U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB/A

(Mark One)

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

For the quarterly period ended September 30, 2001

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT

For the Transition Period from

Commission file number 0-12183

BOVIE MEDICAL CORPORATION

(Exact name of small business issuer as specified in its charter)

Delaware                                                                                                                  No. 11-2644611

(State or other jurisdiction of incorporation or organization)                                                                                                    (IRS— Employer Identification No.)

734 Walt Whitman Rd., Melville, New York 11747

(Address of principal executive offices)

(631) 421-5452

(Issuer's telephone number)

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date: As of November 12, 2001, 13,385,334 shares were outstanding.

BOVIE MEDICAL CORPORATION
INDEX TO FORM 10-QSB/A

Contents                                                                   Page

Part I.   Financial Information.................................................

        Item 1:       Consolidated Financial Statements:........................

          Consolidated Balance Sheet - September 30, 2001 and December 31, 2000.
          Consolidated Statements of Operations for the
            three Months Ended September 30,  2001 and 2000.....................
          Consolidated Statements of Operations for the
            nine Months Ended September 30,  2001 and 2000......................
          Consolidated Statements of Cash Flows for the
            nine Months Ended September 30, 2001 and 2000.......................

           Notes to Financial Statements .......................................

        Item 2: Management's Discussion and
            Analysis of Financial Conditions and Results of Operations..........

Part II.   Other Information....................................................

 Item 1:  Legal Proceedings.....................................................

 Item 2:  Changes in Securities.................................................

 Item 3:  Defaults Upon Senior Securities.......................................

 Item 4:  Submission of Matters to Vote of Security Holders.....................

 Item 5:  Exhibits and Reports on Form 8-K......................................

PART I. FINANCIAL INFORMATION ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS

BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000

                                            (Unaudited)            (Audited)
                                         September 30, 2001    December 31, 2000
                                         ------------------    -----------------
Current assets:

Cash                                     $   402,485            $   278,662
 Trade accounts receivable                  1,182,145              1,256,049
 Inventories                                2,422,915              1,994,564
 Prepaid expenses                             165,883                111,343
 Deferred tax asset                           175,010                175,010
 Other receivables                            111,579                111,179
                                            ---------              ---------
 Total current assets                       4,460,017              3,926,807

 Property and equipment, net                1,516,963              1,552,179

 Other assets:

 Repair parts                                 304,233                317,698
 Trade name                                 1,533,128              1,603,527
 Patent rights, net                           329,253                277,644
 Deposits                                      47,341                 35,719
 Investment - Joint Venture                   200,000                200,000
                                            ---------              ---------
                                            2,413,955              2,434,588
                                            ---------              ---------
                                           $8,390,935             $7,913,574
                                            =========              =========

         The accompanying notes are an integral part of the financial statements.

BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
(CONTINUED)

                      Liabilities and Stockholders' Equity

                                          (Unaudited)            (Audited)
                                       September 30, 2001   December 31, 2000
                                       ------------------   -----------------
Current liabilities:

Accounts payable                        $   449,180            $   439,144
Accrued expense                             319,495                350,425
Notes payable - current portion             805,192                572,931
Due to shareholders                          32,705                 57,425
Due to Joint Venture                             --                100,000
                                          ---------              ---------
        Total current liabilities         1,606,572              1,519,925


Stockholders' equity:

Preferred Stock, par value $.001
 10,000,000 shares authorized,
 0 issued and outstanding                        --                     --
 on September 30, 2001 and
 December 31, 2000

Common stock par value $.001;
 40,000,000  shares authorized,
 issued and outstanding
 13,385,334 and 13,685,334 shares
 on September 30, 2001 and
 December 31, 2000 respectively              13,455                 13,756
Additional paid in capital               19,881,756             19,991,488
Accumulated deficit                     (13,110,848)           (13,611,595)
                                        -----------            -----------
         Total stockholders' equity       6,784,363              6,393,649
                                        -----------            -----------
            Total liabilities and
            stockholders' equity        $ 8,390,935           $  7,913,574
                                        ===========            ===========

The accompanying notes are an integral part of the financial statements.

BOVIE MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

                                                  2001               2000

Sales                                         $ 2,683,718        $ 2,490,351
Cost of sales                                   1,291,296          1,346,782
                                                ---------          ---------
Gross profit                                    1,392,422          1,143,569
                                                ---------          ---------

Costs and expenses:
Research and development                          115,917            155,567
Professional services                              70,384            103,088
Salaries and related costs                        328,817            399,604
Selling, general and administrative               542,310            325,001
                                                ---------          ---------
                                                1,057,428            983,260
                                                ---------          ---------

Gain from operations                              334,994            160,309

Other income (expense):
Interest income                                     2,627              6,527
Interest expense                                (  25,313)         (  17,227)
Miscellaneous                                          --                 51
                                                ---------           --------
                                                (  22,686)         (  10,649)
                                                ---------           --------

Income (loss) before extraordinary items          312,308            149,660

Provision for income tax                        ( 109,308)         (  52,381)
Realized benefit of loss carryforward             109,308             52,381
                                                ---------          ---------
Net income                                    $   312,308            149,660
                                                =========          =========
Earnings per share
Net income:
      Basic                                           .02              $ .01
      Diluted                                         .02              $ .01

Weighted average number of shares
 outstanding                                   13,435,334         13,827,834

Weighted average number of shares
 adjusted for dilutive securities              14,635,334         13,940,834

BOVIE MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)

                                                  2001                2000
                                                  ----                ----

Sales                                         $ 8,238,896         $ 7,095,316
Cost of sales                                   4,479,589        (A)3,836,607
                                                ---------           ---------
Gross profit                                    3,759,307           3,258,709
                                                ---------           ---------
Costs and expenses:
Research and development                          327,371             354,401
Professional services                             226,989             323,429
Salaries and related costs                      1,297,396           1,159,989
Selling, general and administrative             1,361,317             944,712
                                                ---------           ---------
                                                3,213,073           2,782,531
                                                ---------           ---------

Gain (Loss) from operations                       546,234             476,178

Other income (expense):
Interest income                                     8,287              24,927
Interest expense                                (  53,773)          (  51,223)
Miscellaneous                                          --              15,758
                                               ----------            --------
                                                (  45,486)          (  10,538)
                                               ----------            --------

Income                                            500,748             465,640

Provision for income tax                        ( 175,262)          ( 162,974)
Realized benefit of loss carryforward             175,262             162,974
                                                ---------           ---------
Net income                                        500,748             465,640
                                                =========           =========
Earnings per share

Net income:
      Basic                                            .04              .03
      Diluted                                          .03              .03

Weighted average number of shares outstanding    13,559,501       13,945,060

Weighted average number of shares adjusted for
  dilutive securities                            14,759,501       16,073,220

(A) Commissions paid to independent sales representatives have been reclassified
as selling general and administrative expense.

The accompanying notes are an integral part of the financial statements.

BOVIE MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)

                                                       2001            2000
                                                       ----            ----
Cash flows from operating activities
Net income                                       $   500,748      $  465,640
Adjustments to reconcile net income
  to net cash provided by (used in)
  operating activities:
Depreciation and amortization                        424,431         248,192

Changes in current assets and liabilities:
Receivables                                           73,904       (  75,530)
Inventories and repair parts                       ( 414,886)      ( 182,994)
Prepaid expenses                                   (  54,540)      (  10,789)
Accounts payable                                      10,036       (  18,372)
Accrued expense                                    (  30,930)         28,495
Other assets                                       (     400)         17,498
                                                     -------         -------
Net cash provided by operating activities            508,363         472,140
                                                     -------         -------
Cash flows from investing activities
Increase in fixed assets                           (  99,988)      ( 230,185)
Increase in patents                                ( 270,438)      ( 124,471)
Increase in deposits                               (  11,622)      (  25,580)
Decrease in Due to joint venture- J Plasma         ( 100,000)             --
                                                     -------         -------
Net cash used in investing activities              ( 482,048)      ( 380,236)
                                                     -------         -------
Cash flows from financing activities

Decrease in notes payable                          ( 206,522)      ( 529,433)
Increase in notes payable                            438,783         573,565
Common shares purchased                            ( 114,000)      ( 114,000)
Exercise of stock options                                 --          30,000
Decrease in loans from shareholders                (  24,720       (  30,066)
Subscription receivable                                3,967       (     146)
                                                     -------         -------
Net cash used in financing activities                 97,508       (  70,080)
                                                     -------         -------
Net increase (decrease) in cash
 and cash equivalents                                123,823          21,824

Cash and cash equivalents, beginning of period       278,662         415,074
                                                     -------         -------
Cash and cash equivalents, end of period             402,485         436,898
                                                     =======         =======

The accompanying notes are an integral part of the financial statements.

BOVIE MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Cash paid during the nine months ended September 30:

                                    2001               2000
                                    ----               ----

Interest paid                   $  53,972           $  48,250
Income Taxes                        - 0 -               - 0 -

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

There were no non-cash investing and financing activities in the first half of the year 2001 or 2000.

BOVIE MEDICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION (CONTINUED)

NOTE 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements include the accounts of Bovie Medical Corporation and its wholly owned subsidiary Aaron Medical Industries, Inc. In the opinion of management, the interim financial statements reflect all adjustments, consisting of only normal recurring items, which are necessary for a fair presentation of the results for the interim periods presented.

The results for interim periods are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the significant accounting policies and the other notes to the financial statements included in the Corporation's 2000 Annual Report to the SEC on Form 10-KSB.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Values of Financial Instruments

Cash and cash equivalents. Holdings of highly liquid investments with maturity of three months or less, when purchased, are considered to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair values.

Accounts receivable and accounts payable. The carrying amount of accounts receivable and accounts payable on the balance sheet approximates fair value.

Short term and long term debt. The carrying amount of the bonds and notes payable and amounts due to shareholders approximates fair value.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at September 30, 2001 and December 31, 2000 were as follows:

                    September 30, 2001       December 31, 2000
                    ------------------       -----------------

 Raw materials         $ 1,303,746               $ 1,269,110
 Work in process           734,199                   490,620
 Finished goods            384,970                   234,834
                         ---------                 ---------

         Total         $ 2,422,915                $1,994,564
                         =========                 =========

BOVIE MEDICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION (CONTINUED)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Repair Parts. The Company acquired the inventory of repair parts in conjunction with the purchase of the Bovie line of generators and Bovie trade name, on May 8, 1998. The Company has maintained the inventory to service previously sold generators. The useful life of repair parts is estimated to be five to seven years and the Company has set up an allowance for excess and obsolete parts.

As of September 30, 2001 and December 31, 2000, the inventory of parts was as follows:

                                                September 30,     December 31,
                                                   2001              2000
                                                 -----------      -----------

   Raw materials                                 $ 537,833        $ 537,917
   Allowance for excess or obsolete parts         (233,600)        (220,219)
                                                   -------          -------

                                                 $ 304,233        $ 317,698
                                                   =======          =======

Long-Lived Assets

Long-lived and assets consist of property, plant and equipment, and intangible assets.

Property, plant and equipment are recorded at cost less depreciation and amortization. Depreciation and amortization are accounted for on the straight-line method based on estimated useful lives. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterment and large renewals, which extend the life of the asset, are capitalized whereas maintenance and repairs and small renewals are expenses, as incurred. The estimated useful lives are: machinery and equipment, 7-15 years; buildings, 30 years; and leasehold improvements; 10-20 years.

Intangible assets consist of patent rights and goodwill. Goodwill represents the excess of the cost of assets of the acquired companies over the values assigned to net tangible assets. These intangibles are being amortized by the straight-line method over a 5 to 20 year period.

Effective January 1, 1996, the Company adopted the Statement of Financial Accounting Standards (SFAS) No.121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. In accordance with SFAS No.121, the Company reviews long-lived assets for impairment whenever events or changes in business circumstances occur that indicate that the carrying amount of the assets may not be recovered.

The Company assesses the recoverability of long-lived assets held, and to be used, based on undiscounted cash flows and measures the impairment, if any, using discounted cash flows. Adoption of SFAS No.121 did not have a material impact on the Company’s consolidated financial position, operating results or cash flows.

Revenue Recognition and Product Warranty

Revenue from sales of products is generally recognized upon shipment to customers. The Company warrants its products for one year. The estimated future costs of warranties are not material.

BOVIE MEDICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION (CONTINUED)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition and Product Warranty (continued)

Income is recognized in the financial statements (and the customer billed) when products are shipped from stock. Net sales are arrived at by deducting discounts from and adding freight out to gross sales.

Environmental Remediation

The Company accrues environmental remediation costs if it is probable that an asset has been impaired or a liability incurred at the financial statement date and the amount can be reasonably estimated. Environmental compliance costs are expenses, as incurred. Certain environmental costs are capitalized based on estimates and depreciated over their useful lives.

Earnings Per Common and Common Equivalent Share

In February 1997, the Financial Accounting Standards Board issued SFAS 128, “Earnings Per Share.” SFAS 128 establishes new standards for computing and presenting earnings per share (“EPS”). Specifically, SFAS 128 replaces the previously required presentation of primary EPS with a presentation of basic EPS, requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the financial statements issued for periods ending after December 15, 1997. In 1997, the Company adopted SFAS 128.

Research and Development Costs

Only the development costs that are purchased from another enterprise and have alternative future use are capitalized and amortized over five years.

Income Taxes

The Company and its wholly-owned subsidiary file a consolidated federal income tax return.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Non-monetary Transactions

The accounting for non-monetary assets is based on the fair values of the assets involved. Cost of a non-monetary asset acquired in exchange for another non-monetary asset is recorded at the fair value of ; the asset surrendered to obtain it. The difference in the costs of the assets exchanged is recognized as a gain or loss. The fair value of the asset received is used to measure the cost, if it is more clearly evident than the fair value of asset surrendered.

BOVIE MEDICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION (CONTINUED)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation

The Company has adopted Accounting Principles Board Opinion 25 for its accounting for stock-based compensation. Under this policy:

1. Compensation costs are recognized as an expense over the period of employment attributable to the employee stock options.

2. Shares issued in accordance with a plan for past or future services of an employee are allocated between the expired costs and future costs. Future costs are charged to the periods in which the services are performed. The pro forma amounts of the difference between compensation cost included in net income, and related cost, measured by the fair value based method including tax effects, are disclosed.

New Accounting Standards

In June 1997, the Financial Accounting Standards Board issued SFAS 130, “Reporting Comprehensive Income”. SFAS 130 establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains, and losses) in a full set of general purpose financial statements. Specifically, SFAS 130 requires that all items that meet the definition of components of comprehensive income be reported in a financial statement for the period in which they are recognized. However, SFAS 130 does not specify when to recognize or how to measure the items that make up comprehensive income. SFAS 130 is effective for fiscal years beginning after December 15, 1997 and early application is permitted.

Management believes the application of SFAS 130 will not have a material effect on the Company’s future financial statements.

In April 1998, the FASB issued SOP 98-5, “Reporting on the Costs of Start-up Activities,” which will become effective for the Company in fiscal 2000. It requires costs of start-up activities and organization costs to be expressed, as incurred. The Company currently follows this approach and such costs have been minimal in the past.

In June 1997, the Financial Accounting Standards Board issued SFAS 131, “Financial Reporting for Segments of Business Enterprise.” SFAS 131 supersedes the “industry segment” concept of SFAS 14 with a “management approach” concept as the basis for identifying reportable segments. SFAS 131 is effective for fiscal years beginning after December 15, 1997 and early application is permitted. Management believes the application of SFAS 131 will not have a material effect on the Company’s future financial statements.

Prospective Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations, and Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Statement No. 141 requires all business combinations initiated after June 30, 2001, to be accounted for using the purchase method of accounting. Under Statement No. 142, goodwill will no longer be subject to amortization over its estimated useful life. Rather, goodwill will be subject to at least an annual assessment for impairment by applying a fair-value-based test. In addition, Statement No. 142 requires separate recognition for certain acquired intangible assets that will continue to be amortized over their useful lives.

Implementation of Statement No. 142, which is effective for fiscal 2002, is currently expected to increase the company's annual net earnings by approximately $187,732 due to the cessation of goodwill (trade name) amortization. In addition, the company does not currently expect any material impairment of goodwill to result from implementation of Statement No. 142.

Foreign Currency Translation

Local currencies are considered the functional currencies for most of the company's operations outside the United States. Assets and liabilities are translated into U.S. dollars at the rate of exchange in effect at the balance sheet date. Revenues and expenses are translated into U.S. dollars at average monthly exchange rates prevailing during the year.

2001 Statutory and Non-Statutory Stock Option Plan

On July 16, 2001 the Company filed a registration statement, under Securities Act of 1933, to register 1,200,000 underlying shares of the Company to be issued upon exercise, to employees or consultants ("Participants"), pursuant to the Company's "2001 Statutory and Non-statutory Stock Option Plan".

According to the Plan, the exercise price of the any option shall not be less than 100% of the fair market value of a share on the date of grant. The exercise price for those who possess more than ten percent of the total voting shares of the Company shall not be less than 110% of the fair market value per share at the date the grant. The term of each option shall not exceed ten years from the date of the grant and five years for any 10% Shareholder. Under the plan, the aggregate fair market value of the shares granted to each participant in any calendar year shall not exceed $100,000.

Options granted to participants shall either vest immediately or if a participant has served the Company for a period of less than five years, options shall vest at the rate of 20% for each year served and 20% per year for each additional year thereafter until a total of five years has been served. Options are not transferable except by will or by the laws of descent and distribution.

All certificates for shares delivered upon the exercise of Options under the plan shall be subject to such restrictions as the Company may deem advisable or the rules, regulations and other requirements of the Securities and Exchange Commission and any applicable federal or state securities laws. Unless otherwise specified by the Company, upon termination of the employment or consultancy, any unexercised option previously granted is cancelled.

BOVIE MEDICAL CORPORATION

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The results of operations over the nine months ended September 30, 2001 show increased sales and increased profitability, as compared to the first nine months of 2000. The Company's sales revenues increased by 16%, from $7,095,316 to $8,238,896. For the first nine months of 2001 and 2000, cauteries accounted for 42% and 44% of sales, respectively. For the same period, electro-surgical devices accounted for 25% and 19%, respectively.

Gross profit increased from $3,258,709 to $3,759,307. Increased gross profit was mainly attributable to increased sales of electro-surgical devices. Gross profit percentage was the same for the nine-month periods ended September 30, 2001 and 2000, respectively.

Operating salaries and related expenses increased by 12%, from $1,159,989 to $1,297,396, in the nine months ended September 30, 2001 as compared to the same period in 2000. The recruitment of additional quality control ("Regulatory Staff"), and administrative personnel to meet the total quality control policies of the Company and employee incentive raises were the principal reasons for $137,407 increase in salaries.

Research and development costs decreased by 8% from $354,401 to $327,371 from the nine months ended September 30, 2000 to the nine months ending September 30,2001. Research and development costs are mainly attributable to engineering costs on electro-surgical generator and J Plasma device development.

Expenses for professional services decreased by 30% to $226,989 in the nine months ended September 30, 2001, as compared to $323,429 in the same period of the previous year. The main reason for this decrease was professional fees associated with law suits and business combinations.

Selling, General and Administrative expenses increased by $416,605 (44%). These expenses were $1,361,317 in the nine month period ended September 30, 2000 as compared to $944,712 for the nine months ended September 30, 2001. The increase was mainly attributable to the expense of additional personnel and the cost associated with establishing expanded European operations.

Interest expense increased from $51,223 in the nine months ended September 30, 2000 to $53,773 in 2001. The $2,550 (5%) increase in interest expense was mainly attributable to the increase in interest expense on the Company's line of credit.

The operating gain was $546,234 in the first nine months of 2001 as compared to an operating gain of $476,175 in the same period in 2000.

The Company had a net gain of $500,748 for the nine months ended September 30, 2001 as compared to a net gain of $465,640 in 2000 for the same period. The main reason for the increase of $70,056 in the operating income and $35,108 in net income is the increased electrosurgery sales.

BOVIE MEDICAL CORPORATION

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (continued)

The Company sells its products predominately through distributors and independent representatives who service the distributors, both in the United States and in the international market. Distributors are contacted through response to company advertising in international medical journals or at domestic or international trade shows. The main focus for export sales has been Western Europe.

The Company has distributors in all major markets in Europe, concentrating on major markets for increased exposure and the introduction of new products.

During the first nine months of 2001, international sales increased by 16%. These sales were $1,435,057, representing 18% of total sales, while in 2000, for the same period total international sales were $1,235,561 or 17% of total sales. The Company expects international sales to continue to increase due to it's increased marketing efforts in electrosurgery.

Financial Condition

As of September 30, 2001, the amount of cash was $402,485 as compared to $436,898 at September 30, 2000. Cash provided by operating activities was $508,363 in the first nine months of 2001 as compared to $472,140 provided by operations in 2000. Net working capital of the Company on September 30, 2001 was $2,853,445 as compared to $2,629,870 on September 30, 2000.

Investing activities utilized $482,048 in cash during the first nine months of 2001, compared to $380,286 in the first nine months of 2000. In 2001, the Company continued its policy of investing in property, plant and equipment needed for future business requirements, including manufacturing capacity.

The Company's ten largest customers accounted for approximately 59% and 60% of net revenues for the first nine months of 2001 and 2000, respectively. As of September 30,2001, the ten largest customers accounted for approximately 65% of outstanding accounts receivable.

The amount of cash used (provided) by financing activity was $97,508 and ($70,080), respectively, in the first nine months of 2001 and 2000. The most significant financing activities in the nine months ended September 30, 2001 were the purchase of Company shares from a former major shareholder ($114,000) and borrowing $340,000 on the Company's new credit line.

The Company believes that it has the financial resources needed to meet business requirements in the foreseeable future, including capital expenditures for the expansion of its manufacturing site, working capital requirements, and product development programs.

BOVIE MEDICAL CORPORATION

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Outlook

The Company believes that the world market for disposable medical products, such as the Company's battery-operated cauteries, have significant growth potential because these products have not been affordable or effectively marketed outside the U.S. cautery market and does not expect a dramatic growth in sales of cautery-related products domestically.

The Company has focused on expanding its line of electrosurgical products. Electrosurgical products sold by the Company include standard stainless steel disposable and reusable electrodes, electrosurgical pencils and accessories, the Aaron 800, 900, 1200, and 1250 generators, and recently introduced, the Aaron 2100 high frequency generator.

From the first nine months of 2000 to the first nine months of 2001, the Company’s electrosurgical sales increased by 55% from $1,375,107 to $2,127,758. The increase was mainly attributable to an additional O.E.M manufacturing agreement. With the introduction of new electrosurgical products, the Company expects future electrosurgical sales to increase. The Company, through its private label capability, anticipates new opportunities in the domestic and international markets. The electrosurgery market is larger than the Company's traditional market and is dominated by two main competitors, ValleyLab and Conmed. The Company believes combined markets for these products worldwide approximate 800 million.

Reliance on Collaborative, Manufacturing and Selling Arrangements

The Company is dependent on certain contractual partners for manufacturing and product development. Should a collaborative partner fail to develop and manufacture products, the Company’s future business and value of related assets could be negatively affected. No assurance can be given that a collaborative partner may give sufficient high priority to the Company’s products. In addition, disagreements or disputes may arise between the Company and its contractual partners, which could adversely affect production of its products.

Liquidity and Future Plans

The Company has expanded its manufacturing facilities by renting additional off premises office space. This is due to increased sales and the need for additional space for developmental work in electrosurgery.

The Company's joint venture has made substantial progress towards the commercialization of the J-Plasma electrosurgical generator: an innovative patented electrosurgical technology that uses an inert gas to affect precise surgical procedures.

In order to resume strong international sales growth and maintain its ability to sell in Europe, management has implemented and been certified as ISO9001/EN46001 quality system compliant and has been granted its CE mark (International Quality control).

In the Second Quarter of 2001, the Company obtained a new line of credit with a local commercial bank for $1,500,000. Interest on the loan is to be paid at the bank’s base rate. As of September 30, 2001, the Company had paid off $175,000 on its former line of credit and borrowed $340,000 against it's new line of credit.

BOVIE MEDICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION (CONTINUED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Outlook (continued)

The Company’s future results of operations and the other forward-looking statements contained herein particularly the statements regarding growth in the medical products industry, capital spending, research and development, and marketing and general and administrative expenses, involve a number of risks and uncertainties. In addition to the factors discussed above, other factors that could cause actual results to differ materially, are the following: business conditions and the general economy; competitive factors such as rival manufacturers’ availability of products at reasonable prices; risk of nonpayment of accounts receivable; risks associated with foreign operations; and litigation involving intellectual property and consumer issues.

The management of Bovie Medical Corporation believes that it has the product mix, facilities, personnel, and competitive and financial resources for business success, but future revenues, costs, margins, product mix and profits are all subject to the influence of a number of factors, as discussed above.

BOVIE MEDICAL CORPORATION

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company has instituted an action for breach of contract against Advanced Refractory Technology, Inc. (ART) - (A former major shareholder) to recover a deposit of $125,000.

Also see Form 10-KSB for the year ended December 31, 2000, Part I, Item 3.

ITEM 2. CHANGES IN SECURITIES

There have been no changes in the instruments defining the rights or rights evidenced by any class of registered securities.

There have been no dividends declared.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

In February of 1997, the 10-year notes came due and the Company offered each bond holder 2,200 shares of common stock for their $1,000 bond and accrued interest of $550. Nineteen bondholders accepted the offer and forty-three bondholders received cash for their bonds and accrued interest. The balance of the bondholders have not redeemed their bonds or accepted the shares offered.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

There has not been a meeting of shareholders and therefore, no matters have been submitted to a vote of security holders.

ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K

A) Exhibits - None
B) Form 8K - None

SIGNATURES:

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Bovie Medical Corporation.
(Registrant)
Date: November 13, 2001

/s/Andrew Makrides
Chief Executive Officer - Andrew Makrides,