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                       SECURITIES AND 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
                                DECEMBER 31, 1999

                         Commission file number: 0-26022
                         -------------------------------

                             SERENGETI EYEWEAR, INC.
             (Exact name of registrant as specified in its charter)
              ----------------------------------------------------

                NEW YORK                        65-0665659
       (State of Incorporation)    (I.R.S. Employer Identification No.)


                  8125 25TH COURT EAST, SARASOTA, FLORIDA 34243
                    (Address of principal executive offices)

                                  (941)359-3599
                         (Registrant's telephone number)
                          -----------------------------

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

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

                          COMMON STOCK, $.001 PAR VALUE
                    REDEEMABLE COMMON STOCK PURCHASE WARRANTS
                                (Title of class)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes  __X__        No ___


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of 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]

The aggregate market value of the common stock held by non-affiliates of the
registrant as of March 15, 2000 was:

                    Common Stock, $.001 par value: $3,219,606

There were 2,384,000 shares of the Registrant's common stock outstanding as of
March 15, 2000.


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                                     PART I

ITEM 1.  BUSINESS.

COMPANY OVERVIEW

           Serengeti Eyewear, Inc. (the "Company") is engaged in the business of
designing, manufacturing through outside sources, marketing and distributing a
wide array of quality sunglasses.

           On February 13, 1997, the Company acquired for $27.5 million (the
"Acquisition") in cash the assets of the Serengeti Eyewear division of Corning
Incorporated ("Corning") used in the design, manufacture and distribution of
Serengeti brand sunglasses. Drivers sunglasses, first introduced by Corning in
1985, constitute the core of the Serengeti product line. Over the years,
Serengeti sunglasses have developed a brand identity which provides appeal to
consumers in the market for premium sunglasses. The Serengeti brand identity is
based upon superior lens technology, quality and performance.

           Prior to the Acquisition, the Company primarily designed and marketed
selected non-premium lines of sunglasses, such as Solar*X sunglasses, which were
targeted for distribution through mass merchandisers and designed as a sunglass
with quality comparable to that of premium sunglasses at popular prices. Solar*X
features a ground and polished lens which provides virtually complete protection
from harmful ultraviolet sun rays and glare. The Company also markets to mass
merchandisers other sunglass brands, each of which the Company believes creates
a niche among popular priced sunglasses of various categories. Non-premium
sunglass sales accounted for approximately 19% of the Company's total sales in
1999.

           In the latter part of 1995, with the proceeds of its initial public
offering completed in August 1995, the Company launched its H2Optix line of
sunglasses which is designed specifically for use in the water environment.
H2Optix utilizes a combination of characteristics which the Company believes
differentiates it from other competing sunglasses which target the watersports
market. H2Optix sales approximated $1.2 million in each of 1996 and 1997 and $2
million and $1.8 million in 1998 and 1999, respectively. The Company has
included H2Optix within the Serengeti (premium) line, thereby tapping into
Serengeti's well-established distribution network. Premium sunglass sales
accounted for approximately 81% of the Company's total sales in 1999.

           The Company is a New York corporation formed in 1976. The Company
maintains its principal executive offices at 8125 25th Court East, Sarasota,
Florida 34243, and its telephone number is (941) 359-3599.

INDUSTRY BACKGROUND

           The sunglass industry is generally divided into two principal
segments, the under-$30 or "non-premium" market and the over-$30 or "premium"
market. The retail market for sunglasses in recent years has experienced the
emergence of a broader premium market, reflected by increased sales of
higher-priced, quality-oriented sunglass products. This premium sunglass market,
the category in which the Company's Serengeti products compete, showed an
increase in retail sales of 45%, from $825.6 million in 1989 to $1.2 billion, in
1999. Retail sales in the premium sunglass market declined by an estimated
$300.0 million from 1998 to 1999, not as a result of decreased unit sales, but
as a result of a decrease in the average unit selling price of sunglasses within
the premium sunglass market.

           Management of the Company believes that consumer willingness to pay
more for premium sunglass products results from increased awareness of the need
for quality eye protection, the continued growth of sunglasses as a fashion
accessory, an increased demand for specialized sunglasses for different sports
and activities and growing brand awareness. The Company seeks to capitalize on
these changes in the sunglass market by emphasizing sales of its premium
products which are designed to appeal to the quality conscious consumer and
which are marketed for use in specifically targeted sporting and recreational
activities in which participants tend to spend a significant amount of
disposable income on equipment and accessories.

                                       2


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           The under-$30 market is primarily served by mass merchandisers such
as Wal-Mart, chain drug stores and discount department stores. These outlets
generally offer sunglasses in the $8 to $25 price range. The Company currently
serves the top of the retail price range in the under-$30 market primarily with
its Solar*X, Sensor-X, Mach 1 and Wal-Mart private-label brands of sunglasses.

BUSINESS STRATEGY

           The Company's objective is to become a leading designer and
distributor of premium sunglass products. The Company believes that its success
will depend upon its ability to control, protect and enhance the Serengeti brand
image. Accordingly, the Company has adopted a growth-oriented business strategy
which includes the following key elements:

           MAINTAIN BRAND NAME RECOGNITION. The Company believes that a brand
name provides instant appeal for many consumers. The Company intends to continue
developing Serengeti signature styles that incorporate superior lens technology,
quality and performance, factors which the Company believes differentiate its
products from those of its competitors and increase brand recognition among
consumers.

           FOCUS ON SELECTIVE DISTRIBUTION. It is the policy of the Company to
maintain strict control over the distribution of its Serengeti products to avoid
overexposure of the brand. The Company sells its Serengeti products through
carefully selected retailers that are routinely assessed to ensure they conform
with the Company's standards. The Company believes this selective distribution
policy will promote a high degree of loyalty from retailers and a stable retail
price environment, while increasing the Company's control over diversion and
counterfeiting of its products.

           AGGRESSIVELY PROTECT ITS INTELLECTUAL PROPERTY RIGHTS. The Company
will continue to rely on patent, trademark, trade secret, unfair competition and
copyright laws to protect its rights to certain aspects of its products,
including product designs, proprietary manufacturing processes and technologies,
product research and concepts and recognized trademarks and trade dress.

           INTRODUCING INNOVATIVE NEW PRODUCTS. The Company has capitalized and
will continue to capitalize on Serengeti's strong brand identity by introducing
new Serengeti signature styles. These new styles incorporate the Serengeti name
and logo into the frame decor with logo plaques and lens decoration. In addition
to the retail space Serengeti accounts have provided for the Company's strong
performing existing products, such accounts have made space available for the
new products introduced by the Company in 1999. These new products accounted for
approximately 28% of premium sales in 1999.

           The Company will utilize its existing relationships with European and
Asian designers to design the new styles. The Company has an existing
relationship with a renowned European design team that has worked with the
Company for the past five years and which has developed new products for other
well-known sunglass distributors. The Company believes that this team has
consistently demonstrated the ability to create top selling styles.

           FOCUS ON INTERNATIONAL EXPANSION. The Company believes that wider
international distribution also represents a significant opportunity for
expansion of sales. Sales outside North America represented approximately 21% of
total sales of the Serengeti line in 1999. To improve the consistency of its
image and operating strategy worldwide, the Company is establishing closer
working relationships with its international distributors. The Company believes
that concentrating its efforts in existing regions and introducing Serengeti to
new regions abroad provide a significant opportunity for increased growth. The
Company also expects to continue benefiting from the global expansion of its
retail accounts, particularly Sunglass Hut International ("Sunglass Hut"), the
largest customer for the Serengeti line.

                                       3


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PRODUCT LINES

PREMIUM PRODUCTS

           The Serengeti line is presently divided into two distinct lines,
Drivers and Kinetix, each of which is targeted at a different portion of the
premium area of the sunglass market. The Company has also integrated its H2Optix
products into the Serengeti line. The premium product line accounted for
approximately 64%, 69% and 81% of the Company's total sales in 1997, 1998 and
1999, respectively.

           DRIVERS

           Drivers, which is a general purpose sunglass, is the core Serengeti
product line, accounting for approximately 90% of 1999 premium product sales.
Several popular Drivers models have been marketed since the mid-1980s.
Independent marketing surveys have indicated that Drivers inspire exceptional
customer loyalty. All Drivers lenses are photochromic and incorporate "spectral
control" technology. Photochromic lenses automatically darken to adjust to
bright daylight conditions and lighten to adjust to darker daylight conditions
thereby adjusting the amount of light being transmitted to the user. Proprietary
spectral control filters are then created by "hydrogen firing" a photochromic
lens. The resultant lens filters out 95% of blue light, cutting glare, boosting
contrast and reducing eye fatigue in fog and haze without distorting the colors
seen through the lens. The combination of a special base glass and hydrogen
firing give Drivers lenses a lustrous copper color. Drivers lenses are available
in a single-gradient lens that reduces glare from above and are also available
in a darker, non-gradient version known as Drivers Sienna. The Company has
decreased, from 1998 to 1999, the number of Drivers collections it offers from
10 to seven, and the number of Drivers products it offers from 115 to 97, as it
continues to adjust to market demands.

           KINETIX

           Kinetix, Serengeti's sports/lifestyle, active line, is equipped with
photochromic, spectral control lenses of specific colors engineered to enhance
their performance in particular sports environments. Distinct Kinetix
collections are designed specifically for boaters, skiers, drivers, golfers,
hunters and target shooters. The Company has increased, from 1998 to 1999, the
number of Kinetex products it offers from nine to 21, as it continues to adjust
to market demands.

           H2OPTIX

           Although there are a number of sunglasses currently marketed that can
be used by watersports enthusiasts, they are not designed specifically for use
in the water environment. The Company believes that each of the existing
sunglass product lines distributed to the watersports market has significant
drawbacks or technical omissions. The H2Optix line has been designed by the
Company to differentiate it from other competing sunglasses which target the
watersports market. The Company believes that its H2Optix product incorporates a
distinctive combination of elements that work together to provide a total
optical system for all of the needs of the water sports enthusiast. The base
material for the H2Optix lens is polycarbonate, which exhibits both optical
clarity and extraordinary strength. The lamination of polarized film between two
such lenses results in a lens ideally suited for any water sport activity. The
Company has decreased, from 1998 to 1999, the number of H2Optix products it
offers from 26 to 15, as it continues to adjust to market demands.

NON-PREMIUM PRODUCTS

           The Company's Solar*X, Sensor-X and Mach 1 lines of sunglasses have
been marketed by the Company as a high quality line of sunglasses with a ground
and polished lens. Although these sunglasses retail at approximately $15-$20,
the Company believes that their quality makes them competitive with higher
priced premium sunglasses in the premium market. They are available in a variety
of popular, classic and contemporary frame styles.

                                       4

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The non-premium product line accounted for approximately 36%, 31% and 19% of the
Company's total sales in 1997, 1998 and 1999, respectively.

DISTRIBUTION

PREMIUM DISTRIBUTION

           The Company's principal customers are regional optical distributors,
sunglass specialty stores and optical chains. The Company also uses independent
direct sales representatives to focus on sporting goods and non-direct optical
accounts. Regional sales managers are responsible for maintaining relationships
with optical distributors in their region, as well as direct accounts with
optical and sunglass chains.

           SPECIALTY SUNGLASS RETAILERS

           The principal specialty sunglass retailer of the Serengeti product
line is Sunglass Hut, the world's largest sunglass retailer, which has more than
2,000 stores worldwide. Sunglass Hut, which is serviced directly by the
Company's in-house sales staff, accounted for approximately 23% of total sales
of the Serengeti product line in 1999, down from 20% in 1998.

           OPTICAL CHAINS

           In 1999, approximately 15% of total sales of the Serengeti product
line were to optical chains. Of these optical chains, Wal-Mart Optical, Pearle
Incorporated and Lenscrafters were the most significant customers. The Serengeti
brand also has long-standing relationships with other large chains, including
Eyecare Centers of America, Vista Eyecare and DOC Optics. The Company believes
that optical chains present significant opportunities for increased penetration;
specifically, that the Company may be able to leverage the Serengeti reputation
for high performance lenses with the optical chains in order to help create and
grow a substantial prescription sunglass business.

           OPTICAL DISTRIBUTORS

           The network of optical distributors for the Serengeti line is
comprised of eight regional optical distributors which distribute to optical
chains, independent optical retailers and specialty sunglass retailers
throughout the United States and Canada. The Company encourages its optical
distributors to distribute exclusively to premium retailers.

           In 1999, optical distributors accounted for approximately 6% of total
sales of the Serengeti product line. The Company intends to increase
distribution through independent optical retailers with prescription Serengeti
lenses as it believes that continued opportunities for growth lie in increasing
Serengeti sales to independent optical retailers.

           INTERNATIONAL DISTRIBUTION

           Sales outside North America accounted for approximately 22% of total
sales of the Serengeti product line in 1999. Sales in each region are conducted
through distributors and, in certain countries, directly to large retail chains
or buying groups. European sales, which includes sales to markets in the
Netherlands, Switzerland, Belgium and Finland accounted for approximately 45% of
1999 foreign sales. Sales to Canada, Australia, and the Pacific Rim region
accounted for the balance of such sales.

           OTHER

           The Company further sold its premium products to sporting goods
stores and non-direct optical stores, both domestically and internationally, and
excess inventories of its premium products through a variety of outlets,
aggregating approximately 39% of the Company's 1999 premium sales.

                                       5


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NON-PREMIUM DISTRIBUTION

           Sales to Wal-Mart in 1999 of non-premium products were approximately
$4.6 million, or 62% of the Company's total non-premium sales. Wal-Mart has been
a principal customer of the Company for more than ten years.

           The Company utilizes independent sales representatives throughout the
United States to generate its non-premium sales. The Company's sales
representatives are each responsible for soliciting, selecting and securing
accounts within a particular regional territory. Such sales representatives are
paid on a commission basis, with commissions depending on the product line and
terms of the sale. The Company provides service and support to its sales
representatives, including advertising and sales literature.

           As a result of strategy changes by retailers, including
consolidations and increases in the size of retail locations, retailers have
imposed additional requirements on their merchandisers. The Company has
increased the services provided to its mass merchandise customers, particularly
Wal-Mart, in many areas including the sourcing of products necessary to fill a
specific demand, the tracking of supply inventory by direct computer link-up and
the implementation of specifically tailored systems for the shipment of
inventory.

MARKETING

           The Company's marketing and promotion strategies for its Serengeti
products are focused on building and maintaining a high-quality image, and
providing multiple price points to meet the needs of the retailer and consumer.
The Company seeks to maintain high visibility for its Serengeti products through
the efforts of its in-house marketing staff which coordinates the sales efforts
of the Company's distributors and develops programs to help retailers increase
their sales of Serengeti products. The marketing staff also designs, develops
and produces sales materials for use by distributors. These sales materials
include point-of-purchase packaging, photography, advertising layouts, signage,
logo designs and catalogs.

           The Company markets its Serengeti products with point-of-purchase
displays and through high quality general publications, as well as through
catalogs, event sponsorships, product promotions, and trade and consumer
publications. The Company assists in the funding and preparation of advertising
campaigns initiated by retailers. The Company also promotes the Serengeti brand
name by utilizing high visibility sports and celebrity figures to provide
product exposure to the consumer. Additionally, the Company attends trade shows
targeting specific activities to increase retailer awareness and enthusiasm for
its products which relate to such activities.

           The Company seeks to establish a value purchase for the quality-and
price-conscious consumer by maintaining a premium quality product at a price
more attractive than that of competing brands, providing a significant value to
the consumer. The Company provides counter cards to retailers which compare the
features and benefits of Serengeti sunglasses with those of the competition,
exploiting the price/value advantage of Serengeti. The Company determines prices
with the goal of providing both the Company and the trade with the opportunity
for significant margins.

MANUFACTURING

           The Company currently obtains photochromic glass lens blanks for the
existing Serengeti lines pursuant to a three-year supply agreement entered into
with Corning upon the closing of the Acquisition, which agreement was
automatically extended until February 2001. Pursuant to the supply agreement,
the Company is required to purchase such Serengeti lens blanks exclusively from
Corning only to the extent that Corning is able to provide such lenses in the
quantities and within the time periods required by the Company. The lens blanks
are currently manufactured by Corning in the United States, Brazil and France
and then shipped to Italy and other locations overseas for finishing. All lenses
currently mounted in the Drivers and Kinetix lines are then subjected to the
Company's proprietary hydrogen firing


                                       6

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process at a Corning facility in France or manufacturing facilities in Italy.
Lenses are cut, edged, tempered, coated, drop ball tested and inserted into the
frames by third-party contractors in Japan and Italy. The Company purchases its
polarized polycarbonate lenses from Wintec Corporation, based in Japan. These
lenses are used in the Company's H2Optix product line.

           The Company currently sources all of its sunglass frames from
third-party suppliers. The Company intends to retain cost-effective frame
suppliers worldwide for the manufacture of the Serengeti frames. The Company
believes that there are a number of suppliers with the ability to manufacture
such frames.

           Upon completion of the manufacturing process, the finished sunglasses
are shipped to the Company's facility in Sarasota, Florida from where
distribution takes place.

           The Company has developed long-standing collaborative relationships
with established manufacturers of sunglasses throughout the Far East for the
manufacture of its non-premium products and component parts. The Company
maintains its relationship with Swank for certain premium and non-premium
products. In addition, the Company purchases non-premium products from Ialin
Optical Manufacturing Company. The Company actively participates in the
development and refining processes relating to the manufacture of its products.

           The manufacturers of the Company's products also manufacture
sunglasses for other companies, including competitors of the Company. Although
the Company has never experienced any difficulties in obtaining the necessary
supplies of its products, its manufacturers could choose to prioritize
production for other companies or cease production for the Company's products on
short notice. Although the Company believes it can find other manufacturers of
its products, there can be no assurance that it will be able to locate new
manufacturers for its products in a timely manner or that such new manufacturers
would be able to meet the Company's supply requirements. While the Company
believes it has available to it manufacturers with the capability of fabricating
Serengeti lenses utilizing the hydrogen firing process, there can be no
assurance that an alternative manufacturer with such capability will be
identified. Termination or disruption of supplies from these sources could
result in production delays, reductions in shipments, or increased costs that
could have a material adverse effect on the Company's operations. While the
Company continually explores ways to reduce its dependence on these limited
source suppliers, there can be no assurance that the Company will be successful
in doing so.

           Although the Company's policy is to work closely with its
manufacturing sources, there are certain risks associated with the use of
outside manufacturers, including foreign manufacturers. Risks inherent in the
use of such manufacturers include the absence of an adequate guaranteed supply,
unavailability of or delays in obtaining access to transportation of products
from the manufacturer, destruction, damage, loss or theft at the manufacturer's
facility, delay in delivery of orders, bankruptcy and other financial problems
of the manufacturer as well as potential misappropriation of proprietary
intellectual property. Risks arising in connection with the use of a foreign
manufacturer include foreign governmental regulation, economic instability in
the country of manufacture, labor strikes and the implementation of additional
United States legislation and regulations relating to imports, including the
imposition of duties, taxes and other charges or restrictions on imports.

COMPETITION

           The Company faces significant competition in the sunglass business.
The Company competes with a number of established manufacturers, importers and
distributors whose brand names enjoy recognition which exceeds that of the
Company's brand names. The Company competes with several manufacturers,
importers and distributors who have significantly greater financial,
distribution, advertising and marketing resources than the Company. The Company
competes primarily on the basis of performance features, quality, brand name
recognition and price.

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           The Company believes that its continued success will depend upon its
ability to remain competitive in its product areas. The failure to compete
successfully in the future could result in a material deterioration of customer
loyalty and the Company's image, and could have a material adverse effect on the
Company's business.

INTELLECTUAL PROPERTY

           The Company's trademarks include Country Club-Registered Trademark-,
Drivers-Registered Trademark-, Engineered for the Elements-TM-,
Flex-Grip-Registered Trademark-, Flyers-TM-, Get Behind the Lens-TM-,
Grafix-Registered Trademark-, H2Optix-Registered Trademark-, H2Optix Zero
Tolerance-Registered Trademark-, In-B-Teen-Registered Trademark-, KidzFlipz-TM-,
Kinetix-Registered Trademark-, Mach 1-Registered Trademark-, Marine Vision
Systems-TM-, Outa Limitz-Registered Trademark-, Photo-Blues-Registered
Trademark-, Photo Polarized-TM-, Power Plus-Registered Trademark-, Range &
River-Registered Trademark-, Rhythm `n' Blues-TM-, S Design-TM-,
Sensor-X-Registered Trademark-, Serengeti-Registered Trademark-, Serengeti
Rx-TM-, Signia-Registered Trademark-, Solar Barriers-Registered Trademark-,
Solar-Mates-Registered Trademark-, Solar*X-Registered Trademark-, Spectral
Control-Registered Trademark-, Sport Shields-Registered Trademark-,
Strata-Registered Trademark-, Sunglasses for the Waters of the World-Registered
Trademark-, Sunpets-Registered Trademark-, Surf and Cycle-Registered Trademark-,
The Best Sunglass Value Money Can Buy-Registered Trademark-, The Original
Interactive Technology-TM-, Vision Mates-Registered Trademark-, When You Buckle
Up Clip It On-TM- and Wickets-Registered Trademark-.

           As of March 15, 2000, the Company had 29 trademark registrations in
the United States and 137 trademark registrations in foreign countries,
including those for Serengeti, Drivers, Kinetix and H2Optix. As of such date,
the Company had 15 trademark applications pending in the United States and 31
trademark applications pending in foreign countries.

           The "Serengeti" trademark is currently licensed to two international
distributors which purchase finished Driver lenses from the Company for
insertion into their manufactured sunglass frames. The Company maintains final
approval rights on all such licensed products.

           In connection with the Acquisition, the Company granted to Corning a
royalty-free, worldwide license to utilize the hydrogen firing process
technology and other proprietary technology of the Company in connection with
the manufacture and marketing of lenses, lens blanks and other optical materials
or prescription eyeglasses or lenses used to treat or mitigate medical
conditions or symptoms such as light sensitivity, as well as in connection with
other products manufactured or practices engaged in by Corning prior to the
Acquisition unrelated to the Serengeti business and that do not relate to plano
or prescription sunglass lenses.

           The following are the principal patents owned by the Company relating
to Serengeti sunglasses:

                      HYDROGEN FIRING PROCESS. The Company owns a patent
                      governing the hydrogen firing process, which expired
                      November 19, 1999 (Patent No. 4,290,794). This patent
                      covers the process by which Spectral Control filters are
                      created within a lens. The patent affects all Drivers and
                      Kinetix lenses.

                      DRIVER GLASS. The Company owns a patent for colored
                      photochromic lenses relating to Drivers and certain
                      Kinetix lenses (Patent No. 4,240,836) which expired
                      November 19, 1999. This patent covers color spaces that
                      provide glare control.

Due to the complexity of the lens manufacturing processes as it relates to the
above-listed patents, together with the financial and time investment necessary
in order for another party to duplicate such patents, the Company does not
anticipate any adverse consequences as a result of the expiration of these
patents.

                                       8


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The Company owns twelve additional patents, which expire at various dates
through July 15, 2017.

           While there can be no assurance that the Company's patents or
trademarks protect the Company's proprietary information and technologies, the
Company intends to assert its intellectual property rights against any
infringer. Although the Company's assertion of its rights can result in a
substantial cost to, and diversion of effort by, the Company, management
believes that the protection of the Company's intellectual property rights is a
key component of the Company's operating strategy.

REGULATORY MATTERS

           The Company's products, which are imported to the United States, are
subject to United States customs duties, and, in the ordinary course of its
business, the Company may from time to time be subject to claims by the United
States Customs Services for duties and other charges. The United States and
foreign governments may from time to time impose new duties, tariffs or other
restrictions, or adversely adjust prevailing duty or tariff levels, which could
adversely affect the Company's operations and its ability to import products at
specified levels. In general, the Company cannot predict the likelihood or
frequency of any such events occurring or what effect such events could have on
its financial condition and results of operations.

           The Company's sunglasses are certified to the United States Food and
Drug Administration ("FDA") impact standards. The FDA requires that sunglasses
sold in the United States pass what is commonly referred to as the "drop ball
test." Pursuant to this test, a ball is dropped down a tube approximately four
feet long and allowed to hit the lens. A percentage of a statistical sampling of
lenses must not break or shatter. For the Company to take shipment of its
products from overseas, the Company must first deliver to the United States
Customs Service a certificate indicating that a statistical sampling of the
lenses being shipped to the Company meet FDA requirements. The Company believes
that all of its products comply with existing FDA requirements. To date, the
Company has not experienced any difficulties with regulatory compliance.

INSURANCE

           The Company maintains product liability insurance coverage of $1
million per occurrence and $2 million in the aggregate and $10 million of excess
liability coverage. The adequacy of the Company's insurance coverage and
reserves to cover known and unknown claims is evaluated at the end of each
fiscal year. The Company believes that its current insurance coverage is
adequate.

EMPLOYEES

           As of March 15, 2000, the Company employed 69 individuals on a
full-time basis, 46 of whom were employed in executive, sales and administrative
positions and the remainder of whom were warehouse employees. The number of
warehouse employees increases during various time periods in the course of a
year due to the buying patterns of the Company's customers. None of the
Company's employees are covered by collective bargaining agreements, and
management believes that the Company's relations with its employees are good.

ITEM 2. PROPERTIES.

           The Company's corporate offices, distribution and warehouse
facilities occupy approximately 15,500 square feet of space in Sarasota, Florida
under a lease expiring in September 2000 at a monthly rental of approximately
$7,250. The lease provides for various escalations based on cost of living and
real estate taxes. The Company does not anticipate any difficulty renewing this
lease beyond its current expiration date. The Company also leases a satellite
sales office in Windsor, England expiring in March 2001 and an off-site
warehouse facility in Sarasota, Florida on a month-to-month basis.

                                       9


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ITEM 3. LEGAL PROCEEDINGS.

           On or about August 18, 1997, Argon, Inc. filed an action against the
Company and Corning in the Superior Court of California, County of Los Angeles.
The complaint alleges, among other claims, breach of contract in which the
plaintiff seeks approximately $250,000 based upon a non-exclusive distributor
agreement and a service agreement. The Company has denied the substantive
allegations and has asserted a counterclaim for $118,000 based upon Argon's
breach of the above mentioned agreements and non-payment of amounts due to the
Company. As of March 15, 2000, the parties had reached an agreement in principle
to settle the litigation, which agreement requires that The Company pay Argon a
final settlement amount of $100,000.

           During January 1998, RBB Bank Aktiengesellschaft ("RBB"), the entity
which purchased $22.5 million of the Company's preferred stock, the proceeds of
which were utilized by the Company to purchase the Serengeti business, filed a
complaint in the United States District Court, Southern District of New York. In
the complaint, RBB alleges various violations of the securities laws in
connection with the purchase by RBB of the 22,500 shares of the Company's
convertible preferred stock. RBB contends that the Company a) failed to disclose
certain material information and that RBB relied to its detriment on these
omissions in purchasing the Company's convertible preferred stock and b) failed
to convert the preferred stock when requested. There are also common law claims
for fraud and negligent misrepresentation. RBB seeks specific performance of
RBB's right to convert its preferred shares and compensatory damages up to $22.5
million, equal to the purchase price of the preferred stock, plus interest. RBB
also seeks punitive damages and attorney fees. In April 1998, the Company moved
to dismiss the federal securities laws claims against it, as well as the common
law claims for conversion, fraud and negligent misrepresentation. Following the
filing of the motion to dismiss, RBB withdrew its claim against the Company
arising under Section 12 of the Securities Act of 1933. The court granted the
Company's motion to dismiss the remaining securities law claim against it under
Section 10 of the Securities Exchange Act of 1934 and limited the scope of the
fraud and negligent misrepresentation claim. The court denied the motion with
respect to the conversion claim. In January 1999, the Company answered the
complaint by denying all the allegations of wrongdoing and by asserting various
affirmative defenses to RBB's claims. Document and deposition discovery has been
substantially completed. No trial date has been scheduled. The parties have
reached a conditional settlement of this action. Accordingly, by order dated
February 17, 2000, the court dismissed the case without prejudice with the right
to reopen the case on or before August 17, 2000, if the settlement is not
consummated.

           On or about March 19, 1997, Argent Securities, Inc. ("Argent"), the
underwriter of the Company's initial public offering, filed an action against
the Company which alleged, among other things, breaches by the Company of its
underwriting agreement with Argent, breach of corporate duties relating to the
issuance of the Preferred Shares, more fully discussed in Item 12, below, and
misstatements in the Company's Proxy Statement relating to the issuance of the
Preferred Shares. In April 1999, a settlement whereby the Company paid Argent
$35,000 was reached and the action was discontinued with prejudice.

           In the normal course of conducting its business, the Company is
involved in various other legal matters. The Company is not a party to any other
legal matter which management believes could result in a judgment that would
have a material adverse affect on the Company's financial position, liquidity or
results of operations.

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

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

                                       10



<PAGE>


                                     PART II

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

           The Company's common stock is quoted on the OTC Bulletin Board, an
NASD sponsored and operated inter-dealer automated quotation system for equity
securities not included in the Nasdaq Stock Market ("Nasdaq"). The trading
symbol of the Company's common stock is SOLR. The following table sets forth for
the periods indicated the range of the high and low sales prices of the common
stock, as reported by Nasdaq.



                         Quarter Ended(1)                         High      Low
---------------------------------------------------------------   ----      ---

March 31, 1998.................................................  $2.44     $1.50

June 30, 1998..................................................   1.81      0.63

September 30, 1998.............................................   1.00      0.25

December 31, 1998..............................................   0.56      0.34

March 31, 1999.................................................   0.97      0.16

June 30, 1999..................................................   0.88      0.50

September 30, 1999.............................................   0.91      0.56

December 31, 1999..............................................   0.72      0.34


----------

(1)   On June 11, 1998, the quotation of the Company's common stock and warrants
      was transferred from the Nasdaq National Market to the Nasdaq SmallCap
      Market. On October 1, 1998, the Company's securities ceased being listed
      on the Nasdaq SmallCap Market.

           At March 15, 2000, there were approximately 46 shareholders of record
of the common stock. Such number does not include beneficial owners holding
shares through nominee names.

DIVIDEND POLICY

           The Company has never paid any dividends and does not expect to pay
any dividends in the foreseeable future with respect to its common stock. Any
earnings which the Company may realize in the foreseeable future will be
retained to finance the growth of the Company. The Company's bank credit
facility restricts the Company's ability to pay dividends on its common stock.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operation - Liquidity and Capital Resources."


                                       11

<PAGE>


ITEM 6.    SELECTED FINANCIAL DATA

The following selected consolidated financial data of the Company should be read
in conjunction with the Company's consolidated financial statements, including
the accompanying notes and "Management's Discussion and Analysis of Financial
Condition and Results of Operation":

<TABLE>
<CAPTION>
                                       Fiscal Year Ended December 31,
                                            1999                1998              1997             1996            1995
                                            ----                ----              ----             ----            ----
<S>                                   <C>                 <C>                   <C>             <C>             <C>
 Net sales                            $   38,429,533      $    43,323,222       $  32,458,362   $ 13,584,255    $ 10,472,656
 Net income (loss) from
  continuing  operations              $    1,557,650      $    (5,289,033)      $  (4,912,792)  $    568,247    $    615,327
Net income (loss) from
  applicable to common stock                  (6,350)           (6,765,033)        (9,952,792)  $    568,247    $    615,327
 Basic loss per common share          $            0      $         (2.84)      $       (4.17)  $       0.21    $       0.37

                                   As of December 31,
                                          1999                1998                  1997             1996           1995
                                          ----                ----                  ----             ----           ----
 Total assets                         $   39,499,315      $    40,613,844       $  52,306,621   $ 19,354,587    $  9,644,347
 Long-term debt                       $      523,579      $        91,415       $     154,865   $    105,886    $     35,975
 Capital lease obligations
                                      $            0      $             0       $           0   $          0    $          0
 Redeemable preferred stock           $   23,809,000      $    22,333,000       $  21,043,000   $  6,975,000    $          0
 Cash dividends per common share      $            0      $             0       $           0   $          0    $          0
</TABLE>



                                       12

<PAGE>


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

           The following should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto appearing elsewhere in this report.

RESULTS OF OPERATIONS

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1999

         Net sales decreased from approximately $43.3 million in 1998 to
approximately $38.4 million in 1999. Premium sales increased from approximately
$29.9 million in 1998 to approximately $31.0 million in 1999, primarily as a
result of increased sales of approximately $3.3 million, $2.9 million and $1.8
million to Costco, Sunglass Hut and Wal-Mart Optical, respectively, partially
offset by a decrease in low-margin close-out sales of approximately $6.9
million. Sales of the Company's H20ptix product line declined
approximately$200,000 from 1998 to 1999. Non-premium sales decreased from
approximately $13.4 million in 1998 to approximately $7.4 million in 1999,
primarily as a result of inventory reductions made by Wal-Mart, the Company's
largest non-premium customer. Sales of non-premium product to Wal-Mart and other
customers conducted through the Company's Hong Kong subsidiary increased
approximately $600,000. Inventories were greater by $1.7 milion at year-end 1999
when compared with inventories at year-ebd 1998, as the Company acquired
inventory for anticipated fourth-quarter 1999 sales to major customers, which
did come to fruition until the first quarter of 2000.

           Gross profit as a percentage of sales increased from 30.9% in 1998 to
44.6% in 1999, primarily due to higher average unit selling prices, discounts
taken on purchases from suppliers not previously taken in 1998, and a reduction
in close-out sales for 1999 as compared to 1998, which sales typically have
lower margins.

           Selling expenses decreased from approximately $5.7 million in 1998 to
approximately $3.9 million in 1999. This decrease resulted primarily from a
reduction in marketing-related expenditures such as retail cooperative
advertising, endorsements, miscellaneous promotions and public relations. During
1998, the Company spent approximately of $1.0 million on a sponsorship promotion
which was not repeated in 1999. These reductions were partially offset by
increased trade ads and media advertising designed to promote the technical
advantages of the Serengeti lens.

           General and administrative expenses decreased from approximately $9.8
million in 1998 to approximately $8.7 million in 1999. Employee-related expenses
such as payroll and travel decreased approximately $500,000 from 1998 to 1999.
In June 1998, the Company reduced its headcount to 69 from 90 as it restructured
its sales force, terminating in-house regional sales managers and their
administrative support personnel. In addition, outside labor was reduced by
$800,000. The Company incurred outside labor costs in 1998 in order to liquidate
excess inventory; this was not repeated in 1999. These reductions were partially
offset by foreign exchange costs associated with purchases from a Japanese
supplier, resulting from the devaluation of the U.S. Dollar against the Japanese
Yen.

           Interest expense decreased from approximately $1.9 million in 1998 to
approximately $1.5 million in 1999, as a result of a reduction in long-term debt
of $2.8 million.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 and 1998

           Net sales increased from approximately $32.5 million in 1997 to
approximately $43.3 million in 1998, primarily as a result of increased sales of
the Serengeti premium eyeglass product line which accounted for approximately
69% of the Company's total sales in 1998. The Company also experienced increased
sales in its H2Optix products, as well as sales from new products introduced
late in 1997 and 1998. In addition, sales increased as a result of the inventory
reduction program that was put into place in the third quarter of 1998.

                                       13


<PAGE>


           In the fourth quarter of 1998, the Company made adjustments to its
inventory balance, resulting in a charge to operations of approximately $4.2
million. These adjustments resulted from difficulties encountered by the Company
in connection with its implementation and integration of its new financial
reporting and accounting system, as noted above. Reference is made to Note 12 of
Notes to the Consolidated Financial Statements.

           Gross profit as a percentage of sales declined from 37.9% in 1997 to
30.9% in 1998 primarily as a result of lower profit margins from the inventory
reduction program and markdowns and other allowances provided to certain
customers as inducements to acquire new Company product offerings.

           Selling expenses decreased from approximately $6.2 million in 1997 to
approximately $5.7 million in 1998. The Company reduced its advertising expenses
in 1998 as a response to cost reduction programs. In 1997 the Company spent in
excess of $1.1 million on a radio advertising campaign which was not repeated in
1998.

           General and administrative expenses increased from approximately $8.8
million in 1997 to approximately $9.8 million in 1998, primarily as a result of
an increase in executive and administrative salaries incurred during the first
half of 1998. Outside labor costs increased due to the temporary help required
to pack, ship and administer the Company's inventory reduction programs. Higher
consulting fees were also incurred in 1998, attributable to the costs incurred
upon the implementation of the financial reporting and accounting systems.

           Interest expense increased from approximately $1.3 million in 1997 to
approximately $1.9 million in 1998, primarily as a result of the interest
charges incurred on higher outstanding debt and higher interest rates from its
renegotiated bank credit facility, discussed below.

LIQUIDITY AND CAPITAL RESOURCES

           The Company entered into a loan agreement for a new senior credit
facility on September 17, 1999 which includes 1) a $12 million revolver facility
with interest calculated at prime plus 1.75%, and 2) a term loan of $725,000
with interest calculated at prime plus 2.00%, payable in 12 equal monthly
installments commencing November 1999.

           Under the new credit facility, the Company is able to borrow up to
85% of eligible domestic accounts receivable and 75% of eligible foreign
accounts receivable, and up to 80% and 50% of the value of the Company's
eligible premium and non-premium inventory, respectively, subject to additional
limitations on inventory-based loans. The unused portion of the facility was
approximately $1.9 million at December 31, 1999.

           The new facility requires the Company to maintain certain financial
ratios. Pursuant to the credit facility, in the event the Company has "surplus
cash" in any fiscal year, the Company is required to make mandatory prepayments
against the term loan in the amount of 25% of the surplus cash. The facility
also contains a number of customary covenants, including, among others,
limitations on liens, affiliate transactions, mergers, acquisitions, asset
sales, dividends and advances. The facility is secured by a first priority lien
on substantially all of the assets of the Company and its subsidiaries. At
December 31, 1999, the Company was in violation of the leverage ratio and
capital expenditure requirements under the new revolver and obtained a waiver
from the lender for those violations.


           The new loan agreement retired all but $2 million of the debt which
existed with the Company's former senior lender. An amendment was signed with
the former senior lender which requires the Company to retire said debt in 18
equal monthly installments commencing November 1999, with interest calculated at
prime plus 4.00%.


           The Company's liquidity improved from a working capital deficit of
approximately $4.1 million at December 31, 1998 to a working capital deficit of
approximately $1.1 million at December 31, 1999, primarily as a result of a
reduction in the current portion of long-term debt and accounts payable, which
was partially offset by the increase in the line of credit.

                                       14


<PAGE>



           The Company incurred capital expenditures of approximately $141,000
during 1999, primarily through purchases of computer equipment and software
necessary to ensure year 2000 compliance. The Company does not expect to make
material capital expenditures during 2000.

           The Company anticipates that the net cash available from operations
will be sufficient to satisfy its anticipated cash requirements for the 2000
fiscal year.

CONCENTRATION OF CUSTOMERS

           Wal-Mart, Sunglass Hut and Costco accounted for 19%, 19% and 14%,
respectively, of the Company's sales for the year ended December 31, 1999. Such
customers accounted for 19%, 14% and 4% of sales, respectively, for the year
ended December 31, 1998. The loss of any or all of these customers, or a
significant future reduction in their respective purchases of the Company's
products, may be expected to materially adversely affect the Company's
operations and prospects.

DEPENDENCE ON SINGLE SUPPLIER

           The Company relies on Corning as its sole source of supply for lens
blanks for its Serengeti product line. Any disruption of this source may result,
at a minimum, in a temporary curtailment of the Company's ability to ship these
products, while a loss of this source may materially adversely affect the
Company's operations and prospects.

SEASONALITY

           The Company's sales are seasonal with historical premium product
sales higher in the second quarter of each year. The Company anticipates that
the seasonality of its premium sunglass business generally will follow the
selling activity of its largest customer, Sunglass Hut. Historically, the
strongest quarter in terms of Serengeti sales is the second quarter, followed by
the first, fourth and third quarters.

           The seasonality of the Company's non-premium sunglass business
generally follows the selling activity of its largest customer for such
products, Wal-Mart. Historically, the Company's strongest quarter in terms of
sales is the fourth quarter, followed by the first, second and third quarters.

YEAR 2000 ISSUES

           The Year 2000 problem arose because many computer systems were
designed to identify a year using two digits, instead of four digits, in order
to conserve memory and other resources. Many computer systems were not designed
to recognize calendar dates beginning in 2000, which could have resulted in
miscalculations or system failures, which could have in turn resulted in an
adverse impact on the Company.

           In November, 1997 the Company began converting its information system
to be year 2000 compliant. At December 31, 1997, the Company had completed the
installation of the new software and completed the process of updating
application by mid-1998. The Company incurred charges aggregating
approximately $50,000 in 1998 and additional costs and expenses of approximately
$140,000 in 1999.

           Pursuant to the Company's Year 2000 planning, the Company requested
information regarding the computer systems of its key suppliers, customers,
creditors and financial service organizations.

          As of the date of this report, the Company did not experience any
significant disruptions in any of its systems on January 1, 2000, nor has any
supplier or customer of the Company made the Company aware of any significant
disruptions subsequent to January 1, 2000. The Company will continue to monitor
this issue throughout the remainder of the calendar year.

                                       15


<PAGE>



FOREIGN CURRENCY EXCHANGE

           The Company presently transacts business internationally in United
States currency and in the local currency of its suppliers. During the year
ended December 31, 1999, the Company incurred foreign exchange losses with
Japanese suppliers of approximately $500,000, primarily as a result of the
devaluation of the U.S. Dollar against the Japanese Yen. In order to ensure that
it purchases product at competitive prices, the Company is negotiating with its
suppliers to put in place concessions in the event either party is materially
adversely affected by future currency fluctuations.

RECENT PRONOUNCEMENT

           In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 requires companies to
recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. FAS 133, as amended by FAS 137,
is effective for all fiscal quarters of fiscal years beginning after June 15,
2000.

           Historically, the Company periodically entered into derivative
contracts for the purpose of hedging risks attributable to interest rate
fluctuations and, in general, such hedges have been fully effective in
offsetting the changed in fair value of the underlying risk. The Company did not
have any derivative contracts at December 31, 1999, and does not expect to have
any hedging activities in the future. Accordingly, FAS 133 is not expected to
affect the Company's financial statements.

FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS

           This report contains forward-looking statements, including statements
with respect to proposed financing activities and anticipated business trends,
which are made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, some of which cannot be predicted or quantified and are beyond
the Company's control. Future events and actual results could differ materially
from those set forth in, contemplated by, or underlying the forward-looking
statements. Statements in this Report, including those set forth above, describe
factors, among others such as (i) the Company's continued ability to develop and
introduce innovative products, (ii) changing consumer preferences, (iii)
manufacturing capacity constraints of its outside sources and the availability
of raw materials, (iv) the effect of economic conditions, (v) dependence on
certain customers and (vi) other risks identified from time to time in the
Company's Securities and Exchange Commission filings, that could contribute to
or cause such differences.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

           In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS 133"). FAS 133 establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. The Company
is required to adopt the provisions of the standard during the first quarter of
2000. Because the Company does not use derivatives, the Company does not expect
that the adoption of the new standards will have a material impact on the
results of operations or financial condition.

                                       16


<PAGE>


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements

<TABLE>
<CAPTION>
Consolidated Financial Statements:                                                    Page No.
---------------------------------                                                     --------

<S>      <C>                                                                          <C>
         Report of Independent Certified Accountants                                      F-1

         Consolidated Balance Sheets as of December 31, 1999 and 1998                     F-2 - F-3

         Consolidated Statements of Operations for the years ended
            December 31, 1999, 1998 and 1997                                              F-4

         Consolidated Statements of Stockholders' Equity for the years
            ended December 31, 1999, 1998 and 1997                                        F-5

         Consolidated Statements of Cash Flows for the years ended
            December 31, 1999, 1998 and 1997                                              F-6 - F-7


         Notes to Consolidated Financial Statements                                       F-8 - F-28


Financial Statement Schedules:

         II       Valuation and Qualifying Accounts for the years ended
                     December 31, 1999, 1998 and 1997                                     18

Schedules Omitted

In accordance with the rules of Regulation S-X, other schedules are not
submitted because (a) they are not applicable to or required by the Company, or
(b) the information required to be set forth therein is included in the
consolidated financial statements or notes thereto.
</TABLE>





                                       17
<PAGE>

Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders
Serengeti Eyewear, Inc.

We have audited the accompanying consolidated balance sheets of Serengeti
Eyewear, Inc. and subsidiary as of December 31, 1999 and 1998 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 financial position of Serengeti Eyewear,
Inc. and subsidiary as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.





                                                     BDO Seidman, LLP
Orlando, Florida
March 17, 2000

                                      F-1

<PAGE>


                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                                     Consolidated Balance Sheets
================================================================================
<TABLE>
<CAPTION>
December 31,                                                                        1999         1998
-----------------------------------------------------------------------------------------------------------

Assets (Notes 5 and 6)
<S>                                                                             <C>           <C>
Current assets:
  Cash and cash equivalents                                                     $   306,126   $    87,774
  Accounts receivable, less allowance for doubtful accounts of $818,654
    and $752,436 (Note 8)                                                         5,843,863     7,796,963
  Income tax refund receivable (Note 10)                                                  -       358,055
  Inventories (Notes 3 and 8)                                                    15,237,394    12,536,224
  Prepaid expenses                                                                  289,497       958,603
------------------------------------------------------------------------------------------------------------

         Total current assets                                                    21,676,880    21,737,619
------------------------------------------------------------------------------------------------------------

Property and equipment, less accumulated
  depreciation (Note 4)                                                           1,867,267     2,170,582
------------------------------------------------------------------------------------------------------------

Other assets:
  Patents and trademarks, net of accumulated amortization of $1,808,109
    and $1,187,157 (Note 2)                                                       9,637,116    10,258,068
  Goodwill, net of accumulated amortization of $1,045,957 and
    $696,613 (Note 2)                                                             5,940,970     6,290,314
  Other assets                                                                      377,082       157,261
------------------------------------------------------------------------------------------------------------

         Total other assets                                                      15,955,168    16,705,643
------------------------------------------------------------------------------------------------------------

                                                                                $39,499,315   $40,613,844
------------------------------------------------------------------------------------------------------------
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                      F-2

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                                     Consolidated Balance Sheets
================================================================================
<TABLE>
<CAPTION>
December 31,                                                                   1999             1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>               <C>
Liabilities and Stockholders' Equity

Current liabilities:
  Bank overdraft                                                           $          -      $    288,414
  Accounts payable                                                            8,569,673        10,952,090
  Line of credit (Note 5)                                                    10,146,096         7,322,704
  Accrued expenses                                                              533,718           519,492
  Accrued dividends (Note 7)                                                  1,564,000         1,476,000
  Current portion of long-term debt (Note 6)                                  1,992,318         5,263,448
------------------------------------------------------------------------------------------------------------

         Total current liabilities                                           22,805,805        25,822,148

Long-term debt, less current portion (Note 6)                                   523,579            91,415
------------------------------------------------------------------------------------------------------------

         Total liabilities                                                   23,329,384        25,913,563
------------------------------------------------------------------------------------------------------------

Commitments and contingencies (Note 8)                                                -                 -

Stockholders' equity (Note 7):
  Convertible preferred stock, $.001 par value, 1,000,000 shares
    authorized, 25,384 and 23,908 shares issued and outstanding              23,809,000        22,333,000
  Common stock, $.001 par value, 10,000,000 shares authorized,
    2,384,000 shares issued and outstanding                                       2,384             2,384
  Additional paid-in capital                                                 10,586,094        10,586,094
  Accumulated deficit                                                       (18,227,547)      (18,221,197)
------------------------------------------------------------------------------------------------------------

         Total stockholders' equity                                          16,169,931        14,700,281
------------------------------------------------------------------------------------------------------------

                                                                           $ 39,499,315      $ 40,613,844
------------------------------------------------------------------------------------------------------------
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                           Consolidated Statements of Operations
================================================================================
<TABLE>
<CAPTION>
Years ended December 31,                                            1999          1998           1997
-----------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>            <C>
Net sales                                                       $38,429,533    $43,323,222    $32,458,362
Cost of goods sold                                               21,278,786     29,927,850     20,155,683
-----------------------------------------------------------------------------------------------------------

         Gross profit                                            17,150,747     13,395,372     12,302,679
-----------------------------------------------------------------------------------------------------------

Operating expenses:
  Depreciation                                                      485,896        490,776        364,753
  Amortization                                                      970,296        977,699        906,071
  Selling expenses                                                3,940,988      5,664,785      6,245,338
  General and administrative expenses                             8,659,675      9,766,906      8,759,208
-----------------------------------------------------------------------------------------------------------

         Total operating expenses                                14,056,855     16,900,166     16,275,370
-----------------------------------------------------------------------------------------------------------

Income (loss) from operations                                     3,093,892     (3,504,794)    (3,972,691)
-----------------------------------------------------------------------------------------------------------

Other income (expense):
  Interest expense                                               (1,523,596)    (1,889,446)    (1,334,733)
  Other income (expense), net                                       (12,646)       105,207         64,644
-----------------------------------------------------------------------------------------------------------

         Total other income (expense)                            (1,536,242)    (1,784,239)    (1,270,089)
-----------------------------------------------------------------------------------------------------------

Income (loss) before income tax benefit                           1,557,650     (5,289,033)    (5,242,780)
Provision for income tax benefit (Note 10)                                -              -       (329,988)
-----------------------------------------------------------------------------------------------------------

Net income (loss)                                                 1,557,650     (5,289,033)    (4,912,792)

Preferred stock dividends (Note 7)                               (1,564,000)    (1,476,000)    (5,040,000)
-----------------------------------------------------------------------------------------------------------

Net loss applicable to common stock                             $    (6,350)  $ (6,765,033)   $(9,952,792)
-----------------------------------------------------------------------------------------------------------

Basic loss per common share                                     $         -    $     (2.84)   $     (4.17)
-----------------------------------------------------------------------------------------------------------

Weighted average common shares outstanding                        2,384,000      2,384,000      2,384,000
-----------------------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                 Consolidated Statements of Stockholders' Equity
================================================================================
<TABLE>
<CAPTION>
                                               Convertible
                                             Preferred Stock              Common Stock             Additional
                                          -----------------------    -----------------------        Paid-in       Accumulated
                                           Shares         Amount      Shares         Amount         Capital         Deficit
--------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>           <C>               <C>          <C>            <C>
Balance, December 31, 1996                  7,500    $ 6,975,000     2,384,000         $2,384     $ 6,836,094    $ (1,503,372)

Preferred stock issued for cash                        5,000,000
  pursuant to a  Regulation S
  offering                                 15,000     15,000,000             -              -               -               -
Costs associated with Regulation S
  offering                                      -     (1,050,000)            -              -               -               -
Issuance of preferred stock as
  payment of preferred stock
  dividends                                   118        118,000             -              -               -               -
Preferred stock dividend accrual                -              -             -              -               -      (1,290,000)
Beneficial conversion feature of
  preferred stock (Note 7)                      -              -             -              -       3,750,000      (3,750,000)
Net loss                                        -              -             -              -               -      (4,912,792)
--------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1997                 22,618     21,043,000     2,384,000          2,384      10,586,094     (11,456,164)

Issuance of preferred stock as
  payment of preferred stock
  dividend                                  1,290      1,290,000             -              -               -               -
Preferred stock dividend accrual                -              -             -              -               -      (1,476,000)
Net loss                                        -              -             -              -               -      (5,289,033)
--------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1998                 23,908     22,333,000     2,384,000          2,384      10,586,094     (18,221,197)

Issuance of preferred stock as
  payment of preferred stock
  dividend                                  1,476      1,476,000             -              -               -               -
Preferred stock dividend accrual                -              -             -              -               -      (1,564,000)
Net income                                      -              -             -              -               -       1,557,650
--------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1999                 25,384    $23,809,000     2,384,000         $2,384     $10,586,094    $(18,227,547)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                           Consolidated Statements of Cash Flows
================================================================================
<TABLE>
<CAPTION>
Years  ended December 31,                                                      1999           1998           1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>            <C>           <C>
Cash flows from operating activities:
  Net income (loss)                                                     $ 1,557,650    $(5,289,033)  $ (4,912,792)
  Adjustments to reconcile net income (loss) to net cash provided by
    operating activities:
    Depreciation and amortization                                         1,456,192      1,468,475      1,270,824
    Deferred loan fees charged to interest                                  418,931        291,097        105,000
    (Gain) loss on sale of assets                                              (925)        35,754              -
    Cash provided by (used for), net of effects of acquisition in 1997:
      Accounts receivable                                                 1,953,100      3,462,093     (5,178,249)
      Other receivables                                                           -         78,730         20,462
      Income tax refund receivable                                          358,055         30,202       (388,257)
      Inventories                                                        (2,701,170)     4,391,446     (4,088,433)
      Trading securities                                                          -              -      4,976,625
      Prepaid expenses and other assets                                     338,427        539,370       (469,057)
      Accounts payable                                                   (2,382,417)    (1,580,963)     8,417,744
      Customer deposits                                                           -       (900,122)       900,122
      Accrued expenses                                                       14,226        129,529       (290,213)
      Accrued income taxes                                                        -              -       (232,930)
--------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                 1,012,069      2,656,578        130,846
--------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Acquisition of Corning division assets                                          -              -    (26,264,530)
  Purchase of patents                                                             -        (53,113)       (23,053)
  Proceeds from disposal of property and equipment                                -              -         64,841
  Proceeds received from Corning settlement                                       -        405,500              -
  Purchase of property and equipment                                       (140,566)      (344,061)    (1,207,583)
--------------------------------------------------------------------------------------------------------------------

Net cash provided by (used for) investing activities                       (140,566)         8,326    (27,430,325)
--------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Increase (decrease) in bank overdraft                                    (288,414)       288,414              -
  Net proceeds from line of credit                                        2,823,392        822,704      5,000,000
  Proceeds from long-term debt                                              725,000              -     10,000,000
  Principal payments on long-term debt                                   (3,605,056)    (3,607,820)    (1,345,858)
  Principal payments on note payable to related party                             -        (44,575)      (209,202)
  Net proceeds from preferred stock sales                                         -              -     13,950,000
  Deferred loan costs                                                      (308,073)      (164,041)      (600,000)
--------------------------------------------------------------------------------------------------------------------

Net cash provided by (used for) financing activities                       (653,151)    (2,705,318)    26,794,940
--------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                        218,352        (40,414)      (504,539)

Cash and cash equivalents, beginning of year                                 87,774        128,188        632,727
--------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                                  $   306,126    $    87,774   $    128,188
--------------------------------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                      F-6

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                           Consolidated Statements of Cash Flows
================================================================================
<TABLE>
<CAPTION>
Year ended December 31,                                                    1999        1998           1997
---------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>          <C>          <C>
Supplemental cash flow information:
  Cash paid for:
    Interest                                                            $1,428,083   $1,835,411   $1,053,618
    Income taxes                                                                 -            -      233,166
---------------------------------------------------------------------------------------------------------------

Non-cash investing and financing activities:
  Acquisition of property and equipment with debt                       $   41,090   $        -   $  164,252
  Issuance of preferred stock as payment of preferred stock dividends    1,476,000    1,290,000      118,000
---------------------------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                      F-7

<PAGE>


                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

1. Significant           Nature of Business
   Accounting
   Policies              Serengeti Eyewear, Inc. and subsidiary (the "Company")
                         is a distributor of premium and nonpremium sunglasses.
                         The Company maintains its office and warehouse
                         operations in Sarasota, Florida. Suppliers for the
                         Company are primarily located in the United States,
                         Asia and Europe. The Company's customers operate retail
                         stores located principally throughout North America,
                         Europe and the Pacific Rim.

                         Consolidation

                         The accompanying consolidated financial statements
                         include the accounts of the Company and its
                         wholly-owned subsidiary, Solartechnics (HK) Ltd.
                         Intercompany transactions and balances were eliminated
                         upon consolidation.

                         Cash and Cash Equivalents

                         For purposes of the statement of cash flows, the
                         Company considers all highly liquid debt instruments
                         purchased with a maturity of three months or less to be
                         cash equivalents.

                         Inventories

                         Inventories are valued at the lower of cost or market
                         on a first in-first out basis.

                         Property and Equipment

                         Property and equipment are stated at cost. Depreciation
                         is calculated using the straight-line method over the
                         expected useful lives of the assets.

                                      F-8

<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

                         Intangible Assets

                         Patents and trademarks are amortized using the
                         straight-line method over periods of 10 to 13 years for
                         patents and 20 years for trademarks, which are based
                         upon their estimated useful lives.

                         Goodwill resulting from the acquisition of the
                         Serengeti business is amortized using the straight line
                         method over a period of 20 years.

                         Impairment of Long-Lived Assets

                         The Company evaluates impairment of long-lived assets
                         in accordance with Statement of Financial Accounting
                         Standards No. 121, "Accounting for the Impairment of
                         Long-Lived Assets and for Long-Lived Assets to be
                         Disposed of" (FAS 121). FAS 121 requires impairment
                         losses to be recorded on long-lived assets used in
                         operations and intangible assets when indications of
                         impairment are present and the undiscounted cash flows
                         estimated to be generated by those assets are less than
                         the assets' carrying amount.

                         Revenue Recognition

                         The Company recognizes revenue upon the shipment of
                         goods to its customers.

                         Advertising Costs

                         Advertising costs are charged to operations when
                         incurred. Advertising costs charged to operations were
                         approximately $2,486,000, $3,522,600 and $3,471,800
                         during 1999, 1998 and 1997, respectively.

                         Warranty Costs

                         The Company offers a one-year warranty on its premium
                         sunglasses. The Company accrued $150,000 for future

                                      F-9

<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

                         estimated warranty costs at December 31, 1999 and 1998.
                         Warranty costs were approximately $461,000, $378,000
                         and $357,000 during 1999, 1998 and 1997, respectively.

                         Use of Estimates

                         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
                         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.

                         Fair Value of Financial Instruments

                         Fair value estimates discussed herein are based upon
                         certain market assumptions and pertinent information
                         available to management as of December 31, 1999 and
                         1998. The respective carrying value of certain
                         on-balance-sheet financial instruments approximated
                         their fair values. These financial instruments include
                         cash and cash equivalents, trade receivables, accounts
                         payable and accrued expenses. Fair values were assumed
                         to approximate carrying values for these financial
                         instruments because they are short term in nature and
                         their carrying amounts approximate fair values or they
                         are receivable or payable on demand. The fair value of
                         the Company's long-term debt approximates its carrying
                         value based on quoted market prices for the same or
                         similar issues or on the current rates offered to the
                         Company for debt of the same remaining maturities.

                         Loss per Share

                         Basic loss per share amounts have been computed based
                         upon the weighted average number of shares outstanding
                         of 2,384,000 in 1999, 1998 and 1997. Potential common
                         shares and the computation of diluted earnings per

                                 F-10

<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

                         share are not considered as their effect would be
                         anti-dilutive. As of December 31, 1999, potential
                         common shares consist of 905,000 options, 975,000
                         warrants and approximately 87,700,000 shares underlying
                         the convertible preferred stock.

                         Segment Information

                         The Company does not identify separate operating
                         segments for management reporting purposes. The
                         consolidated results of operations are the basis on
                         which management evaluates operations and makes
                         business decisions.

                         Recent Pronouncements

                         In June 1998, the Financial Accounting Standards Board
                         issued Statement of Financial Accounting Standards No.
                         133, "Accounting for Derivative Instruments and Hedging
                         Activities" (FAS 133). FAS 133 requires companies to
                         recognize all derivative contracts as either assets or
                         liabilities in the balance sheet and to measure them at
                         fair value. FAS 133, as amended by FAS 137, is
                         effective for all fiscal quarters of fiscal years
                         beginning after June 15, 2000.

                         Historically, the Company periodically entered into
                         derivative contracts for the purpose of hedging risks
                         attributable to interest rate fluctuations and, in
                         general, such hedges had been fully effective in
                         offsetting the changes in fair value of the underlying
                         risk. The Company did not have any derivative contracts
                         at December 31, 1999 and does not expect to have any
                         hedging activities in the future. Accordingly, FAS 133
                         is not expected to affect the Company's financial
                         statements.

                         Reclassifications

                         Certain amounts in the 1998 and 1997 financial
                         statements have been reclassified to conform to the
                         1999 presentation.

                                      F-11

<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

2. Business              On February 13, 1997, the Company changed its name to
   Acquisition           Serengeti Eyewear, Inc. in conjunction with the
                         acquisition of certain assets ("Serengeti Acquisition")
                         of the Serengeti Eyewear division of Corning
                         Incorporated ("Corning") used in the design,
                         manufacture and distribution of Serengeti premium brand
                         sunglasses. The Company used the purchase method of
                         accounting to record this transaction and has included
                         these operations in its statement of operations since
                         the acquisition date. Accordingly, the purchase price
                         was allocated to the net assets acquired based upon
                         their estimated fair market values. The Company
                         acquired the Serengeti assets for cash aggregating
                         $27.5 million. The Company financed the purchase and
                         related transaction expenses with the net proceeds from
                         the sale of shares of preferred stock (see Note 7) and
                         borrowings under a credit facility. In addition, the
                         Company incurred other costs related to the acquisition
                         aggregating $855,561, which have been included in
                         goodwill. In 1998, the Company received $405,500 under
                         a settlement agreement with Corning which was recorded
                         as a reduction of goodwill.

                         The purchase price of the Serengeti division, including
                         the additional costs and settlement described above,
                         was allocated as follows:

                         -------------------------------------------------------
                                                                 (In thousands)

                         Inventory                                      $ 8,831
                         Furniture and equipment                            832
                         Trademarks                                       9,500
                         Patents                                          1,800
                         Goodwill                                         6,987
                         -------------------------------------------------------

                                                                        $27,950
                         -------------------------------------------------------

                                      F-12

<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

                         The following unaudited pro forma summary presents the
                         consolidated results of operations as if the
                         acquisition had occurred at the beginning of 1997 and
                         does not purport to be indicative of what would have
                         occurred had the acquisition been made as of that date
                         or the results which may occur in the future.

                                                                           1997
                         -------------------------------------------------------
                                                                  (In thousands,
                                                        except per share amount)

                         Pro forma net sales                            $35,097
                         Pro forma net loss applicable to common stock  $(9,971)
                         Pro forma basic loss per common share          $ (4.18)
                         -------------------------------------------------------

3. Inventories           Inventories consist of the following:

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

                         Raw materials                $ 2,298,906    $ 4,490,117
                         Work-in-process                3,375,602      2,768,884
                         Finished goods                 9,562,886      5,277,223
                         -------------------------------------------------------

                                                      $15,237,394    $12,536,224
                         -------------------------------------------------------

4. Property, Plant       Property, plant and equipment consist of the following:
   and Equipment
<TABLE>
<CAPTION>
                                                               Useful
                         December 31,                            Life           1999          1998
                         -------------------------------------------------------------------------
<S>                                                        <C>           <C>           <C>
                         Furniture and equipment           3-10 years    $ 2,521,853   $ 2,386,535
                         Leasehold improvements             3-7 years        519,191       519,192
                         Transportation equipment             5 years        200,851       178,084
                         -------------------------------------------------------------------------

                                                                           3,241,895     3,083,811
                         Less accumulated depreciation                     1,374,628       913,229
                         -------------------------------------------------------------------------

                                                                         $ 1,867,267   $ 2,170,582
                         -------------------------------------------------------------------------
</TABLE>

                                      F-13

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

5. Line of Credit        During February 1997, the Company secured a $7,500,000
                         line of credit with a bank with interest payable at the
                         LIBOR rate or a base rate, plus applicable margins. In
                         July 1998, the Company renegotiated this borrowing
                         facility. The terms of the new agreement allowed the
                         Company to borrow up to $7,500,000 with interest
                         payable at the LIBOR rate plus 325 basis points or the
                         bank's prime lending rate plus 1.75% at the borrower's
                         option. Under the renegotiated borrowing facility, the
                         Company was able to borrow up to 75% of eligible
                         accounts receivable and 50% of eligible inventory with
                         certain limitations. The credit facility was
                         collateralized by substantially all the Company's
                         assets and was guaranteed by the Company's wholly-owned
                         subsidiary.

                         During September 1999, the Company replaced the line of
                         credit originally secured during February 1997 and
                         amended in July 1998 with a new line of credit ("new
                         revolver") from a different bank. The maximum available
                         borrowing base under the new revolver is $12,000,000
                         with interest payable at the bank's prime lending rate
                         plus 1.75% (10.25% at December 31, 1999). Under the new
                         revolver, the Company is able to borrow up to 85% of
                         eligible accounts receivable with certain limitations,
                         80% of eligible premium inventory, and 50% of eligible
                         non-premium inventory. The new revolver is
                         collateralized by substantially all of the Company's
                         assets and is guaranteed by the Company's wholly-owned
                         subsidiary. The new revolver is scheduled to mature on
                         August 31, 2001. Certain information related to the
                         lines of credit during 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
                                                                            1999          1998
                         ------------------------------------------------------------------------

<S>                                                                           <C>        <C>
                         Balance outstanding at December 31              $10,146,096   $7,322,704
                         Maximum amount outstanding during the year      $10,146,096   $7,500,000
                         Average month-end balance                       $ 6,898,700   $6,924,000
                         Weighted average interest rate                        9.68%        8.82%
                         Unused balance at December 31                   $ 1,853,904     $177,296
                         ------------------------------------------------------------------------
</TABLE>

                         As more fully described in Note 6, the Company was in
                         violation of certain of the financial loan covenants
                         under the new revolver,  and as a result, has
                         classified the line of credit as a current liability.

                                      F-14

<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

6. Long-Term Debt        Long-term debt consists of the following:
<TABLE>
<CAPTION>
                                                                                  1999          1998
                         --------------------------------------------------------------------------------
<S>                                                                          <C>            <C>
                         $725,000 note payable to bank; principal
                           payments of $60,417 due monthly plus
                           interest at the bank's prime lending rate
                           plus 1.75% (10.25% at December 31, 1999);
                           matures November 2000; collateralized by
                           substantially all the Company's assets and a
                           $2,000,000 key man life insurance policy on
                           the Company's CEO; guaranteed by the
                           Company's wholly-owned subsidiary.                $   604,167    $        -

                         $5,575,000 note payable to bank. Note was
                           refinanced during 1999. See note below.             1,778,000     4,075,000

                         $2,000,000 note payable to bank. Note was paid
                           off during 1999. See note below.                            -     1,125,000

                         Various equipment notes payable in aggregate
                           monthly installments totaling approximately
                           $6,700 principal and interest at rates ranging
                           from 5% to 13%; maturing at various dates
                           between March 2000 to September 2003;
                           collateralized by equipment and vehicles.            133,730        154,863
                         --------------------------------------------------------------------------------

                                                                              2,515,897      5,354,863
                         Less current portion                                 1,992,318      5,263,448
                         ================================================================================
                                                                             $  523,579     $   91,415
                         --------------------------------------------------------------------------------
</TABLE>
                         Long-term debt maturities as of December 31, 1999 are
                         as follows:

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

                         2000                                         $1,992,318
                         2001                                            479,221
                         2002                                             27,512
                         2003                                             16,846
                         -------------------------------------------------------

                                                                      $2,515,897
                         -------------------------------------------------------

                                      F-15





<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   The $5,575,000 and $2,000,000 notes payable
                                   to bank were renegotiated in July 1998 when
                                   the principal balance under the original term
                                   loan was $7,575,000. The original term loan
                                   was restructured into two separate notes, and
                                   the maturity date was changed from December
                                   2001 to December 31, 1999 for the $5,575,000
                                   note and June 30, 1999 for the $2,000,000
                                   note. In September 1999, with proceeds from
                                   the new revolver (see Note 5), the $5,575,000
                                   note was refinanced and paid down to
                                   $2,000,000 and the $2,000,000 note was paid
                                   off. The $2,000,000 note remaining
                                   ("subordinated note") is subordinated to the
                                   new revolver and $725,000 note payable and is
                                   collateralized by substantially all the
                                   Company's assets. This subordinated note is
                                   due in monthly principal payments of $111,000
                                   through April 2001 with interest payable at
                                   prime plus 4% (12.75% at December 31, 1999).

                                   Loan Covenants

                                   The Company is subject to various loan
                                   covenants with respect to its line of credit
                                   and long-term debt borrowings with the
                                   banks. As of December 31, 1999, the Company
                                   was in violation of the leverage ratio and
                                   capital expenditure requirements under
                                   the new revolver (see Note 5). The Company
                                   ontained a waiver from the bank for these
                                   violations. However, the Company does not
                                   believe it will be able to meet the leverage
                                   ratio requirement for the quarter ended
                                   March 31, 2000, and the Company did not
                                   obtain a waiver for this period.
                                   Accordingly, the line of credit was
                                   classified as a current liability.

7.      Stockholders'              Stock Options
        Equity
                                   The Company sponsors the Serengeti Eyewear
                                   1995 Stock Option Plan (the "Plan"). Under
                                   the Plan, the Company's Board of Directors
                                   has reserved 1,500,000 shares which may be
                                   granted at the Board of Directors'
                                   discretion. No options may be granted after
                                   January, 2005 and the maximum term of the
                                   options granted under the Plan is ten years.


                                      F-16
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   The Company applies APB 25, "Accounting for
                                   Stock Issued to Employees," and related
                                   interpretations in accounting for options
                                   issued. Under APB Opinion 25, compensation
                                   expense is recorded for the difference
                                   between the grant price and the fair market
                                   value only if options are granted or extended
                                   at exercise prices less than fair market
                                   value.

                                   Statement of Financial Accounting Standards
                                   No. 123 (FAS 123) "Accounting for Stock Based
                                   Compensation," requires the Company to
                                   provide pro forma information regarding net
                                   income and earnings per share as if
                                   compensation cost for the Company's stock
                                   options had been determined in accordance
                                   with the fair value based method prescribed
                                   in FAS 123. No options were granted during
                                   1999 and 1998. For grants during 1997, the
                                   Company estimated the fair value of each
                                   stock option at the grant date by using the
                                   Black-Scholes option-pricing model with the
                                   following weighted-average assumptions:

                                     o No dividend yield
                                     o Volatility of 50%
                                     o Risk-free interest rates of 6.1% and
                                     o Expected lives of three years

                                   Under the accounting provisions of FAS 123,
                                   the Company's net loss applicable to common
                                   stock and basic loss per common share for
                                   1997 would be as follows:


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

                                  Pro forma net loss           $  (11,443,977)
                                  Pro forma basic net loss
                                   per common share            $        (4.80)
                                  --------------------------------------------

                                   Changes in options outstanding under the Plan
                                   are summarized as follows:


                                      F-17
<PAGE>

                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                       Weighted-
                                                                                       Weighted-         Average
                                                                                         Average      Fair Value
                                                                                        Exercise      of Options
                                                                            Shares         Price         Granted
                                  ---------------------------------------------------------------------------------
<S>                                                 <C> <C>                <C>             <C>               <C>
                                  Balance, December 31, 1996               925,000         $8.08           $   -
                                    Granted above market                   220,065          3.24            1.25
                                    Granted at market                      914,935          2.94            1.33
                                    Forfeited                             (925,000)         8.08               -
                                  ---------------------------------------------------------------------------------

                                  Balance, December 31, 1997             1,135,000          3.00               -
                                    Forfeited                             (210,000)         2.94               -
                                  ---------------------------------------------------------------------------------

                                  Balance, December 31, 1998               925,000          3.02               -
                                    Expired                                (20,000)         2.94               -
                                  ---------------------------------------------------------------------------------

                                  Balance, December 31, 1999               905,000         $3.02           $   -
                                  ---------------------------------------------------------------------------------
</TABLE>

                                   As of December 31, 1999, a total of 836,974
                                   of the outstanding Plan options were
                                   exercisable with a weighted-average exercise
                                   price of $3.00 per share and a
                                   weighted-average remaining contractual life
                                   of 2.7 years.

                                   Stock Warrants

                                   The following details the common stock
                                   warrants outstanding as of December 31, 1999:
<TABLE>
<CAPTION>

                                                                       Underlying      Exercise
                                  Warrant series                           Shares         Price      Expiration
                                  --------------------------------------------------------------------------------
<S>                                                                       <C>             <C>          <C>   <C>
                                  Class A preferred stock                 150,000         $5.56        12/31/02
                                  Class B preferred stock                 300,000          7.50        12/31/02
                                  Class C preferred stock                 300,000         10.00        12/31/02
                                  Class D (commission on Class A
                                    preferred stock)                      200,000          5.50         9/30/01
                                  Class F                                  25,000          3.50         8/31/03
                                                                     ------------
                                                                          975,000
                                                                     ------------

</TABLE>

                                      F-18
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   Preferred Stock

                                   On October 4, 1996, the Company issued 7,500
                                   shares of its $.001 par value Series A 6.5%
                                   cumulative convertible non-voting preferred
                                   stock, to RBB Bank Aktiengesellschaft
                                   ("RBB"), a banking institution located in
                                   Austria, in a private offshore offering
                                   pursuant to Regulation S for cash aggregating
                                   $7,500,000 less commissions aggregating
                                   $525,000. Concurrently with the closing of
                                   the acquisition described in Note 2, RBB
                                   purchased pursuant to said Regulation S
                                   offering 7,500 shares of the Company's $.001
                                   par value Series B 6% cumulative convertible
                                   non-voting preferred stock and 7,500 shares
                                   of the Company's $.001 par value Series C 6%
                                   cumulative convertible non-voting preferred
                                   stock for cash aggregating $15,000,000 less
                                   commissions aggregating $1,050,000.

                                   The dividends on the preferred shares are
                                   payable in cash or additional shares of
                                   preferred stock at the option of the Company.
                                   During 1997, 118 shares of preferred stock
                                   valued at $118,000, which represent dividends
                                   accrued in 1996 were issued. During 1998,
                                   dividends aggregating 1,290 shares of
                                   preferred stock, valued at $1,290,000, which
                                   represent dividends accrued in 1997, were
                                   issued. During 1999, dividends aggregating
                                   1,476 shares of preferred stock valued at
                                   $1,476,000, which represent dividends accrued
                                   in 1998, were issued. At December 31, 1999,
                                   dividends aggregating $1,564,000 were due and
                                   payable to RBB.

                                   Each of the Series A Preferred Shares may be
                                   converted into shares of common stock at any
                                   time. Each Series A share is convertible into
                                   such number of common shares as is determined
                                   by dividing its stated value of $1,000 by a
                                   conversion rate equal to the lower of (a)
                                   $5.50 or (b) 80% of the average market price
                                   for the common stock for the ten trading days
                                   ending three days prior to the giving by the
                                   holder of a notice of conversion.

                                   Each of the Series B Preferred Shares may be
                                   converted into shares of common stock at any
                                   time. Each Series B share is convertible into
                                   such number of common shares as is determined
                                   by dividing its stated value of $1,000 by a
                                   conversion rate equal to the lower of (a)
                                   $6.75 or (b) 80% of the average market price
                                   for the common stock for the ten trading days
                                   ending three days prior to the giving by the
                                   holder of a notice of conversion.



                                      F-19
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   Each of the Series C Preferred Shares may be
                                   converted into shares of common stock at any
                                   time after July 1, 1997. Each Series C share
                                   is convertible into such number of common
                                   shares as is determined by dividing its
                                   stated value of $1,000 by a conversion rate
                                   equal to the lower of (a) $8.25 or (b) 80% of
                                   the average market price for the common stock
                                   for the ten trading days ending three days
                                   prior to the giving by the holder of a notice
                                   of conversion.

                                   The Company recorded dividends of $1,564,000
                                   ($61.61 per share), $1,476,000 ($61.74 per
                                   share) and $5,040,000 ($222.83 per share),
                                   including $3,750,000 of dividends recorded as
                                   an issuance of the beneficial conversion
                                   features of the preferred stock, during 1999,
                                   1998 and 1997, respectively.

                                   At any time after September 30, 2000, the
                                   Company will have the right to force
                                   conversion of the preferred shares into
                                   common stock.

8.      Commitments                Employment Contracts
        and
        Contingencies              At December 31, 1999, the Company is a party
                                   to employment agreements with one officer and
                                   one sales person. These agreements call for
                                   aggregate salaries of approximately $385,000
                                   in 2000 and $130,000 in 2001. Also included
                                   in the contracts are certain bonus
                                   compensation and options to purchase up to
                                   100,000 shares of common stock at $2.94 per
                                   share through June 2001 based on sales and
                                   profit targets set by the Company. The sales
                                   and profit targets were not met in 1999, 1998
                                   or 1997.


                                      F-20
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   Operating Leases

                                   The Company leases its warehouse and office
                                   facilities pursuant to a lease expiring
                                   September 2000. This lease provides for
                                   various escalations based on cost of living,
                                   real estate taxes, and other provisions. In
                                   addition, the Company leases sales offices on
                                   a month-to-month basis and certain computer
                                   and transportation equipment pursuant to
                                   leases classified as operating leases. Total
                                   monthly lease payments for the warehouse and
                                   office facility aggregate approximately
                                   $7,250 per month.

                                   Rent expense was approximately $188,100,
                                   $198,500 and $278,800 for 1999, 1998 and
                                   1997, respectively.

                                   Future minimum rentals for operating leases
                                   with remaining terms in excess of one year
                                   are approximated as follows as of December
                                   31, 1999:

                                  ----------------------------------------------
                                  2000                               $   125,500
                                  2001                                    18,200
                                  2002                                     9,900
                                  ----------------------------------------------
                                                                     $   153,600
                                  ----------------------------------------------

                                   Concentration of Credit Risk

                                   During the years ended December 31, 1999,
                                   1998 and 1997, the Company made net sales to
                                   customers for amounts exceeding 10% of total
                                   net sales as follows:

<TABLE>
<CAPTION>
                                                              1999               1998                  1997
                                  -----------------------------------------------------------------------------
                                                                            (In thousands)
<S>                                                     <C>        <C>      <C>        <C>       <C>        <C>
                                  Wal-Mart              $7,300     19%      $8,200     19%       $9,200     28%
                                  Sunglass Hut           7,100     19%       4,200     10%        3,600     11%
                                  Costco                 5,300     14%           -       -            -       -
                                  -----------------------------------------------------------------------------
</TABLE>

                                      F-21
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   Approximately $3,719,000 and $4,082,000 of
                                   the gross accounts receivable are due from
                                   the above customers at December 31, 1999 and
                                   1998, respectively, and are unsecured.

                                   The Company relies on a single source for the
                                   supply of lens blanks for its Serengeti line
                                   of products. The loss of the source for lens
                                   blanks or a disruption of the supply from
                                   this source could cause, at a minimum,
                                   temporary shortages in needed materials and
                                   could have a material adverse effect on the
                                   Company's business operations.

                                   During 1999, the Company had one supplier
                                   which accounted for approximately 26% of
                                   total purchases. During 1998, the Company had
                                   four suppliers which accounted for
                                   approximately 10%, 15%, 19% and 20% of total
                                   purchases, respectively. During 1997, the
                                   Company had one supplier which accounted for
                                   approximately 17% of total purchases.

                                   Legal Proceedings

                                   On or about August 18, 1997, Argon, Inc.
                                   Filed an action against the Company
                                   and Corning in the Superior Court of
                                   Califirnia, County of Los Angeles. The
                                   complaint alleges, among other claims, breach
                                   of contract in which the plaintiff seeks
                                   approximately $250,000 based upon a
                                   non-exclusive distributor agreement and a
                                   service agreement. The Company has denied the
                                   substantive allegations and has asserted a
                                   counterclaim for $118,000 based upon Argon's
                                   breach of the above-mentioned agreements and
                                   nonpayment of amounts due to the Company. As
                                   of March 15, 2000, the parties had reached an
                                   agreement in principle to settle the
                                   litigation, which requires that the Company
                                   pay Argom a final settlement of $100,000.
                                   This amount was included in accrued expenses
                                   at December 31, 1999.

                                   During January 1998, RBB Bank ("RBB"), the
                                   entity which purchased $22.5 million of the
                                   Company's preferred stock, the proceeds of
                                   which were utilized by the Company to
                                   purchase the Serengeti business, filed a
                                   complaint in the United States District
                                   Court, Southern District of New York. In the
                                   complaint, RBB alleges various violations of
                                   the securities laws in connection with the
                                   purchase by RBB of the 22,500 shares of the
                                   Company's convertible preferred stock. RBB
                                   contends that the Company a) failed to
                                   disclose certain material information and
                                   that RBB relied to its detriment on these
                                   omissions in purchasing the Company's
                                   convertible preferred stock and b) failed to
                                   convert the preferred stock when requested.
                                   There are also common law claims for fraud
                                   and negligent misrepresentation. RBB seeks
                                   specific performance of RBB's right to
                                   convert its preferred shares and compensatory
                                   damages up to $22.5 million, equal to the
                                   purchase price of the preferred stock, plus
                                   interest. RBB also seeks punitive damages and
                                   attorney's fees.


                                      F-22
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   In April 1998, the Company moved to dismiss
                                   the federal securities laws claims against
                                   it, as well as the common law claims for
                                   conversion, fraud and negligent
                                   misrepresentation. Following the filing of
                                   the motion to dismiss, RBB withdrew its claim
                                   against the Company arising under Section 12
                                   of the Securities Act. The court granted the
                                   Company's motion to dismiss the remaining
                                   securities law claim against it under Section
                                   10 of the Exchange Act and limited the scope
                                   of the fraud and negligent misrepresentation
                                   claim. The court denied the motion with
                                   respect to the conversion claim.

                                   In January 1999, the Company answered the
                                   complaint by denying all the allegations of
                                   wrongdoing and by asserting various
                                   affirmative defenses to RBB's claims.
                                   Document and deposition discovery has been
                                   substantially completed. No trial date has
                                   been scheduled. The parties have reached a
                                   conditional settlement of this action.
                                   Accordingly, by order dated February 17,
                                   2000, the court dismissed the case without
                                   prejudice with the right to reopen the case
                                   on or before August 17, 2000, if the
                                   settlement is not consummated.

                                   In addition to the above matters and in the
                                   normal course of conducting its business, the
                                   Company is involved in various other legal
                                   matters. The Company is not a party to any
                                   legal matter which management believes could
                                   result in a judgment that would have a
                                   material adverse affect on the Company's
                                   financial position, liquidity or results of
                                   operations.

9. Related Party
   Transactions                    Certain of the Company's legal services are
                                   rendered by a law firm in which a member of
                                   the Company's Board of Directors is a
                                   partner. All of these services have been
                                   accounted for as an arm's-length transaction.
                                   Legal expenses for these services of
                                   approximately $410,000, $370,000 and $565,000
                                   were incurred during 1999, 1998 and 1997,
                                   respectively.


                                      F-23
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

10. Income Taxes                   The Company accounts for income taxes on the
                                   liability method. Under this method, deferred
                                   tax assets and liabilities are determined
                                   based on differences between financial
                                   reporting and tax bases of assets and
                                   liabilities. Measurement of deferred income
                                   tax is based on enacted tax rates and laws
                                   that will be in effect when the differences
                                   are expected to reverse, with the measurement
                                   of deferred income tax assets being reduced
                                   by available tax benefits not expected to be
                                   realized.

                                   The components of deferred tax assets and
                                   liabilities consisted of the following:
<TABLE>
<CAPTION>

                                                                                            1999           1998
                                  --------------------------------------------------------------------------------
<S>                                                                                 <C>            <C>
                                  Deferred tax assets:
                                  Warranty reserve                                  $     56,000   $     56,000
                                  Allowance for doubtful accounts                        308,000        256,000
                                  Net operating loss carryforward                      2,439,000      3,013,000
                                  Inventory                                               46,000         37,000
                                  Accrued expenses                                        38,000              -
                                  Valuation allowance                                 (2,689,000)    (3,243,000)
                                  --------------------------------------------------------------------------------

                                  Deferred tax assets                                    198,000        119,000
                                  --------------------------------------------------------------------------------

                                  Deferred tax liabilities:
                                  Depreciation and amortization                         (198,000)      (119,000)
                                  --------------------------------------------------------------------------------

                                  Net deferred tax assets                           $          -   $          -
                                  --------------------------------------------------------------------------------
</TABLE>

                                   The Company's valuation allowance decreased
                                   by $554,000 and increased by $2,627,000
                                   during 1999 and 1998, respectively. The
                                   Company has recorded a valuation allowance to
                                   state its deferred tax assets at estimated
                                   net realizable value due to the uncertainty
                                   related to realization of these assets
                                   through future taxable income.


                                      F-24
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   The amounts shown for income taxes in the
                                   statements of operations differ from amounts
                                   that would be derived from computing income
                                   taxes at federal statutory rates. The
                                   following is a reconciliation of those
                                   differences:

<TABLE>
<CAPTION>
                                                                                1999        1998        1997
                                  --------------------------------------------------------------------------------
<S>                                                                               <C>        <C>         <C>
                                  Tax at federal statutory rate                   34%        (34)%       (34)%
                                  Net operating loss carryforward and
                                    valuation allowance                          (34)         34          28
                                  --------------------------------------------------------------------------------

                                                                                   -%          - %        (6)%
                                  --------------------------------------------------------------------------------
</TABLE>

                                   Due to the net operating loss, the Company
                                   was able to file a claim for federal income
                                   tax refunds from 1995 and 1996 aggregating
                                   $358,055, which was received in January 1999.
                                   The unused amount of operating loss
                                   carryforwards will expire as follows:

                                  ---------------------------------------------
                                  2012                            $   1,218,915
                                  2018                                5,232,130
                                  ---------------------------------------------
                                                                  $   6,451,045
                                  ---------------------------------------------


                                      F-25
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

11. Foreign Operations             During 1999, 1998 and 1997, the Company
                                   operated in two geographic areas: the United
                                   States and Hong Kong. Following is a summary
                                   of information by area:

<TABLE>
<CAPTION>
                                                                        1999           1998            1997
                                  --------------------------------------------------------------------------------
<S>                                                                <C>            <C>             <C>
                                  Net sales to unaffiliated
                                    customers:
                                      United States                $  35,509,205  $  41,010,380   $  31,341,200
                                      Hong Kong                        2,920,328      2,312,842       1,117,162
                                  --------------------------------------------------------------------------------

                                                                   $  38,429,533  $  43,323,222   $  32,458,362
                                  --------------------------------------------------------------------------------

                                  Income (loss) from operations:
                                      United States                $   2,911,471  $  (3,558,690)  $  (3,466,468)
                                      Hong Kong                          182,421         53,896        (506,223)
                                  --------------------------------------------------------------------------------

                                                                       3,093,892     (3,504,794)     (3,972,691)

                                  Interest expense                    (1,523,596)    (1,889,446)     (1,334,733)
                                  Other income (expense), net            (12,646)       105,207          64,644
                                  --------------------------------------------------------------------------------

                                  Income (loss) before income
                                    tax benefit                    $   1,557,650  $  (5,289,033)  $  (5,242,780)
                                  --------------------------------------------------------------------------------

                                  Identifiable assets:
                                    United States                  $  37,641,607  $  39,732,702   $  49,399,014
                                    Hong Kong                          1,857,708        881,142       1,396,696
                                  --------------------------------------------------------------------------------

                                                                   $  39,499,315  $  40,613,844   $  50,795,710
                                  --------------------------------------------------------------------------------
</TABLE>

                                   Loss before income taxes represents net
                                   sales, less operating expenses for each
                                   geographic area and other income and expenses
                                   of a general corporate nature. Identifiable
                                   assets are those that are identifiable with
                                   operations in each geographic area. The
                                   majority of sales made by the foreign
                                   subsidiary in 1999, 1998 and 1997 were made
                                   to a significant customer described in
                                   Note 8.


                                      F-26
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                   Export sales for the years ended December 31,
                                   1999, 1998 and 1997 are summarized by the
                                   following geographic regions:

<TABLE>
<CAPTION>
                                                                                    1999         1998         1997
                                  -----------------------------------------------------------------------------------
                                                                                          (In thousands)

<S>                                                                               <C>          <C>          <C>
                                  Canada                                          $2,930       $1,630       $2,000
                                  Europe                                           3,060        2,850        5,000
                                  Pacific Rim and Latin America                      270        2,100        2,500
                                  Australia                                          920            -            -
                                  -----------------------------------------------------------------------------------

                                                                                  $7,180       $6,580       $9,500
                                  -----------------------------------------------------------------------------------
</TABLE>


12.     Significant                Accounts Receivable
        Fourth Quarter
        Adjustments                During the fourth quarter of 1999, 1998 and
                                   1997, the Company issued credits and
                                   markdowns to several customers which resulted
                                   in a charge to operations aggregating
                                   approximately $1,400,000, $1,100,000 and
                                   $2,100,000, respectively. These credits and
                                   markdowns were issued by the Company at the
                                   request of certain significant customers to
                                   allow them to increase the rate of sale of
                                   the Company's products and to allow these
                                   customers to adjust their mix of the
                                   Company's products at the retail level.

                                   Inventory

                                   During the fourth quarter of 1998, the
                                   Company made adjustments to its inventory
                                   balance, resulting in a charge to operations
                                   of approximately $4.2 million. These
                                   adjustments were the result of difficulties
                                   encountered by the Company in implementing
                                   the inventory system installed in late 1997
                                   and integrating this system with their
                                   financial reporting and accounting system. Of
                                   the $4.2 million, approximately $2.0 million
                                   relates to the following fiscal quarters:


                                      F-27
<PAGE>
                                                         Serengeti Eyewear, Inc.
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

                                  ----------------------------------------------
                                  First quarter 1998               $   1,200,000
                                  Second quarter 1998                    800,000
                                  ----------------------------------------------

                                  Total                            $   2,000,000
                                  ----------------------------------------------



                                      F-28
<PAGE>

Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders
Serengeti Eyewear, Inc.

The audits referred to in our report dated March 17, 2000 relating to the
consolidated financial statements of Serengeti Eyewear, Inc., which is
contained in Item 8of this Form 10-K, included the audit of the financial
statement schedule listed in the accompanying index. This financial schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement schedule based upon our audits.


In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.


                                                  BDO Seidman, LLP

Orlando, Florida
March 17, 2000





                                      F-29

<PAGE>


<TABLE>
<CAPTION>

                                                                                   Schedule II




                                       Balance at          Charged         Write-Offs
                                      Beginning of        to Costs        Retirements        Balance at
                                          Year          and Expenses    and Collections     End of Year
<S>                                     <C>               <C>              <C>             <C>
---------------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1997:

 Allowance for doubtful
 accounts receivable                    $102,000          $160,787         $  24,342          $ 238,445

Year ended December 31, 1998:

 Allowance for doubtful
 accounts receivable                    $238,445          $513,991                --          $ 752,436

Year ended December 31, 1999:

 Allowance for doubtful
 accounts receivable                    $752,436          $562,879         $ 496,661          $ 818,654



</TABLE>



                                       18
<PAGE>




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

                   None.








                                       19



<PAGE>


                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

           The names and ages of the directors and executive officers of the
Company are set forth below.


NAME                        AGE          POSITIONS

Stephen Nevitt              52           President, Treasurer and Director

Milton Nevitt               78           Vice President, Secretary and Director

Michael J. Guccione         52           Vice President and Director

Lucia Almquist              46           Vice President-Corporate Development

Douglas Hinton              44           Vice President - Premium Sales

William McMahon             47           Chief Financial Officer and Director

David B. Newman             45           Director

William Keener              54           Director

Dr. Jeffrey Sack            38           Director

John Kopinski               47           Director


           Stephen Nevitt became the President of the Company in 1993. Prior to
such time, he served as Vice President and a director of the Company since its
founding in 1976 by his father, Milton Nevitt. As Vice President, he was
involved in all phases of operations including management and sales. As
President he has been given primary responsibility for management and sales and
has also been responsible for design and development of the Company's products
as well as product procurement.

           Milton Nevitt founded the Company in 1976 and served as its President
and a director until 1993, and has since served the Company as a Vice President
and a director. As President, Mr. Nevitt was primarily responsible for sales and
administration. Mr. Nevitt's career in the sunglass industry began in 1950 as a
manufacturer's representative for Rayex Corporation, a major domestic supplier
of popular priced sunglasses. Mr. Nevitt worked in that capacity until Rayex
ceased its business operations in 1976. Mr. Nevitt founded the Company shortly
thereafter.

           Michael J. Guccione became a Vice President and director of the
Company in December 1994. Since joining the Company in 1992, Mr. Guccione's
primary responsibilities have been marketing and product development of the
Company's H2Optix and other product lines. Mr. Guccione became employed by
Wal-Mart in 1976 and started and headed its fine jewelry division. Mr. Guccione
was also in charge of the development of the sunglass business at Wal-Mart and
traveled extensively throughout the Far East and Pacific Rim for the purpose of
developing resources for the purchase of sunglasses. After leaving Wal-Mart in
1990, Mr. Guccione ran a management consulting firm until joining the Company.

           Lucia Almquist became Vice President-Corporate Development of the
Company in January 1997. Ms. Almquist was a director of the Company from May
1997 to May 1998. From 1991 through 1997, Ms. Almquist served as Vice President
- Licensing and Merchandising for the Bon Jour Group, Ltd., a designer and
manufacturer of various fashion products.

           Douglas Hinton became Vice-President-Premium Sales of the Company in
1998. From 1997 until joining the Company, Mr. Hinton was National Sales Manager


                                       20
<PAGE>


for Bucci, Inc. From 1996 to 1997, Mr. Hinton was Senior Vice President/Sales
and Marketing for Optic Video USA. From 1990 to 1996, Mr. Hinton was Senior Vice
President/Optical & Golf Divisions for Bolle USA.

           William McMahon became the Chief Financial Officer of the Company and
a director in June 1998. From 1992 until joining the Company, Mr. McMahon was
Director of Financial Reporting and Corporate Development for Uniroyal
Technology Corporation, a plastics manufacturing company. From 1984 until 1992,
Mr. McMahon was a vice president of Buccino and Associates, Inc. a national
turnaround consulting firm.

           David B. Newman, a director of the Company since December 1994, has
for over the last ten years been a partner of Cooperman Levitt Winikoff Lester &
Newman, P.C., which has acted as outside counsel to the Company since 1987.

           William Keener, a director of the Company since July 1996, has served
as Senior Vice President and Regional Credit Officer for Regions Bank in Aiken,
South Carolina since September 1998. Prior to this, he served as an Executive
Vice President and Chief Credit Officer of SouthTrust Bank of the Suncoast, a
commercial bank, since May 1994 to September 1997. From March 1990 to May 1994,
Mr. Keener served as a Senior Vice President and Group President for Commercial
Lending and, thereafter, as First Vice-President for Commercial Real Estate for
Sunbank, N.A., a commercial bank.

           Jeffrey B. Sack, M.D. became a director of the Company in 1998. He is
board certified in internal medicine and cardiovascular disease and currently
practices in Sarasota, Florida. Dr. Sack has a degree in economics and over
twenty years of business experience in the management of small growth companies.

           John Kopinski became a director of the Company in 1998. He has been
serving as President of Rikart South, Inc. in Bradenton, Florida for the past
ten years. Rikart South, Inc. is a leader in the manufacturing of polyethylene
bags.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

             Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who beneficially own more
than 10% of the common stock to file reports of ownership and changes in
ownership of such common stock with the Securities and Exchange Commission, and
to file copies of such reports with the Company. Based solely on its review of
the copies of such forms received by it, or written representations from certain
reporting persons that no such forms were required for those persons, the
Company believes that during the fiscal year ended December 31, 1999, all filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.

ITEM 11.   EXECUTIVE COMPENSATION.

           The following table summarizes the aggregate compensation for
services rendered in all capacities to the Company paid in 1997, 1998 and 1999
to the Chief Executive Officer and the Company's four most highly paid executive
officers whose compensation exceeded $100,000 (collectively, the "Named
Executives"):

                                       21

<PAGE>



SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                      ANNUAL
                                                   COMPENSATION                        OTHER ANNUAL        ALL OTHER
     NAME AND PRINCIPAL POSITION        YEAR      SALARY ($) (1)         BONUS        COMPENSATION (3)    COMPENSATION (4)
     ---------------------------        ----     ---------------         ------       ----------------    ----------------
<S>                                     <C>        <C>                <C>              <C>
Stephen Nevitt                          1999       $ 250,000      $        -           $  52,487           $        -
   President (CEO)                      1998       $ 232,761      $        -           $  49,909           $        -
                                        1997       $ 167,363      $        -           $  11,590           $        -

Lucia Almquist                          1999       $ 175,000      $        -           $   6,000           $        -
   Vice President                       1998       $ 156,173      $        -           $   8,505           $        -
                                        1997       $ 141,346      $        -           $   2,980           $        -

Ed Borix (2)                            1999       $ 140,000      $        -           $   6,000           $        -
   Vice President                       1998       $ 137,404      $        -           $   8,505           $        -
                                        1997       $ 103,366      $        -           $   1,650           $        -

Michael Burke (2)                       1999       $  86,154      $        -           $   2,769           $  100,000
   Vice President                       1998       $ 166,173      $        -           $  10,276           $        -
                                        1997       $ 156,923      $        -           $   1,777           $        -

Doug Hinton                             1999       $ 129,423      $        -           $  16,377           $    4,108
   Vice President                       1998               -      $        -           $       -           $        -
                                        1997               -      $        -           $       -           $        -

William McMahon                         1999       $ 139,769      $   10,000           $   6,000           $        0
   Chief Financial Officer              1998       $  67,500      $        -           $   4,308           $        -
                                        1997       $       -      $        -           $       -           $        -
</TABLE>


----------
(1)  Messrs. Burke and Borix and Ms.Almquist received their respective salaries
     for the year ended December 31, 1998 at their respective 1997 salary rates.

(2)  Messrs. Borix and Burke left the employ of the Company on February 21, 2000
     and July 9, 1999, respectively.

(3)  Includes automobile allowances and vacation paid in lieu of time taken.

(4)  Michael Burke received severance of $100,000 in 1999.

OPTION GRANTS IN 1999

           No options were granted to any of the Company's directors or
executive officers during the year ended December 31, 1999.

OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES

           No options were exercised by any of the Company's directors or
executive officers during the year ended December 31, 1999. Set forth below is
certain information with respect to exercisable and non-exercisable options to
acquire shares of the Company's common stock held by the Company's Named
Executives:

                                       22


<PAGE>



<TABLE>
<CAPTION>
                               Number of Securities                   Value of Unexercised
                           Underlying Unexercised Options             In-the-Money Options
                                at Fiscal Year End                     at Fiscal Year End*
                           ------------------------------               -------------------

NAME                       EXERCISABLE      UNEXERCISABLE           EXERCISABLE      UNEXERCISABLE
----                       -----------      -------------           -----------      -------------

<S>                          <C>             <C>                      <C>             <C>
Stephen Nevitt.....          681,974         68,026                    --                --

</TABLE>


----------


*    The last sales price of the common stock was approximately $0.34 per share
     on December 31, 1999, which is lower than the exercise price of these
     options.

EMPLOYMENT AGREEMENTS

           In January 1997, the Company entered into a three year employment
agreement with Lucia Almquist, whereby Ms. Almquist became employed as Vice
President-Corporate Development of the Company, which provides for a current
annual base salary of $172,500. Ms. Almquist agreed to receive her 1997 annual
salary of $144,193 for the year ended December 31, 1998, notwithstanding her
current annual base salary pursuant to her employment agreement. The Company
will not accrue any portion of Ms Almquist's unpaid salary.

           In June 1998, the Company entered into a three-year employment
agreement with William McMahon, whereby Mr. McMahon became employed as Chief
Financial Officer of the Company, which provided for an annual base salary of
$130,000 in 1998. The agreement was amended in November 1999, providing for a
base salary of $150,000 in the second half of 1999 and $170,000 during 2000. The
agreement also provides that if the Company achieves revenue and EBITDA
projections as determined in consultation with the optionee, Mr. McMahon will
receive 45,000 stock options for the year ended December 31, 2000.

           In January 1999, the Company entered into a three-year employment
agreement with Douglas Hinton whereby Mr. Hinton became employed as Vice
President - Premium Sales of the Company which provides for a current annual
base salary of $130,000 and annual increases each January 1 by an amount equal
to the increase, if any, in the Consumer Price Index.

           Each of the employment agreements contains a covenant by the employee
not to compete with the Company until the expiration of a one year period after
the expiration or termination of employment.

DIRECTORS' COMPENSATION

           William Keener, a non-employee director of the Company, receives a
fee of $500 per month for his service as a director. No other non-employee
director receives any compensation for his services as such.


                                       23


<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

           The following table sets forth certain information as of March 15,
2000 with respect to the beneficial ownership of the outstanding shares of
common stock by (i) any shareholder known by the Company to beneficially own
more than 5% of such outstanding shares, (ii) each of the Company's directors
and Named Executives, and (iii) the directors and executive officers of the
Company as a group. Except as otherwise indicated, the address of each
beneficial owner of five percent or more of such common stock is the same as the
Company.
<TABLE>
<CAPTION>
                                                                      Amount                   Ownership
      Name and Address of Beneficial Owner                   Beneficial Ownership (1)        Percentage(1)
      ------------------------------------                   ------------------------        -------------

<S>                                                               <C>                        <C>
Nevitt Family Trust(2).......................                       506,103                    21.2%
Milton Nevitt................................                       278,781                    11.7%
Stephen Nevitt...............................                     1,442,435 (3)(4)             45.9%
Michael J. Guccione..........................                       200,830 (5)                 8.2%
David B. Newman..............................                       556,103 (3)(6)             23.0%
   c/o Cooperman  Levitt
   Winikoff Lester & Newman, P.C.
   800 Third Avenue
   New York, New York 10022
William Keener...............................                         2,000                       *
Dr. Jeffrey Sack.............................                         3,500                       *
John Kopinski................................                             0                      --
Douglas Hinton...............................                             0                      --
Lucia Almquist...............................                             0                      --
William McMahon..............................                             0                      --
John R. Clarke...............................                       200,000 (7)                 7.7%
   1725 Lazy River Lane
   Dunwoody, Georgia  30350
RBB Bank Aktiengesellschaft..................                       750,000 (8)                23.9% (9)
   Burging 16
   8010 Graz, Austria
Jerome B. Fox................................                       122,700 (9)                 5.1%
   7821 Wilton Crescent Circle
   University Park, Florida 34201
Directors and executive officers as a
   group (10 persons)........................                     1,977,546 (10)               62.1%
</TABLE>

----------------
* Less than 1%.

(1)  Computation based on the term beneficial ownership as used in the
     regulations of the Securities and Exchange Commission which, for purposes
     of the computation of ownership by the named holder, deems outstanding
     shares of common stock issuable upon exercise of options and convertible
     securities exercisable or convertible on the date, and within sixty days
     following the date, of determination of beneficial ownership. As of March
     15, 2000, 2,384,000 shares of common stock were actually issued and
     outstanding.

(2)  The indicated trust (the "Trust") was created pursuant to a Trust
     Agreement, dated as of September 11, 1992, between Milton Nevitt, as
     grantor, and Stephen Nevitt and David B. Newman, as trustees. Such trustees
     have the sole power to vote the shares held by the Trust. The children of
     Milton Nevitt, including Stephen Nevitt, are the beneficiaries under the
     Trust.

(3)  Includes 506,103 shares held by the Trust, for which such beneficial owner
     acts as trustee.

(4)  Includes 681,974 shares issuable upon exercise of options granted pursuant
     to the Plan. Stephen Nevitt, pursuant to exercise of a power granted in the
     subscription agreement covering the issuance of the Company's Preferred
     Shares (as described in Footnote (8) below), has the power to direct the
     voting of shares of Common Stock issuable upon conversion thereof for the
     election of a majority of the directors of the Company through October
     2000. The table does not include shares of Common Stock issuable upon
     conversion of such Preferred Shares.

(5)  Includes 68,026 shares issuable upon exercise of options granted pursuant
     to the Plan.

                                       24


<PAGE>


(6)  Includes 50,000 shares issuable upon exercise of options granted pursuant
     to the Plan.

(7)  Represents shares issuable upon exercise of the Series D Warrant which
     entitles the holder to purchase such number of shares at an exercise price
     of $5.50 per share at any time prior to September 30, 2001.

(8)  Represents 750,000 shares issuable upon exercise of warrants granted to
     RBB. RBB is also the registered owner of 7,500 shares of Series A 6.5%
     Convertible Preferred Stock ("Series A Stock"), 7,500 shares of Series B 6%
     Convertible Preferred Stock ("Series B Stock") and 7,500 shares of Series C
     6% Convertible Preferred Stock ("Series C Stock"; collectively with the
     Series A Stock and the Series B Stock, the "Preferred Shares") of the
     Company. Such Preferred Shares are presently convertible into shares of
     Common Stock of the Company at a price determined by dividing the stated
     value of the series ($7,500,000 for each) by a price equal to the lower of
     (i) $5.50 in the case of the Series A Stock, $6.75 in the case of the
     Series B Stock and $8.25 in the case of the Series C Stock, and (ii) 80% of
     the average market price (as defined) for the ten consecutive trading days
     ending three days prior to the notice of conversion. As of March 15, 2000,
     the average market price for the ten previous consecutive trading days was
     approximately $0.34 per share. The computation of beneficial ownership in
     the table excludes shares of Common Stock issuable upon conversion of the
     Preferred Shares. See "Legal Proceedings" and "Certain Relationships and
     Related Transactions".

(9)  Such information was set forth in a Schedule 13D, dated October 24, 1997.
     Such Schedule 13D also stated that the spouse of Mr. Fox owns an additional
     600 shares of Common Stock and that Mr. Fox disclaims beneficial ownership
     with respect to those shares.

(10) Includes 800,000 shares issuable upon exercise of options granted pursuant
     to the Plan and 506,103 shares of the Company's Common Stock held by the
     Trust, with Stephen Nevitt and David B. Newman as trustees.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

           On October 4, 1996, the Company issued 7,500 shares of its Series A
6.5% Convertible Preferred Stock, $.001 par value (the "Series A Shares"), to
RBB, a banking institution whose principal offices are located in Austria, in a
private offshore offering pursuant to Regulation S under the Securities Act of
1933, as amended (the "Securities Act"). RBB purchased the Series A Shares for a
purchase price equal to their aggregate stated value of $7.5 million as set
forth in a Regulation S Offshore Subscription Agreement dated September 29,
1996, which also contemplated the purchase of the Series B Shares and Series C
Shares referred to below. The purpose of such investment was to fund, in part,
the Acquisition.

           Pursuant to an Agreement of Purchase and Sale, dated as of October
29, 1996, between the Company and Corning, the Company agreed to purchase the
Serengeti assets for a purchase price of $27.5 million, which was effected on
February 13, 1997. RBB purchased, concurrently with the closing of the
Acquisition, 7,500 shares of the Company's Series B 6% Convertible Preferred
Stock, $.001 par value (the "Series B Shares"), and 7,500 shares of the
Company's Series C 6% Convertible Preferred Stock, $.001 par value (the "Series
C Shares"; together with the Series A Shares and the Series B Shares, the
"Preferred Shares"), for a purchase price equal to their aggregate stated value
of $15.0 million. The proceeds to the Company from the sale of the Preferred
Shares were approximately $20.9 million (net of commissions and the estimated
expenses of such sale). The Company applied such net proceeds to the Acquisition
purchase price. The Company financed the remainder of such purchase price and
related costs and expenses with borrowings under its then credit facility.

                                       25


<PAGE>


           Concurrent with the issuance of the Series A Shares, the Company also
issued to RBB a Series A Warrant of the Company (the "Series A Warrant") to
purchase up to an aggregate of 150,000 shares of Common Stock at an exercise
price of $5.5625 per share. The Series A Warrant is exercisable at any time
commencing January 1, 1999 and on or prior to December 31, 2002. In addition,
the Company issued to RBB, concurrent with the issuance of the Series B Shares
and the Series C Shares, a Series B Warrant of the Company (the "Series B
Warrant") and a Series C Warrant of the Company (the "Series C Warrant"), each
of which entitles RBB to purchase up to an aggregate of 300,000 shares of Common
Stock at a per share exercise price of (i) $7.50 with respect to the Series B
Warrant and (ii) $10.00 with respect to the Series C Warrant. Each of the Series
B Warrant and the Series C Warrant is exercisable at any time commencing January
1, 1999 and on or prior to December 31, 2002.

           The Company has also issued, as part of the commission payable to a
third party in connection with the sale of the Series A Shares, a Series D
Warrant of the Company (the "Series D Warrant") to purchase up to an aggregate
of 200,000 shares of Common Stock at an exercise price of $5.50 per share. The
Series D Warrant is immediately exercisable and expires on or prior to September
30, 2001.

           Certain of the Company's legal services are rendered by a law firm in
which David Newman, a member of the Company's Board of Directors, is a partner.
All of these services have been accounted for as an arm's-length transaction.
Legal expenses for these services of approximately $410,000, $370,000 and
$565,000 were incurred during 1999, 1998 and 1997, respectively.

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

           (a) Financial Statements.

               The Company's financial statements as set forth in the Index to
               Conslolidated Financial Statements under part II, Item 8 of this
               Form 10-K are hereby incorporated by reference.



           (b) Exhibits.
               --------

           EXHIBIT
           NUMBER                           EXHIBIT DESCRIPTION
           -------                          -------------------

           3.1(i)               Restated Certificate of Incorporation of the
                                  Company(1)

           3.1(ii)              Certificate of Amendment of the Certificate of
                                Incorporation of the Company relating to the
                                designation of the Preferred Shares(2)

           3.2(i)               Amended and Restated By-laws of the Company
                                ("By-laws")(1)

           3.2(ii)              Amendment No. 1 to By-laws(1)

           10.1                 Agreement dated December 30, 1994 between the
                                Company and Joseph Feldman(1)

           10.2                 Agreement dated January 17, 1994 between the
                                Company and Michael J. Guccione, Inc.(1)

           10.3                 Agreement dated December 7, 1994 between the
                                Company and Michael J. Guccione(1)

           10.4(i)              Revolving Line of Credit and Term Loan
                                Agreement dated as of February 13, 1997 by and
                                among the Company, SunTrust Bank, Central
                                Florida, National Association, individually and
                                as agent, and Creditanstalt-Bankverein(3)

           10.4(ii)             Second Amendment dated September 16, 1999 to
                                Revolving Line of Credit and Term Loan Agreement
                                dated as of February 13, 1997 (8)

                                       26


<PAGE>


           10.5                 Revolving Line of Credit and Term Loan
                                Agreement dated as of September 17, 1999 by and
                                among the Company and The CIT Group/Business
                                Credit, Inc.(8)

           10.6                 Lease Agreement dated March 3, 1993 between DRI
                                II Partnership and the Company(1)

           10.7                 1995 Stock Option Plan of the Company(1)


           10.9*                Employment Agreement between the Company and
                                Lucia Almquist(7)

           10.10(i)*            Employment Agreement between the Company and
                                William McMahon (9)

           10.10(ii)*           First Amendment to Employment Agreement between
                                the Company and William McMahon (9)

           10.11*               Employment Agreement between the Company and
                                Douglas Hinton (9)

           10.12                Form of Consulting Agreement between the
                                Company and Argent Securities, Inc.(1)

           10.13                Agreement of Purchase and Sale, dated as of
                                October 29, 1996, between the Company and
                                Corning(4)

           10.14                Subscription Agreement, dated September 26,
                                1996, between the Company and RBB(4)

           10.15                Lens Blank Supply Agreement, dated as of
                                February 13, 1997, between the Company and
                                Corning (confidential treatment has been
                                granted with respect to certain information
                                contained in this Agreement)(2)

           10.16                License Agreement, dated as of February 13,
                                1997, between the Company and Corning(2)

           16.1                 Letter on change in certifying accountant(3)

           16.2                 Letter on change in certifying accountant(5)

           21                   Subsidiaries of the Company(6)

           27                   Financial Data Schedule


----------
*Management contract or compensatory plan or arrangement


(1)  Filed as an Exhibit to the Company's Registration Statement on Form SB-2,
     Registration No. 33-89752-A, under the Securities Act of 1933 and
     incorporated herein by reference.

(2)  Filed as an Exhibit to the Company's Annual Report on Form 10-KSB for the
     year ended December 31, 1996.

(3)  Filed as an Exhibit to the Company's Current Report on Form 8-K, dated
     February 11, 1997.

                                       27


<PAGE>





(4)  Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB for
     the quarterly period ended September 30, 1996.

(5)  Filed as an Exhibit to the Company's Current Report on Form 8-K, dated
     December 10, 1997.

(6)  Filed as an Exhibit to the Company's Annual Report on Form 10-KSB for the
     year ended December 31, 1995.

(7)  Filed as an Exhibit to the Company's Annual Report on Form 10-KSB for the
     year ended December 31, 1997.

(8)  Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarterly period ended September 30, 1999.

(9)  Filed  herein.

     (c)  The Company did not file any report on Form 8-K during the fourth
quarter of the year ended December 31, 1999.






                                       28

<PAGE>


                                   SIGNATURES

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

                                             SERENGETI EYEWEAR, INC.


Date: March 30, 2000                           By  /s/ Stephen Nevitt
                                                --------------------------------
                                                Stephen Nevitt
                                                President

Pursuant to the Exchange Act, 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>
      SIGNATURES                     TITLE                                      DATE

<S>                                  <C>                                 <C>
/s/ Stephen Nevitt                   President, Treasurer and            March 30, 2000
                                     Director
------------------------------       (principal executive officer)
    Stephen Nevitt


/s/ Milton Nevitt                    Vice President, Secretary           March 30, 2000
------------------------------       and Director
    Milton Nevitt


/s/ Michael J. Guccione              Vice President and                  March 30, 2000
------------------------------       Director
    Michael J. Guccione


/s/ William L. McMahon               Chief Financial Officer             March 30, 2000
------------------------------       (principal financial and
    William L. McMahon               accounting officer) and Director


/s/ David B. Newman                  Director                            March 30, 2000
------------------------------
    David B. Newman


/s/ William Keener                   Director                            March 30, 2000
------------------------------
    William Keener


/s/ Jeffrey Sach                     Director                            March 30, 2000
------------------------------
    Dr. Jeffrey Sach


/s/ John Kopinski                    Director                            March 30, 2000
------------------------------
    John Kopinski
</TABLE>



                                       29