<PAGE>

                      U.S. Securities and Exchange Commission   
                               Washington, D.C.  20549
                                           
                                     FORM 10-QSB
                                           
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)OF THE SECURITIES EXCHANGE ACT
      OF 1934
                                           
      For the quarterly period ended:          March 31, 1997

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  
                                           
      For the transition period from:       to:          

           Commission file number:                 0-26022  

                        Serengeti Eyewear, Inc. 
------------------------------------------------------------------------------
      (Exact Name of Small Business Issuer as specified in its charter)

             New York                           65-0665659      
------------------------------------     ----------------------
  (State or other jurisdiction                (IRS Employer
of incorporation or organization)        Identification  Number)
                   
                          8125 25th Court East
                         Sarasota, Florida 34243
                         -----------------------
                 (Address of principal executive offices)
                                           
                            (941) 359-3599
                            --------------
              (Issuer's telephone number, including area code)
                                           
    Check whether the Issuer: (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the Registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days. 
YES: X NO: 

              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY              
                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to 
be filed by Section 12, 13, or 15(d) of the Exchange Act after the 
distribution of securities under a plan confirmed by a court.  YES:    NO:

                   APPLICABLE ONLY TO CORPORATE ISSUERS

    State the number of shares outstanding of each of the issuer's classes of 
common equity, as of the latest practicable date: 2,384,000 shares of Common 
Stock, $.001 par value, as of May 1, 1997.

    Transitional Small Business Disclosure Format. YES:   NO: X
 

<PAGE>
                  Serengeti Eyewear, Inc.
                          Index
                                           
                                           
 

         Part I    
Item 1.  Financial Statements     
    
         Consolidated Balance Sheet as of March 31, 1997                     3
    
         Consolidated Statements of Operations and for the Three Months 
         Ended March 31, 1997 and 1996                                       5
    
         Consolidated Statements of Cash Flows for the Three Months Ended 
         March 31, 1997 and 1996                                             6
    
         Notes to Consolidated Financial Statements                          7
    
Item 2.  Management's Discussion and Analysis of Financial Condition 
         and Results of Operations                                          13
    

         Part II   
Item 1.  Legal Proceedings                                                  18
    
Item 4.  Submission of Matters to a Vote of Security Holders                18
    
Item 6.  Exhibits and Reports on Form 8-K                                   19
    

         Signatures                                                         20


                                      2
<PAGE>

                                    PART I
                           FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS. 

                                           
                          Serengeti Eyewear, Inc,
                       (Formerly Solar-Mates, Inc.)
                        Consolidated Balance Sheet
                              March 31, 1997
                                (Unaudited)
                                           
                                           
                                  ASSETS
                                           

Current Assets:

     Cash                                               $    428,397
     Accounts receivable - trade                           7,570,992
     Other receivables                                        66,405
     Inventories                                          13,419,401
     Prepaid expenses                                      1,371,002
                                                        ------------
      Total current assets                                22,856,197

Fixed assets - net of accumulated depreciation             1,822,955

Other assets:
     Goodwill                                             10,494,273
     Deferred acquisition costs                            1,415,862
     Prepaid expenses - non-current                          136,618
     Accounts receivable - stockholders                       45,215
     Patents and trademarks - net                          4,875,000
     Other assets                                             43,746
                                                        ------------
                                                         $41,689,866
                                                        ------------
                                                        ------------

See accompanying notes to financial statements.

                                  3

<PAGE>

                        Serengeti Eyewear, Inc.
                     (Formerly Solar-Mates, Inc.)
                      Consolidated Balance Sheet
                           March 31, 1997
                            (Unaudited)
                            (Continued)
                                           
                                           
                LIABILITIES AND STOCKHOLDERS' EQUITY
                                           

Current liabilities:

   Note payable - bank                                   $ 1,375,000
   Note payable - stockholder                                127,494
   Current portion of long-term debt                          42,880
   Accounts payable - related party                           75,406
   Income taxes payable                                      249,081
   Deposits                                                   80,534
   Accounts payable                                        3,082,069
   Accrued expenses                                        1 145,888
                                                        ------------
       Total current liabilities                           6,178,352
                                                        ------------
                                                        ------------


Long-term debt                                               101,718
Note payable - bank                                        8,625,000

Commitments and contingencies                                 

Stockholders' equity         
Preferred stock, $.001 par value, 1,000,000
 shares authorized 22,500 shares issued 
 and outstanding                                          20,925,000
Common stock, $.001 par value, 10,000,000 
 shares authorized, 2,384,000 shares       
 issued and outstanding                                        2,384
Additional paid in capital                                 4,279,276
Retained earnings                                          1,578,136
                                                        ------------
       Total stockholders' equity                         26,784,796
                                                        ------------
                                                         $41,689,866
                                                        ------------
                                                        ------------

See accompanying notes to financial statements.

                                  4           
<PAGE>

                        Serengeti Eyewear, Inc.
                     (Formerly Solar-Mates, Inc.)
                Consolidated Statements of Operations
          For The Three Months Ended March 31, 1997 and 1996
                             (Unaudited)
                                            
                                              1997          1996    
                                          ------------  ------------
    
Net sales                                 $  6,734,727  $  3,123,909
    
Cost of goods sold                           3,594,639     2,052,379
                                          ------------  ------------
    
Gross profit                                 3,140,088     1,071,530
                                          ------------  ------------
    
Operating expenses:
  Depreciation and amortization                329,995        22,698
  Selling expenses                             995,683       365,921
  General and administrative,
    expenses                                 1,001,679       292,659
                                          ------------  ------------
Total operating expenses                     2,327,357       681,278
                                          ------------  ------------
Income from operations                         812,731       390,252
                                          ------------  ------------
Other expenses (income):
  Other income                                 (39,443)         -   
    Interest                                   206,632       112,260
                                          ------------  ------------
                                               167,189       112,260
                                          ------------  ------------
Income before income taxes                     645,542       277,992
    
Provision for income taxes 
  Current                                     (238,851)     (102,800)
                                          ------------  ------------
Net income                                $    406,691    $  175,192
                                          ------------  ------------
                                          ------------  ------------
Per share information:
  Net income per share:
    Primary                               $        .14    $      .07
                                          ------------  ------------
                                          ------------  ------------
    Fully diluted                         $        .05    $      .07
                                          ------------  ------------
                                          ------------  ------------

See accompanying notes to financial statements.

                                   5
<PAGE> 
      
                         Serengeti Eyewear, Inc.
                      (Formerly Solar-Mates, Inc.)
                 Consolidated Statements of Cash Flows 
           For The Three Months Ended March 31, 1997 and 1996
                                           


                                                     1997        1996
                                                 -----------  ----------

Cash flows from operating activities             $ 5,179,813  $  687,120
                                                 -----------  ----------
Cash flows from investing activities:    
  Acquisition of business interest               (26,621,898)       -    
  Acquisitions of patents and trademarks               -          (3,500)
  Purchase of fixed assets                          (300,457)    (28,966)
                                                 -----------  ----------
    Net cash provided by (used in)
    investing activities                         (26,922,355)    (32,466)
                                                 -----------  ----------
Cash flows from financing activities:
  Increase in deferred acquisition costs            (861,220)       -   
  Proceeds from the sale of preferred stock       13,950,000        -   
  S corporation distribution                            -        (92,635)
  Proceeds from bank borrowings                   10,000,000        -   
  Repayment of bank loans                         (1,500,000)       -   
  Principal payments on notes payable - other        (50,568)     (7,689)
                                                 -----------  ----------
    Net cash provided by (used in) 
    Financing activities                          21,538,212    (100,324)
                                                 -----------  ----------
Net increase (decrease) in cash                     (204,330)    554,330
Beginning - cash balance                             632,737     479,256
                                                 -----------  ----------
Ending - cash balance                             $  428,397  $1,033,586
                                                 -----------  ----------
                                                 -----------  ----------

See accompanying notes to financial statements.
 
                                  6
<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

Note A. Basis of presentation

The accompanying unaudited financial statements have been prepared in 
accordance with generally accepted accounting principles for interim 
financial information and Item 310(b) of Regulation SB. They do not include 
all of the information and footnotes required by generally accepted 
accounting principles for complete financial statements.  In the opinion of 
management, all adjustments (consisting only of normal recurring adjustments) 
considered necessary for a fair presentation have been included.  The results 
of operations for the periods presented are not necessarily indicative of the 
results to be expected for the full year. For further information, refer to 
the financial statements of the Company as of December 31, 1996 and for the 
two years then ended, including notes thereto included in the Company's Form 
10-KSB.

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

Inventories

Inventories, consisting principally of finished goods and work in process, 
are valued at the lower of cost or market on a first in - first out basis.

The cost of sales for the period ended March 31, 1997 has been determined 
using the gross profit method.

Income taxes

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 (34%) primarily as a result of state income taxes net of the 
federal benefit (3%).

Earnings per share

Primary earnings per share amounts are computed based upon the weighted 
average number of shares actually outstanding plus the shares that would be 
outstanding assuming exercise of dilutive stock options. The number of shares 
that would be issued from the 

                                     7
<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

exercise of stock options has been reduced by the number of shares that could 
have been purchased from the proceeds at the average market price of the 
Company's common stock. The number of shares used in the computations was 
2,806,123. The fully diluted earnings per share amount is based on an 
increased number of shares that would be outstanding assuming conversion of 
the convertible preferred stock. The number of shares used in the computation 
was 8,132,827.

Note B. Note payable - bank

During October, 1994 the Company arranged a line of credit with a bank 
whereby the Company was able to borrow up to $1,000,000. During October, 1995 
the Company replaced this line of credit with a $1,500,000 line with the same 
bank. The line was renewed again in September 1996 with a due date of 
September 1997. The line was secured by substantially all of the Company's 
assets. The Company was entitled to advances of up to 70% of its accounts 
receivable less than 61 days old and 25% of its inventory cost. The line had 
an interest rate of prime plus 1.5%. The balance of $1,500,000 at December 
31, 1996 was repaid on February 13, 1997 (see below).

Concurrently with the closing of the acquisition described below, the Company 
entered into a Revolving Line of Credit and Term Loan Agreement with SunTrust 
Bank. Under the agreement the Company has the ability to borrow up to $17.5 
million in the form of (a) a three year revolving credit facility in the 
amount of $7.5 million and (b) a five year amortizing term loan facility in 
the amount of $10 million. 

The Company borrowed the entire $10 million under the term loan to finance a 
portion of the acquisition and to repay the $1.5 million of outstanding 
indebtedness under the line of credit described above. The Company is able to 
borrow up to 85% of eligible accounts receivable less than 91 days past due 
and 50% of eligible inventory under the revolving credit facility for working 
capital. The credit facility is secured by a first priority lien on all of 
the assets of the Company and its subsidiaries. Pursuant to the credit 
facility interest is payable at the LIBOR rate or Base Rate plus applicable 
margins based upon the Company's earnings. In addition, the Company is 
subject to certain financial covenants.

                                    8
<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

Note C. Stockholders' equity

During December, 1994 the Company adopted a stock option plan to be 
administered by the Board of Directors. The plan provides for the granting of 
options for specified individuals to purchase common stock at an exercise 
price to be determined by the Board of Directors. No option may be granted 
after January, 2005 and no option may be granted for a period of greater than 
10 years. The total number of shares with respect to which options may be 
granted under the plan is 1,500,000. A total of 1,410,000 options have been 
granted under the plan at March 31, 1997 at prices ranging from $2.94 to 
$4.72.

During August, 1995 the Company completed a public offering of units. 
Pursuant to the offering the Company issued 1,174,000 units consisting of 
1,104,000 shares of its $.001 par value common stock and 1,174,000 redeemable 
common stock purchase warrants for cash aggregating $3,865,131 net of 
offering expenses of $1,654,869. Included in the offering were 70,000 common 
shares sold by a shareholder. Each warrant entitles the holder to purchase 
one share of the Company's $.001 par value common stock at a price of $6.50 
per share for a period of four years from September 29, 1996. These warrants 
may be redeemed by the Company at any time after August 12, 1996 at a price 
of $.10 per warrant if the average bid price for the Company's common stock 
exceeds $8.75 per share for the 20 consecutive trading days ending on the 
third day prior to the date of the notice of redemption.

In addition the Company sold an option to purchase an aggregate of 96,000 
units, with each unit consisting of one share of common stock and one 
warrant, for cash aggregating $960 to the underwriter. The options are 
exercisable for a period of 4 years from August 11, 1996 at an exercise price 
of $7.50 per unit. The terms of the warrants are the same as those issued 
pursuant to the public offering except that they are not redeemable by the 
Company. 

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 

                                  9

<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

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 E, 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. At March 31, 1997 dividends 
aggregating 351 shares of preferred stock were due and payable to RBB.

Concurrently with the issuance of the Series A preferred shares, the Company 
also issued RBB a Series A warrant to purchase up to 150,000 shares of the 
Company's $.001 par value common stock at an exercise price of $5.5625 per 
share at any time commencing January 1, 1999 through December 31, 2002. In 
addition, concurrently with the issuance of the Series B and C preferred 
shares, the Company issued to RBB a Series B and a Series C warrant each of 
which entitles RBB to purchase up to an aggregate of 300,000 shares of the 
Company's $.001 par value common stock at a per share exercise price of $7.50 
with respect to the Series B warrant and $10 with respect to the Series C 
warrant at any time commencing January 1, 1999 through December 31, 2002. The 
Company also issued as part of the commission in connection with the Series A 
preferred shares a Series D warrant to purchase up to an aggregate of 200,000 
shares of $.001 par value common stock at an exercise price of $5.50 per 
share through September 30, 2001. 

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 

                                  10
<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

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 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.

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

Note D. Commitments and contingencies

Concentration of credit risk/major customers:

During the three months ended March 31, 1997 and 1996, the Company made net 
sales to a significant customer of approximately $2,444,000 and $2,474,000 or 
36% and 79% of its total sales. 

Approximately $990,000 (13%) and $2,745,000 (36%) of the gross accounts 
receivable are due from two significant customers at March 31, 1997 and are 
unsecured. 

Litigation:

On March 19, 1997, Argent Securities, Inc. ("Argent"), the underwriter of the 
Company's initial public offering, filed an action against the Company in the 
United States District Court for the Northern District of Georgia, Atlanta 
Division.  The civil complaint alleges, 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, and misstatements in the 
Company's Proxy Statement relating to the issuance of the Preferred Shares.  
The complaint seeks, among other things, monetary relief as well as a 
preliminary injunction enjoining the Company from permitting the conversion 
of any Preferred Shares, and requiring that the Company secure a seat on its 
Board of Directors for an Argent representative.  The Company has reviewed 
Argent's claims and believes them to be meritless.  

                                     11
<PAGE>

                           Solar-Mates, Inc.
             Notes to Consolidated Financial Statements
                             (Unaudited)

The Company intends to vigorously defend the action and is presently 
considering counterclaims.

Commitments:

During January and February, 1997 the Company entered into employment 
agreements with certain officers and sales personnel. These agreements call 
for aggregate salaries of $822,000 in 1997, $936,000 in 1998, $1,029,000 in 
1999 and $69,000 in 2000 and auto allowances aggregating $36,000 per year. 
Also included in the contracts is certain bonus compensation and options to 
purchase up to 485,000 shares of common stock at a price of $2.94 per share 
through August, 1999 based on sales and profit targets set by the Company.

Note E. Acquisition of business interest

On February 13, 1997 the Company changed its name to Serengeti Eyewear, Inc. 
in conjunction with the acquisition of certain assets of the Serengeti 
Eyewear division of Corning Incorporated used in the design, manufacture and 
distribution of Serengeti brand sunglasses. 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 and the borrowings under the credit facility 
described above. 

                                     12
<PAGE>

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

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

                          FORWARD-LOOKING STATEMENTS

    THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN INVOLVE RISKS AND 
UNCERTAINTIES, AND ARE SUBJECT TO CHANGE BASED ON VARIOUS IMPORTANT FACTORS 
INCLUDING, BUT NOT LIMITED TO, SUCCESSFUL INTEGRATION OF THE NEWLY ACQUIRED 
SERENGETI BUSINESS, THE COMPANY'S CONTINUED ABILITY TO DEVELOP AND INTRODUCE 
INNOVATIVE PRODUCTS, CHANGING CONSUMER PREFERENCES, ACTIONS BY COMPETITORS, 
MANUFACTURING CAPACITY CONSTRAINTS AND THE AVAILABILITY OF RAW MATERIALS, THE 
EFFECT OF ECONOMIC CONDITIONS, DEPENDENCE ON CERTAIN CUSTOMERS AND OTHER 
RISKS IDENTIFIED FROM TIME TO TIME IN THE COMPANY'S SECURITIES AND EXCHANGE 
COMMISSION FILINGS.  GIVEN THESE UNCERTAINTIES, PROSPECTIVE INVESTORS ARE 
CAUTIONED NOT PLACE UNDUE RELIANCE ON SUCH STATEMENTS.  THE COMPANY ALSO 
UNDERTAKES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.

General

Prior to the 1980's, the Company manufactured its own sunglasses for sale to 
the wholesale trade. As manufacturers in the Far East began playing greater 
roles in the sunglass industry in the late 1970's, the Company began 
importing its products and in 1980 discontinued its manufacturing operations 
completely. Since 1978, the Company has focused primarily on the sale of 
sunglasses and sunglass products to mass merchandisers such as large retail 
chain stores. In the late 1980's, the Company began developing programs for 
mass merchants designed to enhance its sale of sunglasses. The Company 
continually adds new products and develops new marketing programs for its 
product lines. In late 1992, the Company introduced its line of Solar*X 
sunglasses, which feature a ground and polished lens, comparable to optical 
quality sunglasses, at popular prices. This product was the predominant line 
of the Company from 1994 until the Company acquired Serengeti in February 
1997, and has contributed significantly to the sales growth of the Company. 
The Company expects its Solar*X line of sunglasses to remain its predominant 
line in the non-premium segment of its business.

                                    13
<PAGE>

In the latter part of 1995, with the proceeds of its initial public offering 
completed in August 1995, the Company launched its H2Optix line, a premium 
sunglass line. The Company sought to emphasize sales of H2optix and thereby 
reduce its dependence upon mass merchandisers. The Company experienced only 
limited sales of its H2Optix sunglasses in 1995 as it commenced its marketing 
efforts to establish H2Optix brand name recognition and broaden the 
distribution network for the H2optix product line. In 1996, the Company 
experienced $1.2 million in H2Optix sales, representing approximately 9% of 
the Company's total sales.

On February 13, 1997, the Company acquired the Serengeti assets. Corning's 
Serengeti Eyewear division entered the premium sunglass market in 1985 with 
the introduction of Drivers sunglasses, which remain the core of the 
Serengeti product line. Over the years, Serengeti sunglasses have developed a 
brand identity which provides appeal to consumers in the premium market. The 
Serengeti brand image is based upon superior lens technology, quality and 
performance. The Serengeti Drivers line of sunglasses, which accounted for 
approximately 91% of plano sales of the Serengeti Eyewear division in 1996, 
is principally responsible for this image. The Company intends to increase 
Serengeti's market share by introducing new Serengeti signature styles that 
exploit the Serengeti brand image. In addition, the Company intends to 
benefit its H2Optix line by including it within the Serengeti line, thereby 
tapping into Serengeti's well-established distribution networks. 

Historically, the Serengeti line has suffered delays in new product launches, 
resulting in depressed orders for those products. In response, Corning's 
Serengeti Eyewear division focused on timing the product development cycle to 
ensure that new products are introduced in October, which is the optimal time 
for selling to the largest Serengeti customers for the spring and summer 
seasons.

Results of Operations

Comparison of the three months ended March 31, 1997 to the three months ended 
March 31, 1996:

Net sales increased 116%, from approximately $3.1 million in 1996 to 
approximately $6.7 million in 1997, primarily as a result of the sales of 
Serengeti products subsequent to the acquisition of the Serengeti Business on 
February 13, 1997 ($3.1 million) and increased sales of the Company's 
non-premium products to a wide range of new customers. The Company has 
continued to broaden the distribution network for its non-premium products 
and, as a 

                                     14
<PAGE>

result, in 1997, Wal-Mart accounted for approximately 36% of the Company's 
total sales, compared to approximately 79% in 1996.

Gross profit increased as a percentage of sales, from approximately 34% in 
1996 to approximately 47% in 1997, primarily as a result of product mix. 
Approximately 46% of the 1997 sales ($3.1 million) consisted of premium 
Serengeti products which carry gross margins significantly higher than the 
Company's non-premium products which made up substantially all of the 
Company's sales in 1996.

Depreciation and amortization increased by approximately $.3 million as a 
result of the amortization of the intangible assets related to the Serengeti 
acquisition. Selling expenses increased by approximately $.6 million, or 
150%, from approximately $.4 million in 1996 to approximately $1.0 million in 
1997. This increase resulted primarily from increased costs associated with 
marketing and selling expenses related to the Company's premium products in 
1997.

General and administrative expenses increased 233%, from approximately $.3 
million in 1996 to approximately $1.0 million in 1997 primarily as a result 
of an increase in executive and administrative salaries, office expenses, and 
costs incurred in connection with the development of the premium line of 
sunglasses. The Company anticipates that its general and administrative cost 
will continue to increase with the growth of its business, and particularly 
in light of the acquisition of Serengeti.

Interest expense increased by approximately $.1 million or 84% as a result of 
the interest expense related to the Company's term loan which was used to 
finance the Serengeti acquisition.

Liquidity and Capital Resources

Prior to the Acquisition of the Serengeti business, the Company financed its 
operations primarily through the proceeds of an initial public offering 
completed in August 1995, its cash flow and a revolving line of credit in the 
amount of $1,500,000 from SunBank/Gulf Coast (the "Old Credit Facility"). As 
of December 31, 1996, the Company had borrowed the maximum amount available 
under the Old Credit Facility. Concurrently with the closing of the 
Acquisition, the Company entered into a Revolving Line of Credit and Term 
Loan Agreement with SunTrust Bank, Central Florida, National Association, 
individually and as agent, and Creditanstalt-Bankverein pursuant to which the 
Company refinanced the Old Credit Facility with a new senior credit facility 
(the 

                                     15
<PAGE>

"New Credit Facility") which provides the Company with the ability to borrow 
up to $17.5 million in the form of (i) a three year revolving credit facility 
in the amount of $7.5 million (the "Revolver Facility") and (ii) a five year 
amortizing term loan facility in the amount of $10.0 million (the "Term 
Facility").

The Company borrowed the entire $10.0 million of availability under the Term 
Facility to finance a portion of the Acquisition purchase price, to repay in 
full the outstanding principal indebtedness and accrued interest 
(approximately $1.5 million) under the Old Credit Facility and to pay related 
fees and expenses. The Company financed the remaining portion of the 
Acquisition purchase price with the net proceeds of the sale of Preferred 
Shares.

The Revolver Facility has a $2 million sublimit for the issuance of stand-by 
letters of credit. Pursuant to the Revolver Facility, the Company is able to 
borrow up to 85% of eligible accounts receivable and up to 50% of the value 
of the Company's eligible inventory. Undrawn amounts under the Revolver 
Facility are available for the working capital and general corporate needs of 
the Company.

Interest under the New Credit Facility is payable at the LIBOR rate or the 
"Base Rate." In addition to applicable margins, the Company pays a floating 
percentage tied to the Company's ratio of funded debt to "EBITDA"; ranging, 
in the case of LIBOR rate loans, from 1.50% based upon a ratio of 1.5:1 or 
less to 2.75% based upon a ratio of greater than 3:1; and ranging, in the 
case of Base Rate loans, from .50% based upon a ratio of 2.25:1 or less to 
1.25% based upon a ratio of greater than 3:1. Pursuant to the New Credit 
Facility, the Company is required to enter into exchange agreements and/or 
other appropriate interest rate hedging transactions for the purpose of 
interest rate protection covering at least 75% of the borrowings under the 
Term Facility through February 13, 2000.

The New Credit Facility requires the Company to maintain certain financial 
ratios. Pursuant to the New Credit Facility, the Company is required to apply 
75% of its "Excess Cash Flow" for the preceding completed fiscal year, the 
net proceeds from any sale of assets other than in the ordinary course of 
business and the net proceeds of equity issuances and permitted debt 
issuances to prepay outstanding amounts under the Term Facility. The New 
Credit Facility also contains a number of customary covenants, including, 
among others, limitations on liens, affiliate transactions, mergers, 
acquisitions, asset sales, dividends and 

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<PAGE>

advances. The New Credit Facility is secured by a first priority lien on all 
of the assets of the Company and its subsidiaries.

The Company's liquidity improved from working capital of approximately $9.7 
million at December 31, 1996 to working capital of approximately $16.7 
million at March 31, 1997. This resulted primarily from increases of 
approximately $1.5 million in receivables resulting from the Company's 
increased sales volume in 1997, and approximately $9.4 million in inventory 
related to the Serengeti acquisition, and a decrease of approximately $5.0 
million in short term investments, combined with an increase of approximately 
$1.0 million in accounts payable.

The Company incurred approximately $300,000 in capital expenditures during 
the three months ended March 31, 1997 primarily relating to the expansion of 
its facility and the acquisition of furniture and fixtures. The Company 
anticipates that it will incur additional capital expenditures of 
approximately $200,000 related to the expansion of its warehouse facility as 
a result of the Acquisition.

The Company anticipates, based on its currently proposed plans, that the net 
cash available from operations combined with the New Credit Facility will be 
sufficient to satisfy its anticipated cash requirements for the 1997 fiscal 
year.

Foreign Currency Exchange

The Company presently transacts business internationally in United States 
currency. To date, the Company has not been affected significantly by 
currency exchange fluctuations.  However, future currency fluctuations in 
countries in which the Company does business could adversely affect the 
Company by resulting in pricing that is not competitive with prices 
denominated in local currencies.

Seasonality

The Company anticipates that the seasonality of its premium sunglass business 
generally will follow the selling activity of its largest customer for such 
products, 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 of its largest customer for such 

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<PAGE>

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.

                                   PART II
                             OTHER INFORMATION
                                           

ITEM 1.        LEGAL PROCEEDINGS.

    On March 19, 1997, Argent Securities, Inc. ("Argent"), the underwriter of 
the Company's initial public offering, filed an action against the Company in 
the United States District Court for the Northern District of Georgia, 
Atlanta Division.  The civil complaint alleges, 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, and misstatements in 
the Company's Proxy Statement relating to the issuance of the Preferred 
Shares.  The complaint seeks, among other things, monetary relief as well as 
a preliminary injunction enjoining the Company from permitting the conversion 
of any Preferred Shares, and requiring that the Company secure a seat on its 
Board of Directors for an Argent representative.  The Company has reviewed 
Argent's claims  and believes them to be meritless. The Company intends to 
vigorously defend the action and is presently considering counterclaims.

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

    (a)  On February 6, 1997, the Company held a special meeting of 
shareholders to vote on the issuance of Preferred Shares and shares of Common 
Stock underlying Preferred Stock and Warrants, to amend the Company's 
Certificate of Incorporation to change the Company's name to Serengeti 
Eyewear, Inc., and to amend the Company's 1995 Stock Option Plan the "Plan") 
to increase the number of shares available for issuance thereunder from 
450,000 to 1,500,000.

    (b)  The shareholders approved the issuance of the Preferred Shares and
         shares of Common Stock underlying Preferred Stock and Warrants. 
         The result of the vote was as follows:  1,518,584 shares of
         Common Stock voted for, and 15,150 shares of Common Stock voted
         against.

    (c)  The shareholders approved the amendment to the Certificate of
         Incorporation.  The result of the vote was as follows: 2,310,720
         shares of Common Stock voted for, and 3,350 shares of Common
         Stock voted against.

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<PAGE>

    (d)  The shareholders approved the amendment to the Plan.  The result of
         the vote was as follows: 1,478,026 shares of Common Stock voted
         for, and 46,680 shares of Common Stock voted against. 
         
      
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

    (a)  Exhibits.

         Exhibit 27  Financial Data Schedule

    (e)  Reports on Form 8-K. 

On February 19, 1997 the Company filed a form 8-K describing the closing of 
the acquisition of the Serengeti Eyewear business of Corning Incorporated, 
its name change from Solar-Mates, Inc. to Serengeti Eyewear, Inc., the change 
in its certifying accountant, and its new term loan and line of credit 
agreement.

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<PAGE>


                                SIGNATURES


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

                             Serengeti Eyewear, Inc.
                             (Registrant)

Dated:  May 14, 1997         By: /s/ Stephen Nevitt
      ---------------------     ----------------------------------
                                Stephen Nevitt
                                President
                                (Principal Executive Officer)




Dated:  May 14, 1997         By: /s/ Neil R. Winter
      ---------------------     ----------------------------------
                                Neil R. Winter
                                Chief Financial Officer

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