SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                   FORM 10-QSB

 

                       Pursuant to Section 13 or 15(d) of
                           the Securities Act of 1934

   For the Quarter Ended                                       Commission File
   November 30, 1997                                            Number 0-19796


                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
               (Exact name of registrant as specified in charter)


   Wyoming                                                         98-0120805

   (State or other                                              (IRS Employer
   jurisdiction of                                         Identification No.)
   incorporation)


                         102 South Harbor City Boulevard
                            Melbourne, Florida 32901
                    (address of Principal Executive Offices)

                                  407-953-4811
               (Registrant's telephone number including area code)


   Check mark  whether the issuer (1) filed all reports  required to be filed by
   Section 13 or 15(d) of the  exchange  Act during the  preceding 12 months (or
   for such  shorter  period  that the  registrant  was  required  to file  such
   reports) and (2) has been subject to such filing requirements for the past 90
   days.
                          Yes_____X____  No __________

   The Registrant  has 14,773,024  shares of common stock,  par value $0.01 per
   share issued and outstanding  as of November 30, 1997.

   Traditional Small Business Disclosure Format

                          Yes _____X_____ No __________






<PAGE>




                   Interactive Technologies Corporation, Inc.

                                Table of Contents


   PART I - FINANCIAL INFORMATION                                      Page No.


   Item 1.   Interactive Technologies Corp, Inc.
                   Financial Statements
             Balance Sheet as of  November 30, 1997 and 1996
               Statement of Operations for the three
                    months ended November 30, 1997 and 1996
               Consolidated Statement of Stockholders' Equity
               Statement of Cash Flows for the six months
                    ended November 30, 1997 and  1996
               Notes to Financial Statements

 
   Item 2.   Management's Discussion and Analysis and


   PART II - OTHER INFORMATION


   Item 1.   Legal Proceedings
 
   Item 2.   Changes in Securities                                     None

   Item 3.   Defaults upon Senior Securities                           None
 
   Item 4.   Submission of Matters to a Vote of Security Holders       None
 
   Item 5.   Other Information

               Interactive Technologies/Airtech International
                 Pro Forma Financial Information

   Item 6.   Exhibits and Reports on Form 8-K                          
               
               Airtech International Financial Statements

   SIGNATURE PAGE









<PAGE>

Part 1-Financial Information
       Item 1   Financial Statements
       -----------------------------

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                           CONSOLIDATED BALANCE SHEETS
                           NOVEMBER 30, 1997 and 1996
                                  (unaudited)

                                     Assets

                                                      1997              1996
                                                      ----              ----
Current assets:

         Cash                                        $133,210         $12,579
         Accounts and note receivable, trade,                          35,235
           net of $25,000, of allowance for
           uncollectible amounts                       41,945               -
            Notes receivable                                -         150,000
         Prepaid expenses and other assets            111,368           8,810
                                                    ---------        --------

          Total current assets                        286,523         206,624
                                                    ---------        --------

Property and equipment, at cost, net of
  $39,684 and $18,541, respectively of
  accumulated depreciation                             75,457          96,289
                                                    ---------        --------

Other assets:

         Organizational costs, net of $2,734
           and $1,934, respectively of
           accumulated amortization                     1,266           2,066
         Investment in Subsidiary - SNT                     -         296,608
         License rights, net of $371,250
           and $236,250, respectively of
           accumulated amortization                   303,750         438,750
         Proprietary software and trademark,
           net of $1,257,028 and 483,129,
           respectively of accumulated
           amortization                             4,154,015       4,927,914
            Investment & Joint Venture                284,766               -
                                                    ---------       ---------

                                                    4,743,797       5,665,338
                                                    ---------       ---------

                                                   $5,105,777      $5,968,251
                                                   ==========      ==========


    The accompanying notes are an integral part of the financial statements.


                                       1
<PAGE>
                                    
                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                            CONSOLIDATED BALANCE SHEETS
                           NOVEMBER 30, 1997 AND 1996
                                  (unaudited)

                      Liabilities and Stockholders' Equity

                                                      1997          1996
                                                      ----          ----
Current liabilities:
         Accounts payable, trade                   $  99,408      $ 135,509
         Accrued expenses                             80,126         80,382
         Contract of sale deposit                          -              -
           Loans Payable
           Related Parties                                 -              -
           Others                                    277,185        144,200
         Current portion of long-term
           liabilities                               210,077        171,227
                                                   ---------       --------
           Total current liabilities                 666,796        531,318
                                                   ---------     ----------

Long-term liabilities:
         License rights payable                      329,923        499,573
           Convertible debentures payable                  -        800,000
                                                   ---------      ---------
                                                     329,923      1,299,573

Commitments and contingencies:

Stockholders' equity:
         Common stock, $.01 par value
           50,000,000 and 12,500,000 shares
           authorized, respectively
           14,773,024 and 12,159,863,
           respectively, shares issued
           and outstanding                           147,730        121,397
            Preferred Stock, $.01 par value
              20,000,000 and -0- shares
              authorized, respectively
              5,000,000 and -0- designated
              as Series M
              350,000 and -0- respectively,
              shares issued and outstanding              350             -
            Series M - PPM Cost                      (36,159)            -
         Paid in capital in excess of par         11,741,227      9,492,845
         Accumulated deficit                     ( 7,744,090)    (5,476,882)
                                                 ------------    -----------
                                                   4,109,058      4,137,360
                                                 ------------    -----------
                                                 $ 5,105,777    $ 5,968,251
                                                 ============   ============


    The accompanying notes are an integral part of the financial statements.


                                       2
<PAGE>
                                       
               Interactive Technologies Corporation, Incorporated
                              Statements of Operations
               For the Three Months Ended November 30, 1997 and 1996
                                  (unaudited)


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

Revenue                                         $    (3,328)     $  177,736
                                               -------------     -----------


Operating expenses:
     Depreciation                                     5,414           5,403
     Amortization                                   227,202         236,868
     Production costs                                 9,463               -
     General and administrative                     122,163         513,069
     Interest expense:
          Stockholder                                     -               -
          Other                                      12,264          34,635
                                               -------------    -----------
                                                    376,506         789,975

                                               -------------    -----------
Loss from operations                               (379,834)       (612,239)

Gain on sale of 90% of
         Charleston license                               -         311,500

Income/(loss) before income taxes                  (379,834)       (300,739)
                                               -------------    ------------

Net income/(loss)                              $   (379,834)    $  (300,739)
                                               =============    ============



Net income/(loss) per share

             Primary                           $    (0.02)      $  (0.03)
             Diluted                           $    (0.02)      $  (0.03)










       Accompanying notes are an integral part of the financial statements.




                                       3
<PAGE>
<TABLE>
                                        
                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       SIX MONTHS ENDED NOVEMBER 30, 1997
<CAPTION>

                    Common Stock        Preferred      Add'l Pd   Accumulated
                   Shares     Amount   Shares  Amount  In Capital   Deficit      Total
                   ------     ------   ------  ------   -------      -----

<S>               <C>         <C>      <C>     <C>    <C>         <C>           <C>
Bal at 5/31/97    13,479,613  $134,796                10,836,034  $(7,016,829)  3,954,001

Net Loss                                                           (  347,426)   (347,426)
                  ==========  ======== ======= ======= ==========  ===========  =========

Bal at 8/31/97    13,479,613  $134,796               $10,836,034  $(7,364,255) $3,606,575


Issuance of common
stock for cash       421,000     4,210                   206,290           -      210,500

Issuance of common
stock in exchange
for services         125,443     1,254                    75,621           -       76,875

Issuance of common
stock upon
conversion of debt   746,968     7,470                   273,632           -      281,102

Issuance of
Preferred Stock,
Series M                               350,000   350     349,650                  313,841
($36,159 PPM cost)

Net loss                                                           (  379,835)   (379,835)
                    ---------  ------- --------  ----  ----------   ---------- ---------
Bal at 11/30/97    14,773,024 $147,730 350,000   350  $11,741,227 $(7,744,090) $4,109,058


























    The accompanying notes are an integral part of the financial statements.


</TABLE>
                                       4
<PAGE>
                                     
               Interactive Technologies Corporation, Incorporated
                             Statement of Cash Flows
               For the Six Months Ended November 30, 1997 and 1996


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

    Cash received from customers                  $   109,766      $   79,731
    Interest received                                     797               -
    Cash paid to employees                          (  57,036)      ( 390,659)
    Cash paid to suppliers                          ( 235,997)      ( 745,977)
    Interest paid:
      Stockholder                                           -               -
      Others                                                -       (  34,635)
                                                  ------------     -----------
 Net cash used in operating activities            $ ( 182,470)    $(1,091,540)
                                                  ------------     -----------
 
Cash flows from investing activities:
    Purchase of property and equipment                               (    665)
    Capitalized software development reduction                         50,000
    Decrease in subsidiary investment                        -        104,719
    License rights payment                                   -       (232,000)
    Joint Interest Investment                           29,075              -
                                                  ------------     -----------
 Net cash used in investing activities                  29,075     $  (77,946)
                                                  ------------     -----------

Cash flows from financing activities:
    Issuance of convertible debentures                      -         300,000
    Proceeds from note payable                        273,000               -
    Common stock issued for cash                            -         576,852
    Promissory notes isssued for cash                                 144,000
    Contract of sale deposits received                                 98,099
    License rights payment                                  -        (232,000)
                                                  ------------     -----------
 Net cash provided by financing activities            273,000       1,118,951
                                                  ------------     -----------

Net change in cash                                    119,605         (50,535)
Cash at beginning of period                            13,605          63,114
                                                  ------------     -----------

Cash at end of period                             $   133,210      $   12,579
                                                  ============     ===========








       Accompanying notes are an integral part of the financial statements.




                                       5
<PAGE>
                                     
                   Interactive Technologies Corporation, Inc.
                             Statement of Cash Flows
               For the Six Months Ended November 30, 1997 and 1996

                    Reconciliation of Net Income to Net Cash
                          Used in Operating Activities
                                  (unaudited)



                                                        1997           1996
                                                  -------------   -----------
 
Net income/loss                                   $ (  727,261)   $(1,192,420)

Adjustments to reconcile net
 income/loss to net cash used in
 operating activities:
    Amortization                                       477,297        477,677
    Depreciation                                        10,829         10,806
    Increase/Decrease in accounts receivable           108,711       ( 11,906)
    Increase in notes receivable                             -       (150,000)
    Decrease in accounts payable                    (   10,896)      (227,293)
    Increase in prepaid expenses                    (   96,578)      ( 14,550)
    Increase/Decrease in accrued expenses           (   11,448)      ( 39,288)
    Stock issued for supplies and services              66,876        366,934
    Gain on sale of Charleston license                               (311,500)
                                                   ------------    ----------
   Total adjustments                               $   544,791     $  100,880
                                                   ------------    ----------

    Net cash used in operating activities          $ ( 182,470)   $(1,091,540)
                                                   ============    ===========




















       Accompanying notes are an integral part of the financial statements.




                                       6
<PAGE>
                                       

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                          NOTES TO FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
------------

     Interactive Technologies  Corporation,  Inc. (the Company) was incorporated
in the state of Wyoming on August 8, 1991.  On October  20,  1995,  the  Company
entered  into  a  reverse   acquisition   transaction,   described  below,  with
Syneractive,  Inc. (SI). SI was  incorporated  in the state of Florida on August
31, 1995.  Prior to October 20, 1995,  the Company was engaged  primarily in the
business of exploiting its rights under a license  granted by CST  Entertainment
Imaging,  Inc.  The license  gave the Company  the  exclusive  right to colorize
black-and-white film and videotape,  including black-and-white  theatrical films
and  television  programs,  which  were  originally  produced  for  distribution
primarily within European countries. However, the Company abandoned the business
of exploiting  the license (see Note 3) on October 18, 1995 as a result of being
unable to realize any revenue  from the  license.  SI,  which was  acquired in a
reverse  acquisition,  obtained  license rights from the Federal  Communications
Commission to operate  interactive  and data service systems in the Charleston -
North Charleston, SC and Melbourne - Titusville, Florida metropolitan areas.

     Syneractive,  Inc. also acquired proprietary software and a trademark known
as Rebate  TV,  which is a  marketing  and sales  medium  for a wide  variety of
products and services.  Advertisers on Rebate TV will offer substantial  rebates
to the network's viewers through a unique interactive rebate program. Touch-tone
phones will initially interact the network to secured earned rebates,  and later
the network  will be  accessed  via  wireless  digital  communications  networks
currently under development.  The Rebate TV operations  commenced April 15, 1996
and  serve   customers  in  the  eastern  United  States.   Management   expects
exploitation  of the FCC  licenses to commence in 1997.  They intend to hire the
necessary management  personnel,  raise addition capital and generate profitable
operations needed to continue its existence.

     Syneractive, Inc. was dissolved on October 30, 1995.

Reverse acquisition
-------------------

     On October 1, 1995, the Company issued  5,700,000 shares of common stock to
its current  sole  director  and  officer in exchange  for the net assets of SI.
After the issuance of such stock, the current  director and officer  effectively
controlled the Company,  holding  approximately  50.1% of the outstanding common
stock.

     Prior to the reverse acquisition,  the current sole director and officer of
the Company owned all of the outstanding  common stock of SI.  Accordingly,  the
reverse  acquisition has been accounted for at the historical cost of the assets
acquired.

Basis of Presentation
---------------------

     The  financial  information  presented as of any date other than May 31 has
been  prepared  from the books  and  records  without  audit.  The  accompanying
financial  statements have been prepared in accordance with the  instructions to
Form 10QSB and do not include all of the information and the footnotes  required
by generally  accepted  accounting  principals for complete  statements.  In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments,  necessary for a fair  presentation  of such financial  statements,
have been included.

     These  financial   statements  should  be  read  in  conjunction  with  the
consolidated  financial  statements and notes thereto for the year ended May 31,
1996 contained in the Company's 10KSB Annual Report.



                                       7
<PAGE>
                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                         NOTES TO FINANCIAL STATEMENTS


Management estimates
--------------------

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

Earnings per share
------------------

     Primary  and fully  diluted  earnings  per  share  amounts  are based  upon
14,773,024 and 12,159,863, respectively, weighted average shares of common stock
and  common  stock  equivalents  outstanding.  No effect  has been  given to the
assumed exercise of stock options and warrants and convertible debentures as the
effect would be antidilutive.

     In February 1997, the Financial  Standards  Accounting  Board (FASB) issued
Statement of Financial Accounting Standards No. 128 Earnings Per Share effective
for  financial  statement  periods  ending  after  December  15,  1997.  Earlier
application is not permitted.  For pro forma  disclosure  purposes,  there is no
difference in the amounts of net loss per share and weighted  average  shares of
common  stock  outstanding  computed  using FASB 128 and those  reflected in the
accompanying financial statements.

2.       COMMITMENTS AND CONTINGENCIES

Operating leases
----------------

     Through  October 31, 1995,  the Company used office space  provided free of
charge by its  stockholder,  the value of which was not  material.  The  Company
presently leases its facilities in Florida under non-cancelable  operating lease
agreements expiring through April 1998.

     Minimum future rental payments  required under the above  operating  leases
are as follows.

                          Year Ending
                            May 31,                           Amount

                              1998                          $   4,820
                                                            =========


License fees payable
--------------------

     The  Company,   through  SI,  has  acquired   licenses   from  the  Federal
Communications  Commission to operate interactive video and data service systems
in various  metropolitan  statistical  areas  (Note 1). The  license  rights are
payable  interest only, at 7.7 percent for two years with principal and interest
payable  monthly over the remaining  three years of the  licenses.  Interest has
been accrued from the dates the license were formally issued.

     Future principal payments under the remaining Titusville,  FL license right
obligation are as follows:

                           Year Ending
                             May 31,                         Amount

                               1998                      $   210,077
                               1999                          183,113
                               2000                          146,810
                                                         -----------
                                                         $   540,000


                                       8
<PAGE>
                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                         NOTES TO FINANCIAL STATEMENTS


3. LITIGATION

Rental operating lease
----------------------

     The Company is  defendant,  and it has filed counter  claims,  in a lawsuit
filed by the  lessor of office  space  facilities  in New  Jersey  (Note 2). The
Company never occupied the space due to the lessor's  failures to finish out the
space to the  Company's  specifications.  The lessor seeks to recover  remaining
lease  payments due under the lease of $606,913 and the Company seeks to recover
damages under a capital lease obligation  (Note 2) for equipment  located in the
New Jersey  facilities and  contractually  precluded from being removed from the
facilities.  Although the Company anticipates a favorable result of this lawsuit
the outcome of it is uncertain.  The  accompanying  financial  statements do not
contain any reserve for this contingency.

4.       CONVERTIBLE DEBENTURES

NONE

5.       NOTES PAYABLE

     The Company's notes payable consist of loans from various  corporations and
individuals  provided for working capital purposes.  The notes, which contain no
significant  restrictions,  bear  interest  at rates of 10.0% to 18.0%,  are due
through March 1998 and are unsecured.

6.  INCOME TAXES

     The Company used the accrual  method of  accounting  for tax and  financial
reporting  purposes.  At November 30, 1997,  the Company had net operating  loss
carryforwards  for  financial  and  tax  reporting   purposes  of  approximately
$7,800,000.  This  carryforwards  expire  through the year 2011, and are further
subject to the provisions of Internal Revenue Code Section 382.

7.       SUBSEQUENT EVENT

     Subsequent  to May 1997,  the Company  entered into an agreement to acquire
Airtech  International  Corporation  (AIC),  a Texas  corporation,  through  the
issuance of its common  stock  shares in a  transaction  to be  accounted  as an
acquisition by ITC. The transaction is subject to final AIC stockholder approval
upon the effective  date of a Form S-4  Registration  Statement,  which has been
filed.

     On  August  1,  1997,  ITC  entered  into a  Manufacture  and  Distribution
Agreement with Airtech.  This  agreement  relating to the Medicare madel 950 air
filtration  unit,  has been used by ITC for the Private  Placement of additional
Securities.  This agreement and the working  arrangements are being treated as a
Joint  Venture  between ITC and Airtech until such time as the merger of the two
companies is complete. Accordingly all receipts from the sales of securities and
disbursement of funds are accounted for as a Joint Venture. At November 30, 1997
350,000 shares of the PPM Series M Perferred stock had been completed.








                                       9
<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

INTERIM PERIOD FROM JUNE 1, 1996 THROUGH NOVEMBER 30, 1997.

     During  the  quarter,  the  Company's  efforts  were  directed  at  program
development  involving the next RebateTV  program and the  initiation of program
development  of  "Assualt on the  Liberty" a DocuDrama  about the sinking of the
United  States  Ship  "Liberty"  during  the  Seven  Day War.  The  Company  has
contracted  for  creative  work  on the  Development  and  Prep  phases  for the
"Liberty"  project  as  well as for  development  work by  Bottomline,  Inc.  of
Atlanta, Georgia. Both the "Liberty" project and the newest RebateTV program are
under  creative  direction by Michael  Hamilton who has  designed,  directed and
produced such television  series as "Magnum P.I.,  "Simon & Simon",  "Wings" and
"The  Twilight  Zone".  His  commercial  experience  includes  such  clients  as
Cadillac, Texaco, Coca Cola, Heineken, American Airlines, Donna Karan, Elizabeth
Arden, QVC, Business Technology Management and the Family Channel.

     The  computer  development  efforts  related  to Rebate TV were done at the
Company's  engineering  offices in  Melbourne,  Florida,  where the hardware and
software  designs and  specifications  were  developed,  tested and  implemented
during the current fiscal year, to:

         (*)   manage the large amounts of data and transactions involved in
               collecting and verifying sales information from the Rebate TV
               retailers;
         (*)   calculate the rebates, record the credits, and issue the checks
               to the consumer;
         (*)   accommodate and record the telephone rebate requests, and provide
               automated participation information to the public.

     Internet  Access.  ITC's  Internet  home pages for use with Rebate TV allow
viewers to access the program's  data base through the Internet.  It allows them
to view the status of their accounts, enter vendor rebate claims, and later will
allow  viewers to access a variety of  products  and  services  associated  with
Rebate TV which  the  Company  expects  to  include.  Rebate  TV is  located  at
http://www.rebatetv.com.

     Interactive  Video and Data  Services.  As part of ITC's  commitment to the
evolution  of  interactive  television,  its Federal  Communications  Commission
Interactive  Video  and  Data  Services  (IVDS)  radio  station  license  in the
Melbourne-Titusville-Palm  Bay,  FL  and  a  10%  interest  in  Charleston-North
Charleston,  SC  service  areas  represent  an  additional  enhancement  to  the
Company's programming distribution. These licenses have a duration of an initial
five years,  and are renewable if all conditions of the license are met. IVDS, a
two way  communications  system,  will allow  viewers to take an active  role in
systems  delivered  through broadcast  television,  cable  television,  wireless
cable,  direct broadcast  satellite or other future television delivery methods.
IVDS is regulated as a personal  radio  service under the rules of the FCC which
has  allocated  spectrum in the 218-219 MHz range for its use.  IVDS systems are
designed to operate with a hand-held  remote  control  device that  controls the
interactive  set top device on the  subscriber's  television set. A viewer would
interact with the TV station through a radio signal using an IVDS frequency.

     The Company is reviewing  alternative uses and equipment  proposals for its
Melbourne-Titusville-Palm  Bay,  FL license  and expects to proceed to install a
system for this license within the next 24 - 36 months.

     Although  ITC will run its Rebate TV and other  programs on its own service
area  systems,  the  programs  it  develops  are  intended  for  use on  various
interactive  delivery systems and are not specific to Interactive Video and Data
Services  systems.  They are marketed to all of these various delivery  systems.
For broadcast of Rebate TV programming  the Company  currently uses and plans to
use standard video media distribution methods such as cable, broadcast stations,
wireless cable and direct broadcast satellite. Although the Company has designed
its  programs to utilize an IVDS  return link (a "return  link" is the method by
which data is sent from the  consumer  or viewer back to the  originator  of the
program),  they are also designed to accommodate  other return links such as the
telephone.  The  Company  has  purchased  equipment  and  software  to provide a
telephone  return link as an interim  return  link for its own license  areas as
well as other areas where it is providing programming, to be utilized where IVDS
is not available; until the installation an operation of the IVDS equipment as a
return link is completed as well as for use with non subscribers to IVDS.

                                       10
<PAGE>

FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

     Revenues from operations for the Quarter reported were $(3,328),  down from
$177,736 for the same period for the previous  year.  The Company has  concluded
its beta test  period  for  Rebate  TV and  continues  to  prepare  for  network
operations.  Operating  expenses for the Quarter reported  decreased to $376,506
from  $789,975  the  previous  year.  The  Company's  computer  operations  were
developed  to  operate  at a level  to  service  a  national  market  and  those
operations  will make up a significant  portion of the operating  expenses which
will  proportionately  decrease as the Company adds markets for its productions.
The Company  expects  its  expenses to expand at a  decreasing  percentag  as it
expands into additional markets.

     During the six months of the current  fiscal  year,  the  Company  received
$210,500  net of cost from the private sale of its common stock and an dditional
$52,500 in loans.  The Company does not expect to receive  significant  revenues
from projects other that Rebate TV during the next quarter.  The Company expects
to  require  additional  funds  over the next 12 months  for the  expansion  and
addition of market for its products and operations.

PART II Other Information

Item l.  Legal Proceedings

     The  Company is in  litigation  with LLB Realty,  L.L.C.  which has filed a
claim alleging  claims under an office lease  agreement in Superior Court of New
Jersey,  Mercer County.  The Company has asseted  claims against L.L.B.  Realty,
L.L.C. for failure to perform under the conditions of the agreement.  Settlement
negotiations have been ongoing and the Company expects this matter to be settled
in a manner no unfavorable to the Company.

     The Company is not as party to any other pending legal  proceedings  except
for claims and lawsuits  arising in the normal course of business.  ITC does not
believe  that these  claims or  lawsuits  will have a  material  effect on ITC's
financial condition or results of operations

Item 5.  Other Information

     The purchase of the outstanding stock of Airtech International  Corporation
has not been  completed  as of  November  30,  1997.  This  transaction  will be
completed upon the effective notice of the registration statement filed with the
Securities  and Exchange  Commission.  The Company is electing to report current
Proforma  Combined  Financial  Statements  of the  Company and Airtech as if the
transaction had been completed on November 30, 1997. And is providing under Item
6 as an Exhibit the November 30, 1997 unaudited Financial Statements of Airtech.

     On August 1, 1997 the Company and Airtech  International  Corporation (AIC)
entered into a Manufacture and  Distribution  Agreement or Joint Venture for the
Production  of the Airtech  Model 950 air  filtration  unit. As a result of this
agreement  the Company  began a Private  Placement  of its  designated  Series M
Preferred Stock, with the maximum placement being 5,000,000 shares at a price of
$1.00 per share with one convertible  warrants attached to each Preferred share.
If this Private  Placement is completed the Company will  contribute  75% of the
net proceeds to the Joint  Venture or such lesser  amount if the total shares of
Preferred Stock are not sold.

















                                       11
<PAGE>
<TABLE>


                    INTERACTIVE TECHNOLOGIES CORPORATION INC.

                        PROFORMA COMBINED BALANCE SHEETS
                                NOVEMBER 30, 1997
                                   (Unaudited)

<CAPTION>

                                     
                                         Historical
                                --------------------------------
                                                     Acquired
                                  Interactive
                                  Technologies        Airtech       Adjustments
                                   Corporation     International        For
                                      Inc.          Corporation     Acquisition     Combined
                                --------------     -------------    ------------   -----------
                                            ASSETS

<S>                             <C>                <C>              <C>            <C>
Current Assets                    $286,523           $721,690                      $1,008,213
                                        

Property and equipment net
    of depreciation                 75,457            235,489                         310,946
Notes receivable                                      899,833                         899,833
Intellectual properties net of
    Amortization                 4,457,765(2)       1,204,895(3)    12,250,000(4)  17,912,660
Investment in subsidiary                              650,000                         650,000
Investment in Joint Venture        284,766           (137,824)                        146,942
Goodwill                                                             1,329,252(4)   1,329,252
Other assets                         1,266            527,918                         529,184
                                -------------      ------------    -------------- ------------

Total Assets                    $5,105,777         $4,102,001      $13,579,252    $22,787,030
                                =============      ============    ============== ============
</TABLE>
<TABLE>


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
<S>                             <C>               <C>             <C>            <C>      
Current Liabilities               $666,796           $874,942                      $1,541,738
Deferred Revenue                                      400,000                         400,000
Long-term liabilities              329,923             45,749                         375,672
                                                                     9,000,000(4)   9,000,000
                                 -------------     ------------    --------------  -----------
Total Liabilities                  996,719          1,320,691                      11,317,410

Commitments and contingencies                                                 (5)

Stockholders' Equity
     Paid in Capital            11,853,148          3,825,571        4,579,252(4)  20,257,971
Retained Earning (Deficit)                                                                          
                                (7,744,090)        (1,044,261)                     (8,788,351)
                                ---------------    -------------   --------------  ------------
                                 4,109,058          2,781,310        4,579,252     11,469,620
                                ---------------    -------------   --------------  ------------
Total Liabilities and
   Stockholders' Equity         $5,105,777         $4,102,001      $13,579,252    $22,787,030
                                ===============    =============   ============== =============


</TABLE>



              See notes to Pro-Forma Combined Financial Statements

                                       12
<PAGE>
<TABLE>

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.
                     PROFORMA COMBINED STATEMENTS OF INCOME
                   For the Six Months Ended November 30, 1997
                                   (Unaudited)
<CAPTION>

                                        Historical               Adjustments
                             -------------------------------    -------------
                                                Acquired
                                                --------
                              Interactive
                              Technologies       Airtech         Adjustments
                              Corporation     International          For
                                  Inc.         Corporation       Acquisition     Combined
                             -------------    --------------    -------------   ----------
<S>                         <C>              <C>               <C>             <C>
Net revenues                  $  (3,325)       $   242,768                      $  239,443

Cost of Sales                                                                                     
                                      -            158,142                         158,142
                             -------------    --------------                    ------------

Gross income                                                                                      
                                 (3,325)            84,626                          81,301

General and Administrative                                                                        
                                143,893            310,841                         454,734
                              ------------    ---------------                   ------------

Net income from operations
 Before depreciation,
 Amortization and  taxes                                                                          
                               (147,218)          (226,215)                       (373,433)

Depreciation and amortization   232,616              8,250                         240,866
                              -----------     ---------------                   ------------

Net income (loss)
     From operations                                                                              
                               (379,834)          (234,465)                       (614,299)

Income taxes                                                                                      
                                      -                  -                               -
                              -----------     ---------------                   -------------

Net Income (Loss)             $(379,834)      $   (234,465)                     $ (614,299)
                              ===========     ===============                   =============


Primary  (loss)  per share    $   (0.02)(1)   $      (0.01)(1)                  $    (0.03)

Diluted (loss) per share      $   (0.02)(1)   $      (0.01)(1)                  $    (0.03)



</TABLE>




              See notes to Pro-Forma Combined Financial Statements

                                       13
<PAGE>
                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.

                NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
                                November 30, 1997
                                   (Unaudited)


1.       Basis of Presentation

     The  accompanying  Pro-Forma  Combined balance sheet at August 31, 1997 and
related  combined  statement of  operations  for the nine months then ended have
been  prepared as if the business  combination  had occurred on June 1, 1997 the
start of the current fiscal year of Interactive.

     The purchase of the  outstanding  stock of Airtech by  Interactive is being
reflected in these Pro-Forma  Combined  Financial  Statements using the purchase
method for  recording  the  transaction.  The excess of cost over book value has
been reclassified to other assets of Airtech based on managements  estimates and
outside  valuation  based on projected cash flows and revenues from the revalued
assets.  No provision for  amortization of these revalued assets or goodwill are
reflected in these combined financial statements.

     There have been no changes in generally accepted  accounting  principals in
the  presentation  of the  combined  financial  statements  from the  historical
audited financial statements included herein by reference as previously filed or
in the audited financial statements of Airtech for its fiscal year ended May 31,
1997.

     Earnings  per Share  (EPS) is  reflected  as primary  earning per share and
fully dilluted  earnings per share set forth in the following table used for EPS
computation:

                                                         Historical         
                                              ------------------------------
                                                 ITC                Airtech

Weighted average number of shares             12,139,865          17,485,000
Less shares cancelled                        ( 3,400,000)
Add shares issued for debentures               1,144,444
Adjustment for combined presentation                             (17,485,000)
Common shares issued for acquired              8,000,000
                                             -----------
Primary shares outstanding                    17,884,309
Assuming conversion of convertable
   preferred issued for acquired               8,850,000
Assuming conversion of convertable
   Debentures issued for acquired             12,857,143
                                             -----------
Fully diluted shares outstanding              39,591,452

 
Notes to Historical Financial Statements

     1.  Intellectual  properties  reflected on the balance sheet of Interactive
consist of the following:

         License rights net of accumulated amortization
         of $371,250                                                $   303,750
         Proprietary software and trademark, net of accumulated
         amortization of $1,257,028                                   4,154,015
                                                                    -----------
                                                                     $4,457,765





                                       14
<PAGE>

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.


                NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
                                November 30, 1997
                                   (Unaudited)

     License   rights  consist  of  ITC's  Federal   Communications   Commission
Interactive  Video  and  Data  Services  (IVDS)  radio  station  license  in the
Melbourne-Titusville-Palm  Bay,  Florida and the  retained  10% interest in IVDS
license  in  the  Charleston-North  Charleston,  South  Carolina  service  areas
representing an additional enhancement to ITC=s programming distribution.  These
licenses  have a duration of an initial  five years,  and are  renewable  if all
conditions of the license are met. IVDS, a two way communications  system , will
allow  viewer to take an active  role in  systems  delivered  through  broadcast
television,  cable  television,  wireless cable,  direct broadcast  satellite or
other future television delivery methods.  IVDS is regulated as a personal radio
service under the rules of the FCC which has  allocated  spectrum in the 218-219
MHZ range for its use.  IVDS  systems are  designed to operate  with a hand-held
remote  control  device that  controls  the  interactive  set top[ device on the
subscriber's television set. A viewer would interact with the TV station through
a radio signal using an IVDS frequency.

     Proprietary  software  and  trademarks  consist of software  developed  for
integration into the rebate television market and a trademark known as Rebate TV
(TM) purchased in October 1995.  This  proprietary  software  allows ITC to be a
developer and producer of television,  interactive  television  and  interactive
digital  media   programming.   These  programs  can  be  developed  in  various
interactive  formats  for  cable,   broadcast  and  direct  broadcast  satellite
television  as well as for  Internet  distribution.  Rebate  TV is a  television
program  which  incorporates  interactive  media and  computer  data  management
allowing retail vendors to communicate their message to consumers, the allow the
consumer  to verify his or her  purchase,  with the  consumer  receiving  a cash
rebate from ITC for their purchases. Retailers represent a broad spectrum of the
business  community  including  grocer chains,  furniture  stores,  tire service
stores,  banks,  restaurants,  car  dealers  and a  variety  of other  specialty
businesses.

     2. Intellectual  properties  reflected on the balance of Airtech consist of
the cost incurred to date for the development of a full line of air purification
products for commercial,  consumer,  automobile and medical use.  Several of the
products will be eligible for a US and foreign patents with patent  applications
currently in process or planned .

Adjustments for Acquisition

     3. Per the stock  purchase  agreement  entered  into on May 8, 1997 between
Interactive Technologies Corporation, Inc. and Airtech International Corporation
the following  presents the securities and the related valuation of the purchase
of 100% of the issued and outstanding common stock of Airtech:


                                                        Value
         Description of Securities                    Per Share         Total
         8,000,000 shares of Interactive
         Common Stock, registered                    $0.56(a)         $4,480,000

         8,850,000 shares of Interactive
         Preferred Stock, registered and
         convertible into Common Stock               $0.45(b)          3,982,500

         $9,000,000 in Convertible
         Debentures                                  At  Face          9,000,000
                                                                      ----------
         Total value of purchase of 100% of 
         Airtech Common Stock                                       $ 17,462,500


                                       15
<PAGE>

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.

                NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
                                November 30, 1997
                                   (Unaudited)
                                        
(a) The  closing  of bid price of  Interactive  common  stock on May 8, 1997 was
$1.125,  for valuation of a private  placement  type  transaction  of registered
shares of common stock Interactive has discounted the price per share by 50%.

(b) The Preferred Stock is convertible  into one (1) share of Common Stock after
24 months or can be  called by the  Company  during  that  time,  for  valuation
purposes the assigned value of the common shares was reduced by 20%.

The following represents the allocation of the purchase price:

         Book value of Airtech common stock            $   3,804,026
         Intellectual properties                          12,250,000
         Excess of purchase price over cost                1,408,474
                                                       -------------
         Total Purchase Price                            $17,462,500

 
4.  Interactive Technologies has the following litigation pending:

     The  Company is a  defendant  in a  proceeding  filed in the United  States
District Court for the Southern  District of New York. It accepted service April
5, 1997 in an action  brought by  Studiolink  Corporation  and Steven Campus for
damages  arising out of an equipment  lease  agreement.  The Company  expects to
assert  counterclaims  against the Plaintiffs for losses suffered as a result of
their  failure to  perform.  Settlement  discussions  have been  ongoing and the
Company  expects  this matter to be settled in a manner not  unfavorable  to the
Company. In addition,  in related matters, the Company is in litigation with LLB
Realty,  L.L.C.  which has filed a claim  alleging  claims under an office lease
agreement  in  Superior  Court of New  Jersey,  Mercer  County.  The Company has
asserted claims against L.L.B.  Realty,  L.L.C. for failure to perform under the
conditions of the agreement.  Settlement  negotiations have been ongoing and the
Company  expects  this matter to be settled in a manner not  unfavorable  to the
Company. .

     The Company is not a party to any other  pending legal  proceedings  except
for claims and lawsuits  arising in the normal  course of business.  The Company
does not believe  that these claims or lawsuits  will have a material  effect on
ITC=s financial condition or results of operations.  Accordingly no provision or
accrual for potential losses are reflected in the Pro-Forma  Combined  Financial
Statements.

     Airtech International Corporation has the following litigation pending:

     Airtech International Corporation,  McCleskey Sales and Service, Inc., C.J.
Comu and John Potter, plaintiffs vs Honeywell, Inc., Honeywell Environmental Air
Control, Inc. And Suzanne Haas,  defendants;  No.  3:96CV-1855-D,  United States
District Court for the Northern District of Texas, Dallas Division.

     In this case,  Airtech,  a subsidiary  and two of its  officers  filed suit
against  Honeywell,  Inc. And a Honeywell  subsidiary and an employee  asserting
several  causes of action.  These  causes of action  include  breach of contract
relating  to  termination   of  the  Company=s   Full  Service   Distributorship
agreements, for defamation and tortious interference with contract relating to a
merger  agreement  between  the Company and DCX,  Inc.,  for unfair  competition
regarding  claims made by  Honeywell  about it air  purification  products,  for
negligent  misrepresentation  regarding  representations made to the Company and
its  subsidiary  regarding  the  exclusivity  of certain  arrangements  with the
defendants,  and for declaratory  relief and attorney=s fees.  Honeywell filed a
counterclaim against the Company,  McCleskey, Comu and Potter. Honeywell alleges
that the Company and McCleskey owe Honeywell money for past purchases,  and that
Comu  and  Potter  interfered  with  the  relationship   between  McCleskey  and
Honeywell.  Honeywell seeks $71,000 in actual damages and  unspecified  punitive
damages  and  attorney=s  fees.  The  Company  has  denied  all of the  material
allegations of Honeywell=s counterclaim.  The Company plans to vigorously defend
the counterclaim  and believes the counterclaim to be without merit.  Honeywell,
Inc.,  plaintiff,  vs Airtech  International  Corporation,  AirSoPure,  Inc. And
Richard Allegrati,  defendants:  No. WMN 97-238 United States District Court for
the District of Maryland, Baltimore Division.

                                       16
<PAGE>

                   INTERACTIVE TECHNOLOGIES CORPORATION, INC.

                NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
                                November 30, 1997
                                   (Unaudited)

     Honeywell  filed suit  against the Company,  a subsidiary  and an employee,
alleging violations of the Lanham Act and the Maryland Uniform Trade Secrets Act
and the common law. The suit alleges that certain Airtech and AirSoPure products
were sold in violation of the Honeywell=s trademarks,  and that the cover design
of certain products of Airtech/AirSoPure was wrongfully obtained. The suit seeks
an injunction and unspecified damages.  Rather than incur substantial additional
attorney=s  fees,  the Company  agreed to the entry of a preliminary  injunction
regarding  the sale of a very  small  number  of  modified  Honeywell  products,
immaterial to the  Company=s  business.  The Company  denies all of the material
allegations  of  Honeywell=s  claims,  is vigorously  defending  this case.  The
Company believes Honeywell=s claims to be without merit.

     Accordingly  no reserve or accrual  has been  reflected  in these  Combined
Pro-Forma Financial Statements for this pending litigation.























                                       17
<PAGE>
Item 6. Exhibits


               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                November 30, 1997
                                   (Unaudited)


                                                   1997                 1996
                                                -------------      -------------
Assets
Current Assets:
          Cash and cash equivalents          $       21,509        $     345,570
          Accounts Receivable                       247,185              369,361
          Inventories                               274,042              198,922
          Other Currents Assets                     178,954               12,240
                                                -------------      -------------
                Total Current Assets                721,690              926,093
Property, Plant and Equipment Net of
          Accumulated Depreciation                  235,489              153,710
Property held for Resale                                                 400,000
Intellectual Properties                           1,204,895              161,387
Notes Receivable-Long Term                          899,833                    -
Investment in Subsidiaries                          650,000              650,000
Other Assets                                        527,918              519,050
                                                 -------------     -------------

                 Total Assets                 $   4,239,825        $   2,810,240
                                              ================     =============

Liabilities and Stockholders' Equity
Current Liabilities:
     Current maturities of long-term debt     $      24,253       $       10,391
     Accounts Payable-trade                         339,493               94,004
     Accrued Payroll and employee benefits          415,196                1,772
     Joint Venture Advances                         137,824
     Loans from Officers                             96,000                    -
                                              ----------------     -------------
               Total Current Liabilities          1,012,766              106,167
Long-Term Debt                                       45,749               18,129
Deferred Revenue                                    400,000                    -
Commitments and Contingent Liabilities

Stockholders' Equity
       Common Stock, issued 16,223,642 shares
       in 1997 and 14,917,342 shares in 1996            164                  149
       Series C Preferred Stock, issued 1,000
       shares in 1997 and 1,000 shares in 1996        1,000                1,000
       Paid-in Capital                            3,824,407            3,410,363
       Retained Earnings (Deficit)               (1,044,261)           (725,568)
                                              ----------------     -------------
               Total Stockholders' Equity         2,781,310            2,685,944
                                              ----------------     -------------

 Total Liabilities and Stockholders' Equity   $   4,239,825        $   2,810,240
                                              ================     =============




                 See Notes to Consolidated Financial Statements



                                       18
<PAGE>

               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
              For the Three Months Ended November 30, 1997 and 1996
                                   (Unaudited)


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


Sales                                   $     242,768             $     214,111

Cost of Sales                                 158,142                   110,987
                                        ---------------            -------------

Gross Income                                   84,626                   103,124

General and Administrative expenses           319,091                   351,152
                                         ---------------           -------------


Net  Income  ( Loss)                    $    (234,465)            $    (248,028)
                                        ================           =============





Primary Income ( Loss) per share        $    (0.01)               $    (0.02)
Dulited  Income ( Loss) per share       $    (0.01)               $    (0.02)
                                                         







                 See Notes to Consolidated Financial Statements











                                       19
<PAGE>


               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
               For the Six Months Ended November 30, 1997 and 1996
                                   (Unaudited)




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


Sales                                   $   510,692                 $   540,131

Cost of Sales                               342,350                     228,296
                                       ---------------           ---------------

Gross Income                                168,342                     311,835


General and Administrative expenses
                                            609,907                     557,717
                                        ---------------          ---------------



                                               
Net  Income  ( Loss)                     $ (441,565)                 $ (245,882)
                                        ===============          ===============

Primary Income ( Loss) per share        $  (     0.03)           $   (    0.02)
Dulited  Income ( Loss) per share       $   (    0.03)           $   (    0.02)








                 See Notes to Consolidated Financial Statements







                                       20
<PAGE>


               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)
 
Note 1:  Summary of Significant Accounting Policies

     Organization.   Airtech   International   Corporation   (the  Company)  was
incorporated  in the state of Texas in March of 1995.  In  August  of 1995,  the
Company  became  a  Full  Service  Distributor  for  Honeywell  Enviracaire,   a
manufacturer of commercial air filtration systems, and began marketing and sales
of  these  products.  In  August  of  1995,  the  Company  determined  that  the
Enviracaire model 13000 could be eligible for Medicare Part B Code and began the
pursuit of an application  for such code,  receiving  notification  of a pending
issuance of a Medicare Part B Code in April of 1996.  In May of 1996,  Honeywell
Enviracaire cancelled the Company's Full Service Distributorship and the Company
withdrew its Medicare application.

     In December 1995, the Company acquired 100% of McCleskey Sales and Service,
Inc., (MSS) a Texas corporation, in exchange for 165,000 shares of common stock.
MSS is  engaged  in the  sales  and  service  of  heating  and air  conditioning
equipment.  MSS was also a Honeywell  Enviracaire Full Service  Distributor with
prior  knowledge  of  the  installation  and  service  of  this  air  filtration
equipment.

     In  September  1996,  the Company  initiated  a design  program to create a
complete line of air filtration and purification products. This line of products
includes  commercial  ceiling mounted units, wall mounted units,  ductable units
and a down  draft  salon  table  for the  nail  industry  as well as a  portable
automobile unit and a portable unit for Medicare. The technology being developed
by the Company will combine ozone generation with air filtration, a new concept.

     In March 1996, the Company  incorporated  AirSoPure,  Incorporated (ASP) in
the state of Texas as a wholly-owned  subsidiary.  ASP was formed to establish a
franchise program for the Airtech products.  The franchisees will be the primary
source for the marketing,  sales and  distribution  of the Company's  commercial
technology.

     Basis of  Financial  Statement  Presentation.  The  consolidated  financial
statements   include  the   accounts  of  the  Company  and  its   subsidiaries.
Intercompany  transactions  and  accounts  have  been  eliminated.  Subsidiaries
purchased  are  recorded  at cost  using the  equity  method of  accounting  for
acquisitions.

     Cash Equivalents.  Holdings of highly liquid investments with maturities of
three months or less when purchased are considered to be cash equivalents.

     Inventories. Inventories are valued at the lower of the first-in, first-out
(FIFO) cost or market. Assembled units are valued at the cost of components plus
allocated labor.

     Property, Plant, and Equipment. Property, plant, and equipment are recorded
at cost less  depreciation and  amortization.  Depreciation and amortization are
primarily  accounted for on the straight  line method based on estimated  useful
lives. The amortization of leasehold improvements is based on the shorter of the
lease term or the life of the improvement.  Betterments and large renewals which
extend the life of the asset are capitalized whereas maintenance and repairs and
small renewals are expended as incurred.

     Sales.  Income is recognized in the financial  statements (and the customer
billed)  either when  materials  are shipped from stock or when the vendor bills
the Company  for the order.  Net sales are  arrived at by  deducting  discounts,
freight, and sales tax from gross sales.

     Franchise Fees.  Franchise fees are recognized in the financial  statements
when all  material  services  relating  to the  sale of a  franchise  have  been
performed by the Company and there is no  obligation to refund any cash received
or forgive any unpaid notes or receivables.


                                       21
<PAGE>

               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)


     Intellectual  Properties.  Cost incurred by the Company in  developing  its
products which are considered  patentable are  capitalized and will be amortized
over  the  estimated  useful  life  of  the  related   patents.   The  technical
requirements for the design,  testing and completion of working  proto-types are
the primary cost  capitalized.  Amortization  will be recorded  after a unit has
been placed in production.

     Income Taxes. The Company uses the asset and liability method as identified
in SFAS 109, Accounting for Income Taxes.

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

     Stock-Based  Compensation.  The Company  follows the intrinsic  value based
method of accounting as  prescribed  by APB 25,  Accounting  for Stock Issued to
Employees, for its stock-base compensation.

     Principals  of  Consolidation.  The Company  acquired  McCleskey  Sales and
Service,  Inc.  in  November  1995  electing  the  equity  purchase  method  for
accounting for this purchase. The Company incorporated AirSoPure Incorporated in
March 1997.  The  accompanying  consolidated  financial  statements  include the
general  accounts  of the  Company  and these  wholly  owned  subsidiaries.  All
material  intercompany  accounts  and  balances  have  been  eliminated  in  the
consolidation except for cash advances to a subsidiary.

     Nature of Operations.  The Company's  primary  business is the manufacture,
sales and distribution of air filtration  equipment.  The technology utilized in
the Company's  air  filtration  equipment  will remove  odors,  gases,  viruses,
pollen,  mold spores and other airborne  particulates.  Uses of this  technology
include, restaurants,  medical facilities, public buildings, schools, gaming and
bingo facilities.

Note 2: Other Current Assets

 At November 30, 1997 and 1996 other assets are comprised of the following:

                                               1997            1996
                                             -------        ---------    
         Prepaid expenses                 $   49,836       $
         Prepaid legal                       122,401
         Other                                 6,721          12,240
                                          ----------        ---------
         Total                             $ 178,954        $ 12,240


     The Company has entered into a contingent  fee agreement  with the law firm
representing  its interest in the  Honeywell  law suit.  Under the terms of this
agreement the Company will pay certain  out-of-pocket  expenses  incurred during
the litigation, to date these expenses have totaled $118,841.








                                       22
<PAGE>


               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)

Note 3: Property, Plant and Equipment

     At November 30, 1997 and 1996,  property  plant and equipment  comprised of
the following:


                                                     1997             1996
                                                  ---------      ----------    
         Furniture and fixtures                 $    17,750      $   17,750
         Computers and equipment                    139,412         124,184
         Vehicles                                   127,783          77,686
         Leasehold improvements                       9,388           1,202
         Assembly equipment                          65,266           3,560
                                                  ---------      ----------  
         Total                                      359,599         224,382
         Less: Accumulated depreciation             124,110          70,672
                                                  ---------      ----------
         Net                                     $  235,489       $ 153,710 


Note 4: Property Held for Resale

     In 1995 the Company purchased the exclusive rights to Honeywell Enviracaire
products for the county of Turkey for $250,000 and for the country of Taiwan for
$150,000.

Note 5: Intellectual Properties

     Prior to the cancellation of the Company's Full Service  Distributorship in
the U.S. by Honeywell in May of 1996 the Company had  received  notification  of
approval  within 90 days of its Medicare Part B  application  for a portable air
filtration system manufactured by Honeywell. Subsequent to this cancellation the
Company  withdrew it Medicare Part B application.  While the Company is pursuing
the development of a full line of commercial air filtration systems, its primary
focus has been on the development of a portable air filtration  system that will
qualify for Medicare Part B and a portable air filtration unit for vehicles.

     The Company has incurred costs totaling $1,204,895 at November 30, 1997 and
$161,387 at November 30, 1996 in its design and testing of these  products.  The
Company  currently has in production one commercial  model and  anticipates  its
complete line of commercial air filtration  products to be in production  during
the 1998  fiscal  year.  The  portable  air  filtration  unit for vehicle use is
scheduled for  production by the end of 1997.  The air  filtration  system being
designed for Medicare Part B applications  should be in a working  proto-type by
the end of 1997 and the application  submitted during the first quarter of 1998.
The Company  forecast  additional cost of  approximately  $1 million dollars for
completion  of the vehicle and Medicare  Part B units.  The Company has and will
continue to apply for patents on its products.

Note 6: Notes Receivable

     At  November  30,  1997 and 1996,  notes  receivable  is  comprised  of the
following:


                                                   1997             1996 
                                                ---------        --------   
         Domestic notes receivable              $ 300,000        $    0
         Foreign notes receivable                 666,500             0
                                                ---------        --------
         Total                                    966,500             0
         Less: Current Maturities                  66,667               
                                                ---------        --------       
         Long Term Notes Receivable            $  899,833       $     0





                                       23
<PAGE>

               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)


     These notes receivable bear interest at 8% and are payable in terms ranging
from 12 months to 36 months.  Credit is extended on a evaluation  of the payee's
financial  condition  and  general  credit  information.  If the  note  is for a
franchise fee or for equipment, these will serve as collateral.

Note 7: Other Assets

     At November 30, 1997 and 1996, other assets is comprised of the following:

                                                  1997             1996
                                             -----------         --------    
         Deposits                            $    16,739      $    16,279
         Prepaid royalties                       500,000          500,000
         Other                                    11,179            2,771
                                             -----------         --------
         Total                                $  527,918       $  519,050

Note 8 Notes Payable

     At November 30, 1997 and 1996, notes payable is comprised of the following:

                                                  1997             1996
                                             ------------        ---------    
         Nations Bank                        $   21,413       $   28,520
         Compass Bank                            11,597
         Resource One                            37,019
                                             ------------        ---------     
          Total                                  70,002           28,520
         Less: Current maturities                24,253           10,391
                                             ------------        ---------
         Long-Term Debt                      $   45,749       $   18,129


Note 9: Earnings Per Common Share

     Earnings  per  common  share are  computed  by  dividing  net income by the
average  number of Common  shares  outstanding  during the period.  The weighted
average  number  of  Common  shares   outstanding  at  November  30,  1997  were
approximately 16,100,000 and approximately 9,200,000 at November 30, 1996.

Note 10: Income Taxes

     The Company uses the accrual  method of  accounting  for tax and  financial
reporting purposes. At November 30, 1997 and 1996, the Company had net operating
loss carryforwards for financial and tax reporting purposes. These carryforwards
expire through the year 2011,  and are further  subject to the provisions of the
Internal Revenue Code Section 382.

Note 11: Operating Leases

     The Company  presently leases its facilities in Texas under  non-cancelable
operating  lease  agreements  expiring  through  September  1999.  These  leased
facilities total approximately 13,000 square feet of office and warehouse space.

     Minimum  future rental  payments  under the above  operating  leases are as
follows:

                                            Amount 
                  1998                   $  78,000
                  1999                      37,680
                                        ----------
                  Total                   $ 15,680 





                                       24
<PAGE>

               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)



Note 12: Commitments and Contingencies

     An original  petition was filed in State District Court,  Dallas,  Texas in
August 1995 by Kristen S. Venable naming McCleskey Sales and Service,  Inc., and
Trane,  Inc.,  Defendants,  alleging breach of contract,  breach of warranty and
negligence relating to the installation of Trane air conditioning equipment. The
complaint seeks damages in excess of the minimum,  jurisdictional  limits of the
Court,  plus  punitive and  exemplary  damages.  McCleskey  and Trane have filed
answers denying all claims.  The matter is currently  awaiting a trial date. The
claims  against  McCleskey  are covered by insurance  which  coverage  amount is
believed by  management  to be sufficient to cover the claims in the event of an
adverse judgement.

     Airtech International Corporation,  McCleskey Sales and Service, Inc., C.J.
Comu and John Potter,  plaintiffs, vs Honeywell Environmental Air Control, Inc.,
and Suzanne Haas,  defendants;  No. 3:96CV-1855-D,  United States District Court
for the Northern District of Texas, Dallas Division.

     In this case,  Airtech,  a subsidiary  and two of its  officers  filed suit
against  Honeywell,  Inc. and a Honeywell  subsidiary and an employee  asserting
several  causes of action.  These  causes of action  include  breach of Contract
relating  to the  termination  of the  Company's  Full  Service  Distributorship
agreements, for defamation and tortious interference with a contract relating to
a merger agreement,  for unfair  competition  regarding claims made by Honeywell
about its air purification products, for negligent  misrepresentation  regarding
representations made to the Company and its subsidiary regarding the exclusivity
of certain  arrangements  with the defendants,  and for  declaratory  relief and
attorney's fees. Honeywell filed a counter claim against the Company, McCleskey,
Comu and Potter.  Honeywell alleges that the Company and McCleskey owe Honeywell
money  for  past  purchases,  and  that  Comu  and  Potter  interfered  with the
relationship between McCleskey and Honeywell.  Honeywell seeks $71,000 in actual
damages and unspecified  punitive  damages and attorney's  fees. The Company has
denied all of the material allegations of Honeywell's counterclaim.  The Company
plans to vigorously  defend the counterclaim and believes the counterclaim to be
without merit.

     Honeywell,   Inc.,  plaintiff,   vs  Airtech   International   Corporation,
AirSoPure, Inc. and Richard Allegrati,  defendants: No. WMN 97-238 United States
District Court for the District of Maryland, Baltimore Division.

     Honeywell  filed suit  against the Company,  a subsidiary  and an employee,
alleging violations of the Lanham Act and the Maryland Uniform Trade Secrets Act
and the common law. The suit alleges that certain Airtech and AirSoPure products
were sold in violation of the Honeywell trademarks, and that the cover design of
certain products of Airtech/AirSoPure was wrongfully obtained. The suit seeks an
injunction and unspecified  damages.  The venue of this suit has been changed to
United  States  District  Court  for the  Northern  District  of  Texas,  Dallas
Division,  without  injunctive  relief and will be included in the other  action
pending before this court. The Company denies all of the material allegations of
Honeywell's claims, and is vigorously defending this case.

Note 19: Subsequent Events

     On May 8, 1997 the Company  entered into a Stock  Purchase  Agreement  with
Interactive  Technologies  Corporation,  Inc  (ITC).  Under  the  terms  of this
agreement ITC will purchase a minimum of 81% of the outstanding  common stock of
the Company in exchange  for  8,000,000  shares of ITC Common  stock,  8,850,000
shares of ITC  convertible  Preferred Stock and $9,000,000 in ITC 8% convertible
Debentures.

     This  transaction  will be closed at such  time as  registration  statement
filed with the  Securities  and  Exchange.  At November 30, 1997 a  registration
statement had been filed and was pending  action by the  Securities and Exchange
Commission. On notification by the Commission that the registration is effective
and a minimum of 81% of the shares  tendered  have been  offered  for  exchange.


                                       25
<PAGE>

               AIRTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                           November 30, 1997 and 1996
                                   (Unaudited)


     On August 1, 1997,  Airtech  entered into a  Manufacture  and  Distribution
Agreement withi  Interactive.  This agreement relating to the Medicare madel 950
air filtration  unit, has been used by Interactive for the Private  Placement of
additional  Securities.  This agreement and the working  arrangements  are being
treated as a Joint Venture between  Airtech and  Interactive  until such time as
the merger of the two companies is complete.  Accordingly  all receipts from the
sales of  securities  and  disbursement  of funds are  accounted  for as a Joint
Venture. At November 30, 1997 350,000 shares of the PPM Series M Perferred stock
had been  completed.  The Joint Venture is not  consolidated  in these Financial
Statements  only,  the  transactions   directly   effecting  Airtech  have  been
reflected.










                                       26
<PAGE>

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for filing and has duly caused this  registration  statement to be
signed on its behalf by the undersigned,  thereunto duly authorized, in the City
of Melbourne, State of Florida, on January 14, 1998.


 

                              Interactive Technologies Corporation, Inc.


                              by: /s/ Perry Douglas West
                                  ---------------------------
                                  Perry Douglas West, Chief Executive Officer
















                                       27
<PAGE>