<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q



  [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997

Commission File Number  0-27994

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

                     Delaware                           13-383-5420
          (State of other jurisdiction               (I.R.S. Employer)
          incorporation or organization)            Identification No.)


                  711 Fifth Avenue
                 New York, New York                        10022
    (Address of principal executive offices)             (Zip Code)

                                 (212) 223-1260
              (Registrant's telephone number, including area code)

                                      N/A
             (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         As of May 12, 1997, there were 4,550,000 shares of common stock
outstanding.

<PAGE>

                           BATTERIES BATTERIES, INC.

                 FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997

                                     INDEX


                                                                       Page No.
                                                                       --------
PART I - FINANCIAL INFORMATION

              Consolidated Financial Statements

              Consolidated Balance Sheets ...............................  3
              March 31, 1997 (unaudited) and December 31, 1996

              Consolidated Statements of Income..........................  4
               For the three months ended March 31, 1997 and
               1996 (unaudited)

              Consolidated Statements of Cash Flows......................  5
               For the three months ended March 31, 1997 and
               1996 (unaudited)

              Notes to the Consolidated Financial Statements ............  6

              Management's Discussion and Analysis of Financial
              Condition and Results of Operations........................ 10


PART II - OTHER INFORMATION ............................................. 12

                                       2
<PAGE>

                           BATTERIES BATTERIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                December 31,    March 31,
                                                                   1996           1997
                                                                   ----           ----
                                                                               (unaudited)
<S>                                                             <C>            <C>       
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                    $    2,609     $      863
   Accounts receivable                                               2,730          6,343
   Inventories                                                       4,445          9,620
   Prepaid expenses and other current assets                           219            463
   Current deferred income taxes                                        28              4
                                                                ----------     ----------
     Total current assets                                           10,031         17,293
                                                                ----------     ----------

PROPERTY AND EQUIPMENT - Net                                           751            943
EXCESS OF COST OVER NET ASSETS ACQUIRED                                615          4,973
OTHER ASSETS                                                           337            364
                                                                ----------     ----------
TOTAL                                                           $   11,734     $   23,573
                                                                ==========     ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Short-term debt                                              $      590     $        0
   Accounts payable                                                  1,336          2,778
   Accrued expenses                                                    499          1,268
   Redeemable Preferred Stock                                          750            750
   Preferred dividends payable                                          35             50
   Current portion of long-term bank debt                                0            600
   Current portion of obligations under capital leases                  40              8
                                                                ----------     ----------
     Total current liabilities                                       3,250          5,454
                                                                ----------     ----------
REVOLVING BANK CREDIT FACILITY                                           0          4,805
LONG-TERM BANK DEBT                                                      0          2,300
OBLIGATIONS UNDER CAPITAL LEASES                                         7             26
DEFERRED  INCOME TAXES AND OTHER DEFERRED CREDITS                       17              9

STOCKHOLDERS' EQUITY
   Common Stock, par value $.001, 10,000,000 shares
     authorized, 4,000,000 shares and 4,550,000 shares,
     respectively, issued and outstanding                                4              5
   Additional paid-in capital                                        8,000         10,264
   Retained earnings                                                   456            710
                                                                ----------     ----------
     Total stockholders' equity                                      8,460         10,979
                                                                ----------     ----------
TOTAL                                                           $   11,734     $   23,573
                                                                ==========     ==========
</TABLE>

                See notes to consolidated financial statements.

                                       3
<PAGE>

                           BATTERIES BATTERIES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                          Three Months      Three Months
                                              Ended             Ended
                                         March 31, 1996    March 31, 1997
                                         --------------    --------------
<S>                                        <C>                <C>       
NET SALES                                  $    6,179         $   12,778

COST OF SALES                                   4,388              9,115
                                           ----------         ----------
          Gross profit                          1,791              3,663

SELLING, GENERAL AND                                          
  ADMINISTRATIVE EXPENSES                       1,510              3,052
                                           ----------         ----------
INCOME FROM OPERATIONS                            281                611
                                                              
INTEREST EXPENSE, NET                              18                140
                                           ----------         ----------
INCOME BEFORE PROVISION FOR INCOME TAXES          263                471
                                                              
PROVISION FOR INCOME TAXES                         82                202
                                           ----------         ----------
NET INCOME                                        181                269
                                                              
PREFERRED STOCK DIVIDEND                                      
    REQUIREMENTS                                   20                 15
                                           ----------         ----------
NET INCOME ATTRIBUTABLE TO                                    
      COMMON STOCKHOLDERS                  $      161         $      254
                                           ==========         ==========
                                                              
NET INCOME PER SHARE                       $      .04                .06
                                           ==========         ==========
WEIGHTED AVERAGE NUMBER OF COMMON &                           
   COMMON EQUIVALENT SHARES OUTSTANDING     4,151,573          4,550,000
                                           ==========         ==========
</TABLE>

                See notes to consolidated financial statements.

                                       4
<PAGE>

                           BATTERIES BATTERIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                   (In 000's)

<TABLE>
<CAPTION>
                                                                      THREE MONTHS     THREE MONTHS  
                                                                         ENDED            ENDED
                                                                     March 31, 1996   March 31, 1997
                                                                     --------------   --------------
<S>                                                                    <C>              <C>        
OPERATING ACTIVITIES:                                         
Net income                                                             $      181       $      269 
Adjustments to reconcile net income to net cash  
  provided by operating activities:
    Depreciation & Amortization expense                                        36              131 
    Deferred income tax                                                         0               16
Changes in assets and liabilities:                                                 
    Accounts receivable                                                      (394)          (1,090)
    Inventories                                                              (105)            (496)
    Prepaid expenses and other assets                                        (140)              37
    Accounts payable and accrued expenses                                     809              698
                                                                       ----------       ----------
       Net cash provided (used) by operating activities                       387             (435)
                                                                       ----------       ----------
INVESTING ACTIVITIES:                                                                 
Purchase of property and equipment, net                                       (65)             (72)
Acquisition of Battery Network, net of cash acquired                            0          (10,462)
                                                                       ----------       ----------
        Net cash used in investing activities                                 (65)         (10,534)
                                                                       ----------       ----------
FINANCING ACTIVITIES:                                                                 
Borrowings under Term  Loan Facility                                            0            3,000
Net borrowings under Revolving Credit Facility                                  0            4,805
Issuance of Common Stock to Stockholders of Battery Network                     0            2,269
Proceeds from initial public offering, net of expenses                      9,134                0
Payments to stockholders of Merger                                                    
   Companies in connection with mergers                                    (5,916)               0
Financing costs relating to the Battery Network aquisition                      0             (148)
Payments under Term Loan Facility                                               0             (100)
Payments on other debt and capital lease obligations                          (24)            (603)
                                                                       ----------       ----------
  Net cash provided by financing activities                                 3,194            9,223
                                                                       ----------       ----------
NET INCREASE (DECREASE) IN CASH AND                                                   
   CASH EQUIVALENTS                                                         3,516           (1,746)
                                                                                      
CASH AND CASH EQUIVALENTS,                                                            
    BEGINNING OF PERIOD                                                       946            2,609
                                                                       ----------       ----------
CASH AND CASH EQUIVALENTS,                                                            
    END OF PERIOD                                                           4,462              863
                                                                       ==========       ==========
SUPPLEMENTAL DISCLOSURES OF CASH                                                      
    FLOW INFORMATION:                                                                 
    Cash paid during period for:                                                      
         Interest                                                              30               67
                                                                       ==========       ==========
         Income taxes                                                          39              110
                                                                       ==========       ==========
</TABLE>

                See notes to consolidated financial statements.

                                       5
<PAGE>

                           BATTERIES BATTERIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997
                                  (Unaudited)


1.  ORGANIZATION BASIS OF PRESENTATION

In April 1996, effective March 31, 1996, Batteries Batteries, Inc. (the
"Company") acquired, by merger or stock acquisition (the "Mergers"),
simultaneously with the closing of its initial public offering of common stock
and redeemable warrants (the "Offering"), Advanced Fox Antenna, Inc. ("Advanced
Fox") and Tauber Electronics, Inc. ("Tauber"), (collectively, the "Merger
Companies") for common stock and cash. These three companies are referred to
herein as the "Combined Companies." As a result of the substantial continuing
interests in the Company of the former stockholders of the Combined Companies,
the historical financial information of each of the Combined Companies has been
combined on a historical cost basis in accordance with generally accepted
accounting principles as if the Combined Companies had always been members of
the same operating group. In June 1995, the Company acquired 95% of the
outstanding common stock of Specific Energy Corporation ("Specific Energy") in
a business combination accounted for as a purchase. (In June 1996, the Company
acquired the remaining minority 5% interest in cash).

On January 7, 1997, effective January 1, 1997, the Company acquired the
business and related assets of Battery Network, Inc. and affiliated companies
(see Note 2), an assembler and wholesale distributor of batteries servicing
specialty batteries customers nationally, in a business combination accounted
as a purchase. The results of operations of Battery Network are included in the
consolidated results of the Company from January 1, 1997, the effective date of
its acquisition.

The accompanying consolidated financial statements and related notes to the
consolidated financial statements are representative of what the financial
position, results of operations and cash flows would have been if the Combined
Companies, except for Battery Network, which is included from January 1, 1997,
the effective date of its acquisition, had been combined at the beginning of
fiscal 1996. The assets and liabilities of the Combined Companies are reflected
at their historical amounts. As of the date of the Mergers, the capital stock
of Batteries Batteries, Inc. was treated as capital stock of the Company and
the capital stock of Advanced Fox and Tauber was included in additional paid-in
capital and their retained earnings have been reclassified to additional
paid-in capital.

The results of operations of the Combined Companies for the three months ended
March 31, 1996 reflect the combined historical operating results of closely
held Subchapter S and C corporations through the effective date of the mergers,
and do not include pro forma adjustments for income taxes, officers' salaries
or other items necessary for combining Subchapter S and C corporations through
such date. However, net income and net income per share amounts would not have
been materially different from the reported historical amounts if such
adjustments were included.

                                       6
<PAGE>

The accompanying consolidated financial statements as of March 31, 1997 and the
three months ended March 31, 1997 and March 31, 1996 are unaudited; but in the
opinion of management, the information contained herein reflects all
adjustments necessary to make the results of operations for the interim periods
a fair statement of such operations. All such adjustments are of a normal
recurring nature. Operating results for interim periods are not necessarily
indicative of results which may be expected for the year as a whole. These
consolidated financial statements should be read in conjunction with the
audited financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.


2.  ACQUISITION AND LOAN FACILITY

On January 7, 1997, effective January 1, 1997 the Company acquired (the
"Acquisition") the business and related assets of Battery Network, Inc. and
affiliated companies ("Battery Network"), an assembler and wholesale
distributor of batteries servicing specialty battery customers nationally.
Battery Network, which operates principally in California, New Jersey and
Illinois, had combined revenues of approximately $23 million for the year ended
December 31, 1996.

The purchase price of approximately $11.2 million consisted of (i) approximately
$8.3 million in cash, subject to adjustment to the extent that the net worth as
defined, of Battery Network, exceeds or is less than $7.3 million; (ii) 550,000
shares of common stock at a price of $4.125 per share and five year options to 
purchase an additional 225,000 shares at an exercise price of $4.50 per share,
and (iii) approximately $590,000 in transaction costs.

The Battery Network agreement also provides the sellers the contingent right to
receive additional consideration of up to $1 million in cash, 350,000 shares of
Common Stock and five year options to acquire 250,000 shares of Common Stock,
of which half are exercisable at $4.50 per share and half are exercisable at
$6.00 per share. Payment of the additional consideration is to be based on the
excess amount by which the combined "pre-tax income" as defined of Battery
Network and Tauber, exceeds (i) $2,100,000 for the year ending December 31,
1997 (the "One-Year Period"), (ii) $4,200,000 for the two years ending December
31, 1998 (the "Two-Year Period") or (iii) $6,300,000 for the three years ending
December 31, 1999 (the "Three Year Period"), with the maximum amount of
additional consideration to be paid if the excess is $400,000 for the One-Year
Period, $800,000 for the Two-Year Period or $1,200,000 for the Three-Year
period. The sellers also entered into employment agreements and were granted
options under the Company's Stock Option Plan to purchase an aggregate of
75,000 shares of Common Stock.

The cash portion of the purchase price was funded with a portion of the
proceeds of a borrowing pursuant to a Revolving Credit, Term Loan and Security
Agreement, dated January 6, 1997 (the "Loan Facility"), between IBJ Schroder
Bank & Trust Company, as Agent ("IBJ") and the Company and all its
subsidiaries. The Loan Facility consists of a $3,000,000 Term Loan (the "Term
Loan") payable in 35 monthly installments of $50,000 each with the balance to
be paid at maturity and a Revolving Credit Facility (the "Revolver Loan") of up
to $10,000,000 to be advanced at the rate of 80% of eligible accounts
receivable and 50% of inventories. The Revolver Loans bears interest at

                                       7
<PAGE>

the rate of 1/4 of 1% plus the higher of (i) the base commercial lending rate
of IBJ or (ii) the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers plus 1/4 of 1%, or, at the option of the Company at the
Eurodollar rate plus 2%. The Eurodollar rate is defined as Libor for a
designated period divided by one less the aggregate reserve requirements. The
interest on the Term Loan is 1/2% higher than the interest rate on the Revolver
Loans. The Loan Facility is secured by a pledge of the assets of the borrowers
and a pledge of the outstanding capital stock of the subsidiaries of the
Company. As of March 31, 1997, the amount of Term Loans outstanding was
$2,900,000 and the amount of Revolver Loans outstanding was $4,805,254.

Pursuant to the Management Agreement with Founders Management Services, Inc.
("Founders") , the Company paid Founders, for its origination and negotiating
services in connection with the acquisition and loan facility, $240,000 and
issued to the designees of Founders five year warrants to purchase 100,000
shares of Common Stock at a price of $4.125 per share.

The Acquisition was accounted for as a purchase in accordance with Accounting
Principles Board Opinion No. 16. The total purchase price net of cash acquired 
was allocated to the assets acquired and liabilities assumed based on their 
estimated fair values as follows:

                                            (In Thousands)

Accounts receivable                             $ 2,522
                                                -------
Inventories                                     $ 4,679
                                                -------
Property and equipment                          $   185
                                                -------
Other assets                                    $   177
                                                -------
Accounts payable and Accrued expenses           $(1,507)
                                                -------
Excess of Cost Over Net Assets Acquired         $ 4,406
                                                -------
  Total                                         $10,462
                                                =======
The excess of the purchase price over the net assets acquired will be 
amortized over a period of 25 years. The results of operations of Battery 
Network are included with those of the Company for the periods subsequent of 
the date of Acquisition.

The following unaudited pro forma summary data presents the consolidated
results of operations of the Company for the three months ended March 31, 1996
as if the acquisition had been completed at the beginning of 1996 and does not
purport to be indicative of what would have occurred had the acquisition
actually been made as of such date or of results which may occur in the future.

                                             THREE MONTHS
                                                ENDED
                                            MARCH 31, 1996
                                            --------------
Net sales                                      $ 11,903
                                               ========
Net income attributable to common
    stockholders*                              $    229
                                               ========
Net income per share attributable to 
    common stockholders*                       $    .05
                                               ========

                                       8
<PAGE>

*Reflects adjustments for increased interest expense arising from acquisition
debt, amortization of goodwill, changes in compensation to stockholder
officers, and related tax adjustments.


3.  INITIAL PUBLIC OFFERING

On April 8, 1996, effective March 31, 1996, the Company completed its initial
public offering (the "Offering") of 2,300,000 shares of Common Stock at an
initial public offering price of $5.00 per share and 2,300,000 redeemable
common stock purchase warrants (the "Warrants") at $.10 per Warrant. The net
proceeds to the Company net of underwriting discounts and Offering costs, were
approximately $9.1 million. Simultaneously with the closing of the Offering,
the Company issued 960,000 shares of Common Stock and options to purchase
50,000 shares of Common Stock and paid approximately $5.9 million in cash to
the former stockholders of the Merger Companies. In addition, the Company
subsequently paid an additional $.8 million in cash to the former stockholders
of the Merger Companies in connection with price adjustments stipulated in the
respective merger agreements. The cash consideration paid to the former
stockholders of the Merger Companies has been reflected as a reduction of
stockholders' equity in the consolidated financial statements. The remaining
cash proceeds from the Offering were used for general corporate purposes.


4.  STOCKHOLDERS EQUITY

See Note 1 for information as to the issuance in January, 1997 in connection
with the acquisition of Battery Network, of 550,000 shares of Common Stock
valued at $4.125 per share and five year options to purchase 225,000 shares of
Common Stock at an exercise price of $4.50 per share. The Company also issued
in connection with the acquisition to designees of Founders Management Services
Inc., warrants to purchase 100,000 shares of Common Stock at a price of $4.125
per share.


5.  SUBSEQUENT EVENTS

During April 1997, the Company redeemed its outstanding 750,000 shares of
Redeemable Preferred Stock at the redemption price of $1.00 per share plus
accrued dividends of $50,000.

During May 1997, the Company acquired the business and related assets of
Cliffco of Tampa Bay, Inc. ("CTB"), a distributor of cellular products
operating out of Tampa, Florida. The total purchase price was $521,985
consisting of cash of approximately $75,000 and 193,500 shares of common stock
valued at $2.31 per share or $446,985 in the aggregate. In addition, the
Company repaid Cliffco's debt in the amount of approximately $560,000 to its
collateralized lender, with borrowings under the Revolver Loans.

                                       9
<PAGE>

Item 2. MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS

RESULTS OF OPERATIONS

The following table represents the Company's statement of operations data
expressed as a percentage of net sales for the respective periods:

                           Three Months Ended March 31,
                           ----------------------------
                              1996             1997
                              ----             ----

Net                           100.0%           100.0%
Sales

Cost of Sale                   71.1             71.3
                               ----             ----

   Gross Margin                28.9             28.7

Selling Gen. & Admin.
Expenses                       24.4             23.9
                               ----             ----

   Operating Income             4.5              4.8

Interest expense, net            .3              1.1
                                 --              ---

Income before provision for
   Income Taxes                 4.2              3.7

Income Taxes                    1.3              1.6
                                ---              ---

Net Income                      2.9%             2.1%
                                ===              ===

Three Months ended March 31, 1997 ("1997") Compared to Three Months Ended March
31, 1996 ("1996")

Net sales increased 107% from $6.2 million in 1996 to $12.8 million in 1997.
The increase was primarily due to the acquisition of Battery Network, effective
January 1, 1997, which had $6.3 million of sales for the quarter, and the
continued growth of Advanced Fox's cellular accessory business (up 14.5% as
compared to 1996), partially offset by a decline in Specific Energy's sales of
16.5 %.

Gross profit increased by $1.9 million from $1.8 million in 1996 to $3.7
million in 1997 but as a percentage of sales decreased from 28.9% in 1996 to
28.7% in 1997. The bulk of the increase in dollars is attributable to the 
acquisition of Battery Network ($1.7 million) and to increases in Advanced
Fox of $.2 million.

Selling, general and administrative ("SG&A") expenses increased from $1.5
million in 1996 to $3.1 million in 1997 or a total net increase of $1.6 million
and as a percentage of sales decreased from

                                      10
<PAGE>

24.4% to 23.9%. The bulk of the increase in dollars is attributable to (i) the
acquisition of Battery Network ($1.3 million), to (ii) general and 
administration costs associated with being a publicly held company and (iii) an
increase in marketing, selling and distribution costs incurred by and to
Advanced Fox, and Specific Energy, offset in part by cost reductions in the
Tauber division, and (iv) amortization of Goodwill related to the Battery 
Network acquisition. The reduction as a percentage of sales is mainly 
attributable to Battery Network's significantly lower rate of selling and 
administrative costs than the other operations of the Company taken as a whole.

Interest expense, net increased from $18,000 in 1996 to $140,000 in 1997,
primarily due to interest on borrowings incurred in connection with the
acquisition of Battery Network.

The Company's effective income tax rate increased from 31.2% in 1996 to 43.0%
in 1997. Prior to the Mergers, certain of the Founding Companies had operated
as Subchapter S Corporations under the Internal Revenue Code of 1986, as
amended. Upon consummation of the Mergers, effective March 31, 1996 the Company
files as a consolidated group for Federal income tax purposes. The income tax
provision for the three months ended March 31, 1997 reflects income taxes at an
estimated annual rate.


LIQUIDITY AND CAPITAL RESOURCES

The Company's primary capital needs have been to fund (i) the working capital
requirements necessitated by its sales growth, (ii) acquisitions and (iii)
prior to the initial public offering, distributions to its existing
stockholders primarily to satisfy their tax liabilities resulting from the S
Corporation status of certain of the Predecessor Companies. The Company's
primary sources of financing have been cash from operations, the initial public
offering and bank borrowings under the Loan Facility.

The Company's working capital as of March 31, 1997 was $11.8 million. For the
three months ended March 31, 1996, net cash provided by operating activities
was $.4 million and for the same period in 1997, cash used in operating
activities was $.4 million. The difference results from several factors
including the increase in net income, changes in inventory, accounts
receivable, accounts payable and accrued expenses, prepaid expenses and other
assets. Cash used for additions to property and equipment were $65,000 and
$72,000 for 1996 and 1997 periods, respectively. Investing activities in 1997,
included the purchase price and related expenses net of cash acquired of
$10,462,000 relating to the acquisition of Battery Network. The cash provided
by financing activities was $3.2 million in 1996, primarily due to the net
proceeds from the Offering. Of the $9.1 million net proceeds from the Offering,
$6.7 million was paid to the former stockholders of the Merger Companies. In
1996, cash provided by financing activities was $6.2 million consisting of net
borrowings of $7.1 million offset by financing and acquisition costs relating
to the Battery Network acquisition. Financing activities in 1997, included the
issuance of 550,000 shares of common stock at $4.125 per share, totalling
$2,269,000 as part of the purchase price of Battery  Network and the finance 
costs of $148,000 expended in 1997 related to Revolving Credit, Term Loan and
Security Agreement with IBJ Schroder Bank & Trust Company of $148,000 and net
borrowings under this facility, partially offset by a payment of Long-Term 
Debt of $590,000 and capital lease obligations of $13,000. The Company had at 
March 31,1997 cash and cash equivalents of approximately $.9 million.

On January 7, 1997, effective January 1, 1997 the Company acquired the business
and related assets of Battery Network, Inc. ("Battery Network") and affiliated
companies, as discussed in (Note 2)

                                      11
<PAGE>

"Acquisition and Loan Facility" to the Consolidated Financial Statements.

The Company redeemed in April 1997 the outstanding 750,000 shares of Series A 
Preferred Stock at the redemption price of $1.00 per share plus accrued 
dividends at 8% per annum, for a total of $800,000.

On May 12, 1997 the Company acquired the business and related assets of
Cliffco of Tampa Bay, Inc. ("CTB") a distributor of cellular products
operating out of Tampa, Florida as discussed in (Note 5) "Subsequent Events"
to the Consolidated Financial Statement.

The Preferred Stock redemption and the cash payments made in connection with
the CTB acquisition were funded under the Company's Revolving Credit, Term Loan
and Security Agreement, as amended on May 13, 1997.

The Company estimates that it will incur additional capital expenditures of
approximately $1,000,000 during the next twelve months in connection with the
expansion and relocation of office and warehouse facilities, acquisition of
machinery and equipment used in the assembly of battery packs and procurement
of computer systems.

Based upon its present plans, management believes that operating cash flow,
available cash and available credit resources, will be adequate to make the
repayments of indebtedness described herein, to meet the working capital cash
needs of the Company and to meet anticipated capital expenditures needs during
the next twelve months. Although the Company intends to issue shares of Common 
Stock as its primary method of financing acquisitions, it anticipates that 
additional funds will be required to implement successfully its acquisition 
program, and it will use various methods to finance acquisitions, including
the payment of cash, for this purpose.


SEASONALITY AND INFLATION

The Company's net sales typically show no significant seasonal variations,
although net sales may be affected in the future by timing of retail store
openings or acquisitions.

The impact of inflation on the Company's operations has not been significant
to date. However, there can be no assurance that a high rate of inflation in
the future would not have an adverse effect on the Company's operating results.


PART II - OTHER INFORMATION

Item 6 Exhibits and Reports on Form 8-K

a) Exhibits

                                      12
<PAGE>

         (1) Copy of Amendment No. 1 and Joinder Agreement dated May 13, 1997
to Revolving Credit, Term Loan and Security Agreement among IBJ Schroder Bank 
and Trust Company, as Agent, the Company and its subsidiaries, including 
Cliffco of Tampa Bay Inc. (the "Loan Agreement")

         (2) Copy of Amended and Restated Term Note issued pursuant to
Amendment No. 1 to the Loan Agreement.

         (3) Copy of Amended and Restated Revolving Credit Note issued pursuant
to Amendment No. 1 to the Loan Agreement.

         27. Financial Data Schedule.

b) Reports on Form 8-K

         No Report on Form 8-K was filed during the three months ended March
31, 1997, except a Report on Form 8-K for January 7, 1997 providing information
with respect to the acquisition of Battery Network Inc, and affiliated
companies and the related bank term loan and revolving credit facility
financing.

                                      13
<PAGE>

                                   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.



    5/20/97                         By: Ronald E. Badke /s/
  -----------                          ---------------------------------------
     Date                           Ronald E. Badke
                                    Vice President and Chief Financial Officer


    5/20/97                         By: John L. Teeger /s/
  -----------                          ---------------------------------------
     Date                           John L. Teeger
                                    Vice President, Secretary and Director

                                      14