SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

            Annual Report Under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the Fiscal Year Ended September 30, 1998
                           Commission File No. 0-3425

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

         New Jersey                                        22-1440857
-------------------------------                  -------------------------------
(State or other jurisdiction of                        (I.R.S. Employer or
incorporation or organization)                         Identification No.)

301 Commerce Road, Linden, New Jersey                     07036
--------------------------------------------------------------------------------
(Address of principal executive offices)                (Zip Code)

Issuer's telephone number, including area
code: (908) 862-3600

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

                                  Common Stock
--------------------------------------------------------------------------------
                                (Title of Class)

      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 |_|

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure fill be
contained, to the best or registrant's knowledge, in definitive proxy or
information statements incorpored by reference in part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

      State issuer's revenues for its most recent fiscal year.

                                   $3,761,631

      As of January 8, 1999, the aggregate market value of the voting stock held
by non-affiliates of the registrant was approximately $ 958,850 as computed by
reference to the average bid and ask prices of the stock.

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the most recent practicable date.

            Date                          Number of Shares Outstanding
            ----                          ----------------------------

      October 21, 1998                       910,031 Common Shares
<PAGE>

                                     PART I

Item 1. Business

General Development of Business

      Platronics, Inc. (the "Company") is a New Jersey corporation incorporated
on September 28, 1946.

      As of September 30, 1998, there was no material change in the nature of
the business done by the Company during the prior year.

Bankruptcy

      On November 24, 1993, the Company filed a voluntary petition for
reorganization pursuant to Chapter 11 of the United States Bankruptcy Court for
the District of New Jersey. A bankruptcy plan of reorganization was approved by
the Court on June 25, 1996.

Narrative Description of Business

      Products and Services: The Company is primarily engaged in the business of
precision electroplating of electrical and electronic components and
semiconductor products used in computers, data processing and communication
equipment, and microwave transmission equipment. In general, electroplating is
the process of plating with an adherent continuous coating by electrodeposition,
or by the creation of deposits through chemical changes produced by passing an
electric current through a non-metallic electric conductor called an
electrolyte. (The term "electroplating" is hereinafter sometimes referred to as
a "plating"). The Company specializes in, among other things, plating with
precious metals. It employs unique plating and other
<PAGE>

techniques designed and developed by the Company. Such techniques are not,
however, patented. The Company's customers impose various requirements with
respect to plating done by the Company, ranging from requiring a coating of only
a small portion of each micro-miniature item to requiring a coating consisting
of precious and base metals to achieve properties which are not characteristic
of the base metal. The plating material includes previous metals such as gold,
silver, rhodium and palladium, and base metals such as copper, nickel and tin.

      Components plated by the Company include semiconductor products such as
diodes, transistors, and rectifiers; telephone and telegraphic components; metal
parts and electronic parts for computers and data processing equipment,
components for microwave transmission and Defense Department related weaponry
components.

      The Company services its customers not only by its barrel and rack plating
operations, but also by continuous automatic reel to reel plating procedures.

      Sources and Availability of Raw Materials: The most important raw
materials used by the Company are gold and silver.

      Although the Company presently purchases its particular metal requirements
from three principal suppliers, it need not rely on any one supplier because
there are many suppliers of such materials available. The Company does not
anticipate any problems with respect to the availability of any raw materials
required.

      Seasonality: The Company customarily experiences a late summer slowdown
averaging 30%, primarily because many customers


                                      -2-
<PAGE>

have annual plant shutdowns at that time.

      Working Capital Items: The Company sometimes must buy the precious metals
it uses for plating materials in significant quantities in order to have them
readily available and to receive a discount on the related purchase prices. Such
purchases require substantial periodic outlays of working capital.

      Also related to working capital is the general practice in the
electroplating industry with respect to completed job orders that are rejected
by the customers. In most cases, if the grounds for rejection are reasonable (a)
if the job has been billed, the customer's account will be credited, (b) the job
will be redone, and (c) the customer will be rebilled. The Company's practices
with respect to such matters are consistent with the foregoing.

      Another item affecting working capital is the Company's practice of
billing its customers for work performed on a "net 30 days" basis. The Company
believes that such practice is consistent with the practices employed in the
industry.

      Customers: The Company had one (1) customer which accounted for 30% or
more of the Company's gross revenues during the fiscal year ended September 30,
1998 and two (2) other customers which each accounted for 10% or more of the
Company's gross revenues during such fiscal year.

      Backlog Orders: There was no material backlog of unshipped orders believed
to be firm as of September 30, 1998 and September 30, 1997, respectively.

      Employees: The Company has thirty-six (36) full time


                                      -3-
<PAGE>

employees and no part time employees.

      Competitive Conditions: The Company competes with a number of other
independent electroplating shops for business with customers located primarily
in the eastern part of the United States. Such customers may, from time to time,
include large industrial companies. Such companies may have in-house
electroplating shops, and the Company competes for overflow work from such
shops.

      The Company believes that a significant competitive condition affecting
the domestic electroplating industry and thus the Company relates to reduced
levels of domestic electroplating business. Such reduced levels are based in
part on large U.S. industrial companies, which previously utilized domestic
manufacturing facilities to produce items which then would be electroplated
domestically, switching to foreign production and electroplating of such items,
based in large part on the lower cost of foreign labor. Such companies have
either acquired foreign facilities or have contracts with foreign firms. Reduced
levels of domestic business are also due to the failure of business
opportunities relating to plating jobs in connection with personal computers to
materialize at least on a domestic level. As a result of the foregoing,
independent electroplating shops are competing more intensely for fewer
customers and fewer job orders and are also competing with new foreign
electroplating competitors commencing operations in Korea, Japan, Taiwan, Mexico
and Europe, in response to new telephone and electronic equipment manufacturing
operations in those countries.


                                      -4-
<PAGE>

      As in prior years, price and service are the principal areas of
competition between the Company and its competitors. In particular, heightened
competition for customers has increased competition in the area of prices. As a
result, the Company has experienced a decrease in sales over the last two years.

      Marketing: The Company advertises its electroplating services in trade
magazines, brochures, catalogues, and newsletters and by direct mail.

      Research and Development and Year 2000 Issues: The Company does not expend
any material amounts for research and development, nor does it expend any
material amounts in connection with the year 2000.

Item 2. Properties

      The Company leases its administrative offices and principal production
facilities which consist of a 42,000 square feet plant at 301 Commerce Road,
Linden, New Jersey. The lease expires on June 30, 2003. The net annual base rent
is currently $170,000 exclusive of supplemental rent for real estate taxes and
insurance to be paid by the Company under the terms of the lease.

      The Company believes that its facility at 301 Commerce Road is adequate
for the operations of the Company.

Item 3. Pending Legal Proceedings

      None.


                                      -5-
<PAGE>

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

      The Company did not submit any matter to a vote of the owners of the
Companies securities during the fourth quarter of the Company's fiscal year
ended September 30, 1998.

                                     PART II

Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters

      (a)   Trading of Common Stock

            The principal market on which the Company's common stock is being
traded is the over-the-counter market. Due to the relatively small and declining
number of shareholders of the Company's stock, trading is infrequent and the
public market for the Company's stock is limited. The following is bid
information for the fiscal year ended September 30, 1998.

                         High Ask                  Low Bid
                         --------                  -------
1st quarter               4 3/8                       2
2nd quarter               3                           2
3rd quarter               4                         1 3/4
4th quarter               4 1/4                       3
Source: Internet

The above quotations may reflect inter-dealer transactions, without retail
markup, mark-down or commission and may no represent actual transactions.

      (b)   As of September 30, 1998, there were approximately 527


                                      -6-
<PAGE>

shareholders of the Company's common stock.

      (c) No cash dividends have been paid by the Company during the past two
years with respect to its common stock.

Item 6. Management's Discussion and Analysis or Plan of Operation

      This Item 6 includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical fact
included in this Item 6 are forward-looking statements. Although the Company
believes that the expectations and assumptions reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations and
assumptions will prove to have been correct.

      Management is encouraged by numerous developments that have occurred and
are occurring in the Company's business activities.

      Orders received have increased and the number of new quotations for new
product requirements for major established customers has also increased.

      The Company is considering the adoption of a new marketing plan to further
attract additional customers as well. If adopted, it is management's expectation
that this new planned marketing program will generate increased sales in 1999.
The Company has manufactured a new automated reel-to-reel gold-plating machine
which will increase the output of its gold-plated telephony and computer
connection products by as much as forty (40%) percent. This new modern automatic
machine is expected to be on line prior to March 1, 1999.


                                      -7-
<PAGE>

      Management believes that its sales in 1998 were lower than 1997 and lower
than expected largely because of the pressure placed upon the electronics market
by competition from abroad, mainly Asia and due to the decrease in the cost of
gold. In addition, the lower pricing available to the Company's customers and
prospects, because of competition and the fluctuation in the value of the U.S.
dollar, have also contributed to lower than desired and expected sales.

      In spite of previous favorable projections for new business, a decline in
the aerospace, computer and electronics field was felt in the industry because
of the so-called Asian problem. This instability has caused a temporary
curtailment of shipments to several major governmental and electronic industrial
contracts. This temporary condition has resulted in the Company's declining
sales figures from 1997 to 1998. The reduction was as follows:

            Sales in 1997     $3,999,668
            Sales in 1998     $3,761,631

      However, it is noteworthy that despite the declining sales, as a result of
economies put in place by Management, the Company's net income increased. The
Company's net loss in 1997 was $196,784.

      The company's profit in 1998 was $8,905.00. The most significant element
of uncertainty known to the Company is the fluctuation in market prices of
precious metals, particularly gold, which are employed as raw materials in the
Company's business operations. This factor especially affects the Company's
liquidity due to its need to keep sizable inventories of


                                      -8-
<PAGE>

gold. To counteract its exposure to gold price fluctuations, the Company has
continued its policy of reducing its gold inventory to the lowest practical
level.

      The Company's only significant internal source of liquidity is its
accounts receivable. The collectability period of receivables, which generally
averaged 45-60 days during the fiscal year ended September 30, 1998 and was
generally consistent with the past operating history of the Company.
Nevertheless, in 1998, the Company experienced collectability periods in some
cases of as long as 90 days.

      In the fiscal year ended September 30, 1998 the Company made a capital
expenditure of $172,022 for an automatic reel to reel plating machine.

      The Company does not anticipate any major expenditures in connection with
the year 2000.

      The Company is in need of additional capital and hopes to obtain same from
a private offering of its securities. If it is successful in such an offering,
it intends to initiate an acquisition strategy to acquire small plating
companies. Management believes that other small plating companies can be
successfully added to the Company's operations and provide significant economies
of scale. While there is no assurance that such acquisitions will actually be
completed and if completed, that such acquisitions will contribute to the
Company's profits. Management believes that this fragmented acquisition or
roll-up strategy will allow the Company to increase its sales and profits


                                      -9-
<PAGE>

and competitive position.

            In summary, Management believes that the economic programs it has
put into place have returned and will continue to return the Company to
profitability. Management further believes that by a diligent and aggressive
strategic marketing program and a fragmented industry acquisition program, it
will obtain a greater share of the marketplace and enhance profitability. As a
small company, however, there is no assurance that the Company will be able to
achieve its goals and objectives.

Item 7. Financial Statements and Supplementary Data

      See Financial Statements attached hereto. The Index of Financial
Statements is located at page 16 of this filing.

Item 8. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

      None.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

      The names of the directors, together with certain information regarding
them, are as follows:


                                      -10-
<PAGE>

                                    Year
                                    First
Name of                             Became         Term           Position
Directors (A)           Age         Director      Expires         With Company
-------------           ---         --------      -------         ------------
Ronald Knigge           54          1997        April, 1998(B)    Chairman,
                                                                  President
                                                                  and Chief
                                                                  Executive
                                                                  Officer

John R. Palumbo,        53          1979        April, 1998(B)    Vice
Jr.                                                               President

Ralph J. Pocaro         73          1997        April, 1998(B)    Director

Alan VanNess            59          1997        April, 1998(B)    Director

(A) There is not currently in force or effect any arrangement pursuant to the
terms of which any nominee has agreed to cause his votes to be cast for the
election of any other nominee or director.

(B) Since the Company did not conduct an Annual Meeting of Shareholders in 1998
to elect directors, all of the directors are serving in a holdover capacity
until the next Annual Meeting of Shareholders.

      The Company's Chairman, President and Chief Executive Officer is Ronald
Knigge. Mr. Knigge is fifty-four (54) years of age, and first became an
executive at the Company in July, 1997, with over thirty (30) years experience
in the operation of electroplating business. Mr. Knigge is also the President of
Ideal Plating & Polishing Co., Inc., as well as the President of the
Independence Plating Corp., both successful metal finishing concerns.
Independence Plating Corp. is primarily involved in the defense


                                      -11-
<PAGE>

industry and Ideal Plating & Polishing Co., Inc., is a volume barrel plating
facility supplying electronic-grade, tin, tin/lead, and related coatings for the
electronic industry.

      Both Ideal Plating and Polishing Co., Inc. and Independence Plating Corp.
are unrelated to the Company and the Company and its shareholders have no
interest whatsoever therein.

      Other key executives include:

      Mr. John Palumbo, Jr., Vice President and Director. Mr. Palumbo has been
employed by the Company for over the past 25 years, including many years as its
President. He has primary responsibility for new production activities, and new
equipment management.

      Mrs. MaryLou Palumbo, Secretary/Treasurer. Mrs. Palumbo has been an
employee for over 16 years, involved with the company's growth through financial
planning, increased business potential, and related responsibilities.

      The other directors of the Company are:

      Mr. Ralph Pocaro, Director. Mr. Pocaro has a degree in engineering and is
also an attorney at law of the State of New Jersey, where he has practiced law
for over 39 years. Mr. Pocaro has an appreciation for the technical and legal
aspects of the Company's business.

      Mr. Alan Van Ness, Director, is the Secretary/Treasurer of the ALFA
Machine Co., Fairfield, NJ. Mr. Van Ness runs a machine shop catering to
electronics, medical and aerospace industries. Mr. Van Ness is expert in the
fabrication of metal parts for the some of


                                      -12-
<PAGE>

the same customers as the Company.

Item 10. Executive Compensation

                           Summary Compensation Table

                  Annual Compensation          Long Term Comp.
                  -------------------          ---------------
                         Other  Rest.        Opt/    LTIP  Other
Name      Salary  Bonus  Comp.  StockAwds.   SARS    Pay.  Comp.
----      ------  -----  -----  ----------   ----    ----  -----
Ronald
Knigge,
CEO         0       0      0       0        303,344   0     0

      Mr. Ronald Knigge, the Chairman of the Board, President and Chief
Executive Officer, was not paid any direct compensation during the fiscal year
ended September 30, 1998. Mr. Knigge was granted stock options to purchase
303,344 shares of the Common Stock of the Company at five ($.05) cents per
share.

      None of the other executive officers of the Company was paid remuneration
in excess of $100,000.

      No compensation was paid to the members of the Company's Board of
Directors for serving as Board members.

      Option/SAR Grants in Last Fiscal Year

        Number of     % of Total
        Securities    Options
        Underlying    Granted to    Exercise    Expiration
Name    Options       Employees     Price          Date
----    -------       ---------     -----          ----
Ronald   303,344         100%        $.05      July 1, 2007
Knigge


                                      -13-
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

      The Company has one class of capital stock, Common Stock, $.10 Par Value,
of which, as of September 30, 1997, 910,031 shares were outstanding. Each
outstanding share of Common Stock is entitled to one vote.

      (a) Security Ownership of Certain Beneficial Owners

      The following chart sets forth, as of December 29, 1998, information
concerning the security ownership of those beneficial owners who are known by
the Company to own beneficially more than 5% of the Common Stock of the Company:

                   Name and                       Amount and
                  Address of                      Nature of         Percent
Title of          Beneficial                      Beneficial        of
 Class               Owner                        Ownership         Class
--------          ----------                      ----------        -------
 Common      Sheridan Printing Co., Inc.         615,000 shares      67.6%
             702 Hamilton Mall
             Allentown, Pa. 18101

      (b) Security Ownership of Management

      As of September 30, 1998, there was no security ownership by the
management of the Company.

Item 12. Certain Relationships and Related Transactions

      As of September 30, 1998, the Company was indebted to Sheridan Printing
Co., Inc., its principal shareholder, in the amount of $295,472, indebtedness
bears interest at the rate of eight (8%)


                                      -14-
<PAGE>

percent per annum and is due on December 31, 1999.

      During the year ended September 30, 1998, the Company purchased $50,856 of
machinery from Independence Plating Corp., a company owned by Ronald Knigge, the
Chairman of the Board, President and Chief Executive Officer of the Company and
there was $31,810 of sales between the Company, on one hand, and Independence
Plating Corp. and Ideal Plating & Polishing Co., Inc., both owned by Ronald
Knigge, on the other hand.

      In addition, Independence Plating Corp. and Ideal Plating & Polishing Co.,
Inc. performed $114,829 of subcontract plating for the Company.

                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K

            (a)1.  Financial Statements:                    Page
                   --------------------                     ----
            Report of Independent Certified
            Public Accountants ...........................   F-2

            Balance Sheet ................................   F-3

            Statement of Income ..........................   F-4

            Statement of Stockholders' Equity ............   F-6

            Statement of Cash Flows ......................   F-7

            Notes to Financial Statements ................   F-9

      2. All other schedules are inapplicable or the required information is
included in the financial statements, the notes thereto, or in the schedules
included herein.

      3. Exhibits


                                      -15-
<PAGE>

         None.

         (b) Reports on Form 8-K:

         None

                                   Signatures

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          PLATRONICS,INC.
                                          Registrant


                                          /s/ Ronald Knigge
                                          --------------------------------
Date: January 8, 1999                     Ronald Knigge, President


                                          /s/ Mary Lou Palumbo
                                          --------------------------------
Date: January 8, 1999                     Mary Lou Palumbo,
                                          Principal Accounting
                                          Officer


                                      -16-
<PAGE>

                                PLATRONICS, INC.

                              FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1998
<PAGE>

                        INDEX TO THE FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Financial Statements:

      Balance Sheet as of September 30, 1998                                 F-3

      Statements of Income for the years ended September 30,
        1997 and 1998                                                        F-4

      Statements of Stockholders' Equity for the year ended 
        September 30, 1997 and 1998                                          F-6

      Statements of Cash Flow for the years ended September 30, 
        1997 and 1998                                                        F-7

Notes to the Financial Statements                                            F-9
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Platronics, Inc.
Linden, New Jersey

We have audited the accompanying balance sheet of Platronics, Inc. as of
September 30, 1998 and the related statements of income, stockholders' equity
and cash flows for the year then ended. 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 audit. The financial
statements of Platronics, Inc. as of September 30, 1997 were audited by other
auditors whose report dated October 29, 1997 expressed an unqualified opinion on
those statements.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the 1998 financial statements referred to above present fairly,
in all material respects, the financial position of Platronics, Inc. as of
September 30, 1998, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.


Ferdinand, Ganek & Company, CPA, PA
Union, New Jersey
November 23, 1998


                                       F-2
<PAGE>

                                PLATRONICS, INC.
                                  BALANCE SHEET
                               SEPTEMBER 30, 1998

                                     ASSETS

Current Assets:
     Cash                                                             $   66,257
     Trade receivables, less allowance for doubtful
       accounts of $11,184                                               485,884
     Inventory                                                           485,223
     Prepaid expenses                                                      7,920
                                                                      ----------

          Total Current Assets                                         1,045,284

Property and Equipment, net of accumulated depreciation                  236,491

Other Assets:
     Security deposit                                                     34,165
                                                                      ----------

Total Assets                                                          $1,315,940
                                                                      ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current maturities of long-term debt                             $  248,610
     Accounts payable                                                    263,750
     Deferred rental obligations - current portion                        10,000
                                                                      ----------

          Total Current Liabilities                                      522,360

Long-Term Debt, less current maturities                                   46,862
Deferred Rental Obligations - Long Term                                   35,832
                                                                      ----------

          Total Liabilities                                              605,054
                                                                      ----------

Stockholders' Equity
     Common stock, $.10 par value
        authorized - 2,000,000, shares issued - 910,031                   91,003
     Paid in additional capital                                            6,156
     Retained Earnings                                                   613,727
                                                                      ----------

          Total Stockholders' Equity                                     710,886
                                                                      ----------

Total Liabilities and Stockholders' Equity                            $1,315,940
                                                                      ==========

               See accompanying notes to the financial statements


                                      F-3
<PAGE>

                                PLATRONICS, INC.
                              STATEMENTS OF INCOME

                                                    Years Ended September 30,
                                                  -----------------------------
                                                      1997              1998
                                                  -----------       -----------

Net Sales                                         $ 3,909,868       $ 3,761,631

Cost of Sales                                       3,540,568         3,291,591
                                                  -----------       -----------
  Gross Profit                                        369,300           470,040

Operating Expenses:
  Selling, General and
    Administrative Expenses                           562,269           436,542
                                                  -----------       -----------

Operating Income (Loss)                              (192,969)           33,498
                                                  -----------       -----------


Other Income (Expense)
  Interest Expense                                     (6,365)          (24,768)
  Miscellaneous                                            --               350
                                                  -----------       -----------

Total Other Income (Expense)                           (6,365)          (24,418)
                                                  -----------       -----------

Income (loss) before income taxes
   and extraordinary item                            (199,334)            9,080

Extraordinary item - gain on
   discharge of debt pursuant to
   Chapter 11 bankruptcy
   reorganization filing (net of
   tax effect of $0)                                    2,550                --
                                                  -----------       -----------

Income (Loss) before income taxes                    (196,784)            9,080

Provision for income taxes                                 --               175
                                                  -----------       -----------

Net Income (Loss)                                 $  (196,784)      $     8,905
                                                  ===========       ===========

                                   (continued)

             See the accompanying notes to the financial statements


                                       F-4
<PAGE>

                                PLATRONICS, INC.
                              STATEMENTS OF INCOME
                                   (continued)

                                                    Years Ended September 30,
                                                  -----------------------------
                                                      1997              1998
                                                  -----------       -----------

Earnings (Loss) per share:
   Income (loss) from operation                        (0.22)              0.01
   Extraordinary item                                     --                 --
                                                  ----------        -----------

      Earnings (Loss) per share                        (0.22)              0.01
                                                  ==========        ===========

Weighted Average Number of
 Common Shares Outstanding                           910,031            910,031
                                                  ==========        ===========

             See the accompanying notes to the financial statements


                                       F-5
<PAGE>

                                 PLATRONICS, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                         Total
                                                  Paid in                            Shareholders'
                                Common Stock  Additional Capital  Retained Earnings     Equity
                                ------------  ------------------  -----------------     ------
<S>                                   <C>           <C>              <C>               <C>      
Balance, September 30, 1996           91,003        $   6,156        $ 801,606         $ 898,765
Net loss for the year                     --               --         (196,784)         (196,784)
                                   ---------        ---------        ---------         ---------

Balance, September 30, 1997           91,003            6,156          604,822           701,981
Net income for the year                   --               --            8,905             8,905
                                   ---------        ---------        ---------         ---------

Balance, September 30, 1998           91,003        $   6,156        $ 613,727         $ 710,886
                                   =========        =========        =========         =========
</TABLE>

               See accompanying notes to the financial statements


                                      F-6
<PAGE>

                                PLATRONICS, INC.
                           STATEMENTS OF CASH FLOWS

                                                    Years Ended September 30,
                                                  -----------------------------
                                                    1997                 1998
                                                  ---------           ---------

Operating activities:
Net income (loss)                                 $(196,784)          $   8,905
                                                  ---------           ---------
Adjustments to reconcile net
  income (loss) to net cash
  provided by (used in) operating
  activities:
    Depreciation and amortization                    45,240              41,282
    Provision for doubtful accounts                      --              (3,160)
    (Increase)Decrease in:
       Accounts receivable                         (199,870)            140,443
       Inventories                                   66,630             (83,046)
       Prepaid expenses                               3,273              (3,661)

    Increase(Decrease) in:
       Accounts payable, accrued
         expenses and taxes                         (26,161)            166,446
       Deferred rental obligations                    7,499             (10,000)
                                                  ---------           ---------

    Total adjustments                              (103,389)            248,304
                                                  ---------           ---------

    Net cash provided by (used in)
      operating activities                         (300,173)            257,209
                                                  ---------           ---------

Investing activities:
   Capital expenditures                              (3,257)           (181,721)
                                                  ---------           ---------

   Net cash used in investing
      activities                                     (3,257)           (181,721)
                                                  ---------           ---------

               See accompanying notes to the financial statements


                                       F-7
<PAGE>

                                PLATRONICS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (continued)

                                                     Years Ended September 30,
                                                  -----------------------------
                                                    1997                 1998
                                                  ---------           ---------

Financing activities:
   Repayment of long-term debt                    $ (81,373)          $ (54,528)
   Proceeds from note payable                       350,000                  --
                                                  ---------           ---------

   Net cash provided by (used in)
      financing activities                          268,627             (54,528)
                                                  ---------           ---------

Net Increase (Decrease) in Cash                     (34,803)             20,960

Cash - Beginning of Year                             80,100              45,297
                                                  ---------           ---------

Cash - End of Year                                $  45,297           $  66,257
                                                  =========           =========

               See accompanying notes to the financial statements


                                       F-8
<PAGE>

                                PLATRONICS, INC.
                       NOTES TO THE FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

      Organization

      Platronics, Inc. (the "Company") was incorporated in New Jersey on
      September 28, 1946. The Company is primarily engaged in the business of
      precision electroplating of electrical and electronic components and
      semiconductor products used in computers, data processing and
      communications equipment, and microwave transmission equipment.

      Basis of Accounting

      The Company's policy is to prepare its financial statement on the accrual
      method of accounting. On November 23, 1993 the Company filed for
      bankruptcy under Chapter 11. The Company submitted a plan of
      reorganization which was approved on June 25, 1996.

      Inventory

      Inventory, consisting primarily of plating materials, are valued at the
      lower of cost or market. Cost is determined on a first-in, first-out
      (FIFO) method

      Property and Equipment

      Property and equipment are stated at cost. Depreciation and amortization
      are computed by the straight line method over the estimated useful lives
      of the assets. Estimated useful lives of the assets are as follows:

              Machinery and Equipment                          7 Years
              Automobile and Trucks                            5 Years
              Furniture and Fixtures                         5-7 Years
              Leasehold Improvements                          10 Years

      Maintenance and repairs are expensed as incurred. Cost of major
      replacements and renewals are capitalized. Upon retirement or other
      dispositions of property or equipment, the cost and accumulated
      depreciation are removed from the accounts and any gain or loss on
      disposition is recognized currently.

      Use of Estimates

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions and affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reported period. Actual results could differ from these
      estimates.


                                       F-9
<PAGE>

                                PLATRONICS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Income Taxes

      Deferred taxes are provided for temporary differences in reporting certain
      transactions for financial and tax purposes, principally relating to net
      operating loss carryforwards.

      Earnings (Loss) Per Share

      Earnings (loss) per share is computed by dividing the net income (loss) by
      the weighted average number of shares of common stock outstanding during
      the period. The Company maintains a simple capital structure and has no
      common stock equivalents.

2.    CONCENTRATION OF BUSINESS AND CREDIT RISK

      The majority of the Company's inventory is purchased from one supplier.
      The Company is subject to risk to the extent a supplier cannot satisfy the
      Company's purchase requirements. The Company sometimes must buy the
      precious metals it uses for plating materials in significant quantities.
      Such purchases require substantial periodic outlays of working capital.
      The Company is at risk to the extent that available working capital cannot
      meet the demand for inventory purchases.

      The Company provides credit in the normal course of business to customers.
      The company performs ongoing credit evaluations of its customers and
      maintains allowances for doubtful accounts based on factors surrounding
      the credit risk of specific customers, historical trends and other
      information. Approximately sixty percent (60%) of the accounts receivable
      are from three customers. Working capital needs are funded through the
      collection of accounts receivable and consequently, the Company is at risk
      to the extent that accounts receivable are collected according to the
      terms provided.

      The Company maintains its cash in bank deposit accounts, which, at times,
      may exceed federally insured limits. The company has not experienced any
      losses in such account. The Company believes it is not exposed to any
      significant credit risk on cash and cash equivalents.

      Cash Flows Information

      Supplemental disclosure of cash flows information:

      Cash paid for:

                                                       Years Ended September 30,
                                                       -------------------------
                                                          1997         1998
                                                         ------      -------
        Interest                                         $6,365      $24,768
        Income Taxes                                         --          175


                                      F-10
<PAGE>

                                PLATRONICS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS

3     COMMITMENTS

      The Company conducts its operation in a leased facility under a net, net,
      net lease. The lease is noncancelable and expires on June 20, 2003. The
      lease has been amended subsequent to the balance sheet date and the future
      minimum commitments, as amended, are as follows:

            September 30,
            -------------
                     1999                             $ 170,000
                     2000                               170,000
                     2001                               170,000
                     2002                               170,000
                     2003                                99,167
                                                      ---------
                                                      $ 779,167
                                                      =========

      The above rental commitments reflect the periods during which the actual
      obligations arise (per lease agreement). Rental expense has been charged
      to operations on a straight line basis which amounted to $160,000 for each
      year ended September 30, 1997 and 1998. The associated liability is
      presented in the balance sheet as a current and long-term deferred rental
      obligation liability of $10,000 and $35,832 respectively.

4.    PROPERTY AND EQUIPMENT

      The components of property and equipment at September 30, 1998 are as
      follows:

             Machinery and equipment               $ 1,624,790
             Automobiles and trucks                      6,389 
             Furniture and fixtures                     94,365
             Pollution control equipment               169,749 
             Leasehold improvement                     608,928
                                                   -----------

             Total property and equipment            2,504,221
             Less: accumulated depreciation          2,267,730
                                                   -----------

             Property and Equipment, Net           $   236,491
                                                   ===========

5.    INCOME TAXES

      As of September 30, 1998, federal loss carryforwards of approximately
      $1,159,448 expiring in years 2007 through 2012 and state loss
      carryforwards of $1,383,466 expiring in years 1997 through 2005 are
      available to offset future income.


                                      F-11
<PAGE>

                                PLATRONICS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS

5.    INCOME TAXES (CONTINUED)

      The Company's net deferred tax asset consists of:

            Total deferred tax asset                           $ 476,390
            Less valuation allowance                             476,390
                                                               ---------
            Net deferred tax asset                                    --
                                                               =========

6.    EXTRAORDINARY ITEM

      Pursuant to the Plan of Reorganization, under a Chapter 11 bankruptcy
      filing dated June 25, 1996, the Company agreed to settle for 8% on the
      unsecured claims. The total settlement of $80,000, which included both
      secured and unsecured claims resulted in the company recognizing income in
      the amount of $2,550 and $-0- for the years ended September 30, 1997 and
      1998, respectively

7.    FAIR VALUE OF FINANCIAL INSTRUMENTS

      Cash, trade receivables, accounts payable and accrued expense, and notes
      payable:

      The carrying amount approximates fair value because of the short maturity
      of these instruments.

      Limitations:

      Fair value estimates are made at a specific point in time, based on
      relevant market information and information about the financial
      instrument. These estimates are subjective in nature and involve
      uncertainties and matters of significant judgment and therefore cannot be
      determined with precision. Changes in assumptions could significantly
      affect the estimates.

8.    RECLASSIFICATIONS

      In 1998, the Company changed its method of classifying certain expense
      transactions. Where practical, certain 1997 amounts previously reported on
      have been reclassified to conform to the 1998 classifications.

9.    LONG-TERM DEBT - RELATED PARTY

      Long-term debt at September 30, 1998 consisted of the following:

            Note payable with interest at 8% due 
            December 31, 1999, unsecured from a
            shareholder owning a majority of the
            outstanding stock                                  $ 295,472

            Less current portion                                 248,610
                                                               ---------
            Long-term debt                                     $  46,862
                                                               =========


                                      F-12
<PAGE>

                                PLATRONICS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS

9.    LONG-TERM DEBT - RELATED PARTY (CONTINUED)

      Maturities of long-term debt as of September 30, 1998 are:

                  Year Ended
                 September 30,
                 -------------
                     1999                              $ 46,862
                     2000                                    --
                     2001                                    --
                     2002                                    --
                     2003                                    --
                                                       --------
                                                       $ 46,862
                                                       ========

10.   STOCK OPTIONS

      On July 1, 1997, the Company established a non-statutory stock option plan
      for key management employees to provide an incentive for such employees to
      expand and improve the profits and prosperity of the Company and to assist
      the Company in attracting and retaining key personnel through the grant of
      options to purchase shares of the Company's common stock. The maximum
      number of shares of stock that may be optioned or sold under the plan is
      303,344 shares. Such shares may be treasury, or authorized, but unissued,
      shares of stock of the Company. Under the plan, the purchase price for
      stock under each option shall be 100 percent of the fair market value of
      the stock at the time the option is granted or the date the employee
      commences employment if the option grant is part of the employment
      agreement with a prospective employee. No option may be exercised after
      the expiration of ten years from the date it is granted. On July 1, 1997,
      an option to purchase a total of 303,344 shares of stock of the Company
      was granted to a key management personnel, subject in all respects to the
      terms and provisions of the non-statutory stock option plan. The option
      price as determined by the Board of Directors of the Company is five
      ($.05) cents per share.

11.   RELATED PARTY TRANSACTIONS

      During the year ended September 30, 1998, the Company purchased $50,856 of
      machinery from a company controlled by an officer of Platronics, Inc.
      Subcontract labor of $114,829 was performed by companies controlled by an
      officer of the Company and there was $31,810 of sales between Platronics,
      Inc. and companies controlled by an officer of the Company. As of
      September 30, 1998, accounts receivable and accounts payable from these
      related parties amounted to $31,810 and $46,959, respectively.


                                      F-13