<PAGE>


                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-K

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

For the fiscal year ended                                 Commission File Number
-------------------------                                 ----------------------
     January 31, 2000                                             1-4124

                            JETRONIC INDUSTRIES, INC.

     Pennsylvania                                                23-1364981
------------------------                                     -------------------
(State of Incorporation)                                      (I.R.S. Employer
                                                             Identification No.)

             4200 Mitchell Street, Philadelphia, Pennsylvania 19128
             ------------------------------------------------------
                    (Address of Principal Executive Offices)

                                  215-482-7660
                               ------------------
                               (Telephone Number)

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

Common Stock, $.10 Par Value                            American Stock Exchange
----------------------------                            -----------------------
    (Title of Class)                                       (Name of Exchange)

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

                                      None
                                ----------------
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety 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 or any amendment to this
Form 10-K. (X)
           ---

On May 17, 2000, the aggregate market value of the Registrant's common stock,
$.10 par value (its only voting stock), held by nonaffiliates of the Registrant
was $2,554,000.

On May 17, 2000, there were 3,701,999 shares of the Registrant's common stock,
$.10 par value, outstanding.

Documents incorporated by reference are hereunder listed.

                                                   Part of 10-K into which the
                  Document                         Document is Incorporated
-----------------------------------------          -----------------------------
Definitive Proxy Statement in connection           Part III, Items 10, 11, 12
   with annual meeting of shareholders to          and 13
   be held in November 2000



<PAGE>



                                     PART I


ITEM 1 - BUSINESS:
------------------

The Registrant, Jetronic Industries, Inc., together with its subsidiary, is
referred to as "the Company" unless the context clearly indicates otherwise.
During fiscal year 2000, the Company and former employees were under
investigation by the Department of Defense for failure to perform required
testing procedures. In May 1998, holders of the 10% Subordinated Debentures
extended the due date of the Debentures, along with the related Deferred
Interest, until January 2003. In 2000, 1999 and 1998, Caterpillar, Inc.
accounted for a significant portion of the Company's revenues. There have been
no other significant developments related to the Company's business.


     Business segment and geographic information:
     --------------------------------------------

Summarized business segment information for 2000-1998 (in thousands) is as
follows:
<TABLE>
<CAPTION>

                                                                2000            1999           1998
                                                                ----            ----           ----

<S>                                                          <C>            <C>            <C>
Net revenues
    Electronic communication equipment                       $     664      $     678      $     719
    Energy conversion products group                            24,530         21,810         25,154
                                                             ---------      ---------      ---------
       Consolidated                                          $  25,194      $  22,488      $  25,873
                                                             =========      =========      =========

Operating profit (loss):
    Electronic communication equipment                       $     236      $     207      $     271
    Energy conversion products group                        (      331)         3,108          3,399
    Net corporate expenses                                  (    4,812)    (    2,967)    (    2,393)
                                                             ---------      ---------      ---------
       Consolidated                                         ($   4,907)     $     348      $   1,277
                                                             =========      =========      =========
Identifiable assets:
    Electronic communication equipment                       $     324      $     525      $     343
    Energy conversion products group                            12,853         11,720         11,872
                                                             ---------      ---------      ---------
       Total                                                    13,177         12,245         12,215
    Other corporate assets                                       1,813          2,966          1,271
                                                             ---------      ---------      ---------
       Consolidated                                          $  14,990      $  15,211        $13,486
                                                             =========      =========      =========
Depreciation expense:
    Electronic communication equipment                       $      20      $      29      $      30
    Energy conversion products group                                89             87             80
                                                             ---------      ---------      ---------
       Consolidated                                          $     109      $     116      $     110
                                                             =========      =========      =========
Capital expenditures:
    Energy conversion products group                         $     132      $      75      $      90
                                                             =========      =========      =========
       Consolidated                                          $     132      $      75      $      90
                                                             =========      =========      =========
</TABLE>

                                       1


<PAGE>



Operating profit is total revenue less operating expenses. In computing
operating profit by segment, none of the following items have been added or
deducted: general corporate expenses, corporate interest expense, corporate
interest income and income taxes.

Identifiable assets by segment are those assets that are used in the Company's
operations in each segment. Corporate assets are principally prepaid and other
assets.

During 2000-1998, respectively contracts with United States Government agencies
accounted for approximately $898,000, $1,059,000 and $863,000 of total sales in
the electronic communication equipment and energy conversion products group
segments.

     Description of the business:

Jetronic was incorporated in the Commonwealth of Pennsylvania on January 12,
1951.

Jetronic is engaged in the design, development, manufacture, distribution and
sale of energy conversion equipment, specialized computer subsystem enclosures
and electronic communication devices for commercial and government use through
its "Electronics" and "Transchem" divisions, the Redco subsidiary and Redco's
Power Systems Group division.

The Electronics Division designs and manufactures, to customer specification,
digital data control terminals.

The Transchem Division (energy conversion products group) manufactures and
markets precision solid state power supplies, primarily for the aircraft and
aerospace industries.

The Redco, Inc. (energy conversion products group) manufactures and markets
paralleling and nonparalleling electrical switchgear and control systems, along
with the metal enclosures in which the equipment is housed. Redco, Inc. supplies
standardized control panels on a regular basis to major domestic engine
manufacturers (principally Caterpillar, Inc.) and designs, builds and installs
complex cogeneration control systems.

Power Systems Group, a division of Redco, Inc., designs and manufactures custom
ruggedized enclosures for the aircraft and aerospace markets and sells
ruggedized laptop computers into these same markets.

Government business is obtained both through competitive bidding and by
negotiated contract. Commercial products are marketed by Jetronic's officers,
sales managers and a network of manufacturers' representatives. All phases of
Jetronic's business are highly competitive. Each of Jetronic's operating
entities competes with other concerns, some of which have substantially greater
sales and resources than Jetronic. Each of the operating entities accounts for
only a small portion of sales in its area of competition. The five largest
commercial customers of the energy conversion products group accounted for 78%
of that group's sales, one of which accounted for 61%. Prime contract sales to
the U.S. Government accounted for 4% of Jetronic sales. At January 31, 2000, the
total backlog of orders amounted to $9,485,000. At January 31, 1999, the total
backlog was $5,988,000. Of the backlog at January 31, 2000, all is expected to
be filled within the current year.

Jetronic purchases components, raw materials and finished products from numerous
sources and has generally experienced no significant difficulty in meeting its
requirements. The business is not materially dependent on patents, licenses or
concessions; Jetronic's position is more dependent on experience and its
marketing and production techniques. During 2000, 1999 and 1998, Jetronic
expended $68,000, $8,000 and $49,000, respectively, on research activities for
the development of new products or the significant improvement of existing
products, all of which were Company sponsored. Future expenditures are not
expected to be significant. Environmental controls have not had a material
effect on operations. At January 31, 2000, Jetronic employed 186 people.


                                       2
<PAGE>


ITEM 2 - PROPERTIES:
--------------------

The Company presently has the following leaseholds:
<TABLE>
<CAPTION>

                                                                                Square           Lease
   Operating entity              Location                  Use                   feet           expires
   ----------------              --------                  ---                   ----           -------
<S>                           <C>                     <C>                        <C>             <C>
Jetronic                     Philadelphia, PA        Manufacturing               3,000             6/03
                                                     and offices
Transchem Division           Corona, CA              Manufacturing              21,000             1/04
                                                     and offices
Redco                        Peoria, IL              Manufacturing              36,000            12/05
                                                     and offices
Redco                        Peoria, IL              Manufacturing              10,000             3/01
</TABLE>


Leased properties are considered suitable for the purposes intended and adequate
for present levels of utilization. The Company has no significant idle
facilities.

ITEM 3 - LEGAL PROCEEDINGS:
---------------------------

In February 1999 certain wholly owned subsidiaries of Woven Electronics
Corporation (Woven) commenced an action against Jetronic's wholly owned
subsidiary, Redco, Inc., for $327,246 and accrued interest alleged to be due
under and pursuant to a promissory note dated March 30, 1997. By way of defense
and counterclaim, Redco has asserted claims in the amount of $328,169 to which
it is entitled under and pursuant to the terms of the agreement under which said
promissory note was issued. In April 2000, Woven was awarded a judgment against
Redco approximating $365,000 which represents principal and interest on the
Woven obligation. The Court did not allow any of the counterclaims by Redco
because of untimely filing of rebuttals. Redco has appealed this judgment and
intends to contest this matter vigorously.

The Department of Defense has conducted an investigation of the Company and
former employees and has determined that one of the Company's divisions has
violated Federal Statutes by failing to perform certain quality control tests
and test procedures in connection with product delivered under government
contracts. While certain irregularities have occurred, they are, in the opinion
of management, of a nature that would have no material effect on the quality or
reliability of such product. The Company is currently in settlement discussions
with the Department of Defense regarding possible fines and penalties. Although
no definitive amounts have been determined, the Company has made a provision for
possible settlement amounts and related costs in its financial statements for
the year ended January 31, 2000.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
-------------------------------------------------------------

None.

                                     PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
         MATTERS:
-----------------------------------------------------------------------------

The Company's common stock is traded on the American Stock Exchange. The high
and low sales prices for each quarterly period in the past two years ended
January 31 are:


                                2000                              1999
                                ----                              ----
   Quarter              High             Low             High             Low
   -------              ----             ---             ----             ---

   First             $1 3/8            $  7/8         $2 15/16         $2 3/16
   Second             1                 11/16          2 13/16          1  1/4
   Third                7/8               5/8          1 9/16            15/16
   Fourth             1 1/8               5/8          1 7/16           1


                                       3

<PAGE>


As of May 17, 2000, there were approximately 1,464 holders of the Company's
common stock. The Company has paid no cash dividends for a number of years. See
Notes 8 and 9 to Consolidated Financial Statements for a discussion of dividend
restrictions.

Trading of the Company's Common Stock on the American Stock Exchange was
suspended on May 18, 2000 because of the Company's inability to file its Annual
Report on Form 10-K with the Securities and Exchange Commission on a timely
basis. The American Stock Exchange is currently reviewing whether the Company
continues to meet the criteria to continue to be listed.

ITEM 6 - SELECTED FINANCIAL DATA:
---------------------------------
<TABLE>
<CAPTION>


                                                          For the year ended January 31,
                                                          ------------------------------
                                             2000         1999         1998         1997         1996
                                             ----         ----         ----         ----         ----
                                                       (in thousands, except per share data)
<S>                                         <C>          <C>          <C>          <C>           <C>
Revenues                                    $25,194      $22,488      $25,873      $23,671       $22,353
Income (loss) from continuing
    operations                             ($ 5,187)     $   718      $ 1,273      $   585      ($ 1,285)
Income (loss) from continuing
    operations per share-basic             ($  1.40)     $   .20      $   .35      $   .16      ($   .36)
Income (loss) from continuing
    operations per share-diluted                         $   .16      $   .33      $   .16
Total assets                                $14,990      $15,211      $13,486      $11,381       $ 9,407
Long-term debt                                           $ 5,773      $ 4,282      $ 4,102       $ 3,996
</TABLE>

No cash dividends have been declared in the past five years.

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

         Results of operations:
         ----------------------

In the following commentary, "Operating Profit" is total revenue less operating
expenses. In computing operating profit or loss, none of the following items
have been added or deducted: general corporate expenses, corporate interest
expense, corporate interest income and income taxes. The following should be
read in conjunction with business segment and geographic information on page 1.

         2000 compared with 1999:
         ------------------------

The Company reported revenues of $25,194,000 and an operating loss of $4,907,000
for the year ended January 31, 2000 (2000) compared to revenues of $22,488,000
and an operating profit of $348,000 for the year ended January 31, 1999 (1999).

The electronic communication equipment operations reported revenues of $664,000
and an operating profit of $236,000 for 2000 compared to revenues of $678,000
and an operating profit of $207,000 for 1999. The revenues generated by this
operation are derived from a single contract. Although, the operation of this
segment is dependent upon the continuation of this contract, since the Company
is the sole source of this product, indications are that add-ons to the existing
contract will continue. The Company is currently negotiating an additional
add-on to its existing contract with the U.S. Government which, if successful,
would expect to begin shipping during the fiscal year ended January 31, 2001.

                                       4

<PAGE>


The energy conversion products group reported revenues of $24,530,000 and a loss
of $331,000 for 2000 compared to revenues of $21,810,000 and an operating profit
of $3,108,000 for 1999. Although revenues increased by twenty-five percent for
the switchgear business, decreased profit margins and inventory write-offs
reduced profitability to $1,777,000 in 2000 from $1,860,000 in 1999.
Additionally, revenues for the solid state power supply and specialized computer
subsystem enclosure businesses were down from the prior year by thirty percent.
This decrease in revenues, coupled with substantial unreimbursed cost incurrence
for rework and product redesign combined with inventory write-offs, contributed
to the energy conversion products group's loss for the current fiscal year.

Net corporate expenses, comprised of interest and debt expense and general
corporate items, were $4,812,000 in 2000 compared to $2,967,000 in 1999.
Increases in corporate expenses year to year is primarily related to additional
professional fees incurred and provision for possible charges associated with
the Department of Defense investigation initiated in fiscal 1999, an increase in
interest expense due to increased borrowings and related increases in the
Corporate and prime borrowing rate and an increase in the amortization of
deferred debt expense due to a full year's amortization in 2000 compared to a
partial year's amortization in 1999.

         1999 compared with 1998:
         ------------------------

The Company reported revenues of $22,488,000 and an operating profit of $348,000
for the year ended January 31, 1999 (1999) compared to revenues of $25,873,000
and an operating profit of $1,277,000 for the year ended January 31, 1998
(1998).

The electronic communication equipment operations reported revenues of $678,000
and an operating profit of $207,000 for 1999 compared to revenues of $719,000
and an operating profit of $271,000 for 1998. The Company is currently
negotiating an add-on to its existing contract which, if successful, would
expect to be shipped during the fiscal year ended January 31, 2000.

The energy conversion products group reported revenues of $21,810,000 and an
operating profit of $3,108,000 for 1999 compared to revenues of $25,154,000 and
an operating profit of $3,399,000 for 1998. Although revenues and profitability
for the solid state power supply business and specialized computer subsystem
enclosure businesses increased by approximately 19% year to year, a decline in
revenues in switchgear business as a result of decreased orders from a major
customer and a reduction in orders for custom switchgear negatively impacted the
performance of the energy conversion products group.

Net corporate expenses, comprised of interest expense and general corporate
items, were $2,967,000 in 1999 compared to $2,393,000 in 1998. The increase in
corporate expenses is primarily attributable to the increase in interest and
financing costs associated with the Company's refinancing in May 1998.

         Liquidity and capital resources:
         --------------------------------

During 2000 and 1999, the operations of the Company and its subsidiary were
financed by a lending institution under various formulae which provide operating
funds as required. Such borrowings are primarily in the form of short-term
loans, secured by assignment of accounts receivable and inventories. Under the
various formulae, borrowings are limited to varying percentages and maximum
dollar amounts of accounts receivable and inventories with a maximum limitation
of $6,500,000. At January 31, 2000, $4,183,000 was available under the various
formulae of which $3,742,00 was outstanding. The Company's line of credit
agreement with its current lender expires in May 2001.

At this time, there are no material commitments for capital expenditures. Cash
requirements for the next fiscal year should increase by ten percent. Based upon
the availability of funds under its existing financing arrangement, the Company
deems its liquidity may not be adequate. Subsequent to January 31, 2000 the
Company has requested, and has received, additional funding as an overline from
its current lender. There is no assurance that the Company's present lender will
continue to make out of formula advances to the Company. In addition, there
exist defaults in its agreements with its present lender as well as the
subordinated debenture holders. There is no assurance that these lenders will
continue to forebear relative to the defaults.


                                       5
<PAGE>


As a result of the substantial losses incurred in the current fiscal year,
negative shareholders' equity, a negative working capital position and the
defaults existing under its present financing arrangements and bondholder
agreement, there is substantial doubt about the Company's ability to continue as
a going concern. The Company has engaged financial consultants approved by its
lender to provide assistance in developing financial plans to alleviate the
present situation, including the possible sale of certain operating entities.
The Company has also initiated an organization-wide program of cost containment.

ITEM 7a - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
---------------------------------------------------------------------

         Market Risk Sensitive Instruments:
         ----------------------------------

The market risk inherent in the Company's market risk sensitive instruments and
positions is the potential loss arising from adverse changes in interest rates.

         Interest Rate Risk:
         -------------------

The Company's bank loans expose earnings to changes in short-term interest rates
since interest rates on the underlying obligations are variable. The fair values
of the Company's bank loans are not significantly affected by changes in market
interest rates. The change in fair value of the Company's long-term debt bearing
variable rates resulting from a hypothetical 10% increase in interest rates is
not material.


                                       6
<PAGE>



ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
-----------------------------------------------------

                                      INDEX


                                                                        Page(s)
                                                                        -------

Independent auditors' report                                               8

Financial statements:

    Consolidated balance sheets                                            9

    Consolidated statements of operations                                 10

    Consolidated statements of changes in
      shareholders' equity                                                11

    Consolidated statements of cash flows                                 12

    Notes to consolidated financial statements                       13 - 20

Financial statement schedule:

    Valuation and qualifying accounts (Schedule II)                       21


                                       7

<PAGE>




                          INDEPENDENT AUDITORS' REPORT

The Shareholders and
   Board of Directors
Jetronic Industries, Inc.
Philadelphia, Pennsylvania


We have audited the accompanying consolidated balance sheets of Jetronic
Industries, Inc. and Subsidiary as of January 31, 2000 and 1999 and the related
consolidated statements of operations, changes in Shareholders' equity and cash
flows for each of the three years in the period ended January 31, 2000. Our
audits also include the financial statement schedule listed in the Index at Item
8. These consolidated financial statements and financial statement schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedule 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, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Jetronic Industries, Inc. and Subsidiary as of January 31, 2000 and 1999 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended January 31, 2000 in conformity with generally
accepted accounting principles. Also, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein for each of the three years
in the period ended January 31, 2000.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.

As reflected in the financial statements, the Company incurred a net loss of
$5,187,000 for the year ended January 31, 2000. As of January 31, 2000, current
liabilities exceed current assets by $4,207,000 as a result of reclassifying
$4,457,000 of long-term debt and $1,405,000 of deferred interest as current
liabilities because there is no definitive forbearance agreement with the
subordinated debenture holders or the Company's primary lender relative to
long-term debt. In addition, total liabilities exceed total assets by
$2,218,000. The Company has not produced positive cash flows from its operations
in the current fiscal year. Additionally, the Company is currently in violation
of several financial covenants related to its debt and is in arrears with
respect to interest payments on its debentures. These factors, and the others
discussed in Note 2, raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that may result from the outcome of this uncertainty.

ASHER & COMPANY, LTD.



Philadelphia, Pennsylvania
August 30, 2000

                                       8

<PAGE>


                            JETRONIC INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                   January 31,
                                                                                   -----------
                                                                          2000                      1999
                                                                          ----                      ----

                                     ASSETS
<S>                                                                   <C>                     <C>
Current assets:
   Cash                                                               $    10,000             $   495,000
   Accounts receivable, net                                             3,816,000               2,775,000
   Inventories                                                          7,751,000               7,569,000
   Prepaid expenses and other current assets                            1,424,000               1,951,000
                                                                      -----------             -----------
         Total current assets                                          13,001,000              12,790,000
Property, plant and equipment at cost, less
   accumulated depreciation                                               399,000                 377,000
Goodwill                                                                  270,000                 280,000
Other assets                                                            1,320,000               1,764,000
                                                                      -----------             -----------
                                                                      $14,990,000             $15,211,000
                                                                      ===========             ===========


                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:
   Notes payable, lender                                              $ 3,742,000             $ 1,781,000
   Current portion of long-term debt                                    5,606,000                 976,000
   Accounts payable                                                     3,207,000               1,215,000
   Other accrued liabilities                                            4,653,000               1,092,000
                                                                      -----------             -----------
         Total current liabilities                                     17,208,000               5,064,000
Deferred interest                                                                               1,405,000
Long-term debt                                                                                  5,773,000
                                                                      -----------             -----------
                                                                       17,208,000              12,242,000
                                                                      -----------             -----------
Commitments and contingencies
Redeemable preferred stock, $1.85 stated value -  shares
   authorized, 577,400; issued and outstanding, none
Shareholders' equity (deficit):
   Series AA preferred stock, no par value - shares
      authorized, 440,000; issued and outstanding,
      327,032                                                              33,000                  33,000
   Common stock, $.10 par value - shares authorized,
      10,000,000; issued and outstanding, 3,701,999
       in 2000 and 1999                                                   370,000                 370,000
   Capital in excess of par value                                      13,822,000              13,822,000
   Retained earnings (deficit)                                       ( 16,443,000)           ( 11,256,000)
                                                                      -----------             -----------
      Total shareholders' equity (deficit)                           (  2,218,000)              2,969,000
                                                                      -----------             -----------
                                                                      $14,990,000             $15,211,000
                                                                      ===========             ===========
</TABLE>

See notes to consolidated financial statements.

                                       9
<PAGE>



                            JETRONIC INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                     Year ended January 31,
                                                                     ----------------------
                                                          2000               1999               1998
                                                          ----               ----               ----
<S>                                                    <C>                 <C>                <C>
Net sales                                              $25,194,000         $22,488,000        $25,873,000

Costs and expenses:
   Cost of goods sold                                   23,889,000          17,866,000         20,861,000
   Selling, general and administrative
      expenses                                           4,468,000           3,004,000          2,712,000
   Interest and debt expense                             1,744,000           1,270,000          1,023,000
                                                      ------------         -----------        -----------
                                                        30,101,000          22,140,000         24,596,000
                                                      ------------         -----------        -----------
Income (loss) from operations before income taxes     (  4,907,000)            348,000          1,277,000
Provision for (benefit from) income taxes                  280,000        (    370,000)             4,000
                                                      ------------         -----------        -----------
Net income (loss)                                     ($ 5,187,000)        $   718,000        $ 1,273,000
                                                      ============         ===========        ===========
</TABLE>

<TABLE>
<CAPTION>

                                                                     Year ended January 31,
                                                                     ----------------------
                                                              2000               1999               1998
                                                              ----               ----               ----
<S>                                                         <C>                  <C>               <C>
Net income (loss) per share:
   Basic                                                    ($1.40)              $ .20             $ .35
                                                             =====               =====             =====
   Diluted                                                                       $ .16             $ .33
                                                                                 =====             =====
</TABLE>



See notes to consolidated financial statements.

                                       10

<PAGE>


                            JETRONIC INDUSTRIES, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                                                Capital in           Retained
                                   Preferred          Common Stock               excess of           earnings
                                     Stock         Shares        Amount          par value           (deficit)            Total
                                     -----         ------        ------          ---------           ---------            -----
<S>                                 <C>            <C>           <C>             <C>               <C>                 <C>
Balance, January 31, 1997                           3,604,499    $361,000        $12,569,000       ($13,247,000)       ($   317,000)
Net income, year ended
   January 31, 1998                                                                                   1,273,000           1,273,000
                                                    ---------    --------        -----------       ------------        ------------
Balance, January 31, 1998                           3,604,499     361,000         12,569,000       ( 11,974,000)            956,000
Issuance of common stock                               97,500       9,000            104,000                                113,000
Issuance of warrants                                                               1,149,000                              1,149,000
Issuance of preferred stock          $33,000                                                                                 33,000
Net income, year ended
   January 31, 1999                                                                                     718,000             718,000
                                     -------        ---------    --------        -----------       ------------        ------------
Balance, January 31, 1999             33,000        3,701,999     370,000         13,822,000       ( 11,256,000)          2,969,000
Net loss, year ended
   January 31, 2000                                                                                (  5,187,000)       (  5,187,000)
                                     -------        ---------    --------        -----------       ------------        ------------
Balance, January 31, 2000            $33,000        3,701,999    $370,000        $13,822,000       ($16,443,000)       ($ 2,218.000)
                                     =======        =========    ========        ===========       ============        ============
</TABLE>

See notes to consolidated financial statements.

                                       11

<PAGE>


                            JETRONIC INDUSTRIES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                     Year ended January 31,
                                                                     ----------------------
                                                          2000               1999               1998
                                                          ----               ----               ----
<S>                                                    <C>                  <C>                <C>
Cash flows from operating activities:
   Net income (loss)                                   ($5,187,000)         $  718,000         $1,273,000
   Adjustments to reconcile net income (loss)
      to net cash from (used by)
      operating activities:
      Depreciation and amortization                        109,000             116,000            110,000
      Change in goodwill                                    10,000              11,000             10,000
      Changes in assets and liabilities:
         Accounts receivable                           ( 1,041,000)          1,181,000             50,000
         Inventories                                   (   182,000)        (   869,000)       ( 1,444,000)
         Prepaid expenses and other                        527,000         (   568,000)       (    79,000)
         Other assets                                      444,000         (   390,000)       (   140,000)
         Accounts payable                                1,992,000         (   846,000)            23,000
         Other accrued liabilities                       2,156,000         (    32,000)       (   122,000)
                                                        ----------          ----------         ----------
         Total adjustments                               4,015,000         ( 1,397,000)       ( 1,592,000)
                                                        ----------          ----------         ----------
             Net cash from (used by)
                operating activities                   ( 1,172,000)        (   679,000)       (   319,000)
                                                        ----------          ----------         ----------
Cash flows from (used by) investing
   activities:
   Capital expenditures, net of disposals              (   131,000)        (    75,000)       (    69,000)
                                                        ----------          ----------         ----------
             Net cash from (used by)
                investing activities                   (   131,000)        (    75,000)       (    69,000)
                                                        ----------          ----------         ----------
Cash flows from (used by) financing
   activities:
      Net borrowings from lenders                        1,961,000         ( 1,542,000)           487,000
      Principal payments on long-term debt             ( 1,143,000)        (   798,000)       (    84,000)
      Proceeds from long-term debt                                           2,930,000
      Proceeds from stock issuance                                             146,000
                                                        ----------          ----------         ----------
             Net cash from (used by)
                financing activities                       818,000             736,000            403,000
                                                        ----------          ----------         ----------
Net increase (decrease) in cash                        (   485,000)        (    18,000)            15,000
Cash, beginning of year                                    495,000             513,000            498,000
                                                        ----------          ----------         ----------
Cash, end of year                                       $   10,000          $  495,000         $  513,000
                                                        ==========          ==========         ==========
Supplemental disclosures of cash flow
   information and non cash transactions:
   Issuance of warrants                                                     $1,149,000
                                                                            ==========
   Interest paid during the year                        $  787,000          $  961,000         $  785,000
                                                        ==========          ==========         ==========
   Income taxes paid during the year                                        $   35,000         $    8,000
                                                                            ==========         ==========
</TABLE>

See notes to consolidated financial statements.

                                       12
<PAGE>


                            JETRONIC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       Business:
       ---------

The Company is engaged in the design, manufacture and marketing of energy
conversion equipment, specialized computer subsystem enclosures and electrical
communication devices.

       Principles of consolidation:
       ----------------------------

The consolidated financial statements include the accounts of Jetronic
Industries, Inc. ("Jetronic") and its wholly-owned subsidiary. Significant
intercompany transactions and balances have been eliminated in consolidation.

       Estimates:
       ----------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.

       Concentration of credit risk:
       -----------------------------

The Company maintains cash accounts which, at times, may exceed federally
insured limits. The Company has not experienced any losses from maintaining cash
accounts in excess of federally insured limits. Management believes it is not
exposed to any significant credit risks on its cash accounts. Financial
instruments which potentially subject the Company to concentration of credit
risk consist principally of accounts receivable because of a significant amount
due from a single customer. This risk is mitigated due to the financial
stability of the particular customer.

       Inventories:
       ------------

Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out (FIFO) method. Progress billings in advance of delivery
reduce inventory.

       Property, plant and equipment:
       ------------------------------

Property, plant and equipment includes the cost of additions and those
improvements which increase the capacity or lengthen the useful lives of assets.
Expenditures for repairs and maintenance are expensed as incurred. Depreciation
is computed principally on the straight-line method over the anticipated useful
lives of the respective assets.

       Goodwill:
       ---------

Goodwill which arose from the acquisition of Redco, Inc. is being amortized over
forty years on the straight-line method. Such balance is net of accumulated
amortization of $136,000 in 2000 and $126,000 in 1999.

       Revenue recognition:
       --------------------

Sales of products under long-term contracts involving definable end items are
recognized as shipments are made. All other sales are recognized as shipments
are made.

                                       13

<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


       Research and development costs:
       -------------------------------

Research and development costs are charged to expense as incurred, except for
certain costs associated with specific long-term programs for which the customer
has contracted. Total expenses amounted to $178,000, $8,000 and $49,000 in 2000
- 1998, respectively.

       Income taxes:
       -------------

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS No. 109). Under SFAS No. 109, the deferred
tax provision is determined under the liability method. Under this method,
deferred tax assets and liabilities are recognized based on differences between
financial statement and tax bases of assets and liabilities using presently
enacted rates.

       Per share data:
       ---------------

Basic per share data is based on the weighted average number of common shares
outstanding during the year. When dilutive, the computation of per share data is
based on the weighted average of common shares outstanding during the year plus
the effect of the exercise of options and warrants outstanding as of the
beginning of the period, using the treasury stock method. The weighted average
number of common shares used to compute basic per share data was 3,702,000 for
2000, 3,648,000 for 1999 and 3,604,000 for 1998, respectively. The weighted
average number of common shares to compute diluted per share data was 4,185,000
in 2000, 4,415,000 in 1999 and 3,799,000 in 1998.

NOTE 2 - BASIS OF PRESENTATION:

As a result of the substantial losses incurred in the current fiscal year,
negative shareholders' equity, a negative working capital position and the
defaults existing under its present financing arrangements and bondholder
agreement, there is substantial doubt about the Company's ability to continue as
a going concern. The Company has engaged financial consultants approved by its
lender to provide assistance in developing financial plans to alleviate the
present situation, including the possible sale of certain operating entities.
The Company has also initiated an organization-wide program of cost containment.

The Company's current lender has provided additional funding as an overline.
There is no assurance that the lender will continue to make out of formula
advances. In addition, there is no assurance that the Company's lender or its
bondholders will continue to forbear relative to the defaults existing under the
various agreements.

Accordingly, these financial statements do not include any adjustments that may
result from the outcome of this uncertainty.

NOTE 3 - FOURTH QUARTER ADJUSTMENTS:

During the fourth quarter of fiscal 2000, the Company made substantial one-time
adjustments relative to its operations. As a result of physical inventories
conducted at January 31, 2000, there was a required write-down of recorded
inventories on a corporate-wide basis of $2,557,000, due both to a difference
between book and physical inventories and the consideration of net realizable
values. Additionally, there was a provision for possible settlement and
anticipated attendant costs related to the Department of Defense investigation
of $1,365,000. Other contributing factors to the fourth quarter loss of
$5,115,000 were due to the effects of normal operating results affected by
reduced revenues in certain operating entities and the resulting impact on
profit margins.


                                       14
<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 4 - ACCOUNTS RECEIVABLE:

                                                          January 31,
                                                          -----------
                                                   2000               1999
                                                   ----               ----

Trade                                            $3,941,000         $2,870,000
Allowance for doubtful accounts                 (   125,000)       (    95,000)
                                                 ----------         ----------
                                                 $3,816,000         $2,775,000
                                                 ==========         ==========

Receivables from Caterpillar, Inc. accounted for 50% and 40% at January 31, 2000
and 1999, respectively.

NOTE 5 - INVENTORIES:

                                                          January 31,
                                                          -----------
                                                   2000               1999
                                                   ----               ----

Raw materials                                    $4,449,000         $4,309,000
Work-in-process                                   3,302,000          3,260,000
                                                 ----------         ----------
                                                 $7,751,000         $7,569,000
                                                 ==========         ==========

Inventory values are stated net of valuation reserves of $324,000 and $132,000
at January 31, 2000 and 1999, respectively.

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT:
                                              January 31,
                                              -----------             Estimated
                                       2000           1999          useful lives
                                       ----           ----          ------------

Land, buildings and improvements     $  602,000     $  602,000      6-15 years
Machinery, equipment and tooling      2,182,000      2,082,000      4-10 years
Furniture and fixtures                1,279,000      1,248,000      4-10 years
                                     ----------     ----------
                                      4,063,000      3,932,000
Accumulated depreciation            ( 3,664,000)   ( 3,555,000)
                                     ----------     ----------
                                     $  399,000     $  377,000
                                     ==========     ==========

Depreciation and amortization expense amounted to $109,000, $116,000 and
$110,000 in 2000, 1999 and 1998, respectively.

NOTE 7 - OTHER ACCRUED LIABILITIES:

Included in other accrued liabilities are accrued and deferred interest of
$2,200,000 and $1,365,000 related to the Department of Defense investigation at
January 31, 2000 and accrued interest of $267,000 at January 31, 1999. Deferred
interest of $1,405,000 at January 31, 1999 is separately stated as long-term.

                                       15

<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 8 - INDEBTEDNESS:

The Company's lender has made available lines of credit aggregating up to
$6,500,000 to the Company and its subsidiary at interest rates 4.0% above prime.
Such borrowings are primarily in the form of short-term loans, secured by
assignment of accounts receivable and inventories. At January 31, 2000,
$4,183,000 was available under the various formulae of which $3,742,000 was
outstanding. Subsequent to January 31, 2000, the Company has requested, and has
received, additional funding as an overline from its current lender. There is no
assurance that the Company's lender will continue to make out of formula
advances to the Company. The weighted average interest rate applicable to all
short-term borrowings outstanding at the end of the year approximated 14.8% in
2000, 10.9% in 1999 and 11.4% in 1998. There exist defaults under the Company's
agreement with its present lender. There is no assurance that the lender will
continue to forebear as a result of these defaults. Consequently, long-term debt
associated with this lender has been classified as current.

Notes payable and term loans are variously secured by substantially all of the
Company's accounts receivable, inventories, property, plant and equipment and
capital stock of the subsidiary. Provisions of these agreements contain certain
restrictive covenants which restrict investments in other companies, forego
dividend payments and payments to subordinated debenture holders other than
normal interest.

Long-term debt consists of:
<TABLE>
<CAPTION>

                                                                                     January 31,
                                                                                    -----------
                                                                           2000                    1999
                                                                           ----                    ----
<S>                                                                     <C>                    <C>
10% Debentures due January 2003                                         $2,400,000             $2,400,000
10% Debentures due January 2003 (formerly 14 1/2%)                       1,456,000              1,456,000
Term loan at 4.00% above prime payable in monthly
   installments of $5,100 through May 2001, with a
   final payment of $251,000 in June 2001                                  328,000                389,000
Term loan at 5.25% above prime payable in monthly
   installments of $42,000 through May 2001, with a
   final payment of $1,042,000 in June 2001                              1,095,000              2,167,000
Philadelphia Industrial Development Corporation (PIDC)
   term loan at 4.5% payable in monthly installments
   of $1,500 through September 1999                                                                10,000
8% Promissory note due July 2000, payable starting April
   1998 with quarterly installments of $62,500 for the first
   year and $50,000 thereafter                                             327,000                327,000
                                                                       -----------             ----------
                                                                         5,606,000              6,749,000
Less amount due within one year                                          5,606,000            (   976,000)
                                                                       -----------             ----------
                                                                       $       -0-             $5,773,000
                                                                       ===========             ==========
</TABLE>

The Debentures are subordinated to the prior payment of all senior indebtedness.
In May 1998, the Bondholders agreed to extend the maturity of both issues to
January 2003. There exist defaults under the Company's Agreement with the
subordinated debenture holders. There is no assurance that these debenture
holders will continue to forebear relative to the defaults. Consequently, all
related debt has been classified as current. The Company has not made any
interest payments to the subordinated debenture holders in the past fiscal year.

Scheduled principal repayment obligations on all long-term debt amount to
$1,149,000 in 2001, $1,351,000 in 2002 and $3,106,000 in 2003. However, as
disclosed above, all debt has been classified as current.

                                       16

<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 9 - COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY:

In conjunction with the extension of the due date of the Subordinated Debentures
until 2003, the Bondholders were issued warrants to purchase 440,000 shares of
non-voting Series AA Preferred Stock with an exercise price of $.10 per share,
expiring in May 2003. The Series AA Preferred Stock is not entitled to any cash
dividends but is entitled to liquidation preference at $.10 per share prior to
any distributions to common shareholders. Additionally, no cash dividends can be
declared for common shareholders as long as the Series AA Preferred Stock is
outstanding. 327,032 warrants were exercised during 1999. The Series AA
Preferred Shares are convertible into common stock at the option of the holder
thereof on a share for share basis. The terms of the Preferred Stock require the
Company to establish a six member Board of Directors of which three members will
be elected by the Preferred Shareholders.

The Company may grant up to 565,774 options on shares of common stock under the
1990 Incentive Stock Option Plan. Options are exercisable immediately upon grant
and expire five years after the date of grant. The option price must be at least
equal to the fair market value of the common stock at the time of grant. During
1998, 455,000 options were granted at an exercise price of $1.063, of which
70,000 were terminated during 2000 and 385,000 were exercisable. None of these
options have been exercised.

In conjunction with his employment agreement, the President of the Company was
granted 360,000 options to acquire common stock at a price of $.375 exercisable
at the rate of 72,000 options per year, expiring in 2006. No options have been
exercised.

In conjunction with various financing arrangements and acquisitions, warrants to
purchase common stock were issued for 75,000 shares at $1.5625 per share and
125,000 shares at $1.00 per share. During 1999, 60,000 of the $1.00 warrants
were exercised. In satisfaction of claims against the Company's discontinued Ray
Jefferson Division, the Company issued 37,500 shares of common stock during
1999.

Under Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting
for Stock Based Compensation", the Company is permitted to continue accounting
for the issuance of stock options and warrants in accordance with Accounting
Principles Board (APB) Opinion No. 25, which does not require recognition of
compensation expense for option and warrant grants unless the exercise price is
less than the market price at date of grant. If the Company had recognized
compensation cost for the "fair value" of option and warrant grants under the
provisions of SFAS No. 123, the pro forma financial results for the years ended
January 31, 2000, 1999 and 1998, respectively, would have differed from the
actual results as follows:

                                         2000             1999           1998
                                         ----             ----           ----
Net income (loss):
   As reported                      ($5,187,000)      $ 718,000      $1,273,000
   Pro forma                        ($5,212,000)      $ 693,000      $  697,000

Basic income (loss) per share:
   As reported                           ($1.40)           $.20            $.35
   Pro forma                             ($1.41)           $.19            $.19

Diluted income per share:
   As reported                                             $.16            $.33
   Pro forma                                               $.16            $.18


                                       17
<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


The per share weighted average fair value of the stock options and warrants
granted during 1999 was $2.35. The fair value was estimated at the date of grant
using the Modified Black-Scholes Stock Option Pricing Model with the following
average assumptions: risk free interest rate of approximately 6%; expected
volatility factor of 135% and expected lives of five to seven years and no
expected dividends rate.

Under SFAS 123, the fair value of stock options issued in any given year is
expensed as compensation over the vesting period. Substantially all of the
Company's options and warrants were vested immediately when granted. The pro
forma results only include the effect of options and warrants granted in 1999
and 1998.

NOTE 10 - INCOME TAXES:

The provision for (benefit from) taxes on income include:

                                           Year ended January 31,
                                           ----------------------
                                2000               1999               1998
                                ----               ----               ----
Current:
   Federal                                      $   17,000          $   4,000

Deferred:
   Federal                   $ 280,000          (  387,000)
                             ---------           ---------          ---------
                             $ 280,000          ($ 370,000)         $   4,000
                             =========          ==========          =========

The tax effects of temporary differences that gave rise to the significant
portions of the deferred tax liability and the deferred tax assets as of January
31, 2000 and 1999 were as follows:

                                                   2000               1999
                                                   ----               ----
Deferred tax liability:
   Depreciation                                $   15,000         $   14,000
   Prepaid expenses                                23,000              3,000
   Deferred financing costs                       157,000
                                               ----------         ----------
                                                  195,000             17,000
                                               ----------         ----------
Deferred tax assets:
   Accounts receivable                             42,000             32,000
   Inventories                                     90,000             71,000
   Net operating loss carryforwards             3,500,000          2,387,000
   Investment tax credit carryforwards                                82,000
                                               ----------         ----------
      Deferred tax assets                       3,632,000          2,572,000
   Less valuation allowance                   ( 3,158,000)       ( 1,996,000)
                                               ----------         ----------
      Net deferred tax assets                     474,000            576,000
                                               ----------         ----------
         Net deferred tax asset                $  279,000         $  559,000
                                               ==========         ==========
In accordance with SFAS No. 109, the Company has provided a valuation allowance
relative to net operating loss and investment tax credit carryforwards because
full realization is not reasonably assured at this time. The Company will
periodically review the likelihood of realizing these assets and adjust the
valuation allowance as needed. The valuation allowance increased by $1,162,000
in 2000 primarily as a result of non-recognition of the loss experienced during
the year and a partial reversal of net operating loss carryforwards recognized
in prior years. The valuation allowance decreased by $590,000 in 1999. $387,000
represents a partial recognition of net operating loss carryforwards in
anticipation of profitable operations in the ensuing fiscal year and $203,000 is
the result of the utilization of net operating loss carryforwards against
current federal income taxes.

                                       18

<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Differences between the statutory federal income tax rate and the effective tax
rate for 2000 - 1998 are accounted for as follows:

                                            2000           1999          1998
                                            ----           ----          ----
Federal income tax rate                    (34.0%)         34.0%         34.0%
Tax effect of non-deductible expenses        0.3            4.0           1.0
NOL accounting under SFAS No. 109           28.0         (137.5)       ( 34.7)
Other                                       11.4          ( 7.2)
                                            ----          -----         -----
Effective income tax rate                    5.7%        (106.7%)      (  0.3%)
                                            ====          =====         =====

For federal income tax purposes, at January 31, 2000 the Company has net
operating loss carryforwards of $10,294,000 which will expire from 2007 to 2020.

NOTE 11 - EMPLOYEE BENEFIT PLANS:

The Company has a 401(k) plan for eligible employees to which contributions of
$10,000, $10,000 and $9,000 were made in 2000 - 1998, respectively. The
Company's subsidiary maintains a qualified defined contribution plan for its
employees under a collective bargaining agreement. The Company's obligation is
based on a rate per hour worked. Contributions to such plan were $251,000,
$254,000 and $165,000 in 2000 - 1998, respectively.

NOTE 12 - COMMITMENTS AND CONTINGENCIES:

In February 1999 certain wholly owned subsidiaries of Woven Electronics
Corporation (Woven) commenced an action against Jetronic's wholly owned
subsidiary Redco, Inc. for $327,246 and accrued interest alleged to be due under
and pursuant to a promissory note dated March 30, 1997. By way of defense and
counterclaim, Redco has asserted claims in the amount of $328,169 to which it is
entitled under and pursuant to the terms of the agreement under which said
promissory note was issued. In April 2000, Woven was awarded a judgment against
Redco approximating $365,000 which represents principal and interest on the
Woven obligation. The Court did not allow any of the counterclaims by Redco
because of untimely filing of rebuttals. Redco has appealed this judgment and
intends to contest this matter vigorously. It is management's opinion, based on
the purchase agreement, that Redco should be entitled to its counterclaim.

The Department of Defense has conducted an investigation of the Company and
former employees and has determined that one of the Company's divisions has
violated Federal Statutes by failing to perform certain quality control tests
and test procedures in connection with product delivered under government
contracts. While certain irregularities have occurred, they are, in the opinion
of management, of a nature that would have no material effect on the quality or
reliability of such product. The Company is currently in settlement discussions
with the Department of Defense regarding possible fines and penalties. Although
no definitive amounts have been determined, the Company has made a provision of
$1,365,000 for possible settlement amounts and related costs in its financial
statements for the year ended January 31, 2000.

The Company rents certain of its facilities under noncancelable operating
leases. At January 31, 2000, total rental commitments under these leases, which
expire periodically through 2006, aggregated $1,557,000. Under the terms of
these lease agreements, expenses such as taxes, insurance, maintenance and
repairs are paid by the company. Total rental commitments approximate $382,000,
$347,000, $300,000, $260,000 and $146,000 for the years 2001 through 2005,
respectively, and $122,000 thereafter. Total rental expense under all operating
leases was $360,000, $394,000 and $345,000 for 2000 - 1998, respectively.

                                       19

<PAGE>


                            JETRONIC INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


In conjunction with the acquisition of certain subsidiary assets from Woven
Electronics Corporation, the Company is committed to paying a royalty of 37.5%
for the five year period ended January 31, 2003 predicated upon pre-tax income,
subject to certain adjustments, of the business of the acquired subsidiaries.

The Company has entered into employment agreements requiring minimum annual
payments of $232,000 until 2006. At January 31, 2000, the Company had a total of
186 employees, of which approximately 33% are represented by a union whose
existing labor agreement expires in November 2003.

Management is of the opinion that no excess profits have been realized on sales
to government agencies or contractors and, accordingly, has made no provision
for renegotiation of profits or profit limitations, if any, to which the Company
may be subject.

NOTE 13 - FAIR VALUE OF FINANCIAL INSTRUMENTS:

The carrying amounts of all assets and liabilities (other than long-term debt)
considered financial instruments approximate fair value because of the short
term maturity of these items.

The carrying amount of long-term debt approximates fair value because of the
short term maturity of a portion of the liability and because the interest rates
approximate market interest rates.

NOTE 14 - BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION:

Business segment and geographic information for the years ended January 31,
2000, 1999 and 1998 included on page 1 of this Annual Report on Form 10-K is an
integral part of these financial statements. In 2000, 1999 and 1998,
respectively, Caterpillar, Inc. accounted for 61%, 59% and 56% of consolidated
revenues.


                                       20
<PAGE>


                            JETRONIC INDUSTRIES, INC.

                        VALUATION AND QUALIFYING ACCOUNTS

                                   SCHEDULE II
<TABLE>
<CAPTION>
                                                               Additions        Deductions
                                                               ---------        ----------
                                            Balance            Charged to                       Balance
                                            beginning          costs and         Account         end of
         Description                          year               expenses       write-offs        year
         -----------                        ---------          -----------      ----------      -------
<S>                                         <C>                <C>               <C>          <C>
Year ended January 31, 2000:

   Allowance for doubtful accounts          $ 95,000           $ 30,000                        $125,000
                                            ========           ========                        ========

   Inventory valuation                      $132,000           $269,000          $ 77,000      $324,000
                                            ========           ========          ========      ========


Year ended January 31, 1999:

   Allowance for doubtful accounts          $ 66,000           $ 30,000          $  1,000      $ 95,000
                                            ========           ========          ========      ========

   Inventory valuation                      $ 72,000           $ 52,000         ($  8,000)     $132,000
                                            ========           ========          ========      ========

   Reorganization                           $126,000                             $126,000
                                            ========                             ========

Year ended January 31, 1998:

   Allowance for doubtful accounts          $ 24,000           $  42,000                        $ 66,000
                                            ========           =========                        ========

   Inventory valuation                      $ 62,000           $  10,000                        $ 72,000
                                            ========           =========                        ========

   Reorganization                           $139,000                             $ 13,000       $126,000
                                            ========                             ========       =========
</TABLE>
                                       21

<PAGE>



ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:
--------------------------------------------------------------

None.

                                     PART II

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
-------------------------------------------------------------

Reference is made to the Definitive Proxy Statement to Shareholders which the
Company intends to file not later than 30 days after the filing of its annual
Report on Form 10-K.

ITEM 11 - EXECUTIVE COMPENSATION;
---------------------------------

Reference is made to the Definitive Proxy Statement to Shareholders which the
Company intends to file not later than 30 days after the filing of its annual
Report on Form 10-K.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
-------------------------------------------------------------------------

Reference is made to the Definitive Proxy Statement to Shareholders which the
Company intends to file not later than 30 days after the filing of its annual
Report on Form 10-K.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
---------------------------------------------------------

Reference is made to the Definitive Proxy Statement to Shareholders which the
Company intends to file not later than 30 days after the filing of its annual
Report on Form 10-K.


                                     PART IV

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

       (a) Exhibits, financial statements and financial statement schedules:

           1. The financial statements included in the Index to Part II, Item 8,
              are filed as part of this report.

           2. The financial statement schedule included in the Index to Part II,
              Item 8, is filed as part of this report.

           3. List of Exhibits:

                (3)        Articles of incorporation and amendments thereto and
                           by-laws are incorporated herein by reference to
                           Exhibit 3 to the Registrant's Annual Report on Form
                           10-K for the year ended January 31, 1981.

                (4)(a)     Instruments defining the rights of security holders,
                           including indentures.  See Exhibit (3) above.

                                       22

<PAGE>


                  (b)      Agreements with the holders of Registrant's
                           Convertible Subordinated Debentures and Preferred
                           Stock related to conversions thereof effective July
                           31, 1992, are incorporated herein by reference to
                           Exhibit 4(b) to the Registrant's Annual Report on
                           Form 10-K for the year ended January 31, 1992.

                (21)       Subsidiaries of Registrant

                           Principal        Location of
                           subsidiaries     incorporation    Business names
                           ------------     -------------    --------------
                           Redco, Inc.      Illinois         Republic Electric &
                                                             Development Company

       (b) Reports on Form 8-K:

           1. There were no reports on Form 8-K filed during the quarter ended
              January 31, 2000. However, a report on Form 8-K was filed on May
              5, 2000 regarding the Department of Defense investigation.

Any person may request a copy of any Exhibit filed with this report upon payment
of a fee of $.25 per page of the requested Exhibit, plus postage. Requests
should be directed to Leonard W. Pietrzak, Vice President - Finance, Jetronic
Industries, Inc., 4200 Mitchell Street, Philadelphia, Pennsylvania 19128.

                                       23

<PAGE>


                                   SIGNATURES
                                   ----------

Pursuant to the requirement 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.


                                           JETRONIC INDUSTRIES, INC.
                                           -------------------------
                                                  Registrant


Date:    August 30, 2000                   By:  /s/ Peter J. Kursman
                                              ----------------------
                                                      President


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

<TABLE>
<CAPTION>


         Signature                                        Capacity                            Date
         ---------                                        --------                            ----
<S>                                              <C>                                    <C>
/s/   Peter J. Kursman
-------------------------------------            Principal Executive Officer            August 30, 2000
Peter J. Kursman                                 and Director
President




/s/  Daniel R. Kursman
-------------------------------------            Director                               August 30, 2000
Daniel R. Kursman
Chairman of the Board and Treasurer





/s/  Leonard W. Pietrzak
-------------------------------------            Principal Financial and                August 30, 2000
Leonard W. Pietrzak                              Accounting Officer and Director
Vice President - Finance





/s/  William L. Weiss
-------------------------------------            Director                               August 30, 2000
William L. Weiss
General Counsel and Secretary
</TABLE>