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

                            FORM 10-K/A
          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
             OF THE SECURITIES EXCHANGE ACT OF 1934
                         (Fee Required)

For the Fiscal Year Ended                  Commission File Number
    December 31, 1998                              0-27996

                    BATTERIES BATTERIES, INC.
     (Exact name of Registrant as specified in its charter)

                           13-383-5420
                        (I.R.S. Employer
                       Identification No.)

          Bldg 1EB, Chimmney Rock Road
          Bound Brook, New Jersey                      08805
                                                     (Zip Code)
(Address of principal executive offices)

                         (215) 322-4600
       Registrant's telephone number, including Area Code

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

Securities registered pursuant to Section 12(g) of the Act:

             Common Stock, par value $.001 per share

                 Common Stock Purchase Warrants

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

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

The aggregate market value of the voting stock held by
nonaffiliates of the registrant (holders other than officers or
directors and other affiliates) as of March 29, 1999 was
$4,976,640.  As of March 29, 1999, 4,743,000 shares of the
Registrant's Common Stock, $.001 par value per share, were
outstanding.

                             PART I

Item 1.   BUSINESS

     Batteries Batteries, Inc. (the "Company" or "Batteries
Batteries") was founded in May 1995.  The Company is engaged in
the nationwide sale and distribution of a wide range of batteries
and battery related products and cellular products, accessories
and components.  The business of Batteries Batteries was created
through the acquisition of five companies:

     -    In June 1995, Batteries Batteries acquired Specific
          Energy, Inc. ("Specific Energy"), a retail distributor
          of specialty batteries based in Phoenix, Arizona.  (The
          Company sold the assets of Specific Energy in
          September 1998.)

     -    In April 1996, Batteries Batteries acquired both
          Advanced Fox Antenna, Inc. ("Advanced Fox") based in
          Huntington Valley, Pennsylvania, and Tauber
          Electronics, Inc. ("Tauber") based in San Diego,
          California.  Those acquisitions were part of a "roll-
          up" transaction also involving an initial public
          offering of the Company's shares.

     -    In January 1997, the Company acquired Battery Network,
          Inc. and affiliate companies ("Battery Network") based
          in Chicago, Illinois, North Branch, New Jersey and
          Escondido, California.

     -    In May 1997, the Company acquired Cliffco of Tampa Bay,
          Inc. ("Cliffco") based in Tampa, Florida.

     The Company's operations are presently organized into two
business groups:  battery assembly and distribution and cellular
and wireless accessory distribution.

     The Battery Group is headquartered in Escondido, California
and is comprised of:

     -    Tauber, which engineers, manufactures, and distributes
          battery packs and battery systems to original equipment
          manufacturers throughout the United States.

     -    Battery Network, which is a national distributor of
          specialty batteries to the commercial, industrial, and
          government/institutional markets.

     The Wireless Products Group is headquartered in Huntington
Valley, Pennsylvania and is comprised of:

     -    Advanced Fox, which distributes over 1,600 cellular
          telephone accessory products, including batteries,
          <PAGE 1> chargers, and antennas ("Cellular
          Accessories") to customers throughout North and South
          America.

     -    Cliffco, which distributes Cellular Accessories to a
          variety of customers including the large communication
          carriers.

     Financial information about these industry segments is found
in Item 14 of this Report and Note 14 of the Company's financial
statements.

OPERATING STRATEGY

     The battery distribution business remains fragmented.  The
Company's strategy is to effectively market a broad line of
original and replacement specialty batteries and Cellular
Accessories.  The Company strives to leverage its distribution
channels and relationships to and provide high quality technical
expertise to its customers.

     The Company's business strategy involves the following:

     -    Diversity of Products and Customers.  The Company
          distributes a vast array of batteries for such products
          as computers, scientific and medical equipment,
          photographic and industrial equipment, calculators,
          cellular phones, camcorders and military equipment and
          battery packs for special applications.  The
          proliferation of portable products has also created a
          growing replacement market which is served by the
          Company.  The Company's extensive product line results
          in a large, diverse customer base.  For example, the
          Company sells and distributes products to original
          equipment manufacturers (OEM's), maintenance repair
          organizations (MRO's), dealers, commercial and
          industrial businesses, carriers and end users.  The
          Company is, therefore, not dependent upon any one
          customer or customer base.

     -    Advantageous Purchasing.  Each of our business units
          has its own purchasing manager who makes inventory and
          purchasing decisions for that unit.  However, a
          corporate purchasing manager assures that vendors
          chosen and pricing are the most advantageous for the
          Company.

     -    Enhance Profits In Battery Group.  The Battery Group
          (excluding the results of Specific Energy) operated at
          a deficit of approximately $3,234,151 in 1998.
          Management has developed a strategy to eliminate the
          loss.  The Battery Group operations were consolidated
          in November, 1997 in facilities in Escondido,
          California.  Prior management intended to fully
          <PAGE 2> integrate the operations of Tauber and Battery
          Network into one operating entity.  This strategy
          proved to be ineffective because the nature of the
          businesses, the respective vendors, customers, methods
          of operation, markets and competition of each of the
          two companies is different.  Beginning in June, 1998
          current management has developed a plan to operate both
          Battery Network and Tauber from the same facility, to
          combine and cooperate with certain tasks but to
          maintain separate management and separate employees for
          each of the companies.  The Company is investigating
          lower cost sources of product both in the Far East and
          domestically and has begun to use telemarketing for
          sales and marketing (i.e., "sales", below) are expected
          to reduce costs, assure appropriate inventory levels
          and increase sales.

     -    Continue and Expand Wireless Group.  The two business
          units within the Wireless Group (Advanced Fox and
          Cliffco) operate from completely separate facilities.
          While management is separate, the companies' management
          team confer daily, consolidate purchasing and are
          operated under similar marketing and operating plans.
          Further, the Company plans to enhance the Wireless
          Division through strategic acquisitions in regional
          markets other than the current eastern seaboard
          locations.

OPERATIONS

     Products.  The Company markets in excess of 7,500 different
battery products and value-added battery packs and over 2,000
cellular phone accessories and components.  The products address
a multitude of applications for commercial, industrial and
consumer use.  The Company offers branded items, private label
items and custom-designed products for special situations which
are produced or assembled at the Company's facilities.  The
Company is an authorized dealer for numerous major battery
manufactures including Panasonic, Gates Energy Products,
Duracell, Sanyo, Varta and Saft, pursuant to agreements or
arrangements that are terminable by the Company or the
manufacturer on short notice.

     Purchasing.  Purchases are made from a wide variety of
vendors.  The Wireless Group purchases a substantial portion of
its products from manufacturers located overseas, principally in
the Far East.  No single supplier accounts for purchases
representing more than 10% of the Company's total purchases for
the year.  The Company has recently opened a buying office in
Taiwan with the goal of reducing costs and improving the quality
of items currently imported or purchased from domestic sources.

     Sales.  The Company markets and sells the majority of its
products to dealers, other distributors, telephone carriers and
<PAGE 3> mass merchandisers.  Additionally, the Company sells
value added battery packs and battery supplies directly to OEM
customers and through fulfillment programs to individual
consumers.  Through August, 1998, the Company operated a retail
division in Phoenix, Arizona under the tradename Batteries
Batteries for Everything.  The assets of the division were sold
and the Company no longer has a retail outlet.

     Each business group has different customers.  Previously,
Batteries Batteries utilized an outside sales force for the
Battery Group and telemarketing and follow up sales calls for the
Wireless Products Group.  Management has revised the prior
strategy and has begun using a similar telemarketing strategy for
the Battery Group.  Management believes that this change in
strategy will both reduce the cost of marketing to the Battery
Group as well as increase sales volume.

     Additionally, the Company produces eight product line
catalogues that are circulated nationally and internationally.
The Company intends to integrate the catalogs on a Company-wide
basis, and to enhance, as appropriate, private label and
proprietary item sales that generally provide higher margins.

     Concentration.  During the twelve months ended December 31,
1998, the Company effected sales to more than 17,000 commercial
and industrial customers.  No one customer accounted for more
than 5% of the revenues of the Company for the twelve months
ended December 31, 1998.  Export sales accounted for less than 3%
of total revenues for the period.

COMPETITION

     The battery distribution business is fragmented, multi-
tiered and loosely structured with manufacturers often competing
with their own regional distributors in sales to both large OEM
and commercial accounts.  There are many distributors, most
operating regionally or locally, selling to smaller commercial
and industrial accounts, regional retail accounts and, to a small
extent, directly to retail customers.  In many instances, small
distributors focus on a particular market segment.  Cellular
accessories are sold by many large retailers, numerous small
importers and by one large distributor of many cellular products.

     The Company believes that its size and diversity provides
certain competitive advantages such as those arising from
centralized volume purchasing and the ability to simultaneously
service several markets.  Competition in the industry is also
based on maintenance of product quality, delivery efficiency,
customer service and satisfaction levels, maintenance of
satisfactory dealer relationships and training programs, and the
ability to anticipate technological changes and changes in
customer preferences.  Although management considers it unlikely,
no assurance can be given that any of several major battery
manufacturers whose products the Company distributes will not
<PAGE 4> acquire, startup or expand their own distribution
systems to sell directly to industrial, commercial and retail
customers.

EMPLOYEES

     As of March 31, 1999, the Company employed approximately 254
personnel in its operations.  Included were 4 in technical
operations, 60 in telemarketing and commercial sales, 52 in
assembly and value-added operations, 82 in warehousing, inventory
control, shipping and receiving, 12 in purchasing and 44 in
management and administration.  None of the employees is
represented by a labor union.  The Company considers its
relations with its employees to be satisfactory.

ENVIRONMENTAL MATTERS

     The Company purchases and distribute batteries which contain
chemicals such as alkaline, nickel-cadmium and lithium.  The
Company does not manufacture the batteries but rather purchases
the items in their finished state.  Company operations do not
involve the alteration or penetration of the batteries.  Returns
of its nickel-cadmium batteries are made to the manufacturer and
returns of its lead acid and mercury batteries are handled
through a bonded agency.  The Company believes that it has
operated its respective facilities in compliance with applicable
environmental laws and regulations.  Accordingly, the Company
does not believe that it has any material risk of environmental
liability.

     The Company currently is not aware of any environmental
conditions relating to present or past waste generation at or
from any of its facilities or operations, that would likely have
a material adverse effect on the financial condition or results
of operations of the Company and does not anticipate any material
expenditures to comply with environmental laws, regulations or
ordinances.  However, there can be no assurance that
environmental liabilities in the future will not be incurred and
that they will not have a material adverse effect on the
financial condition or results of operations of the Company.

INTELLECTUAL PROPERTY

     The Company believes that it has all rights to trademarks
and trade names necessary for the conduct of its business.

SALE OF SUBSIDIARY

     In September 1998, the Company sold all of the assets of
Specific Energy, Inc. for $715,000 in cash to a retail franchise
in Phoenix, Arizona.  Specific Energy, Inc. was the Company's
retail subsidiary.  It operated four retail stores in Phoenix,
Arizona under the trade name Batteries Batteries for Everything.
<PAGE 5> Upon closing on the transaction, the Company ceased all
retail operations.

CHANGES IN MANAGEMENT

     On April 30, 1998, a group of shareholders headed by Stephen
Rade, a director and 10% shareholder, filed a consent
solicitation seeking to remove Warren Haber as the Chairman of
the Board, Allan Baldwin as a director and CEO, John Teeger as a
Director and the Company's Secretary, and directors John Simon,
Fred Corrado and Bruce Barnett.  The shareholder group sought to
replace the six directors with two independent directors:
Robert C. Meehan and Allan Kalish.  Following negotiations
between the parties, all six directors resigned from the board
and Messrs. Haber, Baldwin and Teeger resigned as officers of the
Company.  On June 5, 1998, Mr. Meehan was elected Chairman of the
Board and Mr. Rade was elected President and CEO.

     In November, 1998 and December, 1998 the Board elected
Kenneth Rickel and Christopher F. McConnell, respectively, to the
Board of Directors to fill two of the vacancies.  On December 17,
1998, Mr. Meehan resigned as Chairman of the Board of Directors
and Mr. McConnell was elected as the new Chairman.

SUBSEQUENT EVENTS

     On March 24, 1999, Messrs. Meehan and Sapp resigned from the
Company's Board of Directors and Barbara M. Henagan and
Bradley T. MacDonald were elected by the Board to fill the
vacancies created by the resignations.

Item 2.   PROPERTIES

     All of the Company's real properties are held under leases.
The following table provides certain information concerning the
Company's leased properties:
  <PAGE 6>
                                                          LEASE
                                                APPROX-   EXPIR-
                                                 IMATE    ATION
OPERATION         NATURE       LOCATION          AREA      DATE

Tauber            Office,      San Diego, CA    19,800   07/31/99
                  warehouse
                  and
                  assembly*

Advanced Fox      Office**     Huntingdon, PA    7,000   12/31/99

Advanced Fox      Warehouse    Huntingdon, PA   30,000   08/31/03
                  and
                  assembly

Advanced Fox      Office       Huntingdon, PA    2,000   05/30/02
                  Accounting
                  Dept

Advanced Fox      Office and   Miami, FL         5,555   04/15/02
                  warehouse

Battery Network   Office       McHenry, IL         625   05/31/99
                  warehouse

Battery Network   Office,      North Branch,    11,750   12/31/01
                  warehouse    NJ
                  and

Battery Network   Office,      Escondido, CA    34,820   01/30/04
                  warehouse
                  and
                  assembly

Cliffco           Office and   Tampa, FL        18,800   08/01/04
                  warehouse

Specific Energy   Office and   Phoenix, AZ       6,100   01/31/99
                  warehouse*** (LaSalle St.)

*    Leased but not occupied as a result of the consolidation of
     Tauber and Battery Network.  The Company is in process of
     attempting to negotiate an early termination of the lease.

**   Leased from an affiliate of a Director of the Company.

***  Lease terminated on January 31, 1999.

Item 3.   LEGAL PROCEEDINGS

     David Peterson, a former employee of Battery Network, has
filed suit against the Company seeking damages in an aggregate
amount equal to approximately $300,000 claiming a breach of his
<PAGE 7> employment contract by the Company.  The Company
terminated Mr. Peterson for cause and believes it has a valid
defense to Mr. Peterson's claims.  The action has been filed in
state court in California.  Trial will likely occur within 12
months.

     The Company is, from time to time, a party to other
litigation arising in the normal course of its business, most of
which involves claims for personal injury and property damage
incurred in connection with its operations.  Management believes
that none of these actions will have a material adverse effect on
the financial condition or results of operations of the Company.

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

     No matters have been submitted to a vote of security holders
during the three months ended December 31, 1998.
  <PAGE 8>
                             PART II

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

     The Company's Common Stock and Redeemable Common Stock
Purchase Warrants have traded on the Nasdaq National Market (the
"NMS") since April 8, 1996.  The Common Stock trades under the
symbol "BATS" and the Warrants trade under "BATSW."  The
following tables set forth the range of high and low sale prices
for the quarters indicated for the Common Stock and Warrants on
the NMS as reported by for the period from April 8, 1996 through
December 31, 1998.

        HIGH AND LOW PRICES OF BATTERIES BATTERIES, INC.
           COMMON STOCK AND PUBLIC WARRANTS ON NASDAQ

                                   COMMON STOCK       WARRANTS
                                  HIGH      LOW     HIGH    LOW
1996

SECOND QUARTER                   7 1/8     5 1/2   2 5/8   1
  (April 8-June 30)
THIRD QUARTER                    5 7/8     4 1/2   1 7/8   1 1/4
FOURTH QUARTER                   4 7/8     3 1/2   1 5/8     5/8

1997

FIRST QUARTER                    4 1/4     3 1/2   1 1/16    9/16
SECOND QUARTER                   3 5/8     2 1/8     7/8     7/16
THIRD QUARTER                    3 3/4     2 1/2     9/16    7/16
FOURTH QUARTER                   3         1 3/4     9/16    7/32

1998

FIRST QUARTER                    2 11/16   1 3/4     5/8     5/16
SECOND QUARTER                   2 1/4     1 1/2     1/2     1/4
THIRD QUARTER                    2         1         5/16    1/8
FOURTH QUARTER                   2         1 1/16    1/4     1/16

     The number of record holders of the Company's Common Stock
and of the Warrants as of March 30, 1999 were 50 and 43,
respectively.  A substantially larger number of beneficial owners
hold such shares of Common Stock in depository or nominee form.

     No dividends have been paid on the outstanding shares of
Common Stock.  The Company's Revolving Credit, Term Loan and
Security Agreement prohibits the payment of dividends on the
Common Stock without the consent of the lenders.
  <PAGE 9>
Item 6.   SELECTED FINANCIAL DATA

INTRODUCTION

     In June 1995, Batteries Batteries acquired 95% of the
outstanding common stock of Specific Energy in a business
combination accounted for as a purchase.  In June 1996, the
Company acquired the remaining minority 5% interest for cash.
Advanced Fox, Tauber and Specific Energy were combined by merger
or stock acquisition in April 1996 (collectively the "Mergers").
Prior to the Mergers, each of those companies had been operating
as a separate independent entity. As a result, historical
combined results may not be comparable to or indicative of future
performance.  For all periods presented, the Consolidated
Financial Statements include the accounts of those companies as
if they had always been members of the same operating group
without giving effect to the Mergers.  The assets and liabilities
of these founding companies are reflected at their historical
amounts.

     Certain of the founding companies had operated as
Subchapter S corporations under the Internal Revenue Code of
1986, as amended.  Upon consummation of the Mergers, the Company
now files as a consolidated group for Federal income tax
purposes.  For purposes of the Unaudited Pro Forma Statements of
Operations data included in this Report, pro forma Federal and
state income taxes have been provided as if the Combined
Companies had filed C corporation tax returns.  The unaudited pro
forma results reflect an income tax provision at an effective
percentage rate calculated in accordance with SFAS No. 109.
While this effective rate represents the founding companies' pro
forma tax rate based on the historic earnings trends in the
respective tax jurisdictions, this rate may change in the future
in accordance with such trends.  See Note 1 of Notes to
Consolidated Financial Statements.

     On January 7, 1997, effective January 1, 1997 the Company
acquired (the "BN Acquisition") the business and related assets
of Battery Network, an assembler and wholesale distributor of
batteries servicing specialty battery consumers nationally, in a
business combination accounted as a purchase.  The results of
operations of Battery Network are included in the consolidated
results of the Company from January 1, 1997, the effective date
of its acquisition.

     On May 12, 1997, effective May 9, 1997, the Company acquired
the business and related assets of Cliffco in a business
combination accounted for as a purchase.  The results of
operations of Cliffco are included in the consolidated results of
the Company from May 9, 1997, the effective date of its
acquisition.

     In September, 1998, the Company sold the Retail assets of
Specific Energy in a cash sale price of $715,000, which was the
<PAGE 10> approximate carrying value of the net assets sold and
appropriate transaction costs.

     For the year ended December 31, 1998, the results of
operations include the results of Batteries Batteries, Battery
Network, Advanced Fox and Tauber for the year ended December 31,
1998.  For the year ended December 31, 1997, the results of
operations include the results of Batteries Batteries, Battery
Network, Advanced Fox and Tauber for the year ended December 31,
1997 and those of Cliffco from the date of acquisition, May 9,
1997, through December 31, 1997. For the fiscal year ended
December 31, 1996, the results of operations include the results
of Batteries Batteries for the eleven months ended December 31,
1996 and those of Advanced Fox and Tauber for the year ended
December 31, 1996. For the year ended December 31, 1995, the
results of operations include the results of Batteries Batteries
for the year ended January 31, 1996 and those of Advanced Fox and
Tauber for the year ended December 31, 1995.

     The Selected Financial Data for the years ended December 31,
1995, 1996, 1997 and 1998 have been derived from the Company's
consolidated financial statements that have been audited by
Deloitte & Touche LLP and that appear elsewhere in the Report.
  <PAGE 11>
                     SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                       FISCAL YEAR ENDED December 31,
                                1994      1995      1996      1997      1998
                               ($ THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                           <C>       <C>       <C>       <C>       <C>
INCOME STATEMENT DATA
  NET SALES                   $18,213   $21,029   $25,650   $53,974   $51,454

  COST OF SALES                14,304    15,238    17,805    37,677    35,420

  GROSS PROFIT                  3,909     5,791     7,845    16,297    16,034
  SELLING, GENERAL &
    ADMINISTRATIVE EXPENSES     2,346     4,577     7,004    14,438    17,127

LOSS ON IMPAIRMENT OF
  EXCESS OF COST OVER NET
  ASSETS ACQUIRED                 0         0         0         0         558

  OPERATING INCOME              1,563     1,214       841     1,859    (1,651)
  INTEREST INCOME                   8        59        94         1         -
  INTEREST (EXPENSE)              (98)      (82)      (82)    (727)      (790)

  INCOME BEFORE PROVISION       1,473     1,191       853     1,133    (2,441)
    FOR INCOME TAXES

  PROVISION (BENEFIT) FOR
    INCOME TAXES                   (8)      (98)      337       565      (379)

  NET INCOME                    1,481     1,289       516       568    (2,062)
  PREFERRED STOCK DIVIDEND
    REQUIREMENTS                             53        60        15

  NET INCOME ATTRIBUTABLE
    TO COMMON SHAREHOLDERS                1,236       456       553    (2,062)

  NET INCOME PER SHARE OF
    COMMON STOCK (BASIC AND
    DILUTED)                                                $  0.12    $(0.43)
</TABLE>

                                   FISCAL YEAR ENDED December 31,
                                      1994       1995        1996
                                         ($ THOUSANDS)

UNAUDITED PRO FORMA DATA
  INCOME BEFORE TAXES                   1,473   1,191         853
  PROVISION FOR INCOME TAXES              604     488         350

  PRO FORMA NET INCOME                    869     703         503

  PRO FORMA NET INCOME PER COMMON
    STOCK (BASIC & DILUTED)                    $  .16  $      .15

  PRO FORMA NET INCOME ATTRIBUTABLE
    TO COMMON SHAREHOLDERS                                    443
  PRO INCOME NET INCOME PER SHARE                             .11
  PRO FORMA NUMBER OF SHARES OUTSTANDING                4,100,000
  <PAGE 12>
                              FISCAL YEAR ENDED December 31,
                         1994    1995     1996     1997     1998

BALANCE SHEET DATA
  WORKING CAPITAL        3,597   5,295    6,782   14,844   11,532

  TOTAL ASSETS           6,889   9,105   11,735   28,538   24,485

  LONG TERM DEBT,
    LESS CURRENT
    PORTION                  1     183       --   10,742    8,865

  MANDATORY REDEEMABLE      --      --      750       --       --
    PREFERRED STOCK

  STOCKHOLDERS' EQUITY   3,809   6,533    8,460   11,730    9,668

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Year Ended December 31, 1998 ("1998") Compared to Year Ended
December 31, 1997 ("1997")

     Net sales decreased 4.7% or $2.5 million, from $54.0 million
in 1997 to $51.5 million in 1998.  The decrease in sales was due
primarily to a drop of $6.8 million in Battery Network sales, and
the sale of the Specific Energy retail division on September 14,
1998.  (Specific Energy had approximately $750,000 in sales in
the September 15, 1997 to December 31, 1997 period.)  Further,
Specific Energy's sales decreased approximately $400,000 for the
comparative January 1 to September 14 period.  Partially
offsetting these sales decreases were the continued growth of
Advanced Fox Cellular business (up approximately 10.0% or
$1.6 million over 1997); an additional $2.2 million in sales from
Cliffco during the period up to May 12, 1998 (since Cliffco had
been acquired May 12, 1997), and increased Cliffco sales of
approximately $850,000 from May 12, 1998 to the end of the year;
and an increase of $690,000 in Tauber sales.

     Gross profit decreased approximately $300,000 from
$16.3 million in 1997 to $16.0 million in 1998, and as a percent
of sales increased from 30.2% in 1997 to 31.2% in 1998.  The
decrease in dollars was primarily the result of a decline in
gross profit of $3.6 million in Battery Network and approximately
$300,000 in Specific Energy, which were offset by increases in
Advanced Fox of $2.0 million, the acquisition of Cliffco on
May 5, 1997 that contributed approximately $600,000 in gross
profit for the January 1, to May 12, 1998 period with an
additional comparative increase of approximately $882,000 for the
balance of the year.  Both Advanced Fox and Cliffco substantially
improved their gross margin percentage due to continued
advantageous Far East purchasing bolstered by a consolidation of
<PAGE 13> the two cellular companies' purchasing efforts, which
began in June, 1998, which more than offset reduction in gross
profit percentage at Battery Network which was negatively
effected by its substantial sales drops requiring heavier than
normal markdowns and price reductions in reaction to competitive
pressures and to maintain inventory levels and a management
decision to discontinue certain products and product lines.

     Selling, general and administrative ("SG&A") expenses
increased 18.8%, from $14.4 million in 1997 to $17.1 million in
1998, and as a percentage of sales increased from 26.7% in 1997
to 33.3% in 1998.  The increase in SG&A was attributable to:

     -    the acquisition of Cliffco in May 1997 (approximately
          $750,000.00 attributable to comparative period in
          1998),

     -    an approximate increase of $1.2 million principally in
          marketing, selling, and distribution costs at Advanced
          Fox to support the current and anticipated sales
          growth, including continued expansion of its main and
          Miami distribution facilities, increased sales and
          telemarketing costs, and purchasing, packaging and
          warehousing services provided to Cliffco, and

     -    increases in marketing, selling and administrative
          costs at Tauber and Cliffco which were mostly offset by
          reductions in general and administrative expense at
          Specific Energy and Battery Network.

During 1998, the Company reviewed the unamortized portion of the
excess of cost over net asset acquired related to the original
purchase of Specific Energy and determined that the asset was
impaired.  Accordingly, the Company recorded a charge of
$558,112.  Subsequent to recording the impairment, the Company
sold the retail assets of Specific Energy.  The sale resulted in
cash proceeds of approximately $715,000 which approximated the
carrying value of the assets sold, net of related transaction
costs.  The increase as a percentage of sales is primarily
attributable to the large sales decline at Battery Network which
did not have corresponding reductions in SG&A expenses.

     The Company's effective income tax rate in calculating the
benefit in 1998 on the loss for the year was 15.5% as compared to
a tax rate of 49.5% in 1997.  The substantial difference in tax
rate is attributable to the effect of goodwill acquired through
various stock acquisitions that is non-deductible for income tax
purposes and the effect of state income expense in the various
states in which the entity operates.

     Interest expense increased to $790,412 in 1998 from $727,350
in 1997 due primarily to increased borrowings under the Company's
loan facility in connection with the acquisition of Cliffco in
May, 1997, the redemption in April, 1997 of outstanding 750,000
<PAGE 14> shares of Series A Preferred Stock and general
operating needs offset partially by the sale of Specific Energy
retail assets for $715,000 on September 14, 1998.

     As of December 31, 1998, the principal amounts outstanding
of Term Loans and the Revolver Loans were $1.489 million and
$7.976 million, respectively.

Year Ended December 31, 1997 ("1997") Compared to Year Ended
December 31, 1996 ("1996")

     Net sales increased 110% from $25.7 million in 1996 to
$54 million in 1997.  The increase was due primarily to the
acquisition in January 1997 of Battery Network, which added
$22.1 million in sales, and in May 1997 the acquisition of
Cliffco, which added $3.8 million in sales.  Additionally,
Advanced Fox's cellular accessory business continued to grow (up
22% compared to 1996) and Tauber reversed a decline in sales by
increasing sales in 1997 to $9.6 million (up 6% compared to
1996).

     Gross profit increased 109% from $7.8 million in 1996 to
$16.3 million in 1997, again due primarily to the acquisitions of
Battery Network and Cliffco.  In addition, Advanced Fox's gross
profit increased $1.3 million (or 25%) to $6.5 million compared
to $5.2 million in 1996.  Overall gross profit as a percentage of
sales decreased to 30.2% from 30.6% principally due to lower
gross margins in the Battery Network product line.

     Selling, general and administrative expenses increased 107%
from $7.0 million in 1996 to $14.5 million in 1997, and as a
percentage of sales decreased from 27.3% in 1996 to 26.7% in
1997.  The increases were substantially due to the added SG&A
expenses (approximately $7 million) resulting from the Battery
Network and CTB acquisitions.  Additionally, Advanced Fox's SG&A
increased 19% from $3.7 million in 1996 to $4.4 million during
1997, due primarily to increased warehouse space in Huntingdon,
PA, increased utilization of office space in Huntingdon, PA,
addition of new sales office and associated warehouse space in
Miami, Florida at mid year 1997, and increased selling and
telemarketing support.

     Interest expense in 1997 increased to $727,350 from $81,344
in 1996 due entirely to increased borrowings related to a
Revolving Credit, Term Loan and Security Agreement, dated
January 6, 1997, as amended May 13, 1997 (the "Loan Facility"),
between IBJ Schroder Bank & Trust Company and the Company.
Borrowing against the Loan Facility in 1997 consisted primarily
of $8.3 million as the cash portion of the purchase price of the
Battery Network acquisition, $75,000 as the cash portion of the
purchase price of the Cliffco acquisition, $560,000 of
indebtedness paid by the Company at the closing of the Cliffco
acquisition, and the balance as working capital.  As of
December 31, 1997, the principal amounts outstanding of Term
<PAGE 15> Loans and the Revolver Loans were $8.892 million and
$1.85 million, respectively.

     Interest Income in 1997 decreased to $1,077 from $93,787 in
1996, primarily as a result of using excess cash to reduce
outstanding balances on the Revolver and Term Loans.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's requirement for capital is to fund (i) sales
growth, (ii) capital equipment expenditures related to Year 2000
system compliance and manufacturing tooling, and (iii) financing
for acquisitions.  The Company's primary sources of financing
during 1998 and 1997 were cash flow from operations, equity
issuances and bank borrowings.

     The Company's working capital as of December 31, 1998 was
$11,532,422.  Net cash provided by operating activities for the
year ended December 31, 1998 was approximately $1.6 million.  Net
cash used in operating activities during 1997 was $1,763,927 and
net cash provided by operations for 1996 was $193,080.  The
increase in cash provided by operating activities during 1998 was
attributable to net decreases in accounts receivable and
inventory of $.5 million and $2.0 million, respectively, less a
net loss of $2.1 million (offset by depreciation and amortization
of $749,000 and impairment of goodwill of $558,112), a net
decrease in accounts payable and accrued expenses of $105,948 and
an increase in prepaid expenses and other assets of $95,227.

     Net cash provided by investing activities in 1998 was
approximately $95,180, consisting of proceeds from the sale of
Specific Energy's retail assets of approximately $715,000, less
$619,820 for the purchase of property and equipment.  Net cash
used in investing activities for the year ended December 31, 1997
was approximately $9.5 million, consisting of approximately
$8.5 million (net of cash acquired) utilized in the acquisition
of Battery Network during January 1997, and approximately
$399,000 (net of cash acquired) utilized in the acquisition of
Cliffco during May 1997.  Net cash used in investing activities
during 1996 was approximately $458,000 was utilized by the
Company to fund the remaining interest of a minority stockholder
Specific Energy ($50,882) and to fund the purchase of property
and equipment ($407,015).

     Cash used by financing activities for the twelve months
ended  December 31, 1998 was $1.9 million representing net
payments under the Revolving Credit Facility and Term Loan
Facilities.  Net cash provided by financing activities was
approximately $9.2 million during 1997, comprised of
approximately $3.0 million borrowings under the term loan
facility, approximately $8.9 million borrowings under the
revolving credit facility.  Net cash utilized by financing
activities during 1997 consisted primarily of $550,000 payments
under the term loan facility, $750,000 payment for redemption of
<PAGE 16> preferred stock, approximately $1.2 million repayment
on subsidiary borrowings, approximately $180,000 prepaid
financing and acquisition costs related to the Battery Network
acquisition, and $50,000 payment of preferred stock dividends.
Cash provided by financing activities during 1996 consisted
primarily of $9.1 million net proceeds of the Initial Public
offering, of which $6.7 million was paid to the former
stockholders of Advanced Fox and Tauber.  Net cash utilized for
financial activities included Redemption of preferred stock of
$250,000 dividends paid to preferred stockholders of $78,333,
repayments of notes to a minority stockholder of Specific Energy
of $180,000 and net payment on borrowings of $213,104.

     The Company is party to a Revolving Credit, Term Loan and
Security Agreement, dated January 6, 1997, as amended May 13,
1997 (the "Loan Facility"), between IBJ Schroder Bank & Trust
Company, as Agent ("IBJ") and the Company and all its
subsidiaries.  The Loan Facility consists of a $3,000,000 Term
Loan (the "Term Loan') payable in 35 monthly installments of
$50,000 each with the balance to be paid at maturity and a
Revolving Credit Facility (the "Revolver Loan") of up to
$10,000,000 to be advanced at the rate of 80% of eligible
accounts receivable and 50% of inventories.  The Revolver Loan
bears interest at the rate of 1/4 of 1% plus the higher of
(i) the base commercial lending rate of IBJ or (ii) the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers plus 1/4 of 1%, or, at the option of the Company at the
Eurodollar rate plus 2%.  The Eurodollar rate is defined as Libor
for a designated period divided by one less the aggregate reserve
requirements.  The interest on the Term Loan is 1/2% higher than
the interest rate on the Revolver Loans.  The Loans Facility is
secured by a pledge of the assets of the borrowers and a pledge
of the outstanding capital stock of the subsidiaries of the
Company.  As of December 31, 1998, the principal amounts
outstanding of Term Loan was $1.49 million and the Revolver Loan
was $7.98 million.

     The Loan Facility contains certain covenants that include
maintenance of certain financial ratios, maintenance of certain
amounts of working capital and net worth as well as other
affirmative and negative covenants.  At December 31, 1997, the
Company was not in compliance with certain of these covenants.
On March 30, 1999, the Company entered into an amended credit
agreement whereby the non-compliance at December 31, 1998 was
waived, the loan facility was extended for an additional one year
period and new financial covenants were negotiated through
December 31, 2000 which reflect the Company's current
projections.

     Pursuant to the Management Agreement with Founders
Management Services, Inc. ("Founders"), the Company paid
Founders, for its origination and negotiating services in
connection with the acquisitions of Battery Network and the loan
<PAGE 17> facility, $240,000 and issued to the designees Founders
warrants to purchase 100,000 shares of Common Stock at a price of
$4.125 per share.  Since June, 1998 when Messrs Haber and Teeger
resigned as officers and directors of the Company, Founders has
provided no services to the Company and the Company has not paid
any fees to Founders.  Although neither the Company nor Founders
has formally terminated the Management Agreement, both parties
have acted as if the Management Agreement has been terminated.

     Based upon its present plans, management believes that
operating cash flow, available cash and available credit
resources will be adequate to make the repayments of indebtedness
described herein, to meet the working capital cash needs of the
Company and to meet anticipated capital expenditure needs during
the 12 months ending December 31, 1999.  Although the Company
would like to issue shares of Common Stock as its primary method
of financing acquisitions, it anticipates that additional funds
will be required to successfully implement its acquisition
program, and will use various methods to finance acquisitions,
including raising new equity capital, for this purpose.

SEASONALITY AND INFLATION

     The Company's net sales typically show little or no
significant seasonal variations, although net sales may be
affected in the future by timing of retail store openings or
acquisitions.

     The impact of inflation on the Company's operations has not
been significant to date.  However, there can be no assurance
that a high rate of inflation in the future would not have an
adverse effect on the Company's operating results.

FACTORS AFFECTING FUTURE OPERATING RESULTS

     This Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Business sections
contain certain forward-looking statements and information
relating to the Company that are based on the beliefs of
management as well as assumptions made by and information
currently available to management.  Such forward-looking
statements also include, without limitation, the Company's
expectations and beliefs as to the projected costs and
anticipated timetable to address Year 2000 compliance issues, the
adequacy of its plans to address such issues and the impact on
the Company's operations in the event that certain or all of its
plans or the plans of its lenders and other third parties in
respect of such compliance issues prove to be inadequate.  In
addition, included herein the words "anticipates," "believes,"
"estimates," "expects," "plans," "intends" and similar
expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements.  Such statements
reflect the current views of the Company's management with
respect to future events and are subject to certain risks,
<PAGE 18> uncertainties and assumptions.  Such risks and
uncertainties include:

     1.   Possible competition from the primary battery cell
          manufacturers, Panasonic, Sanyo and others, which could
          materially affect the Company's after-market sale of
          batteries, battery packs and accessories.

     2.   Possible expanded competition from OEM manufacturers of
          cellular telephones and two-way radios to include
          increased emphasis on after-market sales of batteries,
          battery packs and accessories.

     3.   Increased competition on the part of telephone carriers
          to replace traditional dealers and distributors with
          their own direct sales locations.  Such a move on the
          part of the carriers could materially affect the
          Company's sales to the traditional dealers and
          distributors.

     4.   The uncertainty and lack of financial stability in Asia
          could potentially effect one or more of the Company's
          suppliers of cellular products in the Far East.  This
          could have the effect of delaying or interrupting
          shipments of products and could materially affect the
          Company's projected sales during 1999.

YEAR 2000 ISSUES

     The ability of computers, software and other equipment
utilizing microprocessors to recognize and properly process data
fields containing a 2-digit year is commonly referred to as the
Year 2000 (Y2K) compliance issue.  As the year 2000 approaches,
such systems may be unable to accurately process
certain data-based information.

     State of Readiness.  The Company has identified the
following applications and hardware that had required, or do
require, modification or replacement to be Y2K compliant.

Division                    System               Compliance Date

Battery Group
  Battery Network      Accounting server               11/1/98
                       Accounting software             11/1/98
                       Workstations                    7/31/99
                       Phone systems                   6/30/99
                       Other software               EDI-9/31/99

  Tauber Electronics   Accounting server               7/31/99
                       Workstations                    7/31/99
                       Phone system                    6/30/99
  <PAGE 19>
Wireless Products Group
  Advanced Fox         Accounting server               2/1/99
                       Accounting software             2/1/99
                       Workstations                    2/1/99

  Cliffco              Accounting software             7/1/99
                       Workstations                  12/31/98

The Company is in the process of contacting its vendors and
significant customers regarding their Y2K compliance plans.

     Disclosure of Costs.  The Company believes that its
approximate total cost to become Y2K compliant by not later than
September 31, 1999 is as follows:

                                                     Cost Spent
Division                Total Estimated Cost       as of 12/31/98

Battery Group
  Battery Network              $200,000                $195,000
  Tauber Electronics           $ 24,000                $ 15,000
Wireless Products Group
  Advanced Fox                 $184,000                $184,000
  Cliffco                      $ 98,000                $ 72,000

The Company does not separately track the internal costs for the
Y2K project.  This cost is principally the payroll costs for the
information systems department.  The Company believes it has
adequate financial resources to pay for the balance of the Y2K
compliance costs.

     Disclosure of Risk.  The most significant remaining risk to
the Company regarding Y2K would be interruption of business due
to vendor and customer non-compliance.  As no vendor or customer
is more than 10% of our total business the impact of this is
minimized.  Certain operational aspects of Batteries Batteries
could be affected by not being Y2K compliant, including telephone
service and other essential utility services.  Any of the above
discussed items, if not Y2K compliant, could have a material
adverse effect on the Company.

     The Company expects to be fully compliant by September 31,
1999.

     Contingency Plans.  As the Company believes it will be fully
compliant by September 31, 1999, it does not yet have a
contingency plan.  However, in the event that the Company is not
fully compliant by the end of 1999, the failure to have a
contingency plan could have a material adverse effect on the
Company.
  <PAGE 20>
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK

     The Company's only financial instruments with market risk
exposure are revolving credit borrowings and variable rate term
loans, which total $9,465,156 at December 31, 1998.  Based on
this balance, a change of one percent in the interest rate would
cause a change in interest expense of approximately $95,000, or
$0.02 per share (or $0.01 per share net of an income tax benefit
calculated using the Company's historical statutory rates), on an
annual basis.

     These instruments are non-trading in nature (not entered
into for trading purposes) and carry interest at a pre-agreed
upon percentage point spread from either the prime interest rate
of the 90-day London Interbank Offering Rate (LIBOR).  The
Company's objective in maintaining these variable rate borrowings
is the flexibility obtained regarding early repayment without
penalties and lower overall cost as compared with fixed-rate
borrowings.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's consolidated financial statements as of
December 31, 1998 and for each of the three years in the period
ended December 31, 1998 are included in this report as listed in
the Index to Financial Statements in Item 14.

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

     None.
  <PAGE 21>
                            PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     The following table sets forth as of March 24, 1998, the
name of each Director and executive officer of the Company, his
or her principal occupation and the nature of all positions and
offices with the Company held by him or her.  The Directors of
the Company will hold office until the next Annual Meeting of
Stockholders.

                                                       First
                                                      Became
Name                     Age     Office              Director

Christopher F. McConnell  45  Chairman of the Board        1998
Stephen Rade              59  President, Chief Executive   1996
                              Officer and Director
Ronald E. Badke           53  Chief Financial Officer
                              and Secretary
Robert W.  Tauber         74  Director                     1996
Allan Kalish              72  Director                     1998
Kenneth Rickel            48  Director                     1998
Barbara M. Henagan        40  Director                     1999
Bradley T. MacDonald      51  Director                     1999

     Each executive officer serves at the discretion of the Board
of Directors.

     Mr. McConnell has been Chairman of the Board of the Company
since December, 1998.  He is also currently Chairman of the Board
of CFM Technologies, Inc.  For the past five years, he has been
either Chairman or President and CEO of CFM Technologies, Inc.
Mr. McConnell also serves as a director of V-Span, Inc., a
privately held company located in Pennsylvania.

     Mr. Rade has been President and Chief Executive Officer of
the Company since June, 1998.  Prior to that time was Executive
Vice President since  August 1996.  He has been a Director since
April 1996.  He has been the President, Chief Executive Officer
and a Director of Advanced Fox Antenna, Inc. since he founded
that company in 1990.

     Mr. Badke has been Chief Financial Officer since
November 1995 and Secretary since March, 1999.  He had been
Senior Vice President and Chief Financial Officer of Shoe Town
Inc., from 1984 through September 1994, positions he later held
(September to November 1995) with Natures Elements.  Mr. Badke, a
certified public accountant, had been a consultant from
October 1994 through August 1995.
  <PAGE 22>
     Mr. Tauber, Vice President and a Director since April 1996,
has been the President and a Director of Tauber Electronics, Inc.
since it was founded by him in 1975.

     Ms. Henagan was elected to the Company's Board of Directors
in March 1999.  For the past five years, she has been a Senior
Managing Director of Bradford Ventures, Ltd.  She also serves on
the Board of Directors of Central Sprinkler Corp. and Hampton
Industries.

     Mr. Rickel was elected to the Board of Directors in
November 1998.  For the past five years, he has been associated
with Ladenburg Thalman, New York City.

     Mr. McDonald was elected a director of the Company in March,
1999.  He is the Chairman of the Board and Chief Executive
Officer of HealthRite, a position he has held since January,
1998.  Prior thereto, he was appointed as Program Director of the
U.S. Olympic Coin Program of the Atlanta Centennial Olympic
Games.  Mr. MacDonald previously was employed by HealthRite as
its Chief Executive Officer from September, 1996 to August, 1997.
From 1991 through 1994, Mr. McDonald was Deputy Director and
Chief Financial Officer of the Retail, Food and Hospitality and
Recreation Business for the United States Marine Corps.

ITEM 11.   EXECUTIVE COMPENSATION

     The following table sets forth for the years ended
December 31, 1998, 1997, and 1996, the compensation for services
rendered in all capacities to the Company and subsidiaries by the
Chief Executive Officer and the four highest paid executive
officers who received compensation in excess of $100,000 for the
year ended December 31, 1998.

                   SUMMARY COMPENSATION TABLE

NAME                            PERIOD                 SALARY ($)

Stephen Rade,                   Year ended 12/31/98   350,000 (1)
President                       Year ended 12/31/97   350,000 (2)
and Director                    Year ended 12/31/96   347,825 (3)

Ronald E. Badke                 Year ended 12/31/98   135,000
Chief Financial Officer         Year ended 12/31/97   135,000 (4)
                                Year ended 12/31/96   129,515 (5)

Warren H. Haber,                Year ended 12/31/98      -0-  (6)
Chairman of the Board and       Year ended 12/31/97      -0-  (6)
Former Chief Executive          Year ended 12/31/96      -0-  (6)
Officer

Robert W.  Tauber,              Year ended 12/31/98    36,923
Vice President and Director     Year ended 12/31/97   128,269
                                Year ended 12/31/96   177,865
<PAGE 23>

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

(1)  Includes a bonus of $200,000 earned in 1998 and payable in
     1999 pursuant to an agreement relating to the acquisition of
     Advanced Fox.  See Item 12.

(2)  Includes a bonus of $200,000 earned in 1997 and payable in
     1998 pursuant to an agreement relating to the acquisition of
     Advanced Fox.  See Item 12.

(3)  Includes a bonus of $157,768 earned in 1996 and paid in 1997
     pursuant to an agreement relating to the acquisition of
     Advanced Fox.  See Item 12.

(4)  Does not include a bonus of $15,000 earned in 1996 and paid
     in 1997.

(5)  Includes a bonus of $15,000 earned in 1996 and paid in 1997.

(6)  Appointed acting Chief Executive Officer in September 1996.
     Resigned in 1998.  See Item 13 for compensation paid to his
     affiliate.

Employment Agreements

     The Company entered into employment agreements in April 1996
with each of Messrs. Rade and Tauber.  The agreements provide for
Mr. Rade to receive a salary of $150,000 per annum during the
three-year term and for Mr. Tauber to receive a salary of
$150,000 during the first year and $120,000 during the second
year.  Mr. Tauber's agreement terminated on April 11, 1998.
Mr. Rade's agreement obligates the Company to continue his
compensation for the term of the agreement in the event of a
termination of the officer's employment by the Company without
cause.  Messrs. Tauber and Rade have agreed not to compete with
the Company or solicit any employees of the Company for a period
of five years, subject to a shorter period should the Company
breach the agreement.  Applicable law may reduce the time period
of the covenant not to compete.  Mr. Rade, following his election
as President and Chief Executive Officer, has continued to work
under his existing contract.

     Mr. Ronald E. Badke is employed pursuant to an employment
agreement as amended in January 1998 expiring March 31, 1999 at
an annual salary of $120,000 through December 31, 1997 and
$135,000 thereafter with provision for an annual bonus of up to
25% of the base salary subject to the achievement of certain
goals.

Directors
  <PAGE 24>
     The Company does not pay a fee to its directors.  It
reimburses those directors who are not employees of the Company
for their expenses incurred in attending meetings.

Stock Options

     The Company's Stock Option Plan (the "Plan") relates to
250,000 shares of its Common Stock and authorizes the Board of
Directors or a Stock Option Committee appointed by the Board to
grant incentive stock options and non-incentive stock options to
officers and key employees, directors, and independent
consultants, with directors who are not employees and consultants
eligible only to receive non-incentive stock options.  The Board
has authorized, subject to stockholders approval, an increase to
450,000 in the number of shares subject to the plan.

     The following table sets forth the details about the options
granted during 1998 to the executive officers named in the
Summary Compensation Table.  Only Steven Rade received an option
grant during the year.

                Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
                                                                                    Potential realizable value
                                       Percent of Total                              at assumed annual rates
                   Number of Shares         Options        Exercise                of stock price appreciation
                  Underlying Options      Granted in      Price per   Expiration          for option term
Name                    Granted           Fiscal Year       Share        Date             5%        10%
<S>               <C>                  <C>                <C>         <C>              <C>       <C>
Stephen Rade          25,000                  14%          $1 3/8      08/01/03        $43,872   $55,361

</TABLE>

     The following table sets forth the number of shares which
underlie unexercised options held at December 31, 1998, by the
executive officers named in the Summary Compensation Table.  None
of those persons exercised options during 1998.

                  Fiscal Year End Option Values

                   Number of Shares Underlying
                  Unexercised Options at Fiscal
                          Year End (1)

Name                                  Exercisable   Unexercisable
Stephen Rade                             12,500         12,500
Ronald E. Badke                          56,668          8,332
------------------------
(1)  None of the outstanding options held by the named
     individuals were in-the-money on December 31, 1998.
  <PAGE 25>
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     The following table sets forth information with respect to
the beneficial ownership as of March 24, 1999 of shares of Common
Stock of (a) each executive officer, (b) each director, and
(c) each stockholder of the Company known to own beneficially
more than 5% of the outstanding shares of Common Stock, as well
as all executive officers and directors as a group.

                                 NUMBER OF SHARES
                                BENEFICIALLY OWNED     PERCENTAGE

Christopher F. McConnell                0                 0
   1336 Enterprise Drive
   West Chester, PA  19380
Robert W. Tauber                     246,667 (1)          5.1%
   2192 Harbour Heights Road
   San Diego, CA 92109
Stephen Rade                         672,500 (2)         13.9%
  3915 Sommers Drive
  Huntingdon, PA 19606
Ronald E. Badke                       56,668 (3)          1.2%
   50 Tannery Road
   North Branch, NJ 08876
Kenneth Rickel                          0                  0
   590 Madison Avenue
   New York, NY 10022
Allan Kalish                          12,500 (4)          **
   828 Youngsford Road
   Gladwyn, PA 19035
Barbara M. Henagan                      0                  0
   35 Valley Road
   Atlanta, GA 30305
Bradley T. MacDonald                    0                  0
   11445 Cronhill Drive
   Owings Mills, MD 21117
Kennedy Capital Management           238,700              5.0
   10829 Olive Boulevard
   St. Louis, MO  63141

Directors & officers as a group      988,335 (5)         20.5%
  (8 in total)
----------------------
(1)  Includes 51,667 shares issuable upon exercise of options
     which are exercisable within 60 days.

(2)  Includes 12,500 shares issuable upon exercise of options
     which are exercisable within 60 days.

(3)  Represents shares issuable upon exercise of options which
     are exercisable within 60 days.
  <PAGE 26>
(4)  Includes 10,000 shares issuable upon exercise of options
     which are exercisable within 60 days.

(5)  Includes 130,835 shares issuable upon exercise of options
     which are exercisable within 60 days.

**   Denotes less than 1%.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In consideration for the acquisition of Tauber and Advanced
Fox, the Company in April 1996 issued to Mr. Robert W. Tauber
300,000 shares of Common Stock and a five year option to purchase
an additional 50,000 shares at $5.00 per share and issued to
Mr. Stephen Rade 660,000 shares of Common Stock; and paid cash of
$3,289,000 to an affiliate of Mr. Tauber, and $2,175,000 to
Mr. Rade.  Mr. Rade also has a contingent right to receive
additional cash consideration of up to $600,000, but not more
than $200,000 per year, depending on the achievement of
designated levels of pre-tax earnings by the Advanced Fox
subsidiary over the three year period ending December 31, 1998.
Mr. Rade earned $200,000, $176,353 and $157,758 based on the
earnings of Advanced Fox for the years ended December 31, 1998,
December 31, 1997 and December 31, 1996, respectively.

     The principal offices of Advanced Fox, which comprise
approximately 7,000 square feet in Huntingdon Valley,
Pennsylvania, are occupied under a five-year lease terminating
December 31, 1999 with Rare Limited Partnership, of which
Mr. Rade and his wife are the partners.  The lease, as amended
with respect to additions to the facility, provides for an annual
rent of $70,000 with the tenant obligated to pay the applicable
real estate taxes, and maintenance and insurance costs.  Rental
payments for the twelve months ended December 31, 1998,
December 31, 1997 and December 31, 1996 were $76,000, $76,000 and
$70,800, respectively.

PRIOR MANAGEMENT

     Messrs. Warren H. Haber, the then Chairman of the Board and
John L. Teeger, the former Vice President, Secretary and Director
of the Company were the sole stockholders, officers and directors
of Founders Management Services Inc. ("Founders").  Pursuant to
an agreement dated as of June 6, 1995, as subsequently amended,
Founders was to provide advice and consultative services
regarding management, overall strategic planning, acquisition
policy, relations with commercial and investment banking
institutions, and stockholders matters to or on behalf of the
Company.  The agreement is for a term expiring in April 1999,
subject to five one-year renewal options and provides for
Founders to receive a base fee of $150,000 per annum.  Founders
is also to receive an additional fee of 5% of the Company's
annual pre-tax income in excess of $1,250,000.  Under the
agreement, Founders is entitled to receive originating fees with
<PAGE 27> respect to acquisitions or financings for which it
performed originating services - the fee to be that customarily
charged by non-affiliated investment bankers or professional
originators for transactions of similar size and nature.  To
determine the fees customarily charged, the Company is to review
then current  proxy statements and investment publications and
consult with nonaffiliated investment bankers for the computation
of originating fees in similar transactions as those in which the
Founders' originating services have been employed.  The amount of
the fee is to be subject to the approval of a majority of the
Directors not affiliated with Founders.  Founders received for
its origination and consultation services in connection with the
combination with Advanced Fox and Tauber a fee of $150,000; and
in connection with the Battery Network acquisition and related
financing of $13,000,000, a fee of $240,000 and five year
warrants to purchase 100,000 shares of Common Stock at a price of
$4.125 per share issued to the extent of 50,000 shares each to
Messrs. Haber and Teeger as designees of Founders.

     In February 1998 the Management Agreement was revised by
mutual consent to eliminate the origination and incentive fee
provisions of the original agreement, and to establish April 30,
1999 as the expiration date for the Agreement.  The revised
agreement thereby limits fees paid to Founders to an annual fee
of $150,000, payable monthly.

     Since June, 1998, when Messrs. Haber and Teeger resigned as
officers and directors of the Company, Founders has provided no
services to the Company and the Company has not paid any fees to
Founders.  Although neither the Company nor Founders has formally
terminated the Management Agreement, both parties have acted as
if the Management Agreement has been terminated.
  <PAGE 28>
                             PART IV

Item 14.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a)  The following documents are filed as a part of this
Report.

          1.   Financial Statements - The following consolidated
               financial statements of the Company and
               Independent Auditors Report are filed as part of
               the Report:

                                                            Page

INDEPENDENT AUDITORS' REPORT .............................  F-1

CONSOLIDATED BALANCE SHEETS AS OF December 31, 1998 AND
     December 31, 1997 ...................................  F-2

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
     December 31, 1998, December 31, 1997 AND December 31,
     1996 ................................................  F-3

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
     YEARS ENDED December 31, 1998, December 31, 1997 AND
     December 31, 1996 ...................................  F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
     December 31, 1998, December 31, 1997 AND December 31,
     1996 ................................................  F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...............  F-8 -
                                                            F-27

          2.   Financial Statement Schedules - The following
               financial statement schedule has been provided by
               the Company:

VALUATION AND QUALIFYING ACCOUNTS.........................  S-1

          3.   Exhibits.

EXHIBITS

2(a)      Copy of Agreement and Plan of Merger with respect to
          Advanced Fox Antenna, Inc.*
2(a)-1    Copy of Amendment to Merger Agreement*
2(b)      Copy of Stock Purchase Agreement with respect to
          Tauber Industries Inc.*
2(b)-1    Copy of Amendment to Stock Purchase Agreement*
2(c)      Copy of Stock Purchase Agreement with respect to
          Specific Energy Corp.*  <PAGE 29>
2(d)      Copy of Stock Purchase Agreement relating to Battery
          Network, Inc. **
2(e)      Copy of Stock Purchase Agreement relating to W.S.
          Battery Sales & Company, Inc.**
2(f)      Copy of Asset Purchase Agreement relating to WSJ
          Enterprises, Inc.**
3(a)      Certificate of Incorporation of Company and amendments
          thereto*
3(b)      By-Laws of Company*
4(a)      Copy of Common Stock Certificate*
4(b)      Copy of Warrant*
10(a)     Copy of Warrant Agreement related to Redeemable Stock
          Purchase Warrants*
10(b)     Form of Purchase Option issued to underwriter of
          initial public offering*
10(c)     Copy of Preferred Stock, Series A Certificate*
10(d)     Stock Option Plan of Company*
10(d)-1   Forms of Option Agreement under the Plan*
10(e)     Copy of option issued to Mr. Robert W.  Tauber*
10(f)     Copy of Management Services Agreement between Company
          and Founders Management Services, Inc., as amended*
10(g)     Copy of Employment Agreement with Robert W.  Tauber*
10(h)     Copy of employment agreement with Stephen Rade, as
          amended*
10(i)     Copy of Employment agreement with William Steven Sapp**
10(j)     Copy of Employment agreement with James Sapp**
10(j)-1   Copy of Agreement dated January 8, 1998 between the
          Company and James Sapp related to the employment
          agreement
10(k)     Copy of Employment agreement with Susan Grandt**
10(l)     Copy of employment Agreement with Mr. Ronald E.  Badke*
10(m)     Copy of agreement relating to termination of the
          Employment Agreement of Donald L. Luke***
10(n)     Copy of lease between Advanced Fox Antenna, Inc. and
          Rade Limited Partners*
10(o)     Copy of lease with J.W.S. Partnership related to the
          McHenry, Illinois property**
10(p)     Copy of the lease with J.W.S. Partnership related to
          the North Branch, New Jersey property**
10(q)     Copy of Registration Rights Agreement between Company
          and Messrs. Tauber and Rade*
10(r)     Form of Warrant issued to each of Warren H. Haber and
          John L. Teeger **
10(s)     Copy of Revolving Credit, Term Loan and Security
          Agreement, dated January 6, 1997 among IBJ Schroder
          Bank & Trust Company as Agent and the Company, Advanced
          Fox Antenna, Inc., Tauber Electronics Inc., Battery
          Acquisition Corp., Specific Energy Corporation, Battery
          Network, Inc. and W.S. Battery & Sales Company, Inc.
          (the "Loan Agreement)**  <PAGE 30>
10(s)-1   Copy of Amendment No. 1 to the Loan Agreement and
          Joinder Agreement with IBJ Schroder Bank & Trust
          Company as Agent dated May 13, 1997****
10(s)-2   Copy of Amendment No. 2 and Waiver*****

27        Financial Data Schedule
-------------
*    Filed as an exhibit to the Company's Registration Statement
     on Form S-1 (File #33-80939) and incorporated by reference
     thereto.

**   Filed as an exhibit to the Company's Current Report on
     Form 8-K for January 7, 1997 and incorporated by reference
     thereto.

***  Filed as an exhibit to the Company's Current Report on
     Form 8-K for September 6, 1996 and incorporated by reference
     thereto.

**** Filed as an exhibit to the Company's Report on Form 10-Q for
     the three months ended June 30, 1997 and incorporated by
     reference thereto.

***** Filed as an exhibit to the Company's Report on Form 10-K
     for 1997 and incorporated by reference hereto.

     (b)  Reports On Form 8-K.  No reports on Form 8-K were filed
          during the fourth quarter of 1998.
  <PAGE 31>
<PAGE>
                  INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
of Batteries Batteries, Inc.

     We have audited the accompanying consolidated balance sheets
of Batteries Batteries, Inc. and subsidiaries as of December 31,
1998 and 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the three
years in the period ended December 31, 1998.  These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

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

     In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial position
of the companies at December 31, 1998 and 1997, and the results
of their operations and their cash flows for the three years in
the period ended December 31, 1998 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

San Diego, California
March 30, 1999


<PAGE f1>
<PAGE>
     INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION



To the Board of Directors and Stockholders
of Batteries Batteries, Inc.

     Our audits were conducted for the purpose of forming an
opinion on the basic consolidated financial statements taken as a
whole.  The additional information included on Schedule 1 on
page S-1 is presented for the purpose of additional analysis and
is not a required part of the basic consolidated financial
statements.  This additional information is the responsibility of
the Company's management.  Such information has been subjected to
the auditing procedures applied in our audits of the basic
consolidated financial statements and, in our opinion, is fairly
stated in all material respects when considered in relation to
the basic consolidated financial statements taken as a whole.


DELOITTE & TOUCHE LLP

San Diego, California
March 30, 1999
                             <PAGE f2>
           BATTERIES BATTERIES, INC. AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             December 31,
                                                         1998             1997
<S>                                                   <C>              <C>
ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                         $   330,647     $   540,429
     Accounts receivable (net of allowance for
       doubtful accounts of $563,117 and $589,882,
       respectively)                                     7,150,665       7,637,717
     Inventories (net of reserves of $697,191
       and $838,707, respectively)                       9,451,734      11,931,938
     Prepaid expenses and other current assets             339,985         580,453
     Current deferred income taxes                         210,734         219,139

               Total current assets                     17,483,765      20,909,676

PROPERTY AND EQUIPMENT- Net                              1,335,680       1,327,737
EXCESS OF COST OVER NET ASSETS ACQUIRED (net of
     accumulated amortization of $237,525 and
     $269,580, respectively)                             5,109,742       5,905,379
OTHER ASSETS                                               555,509         394,814

TOTAL                                                  $24,484,696     $28,537,606

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Current portion of long-term debt                 $   600,000     $   600,000
     Accounts payable                                    3,887,841       3,107,665
     Accrued expenses                                    1,463,502       2,349,626
     Current portion of obligations under capital
       leases                                                    -           8,385

               Total current liabilities                 5,951,343       6,065,676

LONG-TERM DEBT                                           8,865,156      10,742,028
COMMITMENTS AND CONTINGENCIES (Notes 9 and 12)                  -               -

STOCKHOLDERS' EQUITY:
     Preferred Stock, par value $.001, 1,000,000
       shares authorized, no shares issued or
       outstanding
     Common Stock, par value $.001, 10,000,000
       shares authorized, 4,743,000 shares,                      -               -
       respectively, issued and outstanding                  4,743           4,743
     Additional paid-in capital                         10,715,830      10,715,830
     Retained earnings (deficit)                        (1,052,376)      1,009,329

               Total stockholders' equity                9,668,197      11,729,902

TOTAL                                                  $24,484,696     $28,537,606
</TABLE>
         See notes to consolidated financial statements.
  <PAGE f3>
           BATTERIES BATTERIES, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                          For the Years Ended December 31,
                                       1998           1997            1996
<S>                                 <C>            <C>            <C>
Net Sales                           $51,453,841    $53,974,212    $25,650,075

Cost of sales                        35,419,511     37,676,966     17,804,883

     Gross profit                    16,034,330     16,297,246      7,845,192

Selling, general and
   administrative expenses           17,126,583     14,437,595      7,004,489

Impairment of excess cost over
   net assets acquired                  558,112              -              -

Income (loss) from operations        (1,650,365)     1,859,651        840,703

Interest income                               -          1,077         93,887

Interest (expense),                    (790,412)      (727,350)       (81,344)

Income (loss) before income taxes    (2,440,777)     1,133,378        853,246

Income taxes expense (benefit)         (379,072)       565,375        336,920

Net income (loss)                    (2,061,705)       568,003        516,326

Preferred stock dividend
  requirements                                -         15,000         60,000

Net income (loss) attributable
  to common stockholders            $(2,061,705)    $  553,003     $  456,326
                                    ===========     ==========     ==========

Basic earnings (loss)
  per common share                  $     (0.43)    $     0.12
                                    ===========     ==========

Diluted earnings (loss)
  per common share                  $     (0.43)    $     0.12
                                    ===========     ==========
Basic weighted average
  common shares outstanding           4,743,000      4,688,803

Diluted weighted average
  common and common equivalent
  shares outstanding                  4,759,677      4,691,086

Pro Forma Income Data (Unaudited)
   Income before provision for
    income taxes as reported                                       $  853,246
Pro forma income tax provision                                        349,831
Pro forma net income                                               $  503,415
                                                                   ==========
<PAGE f4>
Pro forma net income attributable
  to common stockholders                                           $  443,415
                                                                   ==========
Pro forma net income per share                                     $      .11
                                                                   ==========
Pro forma number of shares outstanding                              4,100,000
                                                                   ==========


</TABLE>
     For the fiscal year ended December 31, 1996, operating
results of closely held nontaxable predecessor companies have
been combined with taxable predecessor companies.  Pro forma net
income results have been presented, reflecting an estimated
effective income tax rate of 41%.  Pro forma net income per share
was based on the weighted average number of shares of common
stock outstanding prior to and after the Company's initial public
offering.

         See notes to consolidated financial statements.
  <PAGE f5>
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                       Class A
                               Preferred Stock      Common Stock        Common Stock
                                                                                                          Retained
                                                                                             Paid-in      Earnings
                             Shares     Amount    Shares    Amount    Shares     Amount      Capital      (Deficit)        Total
<S>                         <C>         <C>       <C>       <C>      <C>        <C>       <C>            <C>           <C>
Balance, January 1, 1996    1,000,000   $1,000    517,990   $ 518    222,010    $   222   $ 1,506,760   $  5,024,730  $  6,533,230

Conversion of Class A                             (517,990)   (518)   517,990       518           -               -             -
  Common Stock to Common
   Stock

Elimination of retained
  earnings of Founding
  Companies to reflect
  the Merger                                                                                5,024,730     (5,024,730)           -

Proceeds of Offering,
  net of underwriting
  discounts and offering
  costs                                                            2,300,000      2,300     9,132,700                    9,135,000

Issuance of 960,000 shares
  of Common Stock to
  stockholders of Founding
  Companies                                                          960,000        960                                        960

Use of portion of proceeds
  of Offering to pay the
  cash portion of the
  Merger consideration                                                                     (6,665,352)                  (6,665,352)

Reclassification of
  Preferred Stock to
  Redeemable Preferred
  Stock upon consummation
  of the offering          (1,000,000)  (1,000)                                              (999,000)                  (1,000,000)

Preferred stock
  dividends paid                                                                                             (60,000)      (60,000)

Net income                 __________   ______    _______   _____  _________    _______   ___________        516,326       516,326

Balance, December 31, 1996         -        -          -       -   4,000,000      4,000     7,999,838        456,326     8,460,164

Issuance of 550,000 shares
  of Common Stock to
  stockholders of Battery
  Network                                                            550,000       550      2,269,200                    2,269,750

Issuance of 193,000 shares
  of Common Stock to
  stockholders of Cliffco
  of Tampa Bay                                                       193,000       193        446,792                      446,985

Preferred stock
  dividends paid                                                                                             (15,000)      (15,000)

Net income                 __________   ______    _______   _____  _________    _______   ___________        568,003       568,003

Balance, December 31, 1997         -        -          -       -   4,743,000      4,743    10,715,830      1,009,329    11,729,902

Net loss                   __________   ______    _______   _____  _________    _______   ___________     (2,061,705)   (2,061,705)

Balance, December 31, 1998              $                   $      4,743,000    $ 4,743   $10,715,830   $ (1,052,376) $  9,668,197
                           ==========   ======    =======   =====  =========    =======   ===========    ============ ============
</TABLE>  <PAGE f6>
                   BATTERIES, BATTERIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                         Year Ended December 31,

                                             1998                 1997                1996
<S>                                      <C>                  <C>                 <C>
OPERATING ACTIVITIES:

  Net income (loss)                       $(2,061,705)        $    568,003         $  516,326

  Adjustments to reconcile net
    income (loss) to net cash
    (used in) provided by
    operating activities:

  Depreciation and amortization
    expenses                                  749,402              647,190            188,075

  Deferred income taxes                         8,405              173,933             83,700

  Impairment of excess cost over
    net assets acquired                       558,112                  -                   -

  Changes in assets and liabilities,
    net of effects from acquisitions:

    Accounts receivable                       487,052           (1,738,187)          (213,243)

    Inventories                             2,040,204           (2,460,565)          (465,654)

    Prepaid expenses and other assets         (95,227)            (128,760)          (293,987)

    Accounts payable and accrued
      expenses                               (105,948)           1,174,459            377,863

      Net cash provided by (used in)
        operating activities                1,580,295           (1,763,927)           193,080


INVESTING ACTIVITIES:

  Purchase of property and
    equipment, net                           (619,820)            (633,265)          (407,015)

  Acquisition of Specific
    Energy Corporation, net of
    cash acquired                                  -                    -             (50,882)

  Disposal of Specific Energy
    Corporation                               715,000                    -                  -

  Acquisition of Battery Network,
    net of cash acquired                           -            (8,444,788)                -


  Acquisition of Cliffco if
    Tampa Bay, net of cash acquired               -               (399,218)               -
  <PAGE f7>
  Net cash provided by (used in)
    investing activities                       95,180          (9,477,271)           (457,897)

FINANCING ACTIVITIES:

  Borrowing under Term Loan Facility              -              3,000,000                 -

  Borrowing under Revolving Credit
    Facility                                      -              8,892,028                 -

  Proceeds from Offering, net of
    expenses                                      -                   -             9,135,000

  Payments to stockholders of Merger
    companies in connection with
    Mergers                                       -                   -            (6,665,352)

  Redemption of preferred stock                   -               (750,000)          (250,000)

  Net payments on borrowings               (1,885,257)          (1,742,012)          (213,104)

  Dividends paid                                  -                (50,000)           (78,333)

  Prepaid financing and acquisition
    costs relating to the Battery
    Network acquisition                           -               (178,000)           (90,000)

  Repayment of note to minority
    shareholder                                   -                   -              (180,000)

  Prepaid Offering costs                          -                   -               270,604

        Net cash (used in) provided
          by financing activities          (1,885,257)           9,172,016          1,928,815


NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                           (209,782)          (2,069,182)         1,663,998

CASH AND CASH EQUIVALENTS, BEGINNING
  OF YEAR                                     540,429            2,609,611            945,613

CASH AND CASH EQUIVALENTS, END OF
  YEAR                                   $    330,647         $    540,429       $  2,609,611

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION:

  Cash paid during period for:

    Interest                             $    863,337         $    617,520       $     81,386

    Income Taxes                         $    412,341         $    508,071       $    115,000

NON-CASH ITEMS:
Proceeds from the issuance
of common stock to stockholders:
   To Stockholders of Battery Network            -            $ 2,269,000                 -
   To Stockholders of Cliffco of
     Tampa Bay                                   -                446,985                 -
   Total proceeds from the issuance of
      common stock to Stockholders               -              2,715,985                 -
</TABLE>
           See notes to consolidated financial statements.  <PAGE f8>

           BATTERIES, BATTERIES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF OPERATIONS AND BASIS OF PRESENTATION

     Nature of Operations and Basis of Presentation - In
April 1996, Batteries Batteries, Inc. (the "Company") acquired,
by merger or stock acquisition (the "Mergers"), simultaneously
with the closing of its initial public offering of common stock
and redeemable warrants (the "Offering"), Advanced Fox Antenna,
Inc. ("Advanced Fox") and Tauber Electronics, Inc. ("Tauber"),
(collectively, the "Merger Companies") for common stock and cash.
These three businesses are referred to herein as the "Founding
Companies".  As result of the substantial continuing interests in
the Company of the former stockholders of the Founding Companies,
the historical financial information of each of the Founding
Companies has been combined on a historical cost basis in
accordance with generally accepted accounting principles as if
the Founding Companies has always been member of the same
operating group.  In June 1995, the Company acquired 95% of the
outstanding common stock of Specific Energy Corporation
("Specific Energy") in a business combination accounted for as a
purchase.  (In June 1996, the Company acquired the remaining
minority 5% interest for cash.)  In January, 1997, the Company
acquired the business and related assets of Battery Network, Inc.
("Battery Network") in a business combination accounted for as a
purchase.  In May, 1997, the Company acquired the business and
related assets of Cliffco of Tampa Bay, Inc. ("CTB") in a
business combination accounted for as a purchase.  The
accompanying consolidated financial statements and related notes
to the consolidated financial statements include the results of
the companies acquired since the effective dates of their
acquisitions.

     The results of operations of the Founding Companies for
fiscal 1996 reflect the combined historical operating results of
closely held Subchapter S and C corporations through the
effective date of the Mergers and do not include pro forma
adjustments for income taxes.  (See unaudited pro forma
information presented on the consolidated statements of income.)

     Batteries Batteries, Inc. had previously reported on a
fiscal year ending January 31; Advanced Fox and Tauber have
previously reported on a fiscal year ending December 31.  During
the second quarter of fiscal 1996, Batteries Batteries, Inc.
changed its fiscal year-end to December 31 to conform with that
of Advanced Fox and Tauber.  For the year ended December 31,
1997, the results of operations include the results of Batteries
Batteries, Inc., Advanced fox and Tauber for a full fiscal year
and those of Battery Network and CTB from the effective dates of
their respective acquisitions.  The results of operations are now
presented on a calendar year basis.  For the year ended
December 31, 1996, the results of operations include the results
<PAGE f9> of Batteries Batteries, Inc. for eleven months ended
December 31, 1996 and those of Advanced Fox and Tauber for the
year ended December 31, 1996.

     Batteries Batteries, Inc. and its subsidiaries
(collectively, the "Company") are engaged in the distribution of
batteries, battery accessories and cellular products, accessories
and components in the United States.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cash Equivalents - The Company considers all highly liquid
investments with a maturity date of three months or less from the
date of purchase to be cash equivalents.

     Concentration of Credit Risk - The Company invests its
excess cash in money market accounts and short-term investments.
The Company has not experienced any losses on its cash accounts
or short-term investments.  The Company sells its products to
original equipment manufacturers, maintenance and repair
organizations, commercial businesses, institutional users and
retail consumers primarily in the United States.  Through its
continuing relationships with these customers, the Company
performs credit evaluations and generally does not require
collateral.  The Company maintains a reserve for potential credit
losses, and such losses have been minimal.

     Inventories - Inventories consist of batteries, battery
packs and related components and are carried at the lower of cost
(first-in, first-out) or market value.

     Property and Equipment - Property and equipment are stated
at cost.  Additions and improvements are capitalized.
Maintenance and repairs are expensed as incurred.  Depreciation
and amortization of property and equipment is calculated under
straight-line and accelerated methods over the estimated useful
lives of the respective assets.  Estimated useful lives are 30 to
40 years for buildings, and three to ten years for machinery and
equipment.  Leasehold improvements are amortized over the shorter
of their estimated useful lives or the terms of their leases.
Property financed by capital leases (principally equipment) is
amortized on a straight-line basis over the shorter of the
estimated useful lives or remaining lease term.  Amortization of
property financed by capital leases is included in depreciation
expense and accumulated depreciation.

     Excess of Cost Over Net Assets Acquired - The excess of cost
over net assets acquired is being amortized on a straight-line
basis over twenty-five years.  The carrying value of the excess
cost over net assets acquired is periodically reviewed to
determine whether impairment exists.  The review is based on
comparing the carrying amounts to the undiscounted estimated cash
flows before interest charges from operations over the remaining
<PAGE f10> amortization period.  No impairment is indicated as of
December 31, 1998.

     Revenue Recognition - Revenue from product sales is
recognized at the time of shipment.

     Income Taxes - The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes".  Under the
liability method specified by SFAS No. 109, a deferred tax asset
or liability is determined based on the difference between the
financial statements and tax basis of assets and liabilities,
measured using enacted tax rates.

     Earnings Per Share - In December 1997, the Company adopted
SFAS No. 128, "Earnings Per Share."  Net income per common share-
basic was calculated based upon the weighted average number of
common shares outstanding during the period.  Net income per
common share-diluted was calculated based upon the weighted
average number of common shares outstanding and includes the
equivalent shares for dilutive equity instruments outstanding.

     Disclosures About Fair Value of Financial Instruments - The
carrying value at December 31, 1998 of the Company's financial
instruments approximated their fair value primarily due to the
short maturities of these instruments.

     Recent Accounting Pronouncements - In June 1997, the
Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", effective for fiscal years beginning after
December 15, 1997.  SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components
in a full set of general purpose financial statements.
Comprehensive income is defined as the change in equity of a
business enterprise during a period, resulting from transactions
and other events and circumstances from nonowner resources. The
company has no other sources of other comprehensive income.

     In June 1997, the FASB issued SFAS No. 131, "Disclosure
about Segments of an Enterprise and Related Information".  SFAS
No. 131 requires publicly held companies to report financial and
other information about key revenue-producing segments of the
entity for which such information is available and is utilized by
the chief operating decision maker.  Specific information to be
reported for individual segments includes profit or loss, certain
revenue and expense items and total assets.  A reconciliation of
segment financial information to amounts reported in the
financial statements would be provided.  SFAS No. 131 is
effective for the Company in 1998.  The Company operates as two
segments (see Note 15).

     In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133
<PAGE f11> ("SFAS 133"), "Accounting for Derivative Instruments
and Hedging Costs", and is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999.  Although the Company
is not currently required to report under SFAS 133, the Company
has `analyzed the potential impacts of implementing SFAS 133 and
has determined that implementation, when required, will not have
a material impact on the Company's financial statements.

     Employee Stock Options - The Company applies Accounting
Principles Board Opinion No. 25 ("APB 25"), which recognizes
compensation costs based on the intrinsic value of an equity
instrument recorded.  The Company has applied APB 25 to its
stockholder compensation awards to employees and has disclosed
the required pro forma effect on net income (loss) per share.
(See Note 7).

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

     Reclassifications - Certain amounts in prior years have been
reclassified to conform to the current year presentation.

3.   INITIAL PUBLIC OFFERING

     On April 8, 1996, the Company completed its initial public
offering (the "Offering") of 2,300,000 shares of Common Stock at
an initial public offering price of $5.00 per share and 2,300,000
redeemable common stock purchase warrants (the "Warrants") at
$.10 per Warrant.  The net proceeds to the Company, net of
underwriting discounts and Offering costs, were approximately
$9.1 million.  Simultaneously with the Closing of the Offering,
the Company issued 960,000 shares of Common Stock and options to
purchase 50,000 shares of Common Stock and paid approximately
$5.9 million in cash to the former stockholders of the Merger
companies.  In addition, the Company paid in 1996 an additional
$800,000 in cash to the former stockholders of the Merger
Companies in connection with price adjustments stipulated in the
respective merger agreements.  The cash consideration paid to the
former stockholders of the Merger companies has been reflected as
a reduction of stockholders' equity in the consolidated financial
statements.  The remaining cash proceeds from the Offering were
used for general corporate purposes.

4.   ACQUISITION

     On June 6, 1995, effective June 1, 1995, the Company
acquired 95% of the outstanding common stock of Specific Energy
Corporation ("Specific Energy") for approximately $1,013,000,
<PAGE f12> including $770,000 in cash, a note payable in the
amount of $180,000, and acquisition related expenses of
approximately $63,000 (the "Acquisition").  In September 1996,
the Company acquired the remaining 5% interest for approximately
$51,000 in cash and repaid the note payable of $180,000.  The
Acquisition was accounted for as a purchase in accordance with
Accounting Principles Board Opinion No. 16.  The purchase price
was allocated to the underlying assets and liabilities based upon
their respective fair values.  The allocation of the purchase
price included the assignment of approximately $604,000 to excess
of cost over net assets acquired.  The results of Specific Energy
are included in the consolidated financial statements from the
effective date of its acquisition.

     On January 7, 1997 effective January 1, 1997, the Company
acquired (the "BN Acquisition") the business and related assets
of Battery Network, Inc. and affiliated companies ("Battery
Network"), which operates principally in California, New Jersey
and Illinois, and had combined revenues of approximately
$23 million for the year ended December 31, 1996.  The purchase
price of approximately $11.2 million consisted of
(i) approximately $8.3 million in cash; (ii) 550,000 shares of
Common Stock valued at a price of $4.125 per share and five year
options to purchase an additional 225,000 shares at an exercise
price of $4.50 per share, and (iii) approximately $590,000 in
transaction costs.

     The Battery Network agreement also provides the sellers the
contingent right to receive additional consideration of up to
$1 million in cash 350,000 shares of Common Stock and five year
options to acquire $250,000 shares of Common Stock, of which half
are exercisable at $4.50 per share and half are exercisable at
$6.00 per share.  Payment of the additional consideration is to
be based on the excess amount by which the combined "per-tax
income" as defined of Battery Network and Tauber, exceeds
(i) $2,100,000 for the year ending December 31, 1997 (the "One-
Year Period), (ii) $4,200,000 for the two-years ended
December 31, 1998 (the "Two-Year Period:) or (iii) $6,300,000 for
the three year ending December 31, 1999 (the "Three Year
Period"), with the maximum amount of additional consideration to
be paid if the excess is $400,000 for the One-Year Period,
$800,000 for the Two-Year Period or $1,200,000 for the Three-
Year-Period.  The sellers also entered into employment agreements
and were granted options under the Company's Stock Option Plan to
purchase an aggregate of 50,000 shares of Common Stock.  During
both 1997 and 1998, there was no additional consideration earned
or paid by the Company to the sellers of Battery Network.

     In May, 1997, the Company acquired the business and related
assets of Cliffco of Tampa Bay, Inc. ("CTB").  The purchase price
of approximately $615,000 consisted of (i) cash of approximately
$75,000 (ii) 193,000 shares of common stock valued at $2.35 per
share or $446,985 and (iii) approximately $93,000 in transaction
costs.  In addition, the Company assumed liabilities of
<PAGE f13> $1,162,000.  As part of its assumption of liabilities,
the Company paid at the closing indebtedness of CTB of
approximately $560,000.  The CTB agreement provides the president
and sole stockholder of the seller with a three-year employment
agreement.

     The cash portion of the purchase price of each transaction,
as well as the repayment of CTB debt of $560,000 to its
collateralized lender was funded with a portion of the proceeds
of a borrowing pursuant to a Revolving Credit, Term Loan and
Security Agreement, dated January 6, 1997, as amended May 13,
1997 (the "Loan Facility"), between IBJ Schroder Bank & Trust
Company, as Agent ("IBJ") and the Company and all its
subsidiaries.  See Note 6.

     The BN Acquisition and CTB Acquisition were accounted for as
purchases in accordance with Accounting Principles Board Opinion
No. 16.  The total purchase price, net of cash acquired, was
allocated to the assets acquired and liabilities assumed based on
their estimated fair values, as follows:

                                            (in Thousands)

                                      Battery Network      CTB

Accounts Receivable                      $ 2,522         $   648
Inventories                                4,679             347
Property and equipment                       185              79
Other assets                                 177              32
Accounts payable, accrued expenses and
  debt                                    (1,307)         (1,321)
Excess of cost over net assets acquired    4,458           1,061

Total                                    $10,714         $   846

The excess of the cost over the net assets acquired will be
amortized over a period of 25 years.  The results of operations
of Battery Network and CTB are included with those of the Company
for the periods subsequent to the dates of acquisition.

     The following unaudited pro forma summary data in the
consolidated statements of operations presents the consolidated
results of operations of the Company for the year ended
December 31, 1997 and December 31, 1996, as if the BN and CTB
acquisitions had been completed at the beginning of 1996 and does
not purport to be indicative of what would have occurred had the
acquisitions actually been made as of such date or dates or
results which may occur in the future.
  <PAGE f14>
                                              December 31,
                                            1997        1996

Net sales                              $55,767,000    $53,386,000

Net income attributable to common
  stockholders                         $   505,000    $   469,000

Income per share attributable to
  common stockholders                  $      0.11    $      0.10

     Sale of Specific Energy, Inc. - During the second quarter of
1998, the Company made the decision to exit the retail battery
business and explore the sale of Specific Energy Corporation
("Specific Energy") in Phoenix, Arizona (which is the Company's
sole retail facility).  Consistent with Statement of Financial
Accounting Standards No. 121 ("SFAS 121"), "Accounting for the
Impairment of Long-Lived Assets and Assets to be Disposed Of,"
management determined that a portion of the carrying value of the
Company's excess of cost over net assets acquired was impaired.
Accordingly, the Company recorded a charge of $558,112, which
principally represented the remaining unamortized excess of cost
over net assets acquired that resulted from the Company's
acquisition of Specific Energy in 1995.  On September 14, 1998,
the Company sold the retail assets of Specific Energy for cash
proceeds of approximately $715,000, which represented the
approximate carrying value of the net assets sold and applicable
transaction costs.

5.   PROPERTY AND EQUIPMENT - consists of the following:

                                              December 31,
                                           1998          1997

Machinery and equipment                $ 2,082,595   $ 1,991,180
Furniture and fixtures                     191,550       144,389
Vehicles                                    49,265        60,237
Lease improvements                         264,052       287,006

                                         2,587,462     2,482,812
Less accumulated depreciation           (1,251,782)   (1,155,075)

Property and equipment, net            $ 1,335,680   $ 1,327,737

6.   DEBT - consists of the following:

                                              December 31,
                                           1998          1997

Revolving Term Loan Agreement          $ 9,465,156   $11,342,028
Less current portion                      (600,000)     (600,000)

Long-term debt, net                    $ 8,865,156   $10,742,028
  <PAGE f15>
The weighted average interest rates in effect on debt for the
years ended December 31, 1998 and 1997 was 8.25%, respectively.

     Revolving Term Loan Agreement - The Company entered into a
Revolving Credit, Term Loan and Security Agreement, dated
January 6, 1997, as amended August 14, 1998 (the "Loan
Facility"), with IBJ Schroder Bank and Trust Company, as Agent
("IBJ").  The Loan Facility consists of a $3,000,000 Term Loan
(the "Term Loan") payable in 35 monthly installments of $50,000
each with the balance to be paid at maturity and a Revolving
Credit Facility (the "Revolver Loan") of up to $10,000,000 to be
advanced at the rate of 80% of eligible accounts receivable and
40% of inventories.  The Revolver Loan bears interest at the rate
of 1/4 of 1% plus the higher of i) the base commercial lending
rate of IBJ or ii) the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers plus 1/4 of 1%, or, at
the option of the Company at the Eurodollar rate plus 2%.  The
Eurodollar rate is defined as Libor for a designated period
divided by one less the aggregate reserve requirements.  The
interest on the Term Loan is 1/2% higher than the interest rate
on the Revolver Loans.  The Loan Facility is secured by a pledge
of the assets of the borrowers and pledge of the outstanding
capital stock of the subsidiaries of the Company.  As of
December 31, 1998, the principle amounts outstanding of Term
Loans was $1,489,218 and the Revolver Loans was $7,975,938.

     The Loan Facility contains certain covenants which include
maintenance of certain financial ratios, maintenance of certain
amounts of working capital and net worth as well as other
affirmative and negative covenants.  It also prohibits the
payment of dividends of common stock without consent.  At
December 31, 1998, the Company was not in compliance with certain
of these covenants.  On March 30, 1999, the Company entered into
an amendment to the Revolving Term Loan Agreement, whereby the
non-compliance at December 31, 1998 was waived, and the financial
covenants through December 31, 1999 were amended to reflect the
Company's current projections.  In addition, the Company received
a one-year extension on its Loan Facility through January 7,
2001.

7.   STOCKHOLDERS' EQUITY

     The following depicts the capitalization of Batteries
Batteries, Inc. (the "Company"), which is presented as the
capital stock of the Company.  Capital stock of the Merger
Companies is included in additional paid-in capital.

     Capitalization - In June 1995, the outstanding 200 shares of
Common Stock, par value $.001 per share, were converted, pursuant
to an amendment to the Certificate of Incorporation, into an
aggregate of 214,300 shares (222,010 shares as adjusted for
December 1995 and March 1996 stock splits as described below) of
Common Stock, par value $.001 per share.  <PAGE f16>

     In June 1995, the Company effected a private placement of
its equity securities.  The Company sold, at a price of $3.00 per
unit, 500,000 units, each consisting of two shares of the
Preferred Stock, Series A and one share of Class A Common Stock,
or an aggregate of 1,000,000 shares of Preferred Stock, Series A
and 500,000 shares (517,990 shares as adjusted for December 1995
and March 1996 stock splits as described below) of Class A Common
Stock.  The proceeds of the unit sale were applied to consummate
the Specific Energy Acquisition and for working capital.On
December 26, 1995, the Company effected a 1.47 for 1 stock split
of the outstanding shares of Common Stock and Class A Common
Stock.  On March 5, 1996, the Company effected a .70475 for 1
stock split of the outstanding shares of Common Stock and Class A
Common Stock.  All share and per share information presented
herein has been adjusted to reflect the stock splits.

     The terms of the classes of capital stock are as follows:

     Preferred Stock - The Board of Directors of the Company,
without action by the stockholders, is authorized to issue shares
of Preferred Stock in one or more series and, within certain
limitations, to determine the voting rights (including the right
to vote as a series on particular matters), preferences as to
dividends and in liquidation, conversion, redemption and other
rights of each such series.  The Board of Directors could issue a
series with rights more favorable with respect to dividends,
liquidation and voting than those held by the holders of any
class of common stock.  The Preferred Stock, Series A shares were
nonvoting and were redeemed in accordance with their terms one
year following consummation of the initial public offering at the
redemption price of $1.00 per share plus accrued dividends from
the date of issuance at the rate of 8% per annum of the
redemption price.  In May 1996, the Company redeemed 250,000
shares of Preferred Stock.  In April 1997, the Company redeemed
the remaining 750,000 shares of the preferred stock at the
redemption price of $1.00 per share plus accrued dividends of 8%
per annum.

     Class A Common Stock - The shares of Class A Common Stock
were automatically converted into like shares of the Common Stock
upon the consummation of the Offering in accordance with their
terms.  The authority to issue Class A Common Stock terminated as
a result of the Offering and concurrent conversion.

     Common Stock - The shares of Common Stock have one vote per
share.  None of the shares have preemptive or cumulative voting
rights, redemption rights, are or will be liable for assessment
or further calls.  The holders of the Common Stock are entitled
to dividends when declared from funds legally available
therefore.

     Stock Options - The Company, on June 6, 1995, adopted the
Company's Stock Option Plan (the "Plan"), which as amended in
December 1995 relates to 250,000 shares of its Common Stock,
<PAGE f17> authorizing the Board of Directors or a Stock Option
Committee appointed by the Board to grant incentive stock options
and non-incentive stock options to officers and key employees,
directors and independent consultants, with directors who are not
employees and consultants eligible only to receive non-incentive
stock options.  The Board of Directors in 1995 granted under the
Plan options to purchase 20,720 shares of Common Stock to two
directors at a price of $2.89 per share.  In 1996, the Company
granted under the Plan five-year options to purchase an aggregate
of 195,000 shares of Common Stock to employees.  The options are
exercisable at the initial Offering price per share of $5.00.  In
1997, the Company granted, under the plan, five-year options to
purchase an aggregate of 75,000 shares of common stock to
employees of the Company.  The options are exercisable at prices
ranging from $2.80 to $4.50 per share.  In 1998, the Shareholders
of the Company approved an Amendment to the plan increasing the
number of shares granted by 350,000 to an aggregate total of
600,000 for the plan.  In 1998, the Company granted, under the
plan, five-year options to purchase an aggregate of 455,000
shares of common stock to directors and employees of the Company.
The options are exercisable at prices ranging from $1.18 to $2.69
per share.  At December 31, 1998, there were a total of 296,135
shares available for grant.

     The following information pertains to the stock options
outstanding for the three years ending December 31, 1998:

                                                         Weighted
                                                          Average
                                             Number of    Shares
                                              Shares       Price

Shares outstanding at January 1, 1996          20,720      $2.89

Granted                                       195,000       5.00

Shares outstanding at December 31, 1996       215,720       4.80

    Granted                                    75,000       3.93
    Forfeited                                (105,000)      5.00

Shares outstanding at December 31, 1997       185,720      $4.33

    Granted                                   455,000       2.17
    Forfeited                                (336,855)      3.12

Shares outstanding at December 31, 1998       303,865      $2.47

Shares exercisable at December 31, 1998       185,532
  <PAGE f18>

     The following table summarizes information as of December 31, 1998
 concerning currently outstanding and exercisable options:
<TABLE>
<CAPTION>


                             Option Outstanding                 Options Exercisable
                                 Weighted
                                 Average
                                Remaining                                   Weighted
                               Contractual      Weighted                     Average
   Range of         Number         Life          Average         Number     Exercise
Exercise Price   Outstanding     (years)     Exercise Price   Exercisable     Price
<S>              <C>           <C>           <C>              <C>           <C>
 $1.18 - $5.00     303,865          5             2.51          185,532       3.09
</TABLE>

     The outstanding stock options as of December 31, 1998 vests
in accordance with either of the following:

     (A)  Half of the option shares are vested on the date of
grant with an additional one-third vesting in the first
anniversary therefrom (130,000 shares outstanding at December 31,
1998)

                               or

     (B)  One-third of the option shares are vested on the date
of the grant with an additional one-third vesting on the first
and second anniversaries therefrom, respectively.  (140,000
shares outstanding at December 31, 1998)

     (C)  One hundred percent of the option shares are vested in
the date of grant (33,865 shares outstanding at December 31,
1998).

     There were no significant changes or modifications to any
share option agreement during 1998.

     The Company accounts for the Plans in accordance with
Accounting Principles Board Opinion No. 25, under which no
compensation costs have been recognized for stock option awards
because the exercise price for stock options is the fair market
value of the underlying common stock at the date of the grant.
Had compensation costs of the plans been determined under a fair
value alternative method as stated in SFAS No. 123, "Accounting
for Stock-Based Compensation," the Company would have been
required to prepare a fair value model for such options and
record such amount in the financial statements as compensation
expense.  Pro forma net income (loss), as adjusted, would have
been ($2,097,143) or $(.44) per share (basic and diluted),
$332,486 or $.07 per share (basic and diluted) and $426,926 or
$.10 per share for fiscal 1998, 1997 and 1996 respectively.  The
Company arrived at the fair value of each stock grant at the date
of grant by using the Black Scholes option pricing model with the
following weighted average assumptions used for grants:  risk
<PAGE f19>-free interest rate of 5.5%, 6.0% and 6.0% for 1998,
1997 and 1996 respectively; expected dividend yield of 0%;
expected life of 5 years; and expected volatility of 117%, 83%
and 35% for fiscal 1998, 1997 and 1996 respectively.

     Additionally, in connection with the Battery Network
acquisition in 1997, the Company issued options to purchase
225,000 shares of common stock at an exercise price of $4.50 per
share and, in connection with the Tauber acquisition in 1996,
issued options to purchase 50,000 at an exercise price of $5.00
per share.

     Warrants - In connection with the Offering, the Company sold
2,300,000 redeemable warrants to purchase the Company's common
stock.

     Each Warrant is exercisable at a price of $5.00 per share
after April 8, 1997 and is redeemable by the Company thereafter
at a price of $.01 per Warrant upon not less than 30 days' prior
written notice if the last sale price of the Common Stock has
been at least $7.50 per share on the 20 consecutive trading days
ending on the third day prior to the date on which the notice of
redemption is given.

     Also, in connection with the BN Acquisition, on January 7,
1997 the Company issued five-year warrants to purchase 100,000
shares of common stock at a price of $4.125 per share.
  <PAGE f20>
8.   EARNINGS PER SHARE

     Reconciliation of basic and diluted earnings per share in
accordance with SFAS No. 128.

                                  1998         1997
Numerator
  Basic and Diluted:
   Net income (loss)         $(2,061,705)  $  553,003

Denominator
  Basic:
    Weighted average
      common shares
      outstanding              4,743,000    4,688,803

Diluted:
  Effect of dilutive
    securities:
    Common stock options          15,918        2,283
    Common stock warrants              0            0

Total weighted average
  common and potential
  common shares outstanding   $4,758,916   $4,691,086

Earnings (Loss) Per Share
  Basic                       $    (0.43)  $     0.12
  Diluted                     $    (0.43)  $     0.12

     In addition, at December 31, 1996 there were 308,865 common
share options and 2,400,000 common share warrants that were anti-
dilutive and not included in the calculation of earnings per
share.

9.   LEASE COMMITMENTS

     The Company leases various types of warehouse and other
space and equipment, furniture and fixtures under noncancelable
operating lease agreements which expire at various dates.
Certain leases for warehouse and other space contain rental
escalation clauses based on the Consumer Price Index.  Future
minimum lease payments under noncancelable operating leases for
the years ending December 31, are as follows:
  <PAGE f21>
Operating Leases -

                                            Amount

  1999                                    $  642,291
  2000                                       593,039
  2001                                       595,081
  2002                                       483,698
  2003                                       388,017
  Thereafter                                  19,250

  Total                                   $2,721,376

     Rent expense for all operating leases for the years ended
December 31, 1998, 1997 and 1996 was $724,414, $821,093, $245,455
respectively.

10.  PROFIT SHARING PLAN

     Tauber has a profit share plan covering substantially all of
its employees.  Tauber makes contributions to the plan at its
discretion.  The plan allows participating employees to make
voluntary deposits into the plan, subject to annual limits.
Contributions to the plan were $35,275, $141,123 and $41,364 for
the years ended December 31, 1998, 1997, and 1996, respectively.

11.  INCOME TAXES

     The provision (benefit) for income taxes consists of:

                                             Fiscal
                                 1998         1997        1996

Current:
  Federal                      $(445,477)   $549,602    $132,561
  State                           58,000     189,706     120,659

                                (387,477)    739,308     253,220
Deferred:
  Federal                          4,328    (144,463)     66,170
  State                            4,077     (29,470)     17,530

                                   8,405    (173,933)     83,700

Total provision (benefit)
  for income taxes             $(379,072)   $565,375    $336,920

     The approximate tax effects of temporary differences that
gave rise to deferred tax assets (liabilities) were as follows:
  <PAGE f22>
                                            December 31,
                                         1998          1997

Deferred income tax assets:
  Reserves not currently deductible    $110,829     $291,657
  Accrued Expenditures not currently
    deductible                          188,044
  Net Operating Loss                     82,005
                                       $380,878     $291,657
Deferred income tax liabilities:
  Deductible Acquisition Costs         $(78,914)    $(75,174)
  Excess of tax depreciation over
    book                                 (5,637)       2,656
  State Taxes                           (71,787)
  Prepaid Liabilities                   (13,806)

Net deferred tax asset                 $210,734     $219,139

The effective income tax rate varied from the U.S. Federal
statutory tax rate as follows:

                                               Fiscal
                                       1998     1997    1996
Statutory income tax rate            (34.0%)   34.0%   34.0%
State income taxes, net of Federal
  tax benefit                          1.7      6.9     9.9
Subchapter S corporation income
  not subject to corporate level
  taxation                                             (6.9)
Goodwill                              11.0      8.6
Other                                  4.8       -      2.5
Meals and Entertainment                1.0       -       -
Effective tax rate                   (15.5%)   49.5%   39.5%

     The Company had Federal and State operating losses of
approximately $1,081,000 and $699,000, respectively.  The Federal
losses are scheduled to expire in 2018.  The state net operating
losses are scheduled to expire on various dates in 2003.

     Prior to the Offering, Advanced Fox was organized as a
S Corporation.  Also, on January 1, 1995, Tauber converted from
an S Corporation to a C Corporation.  All subsidiaries are
taxable entities and for Federal purposes are included in a
consolidated income tax return from the date of their individual
acquisition.

12.  COMMITMENTS AND CONTINGENCIES

     Litigation - The Company is, from time to time, party to
litigation arising in the normal course of its business.
Management believes that none of this litigation will have a
material adverse effect on the financial position or results of
operations of the Company.
  <PAGE f23>
13.  RELATED PARTY TRANSACTIONS

     Management Agreement - Messrs. Warren H. Haber, Chairman of
the Board and Chief Executive Officer and John L. Teeger, Vice
President, Secretary and Director of the Company are the sole
stockholders, officers and directors of Founders Management
Services, Inc. ("Founders").  Founders has agreed, pursuant to an
agreement (the "Management Agreement") dated as of June 6, 1995,
as subsequently amended, to provide advice and consultative
services regarding management, overall strategic planning,
acquisition policy, relations with commercial and investment
banking institutions, and stockholder matters to or on behalf of
the Company.  The agreement, which is for a term expiring on a
date three years from the closing of the Offering, subject to
five one-year renewal options, provides for Founders to receive a
base fee of $150,000 per annum.  Founders is also to receive an
additional fee of 5% of the Company's annual pre-tax income in
excess of $750,000.  Under the agreement, Founders will also be
entitled to originating fees with respect to acquisitions or
financing for which is performed originating services - the fee
to be that customarily charged by nonaffiliated investment
bankers or professional originators for transactions or similar
size and nature.  Founders received a fee of $150,000 for its
origination and consulting services in connection with the
Mergers.  Founders also received a fee of $240,000 for
originating and negotiating services in connection with the BN
Acquisition and Loan Facility, and was issued five year warrants
to purchase 100,000 shares of the company's Common Stock at a
price of $4.125 per share.  In connection with the Management
Agreement, the Company paid Founders $56,115, $437,265, and
$245,024 during the years ended December 31, 1998, 1997 and 1996
respectively.  In February 1998, the Management Agreement was
revised to eliminate the origination and incentive fee provisions
of the original agreement, and to establish April 30, 1999 as the
expiration date.  The revised agreement thereby limits fees paid
to Founders to an annual fee of $150,000.  On May 5, 1998, both
active principals of Founders resigned as officers and directors
of the Company, effectively terminating the relationship between
the Company and Founders.

     The following is a summary of transactions with related
parties.

<TABLE>
<CAPTION>
                                          1998        1997        1996
<S>                                     <C>         <C>         <C>
Salary and bonus paid to stockholders   $187,000    $804,188    $539,750
Interest expense paid to stockholders
  and affiliates of stockholders            -           -          8,378
Rent expense paid to stockholders        214,734     252,551      70,000

</TABLE>

     Following is a summary of the nature and principal terms of
leases with stockholders as of December 31, 1998:  <PAGE f24>

<TABLE>
<CAPTION>                                                                                Approximate      Base
Lease
Operation         Nature           Lessor                   Location              Area         Rent          Expiration
<S>               <C>             <C>                       <C>
Advanced Fox      Office Staff    An affiliate of Stephen   Huntingdon Valley    7,000 ft.   $6,333 per    December 31, 1999
                  rental          Rade, CEO, Director and   Pennsylvania                      month
                                  stockholder of the
                                  Company

Battery Network   Office and      Affiliate of sellers of   North Branch, New    11,750 ft.  $6,700 per    December 31, 2001
                  Warehouse space Battery Network           Jersey                            month
                  for branch of   (James Sapp, Susan Grandt
                  Battery Network and William Steven Sapp)
                                  former employees of the
                                  Company and shareholders

</TABLE>

     During June, 1998 a lease for office and warehouse space at
a branch location in McHenry, Illinois with an affiliate of the
sellers of Battery Network (James Sapp, Susan Grandt and William
Steven Sapp) former employees of the Company and shareholders was
terminated by mutual consent with no further obligation to the
Company.

14.  SEGMENT DISCLOSURE

     The Company's operations are presently organized into two
business groups: battery assembly and distribution and cellular
and wireless accessory distribution as follows:

The Battery Group, is headquartered in Escondido, California.
The Battery Group consists of Tauber Electronics, which
engineers, manufactures and distributes battery packs and battery
systems to original equipment manufacturers and Battery Network
which is a national distributor of specialty batteries to the
commercial, industrial and government/institutional markets and
Specific Energy, a retail distributor of specialty batteries
whose assets were sold in September, 1998.

The Wireless Products Group, is headquartered in Huntingdon
Valley, Pennsylvania, consists of Advanced Fox Antenna, Inc.
which distributes over 1,600 cellular telephone accessory
products, including batteries, chargers, and antennas throughout
North and South America and Cliffco of Tampa Bay, Inc., which
distributes Cellular Accessories to a variety of customers
including the large domestic carriers.

     The business groups were established based primarily on
commonality and synergies in product offerings and market focus,
and product offerings and management expertise.

     Listed below is a geographic breakdown of each group by
individual company listing the headquarters and branch
operations.
  <PAGE f25>
 The Battery
Group Division           Location       Nature of Operation

Battery Network       Escondido, CA    Headquarters - Battery
                                       Network

Battery Network       North Branch     Branch Sales and
                      NJ               Warehousing

Battery Network       McHenry, IL      Branch Sales Office

Tauber Electronics    Escondido, CA    Headquarters for Tauber
                                       Electronics

 The Wireless
Group Division           Location      Nature of Operation

Advanced Fox Antenna  Huntingdon       Headquarters -
                      Valley, PA       Wireless Group

Advanced Fox Antenna  Miami, FL        Branch Sales and
                                       Warehousing

Cliffco of Tampa      Tampa Bay, FL    Headquarters for
Bay, Inc.                              Cliffco of Tampa
                                       Bay, Inc.

     Summary information by segment as of December 31, 1998 and
1997 and for the years ended December 31, 1988, 1997, and 1996 is
as follows:
  <PAGE f26>
<TABLE>
<CAPTION>
                                                                 Battery         Wireless       Corporate and       Total
                                                                 Segment          Segment        Unallocated     Consolidated

<S>                                                  <C>       <C>              <C>              <C>             <C>
Net sales                                            1998     $26,601,820      $24,852,021                -     $51,453,841
                                                     1997      33,802,978       20,171,234                -      53,974,212
                                                     1996      11,971,024       13,679,051                -      25,650,075

Operating income (loss)                              1998      (3,820,862)       3,339,196      $(1,168,699)     (1,650,365)
                                                     1997         714,332        2,156,008       (1,010,689)      1,859,651
                                                     1996          75,820        1,429,564         (664,681)        840,703

Assets                                               1998      15,834,302        9,735,184       (1,084,790)     24,484,696
                                                     1997      19,267,551        6,134,446        3,135,609      28,537,606
                                                     1996       5,031,315        3,927,747        2,772,705      11,731,767

Depreciation and amortization                        1998         319,134          310,268          120,000         749,402
                                                     1997         347,566          201,407           98,217         647,190
                                                     1996          98,934           69,141           20,000         188,075

Interest expense                                     1998               -                -          790,412         790,412
                                                     1997             827            6,632          719,891         727,350
                                                     1996          15,132           66,212                -          81,344

Interest (income)                                    1998               -                -                -               -
                                                     1997               -           (1,077)               -          (1,077)
                                                     1996         (27,098)               -          (66,789)        (93,887)

Income before taxes                                  1998      (3,820,862)       3,339,196       (1,959,111)     (2,440,777)
                                                     1997         713,505        2,150,453       (1,730,580)      1,133,378
                                                     1996          87,786        1,394,352         (628,892)        853,246
</TABLE>


Listed below is the composition of corporate and unallocated
assets for the years ended December 31, 1996, 1997 and 1998:

                          1998            1997         1996

Cash (overdraft)      $  (41,818)    $   27,615     $2,194,568

Due from (to)
subsidiaries          (1,437,583)     2,625,527        355,095

Deferred organization
expense                   60,000         90,000        120,000

Deferred income taxes    186,453        186,473              0

Deferred finance cost     90,000        184,143         60,000

Other                     58,158         21,851         43,042

TOTAL                $(1,084,790)    $3,135,609     $2,772,705
                     ===========     ==========     ==========

     Additional information regarding revenue by products and
service groups for the years ended December 31, 1998, 1997, and
1996 is as follows:
  <PAGE f27>
<TABLE>
<CAPTION>

                                                  1998           1997            1996
<S>                                           <C>            <C>             <C>
OEM Value Added Sales                        $ 7,265,964    $ 7,149,632     $ 4,658,274
Cellular Products and Accessories             25,212,732     20,767,934      13,844,907
Other Battery Products                        18,975,145     26,056,646       7,146,833

Total Sales                                  $51,453,841    $53,974,212     $25,650,014

</TABLE>

     All revenue and essentially all long-lived assets were
related to operators in the United States as of and for the years
ended December 31, 1998, 1997 and 1996.  In 1998 and 1997 no one
customer accounted for more than 10% of net sales.

     Export sales for the years ended December 31, 1998, 1997 and
1996 as follows:

<TABLE>
<CAPTION>

                                                  1998           1997            1996
<S>                                           <C>            <C>             <C>
Europe, Middle East & Africa                  $  351,448     $  608,765        $ 93,761
Asia & Pacific                                     8,479          9,539          22,756
Americas Excluding U.S.A.                      1,151,274      1,380,927         755,901

Total                                         $1,511,201     $1,999,231        $872,418

</TABLE>

     Receivables from export sales at December 31, 1998 and 1997
were approximately $139,048 and $249,740 respectively for the
Battery Group and $224,311 and $121,937 respectively, for the
Wireless Group.
  <PAGE f28>
<PAGE>
                           Schedule 1

                    Batteries Batteries, Inc.
                Valuation and Qualifying Accounts
             Years ending December 31, 1998 and 1997
<TABLE>
<CAPTION>
Description                   Beginning Balance        Additions   Deductions          Ending Balance
<S>                      <C>               <C>        <C>          <C>          <C>        <C>
Inventory Reserves       January 1, 1997   $851,192   $  311,000   $  323,485   $838,707   December 31, 1997
                         January 1, 1998    838,707    1,171,596    1,313,112    697,191   December 31, 1998

Allowance for doubtful
  accounts               January 1, 1997    432,239      326,915      169,272    589,882   December 31, 1997
                         January 1, 1998    589,882      400,275      427,040    563,117   December 31, 1998
</TABLE>
  <PAGE s1>
                           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.

                              Batteries Batteries, Inc.


                              /s/ Stephen Rade
                              Stephen Rade
                              Chief Executive Officer



                              /s/ Ronald E. Badke
                              Ronald E. Badke,
                              Principal Financial Officer

Dated:  August 10, 1999