred to above         
present fairly, in all material respects, the financial position of SMLX        
Technologies, Inc. and Subsidiaries as of December 31, 1999 and 1998 and the    
results of their operations and their cash flows for the years then ended in    
conformity with generally accepted accounting principles.                       

The accompanying consolidated financial statements have been prepared assuming  
that the Company will continue as a going concern.  As shown in the             
consolidated financial statements, the Company incurred a net loss of $386,547  
during the year ended December 31, 1999, and has incurred substantial net       
losses for each year since its inception.  These conditions raise substantial   
doubt about the Company's ability to continue as a going concern.               
Management's plans regarding these matters are described in Note 2.  The        
consolidated financial statements do not include any adjustments that might     
result from the outcome of this uncertainty.                                    

 /s/ Schmidt & Co.

         SCHMIDT, RAINES, TRIESTE,
        DICKENSON & ADAMS, P. L.

March 8, 2000                                                                   
Boca Raton, Florida                                                             

F-1     

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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES    
CONSOLIDATED BALANCE SHEETS 
DECEMBER 31, 1999 AND 1998  

                                            1999            1998
                                            -----------    -----------
ASSETS                                                                          

Current assets:                                                                 
Cash                                            $   215,026    $    47,594    
Accounts receivable, net of allowance for                                     
uncollectible accounts of $2,786 and                                        
$16,733 for 1999 and 1998, respectively              6,071          1,113   
Employee receivables                                  -0-            1,229    
Prepaid expenses                                     23,299         19,411    
Inventory                                           129,398        141,572    
                                            -----------    -----------
Total current assets                            373,794        210,919
                                            -----------    -----------
Equipment and leasehold improvements,                                           
less accumulated depreciation 1999 $197,336;                                  
1998 $96,600                                       418,547        385,935   
                                            -----------    -----------
Other assets:                                                                   
Patents and trademarks, less accumulated                                      
amortization of $969 in 1999 and $504 in 1998       88,309         58,267   
Deposits                                              8,192          8,192    
Other intangible assets, net of accumulated                                   
amortization of $1,076 in 1999 and $538 in 1998        814          1,352   
Investment in common stock                          200,000        200,000    
                                            -----------    -----------
                                                297,315        267,811
                                            -----------    -----------
                                            $ 1,089,656    $   864,665
                                            ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                  

Current liabilities:                                                            
Accounts payable and accrued expenses           $   190,164    $   160,755    
Current portion of notes payable                     16,913        184,970    
Customer and other deposits                         180,841        108,698    
                                            -----------    -----------
Total current liabilities                       387,918        454,423
                                            -----------    -----------
Notes payable, net of current portion                310,636        237,119     
                                            -----------    -----------

Commitments and contingencies                                                   

Stockholders' equity (deficit):                                                 
Common stock, $.0001 par value, 100,000,000                                   
shares authorized, 11,544,648 and 10,600,000                                
shares issued and outstanding at December                                   
31, 1999 and 1998, respectively                      1,154          1,060   
Preferred stock, $.0001 par value, 10,000,000                                 
shares authorized, no shares issued or                                      
outstanding                                          -0-            -0-     
Additional paid-in capital                        2,450,516      1,846,084    
Accumulated deficit                              (2,060,568)    (1,674,021)   
                                            -----------    -----------
                                                391,102        173,123
                                            -----------    -----------
                                            $ 1,089,656    $   864,665
                                            ===========    ===========

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     
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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS 
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

                                             1999           1998
                                            -----------    -----------
Operating revenues:                                                             
Research and development services               $   899,985    $      -0-     
Product sales and services                           62,851        390,410    
                                            -----------    -----------
Total operating revenues                        962,836        390,410

Cost of research and development services                                       
and product sales:                                                            
Research and development services                  177,712        178,238   
Product sales and services                         110,550        247,001   
                                            -----------    -----------
Total cost of research and development                                
 services and product sales                     288,262        425,239

Gross profit (loss)                                  674,574        (34,829)    

Operating expenses:                                                             
Selling, general and administrative expenses        997,932        857,180    
Depreciation and amortization expense               101,739         46,905    
                                            -----------    -----------
Total operating expenses                      1,099,671        904,085
                                            -----------    -----------

Net loss from operations                            (425,097)      (938,914)    

Other income (expense):                                                         
Forfeiture of customer deposits                      73,285           -0-     
License fees                                           -0-         115,000    
Other income (expense)                                  478             17    
Loss on disposal of assets                             -0-          (1,580)   
Interest expense                                    (35,213)       (42,648)   
                                            -----------    -----------
Total other income (expense)                     38,550         70,789
                                            -----------    -----------

Net loss before income taxes                        (386,547)      (868,125)    
Income taxes                                            -0-            -0-      
                                            -----------    -----------
Net loss                                         $  (386,547)   $  (868,125)    
                                            ===========    ===========

Loss per common share                            $     (0.03)   $     (0.09)    
                                            ===========    ===========
Weighted average number of shares                 11,291,705      9,549,315     
                                            ===========    ===========

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

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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES  
  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998  

                                                        [Enlarge/Download Table]

                                                                                      Total    
                                                                                  Stockholders'
                                       Common stock     Paid-in     Accumulated      Equity    
                                   Issued      Amount   Capital       Deficit       (Deficit)  
                                 ----------    ------  ----------   -----------   -------------
                                                                                               

Balance, December 31, 1997        7,500,000    $  750  $  658,197   $  (805,896)   $ (146,949) 

Shares issued for cash in                                                                      
 March 1998                         500,000        50     199,950         -0-         200,000  
Shares issued for cash in May                                                                  
 1998                             2,100,000       210     799,790         -0-         800,000  
Shares issued for 19% invest-                                                                  
 ment in the common stock of                                                                   
 a privately held company in                                                                   
 May 1998                           500,000        50     199,950         -0-         200,000  
Stock issuance costs                  -0-         -0-     (11,803)        -0-         (11,803) 
Net loss                              -0-         -0-       -0-        (868,125)     (868,125) 
                                 ----------    ------  ----------   -----------    ----------  

Balance, December 31, 1998       10,600,000     1,060   1,846,084    (1,674,021)      173,123  

Shares issued for cash in March                                                                
 1999                               444,444        44     199,956         -0-         200,000  
Shares issued for cash in                                                                      
 connection with the Joint                                                                     
 Venture Agreement with                                                                        
 HelveStar, S.A. in May 1999        375,204        37     283,063         -0-         283,100  
Conversion of note payable in                                                                  
 May 1999                            25,000         3      24,997         -0-          25,000  
Conversion of note payable in                                                                  
 May 1999                            50,000         5      49,995         -0-          50,000  
Conversion of note payable in                                                                  
 May 1999                            50,000         5      49,995         -0-          50,000  
Stock issuance costs                  -0-         -0-      (3,574)        -0-          (3,574) 
Net loss                              -0-         -0-       -0-        (386,547)     (386,547) 
                                 ----------    ------  ----------   -----------    ----------  

Balance, December 31, 1999       11,544,648    $1,154  $2,450,516   $(2,060,568)   $  391,102  
                                 ==========    ======  ==========   ===========    ==========  

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

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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES    
CONSOLIDATED STATEMENTS OF CASH FLOWS     
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998    

                                            1999            1998
                                            -----------    -----------

OPERATING ACTIVITIES                                                            
Net loss                                        $  (386,547)   $  (868,125)   
Adjustments to reconcile net loss to net                                      
cash used in operating activities:                                          
Depreciation and amortization                     101,739         46,905  
Loss on disposal of assets                          -0-            1,580  
Provision for bad debts                           (13,947)        14,412  
Loss on write-off of patents                        -0-            8,594  
Forfeiture of customer deposits                   (73,285)         -0-    
(Increase) decrease in:                                                   
 Accounts receivable                               8,989        (11,643)
 Prepaid expenses                                 (3,888)       (19,411)
 Inventory                                        12,174             (7)
 Deposits                                          -0-           (1,500)
Increase (decrease) in:                                                   
Accounts payable and accrued expenses            25,559         84,431
Customer and other deposits                     145,428         38,605
                                            -----------    -----------
 Net cash used in operating activities          (183,778)      (706,159)
                                            -----------    -----------
INVESTING ACTIVITIES                                                            
Advances to employees                                 1,229         (1,229)   
Acquisition of other intangible assets                -0-           (1,887)   
Acquisition of fixed assets and patents            (110,355)      (345,181)   
                                            -----------    -----------
 Net cash used in investing activities          (109,126)      (348,297)
                                            -----------    -----------
FINANCING ACTIVITIES                                                            
Proceeds from sale of stock                         483,100      1,000,000    
Payments for stock issuance costs                    (3,224)       (11,803)   
Payments on notes payble                            (19,540)        (2,890)   
Proceeds from notes payable                           -0-           75,000    
                                            -----------    -----------
Net cash provided by financing activities       460,336      1,060,307
                                            -----------    -----------
Net increase in cash                                 167,432          5,851     
Cash - beginning of year                              47,594         41,743     
                                            -----------    -----------
Cash - end of year                               $   215,026    $    47,594     
                                            ===========    ===========

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

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SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES    
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
DECEMBER 31, 1999 AND 1998    

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    

NATURE OF OPERATIONS                                                  

  SMLX Technologies, Inc. (f/k/a Simplex Medical Systems, Inc.) was formed
on June 6, 1995 and was in the development stage through December 31, 1997.     
The year ended December 31, 1998 was the first year during which it was         
considered an operating company.                                                

   Since inception, SMLX Technologies, Inc. (the "Company") has been engaged
in research and development activities.  The Company's primary focus has been   
on the development, acquisition, marketing and manufacture of medical           
diagnostic and dental products, biological products for blood banking, bulk     
pharmaceuticals and specialty chemicals.  In addition, they pursue regulatory   
clearance and patent protection for many of their products.  The Company has    
patented and proprietary technology in the fields of:  point of use medical     
and veterinary diagnostics; dental therapeutic devices; pharmaceutical          
products; and consumer products.  The Company utilizes its own manufacturing    
facilities for the production of proprietary or quality sensitive materials     
and contracts out the other products and final packaging to third parties.      
The Company currently has products approved in several foreign countries and    
is actively marketing its products in those areas.  Within the United States,   
the Company has received FDA registration on one of its major products.  The    
Company's major source of revenue during the year ended December 31, 1999 was   
derived from research and development contracts with outside third parties.     

The financial statements include the accounts of the Company's        
wholly-owned subsidiaries, Analyte Diagnostics, Inc. and IRT Management Corp.   
Analyte Diagnostics, Inc. was a predecessor corporation to SMLX Technologies,   
Inc. which was formed on September 15, 1995.  The two companies were merged     
into SMLX Technologies, Inc., on October 31, 1995, with all account balances    
recorded at cost.  At the time, the Company had a 1 to 200 reverse stock        
split.  Subsequently, the Company had a 2 for 1 stock split.  All share         
references give effect to the post split plans.  IRT Management Corp. was       
incorporated on January 14, 1997 with the sole purpose of obtaining FDA         
approval on the Company's products.                                             

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            

PRINCIPLES OF CONSOLIDATION                                           

The consolidated financial statements include the accounts of SMLX    
Technologies, Inc., and its wholly-owned subsidiaries Analyte Diagnostics,      
Inc., and IRT Management Corp.  All intercompany accounts and transactions      
have been eliminated in consolidation.                                          

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

RECLASSIFICATION                                                      

The Company has retroactively reclassified certain expenses in the    
Consolidated Statements of Operations for the year ended December 31, 1998 and  
changed the presentation of certain revenue and cost of revenue accounts to     
conform to the classifications and presentation adopted for the year ended      
December 31, 1999.  The Company believes the new classifications and            
presentation more accurately reflect the results of operations.  The            
reclassifications have no effect on net income for the year ended December 31,  
1998.                                                                           

INVENTORY                                                             

  Inventory consists of raw materials as of December 31, 1999 and finished
goods as of December 31, 1998 and is stated at the lower of cost (first-in,     
first-out method) or market.                                                    

EQUIPMENT                                                             

Equipment is stated at cost and is depreciated using the straight-line
method over the estimated useful lives of the respective assets.  Expenditures  
for maintenance and repairs are charged against operations as incurred.         

ESTIMATES                                                             

The preparation of financial statements in conformity with generally  
accepted accounting principles requires management to make estimates and        
assumptions that affect certain reported amounts and disclosures.               
Accordingly, actual results could differ from those estimates.                  

PATENTS AND TRADEMARKS                                                

The cost of patents and trademarks acquired are being amortized on a  
straight-line basis over their estimated useful lives, ranging from 17 to 40    
years, beginning when the trademarks and patents are approved.                  

OTHER INTANGIBLE ASSETS                                               

The cost of other intangible assets are being amortized on a          
straight-line basis over three years.                                           

INVESTMENT IN COMMON STOCK                                            

Investments in companies in which the Company has less than a 20%     
interest are carried at cost.                                                   

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

REVENUE RECOGNITION                                                   

Revenue from research and development services is deemed earned when  
received.  Revenue from product sales is recognized upon shipment of goods to   
the customer.  License fee revenue is recognized upon receipt.                  

   Revenue is recognized from the forfeiture of customer deposits based upon
the individual terms contained in the International Distribution agreements     
with each customer.  These deposits are non-refundable and are considered       
forfeited when the customer fails to perform certain requirements as described  
in their contract.                                                              

RESEARCH AND DEVELOPMENT COSTS                                        

Research and development costs are charged to operations when incurred
and are included in cost of research and development services.                  

ADVERTISING COSTS                                                     

 The Company expenses the production costs of advertising the first time
the advertising takes place.                                                    

IMPAIRMENT OF LONG-LIVED ASSETS                                       

The Company periodically reviews its long-lived assets and certain    
identifiable intangibles in order to determine if such assets are impaired.     
When an asset is determined to be impaired, it is written down to its           
estimated fair market value.                                                    

STOCK BASED COMPENSATION                                              

  The Company accounts for its stock based compensation in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 123 which allows the   
Company to account for all stock based compensation arrangements under which    
employees receive shares of the Company's stock under Accounting Principles     
Board ("APB") Opinion No. 25 and make the related disclosures under SFAS 123.   
Accordingly, no compensation cost has been recognized in the accompanying       
financial statements related to stock options.                                  

EARNINGS PER SHARE                                                    

The Company adopted SFAS No. 128, "Earnings Per Share", in 1997.  SFAS
128 establishes accounting standards for the computation, presentation, and     
disclosure of earnings per share information for entities with publicly held    
common stock or potential common stock.                                         

NET LOSS PER SHARE                                                    

Net loss per share is computed on the basis of the weighted average   
number of shares actually outstanding during the years ended December 31, 1999  
and 1998.  Options to purchase 1,726,000 and 881,000 shares of common stock     
during the years ended December 31, 1999 and 1998, respectively, and notes      
convertible to 125,000 shares of common stock during the year ended December    
31, 1998, were not included in computing net loss per share because the effect  
of such inclusion would be to decrease the reported net loss per share.         

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

INCOME TAXES                                                          

The Company accounts for income taxes under the liability method in   
accordance with Statement of Financial Accounting Standards No. 109             
"Accounting for Income Taxes".  Deferred income taxes are determined based      
upon the difference between the financial statement carrying amount and the     
tax basis of assets and liabilities using tax rates expected to be in effect    
in the years in which the differences are expected to reverse.                  

NOTE 2 - BASIS OF PRESENTATION AND CONTINUED EXISTENCE                          

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  Since inception, the Company     
has experienced losses aggregating $2,060,568 and has been dependent upon       
loans from stockholders and other third parties, as well as sale of stock, in   
order to fund operations to date.                                               

 Management believes that the funds raised through its exclusive license
agreement with Vector Medical Technologies, Inc. (Note 8), joint venture        
agreement with HelveStar, S.A. (Note 9) and income generated from the sale of   
several recently developed products will provide the Company with sufficient    
cash flow resources to fund the operations of the Company.                      

The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or   
the amounts and classifications of liabilities that may result from the         
possible inability of the Company to continue as a going concern.               

NOTE 3 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS                                   

Equipment and leasehold improvements consists of the following at     
December 31, 1999 and 1998:                                                     

   Useful Life
                       (in Years)      1999       1998
                         -----------   --------   --------

Computer equipment                     5        $ 39,270   $ 11,569         
Office furniture and equipment        5-7         27,330     24,950         
Shop equipment                        5-7        268,843    169,897         
Computer software                      3           5,779      1,458         
Molds                                  5          85,855     85,855         
Leasehold improvements                10         188,806    188,806         
                                       --------   --------
                                        615,882    482,535
Less:  accumulated depreciation                 (197,336)   (96,600)        
                                       --------   --------
                                       $418,547   $385,935
                                       ========   ========

Depreciation expense totaled $100,736 and $46,367 for the years ended 
December 31, 1999 and 1998, respectively.                                       

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NOTE 4 - NOTES PAYABLE                                                          

   During the year ended December 31, 1997, the Company entered into several
short term notes payable with a director/shareholder totaling $294,990,         
bearing interest at 10% per annum.  These notes were subsequently assigned to   
another shareholder.  On April 2, 1998, the Company entered into an agreement   
with the shareholder to extend the terms of the notes for a three year period   
with interest at 10% per annum.  These notes shall be amortized over the three  
year period with payments on principal to be made only if the Company records   
pre-tax earnings in excess of the principal amount due.  If an additional       
extension of time is necessary, this agreement grants an extension until such   
a time as pre-tax profits are sufficient to amortize the loans over the three   
year period.  Due to the fact that the Company does not anticipate pre-tax      
earnings sufficient to require repayment of these loans in the year 2000,       
these notes payable have been classified as long-term debt as of December 31,   
1999.                                                                           

Notes payable as of December 31, 1999 and 1998 consisted of the       
following:                                                                      
                                       1999         1998
                                       --------     --------
Note payable, third party, due in monthly                                       
payments of $1,648, including interest                                          
which is calculated at 11.46% per annum,                                        
final payment due October, 2001; collater-                                      
alized by equipment with a net book value                                       
of $59,418 as of December 31, 1999.              $ 32,559     $   -0-           

Note payable, vendor, due in monthly payments                                   
of $318, including interest which is cal-                                       
culated at 18% per annum, final payment due                                     
July, 1999.                                          -0-         2,099          

Notes payable, shareholder, interest payable                                    
at 10% per annum; payable as described above.     294,990      294,990          

Convertible note payable, individual,                                           
interest payable at 10% per annum on December                                   
18, 1999 and upon maturity on June 18, 1999;                                    
convertible into common stock at $1.00 per                                      
share (See Note 15).                                 -0-        50,000          

Convertible note payable, individual, interest                                  
payable at 10% per annum on January 21, 1999                                    
and upon maturity on July 21, 1999; convertible                                 
into common stock at $1.00 per share (See Note                                  
15).                                                 -0-        50,000          

Convertible note payable, individual, interest                                  
payable at 10% per annum on January 21, 1999                                    
and upon maturity on July 21, 1999; convertible                                 
into common stock at $1.00 per share (See Note                                  
15).                                                 -0-        25,000          
                                       --------     --------
                                        327,549      422,089
Less:  current maturities                          16,913      184,970          
                                       --------     --------
                                       $310,636     $237,119
                                       ========     ========
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NOTE 4 - NOTES PAYABLE (CONTINUED)                                              

   Aggregate annual maturities of the notes payable at December 31, 1999 are
as follows:                                                                     

During the year ending December 31,                                   
-----------------------------------                                   
2000                         $ 16,913     
2001                          310,636     
                        --------
                        $327,549
                        ========

Interest expense totaled $35,213 and $42,648 during the years ended December    
31, 1999 and 1998, respectively.                                                

NOTE 5 - CUSTOMER AND OTHER DEPOSITS                                            

  Included in customer and other deposits at December 31, 1999 and 1998 is
$16,100 received from an individual as a deposit on stock to be issued at       
$1.00 per share.                                                                

NOTE 6 - ADVERTISING COSTS                                                      

During the year ended December 31, 1998, the Company employed the     
services of a public relations consulting firm to assist them in their          
advertising efforts, including designing the Company's brochure and logo.       
Advertising expense incurred during the years ended December 31, 1999 and 1998  
totaled $29,449 and 36,558, respectively.                                       

NOTE 7 - LEASES                                                                 

The Company is currently renting office and warehouse space in        
Hallandale, Florida pursuant to a five year lease agreement which began April   
1, 1998.  This five year lease agreement requires monthly rental payments of    
$4,000 plus sales tax.  The Company has the option at the end of the lease      
term to renew the lease for an additional five years.                           

Minimum annual rental payments are as follows:                        

During the year ending December 31,                                   
-----------------------------------                                   
2000                         $ 48,000     
2001                           48,000     
2002                           48,000     
2003                           12,000     
                        --------
                        $156,000
                        ========

  Rent expense for the years ended December 31, 1999 and December 31, 1998
amounted to $53,159 and $50,868, respectively.                                  

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NOTE 8 - EXCLUSIVE LICENSING AGREEMENT                                          

On April 13, 1999, the Company entered into an exclusive licensing    
agreement with Vector Medical Technologies, Inc. ("Vector").  This agreement    
grants Vector exclusive license, subject to the payment of royalties, to        
certain drug delivery systems, including intangible and tangible assets.  In    
exchange for this exclusive license, Vector has agreed to pay the Company       
royalties as follows:  4% of its net sales or other net revenues derived from   
assets in which the Company holds the patent; and 3% of its net sales or other  
net revenues derived from the portion of assets that are not covered by a       
patent held by the Company.  These royalty payments are due quarterly within    
45 days from the end of each calendar quarter for which royalties are payable.  
Vector has also agreed to pay the Company non-refundable advances against       
future royalties for a period of four years from the date of the agreement.     
These payments shall amount to at least $900,000 per year, payable in monthly   
installments of at least $75,000.  In regard to these advances, the companies   
have agreed to meet at least 90 days prior to the beginning of each calendar    
year to consider the ongoing feasibility of the relationship and to determine   
the appropriate amount of non-refundable advances to be made by Vector to the   
Company.  Notwithstanding any agreement to the contrary, this agreement shall   
be in existence for 10 years.  In the event that Vector fails to make its       
payments, the agreement shall be deemed null and void and the exclusive         
license and option granted under this agreement shall be terminated without     
further obligation or liability of either company.  Furthermore, this license   
agreement gives Vector the option to purchase 100% of certain SMLX assets       
within four years from the date of the agreement, with any royalty payments     
credited towards the purchase price.  The total purchase price will vary based  
on gross sales during the preceding twelve month period attributable to the     
assets and ranges between $3.6 and $6.6 million.                                

  As of December 31, 1999, the Company had received $600,000 in connection
with this agreement, which is included in the Company's research and            
development revenue.  Revenue from this contract comprises approximately 62%    
of the Company's total revenue for the year ended December 31, 1999.            

NOTE 9 - JOINT VENTURE AGREEMENT                                                

 On May 3, 1999, the Company entered into a joint venture agreement with
HelveStar, S.A., a Swiss technology commercialization, financial and holding    
company.  This agreement outlines the formation and capitalization of BioStar,  
S.A. for the purposes of commercializing, manufacturing, developing, marketing  
and selling the Company's present and future technologies and products.         
BioStar will initially be funded by HelveStar who will own sixty percent.       

Upon the execution of this agreement, the Company granted HelveStar a 
stock option for 900,000 shares of the Company's stock at an exercise price of  
$1.58 per share.  Within 24 months of the execution of this agreement,          
HelveStar shall have the right to purchase a total of 2,250,000 shares of the   
Company's stock.  The purchase price of the shares on the date of purchase      
will be equal to 50% of the closing price of the Company's stock on the latest  
price trading date on which at least 5,000 shares were traded.                  

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NOTE 9 - JOINT VENTURE AGREEMENT (CONTINUED)                                    

  In addition, this agreement grants BioStar a 99-year exclusive worldwide
license for the commercialization, marketing and production of all the          
Company's core products and technology.  However, BioStar will honor all of     
the Company's valid existing distributorship agreements.  In addition, the      
Company has transferred its non-core technologies to BioStar which has agreed   
to purchase them for $2,400,000 payable in monthly installments of $100,000     
for 24 months commencing in May 1999.  As of December 31, 1999, the Company     
had received $300,000, which is included in research and development services   
revenue.                                                                        

The agreement states that in the event that BioStar fails to make its 
payments in connection with its purchase of the non-core technologies, all      
non-core technologies not paid for will revert to the Company and the           
exclusive worldwide licenses related to certain core technologies will be       
terminated.  In March 2000, the Company's Board of Directors approved the       
sending of default letters to BioStar informing them of their non-payment       
under the terms of the agreement and giving them twenty days to cure the        
default.  The default was not subsequently cured during this twenty day         
period.                                                                         

NOTE 10 - RELATED PARTY TRANSACTIONS                                            

REVENUE                                                               

During the year ended December 31, 1999, the Company received $300,000
from its affiliate,  BioStar, for research and development services pursuant    
to the terms of the Joint Venture Agreement described in Note 9.  This          
represents approximately 31% of the Company's total revenue during the year     
ended December 31, 1999.                                                        

NOTES PAYABLE                                               

A director and shareholder loaned the Company a total of $294,990 at
various times during the year ended December 31, 1997.  These notes were        
subsequently assigned to another shareholder of the Company.  These notes were  
outstanding as of December 31, 1999 and 1998 and are discussed in Note 5.       
Interest expense incurred in connection with these loans totaled $34,170 and    
$29,499 for the years ended December 31, 1999 and 1998, respectively.           

STOCKHOLDERS'AGREEMENT                                                

During 1998, the Company entered into a Stockholders' Agreement with  
eight shareholders.  Among other things, this agreement provides that the       
Company will not sell any of its securities in any transactions unless it       
provides the shareholders who are parties to the agreement a preemptive right   
to purchase a pro rata portion of such securities on the same terms and         
conditions.  This preemptive right will not apply to securities issued to any   
officer, director or employee of the Company under a benefit or compensation    
plan or for services or assets, other than cash or notes.  In addition, the     
Company granted "piggy-back" registration rights to Software & Healthcare       
Technology Fund, L.L.C. ("SHTF") and Robertson & Partners, L.L.C. with respect  
to their shares of common stock under certain conditions as outlined in the     
agreement.  These provisions terminate on the later of May 15, 2000 or the      
ninetieth consecutive day on which the bid price of the Company's common stock  
exceeds $4.00 per share on the publicly traded market.  All other provisions    
of the agreement terminate on May 15, 2005.                                     

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NOTE 11 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                     

During the years ended December 31, 1999 and 1998 cash paid by the    
Company for interest totaled  $41,581 and $35,212, respectively.                

  During the year ended December 31, 1999, the Company purchased equipment
costing $50,000 with a note payable.                                            

As of December 31, 1999, stock issuance costs and capitalized patent  
costs totaling $350 and $3,500 were included in accounts payable.               

During the year ended December 31, 1999, three notes payable totaling 
$125,000 were converted into common stock at $1.00 per share.                   

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS                                   

The following methods and assumptions were used to estimate the fair  
value of each class of financial instruments for which it is practicable to     
estimate that value:                                                            

NOTES PAYABLE                                                         

The carrying amount approximates fair value because the same terms and
interest rates could be obtained for similar maturities.                        

STOCK OPTIONS                                                         

 It is not practicable to estimate the fair value of the Company's stock
options because they are subject to trading restrictions and lack quoted        
market prices.                                                                  

NOTE 13 - STOCK OPTIONS                                                         

In August 1997, the Board of Directors granted certain employees,     
directors and consultants of the Company stock options pursuant to the          
Company's 1997 Stock Option Plan.  A total of 2,000,000 shares of the           
Company's stock have been reserved for the options to be granted under this     
plan.  Eligible participants include any employee, officer, director or         
consultant that the Board of Directors, in its sole discretion, designates is   
eligible to participate in this Plan.  The option exercise price is stated on   
the option grant and shall not be less than 100% of the fair market value of    
the shares on the date of the grant or the par value, whichever is greater.     
Unless otherwise stated on the option, each option is exercisable for ten       
years.  As of December 31, 1999, the options granted under this plan totaled    
1,276,000 shares exercisable between five and ten years at prices ranging from  
$0.88 to $3.26 per share.                                                       

In addition to the options outstanding under the Company's 1997 Stock 
Option Plan, during October 1998, the Company granted an option to purchase     
1,000 shares of the Company's common stock at $1.50 per share through October   
2, 2003.                                                                        

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NOTE 13 - STOCK OPTIONS (CONTINUED)                                             

The following summarizes the status of the Company's stock options for
the years ended December 31, 1999 and 1998:                                     

                                          Weighted-Average
                              Shares      Exercise Price
                              ---------   ----------------

Outstanding at January 1, 1998        490,000          $1.58          
Granted and exercisable               391,000          $2.11          
Exercised                                -0-                          
Forfeited                                -0-                          
                          ---------          -----
Outstanding at December 31, 1998      881,000          $1.82          
Granted and exercisable               420,000          $0.88          
Exercised                                -0-                          
Forfeited                             (25,000)         $2.87          
                          ---------          -----
Outstanding at December 31, 1999    1,276,000          $1.49          
                          =========          =====

 The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations in accounting for its stock options.    
Accordingly, no compensation cost has been recognized in the accompanying       
financial statements related to stock options.  The weighted average fair       
value of options granted during the years ended December 31, 1999 and 1998 was  
$0.59 and $0.68, respectively.  These values were computed using the            
Black-Scholes option pricing model with the following assumptions: expected     
life of 3 years; expected volatility of 376% and 163% for the years ended       
December 31, 1999 and 1998, respectively; and a risk free interest rate of 6%.  
Had compensation cost for the Company's stock options been determined based on  
the fair value at the grant dates consistent with the method of FASB No. 123,   
"Accounting for Stock-Based Compensation", the Company's net loss for the       
years ended December 31, 1999 and 1998 would have been $635,296 ($0.06 per      
share) and $1,134,005 ($0.12 per share), respectively.                          

The Black-Scholes option valuation model was developed for use in     
estimating the fair value of traded options which have no vesting restrictions  
and are fully transferable.  In addition, option valuation models require the   
use of highly subjective assumptions.  Because the Company's stock options      
have characteristics that are significantly different from traded options and   
because changes in the valuation assumptions can materially affect the fair     
value estimate, in management's opinion, the existing models do not             
necessarily provide a reliable single measure of the fair value of its          
employee stock options.                                                         

NOTE 14 - INCOME TAXES                                                          

   The Company has incurred tax operating losses and therefore has generated
no income tax liabilities.  As of December 31, 1999, the Company has generated  
net tax operating loss carryforwards totaling  $2,060,568 which are available   
to offset future taxable income, if any.  These loss carryforwards expire       
beginning in 2010.  Due to limitations on the utilization of loss               
carryforwards resulting from ownership changes and separate return limitations  
and the uncertainty that the Company and its subsidiaries will be able to       
utilize the net operating losses, a 100% valuation allowance has been recorded  
against the deferred tax assets.                                                

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NOTE 14 - INCOME TAXES (CONTINUED)                                              

  The following summarizes the components of the net deferred tax asset at
December 31, 1999 and 1998:                                                     
                                 1999         1998
                                ---------    ---------
Deferred tax assets:                                                  
Net operating loss carryforward        $ 700,593    $ 569,168       
Valuation allowance                     (700,593)    (569,168)      
                                ---------    ---------
Net deferred tax asset              $    -0-     $    -0-     
                                =========    =========

NOTE 15 - STOCKHOLDERS' EQUITY (DEFICIT)                                        

SHARE EXCHANGE AGREEMENT                                              

In connection with a Share Exchange Agreement dated May 20, 1998, the 
Company acquired a 19% interest in Automated Health Technologies, Inc.          
("AHT"), a privately held company, in exchange for 500,000 shares of the        
Company's common stock.  This agreement gives AHT shareholders a five year put  
option on an additional 1,000,000 shares of the Company's common stock in       
exchange for the remaining 81% of AHT's common stock under certain conditions   
as outlined in the agreement.                                                   

SHARES ISSUED FOR CASH                                                

On May 15, 1998, the Company sold 1,000,000 shares of common stock to 
SHTF for $400,000 in cash.  In addition, the Company sold 1,600,000 shares of   
common stock to Robertson & Partners, L.L.C. for $600,000 in cash on June 30,   
1998.  These sales were made pursuant to subscription agreements dated May 15,  
1998.  Robertson & Partners, L.L.C. is the managing member of SHTF.  The        
Company also granted SHTF a 120-day right of first refusal with regard to any   
offerings of the Company's securities.                                          

 During December 1998, the Companies' Board of Directors voted to accept
the offer of Robertson & Partners Venture Fund II to purchase an additional     
444,445 shares of stock for $200,000 ($0.45 per share).  This amount was        
received in $50,000 installments during January through April 1999.             

In May 1999, the Company issued 375,204 shares of stock for $283,100. 
These shares were issued to individuals affiliated with HelveStar and are       
considered deductions from HelveStar's right to purchase 2,250,000 shares as    
described in Note 9.                                                            

CONVERTIBLE NOTES PAYABLE                                             

On December 18, 1997 the Company issued an unsecured convertible note 
payable to an individual in the face amount of $50,000, bearing interest at     
10% per annum.  This note matured on June 18, 1999, at which time the           
principal amount was converted into 50,000 fully paid and non-assessable        
shares of $0.0001 par value common stock at $1.00 per share.                    

On January 21, 1998 the Company issued an unsecured convertible note  
payable to an individual in the face amount of $50,000, bearing interest at     
10% per annum.  This note matured on July 21, 1999, at which time the           
principal amount was converted into 50,000 fully paid and non-assessable        
shares of $0.0001 par value common stock at $1.00 per share.                    

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NOTE 15 - STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)                            

On January 21, 1998 the Company issued an unsecured convertible note  
payable to an individual in the face amount of $25,000, bearing interest at     
10% per annum.  This note matured on July 21, 1999 at which time the principal  
amount was converted into 25,000 fully paid and non-assessable shares of        
$0.0001 par value common stock at $1.00 per share.                              

NOTE 16 - LEGAL PROCEEDINGS                                                     

  In June 1999, Americare Transtech, Inc. and two other parties instituted
suit against the Company and two of its employees requesting a judicial         
determination on whether the terms of the Company's corporate documents         
require the Company to indemnify its two employees for a judgment entered into  
on December 30, 1998 for damages for violation of Florida's Trade Secret Act.   
These damages were awarded for misappropriation of trade secrets and            
interference with business relationships.  The Company believes that the        
complaint is without merit since no corporate documents require the Company to  
indemnify anyone for judgments entered.  The Company intends to aggressively    
defend the case and seek an award of its costs and attorney's fees.             

Americare Transtech, Inc. and four other parties filed an amended     
complaint in October 1998 naming the Company as one of five co-defendants.      
This suit alleges patent infringement, misappropriation of trade secrets,       
breach of contract, breach of fiduciary duty as agent, breach of confidential   
relations, breach of trust, unfair competition, and conversion.  Americare is   
seeking damages for an undisclosed amount in excess of $75,000.  The Company    
intends to aggressively defend the suit and has filed a motion to dismiss       
because it lacks merit.  The Company is currently awaiting the court's ruling   
on the motion to dismiss.                                                       

   In July 1998, Superior Wholesale Products, Inc. ("SWP") instituted a suit
against the Company alleging breach of contract and interference with its       
relationship with a third party claiming damages in the amount of $2,500,000.   
SWP claims that they entered into an exclusive distribution agreement for the   
distribution of the Company's HIV saliva test kits and that the Company         
breached this agreement by selling the product directly to one of SWP's         
clients.  The Company is aggressively defending their position that a           
distribution agreement was never finalized because SWP did not perform under    
the provisions of the proposed contract.  The Company has filed a counterclaim  
against SWP for interfering with their relationship with the customer and for   
defamation.                                                                     

   During 1999, a suit was filed in Pennsylvania by Mary Burton, a purchaser
of the Company's stock.  This suit alleges that the Company never issued the    
10,000 shares of stock that she paid $16,100 for in October, 1997.  Mrs.        
Burton is seeking return of her investment.  The Company believes that this     
suit is without merit and intends to aggressively defend its position.          

In September 1998, John Faro filed a complaint against the Company and
four other co-defendants alleging various causes of action and contending that  
Mr. Faro is entitled to 460,000 shares of the Company's common stock.    The    
stock in question was to be issued as part of a consulting agreement between    
the Company and Mr. Faro.  On December 8, 1999, the appellate court directed    
the trial court to issue a writ of mandamus recognizing Mr. Faro's ownership    
of the subject stock.  Subsequent to year-end, following the appellate court's  

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NOTE 16 - LEGAL PROCEEDINGS (CONTINUED)                                         

direction, the trial court has issued a writ of mandamus directing the stock    
transfer agent to issue the stock in Mr. Faro's name but to hold the stock in   
escrow until such time as various claims against Mr. Faro have been             
adjudicated.  The Company has filed a motion for rehearing with the appellate   
court requesting reversal of the order to the trial court on numerous grounds.  
The Company intends to aggressively defend its position and is pursuing a       
counterclaim against Mr. Faro.                                                  

NOTE 17 - COMMITMENTS                                                           

 On July 1, 1998, the Company entered into two-year employment contracts
with its president and a vice president.  These agreements expire on July 1,    
2000 and provide for a minimum annual salary, and incentives based upon the     
Company's attainment of specified levels of pre-tax earnings.  At December 31,  
1999, the total commitment, excluding incentives, was $80,000.                  

 On September 6, 1999, the Company entered into a sub-contract agreement
with Florida International University ("FIU") in which FIU will provide         
assistance in product testing and research services for the Company as          
specifically outlined in the contract.  The fixed fee for these services was    
$16,387.  This contract was modified to include additional product testing and  
research services for a fixed fee of $2,841 due upon completion of the          
project, which is estimated at February 29, 2000.                               

On November 12, 1999, the Company pledged $75,000 to Florida          
International University to be paid in equal amounts over a five year period    
of time.  This pledge is to be used to establish a grant to a graduate student  
in Biomedical Engineering.  This pledge may be discontinued or cancelled by     
the Company at anytime.                                                         

NOTE 18 - CONCENTRATIONS                                                        

VENDOR CONCENTRATION                                                  

Two major vendors represented approximately 28% ($20,700) and 27%     
($19,973), respectively, of the Company's total purchases of inventory during   
the year ended December 31, 1999.  The Company believes that most components    
used in the manufacture of its current and proposed products are currently      
available from numerous suppliers located in the United States, Europe and      
Asia.  However, certain components are available only from a limited number of  
suppliers.  Although the Company believes that it will not encounter            
difficulties in obtaining these components, there can be no assurance that the  
Company will be able to enter into satisfactory agreements or arrangements for  
the purchase of commercial quantities of such components.                       

CASH CONCENTRATION                                                    

 The Company maintains cash balances at a national bank in excess of the
amount insured by the Federal Deposit Insurance Corporation.  As of December    
31, 1999, the Company had cash balances exceeding this insured limit by         
$115,026.                                                                       

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SIGNATURES  

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

Date: May 2, 2000                    SMLX TECHNOLOGIES, INC.                    

               By:/s/ Colin N. Jones
                         Colin N. Jones, President

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

SIGNATURE                       TITLE                   DATE    

/s/ Colin N. Jones             President (Chief Executive     May 2, 2000       
Colin N. Jones                 Officer) and Director                            

/s/ Henry B. Schur             Vice President of Marketing    May 2, 2000       
Henry B. Schur                 and Director                                     

/s/ Joel Marcus                Chief Financial Officer and    May 2, 2000       
Joel Marcus                    Director                                         

/s/ Kenneth H. Robertson       Director                       May 2, 2000       
Kenneth H. Robertson                                                            

/s/ Gerald M. Wochna           Director                       May 2, 2000       
Gerald M. Wochna                                                                

__________________________     Director                                         
Khalid Hossain                                                                  

/s/ Sherman O. Jones           Director                       May 2, 2000       
Sherman O. Jones                                                                

Dates Referenced Herein   and   Documents Incorporated by Reference

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